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On-Lending In Indonesia: Past Performance And Future Prospects

Listed author(s):
  • Blane Lewis

On-lending to sub-national governments in Indonesia has a long and generally disappointing history. Among other noteworthy problems, an insufficient amount of funds has been channelled through the system vis-a-vis capital fi nancing needs, and loan repayments have proved poor. Aid agencies and government have recently invested substantial resources in attempts to improve the on-lending system; the resultant newly installed regulatory framework for sub-national borrowing is, however, unlikely to improve outcomes substantially. Developing sub-national government access to private capital markets would appear to constitute the way forward, although this will not come quickly or easily. A positive step in the right direction would be for government and aid agencies to embrace the anticipated change and work together to make the transition a successful one, rather than continue to tinker with reforms at the margin of a moribund system.

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Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

Volume (Year): 43 (2007)
Issue (Month): 1 ()
Pages: 35-58

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Handle: RePEc:taf:bindes:v:43:y:2007:i:1:p:35-58
DOI: 10.1080/00074910701286388
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