Minister of Finance Sri Mulyani Indrawati revealed a number of legacies from the Netherlands for Indonesia. The legacy ranges from debt to damaged economic conditions.
“From an economic point of view, when we were independent, we were given a Dutch legacy not only from a damaged economy but also debt from the colonial government,” he said at the opening of the 2020 Financial Professional Expo via video conference, Monday (12/10/2020) yesterday.
Sri Mulyani said that since becoming an independent country, Indonesia already has debts. The war that occurred also damaged the assets owned by Indonesia.
“So when we started from government to become an independent Indonesian state, financially we did not have a balance sheet which was 0. With our balance sheet then ‘oh we have all the assets’, no. First, existing assets were damaged by war,” he said.
All investments previously booked by the Netherlands were charged to become Indonesian debt with a record amount of US $ 1.13 billion. If converted to today’s exchange rate, the legacy of the debt at that time was around Rp. 16.6 trillion (exchange rate of Rp. 14,700 / US $).
“All previous investments that were booked by the Dutch government became investments by the Indonesian government, namely the debt became the debt of the Republic of Indonesia. The inheritance was US $ 1.13 billion. In the past, Indonesia’s GDP was probably still very small,” he said.
In addition, when Indonesia began to build, the deficit in the State Budget (APBN) was said to be very large, creating tremendous pressure. At that time, financing the state budget deficit could not be done through the sale of state debt securities as it is now. As a result, what was done at that time was to ask Bank Indonesia to print money to finance the budget deficit.
“What happens is that the amount of money in circulation is more than the economic situation or condition, so that inflation increases enormously,” he said.
(fdl / fdl)