Overseas program loans 'off target'

JAKARTA (JP): Minister of Finance Bambang Subianto said on Monday that realized overseas program loans in the 1998/1999 State Budget ending March 31 were expected to be only Rp 30.31 trillion (about US$35.5 billion), 59 percent off target due to difficulties in meeting lenders' requirements.

He said program loans from the Asian Development Bank were expected to be Rp 13.03 trillion compared to Rp 26.58 trillion stated in the budget, with Rp 12.68 trillion from the World Bank compared to the Rp 21.26 trillion target.

"Slower realization of the program loans was particularly caused by the difficulties in meeting the requirements of the loans," he told a hearing of House Commission VIII on finance and the state budget.

He explained that although the government and the lenders signed loan agreements they would not be effective unless the legal and administrative requirements of the loans were completed.

"Completing the requirements has been time consuming which often causes a delay in the disbursement of the loans," he said.

He also said realized overseas project loans amounted to only Rp 25.92 trillion, 36.1 percent below target.

It was partly caused by the slight appreciation in the rupiah against the U.S. dollar, he said.

The state budget assumed an exchange rate of Rp 10,600 to the dollar, but the rupiah hovered at about the Rp 7,500 level for a few months, and now is trading around Rp 9,000.

Lower realization of overseas loans affected government revenue and spending in the 1998/1999 fiscal budget ending in March.

Bambang told the House last week that actual revenues in the fiscal year were expected to be around Rp 215.1 trillion, or 18.5 percent lower than budgeted, while actual spending was estimated at Rp 215.6 trillion, 18.3 percent lower than planned.

He also said on Monday that foreign loans at state-owned companies at the end of 1998 totaled $5.34 billion, in which $1.50 billion was in the form of commercial papers.

State-owned oil company Pertamina accounts for $3.64 billion and national flag carrier PT Garuda Indonesia $53 million, he said. (rei)