Efficiency put forward in drafting 2006's budget

Muninggar Sri Saraswati and Rendi A. Witular, The Jakarta Post, Jakarta

The current inefficiency in governmental institutions -- ministries, state agencies and local administrations -- has put unacceptable burdens on the state budget.

Concerning this matter, President Susilo Bambang Yudhoyono said in a speech before governors and high-ranking bureaucrats at the State Palace on Wednesday that officials should put more emphasis on efficiency when proposing routine and development expenditures for next year's budget.

"We have to examine the efficiency of the programs proposed for the upcoming 2006 state budget. I hope all governors (and officials) comply with regulations on state finance so that the budget will be more efficient and accountable," he said.

Susilo emphasized that understanding the regulations would help governors and bureaucrats avoid "gray" areas when drafting development programs and budgets, and thus prevent financial abuses.

"Please, study the regulations comprehensively when drafting budgets as it will keep you away from trouble in the future. The rules were made to ensure that you are accountable for state expenditure," he said.

Governors from the country's 33 provinces gathered in the capital for a three-day meeting with State Minister of National Development Planning Sri Mulyani Indrawati and state officials in order to draft development and routine programs for 2006.

The programs will be used to draft the 2006 state budget before being submitted to the House of Representatives for deliberation in August. The agreed programs will also be used by governors to draft their own provincial budgets.

Susilo hoped the draft state budget would be endorsed in October. The implementation of the budget is expected to start on Jan. 1, 2006.

Previous state and provincial budgets have demonstrated that both the central government and local administrations have ignored efficiency, as reflected in the gradually increase in routine expenditures every year. Routine expenditures include such things as civil servants salaries, operational equipment and interest on debts.

At the meeting, Susilo also urged governors to be more focused on serving the interests of the private sector next year in a bid to help boost regional economic activity, which was badly needed in order to help absorb manpower and reduce unemployment.

"Governors should give priority to job creation when developing their regional economies, as well as taking an international perspective to attract foreign investors," he said.

Since the enactment of the autonomy law, many provincial administrations have imposed various taxes on the business sector in an effort to generate revenue for the province.

But many of these policies backfired because they effectively discouraged investment and contributed to Indonesia's high-cost economy.