Image source, BETWEEN PHOTOS/Rivan Early Lingga
President Prabowo Subianto discussed the free nutritious eating program, the fate of the State Capital (IKN), the issue of defense, to the decline in unemployment in state speeches and exposure to the 2026 State Budget and Expenditure Budget (RAPBN) on Friday (15/08).
Observers made criticism related to at least six important points delivered by Prabowo, including regarding the claim of MBG success and government success in reducing unemployment.
Experts also commented on the allocation of defense budget and reduction of transfer to regions that were considered inappropriate.
Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, warned that the reduction in the transfer could trigger tax problems such as in Pati.
“This shows the ego of the central government that can sacrifice local governments,” he said.
Furthermore, the fate of the development of the Capital City of the Archipelago (IKN) is also in the spotlight. The problem is, Prabowo only mentioned the project once throughout his speech.
Prabowo also did not discuss IKN when describing the 2026 Draft State Budget.
Overall, Prabowo announced state revenue based on the 2026 Draft State Budget, it was projected to reach Rp3,147.7 trillion in 2026, or grew 9.8% compared to outlook 2025.
State expenditure is planned to be Rp3,786.5 trillion, up 7.3% from outlook 2025.
Central government spending in 2026 is focused on MBG, health, education, food security, to energy subsidies.
Here are six points from Prabowo’s speech in the spotlight of the observer:
‘Mbg Nation’s Best Investment’
Table of Contents
Prabowo boasts the Free Nutritious Eating Program (MBG) which he said succeeded in increasing the attendance and achievements of children at school.
“The United Nations says that MBG is the best investment that can be done by a nation,” Prabowo said.
He then explained that as of today, 5,800 units of Fulfillment of Nutrition Services (SPPG) have been built in 38 provinces.
According to him, MBG has also created 290 thousand new jobs, involving one million farmers, fishermen, breeders, and MSMEs, as well as encouraging economic growth in villages.
Prabowo also announced that the government allocated Rp335 trillion from the 2026 State Budget (APBN) for MBG. The government is targeting MBG to reach 82.9 million recipients.
Although Prabowo continues to boast MBG, the program actually draws criticism from various parties, especially because there are so many cases of poisoning since the program began in January.
Image source, Getty Images/Aditya Aji
This week alone, two mass poisoning occurred in Sragen and Sleman.
On Monday (22/08), a total of 365 students in Gemolong, Sragen, poisoning after consuming MBG. Of all the victims, 5 of them are still being treated in the hospital.
The person in charge of SPPG Gemolong, Arifuddin Setiawan, said the menu that day included yellow rice, shredded eggs, cucumber, apple, and milk. According to him, the menu is commonly served for children in Gemolong.
Arif state It is still waiting for the laboratory results to find out the cause of poisoning. Meanwhile, SPPG Gemolong also conducts internal evaluations.
“We immediately do it meeting for improvement in all these things. From the progress of preparation, acceptance of materials, preparation, from cooking, from packaging, from distribution, we all evaluate total, “he said.
A day later, a total of 212 students in the region of Whawon Mlati, Sleman, were also reported to have symptoms of poisoning after eating MBG.
Deputy Regent of Sleman, Danang Maharsa, say To this day, 20 students are still being treated in hospitals. He ensured that the Sleman Regency Government would bear the medical expenses of students.
“I have said this, this is our authority to the local government. The most important thing is now for these children, we will take care of them first, and later to recover and be healthy again,” Danang said.
He also emphasized that the Sleman Regency Government would evaluate and call MBG provider partners in Mlati.
Meanwhile, MBG distribution in schools found in poisoning cases will be stopped until there is further decision.
Community nutritionist, Tan Shot Yen, believes that poisoning cases due to repeated MBGs show “irregularities” in various layers of program implementation, ranging from supervision, monitoringto evaluation.
“This has been running for seven months, but always repeats the same problem, even though the place is not the same,” Tan said when contacted last June.
“The central government only receives good news, not listening to shows and reports directly from the field. This is very dangerous.”
Not only that, this program was also overshadowed by a number of other problems, ranging from alleged embezzlement of funds of nearly Rp1 billion in Kalibata, to MBG distribution containing raw materials and snacks in South Tangerang.
‘Lowest unemployment since the 1998 monetary crisis’
In the midst of various complaints of lack of employment, Prabowo claimed that Indonesia’s unemployment rate declined.
“Today, the national unemployment rate has managed to go down to the lowest level since the 1998 crisis,” Prabowo said.
According to data from the Central Statistics Agency (BPS), the open unemployment rate in Indonesia is at 4.76 percent as of February 2025, the lowest since the 1998 crisis.
Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, said this data could not be used as a benchmark for conditions in the field. According to him, the definition of unemployment BPS alone has been problematic.
“This definition has not been revised for a long time. Those who work for an hour a week are considered to have worked. This is very problematic,” he said.
Image source, BETWEEN PHOTOS
Furthermore, Bhima also underlines that most people work in the informal sector with a small wage, but the working hours are longer. Informal sector workers also do not get social protection.
“This has made the lowest unemployment claim since 98 worth doubt because it must be confronted with various other employment indicators,” Bhima said.
He took the example of data from the International Labor Organization (ILO) which showed Indonesia ranked both countries with the highest young unemployment in ASEAN.
“The government should not use macro claims, but must look specifically so that later government programs to create jobs can be more focused, especially to young unemployment,” he said.
‘Defense is not strong enough to be oppressed’
Prabowo also repeatedly emphasized the government’s priority to strengthen defense in the midst of uncertain global situations.
“The global world is now full of uncertainty. Those who do not have strong defense are usually oppressed by strong nations,” he said.
He then explained that throughout 2025, Indonesia formed six new military regional commands, 14 Navy Regional Commands, three Air Force Regional Commands, and one Air Operation Command, and six Special Forces Commands.
Also formed 20 development territorial brigades, a marine infantry brigade, a fast -moving troop corps regiment, 100 development territory battalions, and 5 Marine Infantry Infantry Battalions for Troops Moves for Fast Movement.
In the future, Prabowo ensures that Indonesia will modernize the main defense system (defense equipment) and strengthen the reserve component.
Based on the 2026 Draft State Budget document, the government allocated a budget of Rp335,256.8 billion for defense.
Referring to the shopping table attached, the largest defense ministry budget is allocated for management, which reaches Rp85,402 billion.
The second most budget is allocated for defense equipment spending of Rp81,394.4 billion, down from 146,383 billion in 2025.
Defense observer from the Ishak Ishak Institute, Made Supriatma, criticized a larger management budget allocation than defense equipment spending.
According to Made, the management budget is bigger because today, the Prabowo government involves the military in various major program lines, ranging from food security to MBG.
“It is not appropriate when the allocation is more to expand such organizational structures, not the effectiveness of combat. In this time, wars are more sophisticated, and the government should strengthen defense equipment to deal with it,” he said.
Transfer to the area down, the regional community is said to be a victim
Prabowo also announced a decline in transfer to the area in the 2026 Draft State Budget from Rp919.9 trillion to Rp650 trillion.
Prabowo argued in his speech that the APBN was seen as a whole.
He said the transfer to the region is an inseparable component of the state budget that aims to encourage economic growth and seek a state budget that has no deficit.
“Transfers to the regions are designed into one unit so that the transfer to the region is not the only instrument to realize economic and welfare improvement for all Indonesian people,” he said.
According to the observer, the reduction in transfer to this area can make the regional head later take steps to raise taxes, as happened in Pati, Central Java.
“One of the first victims was the regional government and the people in the regions who had to bear the taxes such as the United Nations were more expensive,” Bhima Yudhistira from Celios told BBC News Indonesia.
Some time recently, Pati Regency was shaken by a demonstration of the lecturer of the regional head effect from the planned increase in land and building taxes up to 200%.
Similar events were also monitored in a number of other regions, such as Cirebon, West Java; Bone, South Sulawesi; Jombang, East Java; and Semarang, Central Java.
“So the centralization of this budget also shows that there is a central government ego. All can be sacrificed as long as the priority program is running,” Bhima said.
“Then, there is something that must be sacrificed, namely from the local government side. So this is contrary to the spirit of fiscal decentralization that is fought for at the time of reform,” Bhima said.
Image source, BETWEEN PHOTOS
Economist from the Institute for Development Economy and Finance (INDEF), Esther Sri Astuti, said that the tax increase felt by the community was the impact of swollen state debt.
“It can be seen from the fiscal deficit. If it rises, it means that debt also increases. Now it is up to 40%. No wonder the government raises taxes,” Esther said.
In the 2026 Draft State Budget, the fiscal deficit is allocated 2.48% of the gross domestic product of Rp638.8 trillion. This percentage drops slightly compared to the current fiscal deficit which reaches 2.53%. Predictions of next year’s fiscal deficit economists have the potential to widen up to 2.7%.
According to Esther, an effective way to encourage actual economic growth by increasing investment and exports.
In addition, state spending is also the easiest way.
“But what must be worked on is how to increase investment and exports is more sustainable than spending.”
However, when talking about exports, Trump’s policy overshadows the sustainability of efforts to boost exports.
One that can be relied upon, said Esther, is the result of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) because Indonesian goods can enter at a rate of 0% to the European Union.
