Private foreign debt concerns

Our monetary authority appears to be concerned with our swelling private foreign loan burden. Particularly disconcerting is the boldness with which some members of the private sector borrow money, daring to accept loans on the most preposterous terms.

The rush to seek foreign loans is closely related to high domestic interest rates and the overall economic situation. Presently, the interest rate of the rupiah is said to be the highest in the world, which drives people to do their borrowing overseas. It is possible that the money is being used to finance projects, but some of the loans are sought to capitalize on the disparity between the interest rate of the rupiah and that of the dollar.

We are convinced that not all of our private businesspeople are this reckless or interested solely in momentary profits. Many are genuine professionals. Nevertheless, the act of borrowing abroad is enough to affect the balance of our transactions in services. What's more, attempts to capitalize on interest rate disparities will keep our monetary authorities unnecessarily busy.

-- Bisnis Indonesia, Jakarta