Japan's Pledge of Assistance to Indonesia at the 11th Consultative Group Meeting on Indonesia

November 8, 2001

At the Consultative Group Meeting on Indonesia (CGI) held in Jakarta on November 7 (Wed) and 8 (Thu), under the auspices of the World Bank, the delegation of the Government of Japan, headed by Mr. Yukio Takeuchi, Ambassador of Japan to Indonesia, announced that Japan, in spite of its own severe financial situation, intended to continue providing Indonesia with as much support as possible for its reform efforts with three pillars of economic cooperation: economic stability, promotion of various reforms, and response to urgent needs such as elimination of economic bottlenecks.
With regard to the public debt issue which Indonesia is currently facing, the Government of Japan announced its policy to deal flexibly with debt rescheduling in the international framework.
The current CGI meeting is the first consultative meeting since the inauguration of the Megawati administration this August. Twenty-one countries including Indonesia and 12 international organizations participated in the meeting.
At the meeting, opinions were exchanged on "ensuring economic stability and recovery," "strengthening governance and fighting corruption," "empowering and investing in the poor," "aid requirements and effectiveness," which are challenges to be tackled in dealing with the issue of poverty that Indonesia is currently facing; and discussion was held on assistance for the financing requirements in FY 2002 and on the pledging of assistance from the mid- and long-term perspective.
The governments and international organizations participating in the meeting pledged approximately 3.14 billion dollars in total, as assistance to meet Indonesia's financing requirements for FY 2002. The Government of Japan stated that the disbursement of projects is expected to be approximately 720 million U.S. dollars (equivalent to 85.7 billion yen).

The Government of Japan also announced that it would extend new ODA loans of approximately 41.7 billion yen in total for the following two projects of high priority and urgency, as assistance from the mid- and long-term perspective to secure a stable recovery and further development of Indonesian economy.

(1) Decentralized Irrigation System Improvement Project in Eastern Region of Indonesia:
    approximately 27.0 billion yen to increase food production, rice in particular, and to increase farmers' income, thereby contributing to reducing poverty and strengthening the structure for securing continuous water control by providing irrigation facilities in eight provinces in East Indonesia
(2) Water Resources Existing Facilities Rehabilitation and Capacity Improvement Project:
    approximately 14.7 billion yen to strengthen the management and maintenance control system and to assure the maintenance of existing facilities through repair of the water resource sector that was completed by an ODA loan
    Furthermore, the Government of Japan is considering extending another ODA loan in the energy sector-related project, and it announced that it intended to reach a decision on this project at a very early date, taking into account such elements as Indonesia's economic situation and reform of the energy sector.

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