Photo by Antara.
Unofficial counts from Indonesia’s presidential election on 14 February suggest a comfortable victory for Prabowo Subianto. Like his political backer, outgoing president Joko “Jokowi” Widodo, he brought a populist policy agenda to the table that appealed to Indonesia’s poor voters. Free food or makan gratis became a flagship program that Prabowo repeatedly promoted throughout the campaign, including during the final presidential debate on social welfare.
No official written proposal on the program has come out of Prabowo’s camp but based on publicly available information the program is slated to provide free lunch to students in school and pregnant women, and milk for toddlers.
He maintains that the program is necessary to overcome stunting, increase the nutritional intake of school children, improve their performance and create economic benefits for farmers and local businesses. While he was happy to spruik the benefits of free food throughout the campaign, he remained much more tight-lipped about the program’s costs.
Is ‘free food’ even possible?
An obvious point of contention is the program’s feasibility given the alleged exorbitant cost. One estimate states that the program would cost at least Rp 400 trillion, or 1.9% of GDP if launched under the current price tag – a massive undertaking. How realistic is Prabowo’s promise then in light of current fiscal conditions?
To put it in context, in 2023, the total budget for social protection programs was Rp 476 trillion (2.2% of GDP), which includes well-known programs like Kartu Indonesia Pintar (KIP), a social assistance program for Indonesian school children; Program Keluarga Harapan, a family social assistance program; and Program Sembako, a pre-existing food assistance program.
Meanwhile, one of the biggest social development programs Indonesia has ever undertaken, the massive primary school construction program ‘INPRES’, cost only 1.5% of Indonesia’s GDP in 1973, although it is known to have improved Indonesia’s long-term development according to research.
Should the proposed ‘free food’ program manifest it would place a huge burden on the state budget. As per the 2023 state budget (APBN), government expenditure amounts to Rp 3,061.2 trillion whereas revenue stands at Rp 2,463 trillion, creating a deficit of Rp 598.2 trillion that the government needs to finance with debt. Assuming no dramatic increase in government revenue, there is very limited fiscal space for a new program of the scale Prabowo is proposing.
Minimising the damage
The only plausible way to overcome the current fiscal limitations is to start small and leverage existing programs. Two programs are particularly relevant.
Sembako is a government initiative that provides Rp150,000 per month to socio-economically deprived families for purchasing essential food items. The funds are distributed electronically and can be used at designated outlets to buy specific foodstuffs like rice, eggs, meat, and fruits and vegetables.
Building on the existing Sembako model, the free food program could expand the scope of providers to allow additional allowances for beneficiaries to buy cooked meals from participating vendors. This would not only help poor families, but also small eateries and get the economy moving.
In the meantime, to serve its goal of providing essential nutrition to children in school, the free food program could leverage the existing KIP program, which provides financial assistance for education expenses to students from low-income families in Indonesia. As an extension, the holder of this card should be able to claim a daily milk – or protein-rich snack – from the school cafeteria.
Leveraging existing programs will be essential if the costs associated with implementing the new program are to be controlled. Indeed, crafting social policies requires a careful balance between financial sustainability and public benefit. Indonesia should take heed from the economic difficulties faced by countries like Venezuela, which adopted hyper-populist policies without considering the economic and fiscal consequences.
Hidden costs
Social welfare programs delivered on a massive scale, like the proposed free food program, can also present a number of political risks and hidden costs. Corruption of social welfare programs is still widespread in Indonesia. Weak controls make it easy for some officials to divert money into their own pockets or for other unauthorised uses. It is also reasonable to expect that some officials will demand bribes from beneficiaries to access benefits or receive kickbacks from suppliers contracted to provide goods or services for the program.
The program would also be vulnerable to politicisation. In the recent presidential election, Jokowi came under fire for leveraging social assistance programs in his campaign for Prabowo. A massive corruption scandal also engulfed the social assistance program for Covid pandemic back in 2020, with the then Minister for Social Welfare, Juliari Batubara, named as the primary suspect.
Politicisation of social welfare programs is common in many other developing countries, especially in settings where clientelism pervades the political system. In Mexico, for instance, massive social welfare programs for the poor have been used by the decade-long ruling party, PRI, to entrench patron-client networks and maximise electoral vote gain by timing the distribution of benefits closer to elections.
In Indonesia, where clientelism is an everyday political phenomena in elections, there is a real risk the program would be leveraged for political gain. Research shows the politicsation of grants and social assistance funds is already widespread.
Clientelism and corruption are often intertwined because politicians need to cover high political costs and pay for the support of their campaign machinery. Projects are often allocated to vote brokers as payback for their electoral services – or to constituents as clients to retain their loyalty.
To overcome corruption and clientelism, stringent transparency and accountability measures need to be set in place. To this end, the free food program needs to have detailed criteria of recipients that are published publicly to maintain a high degree of transparency.
It will also be critical to digitalise the administration of the program to minimise external political and human interference.
State oversight agencies and civil society budget watchdogs will also need to be embedded into the program in addition to performing regular independent external audits. Without these controls, Prabowo’s could come at the expense of Indonesian democracy, not just the national budget.
