Foreign debts fall by 6% in three months
Foreign debts fall by 6% in three months
JAKARTA (JP): Indonesia's outstanding foreign debts dropped
nearly six percent within three months, from US$93 billion in
September 1994 to $87.6 billion last December.
Minister of Finance Mar'ie Muhammad said here yesterday that
approximately $58.6 billion of the outstanding loans recorded as
of last December were owed by the government, and the remaining
$29 billion by private and state-owned companies.
As of last September, the outstanding loans held by the
government and the private sector, including state firms, reached
$56.66 billion and $36 billion, respectively.
Speaking at a hearing with the Budgetary Commission of the
House of Representatives, the minister said the government is
committed to further reducing external debt in the future.
He said the country's debt service ratio (DSR) in the current
1994-95 fiscal year is estimated at 32 percent -- consisting of
19 percent for government loans and 13 percent for private and
state companies.
"Our target is to reduce the DSR to 20.6 percent at the end of
the sixth Five Year Development Plan (Repelita VI) period (in
1998-99). We should firmly stick to this target," he told the
commission.
The minister said that the government's programs in reducing
the foreign debt will include an emphasis on the promotion of
export activities and the creation of a business climate more
conducive to both domestic and foreign investments.
Such efforts are expected to further push down the DSR to
below 20 percent by the end of the current Repelita VI period,
which began in April last year, the minister said.
The finance minister said that offshore borrowings by private
and state-owned companies would also be tightened as part of
their strategy to alleviate the foreign debt burden.
Approval
State-owned companies and other government institutions, for
example, will have to ask for special approval from the Offshore
Borrowing Supervision Team before raising loans abroad, he said.
"Private firms do not have to pass such a procedure. But,
instead, they will have to report their borrowing to Bank
Indonesia," he said.
The government will also begin selling its shares in state-
owned companies to further reduce the debt burden.
Around $799 million raised from the sales of state-owned
Indosat shares on the New York Stock Exchange (NYSE) were used to
pay off some of the government's high-interest loans.
Indosat, the provider of international telecommunication
services, raised the funds when it sold 25 percent of its 1.03
billion ordinary shares through the NYSE in October and around Rp
650 billion ($297 million) from the sale of another 10 percent of
its shares on the local market.
The shares sold through the NYSE were government shares while
those sold at home consisted of new shares.
The minister said yesterday that the privatization of state-
owned companies will continue in order to raise funds for the
pre-payment of the government's debts carrying interest rates of
above 11 percent.
Three major state-owned companies such as PT Telekomunikasi
Indonesia (Telkom), the provider of domestic telecommunication
services, PT PLN, the state electricity company, and PT Jasa
Marga, state-owned toll road corporation, are now preparing to
follow Indosat, the minister said.(hen)