Japanese Aid in Indonesia
The government of Japan takes exception to Karl Schoenberger’s article on Japanese aid to Indonesia (June 9). The author criticizes Japan’s aid to Indonesia as aimed at benefiting Japanese companies rather than assisting the Indonesians to develop their economy and society, with specific reference to the Asahan project.
Japan has been vigorously implementing the principle of “untied” ODA (official development assistance) loans since 1978. In Indonesia, all projects financed with Japan’s ODA loans are open to bidders of all countries. Recent data show that as a result of open and competitive bidding, about 20% of total contract value went to Indonesian local companies, and about 40% went to non-Japanese firms, including those of Europe and America, with only the remainder going to Japanese firms.
During the past four years, about $3 billion has been lent in untied program loans which have not only supported Indonesia for its import requirement, but also provided Indonesia currency for badly needed small-scale local projects. The material and equipment necessary for these projects have been procured at the local level, and have nothing to do with Japanese commercial firms.
With regard to the Asahan project, the article says that nearly all of the 2,600 jobs created by the project are filled by workers imported from Java, rather than local labor. In fact, of 2,600 workers, only about 110 are not local.
Benefits of the Asahan project to the local population include, but are not limited to: a network of access roads, a maximum of 50,000 kilowatt/hours of power that may be provided for local use, 14,000 local jobs for construction over several years, and technology transferred to local industries. Also, housing, medical services, schools and sports facilities have been provided in a joint venture by PT Inalum, which is also paying the Indonesian government $5 million-$7 million in annual fees (for water use), which is being spent on local development and social welfare.
The people of the region have, and will continue to, enjoy the fruits of regional development through Japan’s economic assistance.
KOICHI HARAGUCHI, Consul General of Japan, Los Angeles
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