Backgrounder
Amid the budget efficiency affecting most government institutions, President Prabowo Subianto plans to develop 100 Territorial Development Battalions to implement his vision of food self-sufficiency. The special battalions will be manned by Indonesian Military (TNI) personnel with expertise in farming and livestock, further confirming the return of the military to civilian affairs after over 25 years of Reform.
Amid nationwide budget cuts, former president Joko “Jokowi” Widodo’s ambitious Nusantara capital city project is on the brink of failure. Under the current administration of Prabowo Subianto , the Nusantara project has taken a step back in priority in lieu of funding his own flagship free nutritious meal program and his food and energy self-sufficiency vision.
Despite its scheduled dissolution in 2025, new revelations have emerged regarding the massive graft case at state-owned insurer PT Jiwasraya. The case, which led to state losses of Rp 16.8 trillion (US$1.06 billion), is among the largest financial scandals in Indonesia’s history. The Attorney General’s Office (AGO) recently named Isa Rachmatarwata, the Finance Ministry’s budget director general, as a suspect in the case. According to the AGO, Isa allegedly played a key role in approving Jiwasraya’s ill-fated JS Saving Plan in 2009 despite knowing that the company was already financially insolvent at the time.
Another government drive for financial efficiency has been shot down following a public outcry against restrictions on the sales of subsidized household gas introduced on Feb. 1. The new policy quickly gathered heat, with long lines of angry people around the country trying to buy 3-kilogram canisters of LPG and amid harsh criticism going viral on social media.
Just one month after its launch on Jan. 1, the government’s Rp 1.3 trillion (US$79.58 million) Core Tax Administration System (Coretax) is already under fire. Designed to modernize and streamline the country’s tax administration, Coretax has faced criticism for technical malfunctions, complexity and allegations of corruption.
President Prabowo Subianto , a former Army general, has relied heavily on the Indonesian Military (TNI) to accelerate the implementation of his flagship programs. However, he has maintained some distance from the National Police. Despite this, both the TNI and the police wield significant influence in Prabowo’s administration, with several figures from military and police backgrounds securing key cabinet positions and playing crucial roles in power transitions.
The House of Representatives Commission XII overseeing energy has approved a draft government regulation on the National Energy Policy (KEN), which carries a less ambitious decarbonization target. The new policy postpones the 23 percent share of renewable energy in the national energy mix to 2030 from its original target of 2025, while the share of coal is projected to rise from 39.48 percent last year to 40.7 percent in 2030.
Indonesian officials may openly dismiss the impact of the likely huge cuts in aid coming from the United States as minimal, but privately they know they will still affect many programs in health promotion, poverty alleviation and climate justice and a few other sectors that are crucial to the country’s 2030 Sustainable Development Goals (SDG) agenda.