President unveils new budget...<\/p>\n
President Abdurrahman Wahid and Vice President Megawati
\nSoekarnoputri unveiled the 2000 draft state budget to the House
\nof Representatives' plenary session in Jakarta on Jan. 20.
\nExcerpts of the budget are as follows:<\/p>\n
The year 2000 draft state budget is the draft for the first
\nyear budget which has been drawn up pursuant to the 1999-2004
\nState Policy Guidelines.<\/p>\n
In accordance with direction in the Guidelines, the draft
\nstate budget is a draft for the state budget in the transitional
\nperiod of the April 1 to March 31 fiscal year (FY), which will
\nbecome the calendar year. In spite of the fact that the year 2000
\ndraft state budget is meant as the transitional budget, in
\ndrawing up the draft the government did not in the least abandon
\nthe good mechanism of cooperating with the House.<\/p>\n
This transitional provision is indeed highly important and
\nthere is indeed an objective need for that. The government and
\nthe House have to better prepare themselves in order for them to
\nbe able to work in the new system of life as members of the
\nnation and state, as regulated by the various decrees of the
\nAssembly in the last General Session.<\/p>\n
In this new system, the center of the gravity of the
\nlegislative authority has been moved from the President to the
\nHouse. Not only do high state institutions have the obligations
\nto implement the State Policy Guidelines, they also are obliged
\nto report on the implementation of the Guidelines in the yearly
\nsession of the People's Consultative Assembly.<\/p>\n
Experience has shown that the Constitution which was designed
\nin the framework of setting up the Unitary State of the Republic
\nof Indonesia 55 years ago contains many positive points which
\nmust be maintained well; however, there are also points which
\nneed improving. As was agreed upon in the last General Session of
\nthe Assembly, we must keep the preamble to the 1945 Constitution.<\/p>\n
However, as regards the system of the government which
\nregulates the relationships between and among various state-
\nrunning institutions, it has been felt that it needs to be
\nrestructured. We take this measure either to ward off the
\nconcentration and centralization of power or to provide maximum
\nopportunities for the potentials of our nation.<\/p>\n
All of those are happening when situations in various fields
\nare still critical and cannot be fully surmounted yet. We are
\nfacing options which are not easy to choose and which need to be
\nwell weighed before a binding decision is made. It is obvious
\nthat all of the problems which have piled up for so long cannot
\nbe solved at once. It is obvious that we have to take short-term
\nsafety measures first, not only for the sake of overcoming a
\nchain of crises, but also for the sake of building a platform,
\nfrom which we move forward to the next stage.<\/p>\n
The government is fully aware that sociopolitical and security
\nproblems constitute national priorities which we must handle, the
\nreason being that the solution of those problems is a
\nprerequisite for restoring our economy. Various short-term basic
\npolicies have been, are being, and will be taken to solve those
\nproblems. The basic policies and concrete measures still need to
\nbe developed further by forging close cooperation with the House.<\/p>\n
As a point of departure in the drawing up of this year's state
\nbudget, it can be noted that the world economy in 1999 grew, so
\nit is estimated, higher than it was in the preceding year.
\nWhereas in 1998 the world economy growth was 2.5 percent, it is
\nestimated that in 1999 it reached 3.0 percent.<\/p>\n
It is estimated that in 2000 the world economy will even grow
\nhigher, namely to 3.5 percent. Meanwhile, Asian countries which
\nwere hit by the economic crisis most severely, such as South
\nKorea, Thailand, Indonesia, and Malaysia, have gradually been
\nrecovered and began to sustain a positive growth in 1999.<\/p>\n
The fairly good development in the national economy is shown
\nby the fact that there was an expansion of 3.1 percent in the
\nsecond quarter of 1999, which was followed with an increase of
\n0.54 percent in the third quarter. On the basis of this, in the
\nFY 1999\/2000, the Indonesian economy experienced, it is
\nestimated, a growth of l to 2 percent. In the year 2000 state
\nbudget it is expected that the economy will grow at a higher rate
\nof 3 to 4 percent.<\/p>\n
As the outcomes of various government policies such as the
\nprudent monetary policy, basic commodities are adequately
\navailable; the distribution of goods and services is smooth; and
\nthe exchange rate of the rupiah is relatively stable; and the
\ngrowth of the consumers price index in 43 cities (except Dili)
\nwas, in the first nine months of the 1999\/2000 FY, adequately
\nunder control. During that period, there is an inflation rate of
\nminus 2.61 percent, much lower than that in the same period in
\nthe previous FY, which was 40.70 percent.<\/p>\n
The prudent monetary policy strengthened the exchange rate of
\nthe rupiah in the 1999\/2000 FY (up to November 1999) compared to
\nthe rate at the end of the preceding FY. In the 2000 FY (April-
\nDecember 2000) it is estimated to be Rp7,000.00 per US$ 1.00.<\/p>\n
In line with the initial strengthening of the exchange rate of
\nthe rupiah and with the decrease in the inflation rate, the bank
\ninterest rates also began to slide. This caused negative spread
\nto slide gradually too.<\/p>\n
In line with the monetary improvement, the growth of the
\ncapital market in the FY 1999\/2000 (up to December 1999) showed
\nan increasing trend. This was in line with the signs towards
\nimprovements in the economic activities.<\/p>\n
In addition, the more conducive sociopolitical situation
\nresulting from the running of the general elections and from the
\nconvening of the sessions of the People's Consultative Assembly,
\nwhich went smoothly and safely, also motivated market actors to
\nbe active in making investment in the capital market.<\/p>\n
The number of listed companies in the capital market grew to
