Friday, 5 June 2009

Minimizing Foreign Debts

Economic observer Faisal Basri exoected the Government would gradually reduce foreign debts which now was posted at Rp. 1.667 trilliion and partly used to settle old debts “In the future the Government was expected to reduce those debts by enhancing efficiency and productive management”.

Faisal admitted that all countries in the world were indebted to external resources, and it depended on the country concerned whether they could manage their money efficiently or not. “Not to mention a developing country like Indonesia, even a state as wealthy as the USA have foreign debts but their debt management were effective” According to the lecturer at the University of Indonesia, so far the Government had been borrowing money, part of which used to settle old debts.

“We do not deny the fact that the administration of President Susilo Bambang Yudhoyono borrowed money, part of which were used to settle old debts. The reason for this dependency was that the natural resources were not as yet fully tapped. It took highly expensive technology to exploit there resources, whilst the fund expected from the National budget to build infrastructures were not sufficient. Therefore the only wayout to realize all good plans were to use the loans extended from overseas recources”.

The ratio of debts against national GDP showed decline, but Indonesia’s outstandings had risen from Rp. 1.294 trilliion in 2004 to Rp. 1.667 trillion in 2009. It was reported that the debts were used to pay old debts due.

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