VIVAnews - The Japanese government, through the Japan Bank for International Cooperation (JBIC), is believed as stepping up pressure on Indonesia to receive loans as an attempt to finance electricity infrastructure in Indonesia.
According to economic and political observer Ichsanuddin Noorsy, JBIC is offering investment fund that is worth higher than the ones offered by other parties.
“The loans from donor countries, including from JBIC, although they are considered soft loans, are actually deemed inducement. Most loans from the creditors, both for projects and programs, with strict requirements are binding and difficult,” Noorsy said in Jakarta on January 24.
He also said donors like JBIC always assign their people in power hub to smooth their business. JBIC certainly plays the important role of lobbying the donors to fund economic projects.
“Such governmental intervention is often used to protect Japanese industrialists from the obligation of participating in free competitions in developing countries. That’s why, infrastructure development budget offered by foreign parties, including JBIC, is always relatively higher,” Noorsy said.
On the other hand, foreign fund usage has the potential of consuming state finance. Project PLTA Asahan 3 could also go beyond the budget if it is funded by JBIC. Noorsy also said he had analyzed PLTA Asahan 1 and 2 projects. “Japan did everything. PT Inalum was also there. They also did overpricing but the government wasn’t able to do anything about it,” he said.
Meanwhile, economic observer from Atmajaya University, A Prasetyantoko said most loans from Japan, especially the one from JBIC, are allocated to infrastructure projects because infrastructure is often considered governmental area which enables it to be influenced by government to government schemes (G to G). However, that is not what the government is supposed to do.
“G to G schemes are worth doing for infrastructure development in which private parties are not interested due to economic reasons. Meanwhile, in infrastructure development where private companies are interested, it’s better for the government to use public private partnership schemes,” he said.
He assumes the government could order State-Owned Enterprises to be on board and work together with credible private companies with strong funding ability.
He also thinks if the State Power Company (PLN) collaborates with credible private parties, the State Budget will not have to cover the debts. The government would also get cheaper and cost overrun-free investments.
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Translated by: Nataya Ermanti
