Budget committee revises state budget plans<\/p>\n
JAKARTA (JP): The joint government-legislature state budget
\ncommittee agreed on Monday to revise several assumptions in the
\n2001 state budget draft.<\/p>\n
Legislator Aberson Marle Sihaloho, a member of the committee,
\nsaid the exchange rate of the rupiah had been revised to Rp 7,800
\nto the U.S. dollar compared to the initial assumption of Rp
\n7,300, and the oil price assumption had been changed to $24 per
\nbarrel from $22.<\/p>\n
"But this is still subject to final approval by the plenary
\nsession of the House of Representatives," Aberson said following
\na closed-door meeting of the committee.<\/p>\n
He said the plenary session was scheduled for Thursday.<\/p>\n
Aberson said the revision was made to reflect more "reality".<\/p>\n
The government proposed the state budget draft early in
\nOctober, but since then the rupiah has dropped to its current
\nlevel of about Rp 9,400 to the dollar.<\/p>\n
The local unit has fallen due to a combination of domestic
\npolitical uncertainty and external factors, including the
\nstrengthening of the dollar against other currencies in the
\nworld.<\/p>\n
The international oil price has also been hovering at more
\nthan $30 per barrel.<\/p>\n
Experts have also said the rupiah and oil price assumptions in
\nthe state budget draft were not realistic.<\/p>\n
Aberson said that members of the committee were also
\noptimistic that economic growth next year would reach 5 percent
\ncompared to the government assumption of 4.5 percent.<\/p>\n
He did not say whether an inflation assumption of 7 percent
\nand Bank Indonesia benchmark interest rate of 11 percent had also
\nbeen revised.<\/p>\n
Separately, deputy of the budget committee Abdullah Zainie
\nsaid the revision in the budget assumption would inflate the size
\nof the 2001 state budget to about Rp 300 trillion compared to the
\ninitial proposal of Rp 295 trillion.<\/p>\n
Elsewhere, Aberson said the committee had proposed to reduce
\nthe outstanding government bank recapitalization bonds by about
\nRp 20 trillion next year in a bid to lower the burden of the
\nstate budget in covering the interest rate of the bonds.<\/p>\n
"IBRA is still calculating," he said, referring to the
\nIndonesian Bank Restructuring Agency (IBRA).<\/p>\n
Aberson said that under the plan, the recapitalized banks
\nwould be allowed to exchange part of the bonds with performing
\nbank loans held by IBRA.<\/p>\n
"Our main concern now is how to lower the state budget burden
\nto finance the interest of the bonds," he said.<\/p>\n
The government has issued about Rp 650 trillion worth of bank
\nrecapitalization and restructuring bonds.<\/p>\n
The interest cost of the bonds is estimated to reach Rp 55
\ntrillion in 2001.<\/p>\n
The government recently reached an agreement with Bank
\nIndonesia for the latter to cover about Rp 24.5 trillion of the
\nbonds.<\/p>\n
Aberson said this would reduce the amount of the outstanding
\nbonds, but the budget committee wanted a further reduction by
\nexchanging the bonds with the performing loan asset under IBRA.<\/p>\n
The agency has been targeted to raise about Rp 27 trillion in
\ncash next year from the sale of its various banking assets to
\nhelp finance the state budget deficit.<\/p>\n
IBRA has received more than Rp 600 trillion worth of various
\nassets from closed banks and recapitalized banks, including about
\nRp 260 trillion of nonperforming loans. IBRA is mandated to
\nrestructure the loans.<\/p>\n
Abdullah said the committee had asked IBRA to raise its cash
\ntarget to about Rp 30 trillion.<\/p>\n
Aberson also said the members of the budget committee had been
\ndetermined to push the government not to use new foreign loans
\nwhen possible in financing the 2001 budget deficit estimated at
\nabout $6 billion.<\/p>\n
He said new foreign loans would only create more burden for
\nthe people.<\/p>\n
The Consultative Group on Indonesia (CGI), the country's
\ntraditional donor group, agreed recently to provide $4.8 billion
\nin a loan to help finance the state budget deficit.<\/p>\n
"The government will not use the loan if it is not needed,"
\nAberson said.<\/p>\n
He said the budget deficit could be reduced by postponing
\nseveral projects.<\/p>\n
Government officials attending the meeting declined to provide
\ncomments, saying that the talks were confidential and must be
\napproved first by the House plenary session.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/budget-committee-revises-state-budget-plans-1447893297",
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