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INFID Related Issues IMF/Budget 2003 President Megawati Sukarnoputri
unveiled on Aug. 16 the state budget draft, which highlights a sharp cut in subsidies
and a hike in tax revenue. The government proposes a 39 percent cut in
subsidies to Rp25.3 trillion (US$2.91 billion) for next year, compared to
Rp41.6 trillion allocated for the 2002 state budget. The cut in expensive
subsidies is crucial to help bring down the state budget deficit to 1.3
percent of gross domestic product (GDP) from 2.5 percent estimated for 2002
in a policy aimed at achieving fiscal sustainability. Megawati also plans to
set aside some Rp80.9 trillion for interest debt payment, of which 55.1
trillion is allocated for servicing domestic debt. To help finance this
public debt burden, Megawati proposes an 18.7 percent hike in tax revenue to
Rp260.8 trillion. State expenditures for the 2003 state budget are estimated
at Rp354.1 trillion, compared to Rp344 trillion in the current budget.
However, because of the huge debt burden, only a little can be spent on
public works or other development programs. Development spending is set at
Rp54.5 trillion or 2.8 percent of GDP. In comparison, spending for servicing
the public debt next year is set at 4.1 percent of GDP. The International Monetary Fund
(IMF)’s representative in Jakarta, David Nellor, backs Indonesia’s
macro-economic assumptions. The government projects the national economic
growth rate in 2003 at five percent, the inflation rate at eight percent, the
rupiah at 8,700 against the US dollar, Bank Indonesia’s certificate (SBI)
interest rate for three months at 13 percent, the crude oil price at US$20.5
per barrel, and oil production at 1.2 million barrels per day. If the
government could reach those targets, Nellor said, it would spur exports and
investments as well. State Minister for State Development Planning Kwik Kian
Gie shared the same opinion with Nellor, saying the President’s assumptions
were realistic. But asked to comment on the projection that the government’s
domestic debt would decrease, Kwik simply said, "How could it?" He
also said that the IMF would become more forceful in imposing its own will
during the remaining time of its contract with Indonesia until the end of
2003. The Jakarta Post calls the state
budget proposal as "an austere budget":
http://www.infid.be/austerebudget.html. Sources: JP 18/08, AA 19/08 General News Fires in Borneo Environmentalists warned on Aug.
20 that fires raging in Indonesian Borneo posed a serious threat to the
survival of its remaining forests. Tommy Soehartono, a senior official in
Kalimantan with the World Wide Fund (WWF), said the fires would clearly damage
the already blighted forests and there was no obvious solution. A colleague,
Tri Agum, said the latest El Nino was weaker than the one of five years ago
and could not be blamed for all of the problems. Illegal logging played a
part too. One image taken on Aug. 18 by the US NOAA satellite recorded more
than 2,000 hotspots in Kalimantan while hundreds were also detected in
Sumatra. By comparison, only two were recorded in Peninsular Malaysia, which
is experiencing similar weather conditions. A thick haze from the forest and
ground fires has disrupted road and air traffic and is also responsible for
respiratory problems of thousands of people. People in Central and West
Kalimantan are worst affected. Hospitals and local community health centres
in Central Kalimantan capital of Palangkaraya continue to receive an
increasing number of patients with respiratory complications. In the West
Kalimantan capital of Pontianak, nearly 3,000 people had undergone medical
treatment for respiratory problems. In 1997 and 1998, choking haze
caused by forest fires in Indonesia blanketed parts of Southeast Asia for
months, causing serious health problems and traffic hazards and disrupting
the airline schedules. Sources: SCMP 21/08, JP 21/08,
AFP20/08 Smita on Megawati’s stance on NGOs Smita Notosusanto of the Centre
for Electoral Reform (Cetro) slammed President Megawati’s recent state
address to commemorate Indonesia’s independence. Megawati has said that there
were irresponsible non-governmental organisations (NGOs) that needed regulating.
Smita said that there were also state institutions and political parties that
are irresponsible and lack credibility, not only NGOs. According to Smita,
the government should put those who received government money first into
scrutiny because they have failed to be accountable to the public. NGOs are
not under the auspices of the government and do not receive money from the
government, therefore they are under no obligation to be publicly
accountable, Smita argued. Smita said Megawati had been unfair and lacks a
sence of proportion as she only criticised NGOs in her speech. Source: JP 21/08 Justice for East Timor? Indonesia’s human rights tribunal
on Aug. 14 found the former governor of East Timor, Abilio Jose Osorio
Soares, guilty of crimes against humanity and sentenced him to three years in
jail for failing to stop the rampage by an army-backed militia after the
territory voted for independence in 1999. The conviction is the first verdict
in a series of human rights trials being conducted by the Indonesian
government in connection with East Timor. The sentencing drew a mixed
response among the East Timorese. East Timoor’s Foreign Minister Jose Ramos
Horta expressed fears that only East Timorese, such as Soares, would be
punished for the violence. President Xanana Gusmao appealed for clemency, but
other East Timorese thought Soares’ sentence was inadequate. Human rights
groups in Indonesia criticised the sentence, well below the near eleven-year
sentence demanded by state prosecutors, as too light. "The court’s
action is a mockery of justice", said Washington director for Asia of
Human Rights Watch, Mike Jendrzejczyk. The UN Human Rights Commissioner, Mary
Robinson, also criticised the trials for their failure to reveal the role of
the Indonesian armed forces in the killings. On Aug. 15, the human rights court
acquitted four mid-ranking soldiers and two policemen, including the former
East Timor police chief, of charges they were involved in war crimes. Sources: NYT 14/08, TA 16/08, JP
15/08, SMH 16/08 Batutulis treasure case After a presidential reprimand,
Religious Affairs Minister Said Aqil Munawar apologised to the public for
ordering a dig near the ancient Batutulis tablet in Bogor, West Java. Munawar
had ordered for a dig in Batutulis –a monolith bearing an inscription dating
back to the 16th century Pajajaran kingdom- after being told by a "wise
man" that a fabulous treasure lay hidden under the ground there. With
the treasure, Indonesia would be able to pay its domestic and foreign debts,
amounting to US$130 billion, he said. The dig at Batutulis drew protests
from various groups, who feared the excavation would damage the site. Munawar
once said that he had informed President Megawati Sukarnoputri about the plan
to dig. But Munawar admitted that she had never given her consent. State
Minister for Tourism and Culture I Gde Ardika said the dig at Batutulis had
been stopped and the site had been returned to its original condition. Sources: KCM 21/08 22/08, JP 22/08 Regional News Aceh The Indonesian government on Aug.
19 told the separatist rebel in Aceh to accept a compromise deal on autonomy
by the end of the Muslim fasting month Ramadhan, which ends this year on
December 7, or face a government offensive. The offer, which rebels have so
far rejected, includes separatist control over part of the revenues from the
region’s oil and gas resources. Responding to the government
decision, the Free Aceh Movement (GAM) said that they backed efforts to
peacefully resolve the conflict as long as negotiations were held overseas
and mediated by a third party. In addition, they also urged Jakarta to stop
insisting the group to embrace a special autonomy package for Aceh. Retired US general Anthony Zinni, who
participated in the past peace talks, advised the peace process to resume.
Commander of the US Pacific Fleet, Admiral Thomas Fargo, who visited Jakarta
last week, also urged for more dialogues between the two sides. Sources: TG 19/08, Reuters 20/08, LN
20/08 Abbreviations AA Asia
Pulse/Antara Stichting TitanE |
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