Not Just Once, Prabowo Requests Budget Cut in Three Stages Worth Rp750 Trillion
Reporter
February 19, 2025 | 10:45 am
TEMPO.CO, Jakarta - Indonesian President Prabowo Subianto said budget cuts will be carried out in three stages. He revealed that the government targets a total of Rp750 trillion that can be obtained from efficiency.
"First-round savings, the Ministry of Finance combed and saved Rp300 trillion. Second-round savings reached Rp308 trillion," said Prabowo in his speech at the 17th Anniversary Celebration of the Great Indonesia Movement Party (Gerindra) at the Sentul International Convention Center (SICC), Bogor, West Java, Saturday, February 15, 2025, as quoted from the GerindraTV YouTube account.
However, from the results of the second round of cuts, an amount of Rp58 trillion will be returned to 17 ministries and institutions (K/L), leaving Rp250 trillion. However, Prabowo did not disclose the exact time of the implementation of the second-round budget cut.
Meanwhile, in the third round of budget cutting, it will be carried out through the State-Owned Enterprises (BUMN). Prabowo based this on the report of the Minister of SOEs Erick Thohir, who stated that BUMN dividends are targeted at Rp300 trillion.
"He (Erick Thohir) said (dividends) of Rp100 trillion should be returned to BUMN for future working capital. I agree, so we have Rp200 trillion, and this will not be used, we will invest," said Prabowo.
Prabowo explained that from the saved budget, one of them will be used for financing the Free Nutritious Meal (MBG) program amounting to Rp24 trillion. The remainder will be handed over to the National Strategic Investment Fund Management Agency (BPI Danantara).
"I have to use Rp24 trillion, for what, Free Nutritious Food, our people, our children should not go hungry. The rest will not be used, it will be handed over to Danantara to be invested," said the Chair of the Gerindra Party.
As for the budget cuts, it is stipulated in Presidential Instruction (Inpres) Number 1 of 2025 concerning Efficiency of Expenditure in the Implementation of State Expenditures and Revenues (APBN) and Regional Expenditures and Revenues (APBD) for the 2025 fiscal year, issued by Prabowo in Jakarta on Wednesday, January 22, 2025.
In Inpres Number 1 of 2025, the expected expenditure efficiency reached Rp306.69 trillion. The amount comes from K/L expenditure budget amounting to Rp256.1 trillion and Rp50.59 trillion from transfers to regions.
On a previous occasion, the President has announced the launch plan of Danantara, which will take place on Monday, February 24.
He revealed that the initial funding or early funding of Danantara is projected at US$ 20 billion. "The initial funding this year will reach US$ 20 billion. I think this will be a transformative step. We plan to start around 15 to 20 billion US dollar projects, which will create significant added value for our country," said Prabowo at the 2025 World Governments Summit virtually in Dubai, United Arab Emirates (UAE), Friday, February 14, 2025, as quoted from Antara.
He also stated that the funds will be invested in sustainable projects. He hopes that the strategic projects to be carried out can contribute to achieving the target of Indonesia's economic growth by 8 percent over the next five years.
"Danantara, which will be launched on the 24th of February, this month, will invest our natural resources (SDA) and our state assets in sustainable and high-impact projects, such as advanced manufacturing, renewable energy, food production, downstream industries, and others," said Prabowo.
Furthermore, the President mentioned that the sovereign wealth fund, the government's latest investment fund, is projected to manage more than US$900 billion in assets under management (AUM).
Editor's Choice: Indonesia Budget Efficiency Cuts Remain at $18.8 Bln, Finance Ministry Says
Click here to get the latest news updates from Tempo on Google News
