Jokowi Asks Local Governments to Don't Hesitate to Use State Budget to Prevent Inflation: There Are Rules, I've Conveyed It To The AGO And KPK

JAKARTA - President Joko Widodo (Jokowi) asked local governments not to hesitate to use unexpected spending and general transfer funds in the State Budget (APBD) to prevent rising inflation.

"Don't let anyone have any doubts about the use of unexpected expenditures and general transfer funds because there is already a Minister of Finance Regulation, there is already a Minister of Home Affairs Circular. I have also conveyed to the Attorney General's Office and the KPK regarding these matters because they are urgently needed", said President Jokowi in a briefing to all Ministers/Heads of Institutions, Regional Heads, Regional Military Commanders, and Regional Police Chiefs in Jakarta, Thursday 29 September.

Jokowi explained that unexpected expenditures could be used to finance the transportation of food commodities from the production site to the market.

That way, he said, the price of food charged to buyers can be cheaper because the transportation costs have been compensated by the APBD. This can prevent an increase in food prices after the increase in the price of fuel oil (BBM) on September 3, 2022.

"The issue of rising egg prices, where are the eggs produced? If for example in Palembang the price of eggs goes up, just take eggs from Bogor, let traders or distributors buy in Bogor but the transportation costs are covered by the regional budget for provinces, regencies, and cities", he said as quoted by Antara.

Likewise with the fulfillment of other food commodities, such as shallots. Other regions can buy shallot stock at the production center of Brebes Regency, Central Java. The cost of transportation to and from Brebes can be borne by the local APBD through the postal contingency expenditure.

"The money (for transportation) is not much, and it's impossible to buy onions every day. Only twice a week. This is small money (for transportation) but it does have to work in detail", he said.

Meanwhile, the allocation of general transfer funds (DTU) in the APBD, said Jokowi, could be used to help farmers or local communities produce food commodities.

“Why is red chili so high? because the production is less, the supply is so less, supply is less. Your duty is how to invite farmers to plant this (red chili)", he said.

Jokowi explained that the government's efforts to control inflation will be assisted by the policy mix from Bank Indonesia (BI).

He was grateful that the Ministry of Finance and BI were able to implement synergistic and concurrent policies to strengthen inflation control measures.

"I am happy that BI and the Ministry of Finance are running hand in hand and harmoniously without the intervention of BI's authority, but what is more important is not to brake the money supply but to solve it at the end, namely the increase in goods and services", he said.