APSN Banner

How Jakarta won $9 Billion from a den of hesitant donors

Source
Sydney Morning Herald - October 21, 2000

Michael Millett, Tokyo – The Australian official shrugged his shoulders: "Do you penalise a whole country for the activities of a bunch of thugs?"

That question hung heavily over this week's international donor conference in Tokyo to determine what financial relief should be extended to Indonesia to help prop up its struggling economy over the next year. The answer was clearly "no".

The high-powered Indonesian delegation walked away from the two-day gathering with exactly what it had sought – $A9.2 billion in pledges from an array of rich nations and world institutions.

But even some of those coughing up the funds later admitted to a sense of dissatisfaction over the machinations and the result. They also conceded the talks had done little to devise a template for further aid talks, leaving unresolved the issue of exactly how much leverage should be used by donor countries to force concessions and/or reforms from intended recipients.

It was the inept handling of the West Timor militia issue by the administration of Indonesia's President Abdurrahman Wahid that made this week's Consultative Group on Indonesia (CGI) meeting such an important case study. The Government's unwillingness or inability to control the pro-Jakarta militia operating within West Timor culminated in the murder on September 6 of three unarmed United Nations workers at Atambua.

The resultant international outrage saw at least two pivotal bodies, the United States Government and the World Bank, directly link the looming CGI talks with Jakarta's human rights performance.

The message was clear: Indonesia risked its hold on the promised funds if it did not move quickly to clean up the situation in West Timor. That meant disarming the militia, bringing the perpetrators of the Atambua murders to justice and vastly improving the lot of the refugees living in the squalid border camps.

While the Government has responded by dropping its opposition to a UN investigation and making some efforts to rein in the militia, many charge that it is a case of too little, too late. West Timor also brought into sharp relief the Government's other failings. Critics claim it has fallen short of its commitments to safeguard human rights in outlying provinces.

The Government also stands accused of backsliding on its economic reform pledges and on its promises to clean up environmental problems, such as the huge amount of illegal logging still taking place in its national parks.

The Tokyo meeting shaped up as a perfect opportunity for the international community to use its financial leverage to push Jakarta back on the reform path. Delegates maintain that leverage was exerted – both in backroom talks in the conference lead-up and during the CGI meeting itself. "Indonesia was given a clear message that its performance would have to improve on a whole range of issues – not just West Timor," one official said.

Australia even made the firm link between future aid and the Timor issue in its opening statement, emphasising the need for "continuing and successful Indonesian endeavours to restore security" to the region. "There must be no more Atambuas," AusAID's director-general, Mr Bruce Davis, said. "The international community's commitment to Indonesia and confidence in it as an investment destination will inevitably be influenced by Indonesia's success in resolving these outstanding problems."

Other nations hammered the point. But sources said a tacit agreement had been reached early on that it would be counter-productive to push too hard. Attaching precise riders to the donor pledges would not be used as a tactic.

One motive was to ensure a united front. While the US and some European nations had urged a stronger public stand, Japan, as host and Indonesia's bigger investor, took a more moderate stance.

Australian officials said that while there were differing shades of emphasis, the general assessment was that penalising Indonesia financially would achieve little. "It is not the best way to approach Indonesia. It would inflame nationalist sentiment and most likely make life even harder for Gus Dur [Mr Wahid's nickname]," one official said.

"You have also got to be careful before you penalise a whole country for the activities of what are a bunch of thugs." While conceding that the Wahid Government has fallen well short of performance targets, officials believe it deserves some sympathy.

Country