Increase in the education budget
After receiving a sharp spotlight when conducting budget efficiency at the Ministry of Elementary and Secondary Education, President Prabowo Subianto revealed the increase in the education budget to Rp757.8 trillion in the 2026 Draft State Budget.
In the details, the focus of the use of the budget is in the realization of the Garuda community and superior schools in various provinces.
Garuda’s superior school is intended for outstanding children, while people’s schools for children from extreme poor families.
Since July 14, 2025 until now, 100 people’s schools have been opened. A total of 63 schools operated first and 37 new schools began this August.
Of the 100 people’s schools, 97,000 students were recorded. The plan, as many as 59 schools will be opened with an estimate of accommodating 15,000 students. The number of teachers will be added up to 2,000 people from 1,469 people.
“Next year will be 200. The following year will be 300 and so on this people’s school is intended for those who are truly very, very low,” Prabowo said.
Referring to Book II of the Financial Note, Phase I Phase People’s School in 2025 cost Rp1,764.0 billion consisting of operational expenditure of the Ministry of Social Affairs of Rp1,194.0 billion and physical expenditure of the Ministry of Public Works Rp570 billion.
In 2026, the allocation of funds for people’s schools reached Rp24,900.0 billion for the implementation of schools and the construction of school permanent buildings.
Image source, BBC/Riana Ibrahim
Meanwhile, the government is targeting a total development of 100 Garuda superior schools.
This year, the government set a budget of Rp2,000 billion for the construction of Garuda Superior Schools in the Bangka Belitung Islands, East Nusa Tenggara, Papua, and one other location.
In 2026, the budget allocation reached Rp3,000 billion for development in nine locations.
“This is so that we are able to compete on the global stage. We must catch up in our fields in the fields of science, technology, engineering and mathematics,” Prabowo said.
Whereas based on PISA 2022, Indonesia’s score is 369 points and is Indonesia’s lowest score. This score is almost similar to the scores in 2003 and 2006. This PISA is a measurement of student literacy capabilities. The results of PISA 2025 have not been released.
School revitalization is also included in the details. In 2025, around 13,000 schools and madrasas were improved at a cost of Rp19,490 billion. Next year, the government allocated Rp22,500 billion.
The Indonesia Smart Program also continued targeting 21.2 million students and KIP lectures 1.2 million students. In addition, amounting to Rp178.7 trillion for teacher and lecturer salaries, strengthening competencies, and welfare. Professional allowances for non-PNS teachers and ASN teachers are also prepared.
However, there are no clear details about the amount that teachers might receive or how significant the nominal budget for teacher salaries compared to last year.
Educational observer from the Indonesian University of Education (UPI) ITJE Chodidjah stressed that a budget of that size was more included in fixing schools, significant teacher salary increases, and training for teachers regularly.
The problem is, the front guard is in the ability of teachers in supporting teaching material for students.
The promise to increase the welfare of teachers and training so far has never been clearly specified. On paper, the budget figures always increase, but the conditions in the field felt by teachers related to improving welfare are far from expectations.
People’s schools are considered ITJE as a form of educational segregation and it is feared to cause trauma to children, especially those who graduated from elementary school and then enter the dormitory.
In the field, as many as 115 children resigned from the dormitory because they were not comfortable and needed to look after their parents.
Not only that, as many as 143 teachers also resigned due to their placement far from domicile because the optimization system implemented by the National Personnel Agency.
Instead of improving the system, the government continues this program under the pretext of many teachers and students who queued to enter people’s schools.
“Why not improve the competence of teachers in each region. That is far more included than this. Large education budget must be used on target because the quality of our education is stagnant for 20 years if you look at the results of PISA,” Itje said.
How is the fate of IKN?
In contrast to the reading of state speeches and financial memorandum by President Joko Widodo in 2024, Prabowo now did not mention the national capital in his speech.
However, IKN is still listed in Book II of the Financial Note with development specifications in the Kalimantan region.
The budget plan disbursed is only around Rp500 billion for the support of the feasibility and cooperation of the government and business entities in the development of IKN.
Meanwhile, the Head of IKN Authority, Basuki Hadimuljono, emphasized that further work such as road improvement, airport construction, until the Vice President’s Palace continued.
However, of the total budget of Rp48.8 trillion requested, the final is at Rp. 13.5 trillion. Different in 2024, the IKN budget reached Rp43.4 trillion.
On the other hand, the 80 -year -old anniversary of Independence Day this time was also held again at the State Palace in Jakarta.
Unlike last year which was held in two locations namely the State Palace in IKN and the State Palace in Jakarta.
date:2025-08-16 03:45:00