We can't domestic loans

We were surely startled when reading a scenario made by the Indonesian Bank Restructuring Agency (IBRA) concerning the burden of recapitalization bonds that we have to shoulder. Based on the worst scenario, the total liabilities derived from these bonds that we have to pay until 2041 can reach Rp7,000 trillion.

The first thing that caught us by surprise was certainly the figure Rp7,000 trillion. We can hardly imagine how much that Rp7,000 trillion is.

Second, can we fulfill the obligation?

The bond problem is different from our debts to the Paris Club, the World Bank or the International Monetary Fund as it is related to on-shore loans.

If we owe to other countries, such debts can be negotiated, restructured, written off, or, under forced circumstances, perhaps these debts will not be repaid. On-shore loans are different, though. The government has to meet its obligation as this can influence its credibility, or, and even more frighteningly, disrupt the national economy as a whole.

We can go out of the difficulties in paying on-shore loans and carry on the development if we draft the Law on State Bonds.

Yet, it is just the first step. The next one, which is of no less importance, is to build the people's confidence.

It is only with the people's trust that we all will have no doubt to purchase government bonds. It is these bonds that will then be used to pay on-shore loans and carry on the development in this country.

-- Kompas, Jakarta