Govt repays high rate WB loans
Govt repays high rate WB loans
JAKARTA (JP): The government has settled all the high-interest loans provided by the World Bank through its loan prepayment program, Minister of Finance Mar'ie Muhammad said yesterday.
The minister told the House of Representatives (DPR) in a plenary session here that the prepayment of the World Bank loans, mostly carrying interest rates of above 10 percent per annum, was financed by proceeds from the sales of the government's shares in state-owned companies PT Indosat, PT Timah and PT Telkom.
He said that before the loan prepayment was made in early 1994, outstanding government debts carrying interest rates of 10 percent and above totaled US$2.15 billion.
Out of the total of high-interest loans, $687.9 million were obtained from the World Bank and the remaining $1.47 billion from the Asian Development Bank.
"In the 1994/1995 fiscal year, the government settled the repayment of $782.9 million in high-interest debts," Mar'ie told the meeting, which deliberated the government's budget plan for 1996/1997.
He explained that the prepaid debts consisted of high-interest borrowing of $423.2 million from the World Bank, and another $359.7 million from the Asian Development Bank.
In the first semester (April-September) of 1995/1996, the government prepaid debts worth $264.7 million to the World Bank, he said. "This means that all high-interest borrowing from the World Bank has been settled," he said. "It also means a reduction in the government's high-interest debts to only $1.1 billion, all of which was obtained from the Asian Development Bank."
He said the government planned to prepay $498.1 million of the total high-interest debts in the remaining months of the current fiscal year, which will end in March.
The minister also said the government would continue the prepayment of its high-interest borrowing next fiscal year. But he did not specify if the planned debt prepayment would also be financed with proceeds to be raised from the sales of the government's shares in state-owned companies.
Mar'ie said earlier that the government is now preparing other major stated-owned companies to go public, including PT Krakatau Steel.
According to Bank Indonesia, the central bank, the government's outstanding external debts totaled $64 billion as of last June.
71.4 percent of these debts were categorized as concessional borrowing, carrying annual interest rates of less than 3.5 percent with a repayment period of up to 25 years. Another 25.7 percent were semi-commercial loans and the remaining three percent were commercial loans.
Interest rates on semi-commercial and commercial loans were around 6 percent to over 10 percent.
Minister Mar'ie also told the House that the government will check the depreciation of the rupiah against the U.S. dollar at about 5 percent in 1996/1997.
Last year, the rupiah depreciated by around 5 percent, more than the government's initial projection of 4 percent.
Mar'ie said that the 5 percent depreciation of the rupiah against the American dollar will partly contribute to the increase in the government's expected oil revenues.
The government's revenues from oil and gas are projected to increase by 6.4 percent to Rp 14.12 trillion ($6.1 billion), mainly due to an expected increase in crude oil and liquefied natural gas (LNG) exports.
The government's domestic revenues from non-oil sectors, mostly in the form of taxes, are expected to increase by 20.9 percent to Rp 64.08 trillion, while those from foreign aid are projected to increase by 5.6 percent to Rp 12.41 trillion.
Revenues from oil and gas will account for 16 percent of the government's total revenues in the 1996/1997 fiscal year. (hen)
Oil revenues -- Page 8