State-Budget Cuts Set to Hit Indonesia?s Law-Enforcement Institutions

Indonesian Version  

Marcell Sihombing, CR-20

 

 
Through the issuance of Presidential Directive No. 8 0f 2016 dated 26 August 2016 (Inpres 8/2016), President Joko Widodo is demanding that 85 ministries/institutions under his direct administration utilize their budget allocations, as set out under the Amendment to the 2016 State Budget, more sparingly. This is President Widodo’s second directive demanding a more effective utilization of state budget allocations to be issued this year.
 
Previously, President Widodo issued Presidential Directive No. 4 of 2016 on 12 May 2016 (Inpres 4/2016) which addressed the same issue. Under the Inpres 4/2016 directive, the government has already slashed some IDR 50.02 trillion from the total budget allocation of IDR 784.1 trillion for Indonesia’s ministries/institutions.
 
A post made on the Secretary of the Cabinet’s official website last Monday stated that the Inpres 8/2016 directive has to date cut a further total of IDR 64.7 trillion from the total budget allocation mentioned above. According to President Widodo’s directive, this target has been achieved by cutting the budgets of some of the nation’s lower priority programs.
 
Furthermore, the Appendix to the Inpres 8/2016 directive specifies details of the budget cuts for each of the ministries/institutions involved. The Financial Transaction Report and Analysis Center (PPATK) has sustained the smallest cut of IDR 2.744 billion, while the Ministry of Defense will have to absorb the biggest cut of IDR 7.933 trillion.
 
It is important to note however that several institutions will not be subject to any budgetary cuts at all, namely the People's Consultative Assembly (MPR), the House of Representatives (House), the Regional Representatives Council (DPD) and the Ministry of Women’s Empowerment and Child Protection.
 
Commenting on this issue, Roy Salam, the Executive Director of the Indonesia Budgeting Center, explained that the House also possesses the authority to evaluate the ongoing utilization of the state budget. Therefore, Mr. Salam concluded, the new budgetary allocations may well be credible but may also lead to a significant round of political lobbying between the government and the House.
 
Budgetary Cuts to Law-Enforcement Institutions
 
As mentioned above, the various budgetary cuts set out in the Inpres 8/2016 directive apply to 85 ministries/institutions, including one ministry and several institutions in the law-enforcement sector. Of these, the Ministry of Law and Human Rights will have to absorb the biggest budgetary cut of IDR 550.908 billion.
 
Following that comes the National Anti-Narcotics Agency (BNN) with a IDR 459.400 billion budgetary cut, The Supreme Court (MA) with a IDR 192.536 billion cut, the Corruption Eradication Commission (KPK) with a IDR 13.001 billion cut, the Constitutional Court (MK) with a IDR 10.849 billion cut, and finally the Judicial Commission (KY) with a IDR 3.873 billion cut.
 
It is interesting to note that BNN and the MA, both currently in the spotlight for being two of the country’s most corrupt institutions, will be subject to the largest cuts of all of Indonesia’s law-enforcement institutions.
 
Mr. Salam, however, asserts that the budgetary cuts for these two institutions must have been properly discussed and appraised by both the Ministry of Finance and the Secretariat Generals of each respective institution, and thus have presumably set realistic targets.  
 
Mr. Salam also emphasized that the main objective of any budgetary cut is to minimize budget deficits and also to reformulate any given performance-based budget. After all, the state budget is an instrument which is used to achieve certain predetermined targets which are in turn based upon the government's priorities.
 
“The president has the authority to set out priority guidelines for national development, which should then be translated into various programs by each respective ministry/institution. Thus, any programs which are formulated by the ministries and other institutions must conform to the priorities originally set out by the President,” asserted Mr. Salam.
 
As background information, any amendments which are made to a given state budget should be based upon the development of state priorities and must be stipulated in accordance with Government Regulation No. 90 of 2010 on the Formulation of Budgets and Work Plans for Government Ministries/Institutions (2010 Regulati0n). In compliance with the 2010 Regulation, the Minister of Finance may then issue technical guidelines for the amendment of any budget allocations.
 
Furthermore, Article 7 of the 2010 Regulation also requires ministries/institutions to evaluate the implementation of their current programs and activities in accordance with the president’s instructions and development priorities.
 
The results of any such evaluationshould then become the basis upon which each ministry/institution formulates the required budget plan. Such plans should then be submitted to the National Development Planning Agency (Bappenas), as well as to the Ministry of Finance. These are the two government institutions which are authorized to evaluate the implementation of any ministry or institution’s current programs and activities, as well as to review and analyze any new plans that they formulate, which should aim towards both feasibility and efficiency .
 
(cd/sp)