Budget Cuts For The Sake Of The MBG Program Are Considered Unable To Boost The Indonesian Economy

Rupiah (Photo: Antara)

JAKARTA - President Prabowo Subianto issued presidential instruction (Inpres) Number 1 of 2025 concerning Expenditure Efficiency in the Implementation of the 2025 APBN and APBD.

Through these instructions, the government is now making a massive budget cuts to the state budget this year.

Quoting a copy of the Presidential Instruction, the head of the ministry/institution is asked to make efficiency in operational and non-operational spending, at least consisting of office operational expenditures, maintenance spending, official travel, government assistance, infrastructure development and procurement of equipment and machinery. Efficiency does not include personnel spending and social assistance spending.

For governors and regents/mayors, they are asked to limit spending on ceremonial activities, studies, comparative studies, printing, publications and seminars/focus groups discussions.

Furthermore, reducing official travel spending by 50 percent; limiting honorarium spending through limiting the number of teams and the amount of honorarium; reduce supporting spending and do not have measurable output; focus the budget allocation on public service performance targets; and be more selective in providing direct grants in the form of money, goods, or services to ministries/agencies.

Related to this, the Executive Director of the Institute for Development of Economics and Finance (Indef) Esther Sri Astuti assessed that the budget cuts were solely to support the free nutritious food program aka MBG.

Esther also regretted the efficiency of the budget. Given, budget cuts for the purposes of the MBG program cannot boost economic growth in the long term.

"(The MBG program) has broken other fiscal budgets. In my opinion, MBG cannot carry out long-term economic growth, only temporary," Esther told VOI, Monday, February 10.

Moreover, Esther said, initially the government did not allocate a special budget for President Prabowo's flagship program. However, currently the government has prepared a budget of IDR 100 trillion to run the MBG program.

"What is striking is the MBG budget, yes, it didn't originally exist. Then, it got an allocation of Rp71 trillion, then it was top-up to Rp100 trillion," he said.

In addition to absorbing a sizeable budget, Esther said, the MBG program itself could potentially increase food imports.

"The potential for rent-seeking to emerge is very large," he said.

As a result, Esther continued, other programs such as food self-sufficiency, energy, industrial downstreaming, education and infrastructure were neglected.

"But if MBG is compared to education and other programs, I choose education and other programs that have a long-term effect," he concluded.