Purpose of the study: This study aims to examine foreign debt as a source of financing for economic development. This research is expected to provide (1) an overview of debt as a source of funding for state projects, (2) investigate its impacts and (3) offer additional knowledge of its Islamic perspective. Methodology: This research is a qualitative study using the study literature approach. This research is conducted by analysing books, literature, journals, and magazines with themes related to the focus of the discussion on this study. It is expected that the method used can provide insight, general knowledge, and develop the view of Islam in relation to foreign debt. Main Findings: The government has to ensure that the state has the ability to pay off its obligations in the future; guarantee that loans have to be free from interest; prioritize taking loans from internal sources rather than external sources. In Addition, debts are not intended for deferred needs and not taking loans that exceed their needs. Applications of this study: basically the results of this study can be applied to any country that considers the use of public debt, like other Islamic systems. Novelty/Originality of this study:This research is conceptual research in an Islamic perspective. This study successfully examined comprehensively related to the public debt with the Islamic approach.
Budgeting for a state or a country seems to be the most important part to handle administration and government policy in term of socio economic reason. In practice, a lot of government tends to subscribe a balance budget whereby it is striving to balance between revenues and expenditures accurately. Unfortunately, this balancing post uses a debt and foreign aid charged by interest to cover any shortage in revenues. In the real context, the budget deficit management based on debt is still controversial and considered inappropriate with developing country conditions which their economies are unstable and fluctuated. Unfortunately, many countries in the world including Muslim-populated countries subscribe budget deficit system whereby the sources of its fund are backed up by debt. The focus of this paper is to analyze two main sensitive issues of the Indonesian economy in the light of Maqasid Al Shariah. This study employs a method of literature review and combined with data analysis. Actually, Islam has a very rich literature legacy in administrating public sector economy and it becomes important theory and framework as a stance or point of view to analyze the prevailing system. The high interest rate payment is the main issue of public sector expenditure. Indonesian government seems no choices to resolve its public sector economy and relies too much on debt management. For social welfare expenditure there has been a misallocation in emphasizing budget expenditure whereby oil and petroleum subsidy consume almost majority of the total welfare expenditure in Indonesian public sector economy
This study aims to choose a fiscal stress index that is most suitable to assess state budget condition in Indonesia. The analysis factor is used to assess several factors that can cause stress on the state budget. SPSS is used for the purposes of the analysis. There are eleven indicators of two factors that lead to fiscal stress. The assessment revealed that there is only one fiscal stress index which is suitable to assess state budget condition in Indonesia. Factors can lead to fiscal stress in Indonesia are state expenditure, debt factors, education spending, general allocation funds, profit sharing funds, special autonomy funds, health spending, debt interest payments, state obligation, and the number of population.
In the 1970s,Indonesiais one of thepoorest countries inAsia. In 1976, 54million people in Indonesia(40% of the population) belong to the categoryof poor. In1980-1990anperiodis a period ofhigh economic growth. High economicgrowthis closely linkedwithpoverty reductiondrasticallywhere the numberof poor peoplefell by almost50% from40millionto 22million peoplein 1981s/d1996.In the year2010 the numberof poor peopleamounted to31.02 million people, or about 13:33% andthe poverty ratein March2009 amounted to32.53million, or about 14:15% (BPS). LastBPS dataperSeptember 2013shows that there are28.59millionor11.66% ofthe totalpopulationinIndonesia.PovertyinIndonesia hasdecreasedsignificantlysincethe reformera. Acceleration ofpoverty reductionprogramsinIndonesiais donewithgoodsynergywork programsatnational and local levels. Poverty reduction programscurrently dividedinseveralclusters: Cluster(1) Direct AidSociety(BLM). Thisclusterincludes theSchool Operational Assistance(BOS), Community Health Insurance(Assurance), Ricefor the Poor(Raskin), Family Hope Program(PKH). Cluster1goalistoreducepovertyandimprove thequality ofhuman resources, especiallythe poor.Cluster (2) is the national community empowerment Program (PNPM) independently. The purpose of PNPM Mandiri is to increase prosperity and employment opportunities of the poor independently. Cluster (3) people's business credit (KUR) is a people's business credit is given to the poor without collateral to the community a certain amount. Purpose to provide and strengthening economic access for businessmen of small and micro-scale. An important aspect in strengthening is giving them freely to access of the poor to be able to try and improve the quality of life.In 2011 the Government carry out a Cluster of clusters of four. This Cluster includes: (1) the provision of the House very cheap, (2) a cheap public transport Vehicles, (3) clean water to the people, (4) enhancement of Life for fishermen, (5) improvement of Urban Edge Community Life. The 4 Cluster in the framework of poverty reduction and the achievement of the Millennium Development Goals (the Millennium Development Goals (MDGs), so the expected goal of the Millennium Development Goals (the Millennium Development Goals (MDGs) by 2015 is reached. As it known that the millennium development goals (the Millennium Development Goals (MDGs) is an attempt to meet the basic needs of the rights of man through a joint commitment between the 189 UN Member States to implement the 8 (eight) Millennium development goals, namely (1) tackling poverty and hunger, (2) achieve primary education for all, (3) encourage gender equality and the empowerment of women, (4) reduce child mortality, (5) improve maternal health, (6) fight against spread of HIVAIDS, malaria and other contagious diseases, (7) Living and Sustainability (8) global partnership in development. Eight of these targets as measurable goals for a single package of development and poverty reduction.In September 2000, the United Nations Millennium Summit, where world leaders agreed on eight development goals that are specific and measurable global called the Millennium Development Goals (MDGs). The first seven goals focus on eradication of extreme poverty and hunger, achieve universal primary education, promoting gender equality and empowering women, reducing child mortality; In September 2000, the United Nations improve maternal health, combat HIV-AIDS, malaria and other diseases, and ensuring environmental sustainability. Whereas the eighth goal calls for the establishment of a global partnership for development, with targets for aid, trade and debt relief.However approach the year 2015, global world will experience the transformation of the global development of the Millennium Development Goals (MDGs) into Sustainable Development Goals (SDGs). The shifting of the MDGs to the SDGs doesn't mean the goal contained in the MDGs fail is reached. Quite the contrary, many world records that reveal the success in various countries, there is a remarkable improvement experienced by the poor countries in the ranking of HDI (human development index) the lowest. In the last 40 years, the State- countries that are in the lowest rank of 25 percent experienced improved HDI to 82. The IMF report in the 2013 Global Monitoring Report also explain the positive trend in the achievement of the MDGs. reduction of half of the world's poor population, reduction of half of the population without access to clean water, the Elimination of gender inequality in primary education in 2015, and the improvement of life in a hundred million slums by 2020 was reached more quickly, i.e. in 2010. ADB, a number of countries in Asia also experienced progress in achieving the millennium development goals. The number of poor population has decreased significantly in Malaysia, Viet Nam and China. In Thailand and Malaysia, long-term policies to overcome poverty coupled with their concern for the environment has made the countries that are in the lowest rank of 25 percent experienced improved HDI to 82. The IMF report, these countries are on a sustainable growth path. But not so the case with Indonesia, a country with a diversity of biodiversity in forests is raining but the risorsis contained therein are not managed sustainably and fairly.Programme of the Millennium Development Goals (MDGs) will be forwarded to Suistanable Development Goals (SDGs). The MDGs will expire in 2015, but until now there has been no final draft which will forward the MDGs program. to that end, scientists and many quarters trying to deepen the concept of SDGs as successor to the MDGs. Keywords: Millennium Development Goals (MDGs), Sustainable Development Goals (SDGs), primary education, maternal health, clean water.
