Regions to issue bonds in 2006<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Regional administrations in the country can start issuing bonds
\nin 2006 to raise funds to help finance their economic development
\nprograms, director general for fiscal decentralization Mahfud
\nSidik said on Monday.<\/p>\n
But Mahfud said that based on the State Finance Law, regions
\nwere not allowed to sell the bonds overseas as they did not have
\ndirect access to overseas borrowing.<\/p>\n
\"(Overseas borrowing) must be made through the central
\ngovernment. We want to be prudent so as to avoid a crisis, like
\nwhat happened in Argentina,\" he said, referring to the debt
\ncrisis suffered by Argentina due to the borrowing spree made by
\nits provincial and regency administrations.<\/p>\n
Mahfud said the minister of finance would decide which regions
\nmet the criteria to be allowed to issue bonds.<\/p>\n
He said that when issuing bonds, the regional governments must
\nalso meet the requirements set under the country's Capital Market
\nLaw.<\/p>\n
He did not provide details.<\/p>\n
Following the introduction of the regional autonomy law in
\n2000, which provides greater administrative power for local
\ngovernments to arrange their economic affairs, provincial and
\nregency administrations have been trying to seek external
\nfinancing sources, including the possibility of tapping cheaper
\nfunds from the bond market.<\/p>\n
But the country's major lenders, particularly the
\nInternational Monetary Fund and the World Bank, have warned the
\ncentral government of the financial risks to the country if the
\nregions were immediately allowed to issue bonds.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/regions-to-issue-bonds-in-2006-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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