Summary
Highlights
President Prabowo Subianto opens his address by acknowledging various state officials and political party leaders. He then introduces the main agenda: presenting the macroeconomic framework and fiscal policy outlines for the 2027 State Budget (RAPBN). He emphasizes that the state budget is not merely a financial document but a crucial tool for national struggle, protecting citizens, strengthening the economy, and ensuring their well-being, guided by the 1945 Constitution.
President Prabowo details key economic targets for 2027: national revenue is projected to be between 11.82% and 12.40% of GDP, while state expenditure is planned at 13.62% to 14.80% of GDP. The budget deficit will be maintained within 1.80% to 2.40% of GDP. Other targets include a 10-year government bond interest rate between 6.5% and 7.3%, an exchange rate of IDR 16,800 to IDR 17,500 per US dollar, and an inflation rate of 1.5% to 3.5%. Crude oil prices are estimated at USD 70-95 per barrel, with increased oil and gas lifting targets. Economic growth is projected at 5.8% to 6.5% in 2027, aiming for 8% GDP growth by 2029, accompanied by significant reductions in poverty and unemployment rates.
President Prabowo expresses concern over Indonesia's low state revenue and expenditure ratios compared to other G20 nations, despite being rich in natural resources like palm oil, coal, and nickel. He highlights that despite 35% economic growth over the past seven years, poverty has increased and the middle class has shrunk, signaling a flawed economic trajectory. He reveals that over 22 years, USD 343 billion of Indonesia's national wealth has flowed out due to practices like under-invoicing, transfer pricing, and smuggling, leading to insufficient funds for public services and national development.
The President reiterates the importance of Article 33 of the 1945 Constitution, which mandates that the economy be structured on cooperation, with vital production branches controlled by the state for the people's prosperity. He announces a new government regulation on raw material export governance, requiring sales through designated state-owned enterprises (BUMN) as a single exporter for commodities like palm oil, coal, and ferro alloys. This policy aims to crack down on illegal practices and optimize state revenue, learning from other resource-rich nations like Saudi Arabia and Malaysia. The government also strengthened regulations on export proceeds to ensure they benefit the nation.
President Prabowo advocates for an 'Indonesia Incorporated' economic model, balancing state intervention with a dynamic private sector. He emphasizes nurturing new entrepreneurs and providing support like startup credits, while urging state-owned banks to prioritize lending to those in need at lower interest rates. He criticizes bureaucratic inefficiencies and corruption, calling for swift reforms in customs and other government institutions to foster an investor-friendly environment. He warns corrupt officials that modern technology will be used to detect illegal activities and hidden wealth, urging citizens to report misconduct by public servants.
President Prabowo notes Indonesia's growing international respect and its ability to assist wealthier nations. He highlights the country's success in achieving food self-sufficiency in a year, boosting rice reserves, and reducing fertilizer prices for farmers. He also shares the 'Free Nutritious Meals' program benefiting millions, particularly children and pregnant women. He announces the establishment of the Danantara Sovereign Wealth Fund, managing over USD 1 trillion, to accelerate industrialization, create jobs, and develop domestic industries. Goals include increasing formal employment, establishing thousands of Red and White cooperatives, reducing dependence on imported fuel by converting to palm oil-based diesel and electric vehicles, and building 100 GW of solar power within three years.
The President concludes by thanking the DPR for their time and expressing respect for all political parties, including those not part of the government (PDIP). He stresses the importance of constructive criticism for a healthy democracy and acknowledges PDIP's role in providing checks and balances. He recalls how former President Megawati Soekarnoputri supported him during a difficult time, emphasizing the need to uphold fair practices regardless of political affiliation. He ends with a call for divine guidance, shared commitment, and continued struggle to realize the founding fathers' dream of a prosperous and independent Indonesia.