MBG Budget Of IDR 335 Trillion, Economist Alliance Reveals Potential Crowding Out

Representative of the Indonesian Economist Alliance (AEI) Vid Adrison. (Photo: Aris Nurjani/VOI)

JAKARTA - The Indonesian Economist Alliance (AEI) said that the budget allocation plan of IDR 335 trillion for the Free Nutrition Food (MBG) program in 2026 needs to be carefully reviewed, considering that the source of the funds comes from public taxes.

AEI Representative Vid Adrison assessed that the amount of the budget could have a negative impact on the effectiveness of state spending if it was not carefully designed and on target.

"Regarding the very large budget of MBG, remember this is the APBN budget originating from people's taxes, meaning that it must be used as well as possible for the welfare of the people," Vid told the media crew at the Coordinating Ministry for the Economy Office, Monday, September 29.

Vid highlighted the importance of using the self-targeting mechanism in the implementation of this program, so that food assistance is really accepted by those in need.

"So we emphasized earlier that if this is continued, if it is done, then one thing that can be done is self-targeting. So people will decide whether or not to join the student or his family. Thus, each party will get benefits," he explained.

According to him, with this approach, students or their families are given the option to follow or not, based on their respective economic conditions.

"For people who cannot meet their daily needs, they can get food from MBG. For people who can afford it, they can choose something else. The budget can be saved," he said.

Vid also reminded the potential risk of crowding out, namely when large spending like this causes fiscal space for other important programs to be limited.

"Our concern is related to the crowding out earlier. This is Rp335 trillion, this is very, very large. Even though Mr. Anggito (Wamenkeu Keuangan) said earlier, he said this is Rp335 trillion, this is a reserve. But this is a ceiling. In the sense that this will reduce the availability of funds for others. Well, it means that if the budget is so large, then the availability for other budgets will decrease," he added.

He said the impact was not only on the availability of other sector budgets, but also on economic growth and overall state revenues.

On the other hand, he highlighted the potential for food waste (food waste) if the MBG program is carried out thoroughly without considering different children's consumption capacity.

Not only that, Vid also reminded that there have been cases of food poisoning (food poisoning) and this can appear in all regions if the distribution and storage aspects are not managed optimally and hygienically.

"Please see maybe how long the MBG has been produced. The food is produced until it is finally consumed. So that it is suitable for consumption, it requires a good storage delivery unit, then at school it must also be stored properly, so that in the end it can be eaten properly. Now, it requires a very large initial cost. , "he explained.