Govt plans rewards in poverty fight

Dadan Wijaksana, The Jakarta Post, Jakarta

In an attempt to accelerate poverty alleviation programs, Minister of Finance Boediono has proposed a scheme that will reward regions with good records in fighting poverty with grants from the central government.

"We need to consider that regional administrations that are successfully fighting poverty with their own funds and resources deserve rewards or other forms of appreciation," Boediono said on the sidelines of a discussion on poverty on Thursday.

The discussion also featured central bank governor Burhanuddin Abdullah and Coordinating Minister for People's Welfare Jusuf Kalla, who also heads the Poverty Eradication Committee (KPK).

Boediono said the grants, which should serve as incentives, could be included in a special allocation fund (DAK) designated for the regions in the state budget.

Boediono said that to implement the incentive plan, a rating mechanism would be needed to measure the regions' performance in the area of poverty reduction.

Jusuf said this type of incentive mechanism was needed to intensify the fight against poverty. He also said the program was timely, given that the government's poverty eradication program was beginning to show signs of improvement.

Jusuf pointed out that the latest figures collected by the KPK showed that the poverty rate in 2002 stood at 18.2 percent of the population, or 38.4 million, a 6 percent decline from the year before.

This decline is seen as significant with regard to the fact that Indonesia during 2002 had to weather the impact of the devastating bomb attacks on Bali island, which damaged the country's tourist sector.

KPK is an agency that was established in 2001. It comprises key ministers in the Cabinet and is tasked with focusing on poverty alleviation.

Its main goal is to reduce the country's poverty rate to about 16 percent of the population by the end of 2004.

Using domestic measures, the Central Statistics Agency says an Indonesian is regarded as poor, or living at or below the poverty line, if he or she earns Rp 90,000 or less per month.

Analysts have said that the best recipe for poverty eradication is a high level of economic growth. The higher the growth the higher the chances of reducing poverty.

Economic growth of about 6 percent to 7 percent means the economy would create millions of jobs, thus lifting millions of jobless Indonesians out of poverty.

Indonesia's economy is now growing by about 3 percent to 4 percent per year, barely sufficient to absorb the nearly 2.5 million Indonesians entering the labor market each year.