(Bloomberg) -- Indonesia’s new Deputy Finance Minister Thomas Djiwandono, nephew of President-elect Prabowo Subianto, is promising a smooth fiscal handover while pledging that he won’t raise the debt ratio or the budget deficit.
“I am the bridge between the current president and the president-elect on fiscal policies,” said Djiwandono in his first interview since being appointed on Thursday. His position at the finance ministry will ensure Prabowo’s programs will fit within President Joko Widodo’s economic policy, especially on fiscal prudence, he added.
Djiwandono said that Prabowo’s camp is single-minded in its view that government finances must be kept within their legal limits. “I am making it clear of the president-elect programs going forward — there is no inconsistency whatsoever,” he said.
Investors have been wary of conflicting signals around Prabowo’s fiscal stance, spurring selloffs and higher risk premiums for Indonesia’s bonds. The president-elect himself has said Indonesia can afford to be more “daring” with spending, while his adviser and brother Hashim Djojohadikusumo said the incoming administration may allow the debt ratio to rise to 50% of gross domestic product. Local media have also reported on plans to revise the law capping the budget deficit.
Prabowo’s main campaign promise of free lunches for over 80 million school children is estimated to cost as much as 450 trillion rupiah ($28 billion) a year when it’s fully implemented. The incoming government has since agreed to allocate just 71 trillion rupiah for next year. Djiwandono defended the program, saying it will be an investment in the nation’s long-term human development.
“In that sense, I would say it is quality spending,” he said. “We need to provide quality healthcare, quality nutrition and quality education. There will be economic value in that.”
Djiwandono is the second deputy finance minister, with Suahasil Nazara remaining deputy minister.
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