This shows that Indonesia actually does not have the capacity to repay its debts. Indeed, the difference between government debt (50.36%) and private sector debt (49.64%) is only 0.6%. This actually shows that the debt structure is vulnerable and dangerous because when private sector defaults on its debt the government will have to bear it.
Next, the debts were incurred through turnkey projects not recorded by BI or the Finance Ministry but instead by the SOE Ministry. Meanwhile, turnkey projects such as high-speed railway can suddenly burden the state budget. Now this is dangerous because the responsibility will still rest on the state.
“Many government officials argued that the debt level is still safe and like to compare Indonesia’s debt with that of Japan and America. But the comparison is not apple to apple, because Japan borrows from itself, and so is America.
“In my view, the debt situation now is a yellow light, not yet a red light. Judging from the DSR since Jokowi came to power, there has been no extraordinary achievement to reduce the debt burden. And that is evident in the DSR figures. I have spoken about this since 2015.”