IKN Development Spends Hundreds Of Trillions, Does COVID-19 Fund Still Remain?

Wandy Tuturoong/Photo: Antara

JAKARTA - The Presidential Staff Office (KSP) ensures that the state capital development financing scheme (IKN) from the APBN will not hinder the handling of COVID-19, efforts to accelerate national economic recovery (PEN), as well as overall national development.

“We know that President Joko Widodo's handling of COVID-19 uses the 'gas and brake' principle or philosophy. Now, one of the important aspects of the 'gas pedal' or economic recovery is to build infrastructure," said KSP Main Expert Wandy Tuturoong in an official statement from KSP in Jakarta, Sunday, January 23.

In line with that, said Wandy, in the early stages of IKN development, there will be many infrastructure projects. So far, infrastructure development has been proven to have a multiplier-effect for national economic development and growth. Therefore, said Wandy, there is no need to contrast the development of IKN with the national economic recovery and the handling of COVID-19.

"So here, there is no problem to argue between IKN development and handling COVID-19 and economic recovery," he said, quoted by Antara.

Regarding the question of how IKN financing will have an impact on the state budget posture, Wandy said the government and the DPR agreed that the financing scheme would not "burden" the state budget.

"The fiscal authority, in this case, the Ministry of Finance (Kemenkeu) is currently discussing the IKN funding scheme, which will later be outlined in a government regulation (PP), starting from preparation, development of the relocation of the state capital, to the administration of regional government specifically for the capital of the archipelago," said Wandy.

Wandy said that according to the provisions in the draft of the IKN Bill which had been approved as the IKN Law by the DPR, the PP would be stipulated two months after the approval of the IKN Law.

Wandy also emphasized that the projected amount of IKN financing composition from the APBN which was contained on the www.ikn.go.id page was an approximate amount. This figure arose before the government met with the DPR to approve the IKN Draft Law to become the IKN Law.

"So it can be concluded that this number is a temporary estimation needed until 2024. And it must be remembered that this is a multi-year project with 5 stages until 2045, so that percentage will eventually decrease," he concluded.