One of the mandates of Law 5 of 2017 on the Advancement of Culture (see Goal 1, Specific Policies that Regulate the Cultural and Creative Economy Sector) is the establishment of an alternative funding mechanism in the form of trust funds to encourage the acceleration of the Advancement of Culture. Alternative funding mechanisms outside the State Revenue and Expenditure Budget (APBN) are needed to overcome the problem of budget limitations in the APBN and the rigidity of the state financial administration system in facilitating civil society initiatives toward the advancement of culture.
The law concerning the Advancement of Culture and the sixth resolution produced by the 2018 Indonesian Culture Congress mention the mandate to establish a Cultural Endowment Fund. It also mentioned in (see Goal 1, Measures that Support CSO Participation in Policy Design), the government is mandated to "Establish a Cultural Endowment Fund to expand access to sources of funding and public participation in the advancement of culture". It is line with the strategic agenda in the National Strategy for Culture (see Goal 1, Main Policies and Measures that Contain Strategies and Frameworks for the Development of an Integrated Cultural and Creative Economy Sector). The government must optimize budgeting in the field of culture through a trust fund or endowment fund as the primary source of funding for cultural activities initiated by the people. Furthermore, in a meeting with stakeholders in the field of culture after the 2018 Indonesian Culture Congress, President Joko Widodo said he would disburse a budget of five trillion rupiah (approx. US$354,610) establish an endowment fund for the cultural sector in 2019.
In 2020, the Ministry of Finance has allocated a budget to establish a Cultural Endowment Fund of one trillion rupiah (approx. US$70,922) in the 2020 State Budget. The budget allocation of one trillion rupiah is a good start for the Cultural Endowment Fund. The Ministry of Education and Culture directly follows up on the budget policy by preparing the formation of a Cultural Endowment Fund management agency and the mechanism for managing the funds. The plan is that the endowment fund method will manage the Cultural Endowment Fund. The endowment fund method guarantees the continuation of the efforts to the advancement of culture for the next generation as a form of inter-generational accountability. Concerning funding sources, the funding for the Cultural Endowment Fund is from the state budget, from the results of the previous year development from the Cultural Endowment Fund, as well as other legitimate sources such as domestic and foreign grants.
The management of the Cultural Endowment Fund will be under a work unit of the ministry that handles government affairs in the field of culture, which is the Ministry of Education and Culture. A work unit under the Ministry of Education and Culture manages the Cultural Endowment Fund accountably and in line with the goal of the advancement of national culture in order to provide maximum service to the people. The management by a work unit under the relevant ministry is a prerequisite to the management and guardianship of culture by the Public Service Agency work unit that is more flexible, effective, and efficient. We expect that the Cultural Endowment Fund can be fully operational by mid-2020.
In general, policies and measures that provide funds for CSO capacity development are intended to contribute to the following achievements of the National Strategy for Culture (see Goal 1, Main Policies and Measures that Contain Strategies and Frameworks for the Development of an Integrated Cultural and Creative Economy Sector):
1. Provide space for the diversity of cultural expressions and encourage cultural interaction to strengthen the inclusiveness of culture (Agenda 1);
2. Utilizing objects of cultural advancement to improve people's welfare (Agenda 4);
3. Institutional reform and culture budgeting to support the advancement of culture agenda (Agenda 6); and
4. Strengthen the role of the government as facilitator in the advancement of culture (Agenda 7).
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Ministry of Finance