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.