politics economy

Indonesian Government Wealth Accumulation: Rp653 Trillion in Idle Funds

Executive Summary

Indonesia’s government at both central and regional levels is sitting on a massive Rp653.4 trillion in accumulated wealth, according to the latest data from Q3 2025. This unprecedented accumulation of idle funds has sparked a major controversy between Finance Minister Purbaya Yudhi Sadewa and West Java Governor Dedi Mulyadi, highlighting fundamental issues in fiscal management and budget execution across the archipelago.

Primary Data: Regional Government Funds in Banking Sector

The latest data released by the government (Ministry of Finance and Bank Indonesia) at the end of Q3 2025 (August/September 2025 data) shows a very clear picture of the scale of this problem.

1. Total Government Deposits: Rp653.4 Trillion

Total government deposits (including regional governments) in the national banking system as of August 2025 reached Rp653.4 trillion.

2. Deposit Breakdown (Composition)

This total figure is divided into two main components that are crucial for analysis:

  • Time Deposits (Fixed Deposits): Rp285.6 trillion
  • Current Accounts (Checking Accounts): Rp357.4 trillion
  • Savings Accounts: Rp10.4 trillion

Quantitative Data Analysis

Our analysis focus will be divided into two key findings: deposit funds and current account funds.

1. Time Deposit Analysis (Rp285.6 Trillion)

This is the clearest form of “fund accumulation.” These funds are deliberately placed by regional governments in interest-bearing instruments (deposits) and are not allocated for short-term spending.

Implications:

  • This indicates the presence of budget surplus (SILPA) from previous years or regional income that has been received but does not yet have ready-to-execute programs
  • Regional governments, in this case, choose to obtain yield (interest) rather than spend these funds

Economic Problems:

  • From a macroeconomic perspective, these Rp285.6 trillion funds are “unproductive”
  • These funds do not become roads, do not become bridges, do not pay honorary teacher salaries, and do not become social assistance
  • This slows money circulation and reduces the multiplier effect of government spending in the regions

2. Current Account Analysis (Rp357.4 Trillion)

This finding is analytically more concerning. Current accounts are operational funds that should be highly liquid and ready to be used for project bill payments, salaries, and routine expenditures.

Implications:

  • The large amount of funds in current accounts (even exceeding deposits) indicates serious problems in cash management and budget execution
  • This means the money already exists and is ready to be spent, but the programs are not running

Efficiency Problems:

  • Funds idle in current accounts earn very low interest (or zero)
  • This is a form of acute inefficiency
  • Regional governments fail to execute planned spending, causing very slow budget absorption
  • This is a primary indicator of poor planning and slow procurement processes

Regional Data: Fund Accumulation Concentration

The fund accumulation problem is not evenly distributed and is highly concentrated in regions with large fiscal capacity.

Based on data released in September/October 2025:

  • DKI Jakarta: Recorded as the province with the largest bank deposits nationwide, reaching Rp14.6 trillion
  • West Java: Reported to be in fourth position among provinces with the largest deposits, with figures (which became controversial) around Rp4.17 trillion to Rp4.7 trillion
  • Other Examples (Level II Regions): Even at the city level, the figures are significant. Samarinda City, for example, is reported to have cash in banks amounting to Rp1.48 trillion

Analysis Conclusion (Data-Based)

Pure data analysis shows that the “regional government fund accumulation” problem as of October 2025 has two faces:

  1. Intentional Problem (Deposits): There are Rp285.6 trillion that regional governments deliberately save to earn interest
  2. Execution Incompetence Problem (Current Accounts): There are Rp357.4 trillion in operational funds that failed to be spent due to slow budget absorption

This problem is concentrated in wealthy regions (like DKI Jakarta), creating an irony where the most capable regions that should be economic drivers instead become the largest “savers” of funds in the banking system.

Regional Government Fund Accumulation Case Analysis

The issue of regional government fund accumulation has again become the main focus of the central government. Finance Minister Purbaya highlighted the total government deposits in the banking system reaching significant amounts, including Rp285.6 trillion in time deposits, which are considered to hinder economic circulation.

News Summary:

  • National Scale: Finance Minister Purbaya is aggressively encouraging regional governments to immediately spend their budgets and not “park” APBD funds in banks
  • Finance Minister’s Criticism: Purbaya specifically criticizes regional governments that keep their funds in current accounts. According to him, this is “even more disadvantageous” because the interest is lower than deposits, and this practice will become a finding in BPK audits
  • DKI Case Example: In DKI Jakarta, DPRD members highlighted APBD accumulation reaching Rp14.6 trillion, questioning why the DKI Provincial Government keeps large funds while on the other hand taking loans and cutting subsidies for the people
  • Regional Defense: On the other hand, some regional heads, such as the Mayor of Samarinda, denied that their funds are “idle.” He explained that the funds in the regional treasury (RKUD) have been allocated for payment of physical project terms and employee spending that will fall due, so they are not funds that are hoarded without purpose

Analysis: This case shows a fundamental difference in perspective between the central government and regional governments. For the Ministry of Finance, unspent funds are “idle funds” that hinder national economic growth targets. For regional governments, these funds are “cash funds” prepared for operations and payments for ongoing projects according to terms. Minister Purbaya’s criticism highlighting fund placement in current accounts shows suspicion that regional governments are not efficient in managing their cash, potentially harming the regions.

