Indonesia's foreign loans dilemma

Indonesia's foreign loans dilemma

Before any accord was reached about the amount of assistance
Indonesia would be getting from the Consultative Group on
Indonesia, public demands were aired through demonstrations and
press statements that the government ask the aid consortium to
scrap all loans acquired during the former New Order regime. The
question of whether foreign loans are needed is a classic
predicament.

In relation to the current year's state budget, however, there
is reason to be somewhat relieved. The fact that overseas loans
are no longer posted in the state budget as revenue, as was the
case in the past, reflects the government's realism. This year's
state budget is no longer (misleadingly) made out to be balanced,
as in the past. We have stopped fooling ourselves by admitting
that a budget deficit exists.

By admitting the budget deficit, we are also putting an end to
the practice of government departments squandering money at the
end of the fiscal year, just to use up their budget leftovers
without considering that the money was borrowed and would
eventually have to be repaid.

Viewed in this context, the demands that our old debts be
scrapped is irrelevant. Like the heirs of people who have died,
states too must continue to meet their obligations (after any
change of government). It is true that we are at present in
trouble. Still, it would be a dishonor to ask for a reprieve. Not
only is our dignity as a nation involved, but we are convinced
that with hard work we will be able to survive.

-- Media Indonesia, Jakarta