trillion (exchange rate of Rp.)
On the data issued by Bank Indonesia (BI) last February, the Foreign Debt (ULN) Indonesia twenty seventeen ago reached US dollar, two billion, or around Rp
As an illustration, on the twenty, Indonesia's external DEBT 'only' rose by three.
The increase in external DEBT is quite drastic because 'in line with the financing needs for infrastructure development and productive activities of the government other', said the Executive Director of the Department of Communication BI, Llull, in his official statement. The government of President Joko Widodo once said that to build up infrastructure in various parts of the country on the twenty, Indonesia requires a budget of approximately Rp. 'Cost it can't all be financed by State Revenue and Expenditure Budget (APBN), or the BUDGET, so the government looking the other way, i.e.
attracting investment from abroad by issuing debt securities, Economists said Bank Permata, Josua Pardede.
In three more years of lead, the government of Jokowi calls have been build in between the. km of asphalt roads, mostly in the 'Papua, the border of Kalimantan and Nusa Tenggara Timur' more than km of toll roads is. square meters of the bridge a number of airport projects Light Rail Transit (LRT) Jabodebek and Palembang, as well as the Mass Rapid Transit (MRT) Jakarta. Director of the Institute for Development of Economics and Finance, INDEF, Enny Sri Hartati, told the BBC Indonesia reveal the magnitude of the increase in external DEBT of twenty-seventeen compared to twenty, because two years before the end of the Jokowi-JK government: 'the Government wants to accelerate development. In addition, that is owed (abroad) it's not only the government, but also state-owned. 'For example (pass) the recording of bonds global, Komodo Bond in London by Wijaya Karya, which also aims at issuing debt securities for the acceleration of infrastructure financing, said Enny. Economist INDEF, Enny Sri Hartati, calling the amount of the debt is 'definitely not safe' because of the interest and the installments paid with the 'dig a hole, cover the hole'. The new debt is considered safe if the payout is 'do not disturb liquidity'. Conditions dig a hole cover the hole arises due to tax revenue ratio, which is one of the sources of funds to pay external DEBT, 'also fell'.
The realization of the tax revenue of Indonesia on the twenty, seventeen reached Rp.
trillion or 'only', seven of the target in APBN-P twenty. Enny reveal these conditions 'will be seen the market as of fiscal risk, which makes the financial market so fragile and easy to arising concerns. If the dollar is strong, people will quickly worry will happen to the flow of funds out.
He added again, even though the debt for infrastructure construction, but 'the confidence of the market, is still relatively stagnant.
This is evident from the growth of investment in quarter three and four years, twenty of, which, though growing, but only in the service sector, not to the real sector (agriculture, mining, industry) that has multiple effects on the welfare of the community.
Even so, Finance Minister Sri Mulyani stated that the condition of Indonesia's debt 'still safe', because if compared with the gross domestic product (GDP) still be in the range of thirty-four and the added debt should not exceed sixty of the country's GDP.
However, Enny do not agree with it because he considers the ratio of debt to GDP is just one indicator: 'there was No guarantee, the ratio of the level of debt is safe it is under sixty. We see Portugal, before it was declared bankrupt, its debt ratio also practically safe.
That number rose by, one compared to the previous year
According to him, Indonesia's external DEBT is still within safe limits, because the is in the form of Debt securities of the State 'with a tenor falling the tempo of the long-term, that is an average of eight to ten years'. With the deadline for the payment of which is not in a hurry, the government believed Josua will be able to pay off the debt and interest, through increased productivity of debt which is allocated for infrastructure development: 'Moreover, with our debt, last year the Indonesian economy can also grow five. The magnitude of the numbers Indonesia's external DEBT makes the various parties commented, as Chairman of the Board of Trustees of the Party Beringin Karya (Work), Hutomo Mandala Putra, better known by the name of Tommy Soeharto. According to him, the current external DEBT in Indonesia is cause for concern, since reaching a seven-fold compared to the times of the leadership of his father, Soeharto, during the New Order period, which ranges from US dollar billion, or about Rp trillion. The comments that the children and grandchildren of the people of Indonesia will bear the debt, back to the bustling sounds and Enny rate of the reaction is reasonable because 'the payment of the debt is with the use of tax so that the tax burden later of course will be borne by our children and grandchildren. Even so, he sees the use of DEBT for infrastructure development will make the tax burden it will not be so pronounced again by our grandchildren. 'The results in the form of construction and the number of jobs to make the children and grandchildren of us don't bother looking for work. Even if they have to pay tax, is not a problem because the source of the income greater than the burden of the tax.
The same thing was delivered Josua Pardede: 'the debt Burden to our society it's not as bad as imagined, because the debt allocated to productive activities to build infrastructure.
'Moreover, various international agencies are already projecting that we will be the strength of the economy the largest number of four or five the world. So, this debt will be very worth it. Even so, to the BBC's Indonesia economist Josua Pardede stressed that the government still have to be careful of private external DEBT. Of the total Rp trillion, external DEBT Indonesia, forty-nine are privately owned. Private sector external DEBT can be 'dangerous' because it could not be controlled by the government. The management and payment of debt principal and interest, depends only on the borrower company itself. 'Especially for a private company in the country that do not do hedging or hedging (a type of guarantee). For example he owe in dollars, but its revenue in dollars, so there is missmatch, it is these conditions that trigger the crisis of. Josua revealed ahead of the crisis, many private companies that attract DEBT in large quantities. However, when the debt crisis which triggered a weakening currency, the Thai Baht, the Rupiah to remain weak, so a lot of debt who failed to pay. The increase in private external DEBT this is the irony of economic improvement.
At a time when the economy improves, then more and more companies who want to expand his business.
Companies choose the source of funds of foreign loans, because the 'interest rate abroad more competitive, even in Japan (interest rates) is still negative'. Josua Pardede calls the external DEBT can be suppressed by looking for other sources of funds for financing infrastructure. One of the options which are judged worth considering the government is the of private investment in the country. 'Growth was less than ten.
The lack of private investment is because of the level of risk of infrastructure projects is quite high and less quick 'profitable' because of its financing in the long term, it is clear Josua.
Economist INDEF, Enny Sri Hartati, of the same opinion, by saying the government should be more selective in choosing the funded project: 'for Example, the government just focus on the project that are for public purposes and public infrastructure. Beyond that let private 'The toll in Java for example, don't need to use the state BUDGET. As long as the schematics, the formulation is clear, surely it would sell like hotcakes to worked private. The government just so the guarantor, because there is already a law on land acquisition for public purposes. So no need to issue debt securities. Enny added that Indonesia 'should be' imitating China, which provide 'red carpet' handling of commercial projects, to private investors. 'If we reverse, the lives of many people, for example oil and gas, it's a fifty ahold of the private sector, even foreign anyway. While there are not lives of many people, we (the government) are working on.
