[stop-imf] Indonesian ANTI DEBT COALITION (fwd)

[Robert Weissman]

INDONESIAN ANTI-DEBT COALITION

" WRITE OFF OLD DEBT, NO NEW DEBT "

The Anti-Debt Coalition - an Indonesian civil society coalition comprising
144 organisations of workers, farmers, indigenous peoples, women
non-governmental groups and students - is calling for fundamental action
on the issue of foreign debt so that Indonesia can escape from the debt
trap and start immediate economic recovery.

At the beginning of this century, Indonesia's foreign debt (private and
public) had reached around US$150 billion - the fourth largest in the
world after Brazil, Argentina and Mexico. Indonesia not only has a massive
foreign debt; its capacity to repay this debt is also very limited. In
early 1999, Indonesia's debt service ratio was over 50% - this means that
half of national export revenues is spent on debt repayments. For the same
year our total debt was 1.6 times greater than our Gross Domestic Product.

In the financial year 1998/9, the Government of Indonesia (GoI) allocated
39% of the general budget to meet the interest and repayments on our
foreign debt. For 1999/2000 it is thought that the government has
allocated 44% of routine expenditure to foreign debt repayment. This is in
addition to the cost of bank restructuring which amounts to Rp550 trillion
(the highest amount in the past 30 years). This debt imposes a direct
strain on the national budget in the 1999/2000 financial year to the tune
of Rp34 trillion (Rp18 million from the Routine and Development Budget,
APBN, and the rest from the Indonesian Bank restructuring Agency, BPPN)
=20
The situation is made even worse by Structural Adjustment Loans (SAP) - a
form of lending introduced by the IMF in the 1997 economic crisis which
replaces project loans. SAP force Indonesia to accept binding
conditionalities which impact directly on budget allocations causing
reductions in social expenditure, the liberalisation of markets and
structural changes in all aspects of our lives from the legal system to
the financial system; from workers rights to the public health sector to
the over-exploitation of natural resources.

Even in normal economic conditions with maximum production and high
productivity, Indonesia could not rid itself of such a huge foreign debt
burden. This is why we want to do away with the government's current
system of 'robbing Peter to pay Paul' by calling for debt cancellation.

At the CGI meeting in Jakarta on Feb 1-2, the Anti-Debt Coalition will
urge the Indonesian government, World Bank, ADB and bilateral donors to
take this opportunity to take the following steps:

1. Cancel or wipe out all Indonesia's foreign debt The debt rescheduling
measures proposed by donor agencies will never solve Indonesia's debt
problem. They will merely cause a short-term postponement because they
will not reduce the capital and interest on the loans. Debt scheduling
delays the debt burden to fall on future governments and the general
public. It is completely unfair and immoral to expect the Indonesian
people to pay these costs and to bear the debt burden incurred by an
authoritarian regime which was not selected by the public in free,
democratic elections. It is also not equitable for the rich countries and
donor institutions (World Bank, IMF, ADB, Paris Club) continue to benefit
from debt repayments made by the people of poor countries like Indonesia.

2. Stop the conversion of private debt to public debt
 The GoI and donors must stop this bailing-out process. They must stop the
transfer of private debt to the general public including the signing of
contracts between state-owned and foreign companies. There should also be
an independent investigation and the prosecution of corrupt individuals
who bankrupted the Indonesian economy.

3. Independent investigation of the use of all loans to Indonesian The
donor agencies and the GoI must carry out a public audit into the use of
all foreign loans, including their impact on the environment, the economy
and human rights. Donors must also accept responsibility for the negative
impacts of providing loans to Indonesia.

4. No new debt for Indonesia New debt will only make ordinary Indonesian
people worse off. Most of the new loans will be used to repay old debts
and they bring with them conditionalities which make people's lives
harder. In the 5-year period 1994-1999, World Bank loans have caused a net
negative transfer of US$4.4 billion. In other words, Indonesia has repaid
more than it originally received because of interest payments on the debt.

NOTE: The Anti-Debt Coalition is an Indonesian civil society coalition
comprising 144 organisations of workers, farmers, students, non-government
groups, women and indigenous peoples who are concerned about Indonesia's
foreign debt problem. The Coalition aims to strengthen the role of civil
society in the issue of foreign debt and to build a movement to cancel
Indonesia's foreign debt and reject new debt as a way out of the debt trap
and the prolonged economic crisis.

Secretariat: Jl Tegal Parang Utara No. 14, Jakarta 12790, Indonesia
tel (+62.21) 7919.3363; fax (62.21) 794.1673
Contacts:=20
=B7 Chris Wangkay, INFID <chris@nusa.or.id> or cellphone: (+62.812) 942.572=
7=20
=B7 Longgena Ginting, WALHI <kuleh@indo.net.id> or cellphone: (+62.811) 927=
038=20
=B7 Titi Suntoro, Solidaritas Perempuan <euron@indo.net.id> or cellphone:
(+62.816)141.0969