So the debate on debt-rescheduling is heated up again. This is not new. Remember Kwik Kian Gie against Dorodjatun Kuntjorojakti saga in the previous administration?
The bottomline is actually simple, as Aco texted me yesterday, that is, if you lend the money, you want it back. But the question is when we, as borrower, would pay that?
The argument for debt rescheduling goes that it is urgent to reallocate some money for infrastructure -that may, or may not, spur the economy, therefore, pay it later. While the other camp believes in more financial conservatism stance, which is, the rescheduling may jeopardizing financial situation in Indonesia -such as rating that may increase the cost of, foreign, capital which is stilll very much needed. So they opt to adhere on fiscal discipline,that is, to pay the loan on schedule and take the gradual plan to lower the debt stock-as stated in the Medium Term Development Plan (RPJM).
I do understand and admit that the former standpoint is valid. Yet I am more for the latter option for two reasons. First, debt rescheduling, feasible as it is, has its own cost. It is like that the lenders would think "fine, you can pay later, but I might be more reluctant to lend you again unless you pay higher interest rate" or even worse "okay, but, hey, i smell something wrong --in the economy. I think I should tell my buddy lenders". Second, would that be really critical now to have the rescheduling, let alone to finance the infrastructure that is more a long term investment? I still have, well at least until now, confidence for Boediono and Sri Mulyani to guard and maintain discipline for state budget management. I also worry that once we get rescheduling, it creates precendent for being less discipline in our fiscal management.
And again, we still have to pay the debt anyway, sooner or later.
Meanwhile, since the two points of view have their own merit, it is for the political mechanism to decide -ideally backed with strong data and empirical findings, of course. But, before that, a call for Coordinating Minister for Economy: please do come up with a single position from the cabinet. MoF-Bappenas' differing opinion should be settled internally at the first occassion. And actually taking the political mechanism --legislative involvement, I mean--may also fail and become cumbersome process. You know why :-) and certainly the last comment made in the above article would not help. (The problem lies within, and IMF has been out. You kicked them out already, remember? :-) )