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New Indonesian president's mammoth cabinet may swell national budget

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Benar News - October 22, 2024

Tria Dianti and Arie Firdaus, Jakarta – Indonesian President Prabowo Subianto's newly sworn-in and mammoth cabinet is worrying analysts who fear it may wreak havoc on the national budget.

The United States and China are bigger and far more populated than Indonesia but Prabowo, who took office Sunday, has guaranteed that his cabinet will leave the world's two superpowers in the dust.

He increased the number of ministers, to 53 from the earlier 34, and added 56 deputy ministers to aid them, raising the total personnel count to 109.

Having so many people in charge of the country's affairs will complicate governance and create a host of knock-on problems, analysts said, adding that the strain on finances is among the top concerns.

Galau D. Muhammad, a researcher at the Center of Economic and Law Studies (CELIOS), an Indonesian NGO, said Prabowo's division of positions has the potential to create significant budgetary waste.

"The more deputy ministers appointed, the more state spending will increase, including salaries for support staff, procurement of official cars, office facilities, and payment of pensions for the minister and deputy minister," he said in a Celios report.

Prabowo has also restructured nine existing ministries into 21, so the new ones would need office buildings and other facilities which means additional construction expenses, Celios noted.

Not including these construction costs, the larger cabinet will add U.S. $125 million to the national budget over five years, Celios estimated.

"All of these responsibilities further exacerbate fiscal vulnerability due to debt maturity and declining tax revenues," the NGO said.

Ade Holis, an economist at IPB University, said that the previous administration's expansionary fiscal policies, which were not matched by revenue growth, have left a heavy debt burden.

The government's budget for 2025 is set to allocate 553 trillion rupiah ($35.5 billion) just for interest payments, consuming 15.3% of total spending, he told BenarNews.

Gurnadi Ridwan, a public budget policy researcher, said "the costs could reach billions of rupiah" for each new ministry and agency.

Additionally, "adjustments would be needed for the salaries and allowances of leaders in these new entities," Gurnadi, from the Forum Indonesia for Transparency in Budgeting, told BenarNews.

The Prabowo administration views this differently.

Indonesia's vastness necessitates a more focused approach to governance that requires more ministers, presidential spokesman Hasan Nasbi told reporters.

"This is not a bloated cabinet; rather, it is one that is much more focused," Hasan said.

Celios says, though, that appointing a large number of ministers is not the way to boost government efficacy because that could increase red tape and lead to budgetary waste.

"The United States, with a population of around 346 million people, only has 15 executive departments at the ministerial level," Celios noted.

"Even China, as the country with the largest population in the world, reaching more than 1.4 billion, only has 21 ministries."

When reporters asked Finance Minister Sri Mulyani Indrawati about this, she said she intended to assess the economic impacts of the cabinet structure. Mulyani is one of only five women in the new cabinet.

"We will look into this first," she told reporters on Monday, without elaborating on whether the assessment was something the president had requested or the finance ministry was undertaking of its own accord.

Prabowo's appointments, analysts say, have not reduced patronage but increased the number of people with power, which would widen inequality and inefficiency because the best people were not chosen for the jobs, analysts further said.

"This cabinet is driven by political payback rather than professional qualifications," Celios' Galau told BenarNews.

"It reflects a system where cabinet positions are handed out as political rewards."

In addition, the cabinet's size could cause regulatory overlaps, Septa Dinata, a researcher at the Paramadina Public Policy Institute, told BenarNews.

"This poses a significant challenge for the new president in terms of oversight and ensuring each ministry operates according to its designated functions," he told BenarNews.

For instance, the newly established National Nutrition Agency may end up performing some of the same functions as the Ministry of Health, said Diah Satyani Saminarsih, CEO of the Center for Indonesia's Strategic Development Initiatives.

"This could lead to confusion and duplication of efforts since the Ministry of Health already has a directorate for nutrition and maternal and child health," she told BenarNews.

Ministries need to have a clear delineation of roles to avoid conflicting regulations, she added.

One way to minimize budgetary waste, Celio said, is strengthening the budget oversight mechanism and ensuring transparency in managing of public resources.

"Strengthening the function of institutions such as the Audit Board of Indonesia (BPK), the Corruption Eradication Commission (KPK), and the Supreme Court (MA) is the last guard to ensure accountability," Celios said.

For political analyst Hendri Satrio from Paramadina University the prognosis is gloomy.

"This cabinet may only start functioning normally in the third year of its term. The first two years will primarily focus on adaptation and socialization," he told BenarNews.

And by the fourth year, Hendri said, the administration will likely be preparing for the next election.

Source: https://www.benarnews.org/english/news/indonesian/prabowo-mammoth-cabinet-strain-on-budget-10222024142733.htm

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