The Risk of Development with Debt

Debt is always considered as the right medicine to finance the development, especially when the availability of government funding is considered less or insufficient.

In general there are two main sources of debt , that is :

1. Internal Sources. Example, The sale of Bonds to the public.

2. External Sources. Example, Loans from foreign countries, International Organization such as IMF,World Bank, ADB (Asean Development Bank) and other more.

But the truth is, it is very dangerous if the country want to improve their development with using the external sources.

The State development with debt is very dangerous because the provision of debt will only make the country remains poor and not independent. As humans who living in developing countries will be forced to work hard to repay foreign debt. Problems arising from external debt include the burden placed on future generations, the potential damage to the national debt rating, reliance on foreign governments and a general danger of unsustainable national consumption.

The purpose of foreign aid is actually not to help the underdeveloped countries, but rather to maintain the security of the creditor country, or in other words, the goal is to make the debtor countries as a subject of domination by creditor country so that become used as a cash cow and a tool to defend the interests of the creditor country. 

Various methods are used by foreign nations or the capitalists to embed their influence in Indonesia, one of the way is to cause Indonesian dependent on foreign debt. with the presence of debt then Indonesia will have economic dependence to the other countries, with the addition of interst of debt will be increasingly strangling the economy of Indonesia.

We can see and learn in Indonesian history in new order era during Soeharto’s reign, they think the source of loan from external sources is considered as the best step. Although from these steps actually can pose a danger in the future (The Climax is 1998 Monetary Crisis).

For the conclusion I as a writer is very impressed with the statement "Go to Hell with Your Aid" that was made by Soekarno at the time of the Indonesian Old Order. That Time Soekarno is strongly opposed and hated all forms of aid by foreign countries, especially the United States because he dont want Indonesia to become beggars, begging the debt to other countries. He realize Indonesia must become a country that is not dependent on other countries.

By Alvin Ernesto/1701350380

Reference : 

- Fahmi, Irham (2013). EKONOMI POLITIK Teori dan Realita. Bandung : Penerbit Alfabeta.

- http://www.ehow.com/info_7990295_external-debt-problems.html

- http://www.wisegeek.com/what-is-foreign-debt.htm