The Facts Behind the Soaring Foreign Debt of BUMNs of Nearly IDR 1,000 Trillion

Utang. ┬ęShutterstock – Senior Economist of the Institute for Development of Economics and Finance (Indef) Didik J. Rachbini noted that the debt in the era of President Joko Widodo or Jokowi increased by 150 percent. This debt is an accumulation of debts from the era of President Susilo Bambang Yudhoyono (SBY) IDR 2,700 trillion, President Jokowi’s debt to date is IDR 6,336 trillion.

“Left behind by SBY, he turned to Jokowi for Rp. 2,700 trillion, now Rp. 6,336 trillion. Mother Sri Mulyani looking at the data yesterday, it was up to Rp. 6,336 trillion. So 150 percent in only 5-6 years, “he said, Jakarta, Wednesday (24/3).

Didik continued, this debt has not been combined with BUMN debt which is also classified as very large. Where, up to now, BUMN debt has reached approximately Rp. 2,100 trillion, so in total it is around Rp. 8,000 trillion.

“This does not include the legacy of BUMN debt that has not been calculated. BUMN debt has increased rapidly beyond savings and deposits of Rp. 2,100 trillion. If you add to the current debt, Jokowi will be left with Rp. 8,000 trillion in debt. This is a great achievement,” he explained.

Didik added that entering the second period, President Jokowi’s administration was less responsible for debt management. Likewise with the House of Representatives (DPR) which is considered not to provide much criticism of the increase in debt.

“Why does the DPR not move because the executive power has moved to the legislature. The DPR is like the New Order era. The temporary conclusion is that the debt is very large,” he said.

Institute for Development of Economics and Finance (Indef) researcher Dzulfian Syafrian, revealed the differences in public debt during the era of President Susilo Bambang Yudhoyono (SBY) and President Joko Widodo Jokowi. The significant difference lies in the origin of the debt withdrawal.

“Based on CEIC data, Pak SBY tends to be balanced between foreign debt and domestic debt. Meanwhile, Pak Jokowi tends to rely on domestic debt,” he said in an online discussion, Jakarta, Wednesday (24/3).

Dzulfian continued, Jokowi’s policy is to rely on domestic debt because it is more acceptable to the public than foreign debt. This is because the sentiment to attract debt from abroad will create quite a turmoil.

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“Because it takes advantage of the nationalism of the Indonesian people. If it smells foreign it is rather reluctant. Domestic issues are heroic,” he explained.

In fact, usually in the context of debt, taking domestic debt has a relatively higher interest rate than foreign debt. This is also considered to be detrimental to state and public finances. The accumulated debt will result in tax increases in the future. Where, the younger generation or millennials will become victims of today’s debt payments.

“This is a matter of time. The increased tax means that the money in our wallets is running low and goes to the finance ministry’s wallet. This means that our consumption and savings are reduced. This must be remembered,” said Dzulfian.

Then how much is the SOE’s foreign debt?

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