US$200 million more
Thc Consultative Group on Indonesia, Indonesia’s new aid consortium with the World Bank presiding, met in Paris on 16-17 July and pledged US$4.94 billion for 1992-93, US$200 million more than last year. Several countries and agencies have not yet announced their pledges so the total will probably exceed US$5 billion.
Despite intense lobbying in many countries, by parliamentarians, solidarity groups and human rights organisations including Asia Watch and Amnesty International (which published a 21-page document, lndonesialEast Timor: The Suppression of Dissent three days before the meeting), human rights was not allowed to stand in the war of world financial backing for Suharto. The only delegation to formally raise human fights concerns in the meeting itself was the US delegation which read out a statement of concern about the trials and gross discrepancics between civil and military verdicts and about the failure of Jakarta to account for the dead and missing after the massacre. This was done solely because of pressure from the US Congress. Otherwise, human rights concerns were confined 'to the corridors'.
As for the European Community which was attending the donors' meeting for the first time, there had been intense pressure for a joint statement on human fights. However, the UK made sure this was done privately with the Indonesian Minister, Radius Prawiro. Radius responded by expressing gratitude to the British envoy for having raised the matter so discreetly.
Expanded donors' group:
The CGI, created in the wake of Indonesia’s rebuke of the Netherlands, functions in the same way as the defunct IGGI. The Netherlands is no longer a member but five new members have been roped in: South Korea, the Kuwait Fund for Arab Economic Development, the Saudi Fund for Development, the Nordic Investment Bank and the Islamic Development Bank.
To repair the damage in its relations with Indonesia, Dutch Foreign Minister van den Brock visited Jakarta just before the CGI meeting. Prime Minister Lubbers even took the extraordinary step of going especially to Paris on 16 July to pay his respects to Radius Prawiro. Such are the lengths to which Dutch ministers will go to ingratiate themselves with Suharto.
Jakarta's dependency on foreign aid
While foreign governments have been willing to go on increasing their collective financial backing, there is deep concern in Indonesia that the country's foreign debt is reaching unmanageable proportions. Indonesia’s total foreign debt now stands at US$78 billion, the Debt Service Ratio (the proportion of export earnings used for debt repayment and interest) will soon exceed 30 per cent. Almost half of Indonesia's routine budget expenditure goes to the repayment of foreign debt.
There was a US$4.5 billion deficit in Indonesia's balance of payments last year and no prospects that things will improve this year. As a result of falling earnings from oil and gas exports, foreign exchange from this sector, which accounts for 37 per cent of export earnings, is likely to fall by $1.7 billion. On the import side of the balance sheet, a year ago, Jakarta announced the postponement of all so-called mega-projects because they impose such a heavy burden on the balance of payments. Yet one of the projects, the Chandra Asri poly-olefin project, a business venture of Barito Pasifik run by Prayogo Pangestu, and Bimantara, the business house of Bambang Suharto, was suddenly allowed to resume operations. It is developments like this that create tensions not only in Indonesia but at the World Bank and among Indonesia's financiers.
Bccause of the severe strains on Indonesia's current account. the CGI
agreed to give $1.05 billion of this year's money in the form of fast-disbursing
assistance to cope with Indonesia's foreign exchange crisis. In effect,
the CGI is helping the business of the Suharto clique. <>
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