Jakarta (ANTARA) - The Finance Ministry underscored the need for Jakarta's provincial authority to implement creative financing schemes to develop Jakarta as a global city after no longer serving as the national capital.

"Jakarta has a good financial balance. Hence, Jakarta has sufficient capital to seek 'alternative' or 'creative' financing. Jakarta's enormous development requirements cannot be funded solely by the state or regional budgets," the ministry's Director General of Fiscal Balance, Luky Alfirman, stated on Tuesday.

Speaking at the Development Planning Conference (Musrenbang) on Jakarta's development plan here, Alfirman remarked that Jakarta could attempt creative financing by issuing regional bonds or sukuk (Sharia-compliant bonds).

He said not all regional authorities are authorized to issue a debenture, as they should first prove to have good financial standing before doing so to ensure investors' confidence to regional authorities as the securities issuer.

"Jakarta is one of the regions with the capability to do so," the director general stated.

However, the regional government should remain prudent while seeking alternative financing schemes for development, he stressed.

Alfirman expected Jakarta to seek alternative finance only to fund cross-generation projects, such as long-term infrastructure development, waste management, or educational programs instead of short-term programs, such as cash subsidies.

"Because the future generations will bear the burden later," he remarked.

Apart from regional bonds, the director general suggested Jakarta to implement a public-private partnership scheme that will help to optimize positive aspects of the public and private sectors to benefit regional development.

"We want investors to throng to develop infrastructures (in regions), especially in Jakarta," Alfirman stated.

Although the central government is ready to assist regional governments through its project development facility, he opined that Jakarta's authority can conduct its own feasibility study on new projects to develop it as a global city.

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Translator: Ade Irma Junida, Nabil Ihsan
Editor: Azis Kurmala
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