TEMPO Interactive, Jakarta: The government will create friendlier state financial management for investors by next year.
In its 2008 financial notes, the government will include fiscal risks including contingent liabilities, especially for guaranteeing infrastructure projects.
“With the new posts, investors' accountability may increase because the government guarantees several infrastructure projects with contingent liabilities,” said Deputy Director of Risk Management of Director General of Risk Management at the Department of Finance Schenaider C.H. Siahaan in Jakarta, at the end of last week.
Contingent liabilities emerge when the government decides to provide financial support to other entities in the economy, especially in the form of guarantees, such as payment failure and unachieved revenues.
With this system, said Schenaider, the view of Indonesia as a country with a non-investment rating will start to become more positive.
The reason for this is that investors take notice of the government's capabilities in managing risks involving any economic uncertainties that may appear.
Contingent liabilities will also support creditors in disbursing loans, especially for vital infrastructure projects.
“Business partner will also be more certain about working with Indonesia,” said Schenaider.
In previous government management, contingent liabilities were more focused on natural disasters.
Starting from 2008, the liabilities that could occur in the future will be covered under contingent liabilities.
Guarantee fund will be taken from debt reserve projections with a maximal limit of 60 percent of GDP.
However, the execution will only be done when contingent liabilities have already been realized in the current fiscal year.
According to Ronald Silaban, Head of the Central for Fiscal Risks of Fiscal Policy Agency at the Department of Finance, contingent liabilities are not listed in the government's financial balance.
It is only attached in the financial notes.
“There are amounts that can be quantified, and those that cannot,” he said.