House balks at foreign loan plans<\/p>\n
JAKARTA (JP): The Budgetary Commission of the House of
\nRepresentatives has raised concern over the government's plan to
\nincrease foreign borrowing to finance its development programs in
\n1995-96.<\/p>\n
In its 28 page commentary on the state budget draft proposed
\nlast week by President Soeharto, the commission said yesterday in
\nthe House's plenary session that what the government has so far
\npresented to the House covers only the expected disbursement of
\nforeign aid but not its terms and conditions.<\/p>\n
\"When the government is dealing with any credit agreement, it
\nshould inform the House completely, including its terms and
\nconditions,\" said Dadi Sukardi, the commission's chairman and
\nmember of the Armed Forces faction.<\/p>\n
For the next fiscal year, the government has budgeted Rp 11.76
\ntrillion (US$5.42 billion) from foreign aid, an increase of 17.4
\npercent from this fiscal year, to balance the difference between
\nthe projected domestic revenues of Rp 66.27 trillion and the
\nexpected expenditures of Rp 78.02 trillion.<\/p>\n
Dadi noted that the revenue expected from foreign aid is 3.5
\npercent higher than the target for the second year of the Sixth
\nFive-Year Development Plan (Repelita VI), which began in April
\n1994.<\/p>\n
In a briefing on the budget draft that was convened for
\njournalists and several economics ministers last week, Minister
\nof Finance Mar'ie Muhammad said that the increase in foreign aid
\nreceipts will not result from new borrowing but from the delayed
\ndisbursement of prior aid commitments from creditors.<\/p>\n
Coordinating Minister of Economy and Finance Saleh Afiff made
\nhis own prediction and calculates that the country's foreign debt
\nlevel will stand at nearly $100 billion at the end of the next
\nfiscal year. Of this amount, $59 billion will be owed by the
\ngovernment and the remainder by the private sector.<\/p>\n
According to the budget proposal, the government's debt
\nservicing for the next fiscal year is projected to reach Rp 17.9
\ntrillion or Rp 243 billion higher than this fiscal year.<\/p>\n
Safe<\/p>\n
However, Afiff assured that even at such levels, the debt
\nposed no threat, especially when compared with the country's
\nexports revenues and the size of the economy as a whole.<\/p>\n
\"Although our commission understands, we are still reminding
\nthe government to manage foreign debts carefully to lessen the
\never-increasing burden,\" Dadi said.<\/p>\n
The commission then suggested that the government reevaluate
\nany projects financed through foreign aid, especially the idle
\nones.<\/p>\n
\"The construction of projects which are still feasible should
\nbe speeded up, while the unfeasible ones should be halted
\naltogether,\" Dadi demanded.<\/p>\n
He commended the government's move to pay off some of its
\nhigh-interest debts and suggested that, if possible, it repay all
\nof them prior to maturity.<\/p>\n
The government has said that it will repay its high-interest
\ndebts to the World Bank and the Asian Development Bank ahead of
\nschedule from the sales of 25 percent of the ordinary shares of
\nstate telecommunication company PT Indosat on the New York Stock
\nExchange last October, worth $799 million.<\/p>\n
Debt repayments are expected to accelerate again when a number
\nof state companies, including the other telecommunication company
\nPT Telkom, toll road operator PT Jasa Marga and electricity
\ncompany PT PLN, float some of their shares on both foreign and
\nlocal stock markets.<\/p>\n
The commission also recommended that the government take
\nspecial measures to control foreign borrowing in the private
\nsector so as not to further burden the country's current
\naccounts.<\/p>\n
To ensure more self-reliance in future state budgets, the
\ngovernment hopes to increase domestic revenues, primarily through
\ntaxation and tourism.<\/p>\n
The commission also asked the government to be economical in
\nusing foreign exchange, especially in the service sector, which
\nremains the main contributor to the current account deficit.
\n(rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-balks-at-foreign-loan-plans-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}