Govt OKs Rp 10.5t to stimulate economy<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The government has agreed to allocate Rp 10.5 trillion (about
\nUS$1.1 billion) in additional development spending next year to
\nstimulate the economy hurt by the impact of the Bali bombing.<\/p>\n
The agreement was reached during Monday's meeting with the
\nHouse of Representatives' budget committee, which initially
\nsought a stimulus package of up to Rp 20 trillion.<\/p>\n
Committee chairman Abdullah Zainie said the Rp 10.5 trillion
\nwas the highest amount both sides could agree on under the tight
\nconstraints of the state budget.<\/p>\n
\"The (amount of) stimulus is still within our reach as far as
\nthe budget is concerned,\" Abdullah said during the House
\ncommittee's plenary meeting on the 2003 budget.<\/p>\n
The government initially proposed in its 2003 budget draft a
\nstimulus package worth Rp 5.9 trillion to partly offset a likely
\nplunge in private investment spending after the Bali bombing.<\/p>\n
Legislators, however, ruled that the amount was too small to
\nmeet next year's economic growth target, even after it was
\nlowered to 4 percent from 5 percent.<\/p>\n
The government had to revise its 2003 draft state budget to
\ntake into account a plunge in the tourism sector and private
\ninvestment spending following the terrorist strike in Bali.<\/p>\n
Additional development spending under the stimulus package
\ncould spur investment in sectors, such as construction, and help
\nabsorb some of the unemployment.<\/p>\n
On the downside, however, the budget lacks revenue, which
\nmeans that next year's deficit will be more extensive than
\nexpected.<\/p>\n
Abdullah said that although the stimulus package nearly
\ndoubled, the impact on the deficit would be kept as low as
\npossible.<\/p>\n
With additional spending, next year's expected budget
\nshortfall will swell to about Rp 34 trillion, accounting for 1.77
\npercent of the gross domestic product (GDP), which measures the
\ncountry's annual output of goods and services.<\/p>\n
With a stimulus of Rp 5.9 trillion, the expected deficit is
\nset at 1.5 percent of GDP.<\/p>\n
To cover the wider than expected budget deficit, Abdullah said
\nthe budget would need extra financing from Indonesia's foreign
\ncreditor countries.<\/p>\n
He said earlier that the budget might need another $300
\nmillion from its creditors in the Consultative Group on Indonesia
\n(CGI).<\/p>\n
This would bring the total amount that the CGI needs to raise
\nto about Rp 29 trillion from the Rp 26.1 trillion initially
\nexpected.<\/p>\n
The group had earlier promised to provide Indonesia with extra
\nloans to cope with the impact of the Bali bombing, however the
\namount has yet to be agreed on during January's CGI meeting.<\/p>\n
Abdullah added that domestic financing to plug the budget
\ndeficit would mainly come from selling state companies and assets
\nunder the Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
Last night's plenary meeting should have ended weeks of closed
\ndoor meetings to revise the draft budget. However, several issues
\non the allocation of funds to regions remain unresolved.<\/p>\n
Legislators agreed to postpone approval of the budget until
\nnext Monday, providing that the contentious issues are resolved
\nby then. Discussion over funding continues on Tuesday.<\/p>\n
Under the original budget draft, funding allocation for
\nregions was set to total Rp 77.7 trillion, but several
\nlegislators have demanded the figure be lowered.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-oks-rp-105t-to-stimulate-economy-1447893297",
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