Jakarta. Indonesian economists have called on the government to optimize state spending, strengthen governance, and safeguard the independence of key institutions, saying these steps are crucial to secure sustainable growth.

Lili Yan Ing, Secretary General of the International Economic Association (IEA), underscored that Indonesia’s relatively modest tax revenue makes it vital that every rupiah is allocated wisely. “Public finances must be used prudently and with clear impact on people’s welfare,” she said in Jakarta on Tuesday.

She highlighted the importance of preserving the independence of institutions such as the Central Statistics Agency (BPS), Bank Indonesia, the Corruption Eradication Commission (KPK), and the Supreme Audit Agency (BPK). “Independent institutions will strengthen accountability and transparency, which ultimately supports investor confidence and economic stability,” she added.

Lili welcomed Finance Minister Purbaya Yudhi Sadewa’s recent commitments, including maintaining regional transfers, ensuring the collection of Rp 50 trillion in overdue taxes, and reviewing the structure of civil servants’ salaries. She emphasized that higher wages should be directed toward frontline workers such as teachers, doctors, nurses, sanitation staff, and firefighters. “Their contributions directly support welfare and safety, and recognizing them will strengthen public trust,” she said.

On liquidity measures, Lili noted that simply reallocating Rp 200 trillion ($12.9 billion) from BI to state-owned banks (Himbara) may have a limited effect, given more than Rp 2,373 trillion ($153.1 billion) in idle funds already available. “The challenge is not funds, but boosting people’s purchasing power,” she explained, pointing to sluggish real wage growth of 1.25 percent in 2022–2024 compared to 2.5 percent inflation.

She also underlined the importance of keeping Indonesia’s fiscal deficit within the 3 percent limit set by law. “Prudent fiscal management is not just a number; it’s about ensuring resilience for future generations. Moving gradually toward a balanced budget would be an ideal long-term target,” Lili said.

While acknowledging ambitious government programs such as the Rp 353 trillion free meals initiative, she urged greater transparency and alignment with public welfare goals. “Constructive criticism should be seen as support. The focus must be on programs that deliver tangible benefits for people’s livelihoods,” she stressed.

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