The 2019 Elections and the disappearance of Indonesia as a nation


IO – The 2019 Elections will only generate an Indonesian Republic that can only be sold off at a minimum interest rate of 15% – just wait and see. It is impossible to amass the IDR 825 trillion that we will need to repay all the debts that will mature next year using the current interest rate. After all, it’s become too risky for foreign investors, as Indonesia as a country now has nothing to back up its mountain of debts, carrying choking-level interest rates.

Indonesia’s elites must be aware that since the 1945 Constitution was amended, the Republic’s economic value has decayed – in fact, it is now so low that we are now worth practically nothing. Or will be worth exactly nothing by the end of 2019, in view of the development of permanent deficits in all levels and lines of Indonesia’s economy.

Our Minister of Finance, Sri Mulyani, has smilingly offered investors a volume of bonds at a very appetizing interest rate of 11.625% – but strangely enough there were takers for just USD 2 billion. High-stakes gamblers would probably only take on Indonesia’s bonds at a return of 15% in 2019, and no lower – otherwise they could be hit with currency depreciation and Indonesia would simply default on its debts.

How is that possible? Indonesia no longer has any assets left. Indonesia no longer has any gold, as the reserves have been converted into foreign currency from China and the United States. Its assets are held by State-owned Enterprises (Badan Usaha Milik Negara – “BUMN”), 95% of whose shares are controlled by private parties, either by direct share ownership or by ownership of corporate bonds. The only thing left is the Presidential Palace and the offices of the governors, regents and the mayors. Indonesia’s value is just as much as the combined values of these lands together. And we’re not even sure that we could unload those assets in the case of an emergency either, as the title deed for the Presidential Palace is still in the possession of Her Majesty the Queen of the Netherlands.

Economically, Indonesia has no assets whatsoever: no gold, no M1 (deposit), and no assets other than what’s mentioned above. We really are living in a “red alert”: we really might lose the country, as no other country is in such dire straits – possessing no M1, no gold, and no assets, like Indonesia.

I present the readers four warning signs that Indonesia is really in danger of perishing:

First, Indonesia has no gold reserves. We forfeited our gold reserves to USD reserves during the Crisis of ‘98. On the other hand, China, America, and Germany have taken control of the gold reserves of numerous other countries.

Second, the State of Indonesia does not control its USD deposits. This reserve used to belong to the State, but with changes in BI Law those reserves are now considered “international assets”. Following a currency swap with China, our dollars now belong to China. We cannot regulate our own currency, but must first ask approval from China as the holder and swap controller.

Third, the State of Indonesia has no land assets. After our Investment Laws and other regulations were revised, these lands now belong to international parties as they are used as collateral by private companies. On average, 75% of Indonesian companies are controlled by foreign interests. When debt is piled onto this, these foreign bodies own at least 1.5x of our private companies’ assets.

Fourth, our country has no assets other than those of BUMN. However, after amendments to BUMN Laws, the State’s assets now belong to international financial institutions, as the 49% of BUMN shares are largely owned by foreign institutions. Add to this the number of BUMN debts, the composition of foreign companies in BUMN is valued at nearly twice the asset of these BUMNs (unless we artificially inflate the value of these BUMN assets with an extreme mark-up, of course).

In other words, there is really nothing left of Indonesia, other than the Presidential Palace – a property whose certificate is in fact in the hands of the Queen of the Netherlands. Or was, as now it is her son and heir, the current King of the Netherlands who holds the deed to our Palace. When Indonesia is eventually forced to default on its debts, the game’s all over – Indonesia will have nothing left. Everyone else will move in and grab the lot. Dismissed!