This CELIOS report delivers a critical fiscal audit of the Joko Widodo administration’s legacy, identifying ten structural “fiscal holes” that will burden Indonesia’s future governments. These include massive subsidy inefficiencies, ballooning public debt, opaque state-owned enterprise (SOE) liabilities, and misaligned budget priorities that undermine long-term sustainability. According to the infographic on page 6, total fiscal exposure from these combined gaps reaches IDR 1,850 trillion, equivalent to 45% of the 2024 state budget. The report further warns that unchecked project financing in infrastructure, the food estate program, and the capital city relocation (IKN Nusantara) could deepen fiscal vulnerability.
CELIOS attributes these fiscal weaknesses to populist budget management, short-term political spending, and limited transparency. It proposes three corrective strategies: (1) progressive fiscal reforms, through wealth and carbon taxes; (2) restructuring of SOEs to improve accountability; and (3) tightening subsidy efficiency to prevent future deficits. The report concludes that Indonesia’s fiscal system needs a “restorative correction,” emphasizing public disclosure and structural discipline to prevent the next administration from inheriting chronic deficits.
Bibliography:
Askar, M. W., Fikri, B., Darmawan, J., Muhammad, G. D., & Imaduddin, A. H. (2024). Ten Fiscal Holes Left by Joko Widodo’s Administration. Center of Economic and Law Studies (CELIOS).