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Budget set to win people’s hearts
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Cutting: Finance Minister Sri Mulyani Indrawati (second right) in a meeting with House of Representatives Commission XI on Aug. 31 in Senayan, Jakarta. The meeting discussed a budget cut and progress of the tax amnesty. (Antara/Sigid Kurniawan)
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s President Joko “Jokowi” Widodo approaches the final two years of his term, his administration will attempt to convince voters that it is worthwhile to reelect him as it puts forward a populist theme in its 2018 state budget bill, which has been passed.
Nine of 10 factions at the House of Representatives approved the bill, which bears the title “Consolidating Fiscal Management to Accelerate Just Growth,” during a plenary session held on Wednesday after weeks of deliberation.
The budget promises higher economic growth at 5.4 percent next year compared to 5.2 percent targeted in 2017, with ambitions to alleviate poverty, reduce the economic gap and create more jobs, according to Finance Minister Sri Mulyani Indrawati in her speech at the plenary session.
Eva Kusuma Sundari, a lawmaker from the Indonesian Democratic Party of Struggle (PDI-P), acknowledged in August that the 2018 budget was crucial for her party and Jokowi to secure reelection in 2019 when his fiveyear term ended.
Some experts, however, suspect that the calls to focus on the poor next year are merely lip service in order to secure votes as Indonesia will hold simultaneous regional elections in 2018 as well as legislative and presidential elections the following year.
“We were concerned that the government’s focus would be split into political matters,” said Bank Central Asia (BCA) economist David Sumual recently. “Reforms usually occur in the first two years [...] and a government would be more populist in the fourth year.”
Although total subsidies will decrease to Rp 156.2 trillion (US$11.5 billion) next year from Rp 168.9 trillion in 2017, fuel prices might be stable despite predictions of rising global oil prices as the government prepares to allocate energy subsidies 5 percent higher than the Rp 89.9 trillion set this year.
