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APBN Strengthens Foundation of Golden Indonesia 2045
Creative Desk (The Jakarta Post) October 29, 2024
(Freepik.com)
In his speech delivering the 2025 state budget (APBN) bill and its financial note at the House of Representatives plenary meeting, President Joko “Jokowi” Widodo said the 2025 state budget must further strengthen Indonesia's leap forward in order to escape the middle income trap, by utilizing the demographic bonus, continuing economic transformation, increasing investment attractiveness and creating more jobs.
The APBN is expected to continue to maintain its good performance over the past 10 years in supporting sustainable economic growth, maintaining price stability and improving people's welfare.
During the past decade, global economic conditions were haunted by various risks of uncertainty, originating from high interest rates, financial market volatility, escalation of geopolitical conflicts, increasing trade war tensions, the impact of climate change, population aging, digitalization and the development of artificial intelligence (AI).
To that end, the APBN remains ever-present as a reliable instrument and a mainstay of hope to protect the Indonesian people and economy from various shocks due to global economic uncertainty. Through a credible, accountable, healthy and sustainable APBN, the Indonesian economy of the last decade can continue to be protected.
The 2025 APBN is designed to support a smooth and effective political transition, accommodating sustainability, strengthening and accelerating according to the direction of President Jokowi and president-elect Prabowo Subianto.
The 2025 fiscal policy takes the theme of "Acceleration of Inclusive and Sustainable Economic Growth" as the basis for the transformation to realize the Golden Indonesia 2045 vision. In achieving this target, the policy needs to be supported by a healthy and sustainable APBN through collecting more, spending better and prudent yet innovative financing.
In the short-term and in continuation of the 2014- 2024 strategy, the government will focus on continuing support for quality education and health, reducing poverty rates, increasing equality of welfare and high economic growth.
In the education sector, the APBN for the 2014-2024 period was used to improve the quality of superior and competitive human resources in response to various development challenges. The government aims to improve the quality of education and provide adequate and equal access to various learning information in educational units.
The education budget for the last 10 years has been used to support the progress of Indonesian human resources, both through direct assistance received by students, as well as in the form of research support for innovation.
Several important achievements in the field of education include increasing the number of targets for the Smart Indonesia Program (PIP), from 11 million students in 2014 to 20.3 million in 2023, and targeted to reach 20.8 million in 2024.
Meanwhile, recipients of the KIP Kuliah program for university students rose from 220,000 students in 2014 to 1.002 million in 2023, aiming to reach 1.069 million in 2024. In addition, School Operational Assistance expenditure increased from 39.6 million beneficiaries in 2014 to 53.17 million in 2023, and is targeted to reach 53.24 million in 2024.
In the health sector, the health budget during the 2014-2024 period grew by an average of 17.6 percent per year from the original Rp 59.7 trillion in 2014 to Rp 187.5 trillion in the 2024 APBN, increasing significantly during the handling of the COVID-19 pandemic.
The increase in the health budget is in line with improvements in health sector indicators, including the prevalence of stunting, which has decreased significantly from 37.2 percent in 2013 to 21.5 percent in 2023; increasing access to health services indicated by increasing the number of general hospitals (RSU) from 1,855 units in 2014 to 2,636 units in 2023 alongside community health centers (Puskesmas) from 9,731 units in 2014 to 10,416 units in 2023; and increasing life expectancy at birth from 70.59 years in 2014 to 74.39 years in 2023.
The government continues to strive to provide quality health services covering all stages of human life and evenly distributed throughout Indonesia. The leading health sector initiatives include increasing the effectiveness of the national health insurance (JKN) program, accelerating the reduction of stunting and improving the nutrition of children and pregnant women.
Medium and long-term strategies are directed at downstreaming and green transformation, creative economy and entrepreneurship, strengthening the quality of human resources and equitable welfare (inclusiveness). Infrastructure development is directed to support economic transformation, food and energy security and expanding access to education and health.
The infrastructure budget for the 2014 to 2024 period reached Rp 3,746 trillion or an average of Rp 374.6 trillion per year, and grew an average of 12.8 percent per year from the original Rp 157.4 trillion in 2014 to Rp 423.4 trillion in the 2024 APBN.
The infrastructure budget allocation is directed to the development of connectivity infrastructure (roads, bridges, ports, airports), energy and electricity infrastructure, food infrastructure (dams and irrigation channels), ICT infrastructure (BTS and satellite capacity) and basic service infrastructure (drinking water system, housing, sanitation).
During the 2015-2023 period, approximately 2,050 kilometers of toll roads were built, an average of 228 km per year. As a comparison, only 790 km of toll roads were built in the 1978-2014 period, an average of 21.4 km per year.
In 2024, the target for toll road construction is 650 km, while the target for national road construction is 583 km. The construction of national roads in the 2015-2023 period reached 5,823 km, an average of 582 km per year.
Achievements in infrastructure development in the 2020 to 2023 period as implemented by the Public Works and Housing Ministry include assistance and facilities for as many as 696,422 units of independent housing; construction of 16,443 low-cost apartments; construction of 101,044 units of public housing infrastructure, facilities and utilities (PSU); construction and improvement of drinking water systems by 5,560 liters per second; construction, rehabilitation and renovation of 3,876 educational, sports and market infrastructure units; construction of waste management systems for 2.25 million families; operating 751 km of toll roads and 1,972 km of road construction.
In the 2014-2024 period, the APBN worked hard to maintain fiscal continuity, not only maintaining the balance of income and expenditure, but also building a strong foundation for medium and long-term economic growth. This is to support Indonesia's ambitious target to become a high-income country and the world's fifth-largest economy in 2045, which will be the driving force of the global economy.
Finance Minister Sri Mulyani Indrawati once said that there is still a lot of homework and development agendas that need to be continuously handled and completed. For this, strong collaboration and support from all components of the nation are needed to realize the Golden Indonesia 2045 vision.
Source: www.thejakartapost.com