Budget revision

The interference by the IMF in the budget management to be fixed at Rp 53 trillion or at 3.7 percent of the Bruto Domestic Product and its recommendations to adjust to the changes, such as the rupiah rate against the U.S. dollar, should be accepted as only natural in view of Indonesia's long term dependency on the IMF.

Why there has been a mix-up with the House of Representatives (DPR) that believes it has not been properly consulted, in fact even by-passed, is something very hard to understand. The legislators complain that the DPR's controlling function has been ignored and they have demanded an explanation from both the government and the IMF.

However urgent the budget revision has become due to the time factor, the government also faces the problem of how the revision should be done so as not to disturb the socio-economic front such as withdrawing subsidies or raising taxes.

When it looked as if the government and the IMF had reached an agreement and the disbursement of the US$400 million loan seemed imminent, the IMF team abruptly stopped negotiations and left the country to return only when the budget revision has taken place.

While the government is ready to strike a deal the IMF, as earlier reports have suggested, the DPR is not satisfied with the current state of affairs.

The fiscal crisis is looming. Whatever measures the government takes including accepting new foreign loan commitments, these will likely do little to improve the long term conditions.

GANDHI SUKARDI

Jakarta