Jakarta (VOA) —
President Joko Widodo said the 2024 State Revenue and Expenditure Bill (RUU) proposed a salary increase for Central and Regional ASN, including / TNI / Polri, by 8 percent, and an increase for retirees by 12 percent.
In the Submission of the 2024 RAPBN and Financial Notes, at the RI MPR/DPR Building, Senayan, Jakarta, Wednesday (16/8), President Jokowi added that the salary and pension increases for ASN “are expected to improve performance and accelerate economic transformation and national development.”
He explained that improvements to the welfare, benefits and remuneration of ASNs were carried out based on performance and productivity. In addition, the implementation of bureaucratic reform, said Jokowi, must still be carried out consistently and effectively and efficiently.
On this occasion, Jokowi also estimates that Indonesia’s economic growth next year will reach 5.2 percent. In order to achieve this, he said, the country’s macroeconomic stability must be maintained with a situation that remains conducive ahead of the simultaneous elections and local elections in 2024. In addition, he said, inflation will be maintained at around 2.8 percent.
Jokowi revealed that the average rupiah exchange rate is expected to move in the range of IDR 15,000 per US dollar; the average 10-year Government Securities interest rate is predicted to be at the level of 6.7 percent; the price of Indonesian crude oil (Indonesian Crude Price/ICP) is USD 80 per barrel, and the lifting (sales) of oil and gas are estimated to reach 625 thousand and 1.03 million barrels of oil equivalent per day, respectively.
This macro assumption for next year, said Jokowi, is not without reason. Indonesia is claimed to have succeeded in overcoming the challenges of the COVID-19 pandemic by becoming one of the countries that has successfully handled the health crisis quickly. In addition, he said, Indonesia is also claimed to be one of the few countries with a fast, consistent and inclusive economic recovery.
“Economic growth over the last seven quarters, since the end of 2021, has consistently been above 5.0 percent,” he said.
Containers being loaded onto a cargo ship at Tanjung Priok Port, Jakarta, March 28, 2023. (Photo: Adek Berry/AFP)
This, he said, was also evident from the unemployment rate which had managed to fall from 6.25 percent in February 2021 to 5.45 percent in February 2023. In addition, the poverty rate also continued to decline to 9.36 percent in March 2023 from 10, 19 percent in September 2021. Extreme poverty is also said to have fallen from 2.04 percent in March 2021, to 1.12 percent in March 2023.
“The 2024 State Budget architecture must be able to respond to economic dynamics, respond to challenges and optimally support the development and welfare agenda, accelerate economic transformation, maintain quality, inclusive and sustainable economic growth momentum, protect people’s purchasing power from shocks, and maintain a positive posture. The APBN remains healthy and sustainable in the medium-long term,” said Jokowi.
He added that the 2024 State Budget was designed to answer current challenges as well as in the future. Thus, the 2024 State Budget policy is directed at “Accelerating Inclusive and Sustainable Economic Transformation,” he explained.
Realistic 5.2 Economic Growth
CORE Indonesia economist Muhammad Faisal said that next year’s economic growth target which is set at 5.2 percent is difficult to achieve even though next year is a political year. This is due to global conditions that are still uncertain.
Various international financial institutions, he said, are still predicting global economic growth to be the same as this year’s, namely only three percent. This indicates that global conditions have not fully improved.
For 2023, for example, the realization of economic growth in the first semester is 5.1 percent, still 0.2 percent behind the 5.3 percent growth target stated in the 2023 State Budget.
“In my opinion, up to the end of the year, being able to remain at 5.1 percent is already good, and the risk could even be lower than 5.1 percent. So we see next year’s target of 5.2 percent. The possibility of slipping below 5.2 percent is very possible, not impossible, but difficult if you use the same methods,” said Faisal.
A scavenger binds cardboard boxes for sale at recycling centers in Jakarta, February 22, 2022. (Photo: Bay Ismoyo/AFP)
Furthermore, Faisal said that the salary increases for ASN and pensioners did not help much to boost economic growth because their numbers were limited compared to the population in the country. The increase in ASN salaries, he said, is also often followed by an increase in inflation which the government must pay attention to.
Talking about the level of poverty that is claimed to be reduced, Faisal said, that is not entirely true. The reason is, the poverty alleviation strategy being carried out now by the government is by providing social assistance so that it will not solve the problem.
“The number of people under the poverty line is decreasing but decreasing doesn’t mean that they are prosperous, they don’t go up to prosperity. They are still around the poverty line, just not below but they are still in the category of people who get social assistance, which means they are not prosperous. The problem of poverty will not be solved because the approach still uses social assistance. Even though the main thing is from empowerment so that their income increases,” he explained.
The government must also be careful in creating jobs. The reason is, inviting a lot of investment does not mean the economy in a region will increase.
“For example, with downstream investment, then poverty can be overcome, it can’t. The proof is in Central Sulawesi, North Maluku, when investment came in for a nickel smelter, economic growth immediately doubled. Poverty? let alone instead of going down, instead going up,” said Faisal.
“So, that means he can’t with jargon as it is said that investment creates jobs and alleviates poverty and it doesn’t happen,” he explained.
According to Faisal, job creation should be in accordance with the characteristics of people living around the poverty line.
“Their education is not very high, so what can they do? Not far from labor-intensive jobs that are close to their lives, such as in the primary sector, not far from agriculture, fisheries and micro-enterprises which must be really encouraged so that their income increases,” he concluded. (gi/ab)