WB sees RI's debt service ratio level still manageable<\/p>\n
JAKARTA (JP): World Bank country director Dennis de Tray said
\non Thursday that Indonesia's nearly 50 percent debt service ratio
\nin the current 1998\/1999 fiscal year was still manageable,
\nalthough it had risen to an alarming level.<\/p>\n
De Tray said that the government had no better options than to
\nsecure external official loans, including from the World Bank, to
\nfinance the various economic reform programs and the social
\nsafety net programs which would help the poor survive the 18-
\nmonth long economic crisis.<\/p>\n
\"Indonesia has to accumulate huge foreign debts because of the
\neconomic problems,\" he said.<\/p>\n
He added that plugging the huge budget deficit through
\ndomestic financing by printing money was a bad option as it would
\nonly create more hardships, particularly an uncontrollable
\ninflation rate.<\/p>\n
De Tray was speaking to a small group of reporters, explaining
\nthe bank's programs and priorities for the country.<\/p>\n
\"It's still manageable,\" he said when asked to comment on the
\ncountry's alarming debt service ratio level.<\/p>\n
Finance Minister Bambang Subianto told the House of
\nRepresentatives on Tuesday that the debt service ratio -- the
\nratio between debt servicing and export earnings -- might reach
\n49.3 percent in the current fiscal year ending in March 1999.<\/p>\n
This estimate was higher than the government's earlier
\nprojection.<\/p>\n
The Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita projected in September the debt service
\nratio at 44 percent.<\/p>\n
Bambang said that the new projection was based on forecasts of
\nthe principal and interest payments of sovereign and private
\ndebts amounting to US$27.19 billion this year, and the total
\npredicted export earnings of $55.16 billion.<\/p>\n
De Tray said that the Indonesian government, compared to the
\nprivate sector, had been doing well in managing its foreign debts
\nduring the past eight years.<\/p>\n
However, he said that although securing soft-term official
\nloans would minimize the debt burden, the large size of the debts
\nwould surely affect the country's capacity to finance future
\nactivities.<\/p>\n
\"We're struggling with this problem,\" he said. (rei)<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/wb-sees-ris-debt-service-ratio-level-still-manageable-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }