Govt to stick with budget assumptions despite attacks on U.S.<\/p>\n
JAKARTA (JP): The government said Monday that it would
\nmaintain the macroeconomic assumptions employed in the 2002 draft
\nstate budget despite recent developments in the global economy
\nbrought about by the terrorist attacks on the United States.<\/p>\n
Finance minister Boediono said that the macroeconomic
\nassumptions were realistic enough, and that it was too early to
\npredict how the attacks on the U.S. would effect either the
\nglobal or the domestic economy.<\/p>\n
\"The same goes for the international oil market. Although
\nthere have been indications that the price of crude oil is
\nrising, we need to exercise caution, especially as this external
\nindicator is only temporary and can't yet be used as a
\nbenchmark,\" he told a plenary meeting with the House of
\nRepresentatives.<\/p>\n
Two aircraft slammed into the World Trade Center last Tuesday
\ncausing its two towers to crash to the ground. Another aircraft
\nslammed into the Pentagon in Washington, seriously damaging the
\nbuilding. A fourth plane crashed in Pennsylvania.<\/p>\n
The attacks have raised concerns about a possible global
\neconomic depression.<\/p>\n
In the 2002 draft state budget, the government has assumed an
\neconomic growth rate of 5 percent, inflation rate of 8 percent,
\nrupiah-dollar exchange rate of Rp 8,500, three-month SBI rate of
\n14 percent, crude oil price of US$22 per barrel, and an oil
\nproduction level of 1.23 million barrels per day (bpd).<\/p>\n
The deficit was set at 2.5 percent of GDP or about Rp 43
\ntrillion, compared to 3.7 percent in the current 2001 state
\nbudget.<\/p>\n
\"The government is fully aware that with a deficit of 2.5
\npercent of GDP the country's financial situation in 2002 will
\nstill be tight,\" he said.<\/p>\n
However, to help stimulate the country's economy and therefore
\ncover the 2.5 percent deficit, the government will content itself
\nwith setting a tax ratio of 12.8 percent instead of the 13.6
\npercent initially agreed with the House budget committee,
\nBoediono said.<\/p>\n
He said that it was important for the revival of an ailing
\neconomy that it not be overburdened with a high tax ratio.<\/p>\n
The government expects to receive Rp 41.8 trillion (about $4.6
\nbillion) in cash from the privatization of state enterprises and
\nthe sale of assets managed by IBRA, of which 60 percent will be
\nused to cover the 2002 state budget deficit, Boediono said.<\/p>\n
The remaining Rp 16.4 trillion will go on redeeming government
\nbonds.<\/p>\n
Another Rp 17.6 trillion needed for covering the deficit will
\ncome from overseas sources, including loan programs under the
\nConsultative Group for Indonesia (CGI) and the restructuring of
\nabout Rp 34.7 trillion of Indonesia's sovereign debt through
\nParis Club III.<\/p>\n
\"To achieve maximum financial support from the CGI, we will
\nneed to satisfy other requirements for the disbursement of
\nongoing loan programs, such as those organized by the World Bank,
\nAsian Development Bank and the Japanese government,\" Boediono
\nsaid.
\nParis Club<\/p>\n
Elsewhere, Boediono said that the postponement of the Paris
\nClub meeting of creditor nations due to the attack on the United
\nStates would not effect the Club's commitment to rescheduling the
\ncountry's sovereign debts maturing in 2001 and 2002.<\/p>\n
\"I'm optimistic that we will achieve (a rescheduling) in the
\nnear future,\" he said on the sidelines of the plenary meeting
\nwith the House.<\/p>\n
Last week's Paris Club meeting with the government had to be
\npostponed because the representatives from the United States were
\nunable to travel to Paris.<\/p>\n
\"It was just a technical problem. We heard there were some
\n(representatives) who failed to arrive because there were no
\nplanes out,\" Boediono said.<\/p>\n
Asked about the prospects of an additional rescheduling
\nfacility from the Paris Club, Boediono said that the negotiations
\nwere still at the preliminary stage and that he would still need
\nto approach the individual creditor nations for support.(tnt)<\/p>",
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