Listening To Why Rizal Ramli Often Calls Sri Mulyani As 'The Queen Of Debt'

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

JAKARTA - Throughout his career, Minister of Finance Sri Mulyani Indrawati has not only been named the best finance minister in the world. However, he also received the scathing nickname, 'debt queen', and most recently as 'debt beggar'. The nickname was given by a senior economist and former Coordinating Minister for the Economy, Rizal Ramli.

At first the nickname of the debt queen was when in April 2019, former 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.

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.

Most recently, through his Twitter network, Rizal Ramli poked at President Joko Widodo or Jokowi. He highlighted debt interest which is now getting more expensive. To simply pay the interest, Indonesia has to borrow another debt from another country.

"Mas @Jokowi, where do you want to take RI? The interest bonds are getting more expensive. Just to pay interest on debt, you have to borrow again. It's getting worse," Rizal Ramli explained.

Not without reason, Rizal Ramli said. This is because according to him, the government currently has a strategy of borrowing debts from one country to another.

"That's why starting to change the strategy to become 'beggars for bilateral debt', from one country to another. That too is getting coins. That is what makes a shock," said Rizal.

Latest Debt Data

The position of government debt was recorded at IDR 5,877.71 trillion as of October 2020. This figure is equivalent to 37.84 percent of Indonesia's GDP (debt to GDP ratio) or below the maximum limit of the State Finance Law in the range of 60 percent of GDP. The debt position for September 2020 was IDR 5,756.87 trillion. The debt-to-GDP ratio reaches 36.4 percent of GDP.

The largest portion of government debt was dominated by 85.56 percent by Government Securities (SBN) valued at Rp5,028.86 trillion. Of this amount, the issuance of SBN was still dominated by domestic ones valued at Rp3,782.69 trillion, with the distribution of Rp3,101.86 trillion in Government Securities (SUN) and Rp680.63 trillion in State Sharia Securities (SBSN).

The remaining Rp1,246.16 trillion came from the issuance of SBN in foreign currency. The details are Rp. 986.15 trillion issued in the form of Government Securities (SUN) in foreign currency and Rp. 260.01 trillion in SBSN in foreign currency.

About 14.44 percent of the country's debt portion comes from loans worth IDR848.85 trillion. The majority of this was contributed by foreign loans consisting of IDR315.25 trillion bilaterally, IDR837.77 trillion multilaterals, and IDR43.43 trillion from commercial banks. Apart from foreign loans, only Rp. 11.08 trillion were domestic loans.

Sri Mulyani said, this information is important for the public to know as a form of government transparency. Even though Indonesia's debt does have an upward trend, he ensures that the government has a plan for every rupiah.

Minister of Finance, Sri Mulyani. (Photo: Instagram @smindrawati)

As of October 2020, for example, government debt attracts IDR 958.6 trillion debt to finance a deficit of IDR 764.9 trillion or 4.67 percent of GDP. Until the end of 2020, the realization of debt withdrawal for the 2020 State Budget will reach IDR 1,220.5 trillion and a deficit of IDR 1,039.2 trillion, equivalent to 6.34 percent of GDP.

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Sri Mulyani said that the figure was understandable because it had been regulated in Presidential Decree No. 72/2020 at the same time to finance the handling of COVID-19 and National Economic Recovery (PEN) which cost Rp.695.2 trillion.

Sri Mulyani Responds to Rizal Ramli's Comments

Sri Mulyani said she was surprised because she was always labeled 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 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.

Money illustration. (Irfan Meidianto / VOI)

Sri Mulyani said 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.

Rizal Ramli Agrees with Sri Mulyani

Lately, Rizal has often criticized Sri Mulyani. However, in a tweet on social media Twitter, Rizal Ramli finally agreed with the opinion of the former World Bank Managing Director regarding economic growth.

In a seminar themed "Golden Indonesia 2045: Graduated from Middle Income Trap", Sri Mulyani Indrawati revealed that Indonesia could get the status of a developed country, if its economy grew 8 percent year on year (yoy) in a sustainable manner. Thus, according to him, Indonesia can get out of the middle income trap.

"This time, SMI is right, it needs 8 percent growth per year until 2045, so that Indonesia becomes a developed country," Rizal Ramli said in a tweet on Twitter, quoted by VOI, Saturday, November 28.

Even though he agreed, Rizal Ramli's tweets again ended up being cynical. He said, the growth performance which was always below 6 percent showed that there was wrong management by the government.

"But the performance so far has always been below 6 percent because the formula is only owing money and raising prices. A failed strategy !," wrote Rizal Ramli.

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