Central government to guarantee provinces' debts<\/p>\n
JAKARTA (JP): Coordinating Minister for the Economy Rizal
\nRamli said on Friday the central government would guarantee
\nforeign debts incurred by provincial administrations after the
\nautonomy law takes effect next year.<\/p>\n
Rizal said a guarantee from the central government was
\nnecessary to ease the concerns of foreign creditors about the
\nregions' ability to repay their debts.<\/p>\n
He said foreign creditors attending the recent meeting of the
\nConsultative Group on Indonesia (CGI) in Japan, had raised
\nconcerns over the ability of provincial administrations to repay
\ntheir foreign debts.<\/p>\n
Rizal said the central government would be extra careful in
\nassessing the capability of a province in borrowing foreign
\nfunds.<\/p>\n
\"Regions' foreign debts must not pass us unchecked,\" Rizal
\nsaid during a business luncheon hosted by the German-Indonesian
\nBusiness Association.<\/p>\n
Visiting German Minister of Foreign Affairs Joschka Fischer
\nalso attended the luncheon.<\/p>\n
Rizal said the central government must avoid the mistakes of
\nother countries, which delegated provinces the authority to
\noversee their own debts.<\/p>\n
According to him, Brazil ran into problems during the 1980s
\nafter its local administrations borrowed foreign funds without
\nproper supervision.<\/p>\n
\"The situation got out of control, and in the end it was the
\ncentral government that took over the debts,\" he said.<\/p>\n
The government also gave its assurance last month that the
\nimplementation of regional autonomy would not affect the
\nrepayment of existing foreign debts.<\/p>\n
Rizal also hinted the government might delay the
\nimplementation of autonomy for the forestry and mining sectors.<\/p>\n
He said these two sectors could be prone to problems when the
\ncentral government shifts its authority to the regions.<\/p>\n
\"After review, we decided to slow down the process,\" he said
\nwithout elaborating.<\/p>\n
The government planned to implement full autonomy by Jan. 1,
\n2001.<\/p>\n
Under the autonomy law, provinces, regencies and mayoralties
\nwill receive greater authority to handle their own affairs.<\/p>\n
The director general for general mining at the Ministry of
\nEnergy and Mineral Resources, Surna Tjahja Djadjadiningrat, was
\nunable to confirm a delay of autonomy in the mining sector.<\/p>\n
\"I know that it will be discussed at a Cabinet meeting,\" he
\ntold The Jakarta Post.<\/p>\n
Surna was referring to a proposed five-year delay for the
\nimplementation of autonomy in regard to the mining contracts of
\nforeign investors.<\/p>\n
He said earlier he proposed the delay because foreign
\ninvestors were concerned over the legal strength of contracts
\nsigned by local administrations.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/central-government-to-guarantee-provinces-debts-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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