Ridwan Max Sijabat and Apriadi Gunawan, The Jakarta Post, Medan
The government will issue a new regulation allowing state-owned insurance provider PT Jamsostek to invest a part of its assets in the construction of housing for low-income workers and in labor intensive small and medium enterprises (SMEs).
Under the draft government regulation, due to be issued in February, Jamsostek will be allowed to invest Rp 5 trillion annually in the low-cost housing sector, and 10 percent of its assets, now totaling Rp 38 trillion, in SMEs.
Jamsostek president director Iwan P. Pontjowinoto said that Jamsostek would cooperate with state-owned Bank Tabungan Negara (BTN) in disbursing the funds.
The main priority will be given to the construction of workers' housing in 10 big cities around the country, he said, adding that the financing scheme would come onstream in the second half of this year.
"This major funding allocation (Rp 5 trillion) will be used to construct low-cost apartments and houses in Medan, North Sumatra; Batam in the Riau Islands; Jakarta; Tangerang; Banten; Bandung and Bekasi in West Java; Semarang, Central Java; Surabaya, East Java; Yogyakarta; Balikpapan, East Kalimantan; and Makassar, South Sulawesi," he said after touring a stalled housing project for dock workers at Belawan port earlier this week.
The funds for the financing scheme would be taken from the company's annual profits, while the soft loans for SMEs would be taken from Jamsostek's assets.
Jamsostek, which was established in 1992 to provide social security programs for workers, has built four low-cost apartment complexes in industrial zones on Batam Island, two in Cikarang, West Java, and two in Makassar.
The company had earlier signed a number of memorandums of understanding with BTN and housing developers for the construction of affordable housing, but they were not acted upon due to fears by Jamsostek management that they might be in breach of Government Regulation No. 28 of 2004, which requires that the company's funds be put into secure and profitable investments.
"The new regulation will complement the existing government regulation and provide a government guarantee for Jamsostek's investment programs," said Iwan.
Asked about the soft-loan scheme for labor-intensive SMEs, Iwan said that it was intended to support the government's program to create more jobs for the unemployed.
Under the scheme, Jamsostek, in cooperation with other state-owned banks, would provide soft loans to SMEs to generate employment. In addition, both the SMEs and their employees would be required to participate in Jamsostek's social security programs.
"The soft loans will be offered to SMEs, including herbal medicine distributors, pedicab owners, spare-parts producers and catering enterprises, and this will help the government ensure that workers in the informal sector obtain insurance protection," Iwan said.
Regarding the Belawan port housing project, BTN, at the request of Jamsostek, has appointed a new developer to complete the scheme.
The development ran into trouble, with only 200 of the proposed 506 low-cost homes having been constructed to date. The new developer has agreed to construct the remaining 300 units and public facilities, such as roads, sports facilities and places of worship, and to finish the project by the end of this year.
Hundreds of port workers recently staged a demonstration to protest against the delay in the completion of the project, demanding that an investigation be launched into suspected corruption. The local police are currently investigating the case.