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| World Bank executive director Sri Mulyani Indrawati greeted President Susilo Bambang Yudhoyono, her former boss, during their meeting at the State Palace in Jakarta on Friday. (EPA Photo/Bagus Indahono) |
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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.
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