Throughout 2025 up to September 1, Indonesia has been shaken by a series of corruption cases involving the state budget (APBN). Official records show seven major cases that caused state losses of Rp12.8 trillion and involved approximately Rp11 billion in bribes.
The largest case involves the Indonesia Eximbank (LPEI), with potential state losses of Rp11.7 trillion. The Corruption Eradication Commission (KPK) named at least six suspects, including top executives of the state institution and private sector figures. The scheme involved fraudulent loans and top-ups without proper collateral.
Indonesia’s Attorney General’s Office launched an investigation into the Rp9.9 trillion Chromebook procurement at the Ministry of Education. Four suspects have been named, including a former ministerial special staffer and director-level officials.
Isa Rachmatarwata, former Director General of Budget at the Ministry of Finance of Indonesia, was indicted for causing Rp90 billion in losses in the Jiwasraya insurance scandal. His indictment was read at the Jakarta Corruption Court on August 26, 2025.
Indonesia’s KPK uncovered a bribery scheme involving the Kolaka Timur Regional Hospital project, valued at Rp126.3 billion and funded by the Special Allocation Fund (DAK). A project fee of Rp9 billion was agreed, part of which was seized during a sting operation.
In North Sumatra, Indonesia, the KPK arrested five suspects in a bribery case linked to road projects worth Rp231.8 billion. Kickbacks were estimated at 5 to 15 percent of contract values.
Indonesia’s Deputy Minister of Manpower, Immanuel Ebenezer, was named a suspect in an extortion case involving occupational safety certification. The KPK seized cash along with luxury cars and motorcycles.
The President Director of PT Inhutani V, a state forestry company in Indonesia, was arrested with two private sector actors for bribery in forest management permits. Bribes worth about Rp2 billion were confiscated, partly in Singapore dollars.
Investigators from KPK and the Attorney General’s Office identified five recurring patterns in Indonesia’s state budget corruption. First, project-related bribes through contractor fees. Second, inflated procurement prices, as seen in the Chromebook case. Third, fraudulent loans in state-owned financial institutions. Fourth, extortion of permits and certifications. Fifth, violations of budget procedures by central officials.
By quarter, Q1 in Indonesia was dominated by LPEI and Jiwasraya cases. Q2 shifted focus to Chromebook procurement and road projects in North Sumatra. Q3 saw a surge in sting operations, including the arrest of the Deputy Minister of Manpower in August.
The biggest losses in Indonesia during 2025 stem from the financial sector. Central-to-regional transfers, such as the Special Allocation Fund, proved particularly vulnerable to corruption. Oversight from the Audit Board (BPK), the Financial and Development Supervisory Agency (BPKP), and internal inspectorates must be strengthened. Bureaucratic reforms at the Ministry of Finance, Ministry of Education, Ministry of Manpower, and state-owned enterprises are crucial to prevent systemic abuse.
Indonesia’s 2025 state budget corruption cases show that misuse of public funds remains a serious threat. Stronger law enforcement actions in the second half of the year must be matched with structural reforms to prevent recurrence.
Read also our related analysis on corruption risks in Indonesia’s education sector to understand the vulnerabilities of digitalization programs.
Subscribe to get the latest posts sent to your email.
Type your email…
Subscribe
Subscribe to Olam News
<100 subscribers
Share Dialog
Samuel Berrit Olam
No comments yet