{
  "id": 432760,
  "title": "Prabowo Subianto's Fiscal Recentralization",
  "url": "https://urgent.news/2026/08/10/prabowo-subiantos-fiscal-recentralization",
  "topic": "world",
  "section": "World",
  "published": "2026-08-10T03:22:44.000Z",
  "source": {
    "name": "Tempo.co English",
    "slug": "tempo-co-english",
    "url": "https://en.tempo.co/read/2117096/prabowo-subiantos-fiscal-recentralization"
  },
  "original_language": "en",
  "account": "President Prabowo Subianto's recent fiscal policies, aimed at centralizing regional policies and budgets, have led to significant budget cuts for provinces and villages in Indonesia. The central government is cutting transfer funds to provinces by up to 25% and reallocating 58% of village funds from the 2026 State Budget to Prabowo's flagship programs, such as the free nutritious meal (MBG) project and the red-and-white cooperatives. This has left local governments struggling to repair roads and pay workers, with 79 regions currently facing fiscal difficulties. North Maluku has even stopped paying its employees due to financial strain.\n\nThe government's reallocation of funds for these programs, while justified by Prabowo as a means to combat corruption, has raised concerns about the erosion of regional autonomy. By cutting regional budgets and withholding revenue-sharing funds, the central government is undermining the authority of local and village governments to set their own budget priorities. This fiscal recentralization threatens to disrupt public services and diminish participatory budgeting at the local level, which is crucial for regional autonomy.\n\nFurthermore, the reduction in village funds, which are a significant stimulus for local economies, will have far-reaching consequences. Villages are unable to carry out their public development plans, leading to stalled or abandoned infrastructure projects and struggling integrated service posts. The establishment of the red-and-white cooperatives, a key component of Prabowo's financial strategy, will burden villages with deductions for at least six years to repay the Rp240 trillion debt owed to the bank providing the capital. This is a heavy price to pay for Prabowo's ambitious goals, as it will result in economic slowdowns and reduced financial turnover in villages.\n\nThe actions of the Prabowo administration not only defy the will of the people but also violate the constitutional rights of regional governments. Sumitro Djojohadikusumo, the father of Indonesia's current president, once rebelled against Sukarno's centralist policies, fearing the unequal treatment of provinces outside Java. Today, his son's administration appears to be mirroring those very policies, creating a fiscal crisis for regions and weakening local economies.",
  "summary": "The central government's cutting of regional budgets is a violation of the law. It stems from a centralist mindset.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}