Finance Minister Purbaya Analysis

As Minister of Finance, Purbaya Yudhi Sadewa takes a very firm and proactive stance in encouraging fiscal stimulus and internal improvements.

News Summary:

  • Regional Government Fund Polemic: Purbaya became the main focus because of the “data war” with West Java Governor Dedi Mulyadi. He released BI data stating that West Java Provincial Government funds were idle at Rp4.17 trillion. He even accused KDM that “his subordinates are most likely deceiving him.”
  • Encouraging Liquidity: In the past month, Finance Minister Purbaya has implemented a policy of placing Rp200 trillion in government funds in Himbara banks (SOEs). The goal is to lower interest rates and encourage credit growth to reach double digits by the end of the year
  • Tax System Improvements: Purbaya acknowledged obstacles in implementing the Coretax system. He revised the target for full system completion to January 2026
  • Housing Sector Intervention: He also intervened to address KPR (Home Ownership Credit) distribution problems that were hampered by OJK’s SLIK, and has met with BP Tapera to find solutions

Analysis: Purbaya demonstrates a technocrat leadership style that is very “hands-on” and does not hesitate to take confrontational steps to achieve his goals. He uses data (from BI and OJK) as his weapon. His outspoken attitude in the polemic with KDM shows that he prioritizes national budget discipline over rigid bureaucratic ethics. His focus is clear: accelerating regional spending, increasing bank credit, and improving the Ministry of Finance’s internal systems (Coretax) to boost the economy.

Governor Dedi Mulyadi (KDM) Analysis

As Governor of West Java, Dedi Mulyadi responded directly to Finance Minister Purbaya’s accusations by taking public verification steps.

News Summary:

  • Denying Ministry of Finance Data: KDM openly denied Minister Purbaya’s data. He asserted that there are no Rp4.17 trillion funds “deposited” in the form of deposits to earn interest
  • Current Account Clarification: KDM explained that the existing funds (as of October 21, 2025, remaining Rp2.3 trillion) are in regional treasury current accounts and are operational funds that “have been used to pay for projects, employee salaries,” and other routine expenditures
  • Visiting BI and BPK: Not only denying, KDM directly visited Bank Indonesia offices and BPK West Java Representatives. The goal is to cross-check data and request BPK to conduct transparency audits on West Java Provincial Government’s regional treasury so that this issue becomes clear
  • Budget Transparency: KDM emphasized that the current remaining regional treasury of West Java, around Rp2.6 trillion from the total APBD of Rp31 trillion, is reasonable for spending needs until the end of the year and does not constitute accumulation

Analysis: Dedi Mulyadi uses his responsive political style and “direct approach” to face this crisis. Instead of just engaging in media statement wars, he physically visited authoritative institutions (BI and BPK) to prove his position. This is a political move to demonstrate transparency and “fight back” against data released by the central government. KDM positions himself as a transparent and rule-abiding regional head, where the remaining funds in his treasury are purely for operational needs, not for “hoarding” as accused.

Government Response and Policy Direction

Central Government Initiatives

  • Liquidity Injection: Rp200 trillion placement in state banks
  • System Improvements: Coretax system overhaul by January 2026
  • Credit Growth Target: Pushing for double-digit lending growth

Regional Government Responses

  • Transparency Measures: Direct engagement with BI and BPK for data verification
  • Budget Execution: Emphasis on legitimate operational requirements
  • Accountability: Increased focus on demonstrating proper fund utilization

Conclusion: A Crisis of Fiscal Management

The Rp653.4 trillion government fund accumulation represents more than just a financial statistic—it’s a symptom of deeper structural issues in Indonesia’s fiscal management system. The controversy between Minister Purbaya and Governor Dedi Mulyadi has brought these issues into sharp public focus, forcing both central and regional governments to confront fundamental questions about:

  • The balance between fiscal prudence and economic stimulus
  • The efficiency of budget planning and execution processes
  • The appropriate role of government funds in economic development
  • The transparency and accountability of public financial management

As Indonesia navigates these challenges, the resolution of this controversy will likely set important precedents for center-regional fiscal relations and government accountability in the years ahead.

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Additional Sources:

This article was researched by the author using Gemini Pro 2.5 in Gemini web interface and edited with Roo Code (using Supernova model) for enhanced accuracy and formatting.