Jakarta (ANTARA) - Minister of Home Affairs Tito Karnavian said the\nissuance of regional bonds must be carried out with great care, in\nresponse to plans by the DKI Jakarta Provincial Government.<\/p>\n
\u201cFrom the Ministry of Home Affairs\u2019 perspective, bonds must be\nhandled very carefully, because this involves borrowing, issuing debt\ninstruments,\u201d he said when met at the parliamentary complex in Senayan,\nJakarta, on Tuesday.<\/p>\n
According to him, the issuance of regional bonds needs to consider\nregional governments\u2019 ability to repay the debt so as not to burden\nsubsequent administrations.<\/p>\n
\u201cThe principle is that it must not create a burden for the incoming\nregional head. Many regional heads have confided in me that they have to\nshoulder debts incurred by previous administrations,\u201d Tito said.<\/p>\n
He considered regional debt acceptable if used to finance productive\nactivities that generate income to repay the debt while also boosting\nlocally generated revenue (PAD).<\/p>\n
He cited productive debt examples, such as building a hospital\nmanaged as a regional public service agency (BLUD) capable of generating\nrevenue to service the debt whilst turning a profit.<\/p>\n
However, the Home Affairs Minister warned that issuing bonds to\nfinance unproductive development could burden the next regional\nhead.<\/p>\n
\u201cIf they build something unproductive that then creates a burden for\nthe next regional head, well, that must be handled very carefully,\u201d he\nsaid.<\/p>\n
He specifically cautioned about this risk for regions with low\nfinancial capacity, noting that additional debt through bond issuance\ncould further strain regional finances.<\/p>\n
\u201cImagine if a region has low capacity, already has debt, and is then\nasked to issue bonds on top \u2014 that would be even heavier for the next\nregional head. They would end up in the red,\u201d Tito said.<\/p>\n
Previously, the DKI Jakarta Provincial Government targeted issuing\nregional bonds worth Rp5.6 trillion in stages in 2027 and 2028.<\/p>\n
DKI Jakarta Governor Pramono Anung Wibowo said the financing\ninstrument is projected to serve as an alternative funding source to\naccelerate infrastructure development and improve the quality of public\nservices.<\/p>\n
\u201cThis regional bond issuance plan has been proposed in the KUA-PPAS\n(General Budget Policy and Temporary Budget Ceiling Priorities) of the\n2027 Regional Budget,\u201d Pramono said at a Capacity Building event on\nRegional Bond Issuance in Jakarta on Tuesday (4\/8).<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/tito-regional-bond-issuance-must-be-approached-with-caution-1789469828", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }