After The 'Debt Queen', Rizal Ramli Said Sri Mulyani Made Economic Performance In The Jokowi Era Go Down

Senior economist, Rizal Ramli. (Photo: Instagram @rizalramliofficial)

JAKARTA - Rizal Ramli has again 'sprayed' Minister of Finance Sri Mulyani Indrawati with harsh criticism. This is related to Indonesia's economic performance throughout 2020 which is considered far from successful.

According to Rizal, the economic performance that fell short of expectations was triggered by inappropriate fiscal policies. Apart from external factors, the economic downturn cannot be separated from internal factors in the cabinet of Advanced Indonesia.

The Coordinating Minister for Economic Affairs under the Abdurrahman Wahid alias Gus Dur's administration considered that the fiscal policy under Sri Mulyani's command was chaotic. The first policy that Rizal Ramli focused on was government debt.

High Interest Policy

Rizal said, Sri Mulyani gave benefits to creditors by making high interest on debt.

"For example, at a bank someone wants to borrow 15 percent of the loan (interest). Businessmen come to apply for credit, they negotiate not 15 percent but 12-13 percent," Rizal said as quoted from his written statement, Sunday, December 27.

"But there is one country (Indonesia) that comes to pay 17-18 percent interest, 2 percent more expensive than the market for 10 years," he continued.

According to Rizal, the debt policy with such high interest was not implemented by Indonesia's neighboring countries, such as Singapore to Japan and China.

"Don't mess around. The difference, the difference in interest is only 2 percent for 10 years. For example, if we borrow 10 US dollars, 2 percent of the additional interest is one third. Who pays? Our people," he said.

Compare Policies

In addition, Rizal also sees that the tax holiday policy for big businessmen actually creates a choke in state revenue. As proof, said Rizal, the realization of the tax ratio or tax revenue at the beginning of 2020 did not reach more than 10 percent.

Rizal Ramli claims this achievement is different from when he served as Coordinating Minister for the Economy 20 years ago, which managed to realize up to 11.5 percent of the gross domestic product (GDP).

"Today before the crisis (COVID-19) 10 percent. With this crisis, tax revenue will fall even further. It could even be 60-65 percent of the target. That explains we will have cash flow difficulties. Our tax revenue has dropped, it's huge," he explained.

Furthermore, he assessed that Sri Mulyani had started making bilateral loans because lending and borrowing were increasingly difficult amid the current COVID-19 pandemic.

Minister of Finance Sri Mulyani. (Photo: Doc. Setkab)

"He (Sri Mulyani) only dared to use small (taxes), and secondly he borrowed more and more difficult. That's why he started borrowing through bilateral," he said.

The former Coordinating Minister for Maritime Affairs also predicts that Indonesia's economy in 2021 will still be difficult, even worse than the monetary crisis in 1998.

"The longer the economy is falling for it. Jokowi went down together with Sri Mulyani's performance in financial performance," he said.

Several times Rizal Ramli has criticized Srimul

Rizal Ramli did not only criticize Sri Mulyani this time. Long before that, Sri Mulyani was even given the nickname 'debt queen' by Rizal. This criticism is often conveyed through his Twitter social media account.

The beginning of the nickname of the debt queen, namely in April 2019, Rizal Ramli conveyed his criticism via his Twitter, @RamliRizal. In his tweet, Rizal said that the Minister of Finance is Queen of Debt, praised by creditors for giving the highest interest in ASEAN.

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Rizal Ramli's criticism is not without reason, considering that the nominal debt of the central government in the era of Joko Widodo (Jokowi) leadership has increased significantly compared to his predecessor.

This tweet also responds to the information that there is an additional government debt amounting to Rp347 trillion in April 2019. The additional figure is calculated for one year or from April 2018.

"Government debt increases by Rp347 trillion a year. Nearly Rp1 trillion per day! How come the highest achievement is in debt? Minister of Finance" Ratu of Debt "is adored by creditors for giving the highest interest in ASEAN," wrote Rizal, quoted by VOI, Monday, November 30.

Not only that, before Indonesia officially entered into an economic recession zone, Rizal Ramli also criticized Sri Mulyani's statement saying that there had not been a recession. According to him, Sri Mulyani's statement was a public lie.

In fact, the method of calculation or definition used by Sri Mulyani to see whether or not a country's recession has been completed is incorrect.

"I see the habit of lying is contagious, it turns out that the Minister of Finance says we are not in a recession yet because he was only negative in the second quarter compared to the second quarter of last year," he said in a discussion in Jakarta, Friday, August 21.

That calculation is not the usual way by world economists to determine a recession or not. The common reason is to compare between quarter by quarter.

Money Illustration. (Irfan Meidianto / VOI)

"For example, in the first quarter compared to the fourth quarter of 2019 it was negative, in the second quarter compared to the first quarter it was also negative. So the recession has been negative in a row. How can the finance minister be like an idiot, saying it is not a recession yet," he said.

"The international standard is two quarters consecutively. So he makes his own definition for the 2020 quarter with the second quarter of 2019, that's minus 5.32 for two quarters," he continued.

Sri Mulyani admitted she was surprised because she was always labeled as the queen of debt. In fact, the debt issued is a consequence of the state budget deficit.

From year to year, the APBN formulation that is still in deficit is approved by the House of Representatives (DPR). The APBN deficit occurs because revenues are lower than state spending.

Sri Mulyani said that the matter of debt has been regulated in Presidential Regulation (Perpres) No 72/2020 concerning Amendments to Presidential Decree No 54/2020 concerning Posture Changes and Details of the 2020 State Budget.

Sri Mulyani added that Presidential Decree Number 72 regarding the 2020 State Budget budget has an estimated deficit with financing from SBN (government securities), loans, bilateral and multilateral.

"There are people today who like to talk about debt problems, just say that in Presidential Decree 72/2020 the time for the 2020 State Budget with such an estimated deficit, the financing is from SBN, from loans, some are bilateral, some are multilateral," explained Minister of Finance Sri. Mulyani in the press conference of the US National Budget which was broadcast virtually, Monday 23 November.

For this reason, Sri Mulyani asked that there be no parties responding sideways as if the government had no plans to implement Presidential Decree 72/2020.

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