Hashim Says Budget Efficiency Will Be There Every Year, Can Be Invested in Danantara

JAKARTA, KOMPAS – The budget efficiency policy currently being implemented by the government, amounting to a total of Rp 308 trillion, is planned to be carried out annually. The funds collected from the budget cuts will most likely be invested in the Investment Management Agency of Daya Anagata Nusantara or BPI Danantara.

This was conveyed by the younger brother of President Prabowo Subianto, who also serves as the President's Special Envoy for Climate and Energy Affairs, Hashim Djojohadikusumo, while speaking at the CNBC Economic Outlook event at the Westin Hotel, Jakarta, Wednesday (26/2/2025).

Hashim stated that Prabowo's administration plans to routinely implement budget efficiency measures, which he referred to as "efforts to trim the excess fat" from the State Budget (APBN). The amount is approximately 20 billion US dollars or equivalent to Rp 326 trillion annually.

The first phase of budget efficiency was carried out in 2025 with a value of Rp 308 trillion based on Presidential Instruction (Inpres) Number 1 of 2025. The process has now been completed by all ministries and institutions (K/L) as well as regional government ranks through the reduction of Transfer to Regions (TKD) budgets.

Previously, during the launch of BPI Danantara, Prabowo also emphasized that the approximately Rp 300 trillion in savings achieved by his administration within the first 100 days would be invested in Danantara as initial capital.

"So, the 20 billion US dollars (has been implemented) this year. Next year, Mr. Prabowo and the government are optimistic there will be an additional 20 billion US dollars. After that, 20 billion US dollars every year. Why? Because our state budget will continue to grow, but leakages, excesses, and absurd programs will still be eliminated," said Hashim.

He stated that with an efficiency of around 20 billion US dollars carried out each year, a total of 100 billion US dollars or IDR 1,638 trillion could be accumulated within five years of Prabowo's leadership or until 2029. He referred to these funds as "equity" or the net wealth value owned by Indonesia.

To maximize its benefits, the efficiency results of 20 billion US dollars each year can be invested in BPI Danantara. Through a co-investment scheme with foreign investment funds targeted at 20 billion US dollars, there will be a total equity of 40 billion US dollars developed through Danantara and used to finance development.

"If we can double it through Danantara, with leverage 3-4 times, every year it means around 160 billion US dollars. So, you can understand why I am optimistic," said Hashim.

Deputy Finance Minister Suahasil Nazara who was present at the same event was reluctant to comment on Hashim's statement. He only smiled and waved his hand in response to reporters' questions.

In the dialogue session, Suahasil said that the results of budget efficiency will be allocated to important activities that can drive the economy, including the Free Nutritious Meals (MBG) program.

"The point is, fiscal policy must really hit the points of economic growth. Fiscal policy that can create a bigger multiplier effect and encourage the economy to grow faster," he said.

Meanwhile, Senior Economist Raden Pardede reminded the government to openly communicate the budget efficiency policy. Especially, related to the utilization of efficiency results.

"Is it allocated well to productive places and the timing is right? This is what I think should be communicated to the public at large. That is what the market is actually waiting for," said Raden.

Researcher of the Department of Economics of the Center for Strategic and International Studies (CSIS) Riandy Laksono reminded of the same thing. He assessed that the government does not yet have a clear and concrete plan regarding the utilization of efficiency results. "Presidential Instruction 1/2025 only mentions the cuts, but the reallocation is not clear," he said.

He also warned that Danantara should not burden the APBN. Currently, the formation of the new institution can be said to have added to the burden of the APBN. This is because, to inject initial capital for Danantara, the government must cut the budget by Rp 308 trillion.

"This is risky because the source of funds for Danantara is not from excess government funds, but is taken when our APBN is in a difficult condition. If Danantara is mismanaged, it could become a new burden for the APBN," he said.