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Indonesia's economic chief addresses World Bank's concerns over free lunch program

Jakarta Globe - March 1, 2024

Arnoldus Kristianus, Jakarta – Chief Economic Minister Airlangga Hartarto has addressed the recent comments from the World Bank regarding the potential impact of the free lunch program on the 2025 State Budget (APBN).

Responding to the World Bank's mention of a 3 percent deficit, Airlangga stated, "Who said the deficit would be 3 percent? The Bank doesn't even know the details of the program," Airlangga said at his office in Jakarta on Thursday.

Airlangga emphasized that discussions with the World Bank on Tuesday focused on the opportunities and challenges of Indonesia's economy amidst global economic uncertainties, without delving into the financial implications of the programs.

During the meeting, Airlangga mentioned that discussions revolved around the projected deficit of the 2025 State Budget, ranging between 2.4 percent and 2.8 percent.

In a related development, the Indonesian government conducted a trial run of the nationwide free meal program initiated by the projected winner of the presidential election, Prabowo Subianto. The trial featured a menu consisting of chicken rice, boiled egg rice, siomay (fish cake), and gado-gado (salads with spicy peanut sauce).

The proposed budget for the program is approximately Rp 15,000 ($1) per child per day, excluding the provision of milk. The program aims to cover around 82.9 million students gradually until 2029, with an estimated budget of Rp 400 trillion ($25.5 billion).

The World Bank has advised caution in implementing the president's free lunch program, urging Indonesia to adhere to the specified upper limit of the fiscal deficit at 3 percent of GDP, as mandated by law, to maintain macroeconomic and fiscal stability. Satu Kahkonen, the Head of the World Bank Representative for Indonesia and Timor-Leste, emphasized the importance of measured execution, considering both cost and resource availability, for the estimated Rp 400 trillion program cost.

Source: https://jakartaglobe.id/business/indonesias-economic-chief-addresses-world-banks-concerns-over-free-lunch-progra