The Indonesian Government Debt Transformation

Lana Soelistianingsih ()
Additional contact information
Lana Soelistianingsih: Faculty of Economics University of Indonesia

Economics and Finance in Indonesia, 2012, vol. 60, 49-76

Abstract: In terms of the sources of funds, Indonesia's sovereign debt has been transformed significantly from the East European debt crisis and the policy of printing money to finance the government budget deficit during the Soekamo era, to bilateral and multilateral schemes during the Soeharto era. Subsequently Indonesia has been actively looking for loan in the capital markets in Indonesia and the international capital markets. Yet the purpose for getting loans basically is still the same, namely to finance the government budget deficits. The debt crisis happened due to the Asian financial crisis in 1997-1998 which provided painful lesson tliat forced the government to turn to the second Paris Club for debt rescheduling. The establishment of a debt management office within the Ministry of Finance lias become urgent needed. Since 2000 a debt management office has been established under the Ministry of Finance. This new body is not only responsible for managing the debt portfolio properly but also to raise new debts especially debt with a rupiah denomination. Greece's debt crisis is a reminder tliat domestic currency denomination has not made the country immune from debt solvency and sustainability problems, in particular when the debt is mostly owned by foreign investors, which is then considered as foreign debt. It could also provide a temptation for a country to raise debt in a similar fashion with the Ponzigame trap.

Keywords: debt; fiscal; budget deficit; debt crisis; debt management; tax ratio (search for similar items in EconPapers)
JEL-codes: E62 F34 F35 H62 H63 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
https://lpem.org/repec/lpe/efijnl/201203.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lpe:efijnl:201203

Access Statistics for this article

More articles in Economics and Finance in Indonesia from Faculty of Economics and Business, University of Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Muhammad Halley Yudhistira ( this e-mail address is bad, please contact ).