Finance Minister: Regions with High Fiscal Capacity Can Establish Regional Endowment Fund

Minister of Finance Sri Mulyani (Photo by: PR of Cabinet Secretary/Agung)

Minister of Finance Sri Mulyani Indrawati has announced that regional governments can establish regional endowment fund as an option for wider cross-generational benefits.

“I would like to state that based on Law on Fiscal Relations Between the Central Government and regional governments (HKPD Law), regions that have surpluses because of natural resources can establish regional endowment fund,” she said at the HKPD Law Dissemination Kickoff in Demak regency, Central Java province, Thursday (03/10).

Regional endowment fund is a fund sourced from the Regional Budget that lasts forever and the management result can be used for regional expenditure without decreasing the primary fund. Regional endowment fund can be established by regions with a very high fiscal capacity that have fulfilled the needs for basic public services.

Regional endowment fund is aimed to gain economic, social, and other benefits, as well as to provide donations to regional revenues and cross-generational general usefulness. The management principles are stipulated by regional regulations, namely managed by Regional General Treasurers or Regional Public Service Agencies and carried out in investments that are free from the risk of decreasing value.

“Just like the Central [Government] that has endowment fund for LPDP scholarship, research, higher education, [and] culture, we hope that regions with abundance of resources do not use them up or use them for expenditures that do not relate directly to public welfare. We certainly must save for the next generation so that they can also enjoy the yield of those natural resources,” she remarked. (PR of Ministry of Finance/UN) (DH/MUR)

The official website of Ministry of Finance can be accessed through this link.