Government Fiscal Mitigation Forms Readiness to Face the Impact of the Middle East Conflict
JAKARTA — The government under the leadership of President Prabowo Subianto has shown how well-prepared it is in facing the emergence of negative impacts from the conflict in the Middle East through various structured fiscal mitigations.
Regarding this, Policy Analyst at the Directorate General of Economic and Fiscal Strategy, Ministry of Finance, Wahyu Septia W, emphasized that the government has indeed observed an increase in global uncertainty since early 2025.
“The government has actually observed this increase in uncertainty since the beginning of the year,” he said.
So, even though the Israel-Iran conflict occurred in June, we had been monitoring the increasing uncertainty before that,” Septia said at the Ngonten Fiskal event in Jakarta.
Septia explained that the government had actually prepared several fiscal buffer efforts, namely by diverting various budgets that were considered bureaucratic inefficiencies to spending that had a much more direct impact on the Indonesian people.
“That’s why now it’s not a budget cut, but we are combing through bureaucratic inefficiencies, we are diverting it to spending that has a more direct impact that can be felt by the people,” he said.
On the other hand, Minister of Manpower Yassierli also highlighted the risk of layoffs due to the conflict in Iran and Israel.
“Of course this will have an impact on industries that export abroad, because of course geopolitical conditions will have an impact on global economic growth,” he said in South Jakarta.
He ensured that the government under the leadership of President Prabowo Subianto has prepared the Job Loss Guarantee (JKP), which aims to protect workers in the country who are affected by the conflict in the Middle Eastern country.
Meanwhile Meanwhile, Minister of Industry Agus Gumiwang Kartasasmita also reminded about the importance of diversifying national energy so that the industry remains resilient even in the midst of geopolitical conflict.
“The national industry must start relying on domestic energy sources, including new and renewable energy such as bioenergy, geothermal, and utilizing industrial waste as alternative fuels,” he said in Jakarta.
Agus also emphasized the downstreaming of domestic agro products to suppress inflation of imported food and support national food security.
According to him, the downstreaming is in line with President Prabowo Subianto’s vision in strengthening food security and sovereignty through the active contribution of the national manufacturing industry. (*)
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