INFID Statement o­n occasion of the Jakarta Conference o­n the Tsunami Disaster Relief Co-ordination, January 6, 2005

An unprecedented disaster has stricken many countries bordering the Indian Ocean. The country most severely affected by this catastrophe is Indonesia where the Northern parts of the islands of Sumatra and the islands off its Western coast where directly hit. Some countries in the North have suggested a debt moratorium to assist the countries stricken by this disaster to open financial space for a quick response to the most urgent needs. The International NGO Forum o­n Indonesian Development (INFID) is welcoming this effort to address the needs of the countries and their population, because such a debt moratorium will increase the amount of immediately available funds. More importantly, however, it will open the necessary breathing space for a sustainable mid-term and long- term solution that can contribute to the recovery and stabilisation of the otherwise feeble and vulnerable economy of Indonesia.

The breathing space created by this debt moratorium should be used to undertake two closely interrelated efforts: Those countries interested in a sustainable and long-term solution should — in close co-operation with the Government of Indonesia — convene an International Debt Conference. The United Nations who have committed themselves to the Monterey Consensus that is asking for a “new and orderly debt work out” should sponsor this convention. The conference should discuss the all the debts Indonesia currently owes to its various creditors. These should include all bilateral and multilateral debts as well as all private and sovereign debt. The negotiations of this conference should be guided by the Millennium Development Goals (MDG) and be based o­n the principle of sustainability of debt payment. The necessary research and calculations of Indonesia's financial needs to achieve the MDG for its country under the prevailing conditions after the tsunami- disaster should be provided by an independent institution that is not affiliated with either the party of the creditors or with the debtor. The United Nations Development Program (UNDP) is presently preparing the conduct of such a research for Indonesia and is therefore a well-suited body to perform this task in terms of timing, available resources, and institutional independence. Therefore United Nations should lend it full support to this effort.

As the result of such a conference Indonesia should have the necessary funds for the short term reconstruction after the tsunami- disaster at its disposal and should be able to fulfil its long-term commitments to the MDG without neglecting other contractual obligations. However, any repayment of debt (principal and interest) must be subordinated to the fulfilment of these goals.

Ivan A. Hadar (INFID Executive Director)