Home Minister Urges Regional Governments to Boost Regional Budget Spending

Minister of Home Affairs Tito Karnavian. (Photo by: PR of Cabinet Secretariat)

In order to boost economic growth, all regional governments must accelerate regional spending until the end of this year through regional budgets (APBD), according to Minister of Home Affairs Tito Karnavian.

According to the Minister, the move aims to boost economic growth since it could bring more money into circulation for COVID-19 handling.

“We should not withhold the government spending. Instead, the budget must be spent and realized,” Tito said during the Debriefing of 2021 Home Affairs Leadership for Regents/Mayors/Deputy Regents/Deputy Mayors Batch II, which was held virtually from Ministry of Home Affairs’ office in Central Jakarta, Monday (14/6).

Tito went on to say that government spending is the main expenditure that makes the economy of central and regional governments survive, adding that the spending can also encourage private sectors to participate in economic activities.

The Minister added that the realization of APBD absorption will be carried out by year-end and for that reason, Tito urged regional governments to work together to rebuild national economy.

“The scenario of slow budget realization will not propel the economy. It will be difficult since the government spending is crucial amid the ongoing pandemic,” he said.

Tito further said that household spending and public consumption have made the highest contribution to national economic growth, while expressing hope that the budget disbursed by the Government through several programs can trigger money circulation in the community to bolster purchasing power and economic growth.

“Once we execute the programs, there will be money circulation in the community, which is expected to stimulate private sectors. Money circulation from the Government and private sectors can strengthen household spending and people’s purchasing power so that the economy can bounce back,” he stated.

On that occasion, Tito also revealed that the realization of regional spending at regency/city levels remains low.

As of 11 June 2021, the spending in provinces, regencies and cities throughout Indonesia has only reached 24.41 percent (the APBD realization at the provincial level stood at 26.85 percent, while the regency/city levels recorded a 23.22 percent), adding that the realization of regional spending should have reached a minimum of 40 to 50 percent by mid-year.

“We will regularly evaluate the spending every week. Do spend the budget for program execution. If possible, spend it on labor-intensive programs that will benefit the community,” Tito said.

For the record, the Government has projected economic growth to reach 5 percent this year. Indonesia’s economic growth is also expected to increase by 7 percent in the second quarter despite economic contraction of 0.74 percent in the first quarter.

“Once again, I appeal to all regional leaders to encourage regional secretaries and the Regional Apparatus Organization (OPD) to carry out the planned programs. The spending from the Government and private sectors will increase people’s purchasing power to recover the economy,” he remarked. (PR of Ministry of Home Affairs/UN) (RIF/EP)

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