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OJK looks into regional debt papers to finance tourist hot spots
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Visitors enjoy scenery at Kelimutu Lake in Ende, East Nusa Tenggara, on March 31. The lake is one of Indonesia's most popular tourist destinations.
(Antara/Rivan Awal Lingga)
T
he Financial Services Authority (OJK) is considering seeking alternative funding sources, including through the use of regional bonds, to help finance the government’s plan to upgrade its 11 new priority destinations.
OJK chairman Muliaman D. Hadad said the current budget allocation of Rp 100 trillion (US$755.5 million) from the state budget for the projects was far from sufficient to finance massive infrastructure development and drive promotion.
"We need more funds to build roads, hotels and cottages. We hope capital market instruments will be among solutions,” Muliaman said on Tuesday, attributing the instruments to, among others, the issuance of regional debt papers, sukuk and limited participation mutual fund (RDPT) using the developed projects as underlying assets.
Muliaman admitted that there were currently no regional ratings available to support the issuance of such debt papers by regional administrations.
“This will be part of our work in the near future,” he said.
The 11 new priority destinations are Lake Toba, Belitung, Tanjung Lesung, Thousand Islands, Borobudur temple, Mount Bromo, Mandalika, Lombok, Komodo Island, Wakatobi National Park and Morotai.
The government has allocated Rp 100 trillion for the development of infrastructure and basic facilities for the destinations.
Tourism Minister Arief Yahya said earlier that while the government had allocated Rp.100 trillion for the projects, it needed Rp 200 trillion to fully develop the destinations.
Indonesia, according to Arief, needs an additional 120,000 hotel rooms, 15,000 restaurants, 100 recreational parks, 100 diving operators, 100 marinas and 100 special economic zones.
The government considers tourism to be a leading sector in the economy because of its contribution to national economic growth and foreign exchange earnings.
President Joko “Jokowi” Widodo expects tourism to contribute 15 percent to the gross domestic product (GDP), generate foreign exchange of Rp 240 trillion, and create jobs for 13 million people. (dmr)
