RI economic program 'gains foreign support'<\/p>\n
JAKARTA (JP): Minister of Cooperatives and Small Enterprises
\nAdi Sasono said on Tuesday that his widely criticized people's
\neconomy program had gained backing from Indonesia's foreign
\ndonors.<\/p>\n
The controversial minister, a staunch promoter of small and
\nmedium-sized entrepreneurs (SMEs), said both local and
\ninternational parties accepted his plan to distribute Rp 10.8
\ntrillion (US$1.23 billion) in subsidized loans to SMEs and
\ncooperatives.<\/p>\n
\"Neither the economy, finance and industry ministerial team
\nhere or our international donors have any problems with the
\nprogram,\" he said after a meeting with the House of
\nRepresentatives' Commission VIII for the state budget and
\nfinance.<\/p>\n
Adi's program to provide financial assistance to smaller
\nenterprises through 17 subsidized loan schemes has been heavily
\ncriticized by both local and foreign experts.<\/p>\n
His critics say the program is not market oriented and is
\nmerely a populist ploy to gain a political constituency.<\/p>\n
Adi's people's economy program has won the support of the
\nInternational Monetary Fund (IMF). The program is included in the
\ngovernment's new letter of intent to the IMF.<\/p>\n
Adi said the IMF and other donors demanded tight monitoring of
\nthe disbursement of the subsidized loans.<\/p>\n
To accomplish this, the ministry has employed 5,120 personnel
\nto monitor the disbursement of the loans and prevent any leakage
\nfrom the funds, he said.<\/p>\n
Adi said international donors also urged the government to
\nsimplify the 17 loan schemes.<\/p>\n
He insisted, however, that the schemes could not be simplified
\nfurther because the characteristics of small-scale businesses
\nwere different and financial assistance for them could not be
\ngeneralized.<\/p>\n
\"We can't treat a farming loan in the same way as a fishery
\nloan, for example,\" he said.<\/p>\n
He said he had also convinced international institutions that
\nthe money spent to develop small-sized businesses was not an act
\nof charity, but part of the country's economic recovery program.<\/p>\n
\"This is an investment to open job opportunities. Without it,
\nrural people will migrate to the cities, and unemployment could
\ngenerate a vulnerable social condition and damage efforts to
\nstabilize our country,\" he said.<\/p>\n
Adi said the only problems remaining in the program were
\ntechnical difficulties in disbursing the loans and the
\nmisperceptions of large business groups who were concerned that
\nthey would be victimized by the new program.<\/p>\n
\"There are misperceptions from some people that the government
\nwill take over the assets of troubled conglomerates and
\ndistribute them to small businesses.\"<\/p>\n
\"Our program has nothing to do with that matter at all, it has
\nall been misunderstood,\" he said.<\/p>\n
The technical difficulties, meanwhile, mostly lie with
\nparticipating banks who are not used to channeling such large
\namounts of subsidized credits, he said.<\/p>\n
The allocated money for farming loans, for instance, now
\ntotals Rp 8 trillion, compared to some Rp 200 billion per annum
\nin past years.<\/p>\n
The new program also broadens those eligible for the loans
\nfrom government-sanctioned village cooperatives (KUD) to include
\nnon-KUD cooperatives and nongovernmental organizations.<\/p>\n
Indonesia's vast and sprawling geography has also hampered the
\nprocess, which will see loans disbursed in some 66,000 villages
\nacross the country, Adi added.<\/p>\n
Adi said that so far some Rp 2.2 trillion of the Rp 8 trillion
\nin farming loans had been disbursed, while an additional Rp 3.1
\ntrillion would be disbursed over the next two weeks.<\/p>\n
He said the disbursement of the remaining funds should proceed
\nsmoothly because all the money had been channeled to banks.<\/p>\n
\"So the money is not with the cooperatives minister. I am not
\nSanta Claus, giving money away,\" he said, referring to an
\nexpression coined by his critics to describe his program. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-economic-program-gains-foreign-support-1447893297",
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