HRD Focus via Investments in Education

The 2019 State Budget focuses on human resources development, specifically through investments in education. These investments raise challenges in improving governance and in disbursing regional funds.

KOMPAS/PRIYOMBODO

Finance Minister Sri Mulyani Indrawati and her subordinates prepare to leave a plenary meeting with members of the House of Representatives at the House building, Senayan, Jakarta, Wednesday (31/10/2018). The meeting approved the 2019 state budget, which is focused on human resource development, especially through investment in education.

JAKARTA, KOMPAS – The 2019 State Budget focuses on human resources development (HRD), specifically through investments in education. These investments raise challenges in improving governance and in disbursing regional funds.

The 2019 State Budget bill was passed into law during a House of Representatives (DPR) plenary meeting on Wednesday in Jakarta. Eight House factions supported the 2019 State Budget Bill. The Prosperous Justice Party (PKS) faction approved the budget with reservations, while the Gerindra Faction did not provide an opinion.

The central government is allocating Rp 1.63 quadrillion to state expenditure, while the allocations for regional funds and village funds total Rp 826.8 trillion. For education, the government has allocated 20 percent of the 2019 state budget, or about Rp. 492.5 trillion.

The education budget has been increasing every year. In 2018, it increased to Rp 432 trillion from Rp 406.1 trillion in 2017.

The central government will disburse about Rp 163.1 trillion of the education budget, while Rp 308.4 trillion will be disbursed through regional administrations; Rp 20 trillion will be invested in developing the national education system (DPPN) and the remaining Rp 990 billon is in the research endowment fund.

Finance Minister Sri Mulyani Indrawati said government spending in 2019 would focus on increasing the nation\'s competitiveness through developing the capacity of human resources.

Improving education and cooperation among stakeholders would improve the quality of the Indonesian education system so the country would not lag behind other Southeast Asian countries. "Research will be strengthened to improve the capacity to innovate to meet industry demand, which in turn will add value to the economy," Sri Mulyani remarked at the plenary meeting.

Sri Mulyani wore a black band on her left arm as a symbol of mourning for the victims of the Lion Air plane that crashed on Monday in the Java Sea in Karawang, West Java. Twenty-one employees of the Finance Ministry were among the passengers aboard the plane.

Preparations

Separately, Dorodjatun Kuntjoro-Jakti, the coordinating economic affairs minister in president Megawati Sukarnoputri\'s Gotong Royong (Mutual Cooperation) cabinet, said during a commemoration of the 72nd Hari Oeang (Currency Day) that human resources should be prepared well so that Indonesia would benefit from the demographic bonus in 2045.

"Indonesia\'s challenge in the next 30 years will be to avoid the middle-income trap. It will not be easy," he said.

The approval of the 2019 State Budget positively affected the movement of the Indonesia Stock Exchange’s (IDX)) Jakarta Composite Index (JCI). According to Hans Kwee, the director of securities company Investa Saran Mandiri, the 2019 State Budget reflected the government\'s commitment to implementing fiscal policies that supported development. The JCI rose after the trading afternoon break partly due to positive sentiment from the approved state budget, and rose 0.73 percent to 5,831.65 at the close of the trading day.

(KRN/DIM)