Indonesia calls them climate loans, but...

The Jakarta Post (Indonesia): It seems the government has developed a fondness for exploiting the hot topic of climate change to secure foreign loans, then channeling the money elsewhere -- and environmentalists want it to stop. Instead, if Indonesia wants fresh foreign funds, it should apply existing international mechanisms on emissions reductions, through which developing nations can get financial incentives from rich countries, Greenomics Indonesia says.

"There are no compelling reasons for Indonesia to seek foreign loans in the name of mitigating climate change. It really does not make sense," Greenomics executive director Elfian Effendi told The Jakarta Post on Friday. "The government must revoke its plans (to seek new foreign loans), or use existing mechanisms to get financial aid and technical assistance from wealthy nations."

Rahmat Waluyanto, director general of debt management at the Finance Ministry, said the government had received loans worth US$200 million from French financial institution Agence Francaise de Developpement and $300 million from the Japan Bank for International Cooperation -- all for climate change programs.

But that is not where the funds are headed. "The funds will go to the state budget," Rahmat said. That is, they will be used to cover the state budget deficit, forecast in the revised 2008 budget to reach Rp 94.5 trillion ($10.24 billion). He said the government expected to secure Rp 26.4 trillion in program loans this year…..

Indonesia map from the CIA World Factbook, Wikimedia Commons