Indonesia’s major donors on Wednesday pledged to provide $4.8 billion in new aid — $1.585 billion of which will come from Japan — to help finance the country’s expected 2001 budget deficit.
Delegates from 21 countries and 11 international organizations pledged to provide the aid, which will come mostly in the form of loans, as they wrapped up the two-day conference in Tokyo of the 10th Consultative Group of Indonesia, which was organized by the World Bank.
Japan, Indonesia’s top donor, also pledged to make separate fresh yen loans of 58.1 billion yen to finance five projects to support the Indonesian economy in the medium term, which include irrigation, infrastructure and education projects, the Foreign Ministry said.
Indonesia’s 2001 budget deficit is projected at about $5.8 billion, or 3.7 percent of its gross domestic product.
“These pledged resources will be adequate to finance the budget and our development programs, but we recognize they are mostly loans and will add to our government’s already onerous debt situation,” said Rizal Ramli, the Indonesian coordinating minister for economic affairs, who led the Indonesian delegation.
Ramli said his government will use those funds “only after exhausting every alternative to meet our development needs from domestic sources.”
Discussion during the conference focused on Indonesia’s structural reform efforts, poverty reduction measures and implementation of a comprehensive governance program, said Jemal-ud-din Kassum, the World Bank’s vice president for East Asia and the Pacific.
Participants also discussed the West Timor situation, where three U.N. aid workers were killed by Indonesian militia in September.
Ramli explained that Jakarta has taken steps to disarm the militia and reported that individuals had been arrested in connection with the case.
Kassum said the donors “welcomed” Indonesia’s acceptance of a U.N. Security Council mission to observe progress in West Timor next month. Kassum also said donors offered to assist and support the refugees in West Timor “once security conditions permit.”
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