•  
  •  
 

Abstract

Economic crisis which happened several years ago has caused many impacts to Indonesia. One of these impacts is a huge amount of government debt. Particularly, the government debt whether from domestic or foreign is one of the instruments to finance government expenditure which can not befulfilled entirely by revenues from taxes. However, using the government debt to fund the government expenditure has consequences for the government to pay-back not only for the interest rate but also for the principal of debt which have maturity-date in the future.

The purpose of this study is to analyze how far the development of the government debt dynamic from both domestic and foreign is correlated to fiscal sustainability. This study uses a case of Indonesia in period 1980-2005 which is divided into three periods: before crisis (/980-1997), crisis (1998-2000), and after crisis (2001-2005). In this study, we use Branson (1992) to analyze the government debt dynamic. In addition, we also use different approaches to have several comparisons in our analysis by Hamilton and Flavin (1986), Wilcox (1989), and Trehan and Walsh (1991). Besides that, we also conduct projection of the ratio of government revenue to GDP which is needed to support in decreasing of the ratio of government debt to GDP in the middle-term until 2010.

In summary, this study shows that after the crisis, the dynamic movement of the government debt is decreasing continuously. Furthermore, the government debt and the primary deficit still stand on the sustainable path, or the right track. Equally important, in the middle-term, the ratio of government revenue to GDP is still needed to maintain in decreasing of the government debt from year to year. Generally, this study shows that fiscal condition in Indonesia after the crisis reflects sustainable and suitable to the assumption of Non-Ponzi Game.

References

Abiad, Abdul dan Jonathan D. Ostry, "Primary Surplus and Sustainable Debt Levels in Emerging Market Countries," IMF Policy Discussion Paper, PDP/05/6, September 2005.

Agenor, Pierre-Richard, Development Macroeconomics (New Jersey: Princcton University Press, 1996).

Aghevli, Bijan B., "Inflationary Finance and Growth," The Journal of Political Economy, Vol. 85, No. 6, Desember 1977, hIm. 1295-1308.

Aghevli, Bijan B. dan Mohsin S. Khan, "Inflationary Finance and The Dynamics of Inflation: Indonesia, 1951-72," The American Economic Review, Vol. 67, No. 3, Juni 1977, hlm. 390-403.

Badan Pusat Statistik, Statistik Indonesia, berbagai edisi.

Bank Indonesia, Statistik Ekonomi dan Keuangan Indonesia, berbagai edisi.

Barro, Robert J., "On the Determination of Public Debt," The Journal of Political Economy, Vol. 87, No. 5, Part I, Oktober 1979, hlm. 940-971.

Blejer, Mario I., dan Adrienne Cheasty, "The Measurement of Fiscal Deficits: Analytical and Methodological Issues", Journal of Economics Literature, Vol. 29, No. 4, Desember 1991, hlm. 1644-1678.

Bohn, Henning, "The Behavior of U.S. Public Debt and Deficits," The Quarterly Journal of Econometrics, Vol. 113, No. 3, Agustus 1998, hlm. 949-963.

Chalk, Nigel dan Richard Hemming, "Assessing Fiscal Sustainability in Theory and Practice," IMF Working Paper, WP/00/81, April 2000.

Click, Reid W., "Seigniorage in A Cross-Section of Countries," Journal of Money, Credit and Banking, Vol. 30, N0.2, Mei 1998, hlm. 154-171.

Cuddington, John T., Analysing the Sustainability of Fiscal Deficits in Developing Countries (Washington: Georgetown University, 1996).

Departemen Keuangan RI, Nota Keuangan dan APBN, berbagai edisi.

Dinh, Hinh T., "Fiscal Solvency and Sustainability in Economic Management," Macroeconomics I (South Africa: World Bank, 1999).

Gujarati, Damodar, Basic Econometrics (New York: McGraw-Hill, 1995).

Hamilton, James D. dan Marjorie A. Flavin, "On the Limitations of Government Borrowing: A Framework for Empirical Testing," The American Economic Review, Vol. 76, No. 4, September 1986, hlm. 808-819.

Horne, Jocelyn, "Indicators of Fiscal Sustainability," IMF Working Paper, WP/91/5, Januari 1991.

