Ministers review projects rescheduling
JAKARTA (JP): Economic ministers met for several hours at the finance ministry yesterday to review investment projects that could be rescheduled in anticipation of lower revenues due to the currency turmoil.
But the meeting, which followed a reform package announced Wednesday to cope with the impact of the currency crisis, did not make a final decision on specific budget cuts.
"We took stock of projects according to their scale of priority. Obviously, high priority programs will not be axed," Coordinating Minister for Economy and Finance Saleh Afiff told reporters after the meeting.
Afiff, like other ministers, refused to answer questions on which investment projects would be postponed.
"We have yet to report the results of our meeting to the President," Minister/State Secretary Moerdiono said.
Budget retrenchment was one of the measures adopted at the monthly cabinet meeting Wednesday to cope with the impact of the currency turmoil and address the economic pains inflicted by the tight monetary policy over the last three weeks.
The other moves include a gradual easing of the tight monetary policy, restructuring of the banking industry, liberalizing foreign purchases of shares on the domestic exchanges and raising the luxury sales tax on several goods.
Yesterday's meeting was also attended by Finance Minister Mar'ie Muhammad, State Minister for National Development Planning Ginandjar Kartasasmita, Bank Indonesia's Governor Soedradjad Djiwandono, Minister of Industry and Trade Tunky Ariwibowo and government economic advisors Widjojo Nitisastro and Ali Wardhana.
Asked whether the national car program (sponsored by PT Timor Putra Nasional) would be one of the projects to be rescheduled, Afiff said the term "national" classifies it as a high priority project.
"Power plant projects are among the top priority," he added.
Ginandjar said no decision had been made on which projects would be rescheduled because the finance ministry and other members of the Monetary Council had yet to review revenue targets for the 1997/1998 fiscal year.
"But as I have often explained, the budget retrenchment should be done in such a way so as not to undermine the long-term foundation of our economy and affect poverty alleviation and human resource development programs," Ginandjar added.
He said projects which would likely be axed were ones financed by rupiah funds, which required imported goods and services.
"We should not aim for robust growth as in the past few years because the rupiah's sharp depreciation will surely affect our revenue," Ginandjar said.
The government would do its best to sustain economic growth at 7.1 percent as targeted for the current Sixth Five Year Development Plan. (icn/vin)