Habibie ready to unveil his 1st budget today<\/p>\n
JAKARTA (JP): President B.J. Habibie is set to unveil his
\nfirst draft budget to the House of Representatives (DPR) today
\namid simmering political tensions and a sagging economy.<\/p>\n
The President is scheduled to address the House plenary
\nsession at 10 A.M. to outline the budget for the 1999\/2000 fiscal
\nyear, which begins on April 1.<\/p>\n
The House will then deliberate the draft budget and pass it
\ninto law.<\/p>\n
Unlike during the 32-year rule of former president Soeharto,
\nthe government is likely to face a challenge from the House
\nbefore the budget is approved. Under Soeharto, the legislative
\nbody gained notoriety as the government's rubber stamp.<\/p>\n
The government is expected to allocate considerable sums of
\nmoney to provide subsidies in the 1999\/2000 budget under the
\nauspices of the social safety net programs and to assist small-
\nscale entrepreneurs.<\/p>\n
The government will also disclose the funds it intends to
\nallocate to finance recapitalization of the country's beleaguered
\nbanks.<\/p>\n
Many analysts have predicted that the upcoming budget will run
\nat a large deficit as the result of depressed oil prices and
\nstunted tax revenues generated by the government since the
\neconomy sank into recession.<\/p>\n
In a November report, finance minister Bambang Subianto said
\nthat the government would assume a crude oil price of between
\nUS$12 and $13 per barrel, a rupiah-U.S. dollar exchange rate of
\nbetween Rp 7,000 and Rp 8,000, economic growth between 1 percent
\nand minus 1 percent, and inflation of between 15 percent and 20
\nwhen drafting the 1999\/2000 budget.<\/p>\n
Inflation was recorded at 77.63 in 1998.<\/p>\n
Economist Pande Radja Silalahi of the Center for Strategic and
\nInternational Studies called on the government and the House to
\navoid making a major issues of the assumptions used to draft the
\nbudget.<\/p>\n
\"Assumptions used to calculate the budget must be regarded
\nmerely as a guide and prone to changes,\" Pande told The Jakarta
\nPost.<\/p>\n
In 1998, the government was forced to revise the 1998\/1999
\nbudget three times because of the rupiah's roller coaster ride
\nagainst the dollar.<\/p>\n
Many have predicted further volatility in the rupiah this
\nyear, particularly around two major political events -- the
\ngeneral election in June and the subsequent presidential election
\nin November.<\/p>\n
It is feared that both events could lead to widespread
\nviolence and chaos.<\/p>\n
Pande expressed hope that the government would exercise wisdom
\nand austerity in next year's budget, pointing out that economic
\nand political uncertainty would linger in the country and that a
\nglobal economic downturn was also a real possibility.<\/p>\n
\"Unlike in previous fiscal years, the degree of uncertainty
\nwill be very high and it will be hard to make precise
\ncalculations for the budget,\" he told the Post on Monday.<\/p>\n
Pande warned the government against including populist
\nmeasures in the budget to improve the political standing of the
\ncurrent administration, which continues to be undermined by its
\nclose association to Soeharto.<\/p>\n
The government should instead focus on revitalizing economic
\nactivities using sound economic judgment, particularly in the
\nreal sector and through the social safety net program, he said.
\n(das)<\/p>",
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