“Stop adding new debt…” published by one of the english news papers in Indonesia. One of the NGO’s who addresses it self as anti-debt group, urges the govt to stop adding new debt to fund the state budget due to the high amount of un disbursed loan commitments. Their main concern is that the budget for commitment fee as a consequence of not disbursing the amount of loan commitment can be allocated to help the govt in financing budget deficit. In other words, education budget which was previously promised to be increased to 20% would at least becomes viable. I, by no means, disagree that the govt should eliminate undisbursed loans in order to minimize commitment fee. However, it doesn’t necessarily associate with the govt’s initiation for adding new loan. As the new playing rule has been in place, the govt will not sign the agreement of new project loan unless the readiness criteria of the project has been fulfilled.
Furthermore, commitment fee does not directly link with program loan, as the report might assume. Program loan, by design, is fast-disbursed loan. It means once the agreement has been signed the commitment can be disbursed. Thus, commitment fee may not be applicable.
“Adding more debts makes the government unable to formulate adequate state budget”, the coordinator of the NGO said. To be honest, our government now relies more on debt financing, since raising tax ration will not be politically sound. However there has been a shifting of types of instrument which can obviously seen from the composition of government loan and securities. Government loan tend to decrease while government debt securities is in increasing trend. The high amount, in my opinion, does not matter. What matters here is the debt to GDP ratio in which, in this case, Indonesia has the decreasing trend. In 2000, the number was 88 % while last year it accounted for 39%. This year, using new revised budget assumption, the debt to GDP ratio is projected to be around 37%. Sounds optimistic, isn’t it ?
Well I guess I have to stop now. I need to discuss with my colleague about the new scheme of remunerations in my office, which potentially increases my spending budget for …. mmm the next holiday 🙂 … escape from managing govt debt for a while.
5 thoughts on “Stop adding new debt ???”
hmm… enak sekali aku bacanya, … will not be politically sound, thats my point whom i found some logic about (govt’s) debt financing 🙂 that raise, at least, one question: if the case it’s not political logically sound, perhaps, by assumption, or based on any political condition, is it still optimistic? btw, dulu saya punya teman yang punya ide gila membuat model urat syaraf demokrasi (democratic neuroethology), modelnya sistem jaringan syaraf demokrasi tiruan (artificial demokratic neural networks), baru dengar kan? memang gila, supaya trend politis dapat diukur.
Saya tunggu hasil diskusinya dengan mas Nova (mau dimuat di permatrix juga boleh 🙂
Kenapa ku bilang politically sound? umm aku mendasarkan asumsiku pada teori Barro-Ricardo equivalence proposition. Pointnya sih it’s a matter of choice, taxing now or later in order to finance its spending. Mungkin dalam konteks Indonesia, lebih pasnya raising tax ratio now atau borrowing (regardless internal or externally). Tapi tentu saja kalau pilihannya pinjam sekarang, kita mesti bayar pokok dan bunga in the future. Jadi raise tax rasio-nya cukup di masa depan saja. Assuming, masyarakat sadar bahwa in the future mereka harus bayar pajak lebih, Jadi (lagi), mereka akan save or invest dana yang ada sekarang yang seharusnya mereka bayarkan untuk pajak. Sehingga dana yang dihasilkan akan men-subset kenaikan pajak in the future, so efeknya gak kerasa kan buat masyarakat. Itu baru alasan pertama. Alasan berikutnya … raising tax ratio is unpopular policy. Coba bayangkan kalo pas pemilihan umum calon presiden kita meng-announce “Pilihlah saya, karena saya akan menaikkan rasio pajak Anda demi kemakmuran Anda”.
Btw, artificial demokratic neural networks sounds interesting to me. it’s really something new, at least, for me. Tapi di permatrix teu aya’ nya’, abdi tos search?
Haha hasil diskusi dengan Mas Nova rada mengecewakan. Jadi, jangan dimuat di permatrix ahhh hehe. Menimbulkan kesenjangan dikalangan PNS :).
>> 🙂 kecewa ya hehehe.. kan bukan keputusanku,& memang gak perlu di-publish masalah itu.
@Nova: Ra kecewa-kecewa banget sih. Tapi anggaran untuk ke Belitung jadi berkurang.
@Pram: Menarik Pram. Bisa kolaborasi untuk riset nih. Kepikiran untuk S3 gak?