JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadewa asked the government's debt not only to be seen from its nominal value which has exceeded Rp. 8,000 trillion. According to the Minister of Finance, the ability to pay must be measured by comparing debt to the size of the economy.
Purbaya said Indonesia's debt ratio was still in the range of 40 percent to gross domestic product. The figure is below the 60 percent limit used in national fiscal rules.
"Don't just nominal. If it is used in the fiscal, it should be below 60 percent. We are still 40 percent, so it is still far away," said Purbaya at the Presidential Palace Complex, Jakarta, Wednesday, July 15.
He compared the state's debt to corporate loans. The same loan value can have different risks if the income ability of the two companies is not equal.
Purbaya also referred to the Maastricht Treaty criteria which uses a debt ratio limit of 60 percent to gross domestic product. According to him, Indonesia's ratio is still lower than that of a number of developed countries.
He said the United States' debt ratio had exceeded 100 percent, Singapore around 175 percent, and Japan reached 275 percent.
"So we are still safe from that side. If you look at the fiscal security conditions of a country, you have to use the right reference," he said.
Purbaya also touched on the decision of the S&P rating agency to maintain Indonesia's credit rating at BBB with a stable outlook. According to him, the assessment takes into account the government's ability to manage the budget and debt.
When asked about the government's ability to repay its debt, Purbaya said that a decline in the ability to pay would be seen from the deterioration of the credit rating.
"If we are considered incapable, we must be unstable," he said.
He also denied that the government lacked liquidity. Purbaya gave an example of the transfer of surplus budget balances or SAL from Bank Indonesia to banks as cash management, not new spending.
According to him, the transfer does not require the approval of the DPR because the government does not use its funds, but only transfers the placement with the same rate of return.
"I don't use it, I just move it. I don't have any losses, but at the same time I help the economy," said Purbaya.
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