House approves 2003 budget

House approves 2003 budget

The Jakarta Post, Jakarta

All factions of the House of Representatives unanimously
approved, at a plenary session on Wednesday, the government-
proposed 2002 draft state budget into law.

The approval will clear the way for regions across the country
to start drawing up their own budgets.

The regions draw up their budgets based upon figures
stipulated in the central government budget.

Based on the approved budget, regions are also entitled to
receive funding from Jakarta for next year's administrative
expenditure.

The approval also wraps up weeks of intense debate between the
government and the House budget commission in revising the draft
budget, first proposed by the government in August.

Following the Oct. 12 Bali bombings, the budget needed to be
reviewed to take account of the impact on the country's economy
caused by the terrorist attack.

The revised 2003 budget assumes an average rupiah exchange
rate of Rp 9,000 against the U.S. dollar (compared with Rp 8,700
in the first draft budget), economic growth at 4 percent (5
percent), inflation at 9 percent (8 percent) and an international
oil price of US$22 per barrel ($20.50).

In the plenary meeting, almost all factions highlighted the
government's plans for a Rp 10.6 trillion economic stimulus
package.

The factions agreed that such a plan was necessary to help
minimize the Bali impact. However, they also urged the government
to focus the stimulus on economically productive sectors in order
to create as many job opportunities as possible.

The stimulus brings total development spending to Rp 65.1
trillion and boosts the budget deficit to Rp 34.4 trillion, from
the initial proposal of Rp 26 trillion.

The new deficit figures will provide the government with
stronger reasons to ask its main donor countries, in the
Consultative Group on Indonesia (CGI), to raise their loans to
the country.

The CGI is scheduled to meet early next year to discuss the
matter.