Free milk and cash gifts raise risks to Indonesia and Thailand ratings

SINGAPORE: South-East Asia’s new leaders risk blowing past budget constraints to make good on costly campaign promises of cash handouts and free lunches, increasing the risks to their prized investment-grade ratings.

Indonesia’s likely next President Prabowo Subianto plans to provide free meals and milk to more than 80 million school children across the country to combat extreme poverty and stunted physical development. The project is estimated to cost 120 trillion rupiah (US$7.7 billion) in its first year, before ramping up to 450 trillion rupiah annually by 2029.