STRATEGIC ASSESSMENT. Minister of Finance Sri Mulyani Indrawati increased the budget to IDR 113.05 trillion in ministry and agency spending posts in the 2025 plan (RAPBN) to accommodate several Prabowo priority programs, pending future DPR action: 1) free nutritious meals which will cost IDR 71.0 trillion; 2) free health checks which will require a budget of IDR 3.2 trillion; 3) school renovation which will cost IDR 20 trillion and integrated superior schools IDR 2 trillion; and 4) national, regional and village food barns which will require a budget of IDR 15 trillion.
Finance Deputy Minister Thomas Djiwandono said that various obstacles faced by MSMEs in their growth and development efforts include limited access to markets, high logistics costs, inadequate digital infrastructure, and lack of financial services. He said that to face these challenges, Indonesia needs to collaborate across sectors, emphasizing the importance of international partner involvement. He welcomed the support of the MCC, a U.S. foreign aid agency that encourages economic growth, opens markets, and improves living standards in certain countries, including Indonesia.
Amiadji Nur Kamil, industry and regional analyst at Bank Mandiri, the trade war between China and the United States has been escalating since 2018, leading to the imposition of tariffs by both countries. Recently, the U.S. has restricted China’s access to semiconductor technology and artificial intelligence and has started raising tariffs on various Chinese products… The trade war between China and the United States could also create opportunities for Indonesia. If the U.S. shifts its import sources from China to Asian countries capable of producing substitute goods, it could create opportunities for Indonesia.
Cameron Alford, Vice President Department of Compact Operations at the U.S. Millennium Challenge Corporation (MCC), spoke with CNBC Indonesia. He explained that MCC is an independent U.S. government agency working to reduce global poverty through economic growth by providing large, time-bound grants to select partner countries that meet high criteria for good governance and economic freedom. Cameron noted MCC’s 20-year partnership with Indonesia and said this compact is about trying to increase finance for infrastructure and SMEs.
The MCC is trying to improve the quality and quantity of infrastructure in Indonesia and provide increased access to small and medium enterprises, especially those owned by women. The Indonesian government has set up the entity called Millennium Challenge Account Indonesia II (MCAI) which is responsible for implementing the program, the aspects around the grant and the financing to the projects that are to be implemented.
