Our foreign loans

Members of the House of Representatives have urged the government to ask the Consultative Group for Indonesia (CGI) consortium for loans totaling about US$6 billion. As House member A.A. Baramuli said, if the CGI were to approve only US$5.2 billion, Indonesia would, in real terms, be getting less than before because of inflation and increased foreign exchange rates.

At present, the government has to repay around US$5 billion annually in interests incurred. This is quite a considerable amount, particularly considering the current account deficit which totals approximately US$4 billion. The installments, which private borrowers will have to pay in both interest and principals, are also expected to grow, as short-terms loans mature.

We are not overly concerned about those foreign loans, either private or government, which have now reached a total of about US$100 billion. The loans are well managed. Nevertheless our efforts to reduce our dependence on foreign loans needs to be stepped up. This should be done, among other things, by increasing the efficacy of the relevant government apparatus, so that they will become oriented more towards achieving investor satisfaction, be better able to activate the taxation sector and be more creative in their efforts to mobilize domestic funds.

-- Bisnis Indonesia, Jakarta