WB chief still supports Gus Dur during crisis

WB chief still supports Gus Dur during crisis

TOKYO (Reuters): World Bank President James Wolfensohn said on Monday Indonesian President Abdurrahman Wahid still had his full support, applauding the embattled leader for sticking to a path of democracy during economic and political turmoil.

"I continue to give him ample support in what he is doing," Wolfensohn told reporters in Tokyo. "It seems to me President Wahid is doing his best to balance the conflicting claims of people internally, and is doing it in a democratic way."

Abdurrahman, who is more popularly called Gus Dur, has faced criticism at nearly every turn in Jakarta as Indonesia struggles to emerge from three years of political and economic crisis.

The International Monetary Fund (IMF) and World Bank this year have repeatedly criticized Indonesia for dithering on key reforms and for lack of transparency in corporate debt restructuring deals.

In April, the IMF delayed a US$400 million disbursement because Indonesia failed to implement promised measures to tackle its $120 billion corporate debt burden.

On Friday, Indonesia's chief economics minister Rizal Ramli said talks with an IMF team in Jakarta were progressing well but there was no indication when the next batch of vital funds would be disbursed.

The IMF, which in January agreed to lend Indonesia $5 billion over three years, has sent a mission to Jakarta to assess the country's economic reform efforts.

"I have told President Wahid that we are very anxious to continue to be very supportive of Indonesia," said Wolfensohn, in Tokyo to attend a conference on global economic development.

"We are trying to work with the government without any threats to try and see if we can continue to be supportive."

Wolfensohn also urged Japan not to substantially cut the amount of its official development assistant (ODA) to developing countries.

"It would be my hope that Japan will continue to be a leader in the field" of foreign aid, he told a Tokyo press conference. "It would be my hope that you will continue, whoever is making the decision, to give it priority."

Wolfensohn, in Japan to attend an international conference on development issues, said that while he understands Japan's fiscal situation is deteriorating, a significant cut in ODA "would have an enormous impact" on developing nations.

Japan's ODA budget was the world's largest for the ninth consecutive year in 1999, but the government is facing increasing pressure to limit spending as it faces growing debts and the growth of tax revenue slows.

A study group set up by Japan's three ruling coalition parties agreed last week to reduce the amount of Japan's ODA to developing countries in the budget for fiscal 2001, which begins next April 1.

Asian countries, which depend on Japan as their top ODA donor, have expressed concern over possible reductions.