Indonesia Prabowo's school meal program to cost $7.7 billion in first year

[February 21, 2024]   JAKARTA (Reuters) - A plan by Indonesia's likely new president Prabowo Subianto to provide free school lunches and milk will cost up to 120 trillion rupiah ($7.68 billion) in its first year, his team said on Wednesday.  

Presidential candidate Prabowo Subianto reacts while dancing as he claims victory after unofficial vote counts during an event to watch the results of the general election in Jakarta, Indonesia, February 14, 2024. REUTERS/Kim Kyung-Hoon

Prabowo has declared victory in last week's presidential election in the world's third biggest democracy, after quick ballot counts by independent pollsters in sample polling stations showed he had won nearly 60% of votes.

The election commission is due to announce the formal result by March 20 and a new government will take office in October.

Some analysts have warned the cost for Prabowo's signature campaign pledge, free meals for 82.9 million children, is high and could undermine Indonesia's track record of fiscal discipline.

His team has said the program would cost 450 trillion rupiah ($28.79 billion) when it reached its final stage in 2029.

During Prabowo's first year, however, the program would require between 100 trillion to 120 trillion rupiah in expenditure to provide well-balanced and healthy meals, said Budiman Sudjatmiko, a senior member of Prabowo's team of experts, without providing further detail.

Prabowo's team has estimated that at the final stage, the program per year would require 6.7 million tons of rice, 1.2 million tons of chicken, 500,000 tons of beef, 1 million tons of fish, 4 million kilolitres of milk as well as vegetables and fruits, Budiman said.

The current design of the program includes collaboration with farmers cooperatives and small businesses, which Budiman said could cut the program's total cost further. Investors are paying close attention to the details of the program.

Bank Indonesia Governor Perry Warjiyo was asked about risks from expansionary fiscal plans by the incoming government during Wednesday's regular investor conference call, which the central bank hosted after deciding to keep interest rates unchanged in its policy meeting.

Warjiyo said laws banning Indonesia's annual fiscal deficit from exceeding 3% of GDP would ensure prudent fiscal policy management. ($1 = 15,630.0000 rupiah)

(Reporting by Ananda Teresia and Stefanno Sulaiman; Writing by Gayatri Suroyo)

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