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views or policies of
the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the
governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no
responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official
terms.
REPUBLIC OF INDONESIA
1,373 Km
GDP & Growth: Inflation: HDI:
5,271 Km Rp10,425,3 & 5,17% 3.13% 70.81
(2018) (2018) (2017)
* The methodology is adopted from Schaechter, Kinda, Budina, and Weber (2016)
3
REPUBLIC OF
Budget Balance Rule in Indonesia
INDONESIA
Objectives -100
-0.5
-1.5
-300
-1.74 -2.15
Effectiveness of the Rule -1.75 -2
-2.49 -2.51 -2.01
-2.59
-400 -2.22
By having Budget Balance Rule, Indonesia constantly -2.5
4
REPUBLIC OF
Debt Rule in Indonesia
INDONESIA
2,500
15
Effectiveness of the Rule 2,000
0 0
• Debt Rule followed by credible financing policy has led to 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019**
budget sustainability across government level.
Outstanding Debt Debt-to-GDP Ratio
5
REPUBLIK
Effectiveness of the Rules
INDONESIA
It is considered a proper look to figure effectiveness of the ratios by connecting Debt Ratio and Deficit Ratio
40 29,8
20
• Compare to countries with similar fiscal
0
Indonesia New Zealand Mexico Brazil Malaysia
rules (New Zealand and Malaysia),
1 0.6 Indonesia could maintain lower debt to
0 GDP Ratio in 2018.
-1 • Compare to countries with almost similar
% GDP
Tax Revenue 10.3 percent 12.9 percent 13.5 percent 27.3 percent 13.75 percent
(as % of GDP)
GDP
(at constant US 1,090.5 mio 2,278.9 mio 1,284.3 mio 181.5 mio 364.6 mio
$)
To achieve development targets with available resources requires proper policies in planning and budgeting.
184.9
200
Government Revenue, 2015-2019 147.3
0.8 0.8 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.8
2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019**
Source: Ministry of Finance (2019) * Preliminary Data ** State Budget and Revenue (APBN) Target
* Number in parentheses represents respective expenditure as percentage of GDP
70.8
70.2
69.6
68.9
68.3
67.7
67.1
66.5
Human
Development 2010 2011 2012 2013 2014 2015 2016 2017
Source: Central Bureau of Statistics, Indonesia
Index
REPUBLIC OF
Conclusions
INDONESIA
Indonesia enacted two fiscal rules (Budget Balance Rule and Debt Rule) and committed
implement these rule.
Indonesia’s experience in handling the rules could be implemented by other countries with some
adjustment.
10
REPUBLIC OF INDONESIA
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