Main Article Content
Abstract
Indonesia has received external debt as an external source of finance to fill in the investment-saving gap in achieving economic growth to improve social welfare. Despite Indonesian economy is able to recover to some extent, based on Bank Indonesia (2018), Indonesia’s external debt at the end of Q2/2018 still amounted to USD 355,7 billion; consisting of government and central bank external debt of USD 179.7 billion, as well as private sector (including state-owned enterprises) external debt of USD 176.0 billion. Therefore, this study aims to examine the trend and impact of external debt on economic growth in the context of Indonesia’s economy. If external debt is found to lead to debt trap, or already in the condition of growth-led debt, its benefits for economic development should be reviewed properly and government policies regarding external debt need to be redesigned. This study is a qualitative research in the form of case study of External Debt and its critical impact in Indonesia. Through observation, data comparison and literature study, it is found that external debt of Indonesia has been dominated by US Dollar and Japanese Yen, which assumed to cause surge in debt repayment.
Keywords
Article Details
Authors who publish with this journal agree to the terms:
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
Jurnal Ekonomi Pembangunan is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License..
References
- Ainiyah, I. Q. (2015). Utang Luar Negeri: Instrumen Pembiayaan Pembangunan Ekonomi di Indonesia. Depok: Fakultas Ilmu Sosial dan Ilmu Politik, Universitas Indonesia.
- Alam, N., & Taib, F. (2012). Debt Trap and Basic Borrowing Fundamentals: A Comparative Studies on a Group of Fourteen Asian Pacific Developing Countries. European Journal of Social Sciences, 28(1), 42-49.
- Amoateng, K., & Amoako-Adu, B. (1996). Economic growth, export and external debt causality: the case of African countries. Applied Economics, 28(1), 21–27. https://DOI: 10.1080/00036849600000003
- Atique, R. and Malik, K. (2012). Impact of Domestic and External Debt on the Economic Growth of Pakistan. World Applied Sciences Journal, 20(1), 120-129. https://Doi: 10.5829/idosi.wasj.2012.20.01.1621
- Asley, B. (2002). Debt Burden is not a Problem of Freely Resource to Debt Services Payment. Principle of International Finance, 1(3), 142-147.
- Basorudin, M. (2019). Analisis Kesinambungan Fiskal Indonesia Pasca Krisis Ekonomi. Jurnal Ekonomi Pembangunan, 17(2): 59-70. DOI: https://doi.org/10.29259/jep.v17i2.9792
- Bank Indonesia. (2018). External Debt Statistic of Indonesia. Vol. IX, August 2018. Jakarta: Joint Publication of Statistics Department, Bank Indonesia and Directorate of Budget Financing and Risk Management, Ministry of Finance.
- Bank Indonesia. (2019). External Debt Statistic of Indonesia. Vol. X, August 2018. Jakarta: Joint Publication of Statistics Department, Bank Indonesia and Directorate of Budget Financing and Risk Management, Ministry of Finance.
- Cholifihani, M. (2008). A Cointegration Analysis of Public Debt Service and GDP in Indonesia. Journal of Management and Social Sciences, 4(2), 68-81.
- Cohen, D. (1993). Low Investment and Large LDC Debt in the 1980's. The American Economic Review, 83(3), 437-449.
- Cohen, D. (1994). Foreign Finance and Economic Growth: An Empirical Analysis. L. Leiderman and A. Razin (eds.). Capital Mobility: The Impact on Consumption, Investment and Growth. Cambridge: Cambridge University Press.
- Creswell, J. W. (2013). Qualitative Inquiry & Research Design: Choosing among Five Approaches (3rd edition). Thousand Oaks, CA: SAGE.
- Daseking, C., & Kozack, J. (2003). Avoiding another debt trap. Finance & Development. IMF Policy Development and Revenue Department. Available at https://www.imf.org/external/pubs/ ft/fandd/2003/12/pdf/daseking.pdf. Access on May 30, 2020.
- Eaton, J. (1993). Sovereign debt: A primer. Policy Research Working Paper, World Bank Economic Review, 7(2), 137-172. Doi: 10.1093/wber/7.2.137.
- Frank, A. G. (1966). The Development of Underdevelopment. Monthly Review, 18(4), 17–31. Htpps://DOI: 10.14452/mr-018-04-1966-08_3.
- Gibson, H. D., Tsakalotos, E. (1992). Economic Integration and Financial Liberation: Prospects for Southern Europe. Palgrave Macmillan.
- Indermit, G. & Brian, P. (2005). Public debt in developing countries: Has the market-based model worked? Policy Research Working Paper Series 3674, The World Bank. https://DOI: 10.1596/1813-9450-3674.
- International Monetary Fund (IMF). (2013). The 2013 External Debt Statistics: Guide for Compilers and Users. Washington D.C., United States.
