Indonesia
- Total external debt: $141 billion
- Total external debt payments: Indonesia gives $20 billion each year to the rich world in debt payments.
- UK debt: Indonesia owes around £750 million to the UK
- Population: 218 million
- Poverty: Around half of all Indonesians, more than 100 million people, live on less than $2 a day.*
- Percentage of adults who can read and write: 88%
- Average life expectancy: 67
- Total health spending: $1.5 billion a year*
(All statistics are from 2004, except * are from 2006)
DROP THE DEBT FAST
Indonesia is the focus of the Drop the Debt Fast on Tuesday 6 May. On this day in 1998 riots broke out in Indonesia in reaction to IMF reforms and the economic crisis.
Where did Indonesia's debt come from?
Indonesia's former dictator General Suharto borrowed heavily from the time he seized power in 1967 until his fall in 1998. Rich country creditors were keen to fund Suharto, an avowed 'anti-communist', even though his extensive corruption and brutal oppression were well-documented. The World Bank lent the Suharto regime approximately $30 billion during this time. Suharto is estimated to have stolen more from his country than any other leader in history: up to $35 billion.
Much of Indonesia's debt is paying off the cost of arms sales. The UK government insured large amounts of arms sales to Indonesia by British companies, even after evidence emerged that Suharto was using these weapons against unarmed Indonesians.
The Asian financial crisis of 1997 made it increasingly difficult for Indonesia to pay off its 'debts'. The rapid fall in the value of Indonesia's currency also meant that the debts (which have to be paid off in foreign currency like US dollars) became twice as expensive.
The Indonesian people are paying off this huge and illegitimate debt, almost entirely incurred through loans recklessly - or self-interestedly - given to a brutal and corrupt former dicator, at a rate of $56 million every day.
>> TAKE ACTION: DROP INDONESIA'S ARMS DEBTS
Debt cancellation status
Indonesia is officially classed as 'middle-income country' by the World Bank, as its average daily income per person is over $2.36. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative, nor for any additional assistance from the UK or other creditors.
What do campaigners say?
"Indonesia needs cancellation of its illegitimate and odious debt. World Bank President Paul Wolfowitz insists that one of the Bank's major goals is to fight corruption, both in recipient countries and within the World Bank. But we must remind the Bank once again that tackling corruption does not only involve looking at ongoing loans, but also recognising past corruption, and making recompense for it.... We believe that it is unfair for the people of Indonesia to keep paying and bearing the burden of debts, on loans which have never been beneficial to most people. We therefore demand that the World Bank cancel Indonesian debt, and in particular focus on odious and illegitimate debt by establishing an independent team to investigate projects funded during Suharto's reign."
Chris Wangkay, People's Alliance for Debt Cancellation, Indonesia
Last updated: April 2007
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