Soeharto proposes tight budget

JAKARTA (JP): President Soeharto proposed increasing the state budget 11.6 percent for the 1997/1998 fiscal year at the House of Representatives yesterday.

The draft budget, which when adjusted for inflation is only 5 percent larger than this year's budget, despite what the President called a political year, is envisaged to balance at Rp 101.08 trillion (US$42.8 billion).

"For the first time, our state budget will surpass Rp 100 trillion," Soeharto said in his budgetary speech at a House plenary session.

The prosed budget includes Rp 62.15 trillion of routine expenditure and Rp 38.92 trillion of investment (development expenditure).

Internal receipts from taxes and levies would generate Rp 88.06 trillion, or 87 percent of total revenue, and foreign loans would contribute the remaining Rp 13.02 trillion.

The budgetary address, like his previous speeches to introduce the draft annual state budget, recounted key economic indicators for last year, charted out the economic challenges and outlook for this year and touched on international developments.

But in view of the May 29 general election and the March 1998 presidential election, the President also mentioned the political agenda, succession of the national leadership and the new cabinet.

He said the coming general election, in which the public would exercise their democratic rights, should bring happiness.

"Therefore, we have to prevent the general election creating anxiety and suffering for the people."

He said the political climate would automatically heat up this year but we must "avoid an uncontrollable situation, clashes and animosity among ourselves".

Soeharto, apparently referring to the higher incidence of political violence last year, warned that differences of opinions should not be aggravated out of proportion, particularly when irrational elements were involved.

He admitted that there were shortcomings and disparity in the people's economic progress but warned that "what we have heard often lately were very unbalanced scrutinies of the shortcomings and gaps".

Soeharto cautioned that continuing to blow up the sensitive issues of disparity and poverty among the people could lead to riots and the destruction of economic facilities and social foundations.

"These practices are identical with sowing the seeds of dissension to destroy national unity, as exemplified by the recent incidents in several places," he warned.

He cited corruption, collusion and manipulation as other issues that could easily incite public emotion.

"The government is fully aware of the danger of these issues and will continue to take firm action to eliminate all malfeasance."

Everybody, he said, was free to observe, study, discuss and offer solutions to these shortcomings and disparity. In fact, "we all need clear, impartial and constructive observations and ideas to address those sensitive issues."

He called on the press and prominent community leaders to play a pivotal role in mobilizing public attention toward more productive things, restrain emotion and encourage clearer perception.

"A coverage that mixes the views of public leaders, both formal and informal, or exposes differences of opinions, would only confuse most people."

Soeharto stressed that a nation state could only function if there was solid national integration, when the unity and cohesion between the government, people and its territory were assured.

Development, he said, was a change toward progress. But a change was completely different from chaos.

"What we need is a planned, orderly and peaceful change," he said.

He added that law enforcement, refreshing democratic life and respecting human rights required processes.

Progress

The President recounted the great progress made in lowering the inflation rate to 6.47 percent last year from 8.60 percent for 1995.

He said the estimated economic growth last year was also respectably high at 7.5 percent, though down slightly from 8.2 percent for 1995.

"With such a growth rate, the per capita income of our nation in 1995 surpassed $1,000," he said.

But he again called for caution over the pressures on the balance of payments because the current account deficit was estimated to further increase to $9.8 billion next fiscal year from an estimated $8.8 billion for this fiscal year.

"This situation is mainly caused by the rather slow growth rate of our exports even though the growth rate of imports has slowed down," he said.

He re-emphasized the importance of continuing deregulatory and bureaucratic reforms to increase economic efficiency and strengthen the competitive edge of exports.

The President noted that high economic growth under solid and dynamic monetary stability would promote a more equitable distribution of the fruits of development.

He said the accelerated program of poverty alleviation had succeeded in cutting the number of people in absolute poverty from 26 million in 1993 to 22 million, or 11 percent of the total population, last year.

Most of the development budget, or 38 percent of the budget, would continue to be allocated for regional development which emphasized rural communities. (vin)