Govt to disburse Rp 4.8t for poor
Govt to disburse Rp 4.8t for poor
Rendi A. Witular, The Jakarta Post, Jakarta
The government will disburse Rp 4.8 trillion (US$470 million) in
low-income assistance funds this year to lighten the burden of
the poor once the government reduces the fuel subsidy and thereby
increases fuel prices.
Under the new scheme, poor people with an individual monthly
income of Rp 175,000 or less will receive Rp 100,000 per month in
assistance funds.
Minister of Communications and Information Sofyan Djalil said
in a post-Cabinet meeting media conference on Friday that the new
scheme had been approved in the meeting and that the government
was now more than ready to raise fuel prices.
"Aside from the existing 'indirect subsidy' (education and
health funding), the government will also provide 'direct
subsidies' by transferring money to poor people registered with
the Central Statistics Agency (BPS)," he said.
The assistance funds for the poor is aimed at mitigating the
effects of the resulting surge in inflation following the fuel
subsidy cut.
Sofyan said the latest BPS figures revealed there were 15.5
million households, or 62 million people, living slightly above,
on and below the poverty line. They are eligible for the funds.
Each eligible recipient will be issued a BPS registration card
that will entitle them to collect assistance money every three
months at post offices and Bank Rakyat Indonesia (BRI) branches.
"We believe there will be some problems in the early stages of
the scheme's implementation but we will evaluate the system
quarterly to improve its effectiveness," said Sofyan, adding that
the system would soon be discussed with the House of
Representatives.
He said the assistance funds would go hand-in-hand with
assistance for education and health services for the poor as well
as rural infrastructure development, which has been earmarked at
Rp 17.8 trillion this year.
The education and health care assistance is a result of the
fuel subsidy cut in March, which led to an average 29 percent
increase in domestic fuel prices.
Since the administration of president Soeharto, low-income
assistance funds have always been in the form of non-monetary
assistance such as subsidized rice, projects in the fields of
education, health and rural infrastructure.
Such schemes have been deemed ineffective since it was
possible for central government and regional administration
officials to embezzle funds.
Sofyan emphasized that the assistance funds would contain
fewer moral hazards as only poor people would have BPS cards
entitling them to cash aid.
Distribution of the BPS cards, on the other hand, will be
closely supervised by the government to avoid the number of poor
people being inflated.
The government faces the daunting task of raising fuel prices
in the near future in an effort to slash the ballooning cost of
the fuel subsidy that burdens the state budget. Surging global
oil prices are hovering above US$65 per barrel, which increases
the government cost of subsidizing imported fuel.
Based on recent figures from state oil and gas firm Pertamina,
the fuel subsidy is estimated to cost Rp 119.4 trillion this
year.
The skyrocketing cost of the subsidy has not only disrupted
the country's fiscal balance but also monetary stability, with
the rupiah steadily declining to more than Rp 10,000 against the
U.S. dollar over the past couple of weeks.