Budget woes

Budget analysts for the rest of the year 2000 may be divided into optimists and pessimists. The optimists believe the government will overcome the challenges; the pessimists, including a certain Dr. Sj. in the Kompas edition of Jan. 24, 2000, call it a "lack of vision". This is perhaps the sharpest criticism so far from an economist. I would highly appreciate it if Dr. Sj. would introduce in real terms and figures his vision and expose it to the public for criticism instead.

According to my modest opinion, anyone else in charge with drawing up the state budget under the present circumstances, would produce an identical oevre. There is the legacy of the former administration in huge foreign debts to be serviced and the almost impossible task (especially relating to the time factor) to restructuring the banking sector following the devastating effects of malpractice and abuse of power. The greatest value of this 2000 state budget seems to me to be its moral value or its transparent aspect. Because of a lack of resources, this budget calls for deficit spending.

Before the reform era, all budgets were declared to be balanced budgets, but contrary to the reality, they were just to please the power holders. The government deceived people by calling it balanced.

There is, admittedly, little to be optimistic about, including whether internal revenues will reach their targets through fuel price hikes or taxes, except for the positive foreign commitments to assist Indonesia's economic problems on which everything now depends.

This precarious budget is a race against time. If the rate of the national currency shows stability, it might be an indication that somehow the economy is functioning. The fundamentals are functioning, too, as it were by themselves, a token that the economy is growing, which is a good start for the state budget to run along its track, though it is full of loopholes. In the first two months (January and February), inflation seems to be under control (four percent?) because there is a slow economic growth of 3.5 percent. Whether that stability can be maintained in the months ahead and more decisively in the years ahead, remains to be closely watched.

The fact that a state budget can be introduced to the nation, though with such a dangerous deficit gap, is a positive step toward a balanced budget with less foreign debts and internal economic strains, if you believe me.

GANDHI SUKARDI

Jakarta