Government Debt Swells To Rp6.554 Trillion, PAN: Debt Piles Up, But People Are Still Not Prosperous

Member of Commission XI DPR RI, PAN Faction, Achmad Hafisz Thohir/pan.or.id

JAKARTA - The government's debt is increasing. Based on data from the Ministry of Finance, government debt was recorded at Rp6,554.56 trillion, equivalent to 41.35 percent of gross domestic product (GDP) at the end of June 2021.

The debt position has increased by Rp136.41 trillion when compared to May 2021. In May 2021, Indonesia's debt amounted to Rp6,418.15 trillion, equivalent to 40.49 percent of GDP.

Member of Commission XI DPR RI, PAN Faction, Achmad Hafisz Thohir criticized this. This is because the increase in debt is not accompanied by an increase in the welfare of the people.

“People don't feel anything because welfare is not evenly distributed. If it is evenly distributed, the people will definitely feel the welfare," said Achmad Hafisz Thohir, reported by pan.or.id, Sunday, August 1.

Not only that, but Hafisz also admitted that he couldn't understand the debt ratio which had exceeded 41% more than Gross Domestic Product (GDP), but the level of people's income was even lower.

The Deputy Chair of the DPR BKSAP explained that citing the World Bank report, the latest assessment noted that Indonesia's gross national income (GNI) per capita in 2020 fell to US$ 3,870. Last year, Indonesia was at the top level of an upper-middle-income country with a GNI or gross national income of 4,050 US dollars per capita.

“As we know yesterday, we were downgraded from an upper-middle-income country to the US. 4.060/capita to lower middle income (Lower middle income) US.3.870/capita. It's weird," he explained.

"Unfortunately, there is an opportunity to owe a lot but it has not succeeded in increasing the people's income per capita," he continued. Actually, he said, the state's debt is not a problem as long as it is good for the people. “But it will be a problem when its use is not productive. Just look at the 5 years before COVID-19 economic growth was no more than an average of 4.9%. Meanwhile, Indonesia's debt growth exceeds 5%," he said.

“This means that this difference creates a higher debt ratio. Just look at the ratio of Indonesia's debt to GDP, which continues to increase from 2014 to 2021," he continued.

In fact, he said, in 2013 the debt ratio had fallen by 23% but rose again to 24% in 2014.

"Then it will increase by 40.42% in 2020. Now if it is calculated it can be 42.00% (end of 2021). This is an indication that debt management is not productive,” said Hafisz.

Debt may continue to increase, as long as it is accompanied by GDP which also increases beyond the level of the debt ratio, so that the ratio of GDP to debt remains low or at least remains flat (not rising as it is today)," he concluded.