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YOGYAKARTA – The Indonesian government has released Rp86.6 trillion in previously blocked funds to accelerate ministerial and institutional spending, as well as to support national priority programs.

In response, the Indonesian Employers’ Association (Apindo) Yogyakarta Special Region (DIY) has proposed that a portion of this funding be allocated to Meetings, Incentives, Conventions, and Exhibitions (MICE) activities that support micro, small, and medium enterprises (MSMEs).

Timotius Apriyanto, Deputy Chair of Apindo DIY for Labor Affairs, stated that the reduction in government-driven MICE activities has significantly impacted local economies, as approximately 60% of such events are organized by government bodies. The decline has resulted in decreased business for accommodation and hospitality providers.

He emphasized that MICE-related programs, which often benefit MSMEs, should not be cut back. “These activities should be maintained or even increased. Government cost-efficiency measures should not come at the expense of initiatives that directly benefit the public,” said Timotius. “I propose the central government refocus its budget allocations for the second semester.”

Timotius also noted that earlier cost-cutting efforts have had serious employment implications, threatening more than 500 workers to date. Last year, 1,779 workers were laid off, and this year, layoffs could exceed that figure, particularly in the mid-sized industry sector.

While he supports the principle of budget efficiency, Timotius argued that the strategy has been flawed. “There are indeed spending areas that should be prioritized for cuts, such as overseas official travel. However, activities with strong multiplier effects—like MICE—should be preserved,” he said.

“Budget cuts should not target sectors with significant economic ripple effects,” he continued. “The president’s directive for roughly 30% efficiency is understandable, but the current strategy needs to be reevaluated.”

Source: ekbis.harianjogja.com