Rp 6.5t of RDI funds set aside for 2004 budget

Rp 6.5t of RDI funds set aside for 2004 budget

Dadan Wijaksana, The Jakarta Post, Jakarta

Legislators and the government have agreed to allocate Rp 6.5
trillion of Rp 8.5 trillion in the investment fund account (RDI)
maturing next year to help finance the 2004 state budget as part
of its non-tax revenue.

The decision was taken during a hearing between the
government, represented by the Ministry of Finance's Director-
General for Financial Affairs Darmin Nasution, and the House
budget commission on Tuesday.

"We usually manage to regain around 88 percent to 90 percent
of the matured debts each year, which for next year is estimated
at Rp 7.3 trillion. Of the amount, we decided to set aside Rp 6.5
trillion for the 2004 budget while the remaining Rp 885 billion
will be loaned back," Darmin told reporters after the hearing.

The RDI funds are derived from accumulated payments of the
interest rate and principal the central government obtains from
the extension of the two-step loans. The funds have become one of
the government's domestic sources to help finance its annual
state budget over the years.

The funds are loans from foreign creditors which the
government extends to various parties for investment purposes.
Aside from state enterprises, owned by the central and regional
governments, some of the debtors are also local administrations.

Darmin said that currently, the outstanding debts owed by
those parties stood at some Rp 63 trillion.

As of June 2003, there was some Rp 23 trillion in the RDI
account, which is currently being kept at the central bank, or
Bank Indonesia (BI) and audited annually by the Development
Finance Comptroller (BPKP).

RDI has long been regarded as one of the government's non-
budgetary fund sources. However, given its significant
contribution to the state budget, the government has never
considered RDI as an off-budget fund.

For this year, some Rp 7.9 trillion from the account was
earmarked to help finance the 2003 state budget.

According to Darmin, the contribution from RDI forms part of
the non-tax revenue in the budget.

"But, I cannot reveal the total (non-tax) revenue for 2004 as
yet, pending further deliberations on the budget with the
lawmakers."

According to the proposed 2004 draft budget, submitted to the
House in August, the non-tax revenue will total Rp 72.2 trillion,
approximately two-thirds of which will come from natural
resources.

The House and the government has been intensively debating the
2004 draft budget over the past few weeks.

Today (Wednesday), the hearing is scheduled to discuss the
allocation for subsidies, including the oil subsidy.

Last week, legislators and the government set the basic price
assumption for oil at US$22 per barrel, $1 higher than earlier
proposed in the draft, a move that would likely push the
allocation for the oil subsidy higher also.

Under the proposed budget, the oil subsidy has been set at Rp
12.7 trillion.