Government and Bank Indonesia Agree on Burden Sharing to Finance Asta Cita Programs
Key Takeaways
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JAKARTA, Investortrust.id — The government and Bank Indonesia have agreed to share the financial burden of funding President Prabowo Subianto’s Asta Cita programs, a policy that marks a deeper fiscal-monetary coordination while also sparking debate on its long-term risks.
Governor Bank Indonesia Perry Warjiyo said on Tuesday, Sept 2, 2025, that the central bank has purchased government bonds worth Rp 200 trillion, including through debt switching, to support people-centered initiatives such as housing and the newly launched Koperasi Merah Putih.
“Part of this funding is allocated to programs like public housing and village cooperatives under Asta Cita, through burden sharing or joint interest cost financing,” Perry told the House of Regional Representatives’ Committee IV during an online session.
He emphasized that Bank Indonesia continues to pursue prudent monetary and fiscal alignment, while also expanding liquidity incentives. “We have added Rp 384 trillion in macroprudential liquidity incentives to priority sectors such as downstream industry, agriculture, housing, micro and small enterprises, and inclusive economy,” Perry said.
The central bank also accelerated digital payment systems to streamline social assistance distribution and local government financial transactions.
Financing Formula and Burden Sharing Mechanism
Perry explained that the burden sharing framework was agreed with Finance Minister Sri Mulyani Indrawati. For housing programs, interest costs are equally shared, with each side carrying 2.9%.
For the Red and White Urban Ward Cooperatives (KKMP) andRed and White Village Cooperatives (KDMP), the interest burden is divided at 2.15% each. The formula is calculated using the 10-year government bond yield, reduced by returns from government deposits in banks, with the remainder split equally.
“This arrangement helps reduce the fiscal interest cost burden to 2.9%,” Perry said.
Sri Mulyani added that the arrangement eases financing pressures while ensuring Bank Indonesia remains independent. “This is not only about stability, but also growth. Yet it remains proportional and respects the independence of the central bank,” she said.
She underlined that the focus is on funding social programs such as the three million homes project and the cooperative network envisioned in Asta Cita.
Concerns Over Fiscal Discipline
While the burden sharing plan is intended to support inclusive development, some economists voiced caution. Wijayanto Samirin, an economist from Paramadina University, argued that the scheme risks undermining both central bank independence and fiscal discipline.
“Independence is crucial to navigating a dynamic global economy,” Wijayanto told Investortrust.id on Wednesday, Sept 3, 2025. “The risk is that this weakens fiscal discipline and could even drag Indonesia into a debt trap if funds are not used productively.”
He stressed that the success of the program depends on whether the financing flows to productive projects with broad economic impact. “If the money goes to programs with high risk and limited benefits, like KKMP and KDMP, it would be regrettable,” he said.
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