JK Says Indonesia Pays Annually Rp 1000 Trillion in Public Debt, Finance Minister Responds

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The issue of public debt has once again become a public concern. Vice President of Indonesia in the 10th and 12th terms, Jusuf Kalla (JK), revealed that the government has paid off debts amounting to Rp 1,000 trillion within a year. In response to this issue, Finance Minister Sri Mulyani provided a clear answer.

Previously, JK raised the issue of public debt payment in his speech during the 21st anniversary of the Prosperous Justice Party (PKS) at Istora Senayan, Jakarta, last Saturday (May 20, 2023).

According to JK, debt is an economic issue deeply rooted in Indonesia. He confirmed the existence of Indonesia’s significant foreign debt, as stated by the Chairman of the Democratic Party, Agus Harimurti Yudhoyono (AHY), who was present at the same event.

“Mr. AHY mentioned the large debt, and he is correct. We pay off debts of over Rp 1,000 trillion per year, the highest in Indonesia’s history since independence,” explained JK, as quoted on Sunday (May 21, 2023).

JK hopes that the current escalating debt issue can be continuously addressed, so as not to have a widespread impact on social problems in Indonesia.

Responding to JK’s statements, Finance Minister Sri Mulyani, who has served as the state treasurer since President Jokowi’s first term, stated that debts have maturity periods, and everything is regulated within the state budget.

According to Sri Mulyani, it is part of the government’s financing strategy. Until now, debts have been well managed, from issuance to repayment.

“The most important principle is that the due payments can be made, and the debt burden remains manageable, which falls under sustainability,” she explained.

In fact, according to several sources, Indonesia spends around Rp 500 trillion each year to repay principal debt installments. When combined with interest payments, the amount reaches around Rp 750-900 trillion.

The Report on the Examination of the Central Government’s Financial Statements in 2021 shows that debt interest payments reached Rp 343.49 trillion.

This includes spending on long-term domestic debt interest payments amounting to Rp 260.63 trillion and spending on domestic State Sharia Securities (SBSN) payments amounting to Rp 63.83 trillion.

Spending on long-term foreign debt interest amounted to Rp 10.63 trillion. Meanwhile, debt interest payments have surged by 58.6% over five years, from Rp 216.57 trillion to Rp 343.49 trillion in 2021.

Furthermore, over the course of five years, the repayment of foreign debt principal increased from Rp 65.12 trillion to Rp 82.08 trillion. The budget allocation for domestic debt payments also continued to rise from Rp 285.1 trillion in 2017 to Rp 476.8 trillion in 2021.