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2. CGI's LOAN US$ 5.29 BILLION.

The World Bank's positive remarks about Indonesian economy seem to have convinced the main donor countries such as Japan, the United States, and the European Union of the need to continue providing Indonesia with adequate credit despite their difference of opinion with the latter concerning the National Car issue, which has been filed with the WTO.

The high mutual interests between these donor countries and Indonesia seem to have managed to set aside all the issues which were once raised shortly before the CGI meeting started. It is true that the loan commitments of several members of the CGI for Indonesia for 1997/1998 are less than those for 1996/1997, but the declines are insignificant. In the yen currency, Japan's loan commitment for 1997/1998 is even higher than that for 1996/1997 although in the US dollar currency it is lower as a result of the appreciation of the US dollar against the yen. In the recent CGI meeting, Japan agreed to provide Indonesia with a loan amounting to 213.75 billion yens, up 3.7% from 206 billion yens for last year (1996/1997). In the US$ currency, Japan's loan commitment has declined by 2.48%.

Besides Japan, the party which has shown its consistency in providing credit for Indonesia is the World Bank. Even before the CGI was established, the World Bank under the IGGI had continued to give positive remarks about Indonesian economy and about how the Indonesian Government managed it. Indonesia has been seen as a "good boy" who always accepts the World Bank's suggestions. Therefore, the World Bank has always felt responsible for bringing its Indonesia commitments into reality. At the opening of the recent CGI meeting, the Leader of the Indonesian delegation, namely Coordinating Minister for Economic and Financial Affairs Saleh Afiff, did not hesitate to express his optimism that the CGI's loan commitment for Indonesia for 1997/1998 would not decline, saying that if Japan and the United States reduced their loan commitments, the Worm Bank and the Asian Development Bank would do something to compensate for the reductions. Such a statement was made because Indonesia had always taken the suggestions from both banks seriously and implemented them, something which did not happen in other debtor countries in Latin America.

Although the United States has reduced its loan commitment, the increases in the loan commitments by. the World Bank and ADB show that the United States does not intend to tie its loan commitment to its bilateral trade issue with Indonesia; which has arised as a result of the latter's National Car program. As a country with a great influence over the two financial institutions, the United States would have been able to prevent the World Bank and ADB from increasing their loan commitments if it had wanted to do so.
Table - 1
Growth in loan commitments for Indonesia, 1992/93 - 1997/98

(US$ million)

Donor 1992/93 1993/94 1994/95

A. Bilateral 1,914.70 2,132.60 2.357.24
 1. Australia 73.00 40.20 47.66
 2. Austria 9.60 - -
 3. Belgium 16.40 - 14.66
 4. Denmark 12.00 5.40 -
 5. Finland 2.10 1.30 0.99
 6. Canada - 30 50 25 33
 7. France 176.90 123.30 140.57
 8. Germany 135.50 138.70 157.41
 9. Italy - - -
 10. Japan(a) 1,320.00 1,440.00 1,670.00
 11. New Zealand 2.70 2.70 3.03
 12. Spain - 100.00 24.51
 13. Sweden
 14. Switzerland 23.00 26.00 23.41
 15. United Kingdom 35.00 98.60 150.49
 16. U S A 94.00 90.40 89.60
 17. South Korea 14.50 13.40 9.56
 18. Norway - 1 00 -
 19. Saudi Fund - - -
 20. Kuwait Fund(**) - - -

B. Multilateral 3,034.00 2,978.00 2,845.46
 1. World Bank 1,600.00 1,600.00 1,500.00
 2. ADB 1,219.00 1,200.00 1,100.00
 3. UNO's Agencies(b) 51.00
 4. UNICEF 17.00 15.00 14.00
 5. UNDP 83.00 51.00 50.00
 6. IFAD 30.00 17.00 26.07
 7. IDB 30.00 40.00 65.00
 8. NIB 55.00 55.00 35.00
 9. EIB(**) 54.89

Total 4,948.70 5,110.60 5,202.70

Donor 1994/96 1996/97 1997/98

A. Bilateral 2,795 2,588.3 2,262.7
 1. Australia 47 50.0 54.5
 2. Austria 25 23.5 19.9
 3. Belgium - 16.1 ...(*)
 4. Denmark 4 3.3 0.0
 5. Finland 1 1.1 ...(*)
 6. Canada 20 20.5 19.0
 7. France 139 100.0 ...(*)
 8. Germany 125 208.3 66.3
 9. Italy - 6.5 0.0
 10. Japan(a) 2,140 1,916.7 1869.1
 11. New ZeaLand 3 3.4 3.4
 12. Spain - 62.5 62.5
 13. Sweden - - 0.0
 14. Switzerland 13 8.0 5.4
 15. United Kingdom 155 20.0 16.0
 16. U S A 81 84.7 74.0
 17. South Korea 5 38.7 72.6
 18. Norway - - ...(*)
 19. Saudi Fund - - 20.0
 20. Kuwait Fund(**) 37 25.0 0.0

B. Multilateral 2,565 2.671.7 3.036.6
 1. World Bank 1,200 1.200.0 1.500.0
 2. ADB 1,200 1.200.0 1.200.0
 3. UNO's Agencies(b) 36 36 6 37 8
 4. UNICEF 16 15.10 13.8
 5. UNDP - - -
 6. IFAD 18 20.0 25.0
 7. IDB 70 100.0 100.0
 8. NIB 25 50.0 40.0
 9. EIB(**) 0 500.0 100.0

Total 5,360 5,260.5 5,299.3



Notes:

(a) Japanese loan commitment 213.75 billion yens (US$ 1 = 114.36 years)

(b) UNDP, WFP, UNFPA, FAO, UNIDO, ILO, UNESCO, UNHCR, IAE, WHO

(*) Will be presented subsequently

(**) Unavailable

Source: World Bank and CGI's 1996 meeting
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Publication:Indonesian Commercial Newsletter
Date:Jul 28, 1997
Words:997
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