THE SUSTAINABILITY OF STATE BUDGET IN DEBT REPAYMENT
Keywords:
Domestic debt, Foreign debt, Fiscal sustainability, Primary balance
Abstract
This paper is designed to analyze the sustainability of the central government budget in the case of Indonesia over the period of 1999-2009. First, we explore the theoretical background of the fiscal sustainability. Second, we develop a model to capture some factors determining the fiscal sustainability. Unlike the previous studies, we use both domestic debt and foreign debt to assess the fiscal solvency. Finally, we estimate it empirically. Based on the quarterly data analysis, we concluded that the government budget is unsustainable. This is associated with domestic debt rather than foreign debt. They imply that the central government should manage the debts carefully including re-profile, re-schedule, and re-structure them in order to spread the excess burden in the future. Also, the fiscal risks should be calculated comprehensively in order to maintain solvency.
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References
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Barro, R., 1997, “Optimal Management of Indexed and Nominal Debt,” NBER, working paper No. 6197.
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Buiter, W. H., 2002, “The Fiscal Theory of the Price Level: A Critique,” Economic Journal, Royal Economic Society, 112(127): 459-480.
Celasun, O., X. Debrun, dan J.D. Ostry, 2007, “Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A “Fan-Chart” Approach”, IMF working paper.
Chalk, N., dan R. Hemming, 2000, “Assessing Fiscal Sustainability in Theory and Practice”, IMF working paper.
Chouraqui, J.C., R.P. Hagemann, dan N. Sartor, 1999, “Indicators of Fiscal Policy: A Reexamination,” OECD Working Paper, No. 78.
Ciarlone, A. dan G. Trebeschi, 2006, “A Multinomial Approach to Early Warning System for Debt Crises”, Banca D’Italia, working paper no. 588.
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Yamauchi, A., 2004, “Fiscal Sustainability, the Case of Eritrea”, IMF working paper.
Yeyati, E. L. dan F. Sturzenegger, 2007, “A Balance-Sheet Approach to Fiscal Sustainability”, working paper, Universidad Torcuato Di Tella.
Yilanci, V. dan B. Ozcan, 2008, “External Debt Sustainability of Turkey: A Nonlinear Approach”, International Research Journal of Finance and Economics, 20: 91-98.
Barro, R., 1997, “Optimal Management of Indexed and Nominal Debt,” NBER, working paper No. 6197.
Boediono, 2009, Ekonomi Indonesia Mau ke Mana?, Kumpulan Esai Ekonomi, KPG & Freedom Institute, Jakarta.
Buiter, W. H., 1993, “Public Debt in the USA: How Much, How Bad, and Who Pays?”, NBER, working paper No. 4362.
Buiter, W.H., 1997, “Aspects of Fiscal Performance in some Transition Economies under Fund - Supported Programs,” IMF Policy Discussion Paper.
Buiter, W. H., 2002, “The Fiscal Theory of the Price Level: A Critique,” Economic Journal, Royal Economic Society, 112(127): 459-480.
Celasun, O., X. Debrun, dan J.D. Ostry, 2007, “Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A “Fan-Chart” Approach”, IMF working paper.
Chalk, N., dan R. Hemming, 2000, “Assessing Fiscal Sustainability in Theory and Practice”, IMF working paper.
Chouraqui, J.C., R.P. Hagemann, dan N. Sartor, 1999, “Indicators of Fiscal Policy: A Reexamination,” OECD Working Paper, No. 78.
Ciarlone, A. dan G. Trebeschi, 2006, “A Multinomial Approach to Early Warning System for Debt Crises”, Banca D’Italia, working paper no. 588.
Cuddington, J.T., 1996, “Analysing the Sustainability of Fiscal Deficits in Developing Countries,” WP6.0:sustain7.wpd, Economics Department Georgetown University, Washington, D.C., USA.
Brixi, P.H. dan A. Mody, 2002, “Dealing with Government Fiscal Risk: An Overview”, dalam Government at Risk, World Bank & Oxford University Press.
Dinh, H.T., 1999, Fiscal Solvency and Sustainability in Economic Management. The World Bank, 1999.
Enders, W., 2004, Applied Econometric Time Series, Second edition, John Wiley & Sony Inc.
Hamilton, J.D. dan Flavin, M.A., 1986, “On the Limitations of Government Borrowing: A Framework for Empirical Testing,” American Economic Review, American Economic Association, 76(4), September: 808-19.
