Engaging in Financial Policy Dialogue (on Macroeconomic Policy) with Indonesia's Ministry of Finance

Scenes from the policy dialogue

On April 21, 2016, the Japan Bank for International Cooperation (JBIC) hosted a task force meeting on macroeconomics within a framework for financial policy dialogue with the Indonesian government that has been in place since August 2010. Serving as joint chairs for this meeting were Suahasil Nazara, Head of the Fiscal Policy Agency at Indonesia's Ministry of Finance, and Zenko Shinoyama, Director General of JBIC's Country Credit Department. The participants from Indonesia represented a variety of institutions, and included officials from its economy-related ministries and agencies such as the Ministry of Finance and the Financial Services Authority, as well as economists from the Central Bank of Indonesia, the World Bank, the Asian Development Bank, and private banks.

This meeting followed up on the previous one (held in April 2015) by discussing the need for financial deepening in Indonesia under the topic of "The Present Status and Issues of Indonesia's Bond Market." Zenko Shinoyama from JBIC began with a presentation on the critical role of financial deepening for economic growth in Indonesia and on JBIC's recent efforts in this regard, and this was followed by a presentation from PT Sarana Multi Infrastruktur (PT. SMI), Indonesia's state-owned infrastructure financing company, on its own infrastructure financing efforts.

Next presentations came by participating institutions covering the development history of infrastructure financing and examples of its utilization in other countries, with Fumihiro Honda, Chief Analyst at the Japan Credit Rating Agency (JCR) discussing specific risks with case studies and recent developments of infrastructure financing in Japan, Chu Kok Wei, Group Head of Treasury & Markets at Commerce International Merchant Bankers (CIMB), a major commercial bank in Malaysia, outlining historical development of infrastructure financing in Malaysia and recent trends in the project bond market and offering several case studies, and Boo Hock Khoo, Vice President Operation at the Credit Guarantee and Investment Facility (CGIF), a trust fund established by the Asian Development Bank, speaking on recent trends in ASEAN bond markets and approaches to the financial deepening needed for economic growth in Indonesia.

These presentations helped bring the participants to the shared recognition that investment from overseas is essential to further growth in Indonesia, that financing including the utilization of bond markets has an important role to play, and that the relevant ministries and agencies in the Indonesian government therefore need to address the various issues raised by experts in order to earn the trust of overseas investors.

JBIC intends to continue exchanging views with foreign governments, government institutions and other clients, seeking to accurately ascertain the details of the policies they are implementing and to further strengthen ties with these clients.

Topic "The Present Status and Issues of Indonesia's Bond Market"
Key participants From Indonesia:
 Suahasil Nazara, Head, Fiscal Policy Agency, Ministry of Finance
 Parjiono, Director, Macroeconomic Policy Centre, Fiscal Policy Agency, Ministry of Finance
 (Outside expert) Edwin Syahruzad, Financing and Investment Director, PT Sarana Multi Infrastruktur
 (Outside expert) Chu Kok Wei, Group Head, Treasury & Markets, CIMB

From Japan:
 Zenko Shinoyama, Director General, Country Credit Department, JBIC
 Shu Fukuya, Country Credit Department, JBIC
 Yukako Mizunuma, Representative, Jakarta Representative Office, JBIC
 (Outside expert) Fumihiro Honda, Chief Analyst, JCR
 (Outside expert) Boo Hock Khoo, Vice President Operation, CGIF

*In addition to the persons named above, a total of 60 participants attended this meeting, most of them from Indonesian government ministries/agencies connected with economic matters, and private-sector financial institutions.

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