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