Committee for the Abolition of Illegitimate Debt

NGOs stage rally against IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org Jakarta

(ANTARA News) Tens of non-governmental organization (NGO) members grouped in the Anti-Neocolonialism and new imperialism movement staged a rally in front of the Merdeka Palace here on Wednesday. The rally opposing new debts and asking for debt write-off, took place during a meeting between Executive Director of International Monetary Fund (IMF) Rodrigo Rato and President Susilo Bambang Yudhoyono in the palace. The group consisted of several NGOs including the Anti-debt Coalition, WALHI (Indonesian Environmental Forum), the Indonesian Farmer Union Federation, Anti-Imperialism University Student Committee, and the Alliance of Struggling Workers. The protestors throw rotten tomatoes to a picture of Rato. During the rally attended by around 50 people, the protestors waved banners reading: “Cancel regulations ordered by IMF”, “Go Back Rato”, “Say No To IMF (International Mafia Fund)?, and”Go to Hell IMF“. In their written statement, the NGOs also asked the write-off of the government?s old debts and opposed any new debts. They asked the government not to be used by the IMF in dealing with the IMF potential income which is deteriorating due to the acceleration of debt payment by several countries such as Indonesia, Serbia and Uruguay. They also asked the government to reject the visit of the IMF which brought a new imperialism mission in Indonesia.”The government must give priority to the sovereignty and independency of the national economic," the statement said. They also urged the Indonesian government to cancel its membership in the IMF and to start thinking of dissolving the institution. Meanwhile, following the meeting between President Susilo Bambang Yudhoyono and IMF Executive Director Rodrigo Rato, Coordinating Minister for Economic Affairs Boediono said that the Indonesian government would no longer ask for a new loan from IMF as Indonesia?s balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. of payment was in sound condition.

(*) Copyright © 2006 ANTARA January 24, 2007 16:36
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RI not to seek any new loans from IMF Jakarta

(ANTARA News) The Indonesian government will not seek to obtain new loans from the International Monetary Fund (IMF) as the country`s balance of payments Balance of payments A country’s balance of current payments is the result of its commercial transactions (i.e. imported and exported goods and services) and its financial exchanges with foreign countries. The balance of payments is a measure of the financial position of a country vis-à-vis the rest of the world. A country with a surplus in its current payments is a lending country for the rest of the world. On the other hand, if a country’s balance is in the red, that country will have to turn to the international lenders to meet its funding needs. is in sound condition, Coordinating Minister for Economic Affairs Boediono said here Wednesday. “We have no plan (to ask for new loans from IMF). We only recently repaid all our debts to IMF. There has been no discussion with the president on seeking new loans,” he said following a meeting between IMF Managing Director Rodrigo de Rato and President Susilo Bambang Yudhoyono. “Neither have they (IMF) offered any new loans or made any new loan commitment,” Boediono said. Speaking on the same occasion, Bank Indonesia (BI) Governor Burhanuddin Abdullah said Indonesia may ask for a new IMF loan if its balance of payments was not sound. “Our balance of payments is in a surplus so we don`t need any IMF loan,” he said. Boediono said de Rato was visiting Indonesia as a courtesy and to have a chance to get first-hand information on currrent conditions of the Indonesian economy as well as to exchange views on global economic conditions with the Indonesian president. At his meeting with de Rato, Yudhoyono suggested that IMF determine a country`s borrowing quota not based on the country`s foreign exchange reserves but on its economic openness and regional role. De Rato told Yudhoyono that the latter`s idea would be taken into account when the financial lender determines a country`s borrowing quota. The IMF official also said what the Indonesian government had done so far had created stability in the macro-economic sector. He hoped Indonesia would further focus its economic growth on capacity building. Finance Minister Sri Mulyani Indrawati and National Development Planning Minister Paskah Suzetta were also present at the meeting.

(*)Copyright © 2006 ANTARA January 24, 2007 21:48
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RI to cease seeking financial aid through CGI Jakarta

(ANTARA News) - President Susilo Bambang Yudhoyono said here Wednesday Indonesia would cease to seek financial assistance through the Consultative Group on Indonesia (CGI) this year as it no longer needed the aid. “I think it is necessary to terminate the CGI forum this year. I hereby state we no longer need the CGI,” the president told newsmen on the premises of the presidential palace. He said Indonesia had taken the decision because it was now able to overcome its foreign debt problems without the involvement of CGI. “It is important for us to be more independent and to develop our independence in the planning and implementation of development,” the president said. The CGI was established by the Indonesian government and the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