- Kuncoro, M. (1997). Ekonomi Pembangunan: Teori, Masalah, dan Kebijakan. Yogyakarta: Unit Penerbit dan Percetakan, Akademi Manajemen Perusahaan YKPN.
- Kuncoro, M. (1999). Dampak Arus Modal Asing terhadap Pertumbuhan Ekonomi dan Tabungan Domestik. Prisma, XVIII (9), 26-47.
- Kusumaningtuti, S. S. (2004). Country Experiences of Indonesia on External Debt Management. Paper presented at Regional Workshop on Capacity-Building for External Debt Management. Bangkok. July 6-7, 2004.
- Law No. 25 years 2007 of Republic of Indonesia on Capital Investment.
- Lin, S., & Sosin, K. (2001). Foreign debt and economic growth. The Economics of Transition, 9(3), 635–655. https://DOI: 10.1111/1468-0351.00092.
- Mankiw, N.G. (2009). Macroeconomics. 7th ed. Harvard University. New York (US): Worth Publishers.
- Moosa, I.A. (2002). Foreign Direct Investment: Theory, Evidence and Practice. New York (US): Palgrave.
- Nakatani, P. & Herrera, R. (2007). The South Has Already Repaid its External Debt to the North: But the North Denies its Debt to the South. Monthly Review, 59(02), June 2007.
- Nasution, A. (2000). The meltdown of the Indonesian economy: causes, responses and lessons. ASEAN Economic Bulletin, 17(2), 148-162.
- OECD. (2019). Official Development Assistance (ODA). Development Co-operation Directorate, OECD.
- Observatory of Economic Complexity (OEC). (2017). Indonesia. Available at https://atlas.media.mit.edu/en/profile/country/idn/. Access on April 19, 2019.
- Pattillo, C., Poirson, H., & Ricci, L. (2002). External Debt and Growth. IMF Working Paper, WP/02/69, April 2002. International Monetary Fund Research Department. Available at https://www.imf.org/external/pubs/ft/wp/2002/wp0269.pdf. Access on May 06, 2019.
- Samuelson, Paul A., Nordhaus, W.D. (2010). Economics, Nineteenth Edition. New York: McGraw-Hill Irwin.
- Todaro, M. P., & Smith, S. C. (2006). Economic Development, 9th ed. Boston: Pearson Addison Wesley.
- World Bank. (2013). 2013 International Debt Statistics. International Bank for Reconstruction and Development / The World Bank, 1818 H Street NW, Washington DC 20433.
- World Bank. (2017). Indonesia: Foreign Direct Investment, Percent of GDP. The World Bank 1818 H Street NW, Washington DC 20433.
- World Bank. (2018). 2019 International Debt Statistics. International Bank for Reconstruction and Development/World Bank, 1818 H Street NW, Washington DC 20433.
- Woo, W. T. (2000). The Asian Financial Crisis: Hindsight, Insight, Foresight. ASEAN Economic Bulletin, 17(2), 113-119.
References
Ainiyah, I. Q. (2015). Utang Luar Negeri: Instrumen Pembiayaan Pembangunan Ekonomi di Indonesia. Depok: Fakultas Ilmu Sosial dan Ilmu Politik, Universitas Indonesia.
Alam, N., & Taib, F. (2012). Debt Trap and Basic Borrowing Fundamentals: A Comparative Studies on a Group of Fourteen Asian Pacific Developing Countries. European Journal of Social Sciences, 28(1), 42-49.
Amoateng, K., & Amoako-Adu, B. (1996). Economic growth, export and external debt causality: the case of African countries. Applied Economics, 28(1), 21–27. https://DOI: 10.1080/00036849600000003
Atique, R. and Malik, K. (2012). Impact of Domestic and External Debt on the Economic Growth of Pakistan. World Applied Sciences Journal, 20(1), 120-129. https://Doi: 10.5829/idosi.wasj.2012.20.01.1621
Asley, B. (2002). Debt Burden is not a Problem of Freely Resource to Debt Services Payment. Principle of International Finance, 1(3), 142-147.
Basorudin, M. (2019). Analisis Kesinambungan Fiskal Indonesia Pasca Krisis Ekonomi. Jurnal Ekonomi Pembangunan, 17(2): 59-70. DOI: https://doi.org/10.29259/jep.v17i2.9792
Bank Indonesia. (2018). External Debt Statistic of Indonesia. Vol. IX, August 2018. Jakarta: Joint Publication of Statistics Department, Bank Indonesia and Directorate of Budget Financing and Risk Management, Ministry of Finance.
Bank Indonesia. (2019). External Debt Statistic of Indonesia. Vol. X, August 2018. Jakarta: Joint Publication of Statistics Department, Bank Indonesia and Directorate of Budget Financing and Risk Management, Ministry of Finance.
