The Jakarta Post
In a move to speed up the country's development, President Joko 'Jokowi' Widodo announced on Monday he would issue a presidential instruction (Inpres) stipulating the completion of all government project tenders by March each year.
Speaking in front of ministers and governors in a ceremony at the Presidential Palace to present the budget implementation entry lists (DIPA), President Jokowi said the government must start its planned development projects immediately and not pile them up in the last few months of the year.
'Don't repeat the same mistakes,' he said.
'I will soon issue an Inpres to ensure that all [tenders on government] projects or events are completed by March. The process should have been able to begin immediately after the money was transferred [to the respective ministries and regions].'
An early kick-off, Jokowi continued, would allow the public see the best returns from the state budget allocations.
'It will result in quality [improvement] of goods, projects or buildings since [tender winners] will not be in a hurry [to complete government projects] in October, November or December,' he said.
State budget absorption has been traditionally slow in the first half of the year and normally picks up in the second half mainly because of lengthy tendering processes.
A report from the Presidential Working Unit for the Supervision and Management of Development (UKP4), for example, showed that the Energy and Mineral Resources Ministry, one of the ministries receiving the highest proportion of the state budget, spent only 7.52 percent of its budget in the first half of the 2014 budget year. As of June, Rp 15 trillion (US$1.21 billion), or 92.48 percent of its total budget remained unspent.
Regional administrations are also facing a similar problem.
The Jakarta Financial Management Board (BPKD), for instance, recently reported that during the first nine months of the year the city administration's budget spending had reached only 30 percent of the total Rp 72 trillion, mainly because of the installment of a new centralized procurement system.
The central government is planning to spend about Rp 2.04 quadrillion next year, with around 15 percent of the budget going to fuel and electricity subsidies.
President Jokowi, who was inaugurated as the country's seventh president in October, has repeatedly said that the limited state budget authorized by his predecessor, Susilo Bambang Yudhoyono, had left the government with no choice but to rely on private investment to speed up development.
In a move to attract investors and boost national development, Jokowi also recently instructed all governors, mayors and regents to establish one-stop business license services in their respective regions by next year.
In his remarks, Finance Minister Bambang Brodjonegoro asked governors, ministries and state agency leaders to complete the handover of the regional DIPA to their regional officials within the next two weeks.
'This is important to ensure that the all government activities can be carried out appropriately by early next year,' he said.
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