Directives of President of the Republic of Indonesia During Cabinet Plenary Session State Palace, Jakarta, October 11, 2022
The current global economic and geopolitical situation is extremely difficult for all countries and it is becoming increasingly unpredictable with high uncertainty and volatility.
This morning, I also received a call from [Washington] DC, from Minister of Finance, stating that 28 countries are currently waiting to receive assistant from the IMF.
It indicates that winter is here. We can no longer do business as usual so our preparations must be extremely detailed. Working in [a] macro [scope], [in a] micro [scope], and [in] details will save our country.
Because we are in an extremely difficult situation, our prudence in all policy decisions should part of our management because time is now extremely difficult.
Once again, each ministry and institution’s policy must be cautious. It is a minor issue, but everything has now become sensitive. For example, in yesterday’s issue about electric stoves, it is true that we do need to convert them, but the time is not right.
What does 1800 [VA] stove mean? We have to increase our usage from 450 [VA] to over 1800 [VA] that will surprise people. We must address such things. It must be related to the people and the policies must be carefully considered.
First, I would like to remind everyone to concentrate and to be focused on our respective tasks. Also, we need to check whether or not the implementation of existing programs is deemed useful. If it is not, it can be diverted to more important things.
Therefore, budget absorption is related to budget acceleration. The absorption of the State Budget has to be cautious and it remains low. Realization is only 62.5 percent, especially related to capital expenditure. It is just 45.8 percent. Personnel costs are the highest because this is a routine that must be followed. However, capital, goods and services, and social assistance expenditures remain very low.
Second, I order coordinating ministers to reinforce consolidation between ministries/institutions so that they are truly consolidated in their respective spheres, particularly in the face of the global economic slowdown, food, energy, and financial crises.
I will invite ministers and coordinating ministers to discuss the stress test. How far will our strength go when the storm hits whether it is related to currency, exchange rates, inflation, growth, our food, or our energy, all of which must be thoroughly tested until plan A, plan B, plan C, plan D, plan E, and everything else are in place.
We must prepare for the worst. So, as the situation worsens, and the domestic impact’s anticipation has to be properly prepared.
Then, I entrust this to Coordinating Minister for Maritime and Investment Affairs, Minister of Investment so that the investment can be realized on the ground. Should there is a problem, solve it on the ground, whatever it is, no matter how small it is. As a result, new fresh blood, capital inflows into our country, and money that enters our country must be truly valued because it is difficult to find investment and money to enter our country nowadays.
To Coordinating Minister for Human Development and Cultural Affairs, please examine the impact of the economic turmoil related to poverty in detail. Make sure everyone gets social assistance. If this is not enough, we will meet back to discuss a solution.
The third is about the G20 presidency. I requested that the echo be increased once more. All of the echoes were raised once more so that it truly went to the G20 Summit and the excitement at home and abroad was noticeable.
Lastly, the probability of natural disasters caused by extreme weather must be calculated, like heatwaves in Europe, flash floods in Pakistan, hurricanes in Florida, and a long drought in Kenya. It should be our lesson, our assessment. Do not be unprepared for situation like this.
I believe I ordered Minister of Public Works and Housing yesterday. Even though it has recently rained, pump points must be built, where it will be no water, where it has a dry heat wave. We have had a long-wet season for almost three years.
What worries me is that there will be a long dry season. But if we already have dams, we are able to multiply the smaller ones, but it does not have to be dams. Smaller ones, such as pump business in villages and reservoir affairs, can be prepared quickly.
Once again, disaster mitigation planning is essential.
That concludes my remark for today.
I thank you.