Expert: Indonesia fails to spend 2009 budget well

13:30, January 04, 2010      

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The Indonesian government has failed to spend 38 trillion rupiah (about 4 billion U.S. dollars) of its 2009 budget, a local media report said here on Monday.

Hendri Saparini, an analyst at the economy think-tank agency, Econit, said on Sunday that the unspent budget was due to inefficient bureaucracy and poor planning, despite much of the proposed spending being part of the stimulus package to overcome the impact of global economic crisis.

"This is not the first time the government has money left over in their budget. This shows they are slow in spending the budget but very fast in making debt," Hendri was quoted by the Jakarta Globe as saying.

She said that anticorruption regulations also continued to slow spending, as officials feared being hauled in for graft.

Reluctance to spend meant funds to boost the economy were not put into play, analysts said earlier.

The situation has prompted a senior lawmaker to warn government agencies to spend their allocated budgets or else.

Responded the call, the Finance Ministry had raised 125.2 trillion rupiah (about 13.4 billion U.S. dollars) to plug an expected 2.4 percent deficit in the state budget.

But because only 87.2 trillion rupiah (about 13.4 billion U.S. dollars) of that money was spent, the government is now paying interest on 38 trillion rupiah (about 4 billion U.S. dollars) in idle debt.

"If this continues, it will burden future budgets as we have to pay back debt that has produced nothing for us," Hendri said.

The Finance Ministry said earlier that the state budget deficit was only 1.6 percent of gross domestic product for 2009, lower than the earlier 2.4 percent estimate that took the proposed stimulus into account.

However, the country fared better with its spending than in 2008, when the government still had 80 trillion rupiah (about 8.5 billion U.S. dollars) in unspent financing from foreign and domestic sources.

The Indonesian government collected 866.8 trillion rupiah (about 92.9 billion U.S. dollars) in total revenue in 2009, lower than the targeted 871 trillion (some 93.4 billion U.S. dollars), partly due to the economic downturn hitting commodity exports and corporate receipts falling.

The government managed to spend 954 trillion rupiah (about 102.2 billion U.S. dollars) in 2009, which was 4.7 percent below the targeted amount in the revised total budget of 1,000.8 trillion rupiah (about 107.2 billion U.S. dollars).

Source: Xinhua
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