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ndonesia has signed a commitment with creditors which allows it to access project financing more easily without burdensome conditions.

Unlike other commitments, the so-called Jakarta Commitment, which was signed last week with 22 creditors, empowers Indonesia to lead all foreign-funded projects.

Previous funding commitments were often criticized as they normally contained burdensome terms and conditions imposed on the borrowing country.

Indonesia was represented by the National Development Planning Agency (Bappenas) deputy for development financing Lukita Dinarsyah Tuwo, the Finance Ministry director general of debt management Rahmat Waluyanto and the deputy Coordinating Minister for the Economy, in charge of economic cooperation and international financing, Mahendra Siregar.

Acting Coordinating Minister for the Economy Sri Mulyani Indrawati and Bappenas chairman Paskah Suzetta were also present.

Mulyani said Indonesia would no longer be dictated to by foreign creditors when borrowing money to conduct its projects following the signing of the commitment.

"Thus far, the borrowing country is in a lowly position, so it can find that there are many imposed terms and conditions. The Jakarta Commitment lays down a more equal position or (project) partnership," she said.

Lawmaker Harry Azhar Aziz said the commitment would benefit Indonesia as the country would now lead on all projects funded by foreign loans.

Japan is one of Indonesia's largest creditors. The Jakarta Commitment is expected to facilitate talks between the government and Japan regarding project financing.

The construction of the mass rapid transit (MRT), expected to solve traffic problems in Jakarta is funded by JICA. However, the 20-year-long planned construction has not even started due to a "miscommunication" between JICA and the Transportation Ministry.

If the Jakarta Commitment can simplify financing matters, then Jakartans may see the city MRT system sooner.

The commitment will also benefit Indonesia, which may face difficulties in selling bonds to plug the budget deficit.

In the 2009 budget, the government expects to secure Rp 52.2 trillion (US$4.69 billion) in foreign loans, while also issuing bonds of Rp 99.7 trillion.

It has talked with several creditors to raise up to $5.5 billion in standby loans to plug the budget deficit if the government raises less from bonds than expected.

The deficit is set at Rp 51.3 trillion in the 2009 budget. The government plans to raise the deficit to Rp 132 trillion to stimulate the economy amid the global crisis.

Indonesia has so far borrowed $51.77 billion from 22 creditors, $33.42 billion of which come from bilateral loans and the rest from multilateral loans.