Foreign Debts to Be Reduced
Wednesday, 31 January, 2007 | 12:32 WIB

TEMPO Interactive, Jakarta: The National Development Planning Agency (Bappeneas) will reduce the amount of foreign debts from 2006 to 2009.

The total debts that state departments and institutions will propose during this period amount to about US$40 billion.

Paskah Suzetta, the State Minister for National Development Planning, said that the government will prioritize certain sectors such as education, health, and infrastructure.

“The cuts are large, more than 50 percent,” he said after attending a coordinating meeting of post-tremor development progress in Yogyakarta at the Department of Finance yesterday (01/30).

Greater state budget efficiency will also be prioritized in order to optimize the Rupiah.

Paskah said that the government will make use of funds at several national banks, which are prepared to finance development projects such as airports and harbors.

In addition to domestic funds, the government still requires foreign loans and donations.

“We will maintain soft non-commercial loans,” he said.

The government is trying to obtain foreign debts reduction as well and one way of doing this will be by bringing forward the issue of poverty.

“Poverty is still one of the issues that we will set out,” said Paskah.

On this occasion, Paskah explained that Germany and Italy have granted a debt swap amounting to 20 million Euros, related to the Yogyakarta and Central Java earthquake.

According to him, the debt swap has compelled the government to build educational and health infrastructure facilities that have been ruined by the earthquake.

The allocated funds amounted to about 10 million Euros.

Kurniasih Budi