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