Govt to be flexible on state budget, Bappenas official

JAKARTA (JP): The government may extend the budget for the current fiscal year, which ends next March, to the end of 1999 taking into account the country's political dynamics, a senior official has said.

A deputy chairman for economic matters at the National Development Planning Board (Bappenas), Gunawan Sumodiningrat, said the measure was one of the few alternatives being prepared by the government to exercise flexibility while the country was going through major political events.

"Although the budget ends on March 31, 1999, we have alternatives in mind for the end of 1999 or for the next five years," Gunawan told reporters after the Board's hearing with the House of Representatives' Commission VIII, which deals with budget and finance.

But any change in the state budget would still need the approval of new members of the legislative bodies -- the House and the higher level People's Consultative Assembly (MPR) -- which will be elected in the General Election in June, he said.

"It is up to the House and the public to decide when the state budget will start or end, the most important thing is that the political agenda doesn't disrupt the economic agenda," he said.

The state budget, which must get the House's approval, normally stretches from April 1 to March 31 the next year.

However, due to the political changes, the government might prefer to break with tradition and extend the current one until the change of government.

The House announced Thursday the General Election will be held on June 7, and the newly elected MPR will convene on Aug. 29. It is this MPR which is responsible for electing a new president to replace B.J. Habibie. However, it is not clear yet when the MPR will elect the new president.

In the 32-year rule of former President Soeharto, who was forced to resign in May, the MPR normally convened a year after the general election to elect the president and to ratify several decrees including the five-year development plan.

State Minister of National Development Planning Boediono, who is also Bappenas chairman, said Friday the government would work to synchronize the political agenda with the economic agenda.

"Whatever happens, economic activities must continue. We won't let any vacuum occur in the economy and there won't be a period without a state budget," Boediono said after the hearing.

Boediono said the core of development spending in the next budget, if it is approved by the House, would still be on social safety net programs because such programs had helped improve the purchasing power of the people in the lowest income bracket.

Gunawan told reporters on Thursday evening that the government had increased the funds for social safety nets by some Rp 740 billion (US$99 million) to Rp 17.99 trillion from Rp 17.25 trillion.

The rise was aimed at improving the productive sectors, he said.

The Rp 17.99 trillion social safety nets account for 55.5 percent of the current budget's rupiah-denominated development expenditures.

The programs include provisions of staple food for the poor, creating jobs for the unemployed, channeling subsidized credits for the small and medium enterprises and providing basic health and education needs for the public.

Boediono said, however, only about 30 percent of the funds for the programs had actually been channeled, because the government was practicing prudence to prevent any leakage of the funds. (das)