The Government Will Attempt to Delay Debt Payment



6th September, 2001.

The government will try to delay payment of debts in order to boost the income of foreign funds in the 2002 State Budget Draft. Minister of Finance Budiono made this statement to the press following a cabinet meeting held at the State Secretary Building in Jakarta this afternoon (06/09).

According to Budiono, the Budget Draft is listed amongst Indonesia’s economic recovery programs for the next few months. Therefore, apart from depending on funds from the Consultative Group on Indonesia (CGI), the government will also try to delay payment of debts to the third Paris Club consultative meeting.

Budiono said that the current Paris Club consultative meeting would end in March 2002. Thus, the government will immediately discuss further the details of the third phase of the Paris Club meeting with donor countries. "We’ll certainly approach the major donor countries," he said.

Budiono emphasized that the 2002 Budget Draft is aimed at finding a balance between fiscal consolidation and fiscal stimulus. Therefore, he said, the government will try to manage the fiscal sector and use the fiscal policy to maintain the rate of growth .

The government will also develop supporting segments from the private sector. "This is very important and we will endeavour to encourage further developments in this sector," Budiono said.

He also stated that basic assumptions provided in the Budget Draft really only dealt with a range interval that has been agreed to by the government and the House of Representatives (DPR) in a prior meeting. Nevertheless, Budiono was not prepared to mention the exact figures.

Budiono added that, generally speaking, the budget for development would witness a moderate increase. "Meanwhile, the other posts might decrease, such as the post for fuel subsidies," he said. In his view, domestic income would also decrease because of the different assumptions used for the currency rate in 2001.

Both the Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti and Budiono declined to reveal the exact figures for the 2002 Budget Draft. They promised to deliver these figures in a meeting with chief editors from the mass-media tonight at the Ministry of Finance in Jakarta.