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Analysis: RAPBN 2025 highlights Jokowi’s support for Prabowo’s programs

Tenggara Strategics (The Jakarta Post)
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Wed, August 28, 2024 Published on Aug. 27, 2024 Published on 2024-08-27T14:11:54+07:00

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Analysis: RAPBN 2025 highlights Jokowi’s support for Prabowo’s programs President Joko “Jokowi“ Widodo talks to The Jakarta Post's journalists during an interview at the Presidential Palace, Jakarta, on Nov. 2. (JP/Abdur Rahim)

P

resident Joko “Jokowi” Widodo presented the draft state budget (RAPBN) for the 2025 fiscal year to the House of Representatives on Aug. 16, one of his last acts as president before giving the reins to the incoming administration under president-elect Prabowo Subianto. The RAPBN highlights the government’s focus on improving human capital.

The 2025 RAPBN sets total government expenditure at Rp 3,613.1 trillion (US$ 225.8 billion) for the year and estimates a budget deficit of Rp 616.2 trillion, which translates into a deficit ratio of 2.53 percent. While the budget deficit of the RAPBN is still within regulatory standards, the debt financing spiked to Rp 775.9 trillion, which is 19.7 percent higher than the estimated Rp 648.1 trillion debt financing of the 2024 outlook.

A significant portion of the debt financing, roughly Rp 642.6 trillion, consists of government bonds, while the remaining Rp 133.3 trillion comes from loans. Compared with the 2024 outlook, government bonds increased by a substantial 42.2 percent from Rp 451.9 while loans increased by 31.6 percent from Rp 101.3 trillion.

The sharp rise in the 2025 RAPBN debt financing can be attributed to increased emphasis on human capital improvement programs, a hallmark of Prabowo’s campaign focus, such as with his flagship free meal program. To implement these programs, the national budget for education saw a sizable 8.7 percent increase, from Rp 665.1 trillion in the 2024 outlook to Rp 722.6 trillion in the 2025 RAPBN. During his campaign, Prabowo mentioned that it is possible that some of the education budget allocation will be used to support the free meal program since the program is related to and benefits education.

Notably, the portion of financing from education service costs (BPP) in the 2025 RAPBN rose considerably. In 2024, the BPP contributed 36.3 percent of the education budget financing, whereas in 2025 that portion is expected to rise to 40.9 percent. This change can be viewed as worrisome from the point of view of the people, as it means they can expect notable increases to the BPP of education utilities.

In stark contrast to the rising education budget, the infrastructure budget shows a notable decrease, despite infrastructure development being the primary focus of President Jokowi’s administration. The total infrastructure budget in the 2025 RAPBN is estimated at Rp 400.3 trillion, down 5.5 percent from the total infrastructure budget of Rp 423.4 trillion in 2024. Additionally, The RAPBN financial memorandum notes that the ongoing financial difficulties of construction state-owned enterprises (SOEs), such as PT Wijaya Karya and PT Waskita Karya, contributed to the infrastructure budget cuts, which make launching infrastructure projects difficult.

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Despite the Prabowo-Gibran administration having to bear the burden of the 2025 national budget, purview over the 2025 RAPBN is still largely within President Jokowi’s cabinet. As the last RAPBN to be made by President Jokowi’s administration, the draft’s supportive stance toward Prabowo’s programs and focus on human capital development underscores President Jokowi’s last bid to support Prabowo.

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