Tel: +44 (0)20 7882 8570
Location: Mile End, Bancroft Building, Room 4.23
1st Supervisor: Professor Martin Laffin
2nd Supervisor: Dr Nick Tsitsianis
"Building an analytical framework for assessing the feasibility of local government bond in Indonesia."
At the beginning of 2015, the Directorate General for Regional Fiscal Balance of the Ministry of Finance, of Republic of Indonesia and the Indonesian Financial Services Authority together encouraged local governments to issue Municipal Bonds and use them to raise fund to accelerate development in their regions (CNN Indonesia, 2014/12/04; Sindonews, 2015/01/03; OJK, 2015/02/28).
However, while these bonds have been in use since 19th century in developed countries as one of the instruments local governments use to raise funds to finance their activities and provide services needed by their communities (Johnson, Martin and Moldogaziev 2014; Dollery, Kortt and Grant 2013), local government bonds (widely known as municipal bonds) are still something new for local governments in developing countries such as Indonesia and have not been widely used as a fundraising instrument.
Giving the facts that each country is unique, I believe that using municipal bonds in Indonesia will create a specific risk related particularly to the type of relation between local and central government and the kind of fiscal policy implemented between them. Therefore, I am interested in doing a holistic and comprehensive analysis about the feasibility of local government bonds in Indonesia.
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