SWOT Analysis
The use of municipal bonds as a source of financing regional infrastructure development has been carried out in a number of countries. Including the United States which started in 1812 for the construction of the canal in the City of New York (Fahim, 2012). Until now the United States is the most advanced in the use of municipal bonds for infrastructure development (Platz, 2009). Then Europe is also well advanced with its municipal bond. From 1990 to 2007, the total value of municipal bonds issued by European countries increased from $ 118 billion to $ 333 billion. India began using municipal bond in the 1990s starting with the area of Ahmedabad, Bangalore, Hyderabad, Nashik, Nagpur, Ludhiana, Madurai, and Indore for the construction of several
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It can be said that the use of municipal bonds is quite successful in these countries, especially in America and Europe. By contrast, in Indonesia, the use of municipal bond to finance infrastructure development has not been done. Though municipal bond is one of alternative for infrastructure financing that is more promising than simply relying on government budget. In addition, municipal bonds also encouraged the local government to immediately implement the principles of good governance such as transparency and responsibility in the financial management area (Simatupang, 2012). Based on the SWOT analysis, the municipal bond issuance in Indonesia also deserve to be as one of source for infrastructure financing compare to others (Okta & Kaluge, 2011). According to them the advantages of municipal bonds are to attract owners of the funds to invest, capable of providing large amounts of funds, have a low risk on changes in exchange rates, and have low risk on changes in government …show more content…
The financial analysis looks into the detail financial figure of the project and others financial parameters that are needed to issue bond as well as the bond market acceptance predictability. Moreover, the specific regulations regarding the municipal bonds from different level are explored to give comprehensive understanding related to municipal bond issuance process and requirements. Finally, the DKI Jakarta Budget is examined to get insight and depth information regarding its financial capacity as needed to back up the issuance of municipal
It can be said that the use of municipal bonds is quite successful in these countries, especially in America and Europe. By contrast, in Indonesia, the use of municipal bond to finance infrastructure development has not been done. Though municipal bond is one of alternative for infrastructure financing that is more promising than simply relying on government budget. In addition, municipal bonds also encouraged the local government to immediately implement the principles of good governance such as transparency and responsibility in the financial management area (Simatupang, 2012). Based on the SWOT analysis, the municipal bond issuance in Indonesia also deserve to be as one of source for infrastructure financing compare to others (Okta & Kaluge, 2011). According to them the advantages of municipal bonds are to attract owners of the funds to invest, capable of providing large amounts of funds, have a low risk on changes in exchange rates, and have low risk on changes in government …show more content…
The financial analysis looks into the detail financial figure of the project and others financial parameters that are needed to issue bond as well as the bond market acceptance predictability. Moreover, the specific regulations regarding the municipal bonds from different level are explored to give comprehensive understanding related to municipal bond issuance process and requirements. Finally, the DKI Jakarta Budget is examined to get insight and depth information regarding its financial capacity as needed to back up the issuance of municipal