This is the third time the Indonesian government has raised the budget for its National Economic Recovery (Pemulihan Ekonomi Nasional or PEN) program, of which the efforts to accelerate the disbursement of the funds still need to be accelerated, according to the Finance Ministry.
The Indonesian government has again increased its budget for the National Economic Recovery program to Rp 695.2 trillion (US$49.19 Bn) from Rp 677.2 trillion previously. This Rp 18 trillion increase is meant to support various programs that include healthcare, social security, business incentives and corporate financing.
The increase involves mainly an additional Rp 9 trillion for corporate financing, as well as an additional Rp 9 trillion for government institutions and regional governments to fund their efforts in restoring the economy in its respective sectors and regions.
鈥淲e continually hope that we would no longer have a COVID outbreak and that our economic recovery can move on gradually. Thus, (the additional financing) is needed in order to ensure a positive momentum for the third quarter that would also continue on to the fourth quarter,鈥� Finance Minister Sri Mulyani said in a virtual press conference, Tuesday, June 16, as quoted by Media Indonesia.
The allocation for the remaining funds saw no further changes, with Rp 87.55 trillion for healthcare, Rp 203.90 for social security, Rp 120.61 trillion for business incentives, and 123.46 trillion for small-and-medium-sized enterprises.
Implementation Gap
During that same press conference, Finance Minister Sri Mulyani noted a gap between the funds that have been allocated and the financial and physical realization of the programs funded.
For example, she said, only 1.54% of the healthcare program, towards which the funds were allocated, have been realized, calling for further acceleration in the implementation of the healthcare programs. For social security, about 28.63% of the funds have been channeled. Additionally, for business incentives, only 6.8% of the funds have been used as there were still many businesses that have not applied or are not applying.
She further noted that the Finance Ministry has started monitoring the usage of the PEN funds since the beginning of June, 2020, and that her Ministry pledges to continue improving the disbursement of the funds in ensuring the effectiveness of the program.