Effectiveness of program for the poor remains to be seen

Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta

Following fuel and utility price increases at the beginning of the year, the government has started its program to assist the poor. The program, launched on Friday draws on funds from the reduced fuel subsidies.

It seems like a noble way to provide compensation for the 22 percent increase in fuel prices, but whether it will really work is another question.

Last September the Development Finance Comptroller (BPKP) revealed mismanagement of more than Rp 22 billion (around US$2.47 million) of the compensation funds during the first semester of the program last year.

Worse still, the government has not yet evaluated last year's program, to see whether the mechanism assured an even and prompt distribution of money or necessary staples, or whether they were off target.

The government started its program to help the poor with money taken from the reduction in the fuel subsidy last year. A total of Rp 2.85 trillion was allocated for the program.

This year, the government has slated Rp 4.43 trillion from the state budget to fund the program for 30 million people all over the country.

Previously, as mentioned in President Megawati Soekarnoputri's speech before the People's Consultative Assembly last August, the government earmarked Rp 3.1 trillion from the state's routine and development spending for the compensation funds.

However, the proposal to include the Ministry of Manpower and Transmigration, Family Planning Coordinating Agency (BKKBN) and the Ministry of Home Affairs in the programs had forced the government to stretch the fund.

According to the one of the architects of the program, National Development Planning Board (Bappenas) director for minerals and natural resources Bemby Uripto, the additional fund was drawn from the Rp 10 trillion put aside in the government's budget for a financial stimulus package to deal with economic difficulties that may arise as an outcome of the Oct. 12 Bali bombings.

It is still not clear how the government was able to obtain the Rp 10 trillion as they have not revealed the source of the fund.

Like last year, the offices of the Coordinating Minister for the Economy, Coordinating Minister for People's Welfare and Bappenas have taken charge of the program, with BPKP monitoring it.

However perfect the program may be on paper, Uripto admitted a lack of coordination and sense of emergency within the administering state institutions as the reason for last year's impropriety.

"Not all the institutions complied with the deadline to submit the program proposals to the Ministry of Finance for the disbursement of the funds. Last year, many of the program proposals arrived late," he told The Jakarta Post on Friday.

"Moreover, without a standard distribution mechanism for the administering institutions, it is difficult to measure the success of each of the programs.

"As the result, we cannot set follow-up programs," he added.

Uripto highlighted the 2002 public transportation project as an example of a scheme that missed the target.

The Ministry of Transportation had earmarked Rp 190 billion to subsidize intercity public transportation fares, but only four cities out of 20 targeted cities accepted the subsidy because it deterred public transportation owners from raising fares.

Minister Agum Gumelar had no other choice but to use the rest of the money to buy new buses, ferries, and other public transportation vehicles.

The scheme will be continued this year although it obviously has no connection with cushioning the poor from the rising cost of living.

"And this year, demands from the Organization of Land Transportation Owners (Organda) to get the compensation funds will give another headache to the ministry," Uripto said.

The compensation fund program is also prone to irregularities because the lack of transparency in the eligibility of the recipients.

During the distribution of the subsidized rice for the poor here on Friday, for example, many poor people complained that they were excluded from the program.