Mekeng: Regional Bonds Not a Novelty, US and Japan Have Issued Them

Melchias Markus Mekeng, Chair of the Budget Committee of the People’s Consultative Assembly (MPR RI), has stated that the issuance of regional bonds is not a new concept, noting that the financing instrument has already been implemented in 18 countries and has proven effective in accelerating development. Speaking at a national forum in Pekanbaru, Mekeng pointed to major economies such as the United States, China, Japan, the United Kingdom, and Vietnam as examples where regional bonds have been successfully issued. He emphasised that the instrument is not intended to increase the fiscal burden on local governments but rather to serve as a source of financing for productive projects. Funds raised through regional bonds could be used to build strategic infrastructure, including hospitals, bridges, ports, and water management systems. Citing data, Mekeng noted that the default rate for regional bonds is only 0.1 percent, significantly lower than the typical 5 percent rate for non-performing loans. He added that if regulations for regional bonds are enacted, the instrument could become a key driver of national development acceleration and strengthen the fiscal independence of regional governments.