The Public Works and Housing (PUPR) Ministry is seeking a budget of Rp 149.8 trillion (US$10.1 billion) for 2021 – a 42.7 percent increase from this year’s allocation – in part to fund infrastructure projects to support the nation’s economic recovery.
PUPR Minister Basuki Hadimuljono said on Thursday that the ministry would focus on six priority programs next year: food security, connectivity development, public health development, attracting investment in strategic regions, providing a social safety net through labor-intensive projects and disaster mitigation enhancement.
“From the Rp 149.8 trillion budget allocated in 2021, we will allocate Rp 18.14 trillion for the labor-intensive cash-for-work [PKT] program. The program will receive a higher allocation than this year’s budget of Rp 12.32 trillion,” Basuki said.
The ministry allocated Rp 11.5 trillion for the PKT portion of the program and Rp 654 billion for the labor-intensive work portion this year, providing jobs for an estimated 680,000 workers amid a wave of unemployment during the health crisis.
Indonesia’s economy contracted 5.32 percent in the second quarter of this year as domestic consumption, business investment and government spending fell significantly. The government expects the economy to contract 0.2 to 1.1 percent this year.
Finance Minister Sri Mulyani Indrawati said on Wednesday that Indonesia’s economic recovery in 2021 may not be at “full power”, as the government expected the COVID-19 pandemic to continue to dampen domestic consumption and investment until next year. Given these challenges, the government expects the economy to grow 4.5 to 5.5 percent next year.
To augment food security and resiliency, Basuki said the ministry would allocate Rp 6.47 trillion for a food estate program in Central Kalimantan. The program aims to transform 165,000 hectares of land previously administered by the Peatland Development Project (PLG) into farmland.
“We will start improving the food estate zone’s irrigation system and accessibility by October. We will continue developing the 133,000 hectares of land by 2021, and hopefully, we can start planting crops next year,” he said.
The 2021 state budget is under deliberation in the House of Representatives and must be approved by the legislature before taking effect.
