Press Statement by Sven Sandstrom, Managing Director, The World Bank

JAKARTA, June 29, 1999. I am pleased to meet with the members of the press this afternoon and give you an overview of my four-day visit to Indonesia. I came to Indonesia to meet with members of government, political parties, civil society, and the private sector to hear their views on the challenges facing Indonesia and how donors, such as the World Bank and members of the Consultative Group for Indonesia (CGI), can help.

I had very productive meetings with leaders of the main political parties to discuss the issues they will need to tackle in the next government and the overall macroeconomic and structural reform program for Indonesia. There was agreement that while the reforms, and a peaceful election, seem to have signaled a return of confidence, and with it, signs of recovery; that the situation remains fragile. The reform program needs to be continued, and in some cases sped up.

I then met with President Habibie, Minister Ginandjar, and the government’s economic team to discuss the progress that Indonesia has made in the past year, and areas that needed greater attention. We discussed budget needs for both this current fiscal year and the next fiscal year, and agreed to study the issue in much greater detail—along with the IMF and ADB—in order to reach a figure for estimated financing needs in time for the next meeting of the Consultative Group for Indonesia (CGI).

Finally, today I met with the Jakarta-based members of the CGI group to discuss our plans for holding the next meeting of the Consultative Group for Indonesia in Paris. Donors were in agreement that the next CGI meeting be held on July 27-28, citing the need to provide continuity in a time of political transition, to confirm the direction of policy reform, and to develop a budget framework and financial requirements so that the new government can inherit a sound platform in six months. We also agreed on a preliminary agenda for the CGI meeting, which will focus on the reform program—including tackling corruption—and on related financing needs.

 

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