House upset over foreign aid chunk of State Budget
House upset over foreign aid chunk of State Budget
JAKARTA (JP): The four factions of the House of
Representatives (DPR) approved yesterday the revised version of
the 1998/1999 State Budget, but continued to query the
unprecedented amount of foreign aid financing.
They pointed to the 43 percent of foreign aid financing in the
Rp 263.88 trillion budget.
"The PDI (the Indonesian Democratic Party) faction is still
not satisfied because our suggestion to lower foreign financing
to below Rp 100 trillion was not accepted," said legislator Nico
Daryanto.
On Tuesday, the government cut the foreign aid in the budget
to Rp 114.58 trillion from Rp 127.83 trillion proposed last week,
following pressure from House Commission VIII for state budget
and finance.
"But it's still a huge component and is not in accordance with
the State Guidelines (GBHN) which stipulates that foreign aid
financing should only be complementary," Nico said.
The United Development Party (PPP) warned that developing the
country with huge foreign aid financing was perilous, especially
if it was implemented amid rampant corruption, collusion and
nepotism.
PPP spokesman Endin AJ Soefihara said the burden for servicing
the foreign aid would hamper improvements in the people's welfare
and the quality of public facilities.
"The huge foreign borrowing will be a heavy burden for the
country in the future," he said.
The ruling Golkar political grouping and the Armed Forces
faction concurred.
Spokesman for the military faction Soeyanto urged the
government to be efficient in utilizing the foreign aid,
stressing that it must be ensured that subsidies, which would be
financed by the foreign aid, would reach the needy.
The International Monetary Fund (IMF) and other international
donor institutions, including the World Bank, Asian Development
Bank, China and Australia, have agreed to provide Indonesia with
$6 billion in loans to finance the huge subsidy commitments to
help the poor in surviving the year-long economic crisis.
IMF Asia Pacific director Hubert Neiss arrived in Jakarta
Wednesday for a two-week meeting with the government to review
the fund-sponsored 36-month economic reform programs and work out
details of the additional aid financing.
The government last week tabled a Rp 277.14 trillion state
budget, currently in its fourth month of implementation, but it
was pared down to Rp 263.88 trillion following approval from most
lenders to reschedule $1.25 billion in the country's sovereign
debt due this year.
Minister of Finance Bambang Subianto told House members
yesterday that the source for the payment of government debts to
the central bank, subsidies for fertilizers and cheap credit for
small enterprises and labor-intensive projects would be the
foreign aid.
Under the previous budget, these routine expenditures were
primarily financed by tax revenues.
Foreign-funded development expenditures was increased to Rp
92.68 trillion from Rp 71.60 trillion proposed by the government
last week, compared to domestic-financed routine expenditures
which were lowered to Rp 171.20 trillion from Rp 205.54 trillion.
Under the new 1998/1999 State Budget, the economy is estimated
to shrink by 12 percent, inflation to hit 66 percent, average oil
price to reach $13 per barrel and the exchange rate of the rupiah
against the U.S. dollar was set at Rp 10,600.
The assumptions were revised last week from a revised version
made in late January. The revision was made to reflect the
further deterioration in the economy. (rei)