Debt and economies crisis sinking RI

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

With US$139 billion in foreign debt coupled with a crippling economic crisis, Indonesia is like a ship that has almost sunk.

That was the figure of speech that Vice President Hamzah Haz used on Monday to describe how Indonesia was in the middle of a life-and-death battle for survival.

"It's a good thing that the 'ship' has not sunk, as many have feared," he said, when addressing the National Love Flowers and Fauna Day.

Hamzah was defending the government's views on the bleak economic prospects that President Megawati Soekarnoputri had acknowledged in her accountability speech to the People's Consultative Assembly on Thursday.

Hamzah said the country's crisis was due to an accumulation of problems and the mishandling of economic activities over the past three decades.

The heaviest burden that Indonesia has to shoulder is foreign debt, which consists of $72 billion in government debt and $67 billion in private debt as of April, according to the Indonesian central bank.

The sinking economy is only one problem, Hamzah said. There is a host of others, such as environmental destruction and acute social ills.

Critics say that the Megawati administration has done little to assist the economic recovery. Nothing has improved since she ascended the presidency three months ago.

"When they say that over the last 100 days the government economic team has not yet achieved anything, I say it is fortunate that the country has not sunk yet," Hamzah remarked.

"Our economic condition is very critical, every aspect of our life is in danger ...," he added.

He said that economic indicators showed the country should already have sunk due to the mismanagement of resources in the past three decades, so it would be impossible to see signs of recovery very soon.

Hamzah said the government had to recover some Rp 600 trillion (US$600 million) of losses from the private sector, which collapsed after being hit by the economic crisis in 1997.