Economist Appreciates Prabowo's Plan to Cut Official Salaries

An economist from the Center of Reform on Economics (CORE), Yusuf Rendy Manilet, has viewed President Prabowo Subianto’s plan to introduce an option for cutting state official salaries as an initiative worthy of appreciation, particularly in the context of building a spirit of shared burden amid growing global economic uncertainty.

“From a fiscal perspective, savings from this policy will certainly provide additional space for the state, and in certain nominal terms could be said to be quite helpful,” Yusuf told Media Indonesia on Monday (16/3).

However, he continued, when viewed in the context of overall state spending that reaches thousands of trillions of rupiah, the contribution of official salary cuts is relatively small relative to total state budget spending. For this reason, said Yusuf, the primary value of this policy does not solely lie in the amount of savings it generates, but also in the leadership message that efficiency efforts begin from the top level of government.

“In the context of political economy, a step like this can also be a positive signal regarding commitment to fiscal discipline. Amid potential external pressures, such as fluctuations in global energy prices or uncertainty in international financial markets, a signal that the government is ready to implement efficiency from the leadership level can help maintain the credibility of state financial management,” he explained.

Nevertheless, said Yusuf, for the impact on fiscal space to be more felt, this step should also be accompanied by broader refocusing and budget reallocation. This includes conducting evaluations of various priority programmes or government flagship programmes.

“In a situation of global economic pressure, adjustments to the scale, implementation stages, and budget allocation of major programmes become important so that fiscal balance is maintained without compromising overall economic stability,” he explained.

With such an approach, he said, official salary reductions do not stand alone, but become part of a more comprehensive effort to improve the efficiency of state spending.

“If these steps are implemented consistently, this policy can help strengthen fiscal discipline whilst maintaining public confidence in state budget management amid uncertain global economic dynamics,” he concluded.