Jakarta – The Indonesian government – which is starved of funds to help the country's poor – will increase pressure on former bank owners to repay billions of dollars in state loans, the top economics minister, Dorodjatun Kuntjoro-Jakti, said Tuesday.

He said the cabinet would decide soon whether to go ahead with a controversial plan to extend the repayment period to 10 years from four, following fierce public opposition to any extension.

"I'm waiting for everybody in the cabinet, I hope by the beginning of March, to have a decision on where we are heading, [whether] to go back to the old contract," Kuntjoro-Jakti said in a speech to foreign correspondents. "And then we just impress upon all those who signed: 'Look what happened to the discussion in public. It's not just a matter of this governmnet who asked you please to come forward'."

The central bank between 1998 and 1999 injected billions of dollars in emergency liquidity to banks hit by the financial crisis that began in 1997. But a report by the state Supreme Audit Agency in August 2000 concluded that more than 95 percent of the funds had been misused. Only a fraction had since been returned to state coffers. Kuntjoro-Jakti said assets pledged as collateral were worth only about 30 percent or less of the outstanding loans.

Kuntjoro-Jakti said he had examined many of the original deals with banks and was amazed at how the contracts were so weak. He said the losses would have to be borne by all Indonesians but vowed to pressure those who owed the most. "I plan ... to persuade big debtors to be more co-operative than what we have seen in the last four years," he said.

The minister put the total "cost of the crisis" to the government at the equivalent of 44 billion dollars but did not give a breakdown. Kuntjoro-Jakti said annual payments on this would cost the government 58 trillion rupiah (5.7 billion dollars) this year – compared with a mere 2.8 trillion rupiah spent on compensating the poor for the effects of a recent fuel price rise.

Last week the International Monetary Fund (IMF) called for a "clear strategy" from the government to recover the loans. It said a visiting IMF team had held talks with authorities on the need to improve the recovery of funds from the banks' former owners. "The team looks forward to the government developing a clear strategy on this matter, recognising its importance for fiscal recoveries," the IMF said.

Finance Minister Budiono was quoted Tuesday as saying the plan to extend debt repayment periods might impede debt rescheduling talks with the Paris Club of creditors, "The debt extension issue will be part of the letter of intent to the IMF which must be approved and signed by the IMF board in Washington before the upcoming Paris Club," Koran Tempo quoted him as saying. The Paris Club meeting is scheduled for April to discuss a rescheduling of debt maturing in the period of April 2002 to December 2003.