Stop adding new debt, NGOs tell govt

26 07 2007

The Jakarta Post, Jakarta

An anti-debt group is demanding the government stop adding debt to fund the state budget because they said most of the agreed loan commitments have not yet been disbursed. Coordinator of the Anti-debt Coalition Kusfiardi asked the government to forego borrowing Rp 2.8 trillion (about US$308 million) of program loans as per a proposed revision of the 2007 state budget. The new debt would raise total program loans from Rp 16.3 trillion to Rp 19.1 trillion. He said the country’s foreign debt, including that owed to the International Monetary Fund, stood at US$365 billion in 2005, only $162 billion of which had been disbursed.

“The government should focus more on eliminating undisbursed loans and stop adding new debt,” Kusfiardi said. “The House of Representatives should also refuse the government’s new debt proposal.” He added the government had to pay commitment fees for the undisbursed loans, which further burdened the state budget from year to year.

“Eliminating undisbursed loans can shift the allocation of commitment fees to help pay the state budget deficit,” he said. The government could do this by asking creditors for a debt cut because Indonesia had faced many natural disasters lately. He said Indonesia should also seek debt reduction for loans the New Order regime had

embezzled or used to pay commitment fees. “We urge the government to audit debts of the past, including odious debts, in order to get a debt cut,” he said. “The government’s debt payment has severely damaged the people’s welfare.”

He said debts made it impossible for the government to formulate policies independently because creditors imposed a policy matrix among debt disbursement requirements. “The state budget should be able to correspond with the people’s basic rights, such as education, health and public service,” he said. “Adding more debts makes the government unable to formulate adequate state budgets.

“We can see this from the education budget, which has never reached 20 percent as the Constitution has mandated.” Ragwan Aljufri from Women’s Solidarity also rejected the government’s plan to add more debt. “The government should also consider gender in formulating the state budget,” she said. “Adding new debts will diminish local economies and impoverish women.” She said the government had failed to fulfill the people’s basic rights, especially toward women’s health.

She cited 2006 data from the Health Ministry that showed 4,283 women had been diagnosed with uterine cancer and 2,993 with breast cancer. “Most women can’t take care of their health because the hospital costs are very high,” Ragwan said. “With only Rp 17.46 trillion or 2.2 percent for health in the state budget, the government definitely can’t fulfill that basic need.” She said the government could focus undisbursed funds on empowerment programs for women, including education and skills training. She said the government needed to allocate a special budget for female migrant workers because they were vulnerable to rape and sexually transmitted diseases. (14)

The Jakarta Post, 26 Juli 2007



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