(6 Jan 1998) Indonesian/Nat
President Suharto has announced a budget to ease Indonesia's economic crisis after its currency plunged to a new record low on Tuesday.
But experts say the new budget, with an increase of 32 per cent in both revenue and expenditure, is too optimistic.
Indonesia's President Suharto on Tuesday announced the budget for the new fiscal year starting on April 1st - aimed at easing the nation's economic ills.
In the last few months the president has been facing pressures to boost spending to deal with mounting unemployment and fears of social unrest triggered by the rupiah's continuing drop in value.
Only last week, the military estimated that as many as two (m) million workers had lost their jobs since the currency turmoil began.
The slide in the rupiah's value on Tuesday, was blamed partly on reaction to an outbreak of violence on Monday in the city of Bandung, 180 kilometres (110 miles) east of Jakarta.
Hundreds of people went on a rampage in Bandung, damaging some stores, following a crackdown on illegal street vendors, police said on Monday.
Here in Jakarta's main streets hundreds of migrant workers are squatting in the pavements - in the hope of being picked up for work at the construction sites.
SOUNDBITE: (Indonesian)
"Our lives are very hard now. Just to eat everyday we have to borrow money also for cigarettes. Because there's no income, no work."
SUPERCAPTION: Pak Kurdi, local construction worker
Running out of cash, local people rushed to exchange their gold jewellery into money.
In the past six month prices of oil and basic foods have risen as much as 40 percent.
The new budget is intended to provide subsidies for fuel, food, seeds and fertilizer - to meet the needs of Indonesia's poor.
No salary increases are planned for civil servants, but expensive modernization of the politically powerful military will go forward and spending on social projects is up.
Austere measures contained in the budget - in line with terms of a 40 (b) billion dollar International Monetary Fund bailout package - were more or less what the markets had anticipated.
The president pledged commitment to strict reforms tied to the I-M-F package that requires Indonesia to reach a fiscal surplus of one percent of gross domestic product in the next financial year.
The president predicted four percent growth in 1998, down from seven and a half percent last year.
Amid rising inflation, people can no longer afford basic commodities.
Locals say the price of imported goods are rising sharply and chicken is particularly expensive since the outbreak of the bird flu scare in Hong Kong.
SOUNDBITE: (Indonesian)
"The monetary crisis that has plagued this region, is apparently more serious and long lasting, than first thought. Both regional and international actions must continue to be intensified. However, the solution will in the final analysis, depend on each individual country. The determination to address this issue is firm, we will fight with all our strength, to extricate ourselves from this crisis."
SUPERCAPTION: President Suharto of Indonesia
President Suharto's address before the parliament was one of the few public appearances he has made since he was ordered to rest at home by doctors in December after a long overseas trip.
SOUNDBITE: (Indonesian)
"The effort to restore the confidence in the rupiah, is the task for all of us, it is our common task, the sooner we put this task above our respective interest, the sooner we will be able to accomplish our goal."
SUPERCAPTION: President Suharto of Indonesia
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