Indonesia’s Finance Minister, Sri Mulyani, stated during the International Conference on Infrastructure (ICI) held at JCC Senayan on June 12 that several new government agencies are expected to emerge during President Prabowo Subianto’s administration. In fact, the president is reportedly preparing to establish a National Revenue Agency in the near future. Before this, eight new agencies had already been created, including the National Nutrition Agency (BGN), BPI Danantara, the Agency for the Acceleration of Poverty Eradication (BP Taskin), the Hajj Management Agency (BPH), and the Halal Product Assurance Organizing Agency (BPJPH).
Dr. Agustinus Subarsono, a public policy expert at Universitas Gadjah Mada (UGM), views the formation of new agencies as a way to promote functional specialization.
These agencies, he noted, are expected to take on more specific roles previously managed by multifunctional institutions, potentially enabling quicker resolution of targeted issues.
“These new agencies are likely to drive innovation, as they will carry fresh ideas, be staffed by newer human resources, and may adopt modern information technologies,” said Dr. Subarsono on Monday, Jun. 23, 2025.
However, he cautioned that without careful institutional design and comprehensive feasibility studies, the proliferation of such agencies could result in overlapping functions with existing bodies.
Additionally, these new agencies could lead to increased state expenditure, particularly in staffing, physical infrastructure, and technology provision.
“Given the current economic climate, the creation of new agencies outside the existing ministries deserves serious consideration. These new bodies could end up causing inefficiency, something President Prabowo himself has vowed to avoid,” he remarked.
Dr. Subarsono also pointed to a major challenge the government may face: managing the national budget.
The introduction of new agencies will naturally increase state spending, as funds will be required for operations, including employee salaries, buildings, equipment, technology, and program activities.
“The emergence of new institutions will fragment the national budget. Existing ministries and sectors may see their allocations reduced. From an economic standpoint, a thorough cost-benefit analysis should precede the launch of any new agency,” Dr. Subarsono explained.
As an example, Dr. Subarsono cited the proposed National Revenue Agency (BPN), which is being designed to streamline fiscal reform without adding to bureaucratic burdens.
However, as an autonomous state agency, the BPN would report directly to the president, thereby increasing the president’s responsibilities.
“As an authoritative body, the agency may enjoy greater operational flexibility and has the potential to boost future national revenue,” he concluded.
Dr. Subarsono emphasized that the formation of new agencies must be approached with caution, careful planning, and robust academic analysis.
Rushed institutional expansion can carry significant economic, political, and social implications. Economically, the impact includes increased state spending.
Politically, it may shift power toward greater centralization.
“From a social standpoint, it could lead to employee transfers and the need for competency alignment with the new agencies’ functions, all of which require time and preparation,” he added.
Author: Kezia Dwina Nathania
Editor: Gusti Grehenson
Post-editor: Lintang Andwyna
Illustration: Freepik