\ninclude 15 more companies, of which nine were share emittents and
\nsix were bond emittents. In addition, the composite share price
\nindex positively reflected the capital market activities. The
\nmarket capitalization value, also rose from Rp 167.3 trillion to
\nRp 451.8 trillion, rising 170.05 percent.<\/p>\n
In the FY 1999\/2000, the value of export comprising oil and
\ngas export and non-oil and non-gas export is estimated to amount
\nto US$ 54,151 million, an increase of 12.0 percent compared to
\nthe value of export in the preceding FY, which was only US$
\n48.354 million. In the FY 2000, which is only nine months long,
\nthe export value is estimated to reach US$41,552 million,
\ncomprising the export value of oil and gas, at US$8,003 million,
\nand that of non-oil and non-gas, at US$33,$49 million.<\/p>\n
In the mean time, the import value in the FY 1999\/2000,
\ncomprising the oil and gas import and the non-oil and non-gas
\nimport is estimated to reach US$ 32,934 million. This figure
\nshows an increase of 7.3 percent from the import value in the FY
\n1999\/2000, which was US$ 30,707 million. In the FY 2000 the
\nimport value is estimated to reach US$27,284 million, comprising
\nthe oil and gas import at US$ 3,233 million and the nonoil and
\nnon-gas import at US$ 24,051 million.<\/p>\n
With the improving export and import, the balance of trade in
\nthe FY 1999\/2000 is estimated to have a surplus of US$ 21,217
\nmillion or 20.2 percent higher than the surplus in the preceding
\nFY, which was only US$17,674 million. In the FY 2000 the balance
\nof trade is estimated to have a surplus of US$ 14,268 million.<\/p>\n
In spite of the fact that there are indications of
\nimprovement, grave problems still pose before us. In the FY
\n1999\/2000, the capital flow, which encompasses the government's
\ncapital flow and private sector's capital flow, is expected to
\nundergo a deficit of US$ 3,476 million. In that FY, the
\ngovernment's capital flow underwent a surplus of US$ 5,446
\nmillion, while the private sector's capital flow underwent a
\ndeficit of US$ 8,922 million. In FY 2000, the capital flow is
\nestimated to have a surplus of US$ 214 million.<\/p>\n
Various improvements in the overseas trade can also be seen in
\nthe decline of the national debt service ratio (DSR), which in
\nthe FY 1999\/2000 is estimated to be 54.0 percent, compared to
\nthat in the FY 1998\/1999, which was 57.4 percent. In the FY 2000,
\nthe national DSR is estimated to be 47.2 percent, comprising the
\ngovernment's DSR of 12.8 percent and the private sector's DSR of
\n34.4 percent.<\/p>\n
However, in presenting the state budget 2000, please allow the
\ngovernment to concentrate on the economy and to forward the
\nvision on the medium-term economic framework which is needed to
\nadopt policies and take subsequent measures. As-the underlying
\nattitude and point of departure, we find it necessary to develop
\nthe people's economic power as the backbone of the national
\neconomic development.<\/p>\n
It is imperative in this regard to bring into being more just
\nand equitable opportunities for all of the people to seize and at
\nthe same time to create more efficient and shockproof economy. In
\nthis respect, the active roles of the people at large should be
\nenhanced, especially as regards the roles of the members of the
\nsociety, the majority-of whom are still left behind, by means of
\ncreating opportunities to progress and to empower themselves.<\/p>\n
As regards the labor policy, there are three main items of the
\nagenda which need to be paid attention to.<\/p>\n
First, unemployment should be curtailed and business
\nactivities restored. The endeavor towards pushing business
\nactivities should be directed primarily to ones which have
\npotential for economic recovery such as the enhancement of export
\nand trade. Especially for the small-scale and medium-scale
\nenterprises, which absorb a great deal of labor, an endeavor will
\nbe taken by mainly eradicating all impediments that still exist
\nand by providing direct support if it is really needed and if it
\ncan be done in an effective manner. Subsequently, improvements
\nwill be made in the execution of the labor-intensive social
\nsafety net and poverty alleviation programs designed to absorb
\nlocal labor, including those who have been laid off as a result
\nof the crisis.<\/p>\n
Second, an impetus should be provided for cross-labor economic
\nactivity mobility, by providing systematic and directed training.
\nOn the basis of the results achieved by vocational schools and
\ntraining centers up to now, training programs should be designed
\nand implemented by the private sector. In this regard, the
\ngovernment should only play the catalytic role for the sake of
\nachieving the reallocation of human resources.<\/p>\n
Third, the labor market is expected to be more flexible; in
\norder to sustain it, various labor regulations need to be
\nrectified.<\/p>\n
The improvement of the human resource quality will be done
\nthrough, among other things, health and education development.
\nThe priority of the health development needs to be set higher in
\norder that its target, namely the impoverished members of the
\ncommunity, get the adequate share of the funds. In the medium
\nterm, the role of the community health funds should be raised. In
\nline with the process of decentralization, the authority to use
\nthe available funds should rest with regency or municipality.<\/p>\n
As such, the activities developed will better reflect the
\nneeds of the region concerned. At a later date, in line with the
\nenhancement of development and the availability of adequate funds
\nfor community health development programs, the charge rate to
\nmembers of the community who are really needy should be lowered.
\nHospitals should be provided with an impetus to finance their
\nactivities. The private sector's role in health development needs
\nto be extended too, among other things by developing national
\ninsurance and phamarceutical industry.<\/p>",
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