Examining The Influence Of Regional Head Elections On The Economy, How Large Is The Impact?

Illustration of voting during the Pilkada (Between)

YOGYAKARTA The election of Regional Heads (Pilkada) is one of the important democratic processes in Indonesia. In addition to having an impact on political life, Pilkada also has a significant influence on the economy. So, what are the impacts of regional elections on the economy? Check out the full information in the review below.

According to Institute for Development of Economics and Finance (Indef) Executive Director Esther Sri Astuti, the 2024 Pilkada contestation will affect future economic policy directions.

Esther said, the acceleration of the regional economy was greatly determined by the leadership model resulting from the regional elections.

"We hope that the regional elections will not only encourage economic growth from the aspect of household consumption, but also give birth to regional leaders who are able to boost the regional economy and have an impact on national economic growth," Esther said in an Indef public discussion entitled Political Economy Competition for the 2024 Pilkada which was held in Jakarta on Thursday, September 5, 2024.

Meanwhile, Indef Research Director Berly Martawardaya said that regional leaders have an important role in the economic sector. But unfortunately, said Berly, indications of unhealthy competition in the 2024 regional elections were found simultaneously.

When we look at the development of the regional elections, we are concerned about the large number of actions to buy up single candidates. KPU data, there are 43 regions with single pairs to date," he said.

In Berly's view, the economic sector must have a firm policy that prohibits business actors from cooperating in monopolicing or market oligopoly.

He added that the regulation aims to prevent unhealthy business competition.

"In the economy, the rights of economic actors are not absolute and may be prohibited from mergers or acquisitions to prevent dominance that harms markets and consumers," he said.

Berly assessed that the dominance of party groups in the Pilkada could lead to unfair inequality in strength and competition.

"In the economy, if there are many choices, it is good for the community. But if there are few options, then the choice of the community will also be limited," said Berly.

On the other hand, BPP Secretary General Hipmi Anggawira said that the 2024 Pilkasa contestatis could boost national economic growth.

For example, if each district/city has three pairs of candidates for regional heads and each spends a budget of up to Rp. 20 billion, the overall economic consumption will be up to Rp. 30 trillion.

"More or less the circulation of money in this election is IDR 40 trillion. Approximately 0.5 percent can boost (economic) growth," said Anggawira on Thursday, September 5, 2024.

According to Anggawira, the 2024 Pilkada simultaneously can contribute to the economy, especially to business actors in the Ril sector.

According to the calculation of the Ministry of Home Affairs (Kemendagri), the 2024 Simultaneous Regional Head Election budget is estimated at more than IDR 41 trillion.

This calculation is based on the amount of the budget that has been agreed upon by the regional government (Pemda) in the 2024 Pilkada regional grant agreement (NPHD) with the General Election Commission (KPU), the General Election Supervisory Body (Bawaslu), TNI, and local police.

"There is a (budget for) the KPU, Bawaslu, then the security apparatus of the National Police and the TNI, tied in the manuscript of the grant agreement, then the figures agreed. As many as 40 percent I have submitted a letter to be disbursed last year," said Minister of Home Affairs Tito Karnavian at the Coordination Meeting for the Preparedness of the 2024 Simultaneous Regional Head Election Organizers in Medan, North Sumatra, Tuesday, July 9, 2024.

Tito added that the Ministry of Home Affairs has asked every regional government to prepare a simultaneous regional election budget of 40 percent of the 2024 APBD and 60 percent of the 2024 APBD.

This is information about the impact of regional elections on the economy. Get news updates of other options only on VOI.ID.