RI's offshore debts stand at $89b: Mar'ie<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad announced
\nyesterday that Indonesia's offshore debt stood at US$89 billion
\nas of last June.<\/p>\n
\"According to our research along with the World Bank's, the
\ncountry's offshore debts stood at around $89 billion at the end
\nof June, $59.46 billion of which was owed by the government and
\nsome $29.5 billion by the private sector,\" Mar'ie said in a
\nhearing with Commission VII of the House of Representatives (DPR)
\nhere.<\/p>\n
Mar'ie's figure is slightly lower than that announced in April
\nby Coordinating Minister for Economy and Finance Saleh Afiff, who
\nplaced the country's offshore debts at some $90 billion as of
\nMarch.<\/p>\n
During yesterday's hearing, Mar'ie said that out of the
\ngovernment's foreign debt, $22.26 billion was accrued under
\nbilateral agreements with creditor countries, $18.58 billion
\nunder multilateral financing schemes, $13.37 billion under export
\nfinancing schemes and $2.90 billion under commercial
\narrangements.<\/p>\n
In addition, $1.37 billion was accrued under leasing
\narrangements, $99 million by floating bonds and $875.30 million
\nwas owed by the government from several years ago, he said.<\/p>\n
Mar'ie said the government, in making new loans, will continue
\nto put a high priority on bilateral and multilateral aid which
\noffers loan concessions.<\/p>\n
Indonesia in July received loan commitments of $5.2 billion
\nfrom the creditor members of the World Bank-chaired Consultative
\nGroup on Indonesia (CGI).<\/p>\n
Private sector<\/p>\n
Mar'ie gave no details of the foreign loans owed by the
\nprivate sector.<\/p>\n
He assured reporters that, according to the latest report of
\nBank Indonesia, the central bank, the foreign debts of the
\nprivate sector was not higher than $30 billion as of June.<\/p>\n
\"However, I warn the private sector not to borrow excessive
\namounts from foreign sources in order to keep the country's
\nbalance of payments at a convenient level,\" he said.<\/p>\n
According to the government's budget plan, Indonesia expects a
\nslight increase in its current account deficit to $3.2 billion
\nthis fiscal year from $2.82 billion estimated for last fiscal
\nyear -- but the country's balance of payments will likely more
\nthan double to $1.12 billion from $506 million.<\/p>\n
Mar'ie said the bulk of the private sector's foreign loans
\nhave short terms of maturity.<\/p>\n
\"I expect that private sector businessmen are aware of the
\nrisks of accruing short-term borrowing,\" he said, adding that the
\ngovernment is not in a capacity to restrict the private sector
\nfrom raising debts.<\/p>\n
\"What we can do is to make regular cross-checks with the
\ncentral bank on the position of the private sector's foreign
\ndebts,\" Mar'ie said. \"But it is possible that the private sector
\ndoes not report their own foreign loans to the central bank.\"<\/p>\n
He said the private sector should manage offshore debts, being
\ncareful to apply rigorous standards<\/p>\n
For that purpose, the government has set up ceilings on
\noffshore commercial borrowing, Mar'ie added.<\/p>\n
Until next fiscal year, the ceiling on offshore commercial
\nloans are set at $6.5 billion. The annual ceilings for foreign
\nloans of the central bank, state banks and private banks are set
\nat $500 million, $1.0 billion and $500 million, respectively.<\/p>\n
Under the existing ceilings, private companies are permitted
\nto borrow up to $2.8 billion from foreign creditors in this
\nfiscal year and up to $2.9 billion next fiscal year. Meanwhile,
\nthe state companies are allowed to borrow up to $1.4 billion in
\nthe current fiscal year and up to $.16 billion in the next fiscal
\nyear. (fhp)<\/p>",
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