Govt to curb new foreign loans

Govt to curb new foreign loans

JAKARTA (JP): The government will continue to curb new foreign
borrowings to prevent the total foreign debts outstanding, as a
percentage of the country's gross domestic product, from
increasing beyond 52 percent at present, a minister says.

"We instead plan to gradually reduce the ratio of our total
foreign debts against our GDP to 46 percent by 1999," said
Minister of National Development Planning, Ginandjar
Kartasasmita, in a hearing with the Budgetary Commission of the
House of Representatives yesterday.

Ginandjar said that even though the country's foreign debts
would continue to increase in absolute terms, their ratio against
the GDP would not rise from its current level.

"During the current Sixth Five Year Plan (1994-1999) the
government will also see to it that the debt service ratio
against export earnings decreases to 28.2 percent," he added.

Of the 28.2 percent, he said, 20.6 percentage points will
consist of government debt service and the other 7.6 percentage
points of private debt service.

Indonesia's debt service ratio at present stands at
approximately 30 percent.

Ginandjar did not mention the total amount of foreign debts
outstanding at present but official figures recently put it at
US$93 billion as of last September.

The government has acknowledged that the total foreign debts
might reach the $100 billion mark this year.

Senior economist Sumitro Djojohadikusumo even estimated last
December that the country's total foreign debts would increase to
$110 billion in 1998.

According to Minister of Finance Mar'ie Muhammad, $56.66
billion of the foreign debts were owed by the government and the
remaining $36 billion by the private sector.

Ginandjar was optimistic that concerted efforts to promote
exports would result in a reduction of the debt service ratio.

"We expect to expand our exports by 16.8 percent a year during
the next five years," he added.

Ginandjar said the government would also do its best to check
the current account deficit at two percent of the GDP. (fhp)