Govt debt prepayment to continue<\/p>\n
JAKARTA (JP): The government plans to continue the prepayment
\nof its high-interest borrowing next fiscal year to further bring
\ndown its already declining external debts, Minister of Finance
\nMar'ie Muhammad said yesterday.<\/p>\n
"Should the government's financial condition allow,
\nthe government will continue the prepayment of its foreign debts,
\nespecially those which carry high interest rates," Mar'ie said at
\na hearing here with the House of Representatives' Budgetary
\nCommission.<\/p>\n
Mar'ie explained that the planned debt prepayment will be
\nfinanced with proceeds to be raised from the sales of government
\nshares in state-owned companies or with the projected surplus
\nfrom this fiscal year's budget.<\/p>\n
The minister said recently that the government is now
\npreparing three more state-owned companies -- PT Krakatau Steel,
\ntoll-road operator PT Jasa Marga and Bank Negara Indonesia 1946
\n-- to go public later this year.<\/p>\n
The first two will be listed both on domestic and
\ninternational stock exchanges, like their predecessors PT
\nIndosat, PT Telkom and PT Tambang Timah, while Bank Negara
\nIndonesia will be listed locally only.<\/p>\n
In the 1994\/1995 fiscal year, the government settled the
\nprepayment of $782.9 million in high-interest debts, consisting
\nof $423.2 million borrowed from the World Bank and another $359.7
\nmillion from the Asian Development Bank.<\/p>\n
The funds used for debt prepayments in the 1994\/1995 period
\nwas generated from the sales of government shares in Indosat on
\nthe New York Stock Exchange in 1994.<\/p>\n
Mar'ie revealed yesterday that in the current fiscal year, the
\ngovernment has prepaid high-interest debts worth $738.6 million,
\ncomprising $264.7 million to the World Bank and $473.9 million to
\nthe Asian Development Bank.<\/p>\n
He said the debt prepayment in the current fiscal year was
\nmade possible by the sales of the government's shares in Telkom
\non the New York Stock Exchange and Tambang Timah on the London
\nStock Exchange. Telkom contributed $605.9 million and Tambang
\nTimah $154.7 million.<\/p>\n
Drop<\/p>\n
The minister disclosed that the government's outstanding
\nforeign debts had dropped again to US$59.96 billion as of last
\nDecember from $61.3 billion as of September.<\/p>\n
Out of the outstanding debts, $23.65 billion was obtained
\nunder bilateral arrangements, carrying an average interest rate
\nof 2 percent per annum.<\/p>\n
Other loans worth $19.24 billion were made under multilateral
\ndeals, carrying an average interest rate of 7.07 percent per
\nannum. Some of these loans carry interest rates of over 10
\npercent.<\/p>\n
Other loans of $14.85 billion were provided in the form of
\nexport credits, $1.2 billion in leasing deals and $990.9 million
\nin commercial credits.<\/p>\n
The minister and the commission were discussing amendments on
\nthe government's budget plan for the current fiscal year at
\nyesterday's hearing, which will resume today and tomorrow.<\/p>\n
Mar'ie said the current budget is estimated to enjoy a surplus
\nof Rp 375.3 billion (US$161 million), because revenues are
\nestimated to reach Rp 82.72 trillion, while spending is likely to
\nreach only Rp 82.35 trillion.<\/p>\n
The current budget was originally envisaged to balance at Rp
\n78.02 trillion.<\/p>\n
Mar'ie explained that funds collected from domestic sources
\nare estimated to contribute Rp 71.55 trillion to the government's
\ntotal revenues of Rp 82.72 trillion, which indicates an increase
\nof Rp 5.9 trillion from the original budget. Meanwhile, foreign
\nrevenues are projected to decline by Rp 859 billion from the
\noriginal budget.<\/p>\n
He explained that the increase in domestic revenues results
\nfrom unexpectedly higher tax and non-tax receipts as well as
\nhigher receipts from the oil and gas sector.<\/p>\n
Tax receipts are projected to reach Rp 48.42 trillion, 7
\npercent more than the original target; non-tax revenues are
\nestimated to reach Rp 7.8 trillion or 20.2 percent higher than
\nthe target, while the oil and gas sector is estimated to
\ncontribute Rp 14.8 trillion or 11.8 percent more than the
\noriginal estimate.<\/p>\n
"With higher revenues from taxes, we expect that we can cool
\ndown the economy from the current overheating because taxes have
\na contractive effect on the economy," Mar'ie told the commission.
\n(rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-debt-prepayment-to-continue-1447893297",
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