Poor will get fuel subsidy funds<\/p>\n
JAKARTA (JP): The government said on Tuesday it would allocate
\nRp 800 billion (US$96 million) of the additional revenues to be
\ngenerated by the upcoming October hike in fuel prices in the form
\nof cash aid for the poor, seed capital for small businesses and
\ninfrastructure development in rural areas.<\/p>\n
The government has selected three mechanisms for channeling
\nthe funds, namely direct cash transfers to the poor to insulate
\nthem from the impact of the fuel price rise, credit schemes for
\nsmall businesses, and investment in infrastructure development.<\/p>\n
Coordinating Minister for the Economy Rizal Ramli told a press
\nbriefing that a team had been formed to manage the distribution
\nof the funds.<\/p>\n
He said that the team, which is under his chairmanship,
\ncomprised, among others, Minister of Energy and Mineral Resources
\nPurnomo Yusgiantoro; Minister of Settlement and Regional
\nInfrastructure Erna Witular; and State Minister for Cooperatives
\nand Small\/Medium Enterprises Zarkasih Noer.<\/p>\n
\"The team is also responsible for disseminating information on
\nthe fuel price increase so as to sway public opinion in favor of
\nthis unpopular measure,\" Rizal said.<\/p>\n
The government recently announced it would go ahead with its
\nplan, already delayed since April, to hike fuel prices by an
\naverage of 12 percent as from October. The exact date has yet to
\nbe set.<\/p>\n
With the increase, the government expects to save Rp 800
\nbillion in subsidies during the remaining three months of this
\nyear's state budget, which expires in December.<\/p>\n
Purnomo said the government had yet to determine how much of
\nthe Rp 800 billion would be channeled through each of the
\nmechanisms.<\/p>\n
He explained that the team would first monitor the public's
\nresponse to the subsidy mechanisms before deciding on fund
\nallocation.<\/p>\n
\"So the task ahead is to decide how will we go about
\ndistributing the Rp 800 billion to the public,\" Purnomo said.<\/p>\n
Deputy Head in charge of Natural Resources at the National
\nDevelopment Planning Board (Bappenas) Herman Haeruman said that
\nthe mechanisms allowed for direct public participation.<\/p>\n
\"Instead of the central government controlling fund
\nallocations, we'll let the people decide what they need,\" he
\nsaid.<\/p>\n
He added that the government would use existing financing
\nmechanisms to channel the funds.<\/p>\n
\"These are reliable programs that we have been using for the
\npast two to three years,\" he said of the three mechanisms.<\/p>\n
Herman, who is responsible for the direct cash aid mechanism,
\nsaid that locals in each village would themselves decide on the
\nuse of their share of the funds.<\/p>\n
The local community will determine by itself which families
\nwill be eligible for the subsidy, according to information
\ncontained in a leaflet on the scheme.<\/p>\n
Under the previous subsidy scheme, the government had
\nidentified some 17.4 million underprivileged families whom it
\nplanned to insulate from the effects of the fuel price hike
\nthrough direct cash assistance.<\/p>\n
While the previous scheme was to use post offices across the
\ncountry to distribute the funds, the new scheme will use banks.<\/p>\n
So far the government has only selected Bank Rakyat Indonesia
\n(BRI), which has a nation-wide branch network, as a distributor
\nof the funds.<\/p>\n
The second mechanism, which concerns small businesses, will be
\nmanaged by Minister Zarkasih Noer.<\/p>\n
Zarkasih said the money, known as revolving funds, would be
\nextended in loan form to small businesses in a bid to strengthen
\nthe economic recovery.<\/p>\n
He said the loans would be subject to commercial interest
\nrates, but small businesses could receive discounts if they
\nrepaid the loans upon maturity.<\/p>\n
According to him, most small businesses only needed minor
\ncredits ranging from Rp 1 million to Rp 5 million.<\/p>\n
\"We will distribute small amounts of funds to many
\nbusinesses,\" he explained.<\/p>\n
Zarkasih said the government would transfer the funds to rural
\nfinancing institutions who would then relay the money to small
\nbusinesses.<\/p>\n
Erna, who is in charge of infrastructure development, said the
\nfuel subsidy funds would also be used to develop infrastructure
\nin villages and urban slums which would be selected by the local
\ncommunities themselves. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/poor-will-get-fuel-subsidy-funds-1447893297",
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