President to unveil 2001 budget on Oct. 2

JAKARTA (JP): President Abdurrahman Wahid is expected to deliver the 2001 budget draft to the House of Representatives (DPR) on Oct. 2, House media relations department head Iskandar Basri said on Friday.

Iskandar said that the President would deliver a speech in a plenary session to be chaired by House Speaker Akbar Tandjung.

Government officials have predicted the 2001 state budget, which runs from January to December, will have a deficit of around Rp 53 trillion (US$6.39 billion), compared to the estimated Rp 44 trillion deficit in the current April-December 2000 budget.

The deficit will be financed by foreign loans and proceeds from the country's privatization program and sales of assets under the Indonesian Bank Restructuring Agency.

The government is scheduled to meet with the country's traditional donors grouped in the Consultative Group on Indonesia some time in the middle of next month in Tokyo to seek for some $4.8 billion of loans.

But the recent killing of United Nations humanitarian workers by East Timorese militias in Atambua, West Timor, means the government will have a hard time persuading donors to agree to badly needed loans.

Government officials have said that government spending in the upcoming state budget was projected to reach Rp 283.3 trillion, while domestic revenues only amount to Rp 230.3 trillion, resulting in the Rp 53 trillion deficit.

Officials said that the largest spending would go on servicing government domestic and foreign debt.

The domestic debt has arisen from the interest rate of the government bonds issued to help finance the country's bank recapitalization program.

The next budget assumes 4 percent to 5 percent rate of economic growth, an inflation rate of between 6 percent and 8 percent, oil prices of $17-$22 per barrel, and an exchange rate of Rp 6,800-Rp 7,800 per U.S. dollar.(rei)