President Prabowo Subianto's administration is taking significant corrective steps to improve national and regional financial governance. This policy was adopted in response to the low effectiveness of budget management, which has long been characterized by widespread corruption and the phenomenon of massive amounts of regional government (Pemda) funds sitting idle in banks.
As of August 2025, regional government funds idle in banks reached IDR 233.11 trillion. This figure is considered unproductive, especially at a time when the central government is targeting budget efficiencies of IDR 306.9 trillion for the same year. The government's moves to correct Revenue Sharing Funds (DBH) and strictly oversee the budgets of strategic programs, such as Free Nutritious Meals, are seen as rational efforts to maximize national fiscal potential.
Beyond administrative issues, the government also highlighted real-sector challenges, namely rising youth unemployment and the threat of bankruptcy haunting the manufacturing sector and MSMEs. The closure of several large companies and the drop in bank credit for small business actors serve as strong signals that the national economy requires shock therapy to regain competitiveness.
As part of these corrective measures, President Prabowo emphasized the importance of honesty in mapping out problems and the willingness to be realistic about the current fiscal condition. The government has decided not to burden the state budget (APBN) with debt from large-scale infrastructure projects and to prioritize the recovery of business productivity through debt write-off policies for pandemic-affected MSMEs.
Although this policy has sparked public debate and feels somewhat disruptive to some parties, consistency in enforcing efficiency is expected to provide broader fiscal space. By prioritizing public welfare, these corrective steps are hoped to reduce unemployment while sustainably revitalizing Indonesia's economic productivity.
