Foreign debts fall by 6% in three months<\/p>\n
JAKARTA (JP): Indonesia's outstanding foreign debts dropped
\nnearly six percent within three months, from US$93 billion in
\nSeptember 1994 to $87.6 billion last December.<\/p>\n
Minister of Finance Mar'ie Muhammad said here yesterday that
\napproximately $58.6 billion of the outstanding loans recorded as
\nof last December were owed by the government, and the remaining
\n$29 billion by private and state-owned companies.<\/p>\n
As of last September, the outstanding loans held by the
\ngovernment and the private sector, including state firms, reached
\n$56.66 billion and $36 billion, respectively.<\/p>\n
Speaking at a hearing with the Budgetary Commission of the
\nHouse of Representatives, the minister said the government is
\ncommitted to further reducing external debt in the future.<\/p>\n
He said the country's debt service ratio (DSR) in the current
\n1994-95 fiscal year is estimated at 32 percent -- consisting of
\n19 percent for government loans and 13 percent for private and
\nstate companies.<\/p>\n
\"Our target is to reduce the DSR to 20.6 percent at the end of
\nthe sixth Five Year Development Plan (Repelita VI) period (in
\n1998-99). We should firmly stick to this target,\" he told the
\ncommission.<\/p>\n
The minister said that the government's programs in reducing
\nthe foreign debt will include an emphasis on the promotion of
\nexport activities and the creation of a business climate more
\nconducive to both domestic and foreign investments.<\/p>\n
Such efforts are expected to further push down the DSR to
\nbelow 20 percent by the end of the current Repelita VI period,
\nwhich began in April last year, the minister said.<\/p>\n
The finance minister said that offshore borrowings by private
\nand state-owned companies would also be tightened as part of
\ntheir strategy to alleviate the foreign debt burden.<\/p>\n
Approval<\/p>\n
State-owned companies and other government institutions, for
\nexample, will have to ask for special approval from the Offshore
\nBorrowing Supervision Team before raising loans abroad, he said.<\/p>\n
\"Private firms do not have to pass such a procedure. But,
\ninstead, they will have to report their borrowing to Bank
\nIndonesia,\" he said.<\/p>\n
The government will also begin selling its shares in state-
\nowned companies to further reduce the debt burden.<\/p>\n
Around $799 million raised from the sales of state-owned
\nIndosat shares on the New York Stock Exchange (NYSE) were used to
\npay off some of the government's high-interest loans.<\/p>\n
Indosat, the provider of international telecommunication
\nservices, raised the funds when it sold 25 percent of its 1.03
\nbillion ordinary shares through the NYSE in October and around Rp
\n650 billion ($297 million) from the sale of another 10 percent of
\nits shares on the local market.<\/p>\n
The shares sold through the NYSE were government shares while
\nthose sold at home consisted of new shares.<\/p>\n
The minister said yesterday that the privatization of state-
\nowned companies will continue in order to raise funds for the
\npre-payment of the government's debts carrying interest rates of
\nabove 11 percent.<\/p>\n
Three major state-owned companies such as PT Telekomunikasi
\nIndonesia (Telkom), the provider of domestic telecommunication
\nservices, PT PLN, the state electricity company, and PT Jasa
\nMarga, state-owned toll road corporation, are now preparing to
\nfollow Indosat, the minister said.(hen)<\/p>",
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