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Keberlanjutan Fiskal di Indonesia
[Fiscal Sustainability in Indonesia]

Listed author(s):
  • Simarmata, Djamester A.

Abstract: Fiscal sustainability has been a hot topic recently. Both the experiences in the past and the Stability and Growth Pact in the European Union have been playing a great role in the revival of the interest in the issue. The European Pact has triggered the academician to pay more attention to the unique threshold of the budget deficit and the level of debt in terms of GDP for a country aspiring to be the member of the Union. Several countries of the Union have since several years bypassing the rule, provoking objections from other members. Here come the economists to shed light on the subjects, whether the threshold is well-founded or not. Their results show that unique threshold for all countries is not justifiable. Indonesia has experienced a period of very high indebtedness after the 1997 crisis. It is followed by a bitter situation of that situation, even though mow there has been a substantial reduction in the ratio of debt over GDP. But the reduction of ratio was due partly to the appreciation of the Indonesian currency after the time of the severest crisis year. This article uses the advances in this subject to see the Indonesian case. It also arrives at the same conclusion, where sustainability of Indonesian debt will depends on several factors, like the international interest rate, economic growth, the structure of the domestic production. By using different point of view, one could arrive at different level of fiscal sustainability.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41344.

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Date of creation: 03 May 2007
Handle: RePEc:pra:mprapa:41344
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  1. Carlos Díaz Alvarado & Alejandro Izquierdo & Ugo Panizza, 2004. "Fiscal Sustainability in Emerging Market Countries with an Application to Ecuador," Research Department Publications 4371, Inter-American Development Bank, Research Department.
  2. Jacob A. Frenkel & Assaf Razin, 1986. "Fiscal Policies and Real Exchange Rates in the World Economy," NBER Working Papers 2065, National Bureau of Economic Research, Inc.
  3. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003. "Debt Intolerance," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 1-74.
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