Abstract
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-à-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.
Original language | English |
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Pages (from-to) | 35-58 |
Number of pages | 24 |
Journal | Bulletin of Indonesian Economic Studies |
Volume | 43 |
Issue number | 1 |
DOIs | |
Publication status | Published - Apr 2007 |
Externally published | Yes |