Funds to be given poor next month

Hera Diani, The Jakarta Post/Jakarta

The government says it is ready to disburse funds to millions of low-income families next month to help cushion the impact of the planned increase in fuel prices.

Coordinating Minister for People's Welfare Alwi Shihab said the government had prepared ways to monitor the disbursement process amid the possibility of embezzlement or even riots.

Speaking at a press conference on Friday following a meeting with other top government officials on the issue, Alwi said the Ministry of Home Affairs had been assigned to oversee the monitoring work and to handle people's complaints.

"We are also coordinating with the National Police in the supervision of the scheme to prevent people from using fake ID cards," he said.

The government plans to provide cash assistance of Rp 100,000 (about US$10) monthly to each family of five with a maximum monthly income of Rp 700,000 or Rp 175,000 per capita. Through the assistance it is hoped that the fuel price increase, which is planned for early October, will not hit the some 15.5 million low-income families in the country so hard. Early reports said prices could increase by as much as 50 percent on average.

State Minister of National Development Planning Sri Mulyani Indrawati said Rp 300,000 would be paid to the families every three months.

"We'll give it every three months for easier management and execution. It will start in October," Mulyani said.

Low-income families will be issued ID cards from state-owned postal office PT Pos Indonesia. They will receive the funds through Bank Rakyat Indonesia (BRI), which has branches/offices at village level.

Alwi said the registration process of low-income families in 18 of the country's 32 provinces was near 100 percent completion.

It is not clear for how long the cash assistance will be provided.

Through providing the cash assistance the government hopes to minimize public protest over the politically sensitive fuel-price-increase policy, which is unavoidable to help ease the burden on the state budget in covering the costly fuel subsidy and in avoiding a fiscal crisis as international oil prices soar.

This is the first time the government has provided cash assistance for low-income families, a scheme that may be prone to abuse.

Alwi said the government would be tough on people who took advantage of the facility, saying the embezzlement of funds intended for low-income families would be regarded as a serious crime.

People who steal or misuse identity cards could be charged under Article 266 of the Criminal Code on document forgery, which carries a maximum penalty of seven years' imprisonment, he said.

Compensation schemes for poor families in the past have involved indirect non-monetary assistance such as subsidized rice, labor-intensive projects, health services and subsidized education.

Officials have deemed such schemes ineffective as they are prone to abuse by government officials as the funds are not directly handed to the recipients.

Elsewhere, Mulyani said that based on the government's simulation, the monthly payments of Rp 100,000 would be sufficient to cushion the poor from the impact of the fuel price increase.