ASEAN KEY DESTINATIONS
RI still needs WB, but does not want to be dictated‘
Indonesia still needs financial aid from West-led international financial institutions such as the World Bank and the International Monetary Fund (IMF) to finance sustainable economic development, especially those related to environmentally friendly projects, according to Presidential chief of staff Luhut Panjaitan.
“Don’t misunderstand, [it is not] as if the Indonesian government does not welcome the World Bank aid to invest in Indonesia,” Luhut said during a press conference at Tropical Landspaces Summit on Monday in Jakarta.
He added that, currently, the World Bank interest rate was 0.5 percent — cheaper than that charged by other international financial organizations. However, he said Indonesia did not want to be “dictated” to in order to access money from the institution.
Indonesia has a clear stance, but the government will not refuse aid from the western bank, he said. He added that international aid was not only useful for Indonesia, but would also help investors.
Luhut confirmed that the President was committed to investments in green growth, adding the administration would offer various incentives to help the country meet its target of a 26 percent reduction in greenhouse gas emissions by 2020.
“We will need financial support from developed countries for that because we cannot support green investment on our own. We are not against foreign aid. However, we don’t want to be dictated [for receiving the funds] because we are a sovereign nation,” Luhut said
In his speech during the Asian-African Conference Commemoration last week, President Joko “Jokowi” Widodo delivered a strongly worded critique of global inequality, which he blamed on the unjust West-led world order, prompting speculation that the President intended to support China’s initiative with the Asian Infrastructure Investment Bank (AIIB).
He also lashed out at the World Bank, the IMF and the Asian Development Band (ADB), saying the institutions had failed to deliver a solution global inequality. “I think global economic management cannot be left to those three financial institutions.
Therefore, we are urging for global financial architecture reform,” Jokowi said. However, just before departing for Malaysia to attend the 26th ASEAN Summit in Kuala Lumpur, Jokowi said Indonesia did not oppose the existence of the World Bank, IMF or the ADB, but that they should strive to contribute more to helping poor nations. “We need a good global financial order that pays [more] attention to poor nations,” Jokowi said at Halim Perdanakusuma Airport on Sunday, adding that Indonesia still needed the aforementioned international financial institutions.
Indonesia wants to play a major role in the new Chinese-led Asian infrastructure bank, with at least the Vice President’s position reserved for the Southeast Asian country, the finance minister said.
The US$50 billion AIIB, expected to start operations by the end of the year, is attracting a growing list of countries from Britain to India to New Zealand. Indonesia is expected to be one of the main beneficiaries of the bank as it seeks significant funding to build new roads, ports and bridges in the vast archipelago.
“We are fighting to get a position in the AIIB [...] because most likely we will be the biggest client,” Finance Minister Bambang Brodjonegoro said recently
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