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🇮🇩 Indonesia /Economy & Trade

Pekanbaru City: Strengthening the Economy, Enhancing Local Revenue

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Pekanbaru's government is strengthening its economy by increasing local revenue and promoting sustainable development.
  • The city has successfully boosted its original local revenue (PAD) from Rp 800 billion to Rp 1.3 trillion, becoming a model for other regions.
  • Initiatives include digitalizing services, simplifying regulations, and transforming waste management into an economic resource.

Pekanbaru's government is actively transforming its governance to bolster the local economy, focusing on increasing original local revenue (PAD) and fostering sustainable urban development. Under the leadership of Agung Nugroho, the city aims to ensure development benefits are distributed equitably among its residents, viewing Indonesia's Independence Day as a reminder of the ongoing struggle for public welfare.

Initially, Pekanbaru faced fiscal challenges, heavily reliant on central government transfers (66.8%) with operational spending dominating the regional budget (89.3%). Recognizing this, the administration launched a major fiscal transformation agenda, emphasizing cross-sectoral synergy and collaboration with central and provincial governments. This strategic shift has garnered national attention, with the Minister of Home Affairs citing Pekanbaru as an example of effective PAD management.

The condition became the birth point of Pekanbaru City's large fiscal transformation agenda. We realize that strengthening fiscal capacity requires cross-sectoral synergy, cross-authority, and close collaboration with the central government, provincial government, and various vertical agencies.

— Agung NugrohoAgung Nugroho, explaining the impetus behind Pekanbaru's fiscal transformation efforts.

The city has seen its PAD increase significantly, projected to rise from Rp 800 billion in 2024 to Rp 1.3 trillion in 2025, with Rp 540.46 billion realized by mid-2026. These increased revenues are being reinvested into the community, notably through urban beautification projects like regulating billboards and promoting a greener city via waste management.

Pekanbaru views waste as an economic asset, establishing 83 waste management institutions at the neighborhood level. Thirty of these have demonstrated strong performance with high citizen participation. The city further enhances this by utilizing Waste Stations and the digital platform Rekosistem, allowing residents to exchange inorganic waste for economic value, underscoring Pekanbaru's commitment to sustainable development and economic innovation.

Not many local governments are openly used as examples by the Minister of Home Affairs in managing PAD. Pekanbaru City is one of them.

— Agung NugrohoAgung Nugroho commenting on the national recognition of Pekanbaru's success in managing local revenue.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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