Tue, 11 Oct 1994

RI's foreign aid likely to exceed original target

JAKARTA (JP): New grants and loans accrued by the government from foreign creditors for development projects will likely exceed the original target of Rp 10.01 trillion (US$4.57 billion) due to the appreciation of the Japanese yen against the rupiah, a minister says.

"Details of the realization of the offshore aid are now being calculated but it will most likely go higher than our target," State Minister of National Development Planning Ginandjar Kartasasmita, told a hearing with the Budgetary Commission of the House of Representatives (DPR) yesterday.

For this 1994/1995 fiscal year, Indonesia has received aid commitments of $5.2 billion from the Consultative Group for Indonesia's (CGI), including $1.67 billion from Japan.

Ginandjar, who is also chairman of the National Development Planning Board (Bappenas), assured the Budgetary Commission that the government will be able to repay its offshore loans, most of which have been accrued with concessional terms offering low interest rates with long-term maturity.

Ginandjar did not reveal the government's total foreign debt, but Minister of Finance Mar'ie Muhammad last month disclosed that the country's offshore borrowing reached $89 billion as of June, including $59.46 billion owed by the government and $29.5 billion by the private sector. Over 40 percent of the government's total debts are denominated in yen and the rest in other currencies.

Ginandjar said that the government will not depend much on offshore loans. "In the future, we plan to gradually reduce reliance on offshore loans," he said.

Next year

In spite of the country's efforts to curb its loan reliance, the government, under its Sixth Five Year Development Plan (Repelita VI), expects to obtain Rp 11.35 trillion in foreign aid next fiscal year.

"The aid planned for next fiscal year will be used mostly to develop human resources, infrastructures in rural areas and less- developed provinces, management, as well as improve industrial production and promote poverty alleviation in the less-developed regions," Ginandjar said.

He told reporters during a break in yesterday's hearing that CGI creditor members are expected to meet the government's demand for new aid next year because it has thus far performed well in debt repayments. (fhp)