The Strategy To Accelerate Infrastructure Development

Indonesian Senator Tamsil Linrung Urges Local Governments to Issue Municipal Bonds to Boost Economic Growth

kandidat-kandidat.com - Friday, 11th July 2025, 13:54 AM, YusufB

 JAKARTA, Indonesia — Tamsil Linrung, Deputy Speaker of the Regional Representative Council (DPD) of Indonesia, has called on regional governments to consider issuing municipal bonds as a means to accelerate infrastructure development and help achieve the national economic growth target of 8% set by President Prabowo Subianto.

Speaking at a policy forum titled “Alternative Financing for Regional Development through Municipal Bonds” held at the national parliament complex in Senayan, Jakarta, Linrung emphasized the urgent need for local financial innovation in addressing investment shortfalls, Friday (11/7/2025).

“National development cannot be separated from the success of regional development. Yet, not all regions have fiscal independence,” said Linrung, who oversees the DPD’s Commission on Economic and Development Affairs.

He warned that continued reliance on central government transfers often hampers the speed and flexibility of executing long-term strategic projects.

“It can even hinder regional leaders from fulfilling their campaign promises,” he added.

A Call for Fiscal Innovation
Linrung argued that local governments must now explore more creative and sustainable financing solutions.

Municipal bonds, he said, present a viable and pragmatic option—particularly when aligned with revenue-generating projects.

“This is not a novel concept,” he noted, “Economists and financial industry stakeholders have long discussed it. The legal and regulatory frameworks are in place, but no region has yet taken the initiative.”

He cited the need to align three key factors—technical capacity, political will, and public trust—for municipal bond issuance to become a reality.

DPD to Facilitate Policy Convergence
Linrung also reaffirmed the DPD’s role in fostering dialogue and formulating recommendations to strengthen the legal and institutional landscape surrounding municipal finance.

Through its Committee IV, the DPD will continue hosting technical discussions with experts and stakeholders to sharpen strategies and encourage intergovernmental collaboration.

“The DPD is committed to being a facilitator—not only voicing aspirations, but also offering concrete solutions. Municipal bonds represent one such pathway we must pursue together,” he said.

Insights gathered from the forum will feed into policy recommendations, including enhancements to technical regulations, human capital development for regional governments, feasibility criteria for eligible projects, and risk mitigation mechanisms to improve investor confidence.

Building from the Ground Up
Linrung expressed hope that these efforts will support President Prabowo’s vision of "building from the periphery" by equipping regional governments with tools to independently finance critical infrastructure.

“Let us not see municipal bonds as a fiscal burden, but as instruments for progress,” he concluded.

Policy Forum Highlights
The forum featured several key experts, including regional finance scholar Reydonnyzar Moenek, Sunarsip (Chief Economist at The Indonesia Economic Intelligence), and analysts from credit rating agency PEFINDO.

Regional officials in attendance included South Sulawesi Vice Governor Fatmawati Rusdi, Maluku Vice Governor Abdullah Vanath, Sidrap Regent Syahruddin Alrif, South Tangerang Vice Mayor Pilar Saga Ichsan, and representatives from the provinces of Lampung, West Nusa Tenggara (NTB), West Sumatra, and Gorontalo. [■]

 

Reporter: YusufBlegur - Editor Board - EditorInChief: DikRizal