Directives of President of the Republic of Indonesia during Evaluation of Affirmative Action to Increase Purchase and Utilization of Local Products in “Proud of Indonesian Products” National Movement at the Jakarta Convention Center, Jakarta Province, May 24, 2022
Assalamu’alaikum warahmatullahi wabarakatuh.
May prosperity be upon us all,
Greetings of Virtue.
Distinguished Coordinating Ministers, Ministers, Governor of Bank Indonesia, Governors, Deputy Governors, Regents, Deputy Regents, Mayors, Deputy Mayors, Regional Secretaries from all over Indonesia;
Distinguished Attorney General, Chief of the National Police, Commander of the Indonesian National Defense Forces, Chairman of the Corruption of Eradication Commission, Ladies and Gentlemen, all echelon I and II officials of ministries and institutions, the President Director of SOEs, all Regional Leaders Communication Forum (Forkopimda) throughout Indonesia;
Ladies and Gentlemen,
Once again, I want to convey how the current situation is really not an easy situation. It is a very difficult situation, experienced by all countries. Therefore, we must have a sense of crisis regarding our current situation as well as the global situation.
We know that today’s global uncertainty is changing almost every day. Once COVID-19 is over, all countries are actually planning to recover their economy, but then war between Ukraine and Russia happens. This is what all of us must aware of, that the current situation is not easy. It is not easy.
I give an example. Currently, there are two serious problems, namely energy matters, including fuel, gasoline, gas, electricity, and food matters. In all countries, these two issues are a big problem. Fuel price is increasing very high in other countries. In Singapore, the price of fuel is now at Rp32,000, Germany is at Rp31,000, Thailand is at Rp20,000. We are still at Rp7,650 for Pertalite and Rp12,500 for Pertamax. Other countries are far more expensive than us.
Why are our prices still considered low? Because we hold it. But the subsidy is getting bigger. How long can we endure this? This is our work together. So, I ask ministries/institutions, regional governments to have the same sense. It’s difficult to hold price stability like that.
Rice, in our country, is still at Rp10,700, while in other countries it has risen by 30 percent, some have risen to 40 percent or even above 60 percent. If commodity prices rise, inflation will follow. In America, the inflation was never more than 1 percent, but now it reaches 8.3 percent. How many times? Turkey has even reached almost 70 percent. We are still at 3 percent, around 3.5 percent. We should be grateful. But that is because we are holding the commodity prices, such as metal, gas, electricity. If we follow the economic price, surely our inflation will go up.
Therefore, our State Budget, Regional State Budget and the SOEs budget must be hold on tightly so that it can really benefit the government programs and focus on our target, since the budget is very big. Our State Budget is at Rp2,714 trillion, Regional State Budget is at Rp1,197 trillion, plus the SOEs budget.
As I said in Bali, the State Budget, the Regional State Budget and the SOEs budget are people’s money so don’t buy imported goods. It would be a big mistake for us to do that. That is why Proudly Made in Indonesia movement appears. I will continue to follow. We will evaluate this kind of meeting every two or three months to overview the budget.
Once again, don’t use the state budget to buy imported goods. Those who are present here, especially echelon I, echelon II, regional secretary, are policy makers, decision makers, and implementers. The big policy is in the ministers, governors, regents, mayors, but the implementation of the decision is in your hands. So, we invite you to share the same value.
I ask governors, regents, mayors, regional secretaries to make local and superior products entering the local E-Catalog immediately. Only 46 regional governments from 514 districts/cities and 34 provinces have local E-Catalogs. Only 46 regional governments. In fact, the requirements are no longer complicated to create a Local E-catalog. It used to be complicated, now it’s very simple.
I confirmed this morning to the Head of the Goods/Services Procurement Policy Institute, Mr. Anas, how many steps needed (to create a local e-catalog)? It used to be eight steps, now it’s only two steps. Very simple. So once again, I ask the regional head and the regional secretary to do this immediately. Local products, regional superior products must immediately enter the local E-Catalog.
Then the Indonesian Chamber of Commerce (Kadin), the Indonesian Young Entrepreneurs Association (HIPMI), and other business associations to encourage local entrepreneurs to produce high quality products with attractive designs and packaging as well as good branding. So that later more and more local products, the regional superior products will all enter the E-Catalog. It will trigger the regional economy, and I make sure that it will open up a lot of job opportunities in the region.
In the past, to overcome stunting problem, we used to buy the nutritious food nationally. The supplier must be a big company for bread or biscuits. Now, if local products can enter the local E-Catalog, any traditional food such as arem-arem can be used to tackle stunting because it contains eggs, meat, and others nutritious ingredients. What does it mean? Our small entrepreneurs, our MSMEs, will be able to develop. If the capacity is not enough, they will definitely expand. Expansion means that there is a lot of demand. Expansion means adding workers, creating job opportunities. This is our goal.
And now I have said to the Head of LKPP, don’t complicate things, for example by requiring all products to have SNI (Indonesian National Standard) label. It is difficult for small company. The SNI is not mandatory. It used to be mandatory, now it’s not. The SNI is required only for items related to safety, such as helmet. Dangerous things such as cables also needs SNI. If all local products need SNI, when can they enter the E-Catalog? It’s impossible. It does not make any sense if everything needs SNI [label], such as stone, sand, or brick.
From the past until today, how many products we have in our E-Catalog? 52,000 products registered and many of them were imported using the aggregator model. Buy the product overseas, use local brand then input it in the E-catalog. We must be aware of this. They use imported products and rebrand it as local brand. Be aware of this.
Once again, only 52,000 products entered the E-Catalog. Now we have 340,000 products, and our target by the end of this year must be above one million. And that is the task of the regional head, the regional secretary, Kadin, HIPMI, and the association of entrepreneurs.
If we can do this, once again, it will open up huge job opportunities. Hundreds of trillions spending on goods and services can boost our economic growth, that’s for sure. So again, we will continue to evaluate this, will continue to be reviewed by the BPKP and continue to be reported to me by the Coordinating Minister.
And what was said earlier, I am happy that the commitment has reached Rp802 trillion. That is for ministries/institutions and regional governments. Then from SOEs is Rp296 trillion.
What we need is the realization, how to realize it, because the realization is still below 10 percent, still Rp110.2 trillion. Now we can follow the report, how many commitments and realizations we can achieve. This is called a platform that we want to build so that we don’t use people’s money to buy imported products. It is a big mistake for us to find income for the country in the current condition, seeking foreign exchange is very difficult.
If the money in the State Budget and Regional State Budget as well as in SOEs is used to buy imported goods, foreign products, it is indeed a big mistake. Of 107 regional governments, the budget absorption is still 5 percent, even 17 regional governments are still zero absorption. Actually, I wanted to show it today but I delay until around September. So by the time we can see which regional government, which ministry and which institution with the lowest budget realization.
A commitment of Rp802 trillion but the realization is only of Rp110 trillion. I will not show to you today. Later in September or October, I will publish all data. This is Jakarta, this is Aceh, this is South Sulawesi, this is Central Java, this is East Java, this is district A, district B, city A, city B, I will publish them all. I will publish which city/district has commitment to the nation and state by purchasing domestic products and which ones enjoy buying foreign products. It will be showed later.
I think that’s what I want to convey in this auspicious occasion. Once again, we must share the same sentiment, the same sensitivity to this very difficult situation. We will get through this if we work together. We really hope that this will open up as many job opportunities as possible and will also affect our economic growth.
I thank you.
Wassalamualaikum warahmatullahi wabarakatuh.