{
    "success": true,
    "data": {
        "id": 1893493,
        "msgid": "economist-regional-bonds-only-effective-for-financing-productive-projects-1785510063",
        "date": "2026-07-31 21:02:18",
        "title": "Economist: Regional Bonds Only Effective for Financing Productive Projects",
        "author": "",
        "source": "ANTARA_ID",
        "tags": "",
        "topic": "Finance",
        "summary": "An economist from the Institute for Development of Economics and Finance (INDEF) warns that regional government bonds should only be used for projects with measurable economic benefits. Using such instruments to cover routine expenditures could create significant fiscal burdens for local governments in the future.",
        "content": "<p>M. Rizal Taufikurahman, an economist at the Institute for Development\nof Economics and Finance (INDEF), stated that the issuance of regional\ngovernment bonds is only effective for financing productive projects\nthat offer economic benefits and measurable revenue streams.<\/p>\n<p>Conversely, if used for routine expenditures, Rizal believes the\nbenefits of issuing debt securities could potentially create challenges\nfor regional fiscal stability in the future. \u201cRegional bonds can be an\neffective financing instrument, but they are not a shortcut to\ncompensate for weak regional fiscal capacity,\u201d Rizal said when contacted\nin Jakarta on Friday.<\/p>\n<p>According to Rizal, financing from debt securities should be utilised\nfor projects such as transport, drinking water, hospitals, or public\nservice infrastructure. If used to cover routine spending, operational\ndeficits, or economically unviable projects, regional bonds are seen as\nmerely shifting today\u2019s fiscal burden into future obligations for\ninterest and principal payments within the Regional Budget (APBD).<\/p>\n<p>Furthermore, he noted that the greatest challenge lies in the\ndisparity of capacity between regions. \u201cNot all regional governments\npossess strong Local Genuine Revenue (PAD), credible governance,\nbankable project quality, or the ability to manage debt risks,\u201d he\nadded.<\/p>\n<p>Rizal emphasised that the issuance of regional debt securities must\nbe carried out very selectively, transparently, and accompanied by\nstrict debt limits, project audits, and oversight of fund usage. If\nthese conditions are not met, there are concerns that bond issuance\ncould become a risky fiscal fulfilment strategy. \u201cWithout these\nprerequisites, regional bonds are risky and have the potential to\ntransform from a development instrument into a source of moral hazard,\nproject waste, and new fiscal pressure that ultimately must be borne by\nthe community,\u201d he concluded.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/economist-regional-bonds-only-effective-for-financing-productive-projects-1785510063",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}