Prabowo: Rp1,000 Trillion Lost to Budget Leakages
President Prabowo Subianto has raised the issue of high leakage in the state budget. According to the government’s calculations, the potential losses amount to more than Rp1,000 trillion. He made the remarks while attending the peak event of the 28th anniversary of the National Awakening Party (PKB) in Jakarta on Thursday evening (23/7).
In his speech, Prabowo referred to assessments by a number of economists that Indonesia’s economy is not yet efficient. He said this is reflected in the country’s Incremental Capital Output Ratio (ICOR), which stands at 6.5.
Prabowo explained that the ICOR shows how much capital must be spent to generate additional economic output. The higher the figure, the lower a country’s level of efficiency.
“ICOR, in foreign terminology, means Incremental Capital Output Ratio. It means that if we want to become one dollar or one rupiah richer, we have to spend 6.5. Other countries can earn one dollar by spending only four dollars. The difference is two dollars. Two out of six, a third. This means 30 per cent of our wealth is leaking,” he said.
According to Prabowo, when linked to the size of the state budget of around US$270 billion, or approximately Rp3,700 trillion, a 30 per cent leakage means more than Rp1,000 trillion is lost.
“The state budget is 270 billion dollars, roughly Rp3,700 trillion. So if 30 per cent leaks, that means more than Rp1,000 trillion is leaking. I am putting a stop to this,” he said.
He affirmed that the government is working to close the various gaps that have long caused budget leakage. One of these is fixing the government procurement system for goods and services, which is often marked by price inflation practices.
“I want to shut down these tricks played by many parties. Yes, we must introspect. We already know, ladies and gentlemen, even in the regions everyone knows what has been happening. Every purchase by government institutions has always had its price inflated. Sometimes the inflation is outrageous. We are putting a stop to this,” he said.
Prabowo claimed that these efficiency measures have begun to show results. In the first few months of his administration, the government is said to have saved up to Rp300 trillion.
Those savings, he said, have been allocated to support a number of priority programmes, including the Free Nutritious Meals Programme (MBG), basic infrastructure development and school rehabilitation.
“This is what we saved in the first few months of the government we lead. We managed to save Rp300 trillion. This is what we use for MBG. This is what we used for the bridges mentioned earlier. We are building 5,000 bridges by December 2026,” said Prabowo.
In addition, he continued, the government is accelerating the renovation of schools that have gone unrepaired for many years.
“Schools are collapsing, collapsing. By the end of the year, I have instructed that 100,000 schools that have gone untouched for a dozen years or so be addressed,” said Prabowo.
On another point, Prabowo criticised media coverage which, in his view, focuses more on the government’s shortcomings than on its development achievements.
“There are also media outlets which, even though we have repaired 27,000 schools, go looking for a school that has not been repaired and put it on the front page. They think we don’t understand. I won’t say which media. In due time I will name them. You already know,” he said.
Nevertheless, Prabowo affirmed that the government continues to respect freedom of expression and does not reject criticism.
“We are a democratic country. We are not anti-criticism. But we are not children. We know there are Indonesians who take pleasure in serving and devoting themselves to other nations,” he declared.