The Inter-Governmental Group on Indonesia was established in 1967 as an international consortium of official donors to coordinate the provision of foreign assistance to Indonesia. 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. 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. Radius Prawiro, 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, the Asian Development Bank, the United Nations Development Programme, and the Organisation for Economic Co-operation and Development. Prawiro has described IGGI, during the period that it existed, as "... perhaps the world's most effective organization in bilateral and multilateral economic relations."
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, and then in April the next year to consider actual aid commitments and plans for further assistance. 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.
Some commitments were for loans while others were for grants. Asian Development Bank concessional loans. World Bank concessional loans. Source: USAID Indonesia. . mimeo. September 1972. During the next several decades, the total assistance flow to Indonesia was estimated to amount to over $50 billion, initially mainly provided by bilateral donors but increasingly by multilateral agencies. Later, during the 1990s, the flow of assistance continued within the coordination arrangements agreed to under the Consultative Group on Indonesia in 1992.
Plans
Period
Bilateral
Multilateral
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
Some commitments were for loans while others were for grants. Refers to the six five-year economic plans covered between 1969/70 and 1998/99 known as Rencana Pembangunan Lima Tahun I, Rencana Pembangunan Lima Tahun II, and so on. Mainly World Bank and Asian Development Bank loans. Source: Bappenas, Directorate of Bilateral Foreign Financing. 2003. Cited in INFID. . August 2007. Working Paper.
