A Year Of Jokowi's Administration, Members Of The PKS Faction DPR: Amount Of Indonesia's Debt Entered The Alert Level

Illustration (Pixabay)

JAKARTA - Member of Commission XI DPR RI from the PKS faction, Anis Byarwati, gave work notes to President Joko Widodo and Vice President Ma'ruf Amin in their first year. He said Indonesia's debt was in the alert stage.

The World Bank (World Bank) has released the latest report on international debt statistics (International Debt Statistics) for 2021. In this release, this institution reports a row of low-middle income countries with the largest foreign debt in the world. The country with the largest debt in 2019 is China, where the amount is US $ 2.1 trillion.

Indonesia is included in the report, is in the 7th position with a total debt of 402.08 billion US dollars or worth Rp5,900 trillion. The report also stated that the position of Indonesia's foreign debt continued to increase. In 2017, Indonesia's debt was valued at US $ 353.56 billion, in 2018; US $ 379.58 billion and in 2019 US $ 402.08 billion.

Anis said, based on world bank records, the government must be careful in determining foreign debt (ULN). Based on data from the August 2020 edition of the State Budget, the realization of Indonesia's debt financing up to July has reached IDR 519.22 trillion. The realization consisted of the absorption of SBN of Rp.513.4 trillion, foreign debt (ULN) of Rp. 5.17 trillion, and domestic loans of Rp.634.9 billion.

With this realization, Indonesia's debt position as of July 2020 has reached IDR 5,434.86 trillion. These debts consisted of IDR4,596.6 trillion SBN, IDR10.53 trillion loans, and IDR828.07 trillion external debt. The debt-to-GDP ratio has increased to 34.53 percent from 33.63 percent in July 2020. For this year, Indonesia's debt interest has reached IDR 338.8 trillion, equivalent to 17 percent of the 2020 State Budget.

"This figure has passed the safe limit recommended by the IMF, which is 10 percent," Anis said in a statement received by VOI, Wednesday, October 21.

In addition, due to this debt policy, Indonesia's debt service ratio (DSR) has also increased. The Foreign Debt Statistics (SULNI) for semester I 2020 shows, Indonesia's tier-1 DSR has reached 29.5 percent. This figure has exceeded the DSR safe limit set by the IMF of 25 percent. Tier-1 DSR is an indication of additional external debt that is not accompanied by an increase in export performance and other components of additional foreign exchange.

"With a DSR of above 25 percent, it means that Indonesia's total debt is now at the alert level," said Anis.

Anis assessed that it becomes an additional problem when this big risk is taken for something whose results have not been seen to be effective. Efforts to reduce the impact of COVID-19 and the National Economic Recovery (PEN), which are the pretext for the government's debt, have not shown maximum results. The absorption of national economic recovery funds to deal with Covid-19 is still below 40 percent. "Until 17 September, only Rp254.4 trillion was allocated, or 36.6 percent of the Rp605.2 trillion ceiling," said Anis.

Anis further explained that the addition of Indonesia's debt statistically during the period 2014 to 2020 (outlook) had reached IDR 3,390.72 trillion or an increase of 129.97 percent in just six years (2014 amounted to IDR 2,608.78 trillion and IDR 5 .999.50 trillion at outlook 2020).

"Since the 1997-1998 crisis, this period of government has held the record for the largest increase in debt," said Anis.

Not only in aggregate, the Debt to GDP ratio has also increased. The previous administration period noted that the debt to GDP ratio continued to decline from 50 percent in 2004 to 24 percent in 2014. On the other hand, this administration period until the end of 2019 the debt to GDP ratio had reached 30.2 percent. With debt increasing in 2021, the debt to GDP ratio will reach around 40 percent. Anis also reminded that the increase in debt to GDP ratio shows an increase in the amount of debt that is not accompanied by an increase in national production proportionally.

Therefore, Anis advised the government to immediately optimize the external debt financing and seek cheaper financing alternatives. Meanwhile, debt must be used for spending that is truly productive and can drive the people's economy during the pandemic.

"The government needs to maintain the sustainability of financing and optimize the results of asset management and investment as well as problematic State receivables so that they can become State revenues," he said.