IO – According to many people, Indonesia is a rich country, which is just an illusory a concept as that one stating Indonesia is a poor country. Not only are the majority of the people poor, but the government is also poor.
The World Bank claims the total of poor people in Indonesia in 2018 numbered 150 million, using the criteria for upper-middle-income countries with per capita income above USD 4,000, with a poverty line of USD 5.5 (PPP 2011) per day per person.
79 million people if using the criteria for lower-middle-income countries with per capita income below USD 4,000, with a poverty line of USD 3.2 (PPP 2011) per day per person.
The Indonesian government is also very poor, since the government must go into debt to finance all its needs. Not only to finance the state budget deficit, but also to finance other expenses not included in the State Budget (APBN), such as State Capital Participation (PMN), or investment, in State- Owned Enterprises and BLU (Public Service Bodies).
The BLU includes, among other things, the State Asset Management (LMAN), the Housing Financing Fund Management Center (PPDPP), the Marine and Fisheries Business Capital Management Institution (LPMUKP), and others. This includes payments (contributions) to International Financial Institutions, such as IDB, IFAD, AIIB, and others.
The 2015-2019 budget deficit reached IDR 1,565.9 trillion, which must be covered (financed) from debt. Also, the government has expenditures for investment or PMN in BUMN, BLU, and others, which are not included in the State Budget. The amount reached IDR 322.5 trillion (2015-2019). So the total deficit reached IDR 1,888.4 trillion. For all of that, the government must finance from debt shows how poor our government is.
However, the management of our country’s finances has turned out to be surprising and dangerous. The government turned out to be in debt far greater than necessary. The government attracted IDR 2,022.5 trillion in debt. So that there is an excess of IDR 134.1 trillion in debt, which goes into the Remaining Budget Financing (SiLPA).
Of course, the management of state finances as above looks very strange and can be manipulative. The budget deficit is too low compared to debt withdrawals. If all these debt withdrawals are considered a deficit in the State Budget, then the deficit in 2015, 2016, and 2017 are already more than the maximum limit of 3 percent of GDP (Gross Domestic Product). Respectively 3.3 percent, 3.2 percent, and 3.2 percent.
Since PMN for BUMN is not considered as state expenditure, the government can manipulate use BUMN to increase state expenditure: without being recorded as state expenditure, without being recorded as a budget deficit. For example, the government can manipulate use “development” companies to build toll roads, or other BUMNs to build other infrastructure.
The Indonesian government is very poor. Investment funds or equity participation must be drawn from debt, including the National Education Development Fund of IDR 35.5 trillion (2015-2019). Also comes from debt. It’s really sad.
Equity participation or contribution to international institutions amounts to IDR 10.7 trillion. Also financed from debt. Of this amount, the largest contribution, namely IDR 9.4 trillion (2016-2019), was paid to AIIB (Asian Infrastructure Investment Bank) which is commanded by China.
The investment (deposit) of state capital in BUMN amounted to IDR 143.2 trillion (2015-2019), also comes from debt with quite high interest. This debt was never paid off. Because the state debt that is due will be paid with new debt. This means that the state must bear the debt interest burden for BUMN capital forever, which is charged annually in the APBN. On the other hand, dividend receipts from BUMN will not sufficiently cover the interest and debt of equity participation in BUMN.
What is heartbreaking is that the management of BUMN seems arbitrary. The appointment of directors and commissioners is full of politics. It is as if the BUMN were their own company. All capital comes from debt that must be borne by the Indonesian people through the state budget. Even more heartbreaking, SOEs are now allowed to waste money: they can appoint up to 5 expert staff, each of whom can be paid IDR 50 million per month. It’s heartbreaking.
What is even more heartbreaking is that people do not feel the benefits of BUMN. Even far from Article 33 of the Basic Law mandates. When the world crude oil price fell earlier this year, Pertamina did not lower the fuel price, even though all countries in the world have reduced their fuel prices several times. Jiwasraya is even detrimental to its customers, which until now there has been no resolution. Garuda is in trouble. PLN has even withdrawn electricity subsidies for low-income people.
Therefore, it is appropriate for the community to demand that BUMN be managed transparently and professionally. Don’t turn them into state-owned cash cows. The DPR must be critical of PMN because the capital comes from debt. If necessary, stop PMN.