Legislators warns govt over new CGI $4.8b loan<\/p>\n
JAKARTA (JP): Legislators expressed concern on Thursday over
\nthe country's high level of external debt following donors'
\napproval to provide Indonesia with a US$4.8 billion loan to help
\nplug next year's yawning budget deficit.<\/p>\n
Outspoken legislator Aberson Marle Sihaloho said that such
\nlevels of foreign debt could undermine the country's sovereignty.<\/p>\n
\"We should reject the new loan or else we may become trapped,\"
\nsaid Aberson, a senior legislator from the Indonesian Democratic
\nParty of Struggle, the largest party in the House of
\nRepresentatives.<\/p>\n
Aberson, who is also a member of House Commission IX on the
\nstate budget and finance, said that this was his personal opinion
\nbut he would push for it to become his faction's opinion.<\/p>\n
Indonesia's international donors grouped in the so-called
\nConsultative Group on Indonesia (CGI) agreed on Wednesday at the
\nend of their two-day gathering in Tokyo to provide the country
\nwith the new loan.<\/p>\n
The government announced earlier this month that the draft
\n2001 state budget would be in deficit to the tune of around Rp 53
\ntrillion (about $7.2 billion based on the state budget's rupiah-
\ndollar exchange rate target of Rp 7,300), or 3.7 percent of gross
\ndomestic product.<\/p>\n
The government has said that the bulk of the deficit would be
\nfinanced by foreign loans, and the remainder would be covered by
\nthe sale of assets controlled by the Indonesian Bank
\nRestructuring Agency (IBRA) and the privatization program.<\/p>\n
The House is currently debating the draft budget with the
\ngovernment, and is expected to reach agreement sometime in
\nNovember.<\/p>\n
\"Why did the donors provide us with the new loan despite
\npersisting political instability and legal uncertainty? The
\ngreater the amount of the loan, the greater the amount of foreign
\nintervention there will be in our country,\" Aberson said.<\/p>\n
\"This is a problem. Our sovereignty could be weakened,\" he
\nadded.<\/p>\n
Aberson said that the approval of the CGI loan was not an
\nachievement or something to be proud of.<\/p>\n
He said that the current high international oil price
\npresented an opportunity for the government to stop taking out
\nfurther foreign loans.<\/p>\n
\"The windfall profit from oil should help plug the deficit,\"
\nhe said.<\/p>\n
He added that additional foreign debt rescheduling could also
\nreduce the overall burden on the state budget.<\/p>\n
Economists had earlier said that legislators could reject the
\nCGI loan or at least request the government to only use part of
\nthe loan due to the already high debt level and booming oil
\nprices.<\/p>\n
The government had assumed an oil price of $22 per barrel, but
\nthe price of the commodity has recently been hovering at more
\nthan $29 per barrel.<\/p>\n
Indonesia is one of the world's oil-exporting countries.<\/p>\n
But, Faisal Baasir of the United Development Party, who is
\nalso a deputy chairman of the House budget committee said that
\nIndonesia should accept the CGI loan in order to help fill in the
\ngaping holes in the budget.<\/p>\n
\"If we don't get the loan, where will we get the funds to
\nfinance the deficit,\" Faisal said.<\/p>\n
However, he conceded that the country's overseas sovereign
\ndebt of around $80 billion was already of alarming proportions.<\/p>\n
Separately, senior banker I Nyoman Moena said that the
\napproval of the CGI loan had lent certainty to the government's
\n2001 state budget and that this should be positive for
\nmaintaining sentiment in the overall economy.<\/p>\n
He also said that the approval indicated the confidence of the
\ninternational community in the government's continued commitment
\nto economic restructuring and resolving the much-criticized
\nAttambua killings.<\/p>\n
The World Bank, the coordinator of the CGI, and the U.S.
\ngovernment had earlier threatened to reject the government's
\nrequest for more loans unless Indonesia showed firm commitment to
\nresolving the killing of United Nations staffers in West Timor by
\npro-Indonesia East Timor ex-militiamen, and to pressing ahead
\nwith the economic reform program.<\/p>\n
The World Bank and the International Monetary Fund have
\nexpressed disappointment over the recent delay in the key sale of
\ngovernment ownership in the publicly listed Bank Central Asia
\n(BCA) and Bank Niaga. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/legislators-warns-govt-over-new-cgi-48b-loan-1447893297",
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