Jokowi to Regional Leaders: Use Regional Budget to Control Inflation

JAKARTA, KOMPAS.com - President Joko “Jokowi” Widodo has ordered regional leaders to set aside a portion of their regional budget for measures to control the inflation triggered by the recent hike in subsidized fuel prices.

“I urge governors, district heads, and mayors to ensure regions collaborate with the central government, just like how we collaborate in addressing the Covid-19 pandemic. I believe, God willing, we can do this to control the inflation from surpassing the 5-percent level,” State News Antara quoted Jokowi during a meeting on inflation control at the State Palace on Monday, Sept. 12.

Also present during the meeting were Vice President Ma’ruf Amin, cabinet ministers, and regional heads.

The fuel price hike could contribute up to 1.8 percent to inflation, and therefore, efforts must be taken to prevent an inflation surge, the President said.

The home affairs and finance ministers have issued a circular instructing regional heads to allocate a portion of their regional budget to reduce inflation in their respective regions, he said.

Also read: Fuel Price Hike to Push Inflation Rate to Over Six Percent: Indonesia

The finance ministry has also issued a regulation asking regional heads to utilize two percent of their region’s general transfer funds (DTU) to assist local micro small medium enterprises (MSMEs), subsidize local public transportation, and provide new jobs, he said.

“The regulation includes that two percent of the general transfer funds, which means the general allocation funds (DAU) and the profit-sharing fund (DBH), can be utilized for subsidies to address issues caused by the fuel price hike,” Jokowi said.

Up to two percent of the general transfer funds can also be used for unforeseen contingencies, such as to provide logistics subsidies for transporting extra commodities to alleviate commodity price increases in the regions, he added.

“If all regions commit (to this action), we can hold the inflation from surging further,” he said.