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Jakarta Post

Regional development banks should boost local economies

  • Aditya Suharmoko

    The Jakarta Post

Jakarta   /   Fri, January 30 2009   /  02:14 pm

Regional development banks (BPD) are to boost their contributions to stimulating the economy in the regions, to provide alternative liquidity sources amidst the global financial crisis.
“BPDs have so far been acting as a cashier to regional government. With huge regional government funds placed in BPDs, the banks should have moved more actively to support regional development,” Finance Ministry director general of financial balance Mardiasmo said in a seminar Thursday.
He said BPDs should allocate more funds to the real sector, such as infrastructure building and also micro-lending, generating growth, instead of simply placing their funds in the financial sector.
As of December 2008, BPD funds placed in central bank certificates (SBI) reached Rp 24 trillion (US$2.11 billion), and in bonds were Rp 9.3 trillion.
Last year, the ministry tran...