Indonesian Coalition Protests Foreign Loans
Regional-Indonesia, Economics, 2/1/2000

An anti-loan coalition pointed out that Indonesia's current external debt of $150 billion have greatly impoverished the people, reports Indonesian news agency "ANTARA."

According to the coalition, the staggering amount of foreign debts have caused the government to cut social development budgets and impacts directly on the country's natural resources.

"With that amount of foreign debts, every Indonesian --including new-born -- should incur an average debt of $750," the coalition said in its petition issued in Jakarta on Monday.

The coalition has 180 members representing non-governmental organizations, labor unions, farmers and fishermen.

In the coming annual meeting of the Consortium Group on Indonesia (CGI/Indonesia's major creditor countries), scheduled in Jakarta on Feb 1-2, 2000, Indonesia has been ensured with a new loan of between $4.2 and $4.7 million, to cover up the projected budget deficit for April-Dec 2000. Most of the new loan, however, will be used to pay back the interest and annual installment of the existing foreign loans, according to ANTARA.

The coalition pointed out further that IMF, through the Structural Adjustment Loan and its Letter of Intent (LoI), has not only worsened the social conditions, but also weakened the country's economic foundation, because the donor's policy is focused on increasing Indonesia's capacity to repay its short-term debts, rather than creating a strong foundation for a sustained development.

The coalition also argues that debt rescheduling would never solve Indonesia's indebtedness problem because it does not reduce the interest and the installment. "It will only serve to put off the bankruptcy," the coalition concluded.

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