Prijadi ill, budget debate delayed<\/p>\n
JAKARTA (JP): The government has delayed the deliberation of
\nthe revised 2001 state budget with the House of Representatives
\non account of the finance minister Prijadi Praptosuhardjo taking
\nill, according to Coordinating Minister for the Economy Rizal
\nRamli.<\/p>\n
"The minister (Prijadi) is ill, so it has to be delayed,"
\nRizal told reporters prior to a closed-door meeting with the
\nHouse special team on the amendment of the central bank law.<\/p>\n
He declined to give any further information.<\/p>\n
Rizal said earlier on Wednesday that the government would
\nstart the deliberation process for the proposed state budget
\nrevision on Thursday.<\/p>\n
But sources said that Prijadi had never agreed to the specific
\ndate set by Rizal, although he had earlier said that the
\ngovernment planned to start the deliberation process with the
\nHouse sometime in the first week of this month.<\/p>\n
Prijadi's sudden illness seems to resemble a similar move by
\nVice President Megawati Sukarnoputri when she claimed that she
\nwas ill and could not attend a key meeting with the embattled
\nPresident Abdurrahman Wahid in the run-up to the issuance of a
\nsecond censure of the President by the House on Monday over two
\nfinancial scandals.<\/p>\n
Separately, the director general of financial institutions at
\nthe finance ministry, Darmin Nasution, said on Thursday that
\nPrijadi had to meet with the President and the Cabinet first
\nbefore going to the House.<\/p>\n
"We don't feel right going to the House if we haven't obtained
\napproval (from the President)," Darmin said.<\/p>\n
He added that the green light from the President was expected
\nto be given at a cabinet meeting, probably on Saturday.<\/p>\n
Darmin said that the proposed budget revision must be fully
\nsupported by all elements in the government to help ensure its
\ncredibility.<\/p>\n
He pointed out, as an example, that the plan to further reduce
\nsubsidies that would result in increased fuel prices was a tough
\nprogram that had to be fully supported.<\/p>\n
The government is under pressure to obtain House approval over
\nthe budget revision as soon as possible to secure crucial
\nInternational Monetary Fund loan funds.<\/p>\n
Prijadi has said that he expected the House to approve the
\nbudget revision by the end of this month.<\/p>\n
The proposed budget revision includes changing the exchange
\nrate assumption to Rp 9,600 per U.S. dollar from the initial
\nassumption of Rp 7,800 per dollar, inflation rate assumption to
\n9.3 percent from 7.2 percent, and the interest rate assumption
\nfor Bank Indonesia SBI notes to 15 percent from 11.5 percent, as
\nwell as cutting the economic growth projection to 3.5 percent
\nfrom 5 percent.<\/p>\n
The government has to revise the state budget mainly due to
\nthe sharp plunge in the value of the rupiah against the dollar
\nand increasing domestic interest rates.<\/p>\n
The drop in the rupiah's value and rising interest rates may
\nresult in the budget deficit widening to a dangerous level of up
\nto 6 percent of gross domestic product, compared to the initial
\nprojection of 3.7 percent of GDP, unless measures are taken.<\/p>\n
The government is proposing a fiscal adjustment package as
\npart of the budget revision which will basically focus on
\nboosting domestic revenue, particularly receipts from taxes and
\nexcise duties, and reducing spending.<\/p>\n
There have been worries, however, that the government may not
\nbe able to secure House approval for the budget revision as
\nquickly as planned given the current tug-of-war between the
\nPresident and the legislature. (rei)<\/p>",
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