Economist Lament Jokowi's Infrastructure-driven Speech; Not Solution for Inflation

18 August 2022 12:25 WIB

TEMPO.CO, Jakarta - Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira on Wednesday said he doubts that the government can overcome the threat of inflation next year. He considered President Joko Widodo's speech on financial notes which touched on infrastructure issues eleven times, was not in line with the country’s main problems.

"This is a bit contradictory. If inflation is one of the main challenges, the solution is not infrastructure, but social assistance subsidies. Social assistance was barely mentioned and what was most mentioned was infrastructure," said Bhima on August 17.

The Indonesian government is set to increase its infrastructure budget to Rp392trillion in 2023 with Rp213.3 billion coming from central government budget spending.

The central government spending includes ministry and agency expenditures of Rp 189.2 billion and non-ministerial and institutional expenditures of Rp 24.17 billion. The infrastructure budget through transfers to regions (TKD) is allocated Rp92.98 billion and the infrastructure budget through budget financing is Rp85.64 billion.

Indonesia is estimated to still face complex challenges due to global geopolitical conditions, such as unstable global oil prices.

The accelerated infrastructure development will place the country in a dilemmatic position regarding its economy. "Because the subsidy will continue to increase. If the assumption (price) of oil is US$90 per barrel, it is still not clear how to divide the subsidy between infrastructure and which infrastructure and which will be prioritized," said Bhima.

FRANCISCA CHRISTY ROSANA

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