RI'S FOREIGN DEBT HIGH BECAUSE OF UNNECESSARY LOANS : OBSERVER

Jakarta, May 21 (ANTARA) - Indonesia's foreign debt has soared to the staggering figure of Rp1,667 trillion because the government has been accepting loan offers without actually needing the credits, an economic observer said.

"The government has always accepted loan offers from other countries while there was actually no real need for the funds," economic observer at INDEF, Fadhil Hasan, said here Wednesday.

Consequently, the government was compelled to create projects that were of little real benefit, he said.

"I don't need to name them but many projects just had to be initiated merely to spend the borrowed money," Hasan said.

According Hasan, the ways in which the loans were managed had been transparent enough but they were not as good as they should be.

Foreign loans were now being managed by almost all existing government agencies so that the funds were not allocated and supervised effectively.

The management of foreign loans should have been done by a separate and sole body which would have made the job more easy and effective, he said.

The distribution and utilization of foreign loans should likewise have been determined by one body to prevent duplication in the financing of projects.
Indonesia's outstanding foreign loans in the period 2004-2009 rose continuously from Rp 1,275 trillion to Rp1,667 trillion.

The country's domestic loans also increased significantly from Rp662 trillion in 2004 to Rp920 trillion in 2009, Hasan said.