This is what we request so that regions have more shock absorbers
Jakarta (ANTARA) - Finance Minister Sri Mulyani Indrawati asked regional administrations to stabilize the regional budget (APBD) during a meeting with Committee IV of the Regional Representatives Council (DPD RI) here on Tuesday.



According to the minister, budget stabilization is needed because whenever the revenue sharing fund (DBH) or special allocation fund (DAK) is reduced or revised slightly by the central government, local governments tend to not be able to adapt accordingly.



"This is what we request so that regions have more shock absorbers," Indrawati said.



Regional administrations need financial managers who can stabilize APBD when facing pressures, like the central government does, she observed.


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When the COVID-19 pandemic hit, the central government successfully made the state budget (APBN) a shock absorber by widening the deficit amid increasing commodity prices and falling tax revenues, she explained.



Since the deficit was widened to more than three percent, financing was also carried out to support the state budget, Indrawati said.



Hence, currently, the Central and Regional Governments Financial Relations (HKPD) Law has been issued so that local governments can utilize creative financing and integrated funding, the minister pointed out.


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"The goal is that when the central government pours a lot of funds, the funds (do not) get stuck in the Regional Development Bank (BPD), or when the funds are taken away, the local governments would not immediately be stuck," she said.



Thus, she said she hopes that the capacity of regional financial management can continue to be improved. The HKPD Law is expected to further improve the ability of regions to realize quality spending, she added.



"Both state and regional spending are crucial functions to create improvements, especially for the quality of our human resources," Indrawati remarked.


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Translator: Agatha V, Kenzu T
Editor: Fardah Assegaf
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