BALANCE OF PAYMENT, FOREIGN CAPITAL FLOWS AND FOREIGN DEBT
BALANCE OF PAYMENT,
FOREIGN CAPITAL FLOWS AND FOREIGN DEBT
Disusun oleh
:
Kelompok 8
Esti
Wulandari (22215282)
Lusiani
Pratama Putri (23215890)
Puput Putri
Pratanti (25215411)
UNIVERSITAS
GUNADARMA
2016
BAB I
PEMBAHASAN
1.
Balance of Payment
Balance of payments a note (document) is
arranged systematically on all economic transactions between residents
(resident) of a country, with residents of other countries for a certain period
(1 year). Definition of resident in an international balance of payments
includes individuals, legal entities, and governments.
Develop balance of foreign payments or balance
of payments internasioanal, can be classified into two debit and credit
transactions. Debit transactions are transactions that give rise to an
obligation for citizens of a country to make payments to residents of other
countries, while credit transactions are transactions that give rise to a right
for citizens of a country to accept payments from residents of other countries.
Balance of payment has two sides, namely credit and debit:
·
Debit
transactions, are transactions that result in increased liability for state
residents who have the balance of payments on hold payments to residents of
other countries. Example: Indonesia buy services from Malaysia, the transaction
give rise to an obligation to hold payments to Malaysia, so that the service
transactions are debit transactions are recorded in the balance of payments with
a minus (-).
·
Credit
transactions, are transactions that result in raised or increased rights for
residents of countries with balance of payments to receive payments from other
countries. Example: Indonesia sells services to Malaysia, the transaction give rise
to a right to receive payments from Malaysia, the transaction is a credit
transaction is recorded in the balance of payments with a positive sign (+).
Component
Balance of Payments
Basically, the balance of payments has two
components, namely the current account and capital flows:
1. Current Account
The
current account provides a description of the transaction value resulting from
the trading of goods and services. Thus, the data shown represent the value of
goods (such as rubber, oil, manufacturing products) and services (such as
tourist resorts, profits from overseas investments and transportation costs)
were traded. Thus the current account recorded the following transactions:
ü Export and import of goods.
ü Exports and imports of services (eg
transactions in transportation activities, overseas travel activities, and
income from capital investments).
The difference between the value of exports
and the value of imports of goods called the trade balance. A country is said
to have a balance of trade surplus if the value of exports exceeded the value
of imports.
2. Capital Flows
The transaction illustrates the flow of
capital out of capital between Indonesia and other countries. In capital flows,
recorded two classes of transactions, namely:
ü Government capital flows. This flow can in
loans and aid from foreign countries given to the government.
ü The flow of private capital. The flow of
private capital, consisting of direct investment, portfolio investment, and
amortization. Direct investment is investment to develop enterprises. Portfolio
investment is an investment in the form of buying shares in other countries.
Amortization is buying back shares or other property which in the past has been
sold to residents of other countries.
Based on the balance of payments above, it is
known that the balance sheet is divided into several economic transactions
inernasional. In garais major international economic transactions (abroad) or
post the basis of a country can be divided as follows:
1. trade transactions (Trade accounts)
2. Transaction revenues modes; (Income on
investment)
3. Transactions unilateral (unilateral
transaction)
4. Transactions direct investment (direct
investment)
5. Transaction debts long-term receivables (long
loan item)
6. Transaction short-term debts (short loan
items)
7. Transactions traffic monoter (accommodating
monetary)
Outposts in
debit and credit balance of payments
In international transactions there is a
transaction that should be recorded on the debit side and recorded on the
credit side. The posts are in debit in the balance of payments:
|
Debit transactions
|
Credit transactions
|
|
1. Balance Sheet Items
-
Imports
of goods to other countries
2. Balance Services
-
Payment
services to residents LN
-
Payment
of the cost of tourism to LN
3. Balance Invested Capital
-
Payment
of interest and dividends
4. Balance of Capital
-
Loans
granted to the LN and repayment of debt
5. Balance of Long-Term Debt
-
The
purchase of the bonds of LN
|
1. Balance Sheet Items
-
Exports
of goods to other countries
2. Balance Services
-
Acceptance
of the services of resident LN
-
Acceptance
of LN tourism
3. Balance Invested Capital
-
Receipts
from interest and dividends
4. Balance of Capital
-
Credits
earned from the LN and acceptance of debt repayments
5. Balance of Long-Term Debt
-
Sales
of bonds to LN
|
Surplus
Deficit and Balance of Payments
In the balance of payments surplus is likely
to occur and the possibility of a deficit, namely:
·
The deficit, if
the amount of export is less than the import
·
Surplus, if the
amount of exports is greater than imports
Deficits and surpluses that occur in a country
that has a balance of payments due to:
ü National Stock, meaning if a decline in stock
nationally significant deficit, and if there is an increase means the national
stock surplus.
ü Accommodative Loans, Loans incoming means as
it relates to the excess of imports means that are part and deficits. While the
loans that go of his own accord (loan otonam) did not affect the deficit.
ü total deficit is the decline in the stock
nasioanal ditamabah besaranya accommodating loan.total
ü surplus is the amount of the loan plus the
increase in the stock nasioanal accommodating.
While the impact of the balance of payments of
the economic activity of a country, among others:
•
Amendments to the
foreign exchange rate.
•
Changes to the
price.
•
Changes in the
level of income.
