TEMPO.CO, Jakarta - President Joko Widodo will look for strategic partner countries such as China and South Korea for Indonesia to issue bonds in a bid to attract capital inflows. Not only that, economist Tony Prasetiantono said the president will visit the Middle East to sell sukuk or Islamic bonds.
"For the government bonds (SUN), the value is around US$3 billion to US$10 billion. For the sukuk we don't know the value yet," he said in Jakarta yesterday.
Tony said that the government's plan is the right plan, given how Indonesia is in need of capital inflows after the considerable amount of outflows over the past few months. According to Tony, the plan will be implemented in less than two weeks.
Selling government bonds is a short-term mechanism of attracting foreign funds through capital inflows.
Tony said the global bond issuance is due to meet Indonesia's short-term needs to have a "benchmark" that foreign capitals are coming into Indonesia.
"At this time, all investors choose to place their funds in the United States, but conditions over there will reach a saturation point eventually," he said.
In addition to issuing global bonds, the government will apply medium-term strategies to improve economic conditions. Tony said the government will announce deregulation policies such as tax holidays sometime soon.
"Improving structure through deregulation persists even though the impact will not show immediately," he revealed.