'RI to repay foreign debts as scheduled'<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Minister of Finance Boediono said on Friday that the government
\nwould not reduce the budget allocated for repayment of maturing
\nforeign debts next year, as such a move would be seen as
\ndefaulting on the debt payment obligation and would result in
\nserious consequences to the country's overall economy.<\/p>\n
He told reporters that the government would repay the maturing
\nforeign debts as scheduled.<\/p>\n
A number of factions in the House of Representatives
\ncriticized the draft 2004 state budget, partly because of the
\nrelatively large allocation toward repaying foreign and domestic
\ndebts, while the budget for development programs was limited.<\/p>\n
Under the proposed budget, Rp 44.89 trillion (about US$5.41
\nbillion), or 2 percent of gross domestic product (GDP), was
\nallocated toward repaying debt principal.<\/p>\n
In comparison, spending for development programs is set at Rp
\n68.10 trillion, which lawmakers said was too small to help create
\na stimulus on the economy.<\/p>\n
Several major factions at the House demanded the government to
\nrevise the budget to provide greater stimulus, saying that the
\n4.5 percent economic growth target assumed in the proposed budget
\nwas not enough to create more jobs to help resolve the chronic
\nunemployment problem in the country.<\/p>\n
The House budget committee is scheduled to start deliberating
\nthe proposed state budget early next month.<\/p>\n
The government is under pressure to come up with a credible
\nstate budget, including a commitment to ensure the repayment of
\nmaturing foreign debts, to help revive investor confidence in the
\neconomy, particularly because the International Monetary Fund
\n(IMF) would no longer be playing a major role in overseeing the
\ncountry's economic reform program.<\/p>\n
The expiration of the IMF economic bailout program will also
\nmake Indonesia ineligible for a debt rescheduling facility from
\nthe Paris Club, which is a key consideration in the development
\nof the budget. For the past couple of years, Indonesia has been
\nenjoying around $3 billion in annual debt rescheduling from the
\nClub.<\/p>\n
Investor confidence is crucial not only for attracting badly
\nneeded foreign investments, but also for retaining the support of
\nthe country's traditional donors.<\/p>\n
Indonesia would still need foreign loans to help finance the
\n2004 state budget deficit, estimated at 1.2 percent GDP.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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