TOPSHOT - A participant takes part in a cultural carnival during celebration marking Indonesia's 79th Independence day in Banda Aceh on August 18, 2024. (Photo by CHAIDEER MAHYUDDIN / AFP)
JAKARTA: President Joko “Jokowi” Widodo says the green economy and Prabowo Subianto’s flagship free-meal programme will prop up economic growth next year by fuelling micro-level business activity and boosting exports.
Delivering the annual State Budget Address before lawmakers and regional representatives at the Senayan legislative complex last Friday, the outgoing president said the free-meals programme would not only “improve children’s nutrition” but also ramp up regional development by involving micro, small and medium enterprise.
Aimed at feeding 82 million children, teachers and pregnant women, it is estimated Prabowo’s signature programme will cost the government about 450 trillion rupiah or about US$28.66bil a year once it is fully implemented.
The plan is to roll it out in stages, and an allocation of 71 trillion rupiah has been earmarked for next year.
Jokowi said in his speech that the programme was one of the short-term “strategies” to “accelerate economic growth”.
The medium-term strategy, meanwhile, encompassed “strengthening downstream programmes and the green transformation to increase export-oriented economic activities that are characterised by high value-addition and low emissions”.
The president kept the bar high for the incoming administration as he stipulated a gross domestic product (GDP) growth target of 5.2% for 2025, which is unchanged from its target for this year.
The World Bank and the International Monetary Fund, meanwhile, both project 5.1 % for Indonesia’s economic growth next year. The country logged GDP growth of 5.17% and 5.05 % in this year’s first and second quarter, respectively.
Yet Finance Minister Sri Mulyani Indrawati expressed optimism on Aug 5 that the full-year average could still reach 5.1% or 5.2%.
“Given the relatively stagnant global economic situation, our economic growth will rely more on domestic demand. People’s purchasing power will be tightly safeguarded by controlling inflation, creating jobs and providing support through social assistance and subsidies,” said Jokowi, after setting a 2025 inflation target of 2.5 %.
He went on to say that the government would focus on incentivising the development of exportable products through “competitive fiscal incentives”.
The president will step down in October for president-elect Prabowo and vice-president-elect Gibran Rakabuming Raka, Jokowi’s eldest son, to take the reins of government, making the budget drafting a rare occasion where the outgoing government is carving out the details for its successor.Jokowi has said on several occasions, including in last Friday’s speech, that the focus for budget planning this year was on a smooth transition.
He enlisted Prabowo’s nephew Thomas Djiwandono into the Cabinet as deputy finance minister specifically to ensure that the draft would cater to the incoming government’s programmes.
During a separate speech earlier last Friday, Jokowi once again apologised for any mistakes made over the past 10 years of his presidency.
The budget came hours after Jokowi’s final State of the Nation address, where he spoke proudly of having cut poverty and achieved roughly 5% annual GDP growth, even as he apologised for not meeting everyone’s expectations.
“I’m fully aware that as a person with all the flaws and limitations of a human being who is far from perfect, it’s possible that sometimes I overlooked things. It is very possible that I have committed a lot of mistakes,” Jokowi said.
“Jokowi’s tenure has been characterised by significant improvements in the country’s investment climate, and steady improvements in the country’s competitiveness” for foreign direct investment, said Douglas Ramage, managing director at BowerGroupAsia Indonesia, a strategic advisory firm. — The Jakarta Post/ANN
