Challenge for govt: Spending enough for education, or else

Challenge for govt: Spending enough for education, or else

Riyadi Suparno, The Jakarta Post, Jakarta

Believe it or not: Just nine regular citizens, mostly teachers
from the small town of Banyuwangi, East Java, have set the wheels
in motion that could lead to the possible impeachment of
President Susilo Bambang Yudhoyono.

These nine people were apparently unhappy that the government
was dragging its feet on its constitutional obligation of
allocating 20 percent of its budget for education.

They were unhappy that the government was merely promising to
gradually work up to that and fulfilling the obligation some time
in 2009. So, they took their case to the Constitutional Court.

In its verdict issued last week, the court met their demands
and obliged the government to allocate at least 20 percent of its
budget for education, starting Jan. 1, 2006, to conform with the
1945 Constitution.

The verdict surprised both the government and the House of
Representatives, which have been investing a lot of energy and
resources to put together the 2006 budget.

With the education budget set at Rp 40 trillion (US$4
billion), or 11 percent of the total spending for 2006, the
government and the House now has two unpleasant options: revising
the budget to conform to the ruling, which would be a near
impossible fiscal task indeed, or ignore the verdict, which could
have wider legal and political ramifications.

Conforming to the ruling means that the government and the
House have to redo the 2006 draft budget, the deliberation of
which is nearing completion. Revising the budget itself is not a
big deal, the main concern would be how to find the additional
funding to increase the education allocation.

To conform with the ruling, assuming that the central
government's expenditures remain the same at Rp 375 trillion next
year, education spending must be jacked up to at least Rp 75
trillion.

In fact, the Ministry of Education will get the largest budget
allocation of all the government ministries next year, nearly Rp
31.5 trillion, while the Ministry of Religious Affairs, which
oversees and funds state Islamic schools from elementary to
higher education levels, will have Rp 8.3 trillion at its
disposal. Together, they have will spend approximately 40
trillion on education.

If the government wants to comply with the court's ruling, one
alternative to meet the target is to shift funding from other
ministries to the ministries of education and religious affairs.

Now, if we look at the ministries with relatively large
budgets for next year, the one that would get the next largest
allotment would be the Ministry of Defense at Rp 23.6 trillion.
It is followed by the Ministry of Public Works and the National
Police at Rp 13.2 trillion each and the Ministry of Health with
Rp 11.5 trillion.

Looking at the budget of those ministries, it is still
possible for the government to shift a portion of the money from
the Ministry of Defense, and possibly from the police, but not
from public works or health.

Reducing the budget of those two ministries is not recommended
at all as it would result in a slowdown of infrastructure
projects and weaker health services. Both are in a dire state at
present: infrastructure for maintaining the momentum of economic
recovery, while health services are needed to help the poor.

Reducing the budget of the Ministry of Defense would possibly
hurt the military most, which plans to revive its territorial
operations down to the village level. But we can cope with that,
and would possibly be a lot happier without the soldiers and
military agents in every neighborhood and village.

However, with the reduction of the military budget, we might
have to cope with the military's foot dragging in freeing
themselves from their many business interests -- a bad practice
that has been going on for decades.

Similarly, by slightly reducing -- emphasis on slightly -- the
budget for the police is still acceptable, but of course at a
cost. With budget reductions, we might have to tolerate more
petty crimes or extortion from our underpaid police officers,
which might irritate many of us. Reducing the budget of the
police could also undermine their work, especially the anti-
terror operation.

Considering these risks, the government would likely not be
able to shift enough money from other sectors to education. Even
if the government could take some portion from the Ministry of
Defense and the police, it would still be far from enough to meet
its constitutional obligation.

Despite such difficulties, the government actually has a very
good option to boost education funding to 20 percent of the
budget next year... by cutting the subsidies completely,
especially fuel subsidies which will remain high next year
despite this year's drastic cuts. The government has allocated Rp
80 trillion for such subsidies next year, of which Rp 68 trillion
is for subsidizing gasoline, diesel and kerosene.

By only reducing by half the fuel subsidies next year, the
government would be able to raise its education budget to 20
percent, as required by the Constitution and the Constitutional
Court's verdict.

Cutting half the fuel subsidies next year requires political
courage on the part of the government as it would likely draw
widespread protests from many people. But learning from the two
fuel price increases this year alone, the government is seen as
quite capable in managing the impacts of those.

If the government has no political courage to cut subsidies,
it still has another option to meet the constitutional
responsibility, i.e. by creating a larger budget deficit.

The government has projected a Rp 20 trillion deficit next
year, equal to 0.7 percent of the gross domestic product.
Boosting the deficit to Rp 55 trillion, or even 60 trillion,
would not pose any serious problem for the country's economy as
it would amount to only about 2 percent of GDP, which is
considered by many to still be relatively healthy; compare it to
the 3 percent deficit ceiling for countries of the European
Union.

Also, financing the deficit should not be a problem for the
government as it has quite successfully done so in the past years
by issuing bonds, both for the domestic and international
markets.

So, the options are wide open for the government to choose.
And yet, if the government remains defiant and does not abide by
the court's ruling, it exposes itself to a greater danger ahead.

By not abiding by the court's ruling, the government sets a
bad precedent for the whole country by literally snubbing its
nose at the legal system. And this would only worsen the already
bad law-abiding culture in the country.

Worst of all, by not upholding the court's ruling, the
government could be legally classified as violating the
Constitution, which is strong grounds for anyone not happy with
the current government to mount an impeachment process of
President Susilo.

Now, the choices are there, and it is up to the government to
decide its own fate.