August 19, 2024
JAKARTA – President Joko “Jokowi” Widodo says the green economy and Prabowo Subianto ’s flagship free meals program will prop up economic growth next year by fueling micro-level business activity and boosting exports.
Delivering the annual State Budget Address before lawmakers and regional representatives at the Senayan legislative complex on Friday, the outgoing president said the free meals program would not only “improve children’s nutrition” but also ramp up regional development by involving micro, small and medium enterprise (MSMEs).
Aimed at feeding 82 million children, teachers and pregnant women, it is estimated Prabowo’s signature program will cost the government about Rp 450 trillion (US$28.66 billion) a year once it is fully implemented. The plan is to roll it out in stages, and an allocation of Rp 71 trillion has been earmarked for next year.
Jokowi said in his speech that the program was one of the short-term “strategies” to “accelerate economic growth”.
The medium-term strategy, meanwhile, encompassed “strengthening downstream programs and the green transformation to increase export-oriented economic activities [that are characterized by] high value-addition and low emissions.”
The President kept the bar high for the incoming administration as he stipulated a GDP growth target of 5.2 percent for 2025, which is unchanged from its target for this year.
The World Bank and the International Monetary Fund, meanwhile, both project 5.1 percent for Indonesia’s economic growth next year.
The country logged GDP growth of 5.17 and 5.05 percent in this year’s first and second quarter, respectively. Yet Finance Minister Sri Mulyani Indrawati expressed optimism on Aug. 5 that the full-year average could still reach 5.1 or 5.2 percent.
“Given the relatively stagnant global economic situation, our economic growth will rely more on domestic demand. People’s purchasing power will be tightly safeguarded by controlling inflation, creating jobs and [providing] support through social assistance and subsidies,” said Jokowi, after setting a 2025 inflation target of 2.5 percent.
He went on to say that the government would focus on incentivizing the development of exportable products through “competitive fiscal incentives”.
The President will step down in October for president-elect Prabowo and vice president-elect Gibran Rakabuming Raka, Jokowi’s eldest son, to take the reins of government, making the budget drafting a rare occasion where the outgoing government is carving out the details for its successor.
Read also: Jokowi to pass fiscal baton to Prabowo in State Budget Address
Jokowi has said on several occasions, including in Friday’s speech, that the focus for budget planning this year was on a smooth transition. He enlisted Prabowo’s nephew Thomas Djiwandono into the cabinet as deputy finance minister specifically to ensure that the draft would cater to the incoming government’s programs.
During a separate speech earlier on Friday, Jokowi once again apologized for any mistakes made over the past 10 years of his presidency.
Read also: Jokowi apologizes, again, in final state address
“I’m fully aware that as a person with all the flaws and limitations of a human being who is far from perfect, it’s possible that sometimes I overlooked things. It is very possible that I have committed a lot of mistakes,” Jokowi said.