Hanni, U., 2006, “Sustainabilitas Fiskal Indonesia dan Faktor Faktor Yang Mempengaruhinya, Jurnal Keuangan Publik, 4(2), September: 19-37
Jha, S., 2009, “Macroeconomic Uncertainties, Oil Subsidies and Fiscal Sustainability in Asia”, ADB Research Paper.
Kuncoro, H., 1999, Dampak Kebijaksanaan Pengeluaran Pemerintah terhadap Pertumbuhan Ekonomi Indonesia, Tesis M.Si., Sekolah Pascasarjana UGM, tidak dipublikasikan.
Kuncoro, H., 2005, Pengaruh Transfer Antarpemerintah terhadap Kinerja Fiskal Pemerintah Daerah, Pertumbuhan Ekonomi, dan Disparitas Pendapatan Regional, Kota dan Kabupaten di Indonesia, Disertasi Doktor Ilmu Ekonomi, Sekolah Pascasarjana UGM, tidak dipublikasikan.
Langenus, G., 2006, “Fiscal Sustainability Indicators and Policy Design in the Face of Ageing”, working paper, National Bank of Belgium.
Makin, T., 2005, “Fiskal Risk in ASEAN”, Agenda, 12(3): 227-38.
Mark, S.V., 2004, “Fiscal Sustainability and Solvency: Theory and Recent Experience in Indonesia”, Bulletin of Indonesian Economic Studies, 40(2), Agustus: 227-42.
Ouanes, A and S. Thakur, 1997, Macroeconomic Accounting and Analysis in Transition Economies, International Moneteray Fund, Washington D.C.
PPE UGM dan BAF, 2004, “Studi Manajemen Utang Luar Negeri dan Dalam Negeri Pemerintah dan Assessment terhadap Optimal Borrowing”, Laporan Akhir Penelitian.
Rahmany, F.A., 2004, “Ketangguhan Fiskal dan Manajemen Utang Dalam Negeri Pemerintah”, dalam Kebijakan Fiskal, Pemikiran, Konsep, dan Implementasinya, Kompas, Jakarta.
Saleh, S., 2002, Pengaruh Kebijakan Defisit Anggaran Pemerintah terhadap Perekonomian Indonesia, Disertasi Doktor dalam Ilmu Ekonomi, UGM, Yogyakarta, tidak diterbitkan.
Soelistijaningsih, L., 2002, Model Portofolio dalam Pengelolaan Utang Luar Negeri sebagai Alternatif mengurangi Gejolak Eksternal: Kasus Indonesia, Disertasi Doktor, Universitas
Indonesia.
Subyantoro, H., 2008, “Adakah Persoalan Contingent Liabilities dan Fiscal Risk di Indonesia?: Sebuah Pelajaran yang Sangat Berharga”, Pidato Pengukuhan Guru Besar Universitas Borobudur, Jakarta, 23 Desember.
Tunner, E. dan I. Samake, 2006, “Probabilistic Sustainability of Public Debt: A Vector Autoregression Approach for Brazil, Mexico, and Turkey”, IMF working paper.
Turner, P., 2002, “Bond Markets in Emerging Economies: an Overview of Policy Issues,” Bank for International Settlement, No. 11, Basel, Switzerland.
Ulfa, A. dan R. Zulfadin, 2004, “Seberapa Seriuskah Perhatian Indonesia terhadap Isu-isu Kontingensi Fiskal?”, Kajian Ekonomi dan Keuangan, 8(2), Juni.
Wilcox, D., 1989, “The Sustainability of Government Deficits: Implications of the Present-Value Borrowing Constrain”, Journal of Money, Credit and Banking, 3: 291-306.
Yamauchi, A., 2004, “Fiscal Sustainability, the Case of Eritrea”, IMF working paper.
Yeyati, E. L. dan F. Sturzenegger, 2007, “A Balance-Sheet Approach to Fiscal Sustainability”, working paper, Universidad Torcuato Di Tella.
Yilanci, V. dan B. Ozcan, 2008, “External Debt Sustainability of Turkey: A Nonlinear Approach”, International Research Journal of Finance and Economics, 20: 91-98.
Published
2011-06-28
How to Cite
Kuncoro, H. (2011). THE SUSTAINABILITY OF STATE BUDGET IN DEBT REPAYMENT. Buletin Ekonomi Moneter Dan Perbankan, 13(4), 415-434. https://doi.org/10.21098/bemp.v13i4.400
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
