Whither our foreign debt?

Whither our foreign debt?

The one issue which is often mentioned in relation to foreign
debt is our inability to absorb the funds optimally. This is
caused by a discrepancy between planning and execution. And for
this the government has to pay a US$200-million commitment fee a
year.

In the case of the foreign debt of the private sector,
however, the condition is quite different. In this case, the
maturity date is shorter and the interest rate is higher. The
private sector's total debts now account for 40 percent of
Indonesia's total foreign debt of $93 billion.

Placement of funds is a crucial issue in the case of foreign
debt in the private sector. If it happens to be put into a
lucrative business, it is fine. But if it is not, or even worse,
if the loans go bad, there are bound to be problems.

Thus far, the foreign debt has never become a national
concern, thanks to prudent handling. Nevertheless, efforts to
boost exports coupled with an enforcement of an austerity policy
are very important. This should apply especially to the middle
class people. They should not let themselves become the victims
of consumerism.

-- Bisnis Indonesia, Jakarta