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International Donor Group Pledges $2.8 Billion for Indonesia - 2003-12-11

International donors have pledged $2.8 billion in assistance for Indonesia in the next financial year, but as some of the money comes with strings attached.

Donors from the 30-member Consultative Group on Indonesia say they are willing to help, but they want to see reform. Disbursement of some $1 billion of the $2.8 billion will depend on Indonesia's progress in reforming its judicial system and tackling corruption.

Joel Hellman, a World Bank advisor, says the donors want to see the Indonesian government clean up and improve the investment climate.

"The dissatisfaction with the extent of the progress to date on this issue is something that really did concern them and will continue to concern them until they feel some serious measures have been put in place to deal with the problem," he said.

Indonesia's parliament is in the process of selecting members of an anti-corruption commission, and an ambitious plan for overhauling the justice system has been published.

Donors also voiced concern about social issues, particularly the ongoing conflict in the resource-rich northern province of Aceh, and unchecked illegal logging, which is devastating Indonesia's environment and depriving the country of one of its most valuable natural resources.

The loans announced Thursday will be a lifeline for the Indonesian economy, which nearly collapsed during the Asian financial crisis six years ago. The economy is improving, but analysts say full recovery will elude the country unless it puts in place deeper and lasting reforms.