RI secures $15m debt swap from Germany

RI secures $15m debt swap from Germany

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Indonesia won a US$15-million debt-for-nature swap from Germany during the third World Water Forum (WWF) in Kyoto, Japan, last week, said Minister of Resettlement and Regional Infrastructure Soenarno.

Minister Soenarno said on Wednesday that the debt swap was used to assist water-related projects such as environmental conservation and food security programs.

"... we are still seeking similar debt-for-nature swap schemes with other countries," he said when opening an exhibition to hail World Water Day here on Wednesday.

Sutardi, head of the hydrology directorate at the Ministry of Resettlement and Regional Infrastructure, said the debt swap from Germany was to be used for coping with water pollution in Garut, West Java and in Pekalongan, Central Java, rural irrigation development, and the improvement and rehabilitation of ground water pumps in several other regions.

"Germany is interested in providing assistance with environmental control, education and poverty eradication programs," he told The Jakarta Post.

The $15 million is actually part of a $321.89 million debt-for-nature swap that Indonesia was seeking from Germany, France, Canada, Italy, Spain and Finland during the World Water Forum.

Soenarno went on to say that with the debt swap scheme, the government would use a part the 2003 state budget to finance development projects, instead of repaying foreign debts.

"We are targeting that by 2005, the ratio of our foreign debt to gross national product (GNP) will be 50 percent," he said.

During the Kyoto meeting, Soenarno, who led the Indonesian delegation at the meeting, described the situation regarding water resources in the country, including the absence of access to clean water on the part of most people.

Yanuar Nugroho of Business Watch Indonesia (BWI) welcomed the government's achievement in securing the debt swap, but added that it was just one of several that Indonesia gained at the meeting.

He questioned the benefit of the debt swap for the public, saying that they might not benefit from the projects developed under the debt swap scheme.

"To my point of view, the most significant result but biggest loss for the ordinary people is that Indonesia will be opened up to private sector management of water resources," he told the Post.

He said Indonesia should learn from other countries on how to manage water resources.

"Public participation is important. Don't treat people merely as consumers of water," he said, adding that transparency and accountability should be improved for the sake of efficiency.

He understood that the public no longer had confidence in the government and state-owned companies to supply clean water to consumers because of a lack of transparency and accountability, and widespread corruption.

"But it doesn't mean that privatization is the only solution to the clean water crisis," he said, while failing to give any concrete examples of alternative solutions.