Fri, 30 Nov 2001

Emergency funds rejected

The Jakarta Post, Jakarta

The House of Representatives rejected on Thursday the government's proposal to raise emergency funds in the event oil prices fall below US$22 a barrel, the assumed price in the 2002 state budget.

The House's budget committee turned down raising contingency funds worth Rp 1 trillion (about $96 million), reasoning the amount should go to development spending.

Finance minister Boediono warned legislators that a shortfall in oil revenue might force the government to cancel projects that were already underway by next year.

"A project which cannot be completed will hurt us more than if it hadn't begun at all," he was quoted as saying by during a hearing with the budget committee.

There is fear the current oil price slump may extend to 2002, given the grim outlook on the global economy for that year.

But legislators said the 2002 budget already reserved funds from routine spending posts, that if accumulated, could amount to some Rp 9 trillion.

"So there is no need to allocate funds from development spending," said legislator Paskah Suzetta.