Arientha Primanita &Markus Junianto Sihaloho
Visiting World Bank executive director Sri Mulyani Indrawati on Friday backed Indonesia’s $1 billion financial contribution to the International Monetary Fund through the purchase of IMF bonds.
Sri Mulyani, the former Indonesian finance minister, said that as an international financial institution, the IMF’s job was to safeguard economies from crisis and help countries overcome financial difficulties.
“To be able to do this, the IMF needs funds,” she said in Jakarta. “Therefore, Indonesia, which is part of the global community, has shown a willingness to play a role not only by participating in policy but also by providing resources.”
Indonesia’s $1 billion bond purchase will help the IMF deal with countries suffering from economic crises.
Sri Mulyani said the move demonstrated solidarity with the global community and showed Indonesia’s commitment to the stability of the world economy.
“I think this is a form of responsibility that has also been showed by other countries, not only those within the G-20. They also contributed to help maintain and create an effective insurance scheme so that the crisis does not worsen,” she said.
Sri Mulyani also said Indonesia’s role on the world stage had changed in line with the shifting roles of developing countries in helping safeguard the stability of the global economy.
Although middle-income countries only account for 30 percent of the world’s GDP, their contribution to economic growth is more than 60 percent, showing how key a role they play in ensuring the health of the global economy.
“And because of this, the role of middle-income countries in solving global problems becomes very important,” Sri Mulyani said after meeting with President Susilo Bambang Yudhoyono at the State Palace.
The World Bank, she said, sees Indonesia as a developing country with good economic growth and one that plays an important role in the region and the world. Indonesia, she added, could even become a model in development studies.
“When it comes to development, Indonesia is really rich in knowledge and experience. Whether something has been successful or not, it is always valuable to study,” she said.
Indonesia’s financial support to the IMF was criticized by scores of local politicians, who argued that the money should instead go toward alleviating domestic woes such as poverty and poor education.
Democratic Party lawmaker Achsanul Qosasih said on Friday that several members of the House of Representatives Commission XI, which oversees finance and banking, were seeking an explanation from Indonesian central bank executives.
“Bank Indonesia will be asked to provide an explanation to Commission XI because this is a strategic decision,” he said.
“The public needs to be enlightened as to what the benefits and advantages are, because Bank Indonesia is the one purchasing these bonds.”
Sri Mulyani said that the World Bank would continue to support Indonesia’s efforts to further develop its infrastructure, by providing monetary assistance and technical expertise.
“More important is to support the huge amount of funds needed to build good-quality infrastructure with good governance so they can last and become an investment that supports the equal distribution of development,” she said.
Finance Minister Agus Martowardojo said the government could only come up with 30 percent of the funds needed under Indonesia’s Master Plan for Expansion and Acceleration of Economic Development (MP3EI), and had to rely on other sources for financing.