Village Budgets Vital for Economic Growth in Indonesia

At the 2025 National Villages Day celebration in Sumedang, West Java, Home Affairs Minister Tito Karnavian encouraged village heads across Indonesia to maximize the use of their village budgets to promote local economic growth.
With the government’s ambitious goal of achieving 8% economic growth, the minister emphasized that village budgets are not just for building infrastructure—they are an essential tool for nurturing economic independence at the village level.
Karnavian pointed out the importance of village leaders developing entrepreneurial skills to help identify and utilize local resources.

Village Budgets Economic Growth Indonesia

This could include making use of vacant land, boosting the local food sector, and supporting small businesses and village-owned enterprises. These efforts are crucial for increasing revenue, creating jobs, and strengthening the local economy.
The push for economic advancement in villages ties into the broader picture of economic development in Indonesia. By nurturing growth at the village level, Indonesia can help ensure the country meets its economic targets.

The role of villages in supporting national goals like food security and economic stability cannot be overstated. If villages reach their potential, they will be a driving force behind Indonesia’s goal of achieving 8% economic growth.
Beyond national economic goals, the progress of villages also plays a part in Indonesia’s role in global politics. As one of Southeast Asia’s largest economies, Indonesia’s economic development directly impacts its position on the world stage.

A stronger economy

For instance, a stronger local economy supports Indonesia’s efforts to be a key player in global trade and politics.
Whether it’s improving food production or supporting micro and small businesses, these actions have the potential to improve Indonesia’s influence in export markets, strengthening its global presence and trade relationships.

Karnavian’s message highlighted the importance of working together to achieve these goals. The government’s strategy encourages collaboration at all levels—from local leaders to regional heads and the central government.
By focusing on economic advancement in villages, Indonesia can create a ripple effect that strengthens the country’s economy and boosts its global standing.

In an interconnected world, global events impacting Indonesia can have far-reaching consequences. Ensuring that villages contribute to the economy is a critical step in safeguarding the country’s resilience and economic future.
By empowering village leaders to make strategic decisions and take full advantage of local resources, Indonesia can maintain its competitive edge, both domestically and globally.

Looking ahead

Economic development in Indonesia is a shared responsibility, and it starts with every village working toward its full potential.
As more villages tap into their unique opportunities, the country as a whole will be better positioned to achieve its economic targets and take a stronger stance in global political and economic matters.