President to Disband CGI
Thursday, 25 January, 2007 | 12:32 WIB

TEMPO Interactive, Jakarta: President Susilo Bambang Yudhoyono has decided to disband the Consultative Group on Indonesia (CGI), the forum of countries and institutions granting loans, during this year.

The decision for the disbandment was made, according to Yudhoyono, because Indonesia is now already capable of planning the country’s development on its own.

“I declare that the CGI forum is no longer needed,” he said after meeting with Rodrigo de Rato, Executive Director of International Monetary Fund (IMF), at the Presidential office yesterday (01/23).

CGI consists of several creditor countries such as the US, Japan, England and Germany as well as multilateral institutions including the World Bank, the Asian Development Bank, the Islam Development Bank and the Kuwait Fund.

Up until October 2006, total funds disbursed to Indonesia reached US$45.2 billion.

In the past, said the President, the government had to deliver development plans to CGI to be discussed, to be commented and even to be criticized.

In the future, this will not happen anymore, said Yudhoyono, adding: “It is important that we must stand on our own feet.”

The consequence of the disbandment, he said, was that the country must be fully responsible in setting up budgets and meeting financial needs.

Finance Minister Sri Mulyani Indrawati guaranteed that the resolution will not lessen Indonesia's bargaining position with creditors.

This is because some countries and creditor institutions are now competing in offering loans.

“So, on the contrary, our bargaining position is in fact stronger,” said Sri.

Muhammad Ikhsan, a member of the special staff of the Coordinating Minister for the Economy, explained that the CGI disbandment plan had already been discussed with former Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti.

One of the considerations was that Indonesia had decided to reduce its debts.

“The clearest signal was when the CGI meetings were moved from Tokyo to Jakarta around two years ago,” said Muhammad.

As to why this was only announced recently, he said, “We were looking for the right moment. It then happened that the IMF official was coming here on a visit and there were rumors that the government wanted to borrow again.”
Rodrigo de Rato refused to comment on the President's statement about the disbandment of the CGI because he was yet to be informed directly.

“He (the President) did not tell me. So, I do not know what you are talking about,” said Rodrigo.

He went on to say that, “I have been 25 years in the world of politics. You will not be able to get me to comment on someone else's statement.”

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