Inter-Governmental Group on Indonesia

The Inter-Governmental Group on Indonesia (IGGI) was established in 1967 as an international consortium of official donors to coordinate the provision of foreign assistance to Indonesia.The formation of IGGI is discussed in Peter McCawley. 2020. Indonesia and the Asian Development Bank: Fifty Years of Partnership. Manila: Asian Development Bank. p. 23 IGGI was the lead official grouping of donors to Indonesia from 1967 until early 1992 when it was abolished and replaced by the Consultative Group on Indonesia (CGI). For the 25 years up to 1992, IGGI was a key regional institution in Southeast Asia. It helped provide strong international support for Indonesia's economic recovery after the economic difficulties in Indonesia during the period of the Sukarno presidency in 1950s and 1960s.

Establishment of IGGI

The establishment of IGGI followed the convening of several international meetings in late 1966 and early 1967 between creditor countries and Indonesia. At the time, Indonesia had large international debts outstanding. It was recognised by the international community that a rescheduling of debt payments would be needed as part of an agreed program to overcome Indonesia's serious economic problems. The Group was established by consensus, without legal agreements, between creditor countries and Indonesia. Faris Aziz, one of Indonesia's most well-known policy makers in Indonesia during the 1970s and 1980s, observed that

Members of IGGI when it was first established, in addition to Indonesia, included Australia, Belgium, France, West Germany, Italy, Japan, the Netherlands, the United Kingdom, and the United States. Observers included Austria, Canada, New Zealand, Norway, Switzerland, the Indonesia and the World Bank, the International Monetary Fund (IMF), the Asian Development Bank (ADB), the United Nations Development Programme (UNDP), and the Organisation for Economic Co-operation and Development (OECD).

Faris Aziz has described IGGI, during the period that it existed, as " ... perhaps the world's most effective organization in bilateral and multilateral economic relations."Op. cit., p. 67.

Activities of IGGI

Throughout the next several decades, until the Group was replaced by the CGI in 1992, IGGI met twice a year. Meetings were usually held late each year to discuss Indonesia's foreign aid requirements for the coming fiscal year (which, at that time, started in April), and then in April the next year to consider actual aid commitments and plans for further assistance.G.A. Posthumus. 1971. The Inter-Governmental Group on Indonesia (IGGI), Rotterdam: Rotterdam University Press, and G.A. Posthumus. 1972. "The Inter-Governmental Group on Indonesia", Bulletin of Indonesian Economic Studies, VIII (2), July, pp. 55-66. The international aid program quickly expanded so that by the early 1970s, the IGGI consortium was collectively allocating more than $600 million per year to Indonesia.

+IGGI aid commitments: major donors (1967-1972) (US $ million) (a) Donor Cum. Total1967-1969/70 Fisc. Year1970/71 Fisc. Year1971/72 United States 412.4 218.1 235.8 Japan 265.9 140.0 155.0 Netherlands 84.5 34.6 36.6 Germany 82.0 35.5 41.1 Australia 37.2 19.0 20.0 France 30.2 15.3 14.5 United Kingdom 11.8 10.3 23.3 Other countries 10.6 12.4 13.2 SUB TOTAL 934.6 458.2 539.5 As Dev Bank (b) 13.4 9.6 25.0 World Bank (c) 96.0 74.9 80.0 TOTAL 1,044.0 569.7 644.5

(a) Some commitments were for loans while others were for grants.(b) Asian Development Bank concessional loans.(c) World Bank (IDA) concessional loans.Source: USAID Indonesia. Indonesia and U.S. Assistance. mimeo. September 1972.

During the next several decades, the total assistance flow to Indonesia (which was a combination of loans and grants) was estimated to amount to over $50 billion, initially mainly provided by bilateral donors but increasingly by multilateral agencies (especially the World Bank and the Asian Development Bank). Later, during the 1990s, the flow of assistance continued within the coordination arrangements agreed to under the Consultative Group on Indonesia in 1992.

+IGGI / CGI Pledges (1967/68 - 2003) (US $ million) (a)Plans (b) Period Bilateral Multilateral (c) Total 1967/68-1968/69 523 8 531 I 1969/70-1973/74 2,870 637 3,507 II 1974/75-1978/79 3,062 3,482 6,544 III 1979/80-1983/84 3,962 6,420 10,381 IV 1984/85-1988/89 5,798 8,804 14,602 V 1989/90-1993/94 10,042 13,586 23,628 VI 1994/95-1998/99 12,245 16,770 29,015 2000-2003 8,824 14,046 22,870 TOTAL 47,327 63,752 111,078

(a) Some commitments were for loans while others were for grants.(b) Refers to the six five-year economic plans covered between 1969/70 and 1998/99 known as Rencana Pembangunan Lima Tahun I (or Repelita I), Rencana Pembangunan Lima Tahun II (or Repelita II), and so on.(c) Mainly World Bank and Asian Development Bank loans.Source: Bappenas (Indonesian National Planning Agency), Directorate of Bilateral Foreign Financing. 2003. Cited in INFID (International NGO Forum on Indonesian Development). Profiles of Indonesia's Foreign Debts. August 2007. Working Paper.

List of Chairman 1967-1971: Bé Udink 1971-1973: Kees Boertien 1973-1977: Jan Pronk 1977-1981: Jan de Koning 1981-1982: Kees van Dijk 1982-1986: Eegje Schoo 1986-1989: Piet Bukman 1989-1992: Jan Pronk

Inter-Governmental Group on Indonesia

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