The Indonesian government is currently confronted with a pressing challenge as it still holds a substantial amount of unspent funds, accounting for 60% of the total State Budget (APBN) allocated for the year 2023. This unabsorbed sum stands at an impressive Rp 1,836.6 trillion out of the total APBN of Rp 3,061 trillion, which has raised concerns among policymakers and stakeholders.
During the International Conference on Economic and Finance (ICEF) 2023, Finance Minister Sri Mulyani highlighted the magnitude of the allocated budget, stating, “The total of Rp 3,000 trillion of state budget is an astronomical figure that demands careful consideration and strategic utilization.”
The finance minister reassured that the government remains committed to effectively utilizing these resources to enhance various activities and strengthen the use of domestic products within the country’s economic landscape.
To address this issue, the government has initiated the Policy for Increasing the Use of Domestic Production (P3DN) to stimulate and encourage the use of locally produced goods, aiming to achieve a commendable 95% utilization of domestic products in all procurement expenditures of Ministries/Agencies (K/L) and Regional Governments.
The implementation of P3DN is expected to foster a resilient and self-sufficient economy, reducing dependency on imports and promoting national industries.
The national budget comprises a comprehensive general plan amounting to Rp 1,112.45 trillion, encompassing a total of 5.3 million procurement packages.
However, the realization of this plan remains at Rp 387.81 trillion, with 768,000 procurement packages projected to be executed in the near future. The significant difference between the planned and actual utilization of funds indicates room for optimization in spending and resource allocation.
Finance Minister Sri Mulyani emphasized the importance of maximizing expenditure, stating, “There is still a considerable amount of unspent funds that can be strategically optimized to address pressing economic challenges.” She expressed hope that the remaining six months of 2023 would witness a surge in procurement activities that prioritize domestic products, stimulating local industries and supporting small and medium-sized enterprises (SMEs).
In tandem with promoting the use of domestic products, the government is actively working to bolster domestic production capabilities, focusing on enhancing competitiveness and pricing. These measures aim to provide essential support for local industries, particularly SMEs, which have endured the adverse impacts of the pandemic for the past three years.
As the Indonesian government continues its efforts to absorb the remaining budgetary spending, policymakers and stakeholders are closely monitoring the implementation of P3DN and other economic measures to foster sustainable growth and achieve economic resilience.
The successful utilization of these funds holds the potential to fortify the country’s economy and create a favorable environment for domestic industries to flourish, aligning with the nation’s vision for a self-reliant and robust economic future.