Sumitro criticizes govt over budget inconsistency
Sumitro criticizes govt over budget inconsistency
JAKARTA (JP): Indonesia's most senior economist Sumitro Djojohadikusumo yesterday criticized the inconsistent way that the government has been implementing the balanced budget system.
"The balanced budget should be reestablished because the budgetary procedures are getting more ambiguous," he said.
Sumitro said state budgets no longer followed the principle of balanced accounts because a large amount of public expenditure was being made outside of state budgets.
The economist was speaking at a seminar at Atmajaya University. The seminar was one of the events organized by the university to celebrate the 70th birthday of Frans Seda, a senior minister in the early years of President Soeharto's administration.
Sumitro said that since a large amount of the funds that have been collected by the government were unaccounted for in the state budget, a significant portion of public expenditure was beyond the control of the House of Representatives.
"Where does the government put the funds raised from forest concessionaires," he asked rhetorically at the meeting which featured senior economists M. Sadli and Subroto of Indonesia, H.W. Arndt of Australia and Kemal Siber, a former executive of the International Monetary Fund in Indonesia in 1966 to 1970, as panelists.
The government collects billions of rupiah in forestry royalties every year but most of the funds are used for out-of- budget expenditure.
The state-owned company IPTN has borrowed some of the forestry funds to finance its aircraft manufacturing program.
"Non-budgetary spending should be avoided in the future," Sumitro said.
Sumitro was a guest, not a panelist, at the seminar but he was asked by its chairman, Rizal Ramli, to come forward to answer some questions raised from the floor.
Ben Mboi, a former governor of an East Nusa Tenggara province, asked the panelists on the difference between Widjojonomics and Habibienomics.
Subroto, a former minister of mines and energy and a former secretary general of the Organization of Petroleum Exporting Countries (OPEC) replied even though the other panelists would not discuss the issue.
Subroto said the economic development concept used by Widjojo Nitisastro, the main architect of Indonesia's economy from the late 1960s to the late 1980s, was wholly based on basic economic theory. Whereas, he said, the concept favored by B.J. Habibie, the state minister of research and technology, emphasized applications of high technology.
Subroto supported Habibie's concept, arguing that the use of high technology was essential in meeting rapid changes in world economics.
Sumitro, however, argued that technology should be tailored to optimally develop the country's natural resources.
The technology that most optimally develops natural resources is the most effective technology for solving the country's unemployment problem, Sumitro said.
"Widjojo made a clear choice and set up the right priority scale in the development plan to cope with prevailing economic problems. This kind of concept is most relevant in the current situation," Sumitro said.
Last year Sumitro sharply criticized Habibie's statement on competitive advantages versus comparative advantages. (hen)
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