Cholifihani, M. (2008). A Cointegration Analysis of Public Debt Service and GDP in Indonesia. Journal of Management and Social Sciences, 4(2), 68-81.
Cohen, D. (1993). Low Investment and Large LDC Debt in the 1980's. The American Economic Review, 83(3), 437-449.
Cohen, D. (1994). Foreign Finance and Economic Growth: An Empirical Analysis. L. Leiderman and A. Razin (eds.). Capital Mobility: The Impact on Consumption, Investment and Growth. Cambridge: Cambridge University Press.
Creswell, J. W. (2013). Qualitative Inquiry & Research Design: Choosing among Five Approaches (3rd edition). Thousand Oaks, CA: SAGE.
Daseking, C., & Kozack, J. (2003). Avoiding another debt trap. Finance & Development. IMF Policy Development and Revenue Department. Available at https://www.imf.org/external/pubs/ ft/fandd/2003/12/pdf/daseking.pdf. Access on May 30, 2020.
Eaton, J. (1993). Sovereign debt: A primer. Policy Research Working Paper, World Bank Economic Review, 7(2), 137-172. Doi: 10.1093/wber/7.2.137.
Frank, A. G. (1966). The Development of Underdevelopment. Monthly Review, 18(4), 17–31. Htpps://DOI: 10.14452/mr-018-04-1966-08_3.
Gibson, H. D., Tsakalotos, E. (1992). Economic Integration and Financial Liberation: Prospects for Southern Europe. Palgrave Macmillan.
Indermit, G. & Brian, P. (2005). Public debt in developing countries: Has the market-based model worked? Policy Research Working Paper Series 3674, The World Bank. https://DOI: 10.1596/1813-9450-3674.
International Monetary Fund (IMF). (2013). The 2013 External Debt Statistics: Guide for Compilers and Users. Washington D.C., United States.
Kuncoro, M. (1997). Ekonomi Pembangunan: Teori, Masalah, dan Kebijakan. Yogyakarta: Unit Penerbit dan Percetakan, Akademi Manajemen Perusahaan YKPN.
Kuncoro, M. (1999). Dampak Arus Modal Asing terhadap Pertumbuhan Ekonomi dan Tabungan Domestik. Prisma, XVIII (9), 26-47.
Kusumaningtuti, S. S. (2004). Country Experiences of Indonesia on External Debt Management. Paper presented at Regional Workshop on Capacity-Building for External Debt Management. Bangkok. July 6-7, 2004.
Law No. 25 years 2007 of Republic of Indonesia on Capital Investment.
Lin, S., & Sosin, K. (2001). Foreign debt and economic growth. The Economics of Transition, 9(3), 635–655. https://DOI: 10.1111/1468-0351.00092.
Mankiw, N.G. (2009). Macroeconomics. 7th ed. Harvard University. New York (US): Worth Publishers.
Moosa, I.A. (2002). Foreign Direct Investment: Theory, Evidence and Practice. New York (US): Palgrave.
Nakatani, P. & Herrera, R. (2007). The South Has Already Repaid its External Debt to the North: But the North Denies its Debt to the South. Monthly Review, 59(02), June 2007.
Nasution, A. (2000). The meltdown of the Indonesian economy: causes, responses and lessons. ASEAN Economic Bulletin, 17(2), 148-162.
OECD. (2019). Official Development Assistance (ODA). Development Co-operation Directorate, OECD.
Observatory of Economic Complexity (OEC). (2017). Indonesia. Available at https://atlas.media.mit.edu/en/profile/country/idn/. Access on April 19, 2019.
Pattillo, C., Poirson, H., & Ricci, L. (2002). External Debt and Growth. IMF Working Paper, WP/02/69, April 2002. International Monetary Fund Research Department. Available at https://www.imf.org/external/pubs/ft/wp/2002/wp0269.pdf. Access on May 06, 2019.
Samuelson, Paul A., Nordhaus, W.D. (2010). Economics, Nineteenth Edition. New York: McGraw-Hill Irwin.
Todaro, M. P., & Smith, S. C. (2006). Economic Development, 9th ed. Boston: Pearson Addison Wesley.
World Bank. (2013). 2013 International Debt Statistics. International Bank for Reconstruction and Development / The World Bank, 1818 H Street NW, Washington DC 20433.
World Bank. (2017). Indonesia: Foreign Direct Investment, Percent of GDP. The World Bank 1818 H Street NW, Washington DC 20433.
World Bank. (2018). 2019 International Debt Statistics. International Bank for Reconstruction and Development/World Bank, 1818 H Street NW, Washington DC 20433.
Woo, W. T. (2000). The Asian Financial Crisis: Hindsight, Insight, Foresight. ASEAN Economic Bulletin, 17(2), 113-119.