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View all search resultsJakarta’s big bond bid
Jakarta’s plan to bypass "unilateral" regional budget cuts with municipal bonds isn't just an urban infrastructure fix. It is an open challenge to the government's centralist agenda.
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A Jakarta LRT train plies the route between Manggarai and Velodrome stations on Sept. 10, 2026, as the light rail transit service kicks off a limited trial of Phase 1B operations through Sept. 16. (Antara/PT Wijaya Karya)
P
resident Prabowo Subianto should respond promptly and constructively to Jakarta’s bid to issue municipal bonds. The city administration is seeking to bridge this year’s steep budget deficit following the government's sharp cuts to revenue sharing funds (DBH) for regions. Under these circumstances, a flat rejection without a viable alternative will backfire.
To build momentum, Jakarta Governor Pramono Anung must rally residents behind the plan. A transparent campaign will reassure them that proceeds will serve only the public good, targeted strictly at critical infrastructure with complete open-book governance.
Skepticism is inevitable given past instances of public sector mismanagement in the country, including in Jakarta, but the proposed projects are not merely visible: They are urgently needed.
Resource-rich provinces across Kalimantan, Sulawesi, Maluku and Papua are watching the capital’s move closely, recognizing that government approval would set a historic precedent for fiscal decentralization.
Bali and West Sumatra have expressed similar interest. West Java had planned to issue regional bonds in 2024 under then-governor Ridwan Kamil, but his successor Dedi Mulyadi scrapped the proposal.
For the President, this marks a defining early test. His broader ambition to centralize fiscal control risks severe pushback from regional leaders, who increasingly feel their interests are being sacrificed to bankroll lavish, high-profile government initiatives such as the free nutritious meal program and the Red and White Cooperatives.
Against this backdrop, Finance Minister Purbaya Yudhi Sadewa’s gesture of reluctance to approve Jakarta’s issuance is shortsighted. It threatens to provoke broader political resistance across regional administrations already strained by austerity measures, many of which risk defaulting on civil service payrolls due to reduced transfers.
