Remarks of President of the Republic of Indonesia at the Opening of the National Coordination Meeting on Government Procurement of Goods and Services of 2020 (through video conference), 18 November 2020 at the Bogor Presidential Palace, West Java Province

Bismillahirrahmanirrahim,

Assalamu’alaikum warahmatullahi wabarakatuh,

Good morning,

May prosperity be upon us all,

Om Swastiastu,
Namo Buddhaya,
Greetings of virtue.

Distinguished Ministers of the Indonesia Onward Cabinet;

Distinguished Heads of Non-Ministerial Institutions;
Distinguished Governors, Regents and Mayors across the country;
Distinguished Heads of Procurement of Goods and Services Working Unit in Ministries/Institutions and Regional Governments;

Distinguished Representatives of the Procurement of Goods and Services Functional Association, Representatives of the Indonesian Procurement Experts Association; and
Honorable Guests.

We are currently under pressure, under a difficult situation that forces us to make decisions. On the one hand, there is COVID-19, on the other hand, we must also save the economy. Therefore, I have often said that we must control the gas and brake pedals, we must manage them, we must manage them well.

And alhamdulillah regarding the COVID-19 cases, every morning I receive the number of active cases in various areas and countries, we have the numbers. In our country, Indonesia, the average rate of active cases today stands at 12.73 percent, while the global average of active cases stands at 27.97 percent. Our country has fared far better, alhamdulillah we should be grateful for this. All governors, all regents, all mayors are working hard to contain COVID-19. On the recovery rate, our country’s recovery rate stands at 84.02 percent, while the global average of recovery rate stands at 69.62 percent. Our rate is higher. These good rates must be maintained and improved so the numbers will increase. We will begin the vaccination program, inshallah, in December or January, we are currently working on it.

Second, regarding the economy. In a difficult situation as it is today, we need to boost the circulation of money, and it comes from, we expect, from consumption and government spending. If we recall in the Second Quarter, government consumption was -6 percent. In the Third Quarter, we managed to reach around +9 percent. That triggered our economic growth in the second quarter to stand at 5.32 percent, minus, but in the Third Quarter the trend was positive, better, it stood at -3.49 percent. We must continue to improve it.

Therefore, the remaining time of procurement of goods and services is only until 22 December, it is only a month left. The budget must be spent according to the planning, sourced from the Regional Budget or the State Budget. Earlier, Head of the National Public Procurement Agency (LKPP) Roni Dwi Susanto has reported that in November, today is 18 November, there is still ongoing procurement process for construction project which value is Rp 40 trillion. If it is still on process, when will the work start? When will it be done? Only a month left. Remember, the year-end closing is on 22 December, we will enter the end of year long holiday.

Hence, it is time for us to make fundamental changes in goods and services procurement system. We must not only have a fast, transparent, and accountable system for government procurement of goods and services but we must also increase the value for money by providing maximum benefit to the people. For that reason, the LKPP must make breakthroughs, must have courage to make breakthroughs, especially by utilizing super modern technology, establishing a real time e-procurement system, carrying out a transformation towards 100 percent use of e-Procurement, utilizing technology to improve procurement data processing capacity to make it faster, big data analytics, cognitive computing, artificial intelligence, blockchain, machine learning, and other latest technologies that should be put into use, start to be used.

With the help of the latest technology, we will be able to monitor in real time the value of realization of the transactions carried out by each ministry, agency, and regional government, whether it has been 100 percent absorbed or only 40 percent of the total procurement spending. Thus, based on the data, ministers, heads of institution and regional heads can be alerted, can be warned so they can take acceleration measures.

Moreover, in the time of the pandemic, it is important to speed up the procurement process. Warning alarm is necessary since there are many ministries, agencies, and regional governments that still implement the old ways of working, same routine, even in this critical situation, in this emergency situation, they are still working in an ordinary channel, which is common and normal, have not switched to extraordinary channel, have not changed the SOP from a normal one to an SOP that full of breakthroughs. As a result, the realization of expenditure that has been budgeted in the State Budget and the Regional Budget is late. In November, it is still Rp 40 trillion, and that is for construction project. Then, after the construction is completed, what will it be like? If it is a building, it will collapse. If it is a bridge, it will too in only a few months.

Do not, once again, do not pile up the spending at the end of year. Once again, in this time of crisis, we need speed in the realization of government spending because government spending can boost the demand, increases public consumption which in turn will drive production and we hope the economy will revive.

Ladies and Gentlemen,

I realize the fear among government officials/apparatus in the process of procuring goods and services even though there are a number of legal umbrella, including laws, Government Regulations, Presidential Regulations, and Ministerial Regulations. Even, Head of the LKPP has also prepared the regulations needed in the procurement of goods and services in emergency situation. So, if you are still in doubt, I have instructed Head of the BPKP (Financial and Development Supervisory Agency), Head of the LKPP, the Attorney General, and the National Police Chief to provide assistance. With such protection, the officials who have been given the mandate should have courage to take risks for the benefit of the people, for the benefit of the community as long as it is done in good faith, there is no intention to corrupt.

I also want to emphasize that the Government Internal Supervisory Apparatus (APIP) must be able to be part of the accelerated solution. Do not be the opposite, being part of the problem, prolonging the process, complicating the process, making it difficult, and impeding it. We need speed. The law officers have been ordered to prioritize prevention in what ways? in a more proactive way, do not wait for a problem to occur. If there is a potential problem, do remind them immediately. Do not let government officials and apparatus fall and remind them after they fall. But if there is an intention or a mens rea, I give an order to punish them firmly without compromise. I need to say this repeatedly so that we all will work in one vision, have the same perspective, so there is speed and accuracy. However, everything should be carried out transparently and accountably, and guarded by a strict law enforcement.

Ladies and Gentlemen,

The system of goods and services procurement must be able to increase the value for money so the spending can generate added values for the society. Therefore, we must prioritize to purchase local products. I reiterate Pak Roni’s statement, especially about MSME products in ministerial spending, institutional spending, and regional governments spending. Do increase local content requirement (TKDN) figure as much as possible. The TKDN must be increased consistently and continuously, instead of being a complement to requirements in the process of procuring goods and services. This is very important.

The purchase of domestic products will create a large multiplier effect. Rp 200 trillion have been spent for non-TKDN components. Once again, it will create a large multiplier effect for regional and national economy. And also remember that millions of workers and their families are depending on the sustainability of our domestic industry and MSMEs sector. The LKPP must actively put MSMEs’ products that meet the requirements in its e-catalog. MSMEs should be more involved in filling the supply chain of TKDN production, for instance, automotive industry, telecommunication, and construction sectors. I am convinced that the quality and price of MSMEs’ products are competitive, both in terms of price and quality, compared to imported products. If we continue to strengthen, to assist, and to facilitate the MSMEs sector, our MSMEs products will be able to compete in regional and global markets.

I think that concludes my directives on this auspicious occasion. By saying bismillahirrahmanirrahim, the National Coordination Meeting (Rakornas) on the Government Procurement of Goods and Services 2020 is officially opened.

I thank you.

Wassalamu’alaikum warahmatullahi wabarakatuh.

Om Santi Santi Santi Om.

Namo Buddhaya.

Translated by Syarifah Aisyah
Reviewed by Mia Medyana B