President to unveil 2001 budget on Oct. 2

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)