State budget draft realistic: Analysts
JAKARTA(JP): Noted analysts hailed as "realistic" the 2002 state budget draft delivered on Friday by President Megawati Soekarnoputri at a plenary session of the House of Representative (DPR).
Raden Pardede, a senior economist at Danareksa Research Institute, said that, as a whole, the 2002 budget bill was realistic and attainable as it contained conservative, yet wise, basic economic assumptions.
"Generally speaking, I find the draft realistic and I give credit to the government for taking this relatively conservative approach," he told The Jakarta Post by phone on Friday afternoon.
"With the exception of the 5 percent economic growth and the sharp reduction in the oil and gas output to 1.23 million barrels per day (bpd) from 1.4 bpd in this year's budget, I endorse other assumptions of the proposed budget such as the rate of inflation, the interest rate of the (central bank's) SBI (promissory notes) and the rupiah rate (against the dollar)," he said.
He dismissed the five percent economic growth as "too ambitious" and the sharp decline in the oil and gas output as "confusing".
The draft budget assumes a rate of inflation set at 8 percent, the rupiah rate against the dollar at Rp 8.500 and the oil price at US$22 per barrel.
Another analyst Bustanul Arifin of the Institute for the Development of Economics and Finance (Indef) also admitted that "realistic" was the right word for the 2002 January-December budget draft.
Major international lenders for Indonesia such as the International Monetary Fund (IMF) and the World Bank also welcomed the proposed draft, saying that it struck the right balance between prudence and stimulating growth.
"It's a prudent budget recognizing the importance of stabilizing the economy and social goals," David Nellar, the fund's senior executive in Jakarta, said on Friday, as reported by Reuters.
The World Bank described it as "well designed", saying the macroeconomic assumptions were generally realistic.
"We welcome the focus on reducing government debt and fuel subsidies, while reallocating resources to priority development programs such as basic education," said Mark Baird, World Bank country director for Indonesia.
Bustanul shared Raden's view that the assumption of 5 percent growth was unrealistic.
"I must say that the figure is too optimistic. It's almost impossible. My estimation is that we could only reach growth of 4.2 percent at the highest," he said.
"But praise should be given to the government for its willingness to allocate more funds to the education and health sectors. The increase of 24 percent for the education sector should be highly appreciated."
Both Bustanul and Pardede also greeted the cutting of the fuel subsidy budget but reminded the government the subsidy cut could place a heavy burden on the poor who are still struggling to recover from the economic crisis.
Meanwhile, private think thank Econit, which was founded by former Coordinating Minister for the Economy Rizal Ramli, said the draft budget showed the government was more concerned with the IMF's demands than with the public.
Econit said in a press release obtained by The Jakarta Post on Friday evening that the government's prioritizing of the IMF was indicated by the huge funds allocated for servicing the country's foreign debt, which is up to twice the amount allocated in this year's budget. (10)