Govt seek ways to ease debt burden
Govt seek ways to ease debt burden
The Jakarta Post, Jakarta
Minister of Finance Boediono said on Wednesday the government
would seek ways to help ease the burden of the 2004 state budget
in repaying government debts, including foreign ones.
"Every effort to reduce the debt burden will be made," he was
quoted by Antara as saying, but quickly added that any measures
taken, particularly in relation to foreign debts, must be
acceptable to international creditors.
The minister said that if creditor nations offered schemes to
reduce the debt burden, the government would consider the options
after studying them carefully.
He did not elaborate.
The Ministry of Finance and the House of Representatives state
budget committee are currently deliberating the government
proposed 2004 state budget. The budget talks were supposed to
have been completed last week, but legislators decided to extend
them considering the fact that the two sides have yet to agree on
a number of issues, including the amount allocated for debt
repayments as it was deemed too high. The House is set to resume
the talks with the Ministry of Finance immediately.
Under the proposed budget, some Rp 113.3 trillion, or around
27 percent of the total budget, will be allocated to repay
domestic and foreign debts. However, such a huge amount limits
the funds allocated for development programs.
Some legislators have said that the government should seek
ways to reduce the repayment of foreign debts.
The country next year will no longer be eligible for the debt
rescheduling facility provided by the Paris Club of creditor
nations as the current International Monetary Fund economic
reform program will end later this year. The country has enjoyed
some $3 billion worth of debt rescheduling facilities from the
club over the past couple of years.
Earlier reports said that the Paris Club had offered its Avian
Approach for Non-Highly Indebted Poor Countries (Non-HIPC), a
category in which Indonesia is included, to reduce its foreign
debt burden. Debt forgiveness is normally given to the HIPC
debtor category.
"We'll study this possibility too," Boediono said.
Several analysts, however, have said that without the active
presence of the IMF, the country would not be able to benefit
from the Avian approach, a system under which an eligible debtor
country can seek bilateral talks with individual creditors to
negotiate a debt relief facility.
In addition to the foreign debts, the government also has a
huge domestic debt, resulting from the cost of bailing out banks
in the wake of the late 1990s financial crisis. Among of the
measures taken by the government so far are issuing new bonds to
refinance maturing debts and selling assets.