Revolution Needed in National Social Programme Financing to Avoid Burdening the State Budget

Indonesia is considered to be entering a new phase of national development. After decades of focusing on physical development, infrastructure, and economic growth, the nation’s attention is now directed towards human development as the main foundation towards a Golden Indonesia 2045. Amid this spirit, the Free Nutritious Meals (MBG) programme has emerged as one of the most ambitious policies in the history of the Republic of Indonesia. This programme is not merely about food provided to school children or vulnerable groups, but about a long-term investment in building a healthy, intelligent, productive, and globally competitive generation. “Various studies show that nutritional quality has a direct correlation with intelligence levels, health, work productivity, and the economic capacity of a nation. Developed countries that are now global economic powers generally began human development through nutritional interventions from an early age,” said Nurhidayat, a member of the PKB faction in the Karimun Regency DPRD, Riau Islands, in a statement on Tuesday (23/6). Therefore, he said, the MBG programme is actually not a consumptive programme as perceived by some circles. This programme is a strategic state investment in building the quality of Indonesia’s human resources. However, behind this grand idea, there is one fundamental question that is still a matter of public debate. One of them, said Nurhidayat, concerns the long-term financing source for MBG. This is highly relevant considering the MBG budget requirement is estimated to reach hundreds of trillions of rupiah each year if implemented fully across Indonesia. “If all financing is charged to the State Revenue and Expenditure Budget (APBN), there is a risk of considerable fiscal pressure in the future. The state must still finance education, health, defence, infrastructure, energy subsidies, social protection, and regional development,” he explained. Under such conditions, he continued, innovative, sustainable financing breakthroughs are needed that do not solely rely on the APBN. This is where the idea of optimising national corporate social responsibility (CSR) funds through the state’s strategic investment holding, Danantara, becomes interesting to examine. According to him, many parties still view CSR as a form of voluntary social assistance or ceremonial corporate activities manifested in the form of distributing basic necessities, aid for places of worship, compensation for orphans, or other social activities. Nurhidayat stated that this view is actually no longer relevant to the development of modern corporate governance. At the global level, CSR has evolved into part of the environmental, social, and governance (ESG) concept, which is the main standard for corporate sustainability. Companies are no longer judged solely by the size of their profits, but also by their contribution to society and the environment. In a modern perspective, a company is not merely an economic entity, but a corporate citizen that has a social responsibility towards national development. “This concept gives birth to a new paradigm that national development is not only the government’s task, but a shared responsibility between the state, the business world, and society,” he clarified. If company profits are obtained from economic activities that utilise the nation’s resources, it is only proper that a portion of these economic benefits is returned to society through measurable and sustainable social investments. Nurhidayat added that Indonesia actually has extraordinarily large CSR potential. Thousands of national and multinational companies allocate very significant CSR funds each year. If it is assumed that total national corporate profits reach Rp2,000 trillion per year and the average CSR allocation is 2 percent, the potential national CSR funds could reach around Rp40 trillion annually. This figure even exceeds the regional budgets of many provinces in Indonesia. Unfortunately, this large potential has not yet yielded optimal social impact. The main problem with Indonesian CSR lies not in a lack of funds, but in weak integration and coordination. CSR implementation remains partial, fragmented, unmeasured, overlapping, and uneven between regions. Large industrial areas enjoy an abundance of CSR programmes, while underdeveloped regions often do not receive adequate benefits. “Many companies run similar programmes in the same locations, while other areas are completely untouched. As a result, the great potential of national CSR has not been able to become a strategic instrument for building public welfare,” Nurhidayat explained. According to Nurhidayat, the presence of Danantara opens up space for the birth of a new paradigm in financing Indonesia’s social development. As a sovereign strategic holding, Danantara possesses capacities that other institutions do not have. “Danantara has the potential to become a national coordination node connecting investment, economic development, SOE governance, and the social welfare agenda. In this context, Danantara can be developed as a National Coordinating Holding for the integration of national CSR funds,” he asserted. The roles that can be carried out include building a national CSR database; integrating social programme planning; compiling a map of community needs; supervising aid distribution digitally; providing a public transparency dashboard; and measuring social impact nationally. This model does not mean taking all corporate CSR funds and turning them into a new tax. On the contrary, companies still have the space to run CSR programmes independently.