Prabowo Cuts Budget by Rp 308 Trillion to Close Corruption Loopholes

JAKARTA – President Prabowo Subianto has emphasised that the policy of cutting unproductive state spending is aimed at closing loopholes for deviations and potential corruption in the management of the State Budget (APBN). In the broadcast “President Prabowo Answers” with experts and journalists on Thursday (19/3/2026), Prabowo stated that the government has saved up to Rp 308 trillion from central government spending in the initial stage of efficiency. “In the first efficiency effort, we saved Rp 308 trillion from the central government. Where did that come from? From all sorts of dubious expenditures. I am convinced that all of this Rp 308 trillion, if not cut, would head towards corruption,” Prabowo said. According to Prabowo, the savings come from reviewing various budget items deemed not to provide real benefits to the public. If not controlled, that budget could become a financial burden on the state. Prabowo linked this efficiency step to the Incremental Capital Output Ratio (ICOR) economic indicator, which reflects a country’s investment efficiency level. He noted that Indonesia’s ICOR is at 6.5, higher than regional countries such as Thailand (4), Malaysia (4), and Vietnam (3.6). With an APBN approaching Rp 3,700 trillion or about $230 billion, Prabowo estimated inefficiencies of around 30%, equivalent to $75 billion. “So this figure means 30% less efficient than Thailand, Malaysia, the Philippines, or Vietnam. If I use this as a basis, it approaches our GDP of Rp 3,700 trillion or $230 billion. 30% of that is $75 billion. This is inefficient,” he explained. Prabowo stated that the current government efficiency is only the initial stage. He assessed that there is still much room for savings, especially from non-essential routine spending. Several budget items cut include ceremonial costs, office stationery purchases, and expenditures for off-site meetings and seminars. Prabowo also touched on the prevalence of studies that he deemed not to address core issues such as poverty alleviation and job creation. In facing potential global crises, Prabowo stressed the importance of controlling consumption and efficiency across various sectors, including the work patterns of civil servants. He cited policies in countries like the Philippines and Pakistan that reduce working days from five to four, as well as work-from-home (WFH) schemes. “During Covid, we did it quite successfully. I think we can do that too. Perhaps 75% of employees or civil servants can work from home,” he said.