2002 state budget gives priority to education

JAKARTA (JP): The government has allocated the largest portion of the 2002 draft state budget for education and social welfare, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said on Thursday.

Speaking at a news conference after a Cabinet meeting to discuss the final draft of the 2002 state budget on Thursday, the minister said the government would also allocate more money for development expenditure.

"I am very happy to say that finally for the upcoming budget, we are earmarking the largest part of the development budget for education, and for anything related to social welfare," Dorodjatun said.

However, he declined to disclose the percentage of the budget to be provided for education.

"One of the fields related to social welfare that is given more focus is development expenditure for transportation," he said.

He also said another main objective of the draft budget was debt settlement.

"The upcoming 2002 state budget will provide some insight into how we are going to settle our debts. But, the focus will be on domestic loans," he remarked.

Minister of Finance Boediono, at the conference, also said the draft budget allocated more money for development expenditure to rebuild infrastructure damaged in the past four years of economic hardship.

The government's policy differs from the economic policy adopted during former president Abdurrahman Wahid's tenure that allocated only some Rp 45.5 trillion (US$5.2 billion) for development spending in the current 2001 state budget due to the debt burden.

"Development spending will increase. But, it will be a moderate increase due to limited sources of funds," Boediono said. He declined to provide figures of the increase.

"Revenue from oil and gas will also decrease for various reasons: first, because we'll use a different exchange rate assumption, plus the prices and the volume will also decrease," he added.

President Megawati Soekarnoputri is due to present the draft budget to the House of Representatives on Friday.

Boediono said Indonesia would still depend on two foreign financial sources -- the Consultative Group on Indonesia and the Paris Club -- for the coming years.

"We will concentrate on the two sources so we can meet the budget and on how to reschedule our debts," he said, adding that the government was striving to have another round of discussions with the Paris Club.

"The upcoming budget tries to balance fiscal consolidation and fiscal stimulus," Boediono said.

"The basic assumptions of the draft budget will be determined between the range that was agreed upon by the government and the House in earlier discussions," he added. (dja)