International Monetary Fund, Government Finance and Statistics, berbagai edisi.

International Finance and Statistics, berbagai edisi.

Jeanne, Olivier dan Anastasia Guscina, "Government Debt in Emerging Market Countries: A New Data Set," IMF Working Paper, WP/06/98, April 2006.

Judge, George G., et.al., Introduction to The Theory and Practice of Econometrics (Canada: John Wiley and Sons. Inc., 1988).

Kraay, Aart dan Vikram Nehru, "When Is Debt Sustainable?" mimeo, paper in Research Workshop Macroeconomic Challenges in Low Income Countries, World Bank, 23-24 0ktober 2003.

LPEM FEUI, Laporan Akhir Kajian Kesinambungan Fiskal dan Program Makroekonomi Jangka Menengah: Exit Strategy Indonesia Pasca IMF, tidak dipublikasikan (Jakarta: LPEM FEUI, 2003).

Panglaykim J., dan H.W. Arndt, "The Indonesian Economy: Facing a New Era?", di dalam Thee Kian Wie (Ed.), Pelaku Berkisah Ekonomi Indonesia 1950-an sampai 1990-an (Jakarta: Penerbit Buku Kompas, 2005).

Panjaitan, Friska Parulian, Dinamika Hutang Pemerintah Indonesia dan Dampaknya Terhadap Kesinambungan Fiskal, skripsi sarjana (Depok: Fakultas Ekonomi Universitas Indonesia, 2001).

Pyndick, Robert S. dan Daniel L. Rubinfield, Econometric Models and Economic Forecast (Japan: McGraw-Hill, 1981).

Rahmany, Fuad A., "Ketahanan Fiskal dan Manajemen Utang Dalam Negeri Pemerintah," di dalam Heru Subiyantoro dan Singgih Riphat (Eds.), Kebijakan Fiskal: Pemikiran, Konsep, dan lmplementasi (Jakarta: Penerbit Buku Kompas, 2004).

Simanjuntak, Robert, "Kesinambungan Fiskal Indonesia: Kajian Teoritis dan Uji Empiris Untuk Jangka Menengah," mimeo, makalah yang disampaikan pada Seminar Sehari "Apakah Kondisi Fiskal Indonesia dalam Jangka Menengah dan Panjang Akan Sustainable?" diselenggarakan oleh Bank Indonesia dan JICA (Bogor: 17 Maret 2001).

Smith, Gregor W. dan Stanley E. Zin, "Persistent Deficits and The Market Value of Government Debt," Journal of Applied Econometrics, Vol. 6, No. I, Januari- Maret 1991, hlm. 31-44.

Soelistianingsih, Lana, "Utang Luar Negeri Pemerintah Indonesia dan Kaitannya dengan Fiscal Sustainability," mimeo, makalah yang disampaikan pada Seminar Akademik yang diselenggarakan Bank Indonesia dan Pasca Sarjana Ilmu Ekonomi FEUI (Jakarta: 16 November 2005).

Trehan, Bharat, dan Carl E. Walsh, "Testing Intertemporal Budget Constraints: Theory and Applications to U.S. Federal Budget and Current Account Deficits," Journal of Money, Credit and Banking, Vol. 23, No. 2, Mei 1991, hlm. 206-223.

Trialdi, Ledi, Fiscal Sustainability in Indonesia, MPP Thesis (Hitotsubashi University: 2004).

Tuwo, Lukita D., "Kesinambungan Utang Pemerintah dan Kaitannya dengan Kesinambungan Fiskal," mimeo, makalah yang disampaikan pada Seminar Sehari "Apakah Kondisi Fiskal Indonesia dalam Jangka Menengah dan Panjang Akan Sustainable?" diselenggarakan oleh Bank Indonesia dan JICA (Bogor: 17 Maret 2001).

Wilcox, David W., "The Sustainability of Government Deficits: Implications of The Present-Value Borrowing Constraint," Journal of Money, Credit and Banking, Vol. 21, No. 3, Agustus 1989, hlm. 291-306.

World Bank dan International Monetary Fund, The Challenge of Maintaining Long-Term External Debt Sustainability (IMF and World Bank, 2001).

Download

Included in

Economics Commons

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.