Jokowi Calls on Asian-African Countries to Ditch IMF, World Bank
23 April 2015 11:50 WIB
TEMPO.CO, Jakarta – The market has responded positively to President Joko “Jokowi” Widodo’s call for Asian-African countries not to rely on international monetary institutions.
“The point is, [we] want to be independent in realizing economic sovereignty,” Enny Sri Hartati, an economist from the Institute for Development of Economics and Finance, told Tempo on Wednesday, April 22, 2015.
During a speech at the 60th Asia Africa Conference yesterday, Jokowi called on the third world countries not to be dependent on monetary institutions, such as the International Monetary Fund (IMF), the World Bank, and the Asian Development Bank (ADB). According to Enny, Jokowi’s statement indicated that Indonesia and other countries must be equal to those institutions.
“We need to improve our bargaining power with the institutions so that it will be beneficial to all parties. In addition, there are other sources of foreign debts,” Enny said.
David Sumual, the chief economist of Bank Central Asia (BCA), viewed that Jokowi’s statement emphasized that there were other institutions to obtain foreign debts from.
“[The government] can mull cooperation with the Islamic Development Bank and commercial banks,” David said, adding that the government could improve its bargaining power by deciding loans with the lowest interest rate.
Yuri O. Thamrin, the director general for Asia and Africa at the Foreign Affairs Minstry, predicted that the fund needed to finance infrastructure projects in Asia-Pacific region would stood at US$8 trillion—an amount neither the World Bank, the IMF nor the IDB would be able to cover,
Therefore, Yuri added, the Asian Infrastructure Investment Bank initiated by China would be the most feasible solution.
“European Union Countries are even interested in working with the institution,” Yuri said.
By February 2015, Indonesia’s foreign debt reached US$289.9 billion, comprising US$30.14 billion in foreign debts and US$23.3 billion from international organizations. The central bank’s foreign exchange debt stood at US$5.48 billion, comprising US$2.8 billion from the IMF, US$223 million from creditor countries and US$2.46 billion from other sources.
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