Mrs. Sri Mulyani, Mr. Didik Rachbini Said It Was An Emergency: The State Budget Is Sick And Can Trigger An Economic Crisis

JAKARTA - Paramadina University Chancellor, Didik J. Rachbini, said that the state's financial condition as reflected in the State Revenue and Expenditure Budget (APBN) was in an unhealthy situation.

In fact, Didik said that the state budget managed by the government could result in systemic failure in the national economy.

"This state budget is sick and I suspect it has the potential to trigger an economic crisis", he said in a webinar organized by the Institute for Development of Economics and Finance (Indef) as quoted on Monday, August 8.

According to students, Indonesia's experience during the economic crisis in the late '90s could be a valuable lesson so that it doesn't happen again. However, the causes of the crisis that are likely to recur at this time are quite different.

“In the past (the economic crisis) occurred due to the exchange rate (rupiah being pressured by the US dollar). Now, it can be through the state budget", he said.

He also mentioned several sources that made the state budget in a 'powerful' condition.

"The problem is in the budget deficit, debt, and others", he said.

As previously reported, the Government through the Ministry of Finance estimates that the 2021 State Budget deficit will reach IDR 1,006,4 trillion or 5.70 percent of Gross Domestic Product (GDP).

This value is formed from state spending which is larger than the revenue sector, which is IDR 2,750 trillion compared to IDR 1,170.1 trillion.

The budget difference is then filled by the government by distributing various state financing instruments (debt securities).

Citing the 2021 State Budget realization report until the first semester of 2021, it is known that the government debt has reached a value of IDR 6,554.56 trillion or 41.35 percent of GDP.

This amount consists of loans amounting to IDR 842.76 trillion or equivalent to 12.86 percent and Government Securities (SBN) amounting to IDR 5,711.79 trillion or 87.14 percent.

Just so you know, Minister of Finance Sri Mulyani often says that the state's financial condition is still under control because it is based on the State Finance Law Number 17 of 2003 and the APBN Law which states that the maximum debt limit cannot exceed 60 percent of GDP.