Analysts reject proposed bigger education budget<\/p>\n
Urip Hudiono, The Jakarta Post\/Jakarta<\/p>\n
While welcoming the Constitutional Court's ruling that mandates
\nan increase in the education budget, economists are saying that
\nfull implementation would not be fiscally viable at present due
\nto the state budget's many limitations.<\/p>\n
Economist Faisal Basri said a 20 percent allocation for the
\neducation sector -- as stipulated in the Constitution and
\nrecently upheld by the Court -- would mean the government would
\nhave to provide up to Rp 110 trillion (some US$11 billion) in
\nfunds, assuming next year's expenditures at some Rp 550 trillion
\n-- an amount that would be difficult to work into the current
\nbudget structure.<\/p>\n
\"Of course the government can reallocate its spending for
\nthis, but what use would it be if more goes to education, but we
\ntake away from infrastructure and health, for example,\" the
\neconomist from the University of Indonesia (UI) said.<\/p>\n
\"Reducing fuel subsidies and debt payments, meanwhile, also
\nhave their own economic and political complications.\"<\/p>\n
Sri Adiningsih from Gadjah Mada University mentioned how
\nswapping fuel subsidies for more education funds -- by allowing
\nanother fuel price hike -- could hurt the economy, referring to
\nhow the recent rise in inflation and interest rates from the
\nlatest hike would likely stifle growth and push up the jobless
\nnumbers.<\/p>\n
Meanwhile, concerning the option of meeting the requirement
\nsimply by raising expenditures for education at the expense of a
\nwider budget deficit, both Faisal and Sri Adiningsih said that it
\ntoo had its fiscal risks.<\/p>\n
\"With allocations for education now standing at some Rp 40
\ntrillion, an additional Rp 70 trillion would translate into a
\ndeficit of some 3 percent of the gross domestic product (GDP),
\nwhich is not good in terms of fiscal sustainability, particularly
\nif the government fails to finance it,\" he said.<\/p>\n
The best that the government could do, Faisal said, is to
\ngradually increase the allocation as it had planned to do --
\nciting a 50 percent budget increase next year to Rp 60 trillion
\nwith a tolerable 1.5-percent deficit.<\/p>\n
The government had said it would only be able to increase the
\neducation budget by an average of 3 percent each year until it
\nreaches 20.1 percent in 2009.<\/p>\n
While the options are limited on the spending side, Chatib
\nBasri, who is also from UI and an advisor at the Office of the
\nCoordinating Minister for the Economy, said the government had at
\npresent few options to increase revenue, other than boosting tax
\ncollection and proceeding with the privatization of state-owned
\nenterprises.<\/p>\n
\"Taxing too much could, however, hurt businesses and the whole
\neconomy, while I don't think proceeds from the selling of state
\nassets would amount to that much, apart from likely objections
\nthe public,\" he said, adding that the government's planned
\nallocation of between 12 and 14 percent for next year would still
\nbe feasible.<\/p>\n
Nevertheless, Faisal, Chatib and Sri Adiningsih, were all of
\nthe opinion that the education budget must indeed be increased
\nfurther if this country wants to improve its human resources.<\/p>\n
\"The Court's ruling should be seen as a wake-up call for the
\ngovernment to change its paradigm and priorities in drafting the
\nstate budget and providing more for human-resource development,\"
\nSri said.<\/p>\n
Faisal, meanwhile, suggested a more output-oriented paradigm
\n-- rather than an input-oriented one -- for the educational
\nsector, linking its financial support to what is actually needed.<\/p>\n
\"Why provide so much money in advance, if we are actually not
\nprepared in the way we will spend it wisely for the betterment of
\nour nation's education system?\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/analysts-reject-proposed-bigger-education-budget-1447893297",
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