West Sulawesi Faces Budget Crisis, Struggles to Pay Employee Salaries

The regional government of West Sulawesi is in a precarious financial situation, struggling to meet its payroll obligations for approximately 4,000 employees, primarily teachers and health workers. Governor Suhardi Duka revealed that the provincial budget only had sufficient funds to cover salaries for 10 months this year.

This crisis stems from significant cuts to regional transfer funds (TKD) by the central government. West Sulawesi's budget allocation dropped from Rp1.83 trillion (approximately US$102.8 million) last year to Rp1.67 trillion (US$93.8 million) this year. The province lost its physical special allocation fund (DAK), saw a reduction in its general allocation fund (DAU), and experienced delays in revenue-sharing fund disbursements.

Adding to the pressure, a letter from the Ministry of Home Affairs arrived on July 5, 2026, notifying regional governments about the central government's compilation of data on regions unable to cover personnel expenses. The letter mandated regional heads to submit detailed information on employee numbers, spending, and funding gaps by noon the following day, July 6. Governor Suhardi described the reporting deadline as "extremely tight" but confirmed that his administration quickly compiled and submitted the required data.

For Suhardi, the ministry's letter offered a glimmer of hope in a dire situation. The urgency of the request underscored the severity of the fiscal challenges faced by the West Sulawesi government, highlighting the critical need for financial support to sustain essential public services.

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We quickly filled out the forms and sent the data to the Ministry of Home Affairs