International donors have promised to give Indonesia more than $3 billion in financial assistance. Disbursement of almost half of the money depends on Indonesia quickly implementing reforms, something the government has failed to do in the past.
The chairman of the Consultative Group on Indonesia, Jemal ud-din Kassum, wants the government to take "resolute action" in implementing reforms, sustaining economic recovery and fighting poverty. "We need to be realistic given the strong vested interests, weak institutions, an ambitious decentralization program and a turbulent transition to democracy," he said. "But inaction or a weak reform effort will carry its own severe costs."
The donors' group has promised just over $3 billion in assistance. However, $1.3 billion will not be disbursed unless the Indonesian government implements key reforms, such as the privatization of bankrupt state industries.
Indonesia's Coordinating Minister for the Economy Dorojatun Kuntjorojakti says the government does not want to repeat the mistakes of previous administrations which failed to stick to reform promises and therefore did not receive billions of dollars in loans.
He says that in the past two days the group has discussed Indonesia's problems. The new administration, which has been in power for only three months is ready to work hard so that all aid pledges can be disbursed.
The donors' group is made up of 20 foreign countries that give Indonesia assistance, and a number of multilateral donors such as the International Monetary Fund and the Asian Development Bank. The group just ended a two-day meeting in Jakarta.
Indonesia has been mired in economic trouble since 1997. Its economic woes have contributed to three changes in government since then and continue to plague the administration of its current leader President Megawati Sukarnoputri.
The government has received billions of dollars in loans since the economy collapsed bringing its total debt to roughly $140 billion. That is equal to Indonesia's gross domestic product a situation President Megawati has called dangerous.