Ministry of Finance Prepares Draft Regulation of the Government to Maintain Fiscal Ratio

The Ministry of Finance (“Kemenkeu”) is preparing a Draft Regulation of the Government (“Regulation”) on Government Guarantees (“Govt Guarantee Draft Regulation”). This policy will serve as a de-risking facility in reducing investment risk levels that may attract non-State Budget (“APBN”) funding sources.

“The aim is none other than to support the continuity of national development through the utilization of financing instruments in the APBN, as well as to overcome funding and/or financing gaps,” said the Head of the Legal Bureau, Secretariat-General of Kemenkeu, Tio Serepina Siahaan, to Hukumonline.

In its implementation, government guarantees always emphasize the principle of fiscal risk management which is implemented through setting the maximum guarantee limit, establishing and managing guarantee reserve funds and implementing a ring-fencing mechanism. Some examples of guarantee policies that have been issued include Regulation No. 35 of 2009 on the Investment of State Capital of the Republic of Indonesia for the Establishment of a Company (Persero) in the Infrastructure Guarantee Sector, as amended several times most recently by Regulation No. 55 of 2020 , Regulation No. 44 of 2015 on the Implementation of the Work-Accident and Death-Insurance Benefit Program, as amended by Regulation No. 49 Tahun 2023 , and Regulation No. 23 Tahun 2020 on the Implementation of a National Economic Recovery Program in Order to Support State Financial Policies for the Mitigation of the Corona Virus Disease 2019 (COVID-19) Pandemic and/or to Deal With Threats That Are Potentially Harmful to the National Economy and/or Stability of the Financial System as Well as to Save the National Economy, as amended by Regulation No. 43 of 2020 .

“There are some that are being discussed such as the Govt Guarantee Draft Regulation for fast trains,” he added.