Mid-term CGI meeting 2004: is transition period the beginning of reform?

Down to Earth No 62  August 2004

The 2004 CGI mid-year review meeting went almost unnoticed, as the country was in the final run up to Indonesia's first direct presidential election.

The meeting of Indonesia's main creditors, grouped in the Consultative Group on Indonesia (CGI) was held in Jakarta on June 2, 2004. It highlighted the introduction of the Indonesian government's Transition Plan: a policy continuity to ensure a smooth shift between the current government and the next one. The Transition Plan is a medium term development agenda for the period of 2006 to 2010. Its main objectives are (1) pushing reform in democracy and political institutions, (2) improving the wellbeing of Indonesia's people through economic development and growth and (3) strengthening the unity and integrity of Indonesia through conflict resolution, national reconciliation and more effective regional autonomy.

While congratulating the government of Indonesia on economic progress, the meeting urged Indonesia to improve investment climate and to take stronger action in poverty reduction.

INFID wants pro-poor policy
In the meeting, the Indonesian NGO Forum on Indonesian Development (INFID), representing Indonesian civil society, reiterated its call to re-examine the existence and role of the CGI. This drew attention to the review of the CGI by carried out by the National Development Planning agency (Bappenas), in November 2003. One recommendation was the move from a donor-led CGI towards an Indonesia-led CGI, in order that the country should genuinely own its development agenda. Concerns that the CGI is donor-driven have been repeatedly raised by civil society groups. Donors are seen as only interested in improving the investment climate and boosting the commercial sector.

INFID also calls CGI to ensure that its decisions furthered Indonesia's progress towards the global Millennium Development Goals (MDGs) set by the UN. Despite all the rhetoric, a coherent pro-poor macro economy policy remains to be seen. It is timely for the CGI to revisit Indonesia's debt burden and its impact on the poor - who number over 50% of the population.

INFID also called on CGI member countries to commit themselves to MDG 8 - to allocate 0.7% of their respective annual GDP for funding their overseas development assistance activities.

Certainly, one of the biggest challenges for the new government of Indonesia will be the implementation of good governance, with combating corruption and nepotism as the prime focus. None of the three post-Suharto governments has demonstrated any convincing efforts to eradicate systemic and extensive corruption.

The next CGI meeting may see some new faces among the Indonesian delegation; maybe not. As change often has to be fought for, the Indonesian delegation also shares the responsibility of reform in the CGI. How much longer can Indonesia afford a status-quo CGI?

(Sources: CGI Mid-Year Review Meeting, June 2, 2004, see web.worldbank.org/; INFID's comment on the Mid-term CGI Statement June 2nd, 2004 about PRSP; GoI & WB Press Release:CGI welcomes progress on the White Papers, but urges stronger actions to boost investment and tackle poverty.)