State budget to be unveiled next month

State budget to be unveiled next month

JAKARTA (JP): President Soeharto will propose the 1998/1999
draft state budget to the House of Representatives on Jan. 6, a
senior minister said yesterday.

Minister/State Secretary Moerdiono said the government would
stick to its balanced budget principle. The budget's composition
and amount would also reflect the ongoing monetary contagion.

"The President underlined that next year's budget must be
realistic... where expenses are to be balanced with revenue,"
Moerdiono said after meeting with Soeharto at his residence on
Jl. Cendana, Central Jakarta.

Soeharto summoned yesterday Coordinating Minister for Economy
and Finance Saleh Afiff, State Minister of National Development
Planning Ginandjar Kartasasmita, Minister of Industry and Trade
Tunky Ariwibowo, Governor of Bank Indonesia J. Soedradjad
Djiwandono, Minister of Finance Mar'ie Muhammad, Moerdiono, and
government economic advisor Widjojo Nitisastro to his residence.

Soeharto is expected to preside over a plenary cabinet meeting
on Dec. 24 to discuss the budget proposal with all economic
advisors, head of state agencies and first echelon officials.

After meeting with Soeharto last week, Ginandjar said the
budget would likely be smaller than previous years as a result of
the financial crisis afflicting the country.

He said the budget, which would be effective beginning in
April, would unlikely exceed the current 1997/1998 budget of Rp
101.1 trillion.

The 1997/1998 budget was equal to about US$42.4 billion when
it was adopted by the House in February, but sharply dropped to
about $23.5 billion in December. The value of the greenback was
only about 2,400 in February but skyrocketed to more than Rp
5,000 this month.

"The draft budget must be as realistic and as transparent as
possible," Ginandjar said.

Some government officials, who spoke on the condition of
anonymity, said yesterday it was still difficult to determine the
value of the dollar against the rupiah for next year's budget.

"The rupiah situation is still volatile, and we must be able
to forecast the most reasonable exchange rate -- this is not an
easy job," said one official.

As a part of a new three-year reform package supported by an
IMF-led team and the government, Mar'ie said on Oct. 30 that the
government would further trim its budget spending and that budget
discipline would be improved.

The IMF has insisted that the government create a surplus in
the coming budget.

"We are targeting a budget surplus of 1 percent of the gross
domestic product in fiscal 1998/1999 and subsequent years,"
Mar'ie said.

The President pointed out to his ministers yesterday that the
budget for the next fiscal year must be adjusted with the ongoing
currency crisis and spending should be curbed on unnecessary
projects.

"The President underlined that routine expenses would be
adjusted accordingly compared to the ongoing economic situation,"
Moerdiono remarked. (prb)