Erwida Maulia and Irawaty Wardany, Denpasar/Jakarta – State Secretary Hatta Radjasa acknowledges the country's debt has increased over the past five years, but says the public should not judge the current government's performance simply on the amount of debt.
The head of the campaign team for incumbent President Susilo Bambang Yudhoyono said the public should instead measure the debt to gross domestic product (GDP) ratio, which currently stands at "slightly above 30 percent.
"Don't measure it with the absolute value; that is unfair," Hatta said. "Indonesia has increased its reserves, GDP, and citizens' incomes, which means that our capacity to pay our debt is increasing. Our debt-to-GDP ratio has been continually declining since the (1998 Asian monetary) crisis," Hatta said.
He said the ratio during the crisis was almost 100 percent; it then slid to about 50 percent in 2004. "That is what people commonly do; measure the debt-to-GDP ratio. We have a much better condition now," Hatta said.
Public debt has reportedly increased by an average of Rp 80 trillion (US$7.94 billion) per year during Yudhoyono's presidency. It stands at Rp 1,667 trillion as of January 2009, including Rp 747 trillion in foreign loans and Rp 920 trillion in bonds.
Meanwhile in Jakarta, a discussion was told that Indonesia needed a president who could stop foreign loans burdening the people.
"Since the New Order regime under Soeharto to the Reform regime under Susilo Bambang Yudhoyono, Indonesia has been ensnared in a debt trap," associate director of Media Institute and Islamic Study Center of Paramadina University, Herdi Sahrasad, told a discussion held by the Research, Education and Information Institute for Society and Economics (LP3ES).
"This has been a dark record of previous administrations from Soeharto into Megawati and it is maintained by Yudhoyono," Herdi said.
He added during the four-and-a-half years of Yudhoyono's administration, state loans had increased drastically, from Rp 1,275 trillion to Rp 1,667 trillion. Most of the loans were used to pay debt from the previous administration.
"If the next president does not make a change, such loans will continue to burden Indonesian people," he said.
Syamsul Hadi, a lecturer of international relations at the University of Indonesia, expressed similar views, saying one of the reasons certain sectors receive small budget allocations was because a large part of the budget was allocated to repay the loans. "In the 2009 state budget, allocation to repay loans' and interests is valued at Rp 162 trillion in total," he said.
He compared the amount with the budget for Agriculture (Rp 8 trillion), Education (Rp 62 trillion), Health (Rp 20 trillion), Maritime and Fisheries (Rp 3.4 trillion) and the Environment (Rp 376 billion).
Unfortunately, Ray Rangkuti of the Indonesian Madani Circle (LIMA) said, none of the presidential candidates had a clear stance of the loan issue.
"They all seem hesitant as to whether loans will be halted under their administration. Not even the Jusuf Kalla-Wiranto pair, which touts its independent economy credentials, or the 'people oriented economy' Megawati-Prabowo pair. The SBY-Boediono pair never even talks about this issue." he said.