Optimize local resources; House

JAKARTA (JP): Members of the House of Representatives said yesterday the government should optimize its efforts in mobilizing domestic resources and refrain from relying heavily on foreign aid.

Legislator Tadjudin Noer Said of the House's Budgetary Commission said the government should not see the large amount of foreign loans Indonesia received every year as a sign of success or donors' trust in Indonesia.

"Any decline in foreign aid should not be seen as a sign of donors' loss of trust in us. It is actually the opposite, especially since we've just passed a bill on nontax revenues which will bolster state revenues," he said, as quoted by Antara.

He was commenting on the possibility of donor countries grouped in the Consultative Group on Indonesia (CGI), notably Japan -- the largest creditor -- reducing their annual aid to Indonesia.

"What we should worry about is whether we can get rid of our perception that large foreign loans equal our success or our ability to win donors' trust," he added.

"If this is true, we will never be encouraged to mobilize domestic resources," he said.

Tadjudin said it was time the government started designing schemes to reduce foreign loans and intensify the tapping of domestic resources.

Japan Premier Ryutaro Hashimoto said earlier this month that Japan's official development assistance (ODA) would be slashed by as much as 10 percent next year, marking the first decline in two decades.

The ODA budget, he said, would continue to decrease annually during a three-year period. A maximum 10 percent cut was aimed for in fiscal year 1998/1999, which starts next April.

The Japanese government has allocated 1.17 trillion yen (US$10.2 billion) to its ODA budget for the current fiscal year 1997/1998, which started last April. This amount was up 2.1 percent from a year earlier.

Indonesia and China are the biggest recipients of Japanese aid.

State Minister of National Development Planning Ginandjar Kartasasmita said earlier this week that Indonesia was "concerned" about Japan's aid cut.

"I understand the situation, but our need for development funds is also very big," he said during a meeting with Foreign Minister Yukihiko Ikeda in Tokyo.

Ginandjar was in Tokyo to lobby Japan, which is currently CGI's most important donor member. CGI is scheduled to hold its annual meeting in Tokyo on July 14 to determine the amount of aid for Indonesia for fiscal year 1997/98.

Chairman of the House's commission VII on finance, Syaiful Anwar Husein, said yesterday Japan's decision to cut back aid for Indonesia was prompted by Indonesia's rapid economic growth.

"This will force us to stand on our own two feet, which means the bulk of state revenues will come from our own sources," he said, adding that five bills on tax and nontax revenues, which had recently been passed by legislators, could help the government significantly increase its revenues.

He said the decline in foreign aid could also be seen as a challenge to Indonesia's ability in setting its priorities and conducting budgetary discipline.

"If all state receipts are accounted for in the state budget, it will be easier for legislators to control," he said, as quoted by Antara. (pwn)