Updating Programme Priorities Amidst Global Uncertainty
Updating the scale of development programme priorities in the midst of uncertainty is not a setback but a necessity. The government’s intention to begin revising programme priorities through its policy on subsidised fuel prices and increasing the effective use of the Free Nutritious Meal (MBG) programme budget deserves appreciation.
Amidst pressure from limited financing, this revision of priorities opens up opportunities to enhance the effectiveness of development budget utilisation. The government’s move to update the priority scale for using development resources is essentially in line with the aspirations frequently voiced by the public.
These aspirations have recently been amplified by the student community through demonstrations in various cities. The essence of their message is clear and simple: a call for frugality for the sake of effectiveness, known in financial governance as being cost conscious.
The limited budget should be used wisely and on target to respond to current challenges or real problems emerging daily, particularly issues directly related to public interests.
The message about cost consciousness is being voiced loudly because the public sees evidence of wasteful and reckless behaviour in utilising budget allocations for certain priority programmes, especially spending on the MBG programme and the development of the Koperasi Desa Merah Putih (KDMP) network.
An example of this waste is the import of trucks and electric motorcycles. The impression of recklessness arises because the imported products are already available in the local market, produced by the domestic automotive industry.
It is worth questioning the unclear utilisation of 21,801 imported electric motorcycles, with a procurement value reaching Rp1.035 trillion. The public has a right to be disappointed and angry because the added value from such a large budget is minimal, especially since part of the import spending is financed by public taxes.
Such a budget could be productive if used as an incentive to restore the performance of millions of micro, small, and medium enterprises (MSMEs). Therefore, the aspiration or pressure for the government to revise programme priorities is highly relevant. One of the aspirations voiced by students during the demonstrations was to stop the waste of the state budget.
It is fortunate that initial efforts to update programme priorities have already begun by the government. The first step is the policy on energy prices. Following the direction of President Prabowo Subianto, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia announced at the State Palace on Thursday (16/4) that the government has ensured subsidised fuel and LPG prices will not increase until the end of 2026. This policy is certainly pleasing to all communities.
Moreover, Minister Bahlil also confirmed that the national energy supply condition remains secure. However, at the same time, everyone knows that a bubble in the subsidised fuel and LPG budget is inevitable.
In the 2026 State Budget (APBN), the energy subsidy budget (fuel and electricity) is set at Rp381.3 trillion. Fortunately, the government has also prepared an additional budgetary cushion from the excess budget balance (SAL) of Rp420 trillion to anticipate a surge in world crude oil prices.
It is therefore reasonable for the government to ensure that the prices of subsidised fuel, such as Pertalite, diesel, and LPG, will not rise until the end of the year. With this priority revision, potential disruptions to business productivity are at least reduced, as energy prices, a factor of production, remain unchanged. Domestic production and distribution costs will not experience a surge.
Besides the policy on subsidised energy prices, the second effort in revising priorities is the suspension of the MBG programme during the school holidays, from 22 June to mid-July 2026. This policy is stipulated in Circular Letter (SE) Number 12 of 2026 concerning Operational Adjustments for the Nutrition Fulfilment Service Unit (SPPG) during the school holiday period.
This policy can save up to Rp3 trillion in the budget as MBG distribution is completely halted. This marks a change in the MBG scheme. In previous periods, such as during Ramadan or school holidays, MBG was still distributed through food packages or bundling.
This initial stage of changing the priority scale does not reflect a setback at all, but rather a smart and tactical step. Its meaning becomes very strategic when linked to the current uncertainty.
The global community had initially welcomed the announcement of a peace agreement between Iran and the United States (US) to end the war.
The agreement was expected to reduce uncertainty because it included a clause to open the Strait of Hormuz for the smooth distribution of world oil. Unfortunately, within days, the peace deal fell apart, and the world is once again shrouded in uncertainty.
Responding to Israeli military action in Lebanon, Iran on 20 June 2026 announced the re-closure of the Strait of Hormuz. Although the fluctuation in oil prices was not significant following the strait’s closure, the international community remains wary of US-Iran tensions.
Thus, it is relevant for the government to respond to this uncertainty by revising programme priorities. As is known, the prices of several basic commodities are still fluctuating due to variable distribution costs.
Rice prices tend to rise. That is why many communities and students are asking the government to make efforts to lower the prices of basic necessities for the public.
Therefore, another option from the effort to change the current priorities is to pay special attention to the prices of basic necessities, which the public truly expects.
After securing subsidised fuel prices, changing the MBG scheme, and so on.