REPUBLIKA.CO.ID, JAKARTA -- The Indonesian government launched a package of state revenue and spending budget policies (APBN) to mitigate the impact of the long drought due to El Nino.

“The occurrence of El Nino resulted in a spike in the price of commodities such as rice which triggered high inflationary pressures. Then the State Government needs to provide protection by thickening the bansos,” Finance Minister Sri Mulyani Indrawati said in a written statement received in Jakarta, Friday (27/10/2023).

In addition to El Nino, the state budget's policy package is also aimed at mitigating the impact of global economic turmoil as well as China's economic slowdown. The Minister said the high interest rates in developed countries and the weakening of the global economic outlook had a very pronounced impact on the economy and society.

The policy package consists of three main agenda. First, the bansos (bantuan sosial), the social assistance for the poor, is thickening in the form of additional rice assistance and Cash Direct Assistance (BLT). The policy is aimed at maintaining purchasing power, stabilizing prices, and controlling inflation.

Additional rice assistance will be provided to 21.3 million groups of beneficiaries amounting to 10 kg during December with a total budget requirement of Rp 2.67 trillion.

BLT will be provided to 18.8 million beneficiary groups amounting to Rp 200,000 per month during November-December with a total budget requirement of Rp 7.52 trillion.

The second policy package is aimed at optimizing the role of MSMEs through accelerating the realization of People's Business Credit (KUR). The Minister of Foreign Affairs targets that the KUR could reach Rp 297 trillion this year.

As for the third policy package, namely strengthening the housing sector to boost activity in the housing construction sector and at the same time help low-income people to get housing.

The form of the policy is the granting DTP (Government-borne) VAT for the sale of below Rp 2 billion beneficiary's first housing. For low-income community, the government also provides Administrative Expense Assistance (BBA) for 14 months amounting to Rp 4 million per house. The last, support was also given to the addition of Rumah Prosperity Integrated (RST) assistance target for poor communities of 1,800 homes.

“These measures that we are taking, especially in the construction sector, but also in the social bearings, we hope to make our economy survive the shocks of global uncertainty,” Sri Mulyani concluded.