House supports creditors' meeting

House supports creditors' meeting

JAKARTA (JP): The outgoing House of Representatives said on
Monday it supported the government's decision to go ahead with
the annual meeting of Indonesia's creditor consortium, the
Consultative Group on Indonesia (CGI), in Paris on July 27 and
July 28.

"We should accept the bitter reality that the government has
still to plug its budget hole for the current fiscal year with
foreign loans," Tayo Tarmadi, chairman of the House's finance and
budget commission told reporters.

Several major political parties and most non-governmental
organizations have demanded that the upcoming CGI meeting be
postponed until the formation of a new government later this
year.

Opponents of the meeting have argued that the present
transitional government has no longer any authority to make new
important decisions and external commitments after the defeat of
the ruling Golkar party in the June 7 general election.

Provisional results put Golkar in only third place after the
Indonesian Democratic Party of Struggle and the National
Awakening Party.

Tayo pointed to great risks to the state budget for the
current and next fiscal years if the creditors' meeting was
postponed in view of the government's heavy reliance on foreign
loans for covering its budget deficit.

He said the upcoming meeting would also seek foreign loan
commitments for the 2000/2001 budget of the new government.

"Whatever is decided on and committed by the present House and
government should be honored by the next government," Tayo added.

Informed sources at the finance ministry said the government
still needed US$2 billion to cover its 1999/2000 budget deficit,
which was estimated at $10.3 billion.

The government received almost $8 billion last year in new
loan commitments from CGI creditors.

The sources said CGI's sovereign and multilateral creditors
had indicated they would pledge $5 billion in new loans at the
upcoming meeting in Paris.(vin)