VIVAnews - Member of Finance Commission at the House of Representatives (DPR) Dradjad H. Wibowo requested the government to cancel plans to seek funds through global bonds. Amidst the economic crisis, the plan to issue global bonds is considered too risky.
"They [investors] may ask for an interest rate that doesn't suit normal situation. In addition, Indonesia is deemed a risky country. Surely, the risk premium will be extremely high," said Wibowo at the House of Representatives (DPR) on Monday, Feb. 9.
Wibowo said that it will be better if the 2009 State Budget deficit of up to 2.5 percent or RP 132 trillion (US$11.3 billion) depends on domestic budget. "We have budget surplus. It may be used to cover the deficit," he said.
He said he objected to the plan to seek global medium term note loans because another alternative is available. The government, he said, may shift and rearrange fiscal stimulation. "The stimulation can still be reviewed in order to reduce the deficit," he said.
It is believed that global bonds issuance will add to state loans in the next few years. "Finance Minister will not bear the burden now. But how about the next minister in office? Who can guarantee that we will not be in trouble in the years to come?" said Wibowo.
According to him, in addition to the high premium, investors are difficult to find today. Not to mention the US or European investors, domestic investors are also reluctant to purchase bonds. "The point is that the need for issuing state bonds must be pressed by reducing deficit and re-modifying the stimulation design," he said.
Translated by: Bonardo Maulana Wahono
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