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.

Cities, provinces with high inflation rates

The 10 districts and cities with the high inflation rates are Luwuk at 7.8 percent; Jambi, 7.8 percent; Kotabaru, 7.5 percent; Sampit, 7.5 percent; Tanjung Selor, 7.4 percent; Jayapura, 7.4 percent; Sintang, 7.4 percent; Bungo, 7.2 percent; Padang, 7.1 percent; and Sibolga, 6.9 percent.

“Five out of the 10 provinces, be careful. Please observe them thoroughly. These five provinces are on Sumatra island,” Jokowi added.

Meanwhile, the provinces with the high inflation are Jambi, at 7.7 percent; West Sumatra, 7.1 percent; Central Kalimantan, 6.9 percent; Maluku, 6.7 percent; Papua, 6.5 percent; Bali, 6.4 percent; Central Sulawesi, 6.2 percent; West Nusa Tenggara, 5.9 percent; Riau, 5.9 percent; and South Kalimantan, 5.8 percent.

Also read: Indonesia Records Inflation at 1.68 Percent in 2020

“Once again, be cautious. If it is not intervened, then there will be an increase in poverty,” the head of state said, adding that the inflation rate is influenced by the increase in food prices.

“We should know the consequences of inflation, especially those related to food prices. The contribution of food prices to poverty is 74 percent. Once food prices rise, it means that poverty (rate) in a region will also increase,” he explained.

To this end, the President called on all regional heads in provinces, districts, and cities throughout the country to be aware of their food supply chains.

He also called to continue to increase the realization of the regional budget (APBD) since it still reached 47 percent as of September 2022.

Source: State News Antara