Indonesia to reduce reliance on foreign debts: President

Indonesian President Susilo Bambang Yudhoyono said on Monday that the country must reduce dependency on foreign loans to finance development as an efforts to trim the burden on the state budget, Antara news wire reported in Jakarta.

"Let us become less dependent on foreign financing sources," the president told a limited cabinet meeting at the presidential office.

If a project needed foreign funding, the president said, the foreign funds should not be obtained in the form of a loan but as a grant or debt write-off.

The president also hoped that the debt-to-income ratio would go down, so that the budget could be bigger.

Indonesia's debt to GDP ratio has decreased to 26 percent since June from 57 percent in 2004, Coordinating Minister for Economy Hatta Rajasa said on Monday.

President Yudhoyono on the occasion also emphasized the need to manage the State Budget properly. A country could go into a crisis due to a bad management of its State Budget, especially unhealthy high deficit and debt ration, he said. The president also hoped that the government could tap maximal revenue and exercise efficiency in the spending.

Indonesia used over one third of state budget of 1,126 trillion rupiah (112.41 billion U.S. dollars) to pay debt and subsidies.

Source: Xinhua