Budget Savings Increase the Effectiveness of the MBG Program and the Community’s Economic Wheels

By: Bara Winatha

In an effort to encourage equal distribution of community welfare and increase the effectiveness of national budget management, the government is implementing the Free Nutritious Meals (MBG) program. This program is projected to not only improve the nutritional level of the community, but also have a major impact on the wheels of economic turnover in villages and remote areas. National figures also provided their views on budget savings and the effectiveness of the MBG program implementation.

The Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, emphasized the importance of wiser budget allocation in increasing the impact of the MBG program. According to Luhut, the allocation of village funds has the potential to increase significantly from IDR 1.1 billion to IDR 6 to IDR 8 billion per year thanks to the implementation of this program. He stated that the opportunity for increasing village funds can strengthen the village economic turnover, create efficiency in economic activities, and improve community welfare at the local level.

Through well-managed budget savings, the government will help accelerate equal distribution of welfare. He also emphasized the importance of strict supervision in the implementation of the program so that there is no misappropriation of funds. In this regard, Luhut also supports cooperation between the Ministry of Villages and Development of Disadvantaged Regions (Kemendes PDT) and law enforcement officers to take firm action against violations of the use of village funds. He said that this budget increase is expected to be fully utilized for the welfare of village communities.

Chairman of the Advisory Board of the Indonesian Chamber of Commerce and Industry (Kadin), Hashim Djojohadikusumo, also provided his views regarding the potential for economic growth that can be achieved with more effective management of the MBG program budget. He explained that with an additional budget allocation of up to IDR 100 trillion after the efficiency of the ministry and agency budgets, the Indonesian economy could grow up to two percent higher than the initial target of 5.2 percent. Hashim stated that spending IDR 71 trillion on free food is estimated to add 0.83 percent to economic growth, while an additional IDR 100 trillion could provide additional growth of up to two percent.

Hashim said that the MBG program has great potential in driving local economic turnover. Every day, this program involves around 82 million beneficiaries who need food supplies such as eggs, chicken, vegetables, rice, tofu, and tempeh. This great need will drive small-scale economies in the regions and create a more equitable economic distribution.

By involving more local producers and MSMEs in providing food needs for the MBG program, the wheels of the community’s economy can turn faster. This is a major stimulus for the economy that will have a long-term effect on the welfare of the wider community.

Meanwhile, the President’s Special Advisor for Economics and National Development, Bambang Permadi Soemantri Brodjonegoro, emphasized that the MBG program and the construction of three million houses per year are two main programs that will have a multiplier effect on the national economy. Bambang said that the MBG program not only aims to improve children’s nutritional standards, but also empowers around 30,900 MSMEs engaged in catering services. Bambang stated that this program has a good output multiplier impact and can increase employment and income at the same time.

Bambang is optimistic that if all parties involved work with high commitment, this program can be successful and have a significant impact on the economy. He mentioned that some technical issues and errors may occur at the beginning of the implementation of this major program, but the responsibility for the success of the program remains in the hands of each party that manages and implements the program.

In addition, Bambang also highlighted the importance of budget savings in the three million houses per year development program which aims to increase public access to decent housing. This program involves many private parties, including property companies and banks in the development and financing of people’s houses. With proper budget management, the construction sector can be the main driver in strengthening the pace of the national economy.

Effective management will not only provide short-term economic benefits, but also create long-term stability. For example, savings made in the procurement process for goods and services for the MBG program can be diverted to other priority needs, such as improving village infrastructure or building community health centers.