New state budget draft welcomed by legislators

JAKARTA (JP): Members of the House of Representatives welcomed on Friday the 2002 state budget draft unveiled by President Megawati Soekarnoputri, saying it was realistic and business- oriented.

"We think the budget is quite realistic and shows the government's seriousness in helping small and medium-sized businesses," House Speaker Akbar Tandjung said.

"We also appreciate the government's decision to increase the budget allocation for certain sectors, such as education, health, infrastructure and agriculture," he added.

It was the first time Megawati unveiled the budget draft since assuming power in July.

The budget will be first debated by legislators before the House approves the proposal.

Megawati's predecessor, Abdurrahman Wahid, was forced to revise his state budget by the legislators, who in July decided to unseat him due to incompetence.

Meanwhile, analysts have said Megawati might not face a tough time with the legislators, particularly since her Indonesian Democratic Party of Struggle (PDI Perjuangan) dominates the House.

However, the analysts said she would have to work hard to convince legislators from other factions of her plans to raise fuel prices, a politically sensitive issue in the country, and electricity rates as well as accelerate the privatization program.

PDI Perjuangan legislator Benny Pasaribu, who heads House Commission IX for financial and development planning affairs, said that the draft budget was prudent and realistic.

"In general, the budget is the best the government has ever produced," he said, pointing out its effort to curb the deficit, reduce subsidies and increase the budget for education, health, social welfare and public utilities.

He urged, however, the government and Bank Indonesia to reduce the real interest rate to between 3 percent and 4 percent to allow the real sector to recover.

Benny said issues, such as the tax ratio, real interest and privatization as well as the sale of Indonesian Bank Restructuring Agency (IBRA) assets, could stay back for the House to endorse the budget immediately.

"We have long asked the government to sell assets held by IBRA to ease pressure on the 2001 state budget, and not to cover the deficit as it is now," he said.

Benny said the House would also stand by its previous suggestion to set the tax ratio at 13.6 percent, compared to the government's 12.8 percent, and real interest rate of between 3 percent and 4 percent.

He also said that Commission IX was expected to convene immediately to debate the proposed state budget.

"We hope to approve the budget by the end of October at the latest," he said.

Meanwhile, Golkar Party legislator Paskah Suzetta doubted the government could meet the economic growth target of 5 percent in 2002 and average exchange rate assumption of Rp 8,500 to the U.S. dollar, particularly due to a host of obstacles including the remaining security problems at home and the global economic slowdown.

However, he hailed the government privatization program.

"I fully support the move because in the medium and long-term, it will benefit the country," he said.(03)