•
Changes in the
interest rate.
Function
Balance of Payments
The balance of payments is very important and
need to be made by a country. The function of international balance of payments
are as follows:
ü As a means of accounting for the government to
take the right decisions, the amount of goods and services that should be in or
out of the borders of a country and to obtain particulars of the budget means
of its external payments.
ü As a tool for measuring the economic
conditions associated with international trade of a country. As a tool to see
the picture of the effect of foreign transactions on national income of the
country concerned.
ü As a tool to obtain detailed information
related to foreign trade.
ü As a tool for comparing posts in the country's
balance of payments with a particular country.
ü As a tool of monetary policy to be conducted
by a state.
2. Capital Inflow
Capital Inflow (net capital inflow) is the
displacement of investment capital from abroad into the country. The amount of
capital inflows to Indonesia, as a result of economic growth is maintained in
recent years, should be used to fund long-term projects. Managing capital
inflows (capital inflow) in the region is a difficult challenge faced by
emerging market countries such as Indonesia because it can carry a variety of
potential risks to financial stability.
As has been known, to maintain monetary
stability due to capital inflow into Indonesia and the magnitude of current
liquidity, the central bank implement some policies that appreciated the World
Bank and IMF as an appropriate step.
The capital account that describes flow in and
out of foreign exchange is not a payment for goods or services. Flows of
foreign exchange are recorded in the capital account are foreign exchange in
terms of capital inflows, whether in the form of investment funds or loans or
foreign debt. Investments and loans from abroad are inflows. While our
investments abroad and loans that we give to foreign parties recorded in
outflows. Most of the foreign loans obtained by the government came from a
consortium called the Consultative Group for Indonesia (CGI), which was
previously named Inter Group on Indonesia (IGGI). Foreign capital flows can
bring greater benefits than risks if managed correctly. It is estimated that by
the end of this year, foreign capital flows into Indonesia reached around US $
25 billion. These benefits include, reduction in interest costs the state
budget, sources of private investment, financing of Foreign Direct Investment
(FDI) and the depth of capital markets. While the risk is the reversal, the
pressure and the rupiah strengthening economic bubble. The government needs to
be more active to encourage private companies to go public through an initial
public offering (IPO) or a rights issue. then, multiply the issuance of state
bonds with various series and time period.
3. Foreign
Debt
Foreign debt or foreign loans, is part of a
country's total debt obtained from creditors outside the country. Recipients of
foreign debt may include governments, companies, or individuals. Forms of debt
can be money raised from private banks, other governments, or international
financial institutions such as the IMF and the World Bank. In the short term,
foreign debt greatly assist the Indonesian government in an effort to cover the
deficit budget revenues and expenditures, as a result of routine expenditure
financing and spending considerable development. There are several causes of
increased debt Abroad Indonesia in general, namely:
·
Current Account
Deficit (TB)
TB
is the ratio between the amount of payments received from abroad and the number
of payments to foreigners. In other words, shows the total foreign trade
operations, trade balance, and balance between export and import, transfer
payments.
·
Increased
investment needs.
According
Sunariyah (2003: 4): "Investment is the investment for one or more of
assets owned and usually long-lasting in the hope of benefit in the days to
come."
·
Increased
inflation.
Inflation
is a process of rising prices in general and persistent (continuous) with
regard to market mechanisms that can be caused by various factors. The
inflation rate affects the interest rates, because inflation expectations is a
component of nominal interest rates.
BAB II
STUDI KASUS
Source
Problems Swell Ratio of External Debt
Liputan6.com, Jakarta - When the position of External Debt (ED)
registered decline of US $ 2.1 billion to US $ 302.4 billion in the third
quarter of 2015, but the ratio of external debt or Debt Service Ratio (DSR) it
has increased. Source of the problem is due to the weakening export
performance. DSR end of the third quarter of 2015 reached 57.47 percent. This
ratio jumped from the position as of the second quarter of 2015 amounted to
53.47 percent and 53.54 percent at the end of the third quarter of 2014.
Coordinating Minister for Economic Affairs,
Nasution spoke with an increase in the DSR. According to him, the decline in
export performance will be followed by the increase in the ratio of external
debt despite additional debt transactions nil.
"If exports fell, DRS certainly rise,
although not add to the debt, let alone add. So this is not the weakening of
the rupiah but exports are down," said Nasution in his office, Jakarta,
Friday (20/11/2015).
He explained that the most important thing
right owed in the form of foreign exchange (forex) or in foreign banks,
companies must be aware of the income generated in rupiah or United States
dollars (US).
"If the export-oriented company, it does
not really matter because there is a natural hedge or she is a sister company
or its parent outside who could back up its in foreign currency," he
explained.
Nasution gave the example, PT PLN (Persero)
was observed in the form of foreign currency debt, but their income in rupiah,
so that the current strengthening of the dollar occurs, then the value of the
debt to swell. This is the importance of hedging (hedging).
"It is important also seen in maturing
debt how many years. Judging the short term, with maturities of one year to the
next," said Nasution
Analysis
In the above described news that the source of
the problem of foreign debt ratio to swell due to weakening export performance.
Therefore the government should do in order to boost exports Indonesia
Indonesia's foreign debt is reduced. As in the case presented by Nasution, PLN
mistakes in borrowing money in the form of borrowing should not in the form of
foreign currency rupiah so that when the US dollar strengthening occurs state
debt is not significantly increased.
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