Jakarta – Many observers appreciate President Prabowo Subianto’s policy of writing off debts of Micro, Small and Medium Enterprises (MSMEs), farmers, and fishermen. This step is considered an appropriate strategy to strengthen the grassroots economy amidst the economic challenges faced by the wider community.
Muhammadiyah University of Surabaya economic observer Arin Setyowati said that this debt cancellation policy reflects the government’s great concern for sectors that are greatly affected by the current economic conditions.
According to Arin, this debt cancellation can ease the financial burden of MSMEs, farmers, and fishermen, so that they have a greater opportunity to develop productivity without being burdened by debt installments which are often the main obstacle.
“When they are free from the obligation to pay installments, productivity increases, and this drives consumption and domestic demand which contributes greatly to the national economy,” he said.
Arin also added that the debt write-off policy could reduce the Non-Performing Loans (NPL) figure which is often a major challenge for banking, especially related to the risk of bad credit from weak economic sectors.
“Eliminating debt means preventing defaults that have burdened the banking sector. This is a wise effort to maintain banking stability which is also important for the long-term economy,” Arin explained.
Furthermore, the economic impact of this policy is expected to be felt widely by the community, especially in encouraging employment absorption.
“This policy automatically strengthens the sectors that have been the pillars of our economy. When they grow, GDP will automatically increase, and many workers will be absorbed,” he added.
However, Arin also suggested that the government consider several long-term risks. He warned of the potential for moral hazard or public dependence on government assistance if this policy is not balanced with a sustainable approach.
As an alternative, Arin proposed a debt restructuring policy, interest subsidies, and credit insurance for the MSME, agriculture, and maritime sectors.
“We can consider debt restructuring or interest subsidies, so that they are still helped but still have responsibility for the loans they take,” he suggested.
President Prabowo’s move is considered a bold and responsive breakthrough to the economic challenges faced by the grassroots sector. Through this debt write-off, President Prabowo has demonstrated his commitment to paying attention to the needs of the community who need support amidst the current economic uncertainty.
“This policy is expected to have a long-term positive impact on the national economy,” he concluded.
