Questioning The Effectiveness Of Money Shocked Rp200 Trillion For Himbara Bank As The Boost Of The Economy

JAKARTA Observers doubt that the distribution of government funds amounting to Rp200 trillion to Himbara banks will encourage economic growth.

Finance Minister Purbaya Yudhi Sadive immediately made a breakthrough after being inaugurated to replace Sri Mulyani last week. He admitted that he received the green light from President Prabowo Subianto to inject state treasury of Rp200 trillion into commercial banks. This figure is taken from the total government deposit of Rp440 trillion at Bank Indonesia.

"[The president] has agreed. I don't give the system a loan to the bank and others. It's like you put a deposit in a bank. It's roughly so rude. But if I want to use it, I (can immediately) take it," said the Minister of Finance. Purbaya.

There are five banks that receive distribution of funds from the government. They are BRI, Bank Mandiri, and BNI received Rp55 trillion. Then BTN Rp25 trillion and BSI Rp10 trillion in the form of depositon calls.

The distribution of state cash funds to Himbara banks is expected to boost the national economy. However, some observers doubt that.

Minister of Finance Purbaya emphasized that funds placed in banks must be focused on channeling productive loans. He prohibits banks from using these funds to buy Government Securities (SBN) or Bank Indonesia Rupiah Securities (SRBI) so that funds can spread to the economic system and encourage faster growth.

SBN and SRBN are conventional ways for banks to earn a fixed profit from interest every year, almost without the risk of default because it is guaranteed by the state. For example, banks buy SBN of IDR 100 billion with a coupon of six percent per year, so banks receive IDR 6 billion every year.

This method is safe and profitable, but will not create new businesses.

Meanwhile, the government wants the money to be distributed to drive the wheels of the economy in the real world, and encourage the private sector to shop.

Purbaya believes that if this distribution runs optimally, industrial performance will increase. One of the impacts that the government hopes is that when the industry grows, it will also have a positive impact on tax revenues.

However, Executive Director of the Center of Economic and Law Studies (CELIOS) Bhima Yudhistira doubts that the distribution of government funds of Rp200 trillion to Himbara banks will encourage economic growth.

The funds, said Bhima, must be balanced with an increase in credit demand.

"Liquidity goes to Himbara bank, but the question is whether the credit demand has increased significantly? This depends on several factors, people's purchasing power, business world confidence and tax policies," said Bhima when contacted by VOI.

To encourage the economy, there needs to be support in the form of tax stimulus in order to increase confidence from the business world so that it is moved to apply for credit. He also emphasized that money from the government must be ensured not given by SBN.

He also suggested that the government not only pour money on banks. Because, there needs to be an additional fiscal stimulus to trigger consumption activities in the community.

Bhima said the government should lower the value added tax rate (PPn) from 11 percent to 8 percent. Not only populist, but this method is believed to be able to encourage the community's economic activity.

In addition, Bhima Yudhistira also urged that the distribution of Rp200 trillion to five banks be closely monitored. He specifically hopes that the funds do not flow to high-risk sectors, such as the Free Nutrition Food (MBG) project and the Red and White Village Cooperative.

"Besides the new absorption MBG below 15 percent, it means that there is an implementation problem, not the availability of the budget," he said.

Furthermore, according to Bhima, there are concerns that the transfer of government cash from Bank Indonesia to Himbara will later be used more to finance fossil sector loans, than allocating them for climate funding and developing the renewable energy sector.

"Pak Purbaya must be more careful not to just be handed over to Himbara bank in government cash financing, because this step risks the occurrence of abandoned assets," said Bhima explaining.

As a follow-up step and pre-emptive risk mitigation, he encouraged the Minister of Finance Purbaya to make specific agreements and regulations. It could be in the form of a Minister of Finance Regulation, to ensure that government funds are managed in line with Prabowo's mission to achieve 100 percent renewable energy in the next 10 years.

Additional liquidity for Himbara banks, said Bhima, is not only encouraging credit growth, but also targeted, on target for sectors that create jobs.

"Well, the renewable energy sector has contributed 19.4 million green jobs in the next 10 years. But so far Himbara's bank has less than 1 percent of the portion of lending to the renewable energy sector. The transfer of government cash funds from BI to Himbara is a transition momentum to prospective economic motors," he continued.

Meanwhile, researcher from the Center of Reform on Economics (CORE) Yusuf Rendy Manilet assessed that the massive injection of shocked money into banks could encourage excess money in circulation.

"Especially if the funds being injected are not distributed productively, it could potentially increase inflation," said Yusuf asserted.