Optimize local resources; House

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)