April 12, 2025 | 10:39 am
TEMPO.CO, Jakarta - Amid the turbulent global market conditions caused by U.S. President Donald Trump's tariffs, Paramadina University economist Wijayanto Samirin urged the government to revitalize the capital market.
According to Wijayanto, the state of the capital market is one of the factors influencing the performance of the Composite Stock Price Index (IHSG).
Wijayanto suggested three steps. "First, the government should prioritize by transforming the Indonesian capital market," he said during an online discussion entitled 'Trump Trade War: Saving the Capital Market, Revitalizing the Indonesian Economy' on Friday, April 11, 2025.
Wijayanto mentioned that in developed countries, the capital market is not only seen as an instrument for economic growth, but also as a tool to distribute the wealth of society.
He clarified that individuals from lower and middle economic classes can benefit from returns through pension funds and mutual funds.
Second, he mentioned that the capital market authority has a homework to enforce good corporate governance.
Third, he emphasized that the government should promptly end its reliance on Government Securities and Indonesian Rupiah Securities. The large-scale issuance of high-yield SBNs (Government Securities), he explained, diverts capital away from the capital market. He recommended shifting to more sustainable funding sources.
Previously, Finance Minister Sri Mulyani announced that by March 2025, the debt financing in the form of Government Securities (SBN) reached Rp282.6 trillion or 44 percent of the State Budget (APBN). The realization of debt financing itself amounted to Rp270.4 trillion or 34.8 percent of the State Budget.
Sri Mulyani acknowledged the surge in debt. However, she claimed it as a frontloading strategy, which involves attracting a large amount of debt at the beginning of the budget period.
According to Sri, this strategy is carried out to anticipate the policy of Trump, which has caused instability in the global market.
"So, if we do frontloading, it's not because we don't have the money, it's a strategy of issuance to anticipate uncertainty that will definitely cause an increase," Sri Mulyani said at the Economic Seminar on Tuesday, April 8, 2025 in Jakarta, cited from the YouTube broadcast of the Presidential Secretariat.
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