Indonesian president warns cabinet against overspending

JAKARTA (Reuters) – Indonesian President Joko Widodo on Monday urged his ministers to maintain a “healthy” state budget in anticipation of global geopolitical and economic risks and as the country gears up for elections next year.

Speaking during a routine cabinet meeting, Jokowi, as the president is known, highlighted outsized spending by the country’s security agencies including the defence ministry which has been modernising Indonesia’s ageing military equipment.

“We have to maintain a healthy state budget. We need to be focused and alert for the risk of crisis,” Jokowi said, warning that ministers must “be careful on purchasing goods”. He also highlighted high spending by the national police and intelligence agencies.

Defence Minister Prabowo Subianto, who is set to mount a third bid for the presidency next year, in January finalised an $800-million deal to buy 12 Mirage 2000-5 fighter jets, which some critics said were too old.

Indonesia also bought 42 Rafale fighter jets for $8.1 billion in February and is in the advanced stages of finalising a deal to buy F-15 fighter jets, according to Prabowo.

The defence ministry’s total budget was pegged at 134.3 trillion rupiah ($8.93 billion), while the country’s total spending was estimated to reach 3,061 trillion rupiah ($200 billion) in 2023, according to the finance ministry.

The government is targeting a 2023 budget deficit of 2.84% of GDP.

Jokowi also urged his ministers to help maintain political and economic stability ahead of the 2024 polls when the world’s third-largest democracy will choose lawmakers and a new president.

($1 = 15,038.0000 rupiah)

(Reporting by Ananda Teresia; Editing by Kanupriya Kapoor)