President: Debt to IMF to Be Settled in Two Years
Wednesday, 24 May, 2006 | 20:40 WIB

TEMPO Interactive, Lombok: President Susilo Bambang Yudhoyono has said that the government will settle all the state's debts to the International Monetary Fund (IMF) in two years.

The repayment period, according to the president, was decided after a talk with Bank Indonesia Governor, Burhanuddin Abdullah.

Currently Indonesia's debt to the international creditor organization is US$7.8 billion.

“I think it's already time for us to repay it. Maybe we repay it over two years, pay half of it first, then the other half. So that we are completely clear from debt to the IMF,” said President Yudhoyono when opening a working meeting of the Indonesian Provincial Governments Association 2006, attended by all governors, in Lombok, West Nusa Tenggara, yesterday (23/5).

The president said that Indonesia's debt to the IMF has been a political issue which has existed during every government.

However, the government cannot now blame previous governments for its debt to the IMF because funds were needed due to the economic crisis that hit Indonesia during 1997 and 1998.

“Our debt just became bigger,” said Yudhoyono.

“This is what we manage. In the future, the debt will become smaller and smaller,” he went on to say.

Yudhoyono emphasized that the debt repayment to IMF was very important to the government in order to increase its self-confidence and also to be able to realize development through its own abilities without any outside interference.

He is of the opinion that the repayment can be carried out by increasing domestic revenue, both from taxes and non-taxes, including preventing budget leaks.

“So that we can repay the debt for the benefit of our future generations and to improve our economy,” said Yudhoyono.

Also present at the event were Home Affairs Minister M. Ma'ruf, Transportation Minister Hatta Rajasa, State Minister for Information and Communication Sofyan Djalil and Bank Indonesia Governor Burhanuddin Abdullah, as well as several members of the House of Representatives (DPR) and the Regional Representatives Assembly (DPD).

The president also asked all governors and regional leaders to help in completing the repayment.

“Let's continue the movement to manage a more appropriate repayment,” he said.

Bank Indonesia's Deputy Governor, Hartadi A. Sarwono, said the mechanism of debt repayment to IMF are still being analyzed.

The option to take is completely the government's decision.

According to him, the mechanism that may be taken is to pay some of the debts in the third quarter of this year.

The remainder will then be settled in the fourth quarter.

The other option is to pay some of the debt this year and the remainder next year.

“The next repayment is based on foreign exchange reserve capability,” said Yudhoyono.

Sunariah and Yudha Setiawan