Bappenas admits political abuse

Bappenas admits political abuse

JAKARTA (JP): Chairman of the National Development Planning
Board (Bappenas) Boediono admitted on Wednesday the country's
multibillion dollar social safety net fund was abused by certain
political parties seeking to gain popularity.

Boediono declined to name the political parties, but said the
government would not halt the social safety net program despite
the abuse.

"We will continue with the safety net program. What needs to
be improved will be taken care of, what is bad will be eliminated
and what is good will be maintained," he said after briefing his
staff members charged with running the program.

Boediono told his staff not to use the social safety net fund
to further the political interests of certain political parties.

"We're working here for the people. We won't support any
political party," he said.

Indonesia is scheduled to hold a general election on June 7,
the first free and fair elections after more than 32 years under
the authoritarian rule of former president Soeharto.

The social safety net program is designed to help the poor
survive the current economic crisis. The government allocated
some Rp 17.9 trillion to finance the program in the 1998/1999
fiscal year ending in March, but only around 80 percent of the
funding was distributed. The remaining funds will be included in
the Rp 6 trillion allocated for the program in the 1999/2000
fiscal year.

The social safety net program for the current fiscal year is
expected to be financed mainly by international lending
institutions.

The World Bank has delayed releasing US$600 million in
financial assistance for the program. The funds were to be
disbursed at the end of the 1998/1999 fiscal year in March.

Non-governmental organizations have accused the ruling Golkar
Party of abusing the social safety net fund to increase its
popularity ahead of the elections.

In a joint press conference with the World Bank last month,
Boediono said the government and the bank were discussing new
ways to improve the effectiveness of the social safety net
program and gain international financial support.

Ben Fisher, a senior World Bank official in Jakarta, said
once the government and the bank agreed on a new monitoring
system for the fund, the bank's board of directors would approve
the disbursement of the loan. The board is scheduled to convene
on May 18.

International Monetary Fund Asia Pacific director Hubert Neiss
is currently in Jakarta to review the country's economic reform
programs, including the social safety net program.

Meanwhile, Boediono welcomed positive developments on other
fronts, particularly the improving picture of the country's
macroeconomic condition.

He pointed to declining inflation and interest rates and a
more stable exchange rate for the rupiah against the US dollar.

"If we can implement a nonviolent and credible general
election, I'm optimistic that everything (the economy) will grow
again," he said.

Indonesia has been hit by a 22-month long economic crisis. The
economy contracted by more than 13 percent in 1998 and by more
than 10 percent in the first quarter of 1999 compared to the same
period last year. The government is expecting the economy to
bottom out some time in the middle of the current fiscal year.

Boediono said the international community would continue to
help the country lift itself out of its worst economic crisis in
three decades.

"They (international donors) may not necessarily support the
current government, but obviously they're supporting this
country's recovery," he said. (rei)