Product purchase

40% of budgetary expenditure must be devoted to the purchase of national products: Jokowi

Jakarta (ANTARA) – President Joko Widodo (Jokowi) has ordered that 40% of the budget of the state (APBN), regions (APBD) and public enterprises (SOE) be used for the purchase of national products.

“Just use 40% of this budget to trigger our economic growth from central government to local government,” he noted in the “Indonesian Product Pride Affirmation Act” in Bali on Friday.

The Head of State said that the central government has a procurement budget of Rs 526 trillion, while each provincial, city and district government has Rs 535 trillion and enterprises public authorities have a budget of 420 trillion rupees. Therefore, he asked them to allocate 40% of their budget expenditure to the purchase of domestic products.

If 40% of the budget is used for the purchase of national products, spending by public enterprises could stimulate economic growth by up to 0.4%, while purchases through national and regional budgets could stimulate economic growth by 1 .5 to 1.7%, Jokowi explained.

“We don’t need to find investors; we constantly have to buy goods produced by factories, industries, our micro, small and medium enterprises (MSMEs),” he stressed.

He also asked ministries and local governments to stop buying imported products.

“Do we want to keep buying imported goods? No. We can’t. By buying imported goods, it means we are giving jobs to other countries. Our money and capital outflows will go directly to other countries. country,” he noted.

If the ministry, regional government and state-owned enterprises purchase domestic assets, there would be additional capital and investment from domestic contractors which could open up more job opportunities, he said.

“It was calculated, it could open two million jobs,” he added.

The president also said that not all parties actually spent their budgets on domestic products.

“We are just asking for 40% of your budget for domestic products, until May 2022. This morning I checked, it was only Rp 214 trillion. If it is already at Rp 400 trillion, then it’s good,” he said.

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The “Indonesian Product Pride Affirmation Law” was preceded by a business matchmaking event for domestic product purchases from March 22-4, 2022, which resulted in transactions worth $85 trillion rupees.

Based on the simulation results conducted by Statistics Indonesia (BPS), the purchase of domestic products worth Rs 400 trillion can increase the national economic growth by 1.67-1.71%.

If the economic growth in Indonesia was 3.69% in 2021, then by maximizing the use of domestic products, the Indonesian economy can be boosted by up to 5.36-5.4%.

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