to coordinate the provision of financial assistance from donor countries to Indonesia. He said with the dissolution of the CGI, Indonesia had to cautiously and properly draw up its development budgets in order not to reduce the quality of its planning and development. Asked about his meeting with IMF (International Monetary Fund) Executive Director Rodrigo de Rato, the president said the IMF executive had not come to Indonesia to offer new loans. “The government is no longer thinking of obtaining loans from the IMF and other institutions,” he said. “We have to start reducing our external loans to make our budget more healthy and to bring our debt-to-GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. (Gross Domestic Product) ratio back to the normal level,” he said. Established in 1992, the CGI is a consortium of countries and institutions providing loans to Indonesia. It was formed to replace the Inter-Governmental Group on Indonesia (IGGI). CGI membership is made up of 30 bilateral and multilateral creditors, including the World Bank, the Asian Development Bank, the International Monetary Fund and industrialized countries such as Japan, the United States and the United Kingdom. It also includes Australia, Austria, Canada, Denmark, Finland, France, Germany, Italy, South Korea, the Netherlands, New Zealand, Norway, Spain, Sweden and Switzeland. Other international lending orgnizations in CGI are the Asian Development Bank, the European Investment, the European Commission, the International Finance Corporation, the International Fund for Agricultural Development, the Islamic Development Bank, the Kuwait Fund for Arab Economic Development, the Nordic Investment Bank, the Organization for Economic Cooperation & Development, the Saudi Fund for Development, the United Nations Children`s Fund and the United Nations Development Program.

(*)Copyright © 2006 ANTARA January 24, 2007 21:50
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Indonesia no longer needs loans from West, president says

Jakarta (ANTARA News) - Indonesia no longer needs help from its main group of Western donors and will rely more on its own funding for development plans, President Susilo Bambang Yudhoyono said Wednesday. The Consultative Group on Indonesia, a World Bank-chaired group of the country’s main Western donors, last year pledged 5.4 billion dollars in fresh loans and grants for Southeast Asia’s largest economy. “Indonesia no longer needs the CGI,” Yudhoyono told journalists at the palace after receiving visiting International Monetary Fund managing director Rodrigo Rato. “I deem it necessary to end the format which we know as the CGI forum... in this year of 2007, I declare that there is no longer a need for the existence of the CGI forum as before,” he added. The CGI comprises 21 donor countries and 11 multilateral donors. The major donors are the World Bank, the Asian Development Bank and Japan. Yudhoyono’s announcement came after Indonesia last year cleared its debt with the IMF. “We can now already overcome all this and there should no longer be an involvement of assistance from the CGI,” he was quoted by AFP as saying. “We are not thinking and not planning to seek new loans, loans from the IMF or other institutions, which we deem should already be reduced,” he said. Yudhoyono said the decision made it the responsibility of the Indonesian people to determine the targets of development and their funding.

(*) Copyright © 2006 ANTARA January 25, 2007 8:26
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CGI liquidation expected to strengthen independence

Jakarta (ANTARA News) - The decision by President Susilo Bambang Yudhoyono to dissolve the Consultative Group on Indonesia (CGI) was expected to be a step to strengthen Indonesia`s independence in formulating economic strategy and policies, a former minister said. “After more than 40 years since early in the New Order era, Indonesia was too dependent on the CGI formerly known as the IGGI (the Inter Governmental Group on Indonbesia). Practically, the consortium of creditors served as a cartel which forced Indonesia to follow the former`s economic policies for the creditors` interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. ,” former finance minister Rizal Ramli said here Thursday. According to the economic expert who strongly opposed the CGI, it was no guarantee that the creditor countries` interest could meet the interest of Indonesia and the people. Thus, he added, Indonesia was unable to become a big country in Asia because it was the consortium of the creditor countries which dictated and formulated its economic policies. “In our experience, there was a member country of the consortium which only lent Indonesia US$100 million but frequently required a lot of conditions on economic, political and legal affairs among other things,” Ramli said. When he was a coordinating minister for economic affairs, Ramli along with his team visited Europe and the United States only to convince the creditor countries that Indonesia needed more leniency in developing its economy without disrupting relations between the two sides. “However, the CGI served as a cartel that weakened Indonesia`s bargaining position that time,” he said. The creditor countries also often used the CGI as a means to force Indonesia to buy capital goods from them with prices higher than those on the international market, he said. In the new order era, President Soeharto liquidated the IGGI because among other reasons that the Netherlands showed dominant intervention in the forum, he said. “Unfortunately, Soeharto and his team entrusted the World Bank making it to play a greater role in formulating Indonesia`s economic policies,” the former minister said. In many cases, he noted, the borrowings from the World Bank and the CGI frequently obliged Indonesia to make laws and government regulations for the creditors` interest, not in favour of the country and the people. Among the laws were law on water privatization which obliged farmers to pay for water and law on privatization of state-owned companies, he cited. Thus, President Susilo Bambang Yudhoyono`s courageous measure to discharge in the hope the government would take other steps to make the national economythe CGI deserved a compliment more independent, he said.

(*) Copyright © 2006 ANTARA January 26, 2007