Indonesia may borrow 35 bln USD over next three years

Indonesia may have to borrow up to 35 billion US dollars during the next three years to help finance its development needs and plug the budget deficit, the National Development Planning Agency (Bappenas) has said.

Government agencies and the regions have already proposed the figure for the 2006-2009 national borrowing strategy that Bappenas is drafting, and with continuing financing needs, the government is targeting a debt ratio of 31.8 percent of gross domestic product by 2009.

"We're still optimistic in reaching the target, but it will no longer be a must, especially when there are still many development needs -- like those of state power firm PT PLN -- and as long as the development projects are beneficial for growth," Bappenas deputy for development financing Lukita Tuwo was quoted Monday by English daily The Jakarta Post as saying.

PLN will need up to 13.3 billion dollars during the next three years to upgrade its power plants and develop the national power grid. Other proposals, meanwhile, include 4.5 billion dollars for capacity building and equipment upgrades for the National Police.

Lukito, however, said Bappenas would borrow carefully and only for projects that were feasible and approved together with the Finance Ministry.

"We'll probably approve only half of the proposed projects," he said. "And from that, not all will actually be realized."

Source: Xinhua