Foreign viral media reported that Indonesia was trapped in hidden debt on the high-speed rail project.

REPUBLIKA.CO.ID, from Andri Saubani, Dessy Suciati Saputri, Antara

The World Is One News (WION), an India-based media company, recently went viral in Indonesia through its review of China’s hidden debt crisis. In the news uploaded via the channel Youtube On October 20, 2021, WION made Indonesia a clear example of China’s hidden debt victims.

According to a WION review, the government of the People’s Republic of China (PRC), led by President Xi Jin Ping, has paid a total of at least $ 385 billion to 165 countries. Indonesia was one of the countries to receive loans from China, one of which was used to fund the Jakarta-Bandung high-speed rail project.

By the time the 143-kilometer high-speed rail project begins in 2025, Indonesia is said to have received a $ 4.5 billion loan. Five years later, the budget requirement for the high-speed rail project grew to $ 8 billion.

Unable to stop the project halfway, the Indonesian government then used funds from the APBN to fill the budget gap. “This could be the beginning of a problem. Because (some) loans granted by China are not recorded in the books. It is a hidden debt, ”said the news channel WION.

Indonesia’s hidden debt to China is said to have reached $ 17.2 billion. This means that 78 percent of Indonesia’s total debt to China is classified as “hidden”.

These hidden debts are considered very risky and may trap Indonesia in the future. Should China get into a financial crisis in the future, Indonesia is also obliged to settle its debts immediately (exit).

“And Indonesia isn’t the only country embroiled in China’s hidden debt,” said WION.

In his review, WION also alluded to the economic situation in China, which is currently on the brink of a financial crisis after the collapse of real estate giant Evergrande. The case Evergrande is witnessing in China today is analogous to what happened to Lehmans Brothers in the US in 2008.

In 2008, the Lehman Brothers crisis sparked the U.S. financial crisis, which then forced the government toexit Debt of one of the largest financial institutions in the world. “The intervention of the Chinese government is the last option if Evergrande is to survive.”

Pictured: Jakarta Bandung Fast Train Development Process