Govt upbeat about fund for social safety net program
Govt upbeat about fund for social safety net program
JAKARTA (JP): Major donor countries and organizations have
agreed in principle to fund the government's social safety net
program in the 1999/2000 fiscal year, according to the chairman
of the National Development Planning Board (Bappenas).
"The bulk of the funding will come from large foreign donors.
They've given the green light to the continued provision of aid,
but have not made any firm commitments on the amount which will
be advanced," Boediono told journalists on Thursday.
He explained that the social safety net program was designed
both to provide the poor with access to affordable essential
commodities and to help them purchase their basic needs through
providing paid employment on labor intensive projects.
Labor intensive projects provide people with menial work in
exchange for a small wage, usually not more than the regional
minimum wage.
"The total budget for labor intensive projects in the current
fiscal year is more than Rp 5 trillion," Boediono said.
Boediono also said that the government provided 4 million
families with rice at a heavily subsidized price in September.
In July, the government launched a program to provide the
country's poorest families with 10 kg of medium-quality rice
every month for Rp 1,000 per kg. The price at which the rice is
made available is much lower than the current market price of
between Rp 2,000 and Rp 2,500 per kilogram.
"The program is expected to cover seven million poor families
in October," Boediono added.
The government has said that the program could ultimately
reach out to cover 15 million families around the country.
The country's international donors are committed to providing
US$14 billion to finance the social safety net program in the
current fiscal year.
However, the World Bank warned last month that international
support would continue only if the government managed to prevent
the funds from being abused by civil servants.
Corruption in the country is seen as being so severe that it
has come to threaten the very survival of the poor in this time
of economic hardship.
The World Bank also warned on Wednesday that the number of
poor people in Asia's crisis-stricken countries could explode due
to the lingering crisis. In Indonesia, it has been forecast that
approximately half of the population will be living below the
poverty line by the end of this year.
Japan is expected to unveil a plan to extend about $30 billion
in aid to Southeast Asian nations at the Group of Seven finance
ministers meeting this weekend.
"We will study this (the plan). Of course we want to take
advantage of the aid," Boediono said.
Rescheduling
He said he also expected creditor nations outside the Paris
Club to agree to the rescheduling of principal repayments on
government debt on terms similar to those offered by the Paris
Club last month.
Under the deal struck with the Paris Club, the repayment of
$4.2 billion in bilateral government debt which was to fall due
in the next two years was postponed for between 11 and 20 years.
Boediono said that debts to commercial banks were expected to
be refinanced, while bilateral debts to non-Paris Club creditor
nations would be rescheduled.
"From past experience, once an agreement had been reached with
the Paris Club, creditors outside this group usually offer
similar terms," he said, adding that the value of government debt
falling due this year to the latter group was small.
The government's debts to foreign commercial banks and non-
Paris Club creditor nations falling due this year totals $263
million.
The flow of international aid to the country and the
rescheduling of sovereign debt has been a major factor in the
strengthening of the rupiah against the U.S. dollar in recent
weeks.
The rupiah was hovering at around Rp 10,700 to the dollar on
Wednesday. (rei)