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Draft Bill on External Debtfor Republic of Indonesia-

Some Suggestions

Tarun Das

Economic Adviser, Ministry ofFinance, India and

Resource Person for UNITAR

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Objectives

 An Act to ensure prudentialmanagement of external loans andgrants consistent with national

interest, fiscal sustainability, greatertransparency, efficiency andaccountability in debt management,and to identify clearly specific roles of different agencies involved in themanagement of external debt.

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Miscellaneous Policies

Without prejudice to the generality of theprovisions in this Act, the Ministry of Finance,in consultation with the concerned Ministriesmay undertake appropriate measures for thefollowing:

(a) To prepare medium term policy on externalfinance indicating the sectors or activitieswhere foreign loans and grants may bedesirable and where these may be restrictedor disallowed.

(b) To strengthen the debt management capability by establishing separate front, backand middle offices for both internal andexternal debt,

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Miscellaneous Policies

(c) To enhance capacity building byupgrading the information technologyand the management information

system.(d) To prepare Annual Status Report onthe Countrys External Debt (indicating

both public and private external debt) onregular basis for information of theParliament and general public.

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Other Suggestions

Preamble: Pancasila (the five basic principlesviz. peace, justice, equity, truth.)

 Articl e 1(1): replace for eign exchange by anycurrency.

 Articl e 1(2): Delete or private individual Articl e 1(3): Proposal Li st  of   Acti viti esneeds elucidation.

 Articl e 1(9): where all the capital are ownedby the state may be replaced by where

government is the majority share holder. Articl e 4( c  ) Add monetary authorities after

institutions. Articl e 6(3) Needs elucidation.

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Rewrite Articles 8 and 9 completely

Combine these with the followingprocedures.

Any regional government or line Ministry willprepare detailed project reports for which

they are seeking external finance. Theseprojects will be appraised by the Bapanasand put in the Blue Book for approval by theIndonesian Legislative Assembly.

Minister in charge or any public officer soauthorised by the Minister will makenegotiations with prospective donors forexternal finance for any projects included in

the Blue Book.

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Rewrite Articles 8 and 9 completely

The signing of NPPHLN shall be done by theMinister in charge or any Public Officer soauthorized by the Minister.

The Ministry of Finance will seek

parliamentary approval for total externalfinance for the financial year in the AnnualBudget and will specify broad sectors forwhich external finance is required.

The Ministry of Finance will also submit adetailed Annual Status Report onGovernment External Loans and Grants tothe Parliament every year.