Indonesian heading for a 'banana republic'?

YOGYAKARTA (JP): Since the crisis in Indonesia, some macroeconomic variables have shown minor improvements. From 1999 to 2000, the real gross domestic product growth rate has increased by 1.5 percent to 2.5 percent.

There is single digit inflation and some improvement in the balance of trade. However, behind the veil of these aggregate figures, deteriorating variables continue, casting doubts on the self-sustaining growth of the fragile economy.

The first such aspect is the continued accelerating burden of public debt: both internal and external. Total foreign and domestic debt has reached the high figure of Rp 1,280.4 trillion, which amounts to a staggering ratio of total debt to gross domestic product of 111 percent. The total interest payments on the debt amounts to Rp 54.6 trillion, which absorbs 36 percent of the total government revenues and 28 percent of the total government expenditure.

This massive annual burden of the …