Austere budget signaled<\/p>\n
JAKARTA (JP): President Soeharto, signaling an austere 1995-96
\nstate budget, instructed all ministers and senior officials yesterday
\nto increase efficiency, generate more revenues and intensify
\nsupervision next year.<\/p>\n
\"The President said that the 1995-96 budget is going to be
\nlimited, but with hard work we can still make a lot of progress,\"
\nMinister of Information Harmoko told reporters after an annual
\nplenary cabinet meeting at the State Secretariat here.<\/p>\n
The three-hour meeting was attended by Vice President Try
\nSutrisno, all of the cabinet members, first echelon officials,
\nChairman of the Supreme Advisory Board Sudomo, Chairman of the
\nSupreme Audit Agency J.B. Sumarlin, Chief Justice Soerjono and Head
\nof the National Intelligence Agency Soedibyo.<\/p>\n
Soeharto is scheduled to deliver a proposal on the 1995-96 state
\nbudget plan to the House of Representatives on Jan. 5 for
\ndeliberations prior to its implementation on April 1.<\/p>\n
The 1994-95 state budget is expected to increase by 11.9 percent
\nto Rp 69.74 trillion (US$31.7 billion) over the previous fiscal year.<\/p>\n
\"The President also said that due to the limitation of the
\nbudget, the government is compelled to adopt strong budgetary
\ndisciplines and must be able to account for the utilization of
\nfunds,\" Harmoko said.<\/p>\n
The minister also cited the President's warnings to all
\nministers not to use funds from state-owned firms to finance their
\nprograms next year.<\/p>\n
Revenue<\/p>\n
Soeharto also stated that the government will make \"a maximum
\neffort\" to increase state revenues from taxes and other non-oil
\nsources next fiscal year.<\/p>\n
Under the 1994-95 budget plan, tax revenues are projected to
\nincrease by 18.4 percent to about Rp 40 trillion, which will
\nconstitute about 70 percent of the government's total revenues.<\/p>\n
Harmoko said the President also ordered Minister of Finance
\nMar'ie Muhammad in the meeting to continue the privatization process
\nfor the state firms.<\/p>\n
\"The government wants to offer more shares of state-owned
\ncompanies to foreign investors,\" the Minister added.<\/p>\n
He also said that the President was impressed with the success
\nof PT Indosat, a state telecommunication firm, which managed to list
\nits shares on the New York Stock Exchange (NYSE) earlier this year.<\/p>\n
Indosat, the provider of international telecommunication
\nservices, raised $799 million from the sales of 25 percent of its
\nordinary shares in October and around $297 million (Rp 650 billion)
\nfrom the sales of another 10 percent of its shares on the local
\ncapital market.<\/p>\n
All of the $799 million will be used to repay the government's
\nloans from the World Bank and the Asian Development Bank.<\/p>\n
Another state telecommunication firm, PT Telkom, is currently
\nbeing prepared to follow Indosat's path to the international capital
\nmarket.<\/p>\n
\"This is why state firms must continue to strive for excellence
\nand efficiency,\" cited Harmoko.<\/p>\n
The \"go international\" move of state firms, Harmoko said, is one
\nway in lessening the country's dependence on oil and gas.<\/p>\n
In the 1994-95 budget, the government calculates its revenues of
\nRp 12.85 trillion from oil and gas on the basis of an average oil
\nprice of $16 per barrel.<\/p>\n
\"The development of oil price on the international market is too
\nvolatile,\" the minister quoted the President as saying.<\/p>\n
Harmoko also cited that the government will prioritize foreign
\naid without political ties in the 1995-96 fiscal year.<\/p>\n
In the current budget, foreign aid is expected to reach Rp 10.01
\ntrillion or about 4.8 percent of the budget.<\/p>\n
The government's outstanding foreign debt fell by almost $3
\nbillion to $56.6 billion as of the end of September from $59.46
\nbillion at the end of June.<\/p>\n
Soeharto also said that efforts to generate foreign exchange
\nrevenues must be stepped up to support the country's balance of
\npayments and to finance development in general.<\/p>\n
Efficiency<\/p>\n
On government spending, Soeharto ordered that it must be
\nconducted under the highest efficiency and most prudent principles
\nand should be dedicated to the best public service, Harmoko said.<\/p>\n
The President also reminded government offices to tighten their
\nbelts. \"This is why workshops and seminars should be carried out
\nwithin the premises of the offices,\" Harmoko quoted the President as
\nsaying.<\/p>\n
Overseas trips and ceremonial expenditures should also be
\nminimized, he added.<\/p>\n
On development spending, the President already outruled the
\nconstruction of new buildings for all government offices, both for
\nthose in the capital or in the provinces.<\/p>\n
Soeharto has ordered the Head of the National Development
\nPlanning Board, the Minister\/State Secretary and the Minister of
\nFinance to coordinate their efforts to control \"everything that
\ninvolves government buildings.\"<\/p>\n
He explained that the main priorities for development
\nexpenditures are to continue the construction of projects already
\nstarted from previous periods and to extend maintenance funds for the
\nexisting projects.<\/p>\n
The President also promised an increase in spending for rural
\ndevelopment programs, including the Inpres Desa Tertinggal (IDT)
\nscheme especially designed for least developed villages.<\/p>\n
Official data show that the IDT scheme currently provides a
\nsubsidy of Rp 20 million for each of 20,000 least developed villages.<\/p>\n
According to Harmoko, the President regarded this year's
\ndevelopment supervision as having been generally carried out well.<\/p>\n
Soeharto, however, has specifically instructed the Minister of
\nFinance and the Governor of Bank Indonesia, the central bank, to step
\nup supervision to \"scrutinize state bank credits used by the private
\nsector\" and on the uses of export-credit facilities.<\/p>\n
Indonesia was rocked by bad debt scandals in state-owned banks
\nand bogus export scams this year.<\/p>\n
The President, while stressing the importance of competitive
\nbidding procedures, also appealed to the private sector not to mark
\nup their projects because it will hamper the country's
\ncompetitiveness and its efforts to distribute its wealth more
\nequitably. (hdj)<\/p>",
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