By : Gus Fendi, Economist Observer at Galesong Institute

According to Bank of Indonesia’s (BI) record, foreign debt of Indonesia until November 2015 has reached up to US $ 304.6 billion, or about Rp 4.234 trillion or grew by 3.2 percent compared to October 2015 which only reached 2.5 percent.

Executive Director of the Department of Communications BI, Tirta Segara (19/1) said that the increase of foreign debt growth was mainly driven by an increase in long-term external debt.

Indonesia's long-term external debt in November 2015 was growing at 6.1 percent (yoy), 5.5 percent higher than the previous month (yoy). Meanwhile the short term experienced a decline of 12.5 per year. The biggest debt comes from the private sector which reached US $ 166.8 billion, or 5.4% of total external debt,while the public debt reached US $ 137.7 billion, or 45.2% of total external debt.

Notwithstanding the big sum of the foreign debt, the Government of Indonesia, in the meantime, managed to re-apply for funding proposal for four projects of infrastructure development to the Asian Infrastructure Investment Bank (AIIB). This proposal is part of government efforts to cover the shortage of available funds for the projects.

Bappenas’ Deputy for Development Funding Wismana Adi Suryabrata (25/1) said that financing four projects will worth for13.8 trillion or US $ 1.003 billion. Those four projects are also included in the 116 projects from the List of Foreign Borrowing Plan (Blue Book). In the future, the government will also apply for loans for infrastructure development projects to some other funding sources.

Secretary of the Ministry of Housing and Public Works (PU-Pera), Taufik Widjoyono (27/1) said that the four projects are part of the nine projects that will be financed in 2016 with a total potential loan to finance the projects worth for US $ 2.4 billion.

Those four projects will cover development and repairs of the national road in North Kalimantan and East Kalimantan, the third stage of the goods procurement for Rail Projects, digitizing TVRI or improvement on TV transmitting station, and improving the quality of clean water in some areas.

Nonetheless, foreign debt-based infrastructure development bears some risks. Indonesian government needs to be very careful and aware because should there be any crisis or economic difficulties in the creditor countries’ economy, it will significantly affect the development progress. In fact, the project will have to stop due to lack of funding. This will eventually disturb our national economy as a whole.

According to the Statistics of Indonesia External Debt issued by BI (27/1), BI assessed that the development of External Debt is still quite under control, but the risks to the economy still persists. Therefore, in the future, the central bank will continue to monitor the development of external debt especially in private sector so that the external debt can play an optimal role in financing development without incurring the risks that can negatively affect macroeconomic stability.

Actually, the increase of foreign debt growth isn’t a problem depend on how we’re manage those debt. If foreign debt will be managed with prudent, to boost local economic growth, to create job vacancies and to reach our national target such as Indonesia will be become as the global maritim fulcrum and we have ability to returning back foreign debt.

Eventhough, we must alert on the false management of foreign debt which done by government or private sector because it could be triggered a threat for national security and our national economic.

Absolutely, we aren’t want Indonesia follow the bankcrupcy of Greece or several countries in Africa which pursuit from their wrong management to maintain their foreign debt.

Therefore, if Indonesia’s want to borrow foreign debt, we must make a situation prediction at first. We must analysize which the countries need a strong fundamental economic will be undertake accompaniment us. It’s very serious to get atention because if we make mistake to choose economic partnership, we will be punctured with the botched of economic process.

Meanwhile to avoid those effects, Indonesia government and all of national stakeholder must have a good intention to make Indonesia more prosperity than ever and still always take a national purporses above on any others purposes. Controling on the management of foreign debt must be involved mass media, NGO and another non state actors. Its very urgent as a step to minimalizing economic fugitive, corruptor and the brazen of economic player if they will be brushed our foreign debt for their purposes. Hopefully.