Prabowo's Efficiency Plan: Learning from Pakistan's Model
JAKARTA – President Prabowo Subianto has floated efficiency measures amidst the prospect of Indonesia’s state budget deficit exceeding 3 per cent.
The greatest pressure comes from potential surges in oil prices following Iran’s closure of the Strait of Hormuz, the world’s most vital oil shipping route, due to Middle East conflicts.
Coordinating Minister for the Economy Airlangga Hartarto stated that in the worst-case scenario without efficiency measures, the fiscal deficit could reach 4.06 per cent of Gross Domestic Product (GDP).
“In other words, with these various scenarios, maintaining a 3 per cent deficit is difficult for us. Unless we want to cut spending and cut the President’s growth targets. So, these are some scenarios we may need to discuss in a limited session,” said Airlangga, whilst briefing President Prabowo at a full cabinet session at the State Palace last week.
The efficiency plan was first directed by President Prabowo during a full cabinet session at the State Palace. During the session, he presented Pakistan’s approach to responding to Middle East conflicts through budget cuts. Pakistan has categorised the US-Iran conflict as a critical situation, calling it “critical measures”. Consequently, the Head of State requested that the Indonesian government study this approach.
“This is just an example, mind you. I mean, it’s been a few days, and I think we can examine this matter. I believe we should also make efforts to implement savings,” said Prabowo on Friday.
Prabowo outlined the steps Pakistan has taken. The country has implemented 50 per cent work-from-home (WFH) for government offices and private companies. Working days have been reduced to four. Pakistan has cut salaries for parliament members. Members of parliament receive a 25 per cent salary reduction, whilst cabinet members receive no salary.
Subsequently, Pakistan’s government has slashed 50 per cent of fuel consumption for all ministries and agencies; made 60 per cent of government vehicles unavailable for use at all times; and suspended ministry spending on air conditioning, vehicles and furniture for an indefinite period.
Additionally, learning at all higher education institutions has been shifted to online delivery. School activities have also been suspended for two weeks.
According to Prabowo, this could serve as an example for Indonesia to implement savings. “So, I’m asking for this to be discussed later, perhaps by the ministers, within a few days, and we can see. Let us think. We once dealt with COVID-19, and we succeeded. We were capable,” said Prabowo.