The Jakarta Post
President Joko “Jokowi” Widodo has instructed his Cabinet ministers to increase capital expenditure and to cut spending on goods procurement in the 2020 state budget.
Speaking in a plenary Cabinet meeting held at Bogor Palace in West Java on Tuesday to discuss the indicative maximum budget for 2020, Jokowi urged the ministers to increase capital expenditure in their respective ministries.
“The point that I would like to stress is that capital expenditure needs to be increased. Each ministry should be able to encourage itself to improve its budget absorption,” said Jokowi.
The President praised the Public Works and Housing Ministry, which had significantly absorbed the funds allocated for its capital expenditure.
“Other ministries hesitant to execute their programs could reallocate the funds to the Public Works and Housing Ministry,” he said, adding that the ministries had to cut spending on goods procurement to the same level as 2017.
Finance Minister Sri Mulyani Indrawati previously explained that the 2018 state budget could not be used as a baseline in calculating spending on goods and service procurement, considering that funds had been allocated for one-off events such as the Asian Games, the Asian Para Games and the Annual Meetings of the International Monetary Fund (IMF) and World Bank Group.
In the 2017 budget, spending on goods procurement was set at Rp 296.6 trillion (US$ 21.06 billion), 26.1 percent out of Rp 1.31 quadrillion total spending. The figure was higher than the Rp 194.3 trillion set aside for capital expenditure. (bbn)