Debts a burden to next generations

Debts a burden to next generations

Finance Minister Mar'ie Muhammad said, after meeting with
President Soeharto, that Indonesia will be able to repay its
foreign debts amounting to US$ 100 billion (over Rp 200
trillion). The loan is still under control, according to him.
But, in my opinion, if the foreign loan is a long term one, the
next generations will inevitably be burdened by the obligation to
repay it.

It is true that we will be able to pay the interest while the
loan itself is too burdensome because the government always
maintains the principle of balanced budget. The government also
has to finance projects like electricity generating plants and
other development projects, so that in 1998, I believe, the
government will continue to borrow money from donor countries,
increasing Indonesia's loans from Rp 220 trillion to well over Rp
330 trillion.

Minister Mar'ie Muhammad further explained that only 60
percent of the loans are government loans and the remaining 40
percent is owed by the private sector. This clearly shows that
the country's loans benefit Indonesian entrepreneurs
who have enjoyed credit facilities from state-owned banks. The
problem is that the entrepreneurs, knowing that the foreign loan
is a long term one, feel no pressure to repay their debt as
quickly as possible. Instead, they will expand their business,
if necessary, by obtaining new loans from the government. It is
not surprising that this kind of business has created powerful
businessmen or even tycoons.

The present generation will soon reach old age and die and
leave our children, grandchildren and great-grandchildren to pay
the country's debts. This should be realized by the present
generation. On the other hand, the government cannot force the
businessmen to repay their debt as quickly as possible, because
the latter feel that they have done meritorious deeds by
contributing a lot of money to different foundations run by
government officials.

H.G. MALIKMASS

Jakarta