Jakarta (ANTARA News) - Economic affairs observer Aviliani said the foreign debts of Indonesia`s private sector had now become cause for alarm as they may have reached 20 percent of the gross domestic product (GNP).
"The government`s foreign debts have decreased but those of the private sector showed the reverse and estimated to reach 20 percent of the GNP," Aviliani said during a discussion on optimizing foreign debts here over the weekend.
He said that ideally the foreign loans of the private sector should be less than 20 percent of the GNP, adding that excessive debts by private businesses would generate a second wave of economic crisis, particularly if the rupiah value against the US dollar slid.
"When the rupiah is weakening and businesspeople could not pay their debts, a default would occur as in 1998. Therefore, Bank Indonesia (BI), the central bank, needs to get down to the fields to make an inventory of the private sector`s debts," he said.
He said that it was quite possible that a crisis would happen if the government failed to pay serious attention to the private sector`s foreign debts.
Aviliani said that if there was no data on the foreign loans of the private sector, BI could not make any decision when it should start releasing or tighteing its foreign exchange reserves.
He said that at the present level, Indonesia did not need foreign loans because the position of public savings had already reached 27 percent of its GDP.
"From the investment point of view there is a surplus because it reaches 22 percent of the GDP," he said, adding that Indonesia actually could utilize its domestic funds and did not need overseas loans.
Deputy Chairman for Funding Affairs of the National Development Planning Board, Lukita D. Tuwo said that in 1997 the amount of the private sector`s foreign loans was high and most of which was used to finance the property sector.
"To anticipate the recurring of crisis, the amount of foreign debts and their use must be monitored. Attention must be paid to this and its reporting system must also be handled well," he added.