Finance Ministry: State Budget to Drive Innovation-Based Economic Transformation
JAKARTA — The government has affirmed that the State Budget (APBN) will be the primary instrument in driving Indonesia’s economic transformation towards a knowledge- and innovation-based economy. One of the steps being prepared is support for the development of the Jakarta Education and Innovation Center, an initiative expected to become an international-standard hub for education, research and innovation in the capital.
Deputy Finance Minister Suahasil Nazara said Indonesia can no longer rely on economic growth driven solely by labour and the exploitation of natural resources. According to him, Indonesia’s future competitiveness must be built through the strengthening of science, technology, research and innovation.
“Indonesia needs to shift from relying on perspiration (hard physical work) towards innovation,” Suahasil said while opening a focus group discussion (FGD) on the design of the Jakarta Education and Innovation Center, as quoted from a written statement in Jakarta on Wednesday.
According to Suahasil, this transformation requires consistent and sustainable fiscal policy support. Therefore, the APBN functions not only as a government financing instrument, but also as a catalyst for building an ecosystem of education, research and innovation capable of producing superior human resources.
He explained that the government’s commitment to human resource development is reflected in the constitutional mandate to allocate a minimum of 20 per cent of the budget to education. From 2009 to 2026, the government has allocated education funds totalling Rp7,667.3 trillion.
Through this policy, the government has also successfully built the Education Endowment Fund, managed by the Education Fund Management Institution (LPDP). To date, the accumulated value of the endowment fund has reached approximately Rp195 trillion, making it one of the strategic instruments for guaranteeing the sustainability of state investment in education.
The fund is used for various programmes, ranging from higher education scholarships, research funding and university development, to improving the capacity of Indonesia’s human resources. The government hopes the benefits of the endowment fund will continue to grow alongside rising demand for experts across various strategic sectors.