Govt 'finds' Rp 21.6 trillion at BI
Dadan Wijaksana, The Jakarta Post, Jakarta
The government unveiled on Wednesday that it was holding some Rp 21.6 trillion (about US$2.4 billion) in cash stashed away in the investment fund account (RDI), part of which is to be used to help finance the 2003 state budget.
"Of the total Rp 21.6 trillion, 70 percent is in various foreign currencies," director general of financial institutions at the finance ministry Darmin Nasution told legislators during a hearing with the House of Representatives Commission IX for financial affairs.
RDI funds are derived from accumulated interest rate gains obtained from the extension of two-step loans. The funds were first originated from foreign loans, the government then extended the loans to various parties for investment purposes. The debtors vary from state-owned firms to local administrations.
The RDI funds are being kept at the central bank, or Bank Indonesia (BI), but no interest is charged. The Development Finance Comptroller (BPKP) audits the funds every year.
Darmin said some Rp 65.4 trillion of the RDI funds were now outstanding loans granted to state-owned companies, regional governments and other parties.
Darmin said the government was hoping to collect some Rp 9 trillion from the above debtors, of which Rp 7 trillion would be used as a financing source for the 2003 state budget.
RDI has long been regarded as one of the government's non- budgetary fund sources. The others are account No. 69 for contingency reserves and funds set aside by the State Logistics Agency (Bulog).
Given its contribution to the state budget, however, the government has never considered RDI as an off-budget fund source.
Nevertheless, the revelation of the existence of such a huge amount of money, should confirm that the government was never as cash-strapped as it always has claimed.
In fact, the current RDI fund balance, plus the amount to be collected from the debtors of the fund, would make up almost 90 percent of the 2003 total budget deficit, predicted to reach Rp 34.4 trillion.
With this revelation, the existence of foreign lenders such as those under the Consultative Group on Indonesia (CGI) looks much less crucial for the financial survival of the country. Indonesia, due to its self-proclaimed poor financial condition, had turned to the CGI for more loans to be used to cover the state budget deficit.
As recently as last week, the CGI granted the country another $2.7 billion in loans and aid for this year, which although helpful, will most certainly mean more burdens for tax-payers as the country has to pay every single cent of it back.
Therefore, the government's reluctance to use the RDI funds to cover the deficit, and thereby eliminate the need for new foreign loans, is certain to raise some tough questions.
When asked to comment, Minister of Finance Boediono said that the government would consider using the fund for financing the deficit in 2004.
He did not clearly explain why the government did not use such an alternative to finance the 2003 deficit. The government instead will use the CGI loans.
Since Indonesia will more than likely stop receiving loans from the International Monetary Fund (IMF) by the end of the year, the country's need for budget financing is more important than ever.
Without the IMF, Indonesia is predicted to have difficulties in securing financial aid from the international community, whose assessments on the country's economy are usually based on the progress of IMF-mandated reforms.