House approves budget with reservations

House approves budget with reservations

JAKARTA (JP): The House of Representatives approved the
1998/1999 budget yesterday with some reservations over the weak
rupiah and falling crude oil prices.

The House also approved changes made to the current budget,
which produced a surplus of Rp 456.24 billion (US$50.7 million)
due to unexpected rises in oil prices last year.

All four factions in the House called on the government
yesterday to strengthen the rupiah from its current 9,000 level
against the U.S. dollar to the 5,000 level assumed in the
1998/1999 budget.

They also expressed concern over falling crude oil prices in
the international market which have dipped to as low as US$13 per
barrel -- far lower than the $17 per barrel assumed in the
budget.

The dominant Golkar faction called on the government to make
extra marketing efforts to achieve the crude oil price target
although oil demand in Indonesia's major oil markets of South
Korea and Taiwan have decreased.

Due to the volatile currency and oil markets, the Armed Forces
(ABRI) faction proposed that the government report on the
implementation of the budget quarterly, rather than its usual
semester reports.

Nevertheless, the ABRI faction hoped the next budget could
restore public confidence in the government and stimulate
economic recovery.

The two minority factions, the United Development Party (PPP)
and the Indonesian Democratic Party (PDI), made special calls on
the government to implement the 1998/1999 budget fairly without
favoring certain parties.

PDI spokesman Markus Wauran urged the government to make
transparent and fair tenders on big projects financed by the
state.

"The PDI faction especially calls on the government to stop
practices in tendering huge projects which favor certain
parties," Markus said.

It has become public knowledge that many large projects, be
they financed by the central government or by local
administrations, are awarded to close associates and relatives of
those in power, he said.

PPP spokesman Kaoy Syah also called on the government to use
foreign loans only to finance productive and export-oriented
projects "because so far, the allocation of foreign loans has
been dictated by vested interests or short-term political goals."

The 1998/1999 budget, which will start on April 1, balances at
Rp 147 trillion -- an increase of 45.6 percent over the current
budget.

The current budget, initially set at Rp 101.1 trillion, has
expanded to Rp 132 trillion mainly due to the higher-than-assumed
crude oil prices and rising U.S. dollar values against the
rupiah.

Another PPP spokesman, Danial Tanjung, blamed the government
for the economic crisis while he presented the faction's views on
the changes in the 1997/1998 budget.

He specifically cited arrogant attitudes from some government
officials toward critics and public suggestions as a reason for a
loss in public confidence in the government.

"The non-accommodative attitude toward critics and suggestions
has dragged this country toward big difficulties, which put more
burdens on the people," Danial said.

"In many cases, the government (makes) wrong conclusions based
on misleading data and statistics, which is manipulated to show
development successes.

"We must fairly admit that our national development successes
are not consistent because they do not mirror reality," he added.
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