Government in no rush to complete debt management bill: Minister
Government in no rush to complete debt management bill: Minister
Rendi A. Witular, The Jakarta Post, Jakarta
The government is in no rush to complete the current draft of a debt management bill and is rejecting suggestions to include in the bill the establishment of a new semi-permanent agency tasked solely to manage debt, a minister has said.
The statements run counter to calls for the government to better manage and coordinate its huge debt -- already at an alarming level due in part to a lack of coordinated efforts in managing and supervising its loans.
"We are currently drafting a bill on debt management, but we don't see any urgency to finish it immediately," said State Minister of National Development Planning Sri Mulyani at the Presidential Palace on Tuesday.
She did not give an indication of when the bill would be completed.
Although at the moment the current debt management authority is scattered over several institutions, the government would insist on continuing to maximize the function of the existing institutions, Sri Mulyani added.
At present, the debt is managed separately by the Ministry of Finance, Bank Indonesia and the National Development Planning Agency (Bappenas), which is chaired by Sri Mulyani, a former top executive with the International Monetary Fund (IMF).
The ministry of finance and Bappenas deal with debts derived from bilateral and multilateral cooperation, while the central bank and the ministry of finance manage commercial debt, including bonds and special loans -- such as the one provided through an IMF lending program.
This has prompted several economists to call for the drafting of a debt management mechanism amid unclear coordination among agencies authorized to manage the debt, an insufficient supervision system that has led to various reports of irregularities and inefficiency.
Other priorities that they suggested for the bill were clear- cut procedures in securing, channeling and the monitoring of loans, and the need for setting up a semi-independent agency to concentrate solely on dealing with loans.
However, Mulyani claimed that there was no need for the new agency since its function would duplicate what other institutions had been doing.
"We have not come up with any idea of setting up a new agency to deal with the debt yet. I think the existing institutions are sufficient enough. They only need to be properly coordinated and maximized," she said.
Debt servicing has been a major headache for the government, already burdened heavily by the whopping cost of subsidizing domestic fuel.
Under the revised 2005 state budget, the government set aside Rp 52 trillion (US$5.1 billion), about 10 percent of this year's total expenditures of Rp 511 trillion, to service foreign debts -- both principal and interest.
Based on the central bank's report, as of Dec. 31, 2004, the government's foreign debt alone stood at US$82.2 billion.
Reports from various research agencies and non-governmental organizations have alleged that embezzlement of foreign debts reaches up to 30 percent of total loans.