MPR Urges Regional Bond Bill to Be Enacted Soon

Palembang, Indonesia — Melchias Markus Mekeng, the head of the Golkar faction in the MPR RI, urged the Regional Bond Bill (RUU Obligasi Daerah) to be enacted swiftly to strengthen the independence of regional development financing.

Speaking after the MPR RI National Dialogue in Palembang on Tuesday, he said the event was very beneficial because they gained much material to feed into the draft Regional Bond Bill.

The existence of the Regional Bond Law is expected to speed up development in the region without too much dependence on central government financing. Regional bonds will provide wider room for local governments to finance various development projects independently while also improving public services.

He hopes for the support of all stakeholders so that the RUU Obligasi Daerah can be completed by the DPR RI. “If we are optimistic, perhaps by the end of this year or early next year this regional bond will be completed,” he said.

The discussion of regional bonds has actually started since 2000. However, it is now seen as the right moment because the central government is promoting greater regional autonomy.

“Regions are trying to build their own areas through their own initiatives and by increasing PAD (own-source revenue), not merely relying on DAU and DAK,” he explained.

He explained that local governments wanting to issue bonds must prepare specific development proposals, such as port development, hospitals, water management, or waste management.

Additionally, each project must have a clear feasibility study so that the use of bond funds can be accounted for to the public.

“There will be a prospectus explaining that the regional bond funds are used for specific projects,” he said.

In addition, projects financed by regional bonds are those capable of generating revenue, such as hospitals, toll roads, ports, and tourist areas, which can help bond repayment while increasing original regional revenue (PAD).

South Sumatra is one of the regions with great potential in applying regional bonds due to abundant resources and high infrastructure development needs.

One potential project to be supported through regional bonds is the development of Tanjung Carat Port to facilitate economic transactions and spur regional economic growth.