State budget is safe, says new finance minister
JAKARTA (JP): Newly appointed Minister of Finance Bambang Sudibyo said on Friday that the state budget remains in a safe position despite the delay in disbursements from the International Monetary Fund (IMF) and World Bank (WB) loans.
Bambang denied reports that there was a deficit in the state budget, saying about Rp 39 trillion (about US$5.5 billion) was available in the state coffers.
"There is about Rp 17 trillion available from the surplus of the previous fiscal year's budget and about Rp 22 trillion of undisbursed funds (in the current budget)," he said after a ceremony marking the official transfer of the post from his predecessor Bambang Subianto.
The finance minister's statement contradicted the statement made by Coordinating Minister of Economy and Finance Kwik Kian Gie, who said the state budget for the 1999/2000 fiscal year ending in March was in a negative position.
"I have reviewed the current budget ... and it is quite safe. So it is not true that the budget is in a deficit," he said.
He said with the existing funds, the government would still be able to finance routine government spending, including covering civil servants' salaries of between Rp 3 trillion and Rp 4 trillion per month.
The ministry's director general for budget affairs, Darsjah, supported Bambang's view, saying the existing funds were sufficient to finance government spending until December.
He said revenues from oil and gas exports, taxes and loan disbursements from international creditors would be able to cover spending from January to March.
The IMF, WB and Asian Development Bank (ADB) suspended loan disbursements to Indonesia in September after the previous B.J. Habibie administration failed to keep its promise to international donors by publishing the audit report on the Bank Bali scandal.
The IMF demands the disclosure of the PwC report for the sake of transparency.
The IMF is organizing a $43 billion bailout fund to help finance the country's economic programs for solving the economic crisis.
Out of the fund's total commitment of $12.3 billion, some $9.5 billion has been released. A disbursement from the IMF would also encourage other donors to lend money and investors to invest.
Review
Separately, Kwik said the government and the IMF would review the country's economic reform program following a major change in political, social and economic conditions.
Kwik said the review in the IMF-mandated economic reform was necessary due to those major changes.
The newly appointed coordinating minister did not say which programs would be reviewed, but he stressed that the change would not affect the government-sponsored bank recapitalization program.
Kwik, once an outspoken critic of the IMF reform program, said the review which would be discussed with IMF Asia-Pacific director Hubert Neiss during his visit to Jakarta next week would be a matter of adjusting some parts of the relief program to the changes in the country's political, social and economic landscape.
Most of the reform program agreed with the IMF and the WB would be still in place, he said, adding that his main duty would be to continue the implementation of the reform programs agreed to with the IMF and WB.
He said the main priorities would be to help the unemployed through the existing safety net program, handle malnutrition problems, eradicate corruption as well as to seek the resumption of the stalled loans from international creditors.
Publishing the full version of the Bank Bali report would pave the way for the loan resumption, he said, adding the IMF would not force the government to wait until the bank scandal was cleared up before resuming the flow of aid it halted.
Included in the transparency requirement is allowing public access to the full report of the independent audit into the bank scandal by accountants PricewaterhouseCoopers (PwC), he said.
"If that is met, then it is settled and they will resume their aid. They will not wait for the police process," Kwik said.
The Bank Bali scandal revolves around the payment of a Rp 546 billion (US$80 million at current rate) "commission" by Bank Bali to a private firm to recover interbank loans.
The loans, which were guaranteed by the government, should have been paid automatically without recourse to a third party.
Habibie and former government officials closely linked to the case have flatly denied they benefited in any way from the money paid to the private firm, PT Era Giat Prima, or that it was used to allegedly fund Habibie's failed campaign to win a second term. (prb/udi/hen)