The 2014 state budget, which is supposed to shape a constructive legacy for President Susilo Bambang Yudhoyono's final year in office, has drifted into an array of inconsistencies.
Economists have praised the budget, which was endorsed by the House of Representatives on Friday, for its sound macro-economic assumptions, but they have said it lacks a focus on spending priorities for basic public services and for boosting economic activity.
Expenditure on civil service wages and pensions has soared by 13 percent while infrastructure spending by the Public Works Ministry has been cut by 10 percent. The Energy and Mineral Resources Ministry and the Agriculture Ministry have also fallen victim to budget cuts of 6 and 5 percent, respectively.
For the third year, the military will be the largest budget recipient, followed by the Education Ministry, the Public Works Ministry, the Religious Affairs Ministry and the Health Ministry.
The Religious Affairs Ministry received a surprising 10 percent increase in its budget to Rp 49.6 trillion (US$4.5 billion) while the National Police, which will shoulder the immense task of securing the 2014 elections, has seen its budget cut by 12 percent to Rp 41.5 trillion.
According to the Finance Ministry, the Religious Affairs Ministry has enjoyed an average 25 percent annual rise in its budget since 2008, higher than the 6 percent annual rise given to the Research and Technology Ministry.
Such policies seem to contradict the government's budgetary note in August that served as a guideline for its budget deliberation with the House. In the note, the government emphasized the priorities of raising spending on infrastructure, food security, public transportation, security for the general elections and development of renewable energy.
"It's always the same. The government has this tendency to have a grand vision, but fails to implement the proper procedures to achieve its goals," said University of Indonesia economist Lana Soelistianingsih.
Lana also cited an example of the slow progress of infrastructure development under the Master Plan for the Acceleration and Expansion of Indonesia's Economic Development (MP3EI).
The MP3EI, which is a set of plans and actions to build economic clusters and business centers on all major islands to support their unique local economies, has been touted as Yudhoyono's legacy in infrastructural development.
"The government has been campaigning for connectivity in the eastern part [of Indonesia] as the main priority for the MP3EI, but little effort has been made so far," Lana said.
The ambitions of MP3EI are not well reflected in the 2014 state budget as the Public Works Ministry, for example, will spend most of its funds on building and maintaining roads in Java, as well as constructing a new irrigation network for agricultural centers in Java.
"There's no other way to see the 2014 budget than as a paradox because it does not have a strong leverage effect despite the government's claim that it wants to accelerate development," said legislator Hendrawan Supratikno. "Reductions in needless spending, such as on the civil service, should be in the budget. But it's too late now," he added.
Chairman for the Democratic Party's economic division Ikhsan Modjo, who has been involved in directing the party's legislators in the budget deliberation, said that infrastructure development remained the administration's priority.
"The Public Works Ministry is still the second-largest recipient of funding despite the fact that its allocation has been reduced," he said.
Ikhsan also pointed to the reduction in social spending as the government would no longer need the direct cash assistance program. "Social spending has been reduced to avoid accusations of politicizing the budget". The 2014 state budget will be Yudhoyono's last major policy achievement before he steps down in October next year.
However, his administration will be involved in the initial drafting of the 2015 budget, and will work with newly elected legislators on its deliberation. The new president, scheduled to be inaugurated in early October, will have the authority to annul the draft budget and make major revisions. (han)
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