In a surprise statement on Wednesday, 24 January, - only hours after meeting the International Monetary Fund (IMF) delegation led by Managing Director Rodrigo de Rato, - President Yudhoyono announced at the Palace that Indonesia will discontinue meeting donor countries grouped in the Consultative Group on Indonesia (CGI) starting immediately this year 2007. For the past 15 years Indonesia was obliged to explain its development plans to CGI for assessment and criticism by the Group, reports Suhartono for the Kompas daily.

"I think (we) need to end the CGI forum in 2007. CGI is no longer needed," Yudhoyono was quoted by Antara news agency as saying, as reported by the Jakarta Post.
The Annual CGI meeting, which comprises 32 members including the International Monetary Fund (IMF) and the governments of Japan and the U.S., were used to brief lenders on Indonesia’s economic agenda and borrowing needs.
According to President Yudhoyono, Indonesia is currently capable of handling its foreign debt without involving the lenders group.
"It is important for us to be more independent in drafting our development plan," he said, further adding that Indonesia will also steadily cut its foreign debt in order to create a healthier state budget”.
The CGI was established in 1992 to replace the Inter-Governmental Group on Indonesia, or IGGI, which was formed in 1967 to help the country resolve its overseas debt. The IGGI was led by the Netherlands, while the CGI is chaired by the World Bank and Indonesia.
The Kompas daily further reported the President as stating that: "We have been able to do all that (drafting the national development plan and clearing debts with IMF) without involving CGI. Last year, we already changed the format of the meeting, to be different from former years”.
While, in connection with the meeting with the IMF delegation, the President confirmed that Indonesia will no longer ask for loans from any institution including IMF.  Yudhoyono also asked that the call on the President by the IMF delegation not be misinterpreted by the media as though the government plans to ask for more loans from IMF. The arrival of the IMF delegation at the Palace had elicited protests and demonstrations.
 ”We have no intention to be in debt again with the IMF”, said the President after his meeting with IMF Director Redrigodo Rato, at which were also present Coordinating Minister for the Economy Boediono, Bank Indonesia Governor Burhanuddin Abdullah, Finance Minister Sri Mulyani Indrawati and Minister for National Planning/Head of the National Planning Board, Paskah Suzetta. 
"Since Indonesia has cleared all debts with IMF, Indonesia has become an equal partner of the organization. This situation differs from times previously when we were still in debt. This means that we must be more self-reliant, and that we must plan our own financial needs to meet our own targets” said the President. 
The IMF delegation came to Indonesia to express the organization’s appreciation that Indonesia had repaid all debts last year, which debt was supposed to be cleared by 2010 only. In October 2006, the government and Bank Indonesia paid out the last installment of  US Dollars 7.8 billion debts to IMF.
With the closure of the CGI meetings, President Yudhoyono urges that the planning of the national budget be done more meticulously and more prudently. The President similarly instructed all government agencies at national, provincial and district levels to form their individual development plans to aim at attaining the correct targets, and in accordance to such priorities as set in the National Budget for 2007.
Indonesia’s Development to depend less on Foreign Debts
Bloomberg explained that Indonesia, which under former President Suharto's 32-year rule depended mainly on overseas loans and aid to fund its budget deficit, began selling debt locally in 2002, reducing the need for borrowing from government and multilateral institutions. The government had $77 billion of overseas debt.
The country's central bank in October paid IMF loans four years ahead of schedule. The Washington-based institution had arranged a $25 billion package between 1997 and 2003 to help rescue Indonesia's banking system and rehabilitate the economy by restructuring private and government debt after the 1997 Asian financial crisis.
Apart from the IMF, the other creditors include the Asian Development Bank, which has $11 billion of loans outstanding, while Indonesia owes the World Bank about $8.8 billion.
“There are only three important creditors: Japan, ADB and the World Bank,'' Finance Minister Sri Mulyani Indrawati said in Jakarta. “It's better if we talk bilaterally with them, so we can hear their concern directly on a one-on-one basis,'' she said. “And we don't have to hear any concern from other countries that have often been not relevant.''
Asian governments had complained about the IMF's handling of the Asian crisis. In return for aid, the IMF asked governments to cut spending, raise interest rates and sell state-owned companies. The IMF arranged about $100 billion to bail out Thailand, Indonesia and South Korea. 
Critics, including Nobel laureate and former World Bank chief economist Joseph Stiglitz, said IMF's policies needlessly deepened the region's recession. Thailand in 2003 made the last payment of the $12.3 billion it drew from the IMF.
“Indonesia has been building on important efforts in the past few years. Part of those efforts were the programs of the IMF,'' the Fund's Managing Director Rodrigo de Rato said at a briefing in Jakarta. “I think those programs were useful at that time. But right now Indonesia is in another situation, and in a more healthy one,'' reported Karima Anjani and Wahyudi Soeriaatmadja for Bloomberg.
(Sources: Kompas, Bisnis Indonesia, Jakarta Post, Bloomberg)    (Tuti Sunario)