( NGO in Special Consultative Status with the Economic and Social Social Council of the United Nation, Ref. No : D1035 ) Jl. Mampang Prapat Prapat an XI No. No. 23, Jakart a 12790- Indonesia Indonesia * Phone Phone (62-21) 79196721, 79196722, 7901950 * Fax (62-21) 7941577 * E-mail: E-mail: infid@
[email protected] infid.or g g * * www.infid.org www.infid.org
INFID Statement Commemorating Two Years of the Dissolution of CGI The “Jakarta Commitment”: A Reincarnation of CGI and a “Commitment to Dependency”
In his New Year speech for 2007, President Susilo Bambang Yudhoyono announced on 31 January 2007 that the Government of Indonesia had officially disbanded the Consultative Group on Indonesia (CGI). The head of state confidently declared that it was time for the people to take matters into their own hands and independently make decisions on the country’s economic programs and on our own accord select the most effective sources of development financing without having to confer with other countries or international institutions under CGI. The president’s statement certainly merits appreciation considering that Indonesia has been long held captive by foreign debt and policies imposed by creditor countries and institutions. The government on the other hand, has often relied on the excuse that Indonesia’s debt burden has substantially eased as shown in the debt to gross domestic product ratio. The use of this indicator is surely questionable as debt burden is not merely an issue of debt stock and debt ratio but bears serious implications on the sovereignty of economic policies and political directions as well as on the exploitation of natural resources by transnational corporations supported by the debt conditionalities. President Susilo Bambang Yudhoyono’s resolve to restore the self-determination of the country in setting the course of its own economic agenda free from the interference of donor countries and international financial institutions is irrefutably also the wish of the people. Reality however, speaks otherwise as to this day; the financing of every single policy (either by loan schemes or grants) is persistently bound by conditionalities. These specific arrangements can either be in the form of tied aid where debtors are obligated to use products and consultancy services provided by the lenders; seek technical assistance (from planning to implementation); and make changes to legislation (by encroaching upon
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the sovereignty of the parliament). We can see clearly that there are so many special rooms reserved for the staff from the international donor and creditor institutions (bilateral and multilateral donors) in many government offices such as the National Development Planning Agency (BAPPENAS), technical Ministries and now even in the provincial and district governments’ offices, as if Indonesia is still under the colonial power. Currently, two years since the demise of CGI, the Government of Indonesia again introduced an inter-governmental initiative involving 22 donor countries and multilateral institutions for managing foreign aid (both in the form of debt and grants), called “the Jakarta Commitment”. The Government of Indonesia believes that this initiative is a manifestation of the country’s independence from creditors’ intervention in terms of foreign aid management. A more discerning scrutiny of the Jakarta Commitment however, shows the contrary. This so-called Jakarta Commitment instead reflects Indonesia’s increased dependency toward foreign debt and policies dictated by donors and creditors. The resolve of the Government of Indonesia to gs willpower to alleviate its heavy financial burden associated with development will get rid of foreign debt for financing development programs in Indonesia will never be actualized. The Jakarta Commitment re-affirms Indonesia’s dependency to foreign debt and policies from the international financial institutions. The establishment of the Development Aid Effectiveness Secretariat in the office of BAPPENAS, as the executor of the Jakarta Commitment, is an indication of the reestablishment of new façade of CGI. INFID’S critical analysis of the Jakarta Commitment document concludes that it contradicts with key elements embodied in the Paris Declaration and Accra Agenda for Action, two international agreements that the document claims to refer to and thus further undermines the sovereignty of the Indonesian economy. The inconsistencies include: 1. The Jakarta Commitment fails to incorporate the principles laid down in the Accra Agenda of Action pertaining to the consultation process on development policies to ensure acknowledgement of international agreements on gender equality, human rights, rights of the disabled persons and environmental sustainability. 2. The Jakarta Commitment will further consolidate the multi-donor trust fund scheme (which started off with the funding of the Aceh and Nias Rehabilitation and Reconstruction Agency, Java Recovery Trust Fund and the National Program for Community Empowerment) where its management standard is kept under the World Bank’s control instead of the mechanism established according to the financial system adopted by the Government of Indonesia, and free from the democratic control of the parliament and the people.
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diplomatic solutions in the form of debt reduction and debt relief (including for illegitimate debt). 5. The institutionalization of the Jakarta Commitment through the formation of the Development Aid Effectiveness Secretariat is simply a reincarnation of CGI which will only undermine the sovereignty of the country to promote its own development financing policies. Based on the analysis, INFID hereby states that the Jakarta Commitment is not the answer to Indonesia’s foreign debt problem but instead is an additional strain that thrusts Indonesia deeper into debt trap. The Jakarta Commitment is indeed an affirmation of the Government of Indonesia’s willingness to remain dependent on foreign debt and policies formulated by the international financial institutions. By adhering to the Jakarta Commitment, the government clearly degrades its own dignity before the eyes of nations struggling to rid of their reliance toward creditor countries and international institutions, and also demeans the dignity of a great nation like Indonesia. Through the Jakarta Commitment, Indonesia becomes the only country in the world that has assertively proclaimed its dependency on international creditors, both in regard to development financing and development policies.
Jakarta, 30 January 2009
Don K Marut Executive Director
For more information please contact: Dian Kartika Sari Deputy Director 0816759865 Wahyu Susilo Head of Network and Campaign Division 08129307964
