How Risk-Taking Could Result in Higher Growth for Indonesia - Tempo.co English
TEMPO.CO, Jakarta - The Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia (LPEM UI), believes financial governance reform is necessary to give the government room to take risks in pursuit of higher economic growth.
"Our state financial governance, perhaps due to the 1997 economic crisis, has been too rigid and too prudent. The result is that our economy has grown steadily at 5 percent," said LPEM UI Director Chaikal Nuryakin, during a parliamentary meeting with the State Financial Bill working committee on Thursday, September 17, 2026.
Chaikal made the statement while advising the State Financial Bill discussion with lawmakers. According to Chaikal, current financial governance is rigid because it is oriented towards a "straitjacket" paradigm rather than a "springboard," meaning the state has strict fiscal control while avoiding mistakes, including losses.
This paradigm has led policymakers, including directors of state-owned enterprises (SOEs), to avoid risks for fear of criminal charges due to decisions that trigger losses.
However, Chaikal believed that losses resulting from a policy or decision do not necessarily indicate wrongdoing or unlawful acts. Therefore, Chaikal urged criminal investigations be directed more towards assessing the extent to which the decision-making process was carried out in good faith, with prudence, and in accordance with procedures.
"Focusing on state losses is inappropriate, because it's possible for the state to still profit despite corrupt practices," Chaikal stated.
He argued that focusing on state losses while limiting freedom of movement undermines the state's goal of maximizing economic and social value.
Nevertheless, Chaikal emphasized that efforts to improve financial governance shall not weaken the fight to eradicate corruption, but rather shift the focus toward decision-making procedures instead of making profit and loss the primary indicator.
For Chaikal, it is impossible to achieve 8 percent economic growth if the state limits innovation and risk in order to minimize losses. He instead urged for state financial governance to work towards creating economic and social benefits.
