Compensation funds 'miss the target'

Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta

A coalition of nongovernmental organizations has found that 75 percent of the state funds saved from lowering fuel subsidies last year missed the target.

The Network for Community Empowerment (JKPM) announced on Thursday that a survey it conducted between November and December last year in 98 subdistricts in the provinces of North Sumatra, Lampung, West and East Java, West Kalimantan, South and North Sulawesi and East Nusa Tenggara revealed that the cheap rice program was the only one to reach the lower income groups.

"This may have been caused by corruption, where the funds were enjoyed not only by the poor, or because the programs had not yet been completed because the government had difficulty in disbursing the money," JKPM presidium chairman Erfan Maryono said.

The government allocated Rp 2.2 trillion (US$21 billion) of compensation funds to ease the burden of the country's 49.7 million poor families, following the fuel price hike.

Erfan said JPKM discovered, after interviewing around 2,000 families, that as of December, not all of the funds had been disbursed to the villages, while the residents claimed to have never heard of the programs. Worse still, the officials also knew little about the objectives of the programs.

The survey found that the free medicines and vaccines had not yet been distributed to the community health centers in the villages.

Erfan said the programs should have reduced each poor family's monthly expenditure by Rp 30,000 ($2.80).

"But they could only enjoy the cheap rice at an average price of Rp 1,000 to Rp 1,200 per kilogram if the subsidy totaled Rp 7,500 each month," he said.

The government launched seven social programs after increasing fuel prices by 30 percent in July 2001.

Rp 833.4 billion of the funds were allocated to provide scholarships and renovate school buildings, Rp 534.1 billion for free medicines and vaccines, Rp 279.9 billion to supply cheap rice, Rp 216.4 billion for public transportation, Rp 174 billion to provide clean water, Rp 105.8 billion to assist people in coastal areas and the remaining Rp 56.3 billion to help small- and medium-sized enterprises.

Smarting from the past experience, Erfan suggested that the government stop similar programs this year if they failed to reach the poor, and allow direct control by the public.

Erfan said JKPM would show its findings to the ministries concerned in order to help them find a better mechanism, as the government was intending to continue with the compensation fund scheme.