Incidence of local poverty declines in 1996

Incidence of local poverty declines in 1996

JAKARTA (JP): The number of Indonesians living below the
poverty line dropped to 22 million in 1996 from almost 26 million
in 1993, President Soeharto said yesterday.

Soeharto said he had just received a provisional report on the
1996 National Socioeconomic Survey, the basis for counting the
number of people living below the poverty line.

"Based on the 1996 national survey, the number of poor has
fallen to around 22 million or about 11 percent of Indonesia's
population in 1996," Soeharto said.

The President, in his speech unveiling the 1997/1998 draft
budget, said the number of poor in rural areas had decreased by
two million to 15 million, while the figure in urban areas had
dropped from eight million to over six million.

He said the drop in the number of poor people had resulted
from the government's special poverty alleviation program in
least-developed villages, called Presidential Aid for Least-
Developed Villages (IDT), in which each poor village got Rp 20
million (US$8,390).

"At the same time, we are also developing a poverty
alleviation program for villages outside the least-developed
ones, because even in these villages there are poor people,"
Soeharto said.

The IDT program, launched in April 1994, covers areas with
large populations of poor people. Villages not covered by the IDT
program will have access to the new poverty alleviation program,
in which each poor family will be able to borrow Rp 100,000 with
a subsidized interest rate of 6 percent per annum.

State Minister of National Development Planning Ginandjar
Kartasasmita told reporters on Sunday night that all the 28,223
least-developed villages had received IDT aid three times.

In this fiscal year, the government has budgeted to spend a
total Rp 479.84 billion on 22,054 least-developed villages.

In the next fiscal year, the government plans to provide IDT
aid to only 6,573 least-developed villages -- villages with over
100 families each which would have only received IDT aid once or
twice. Each village would get Rp 20 million.

Besides IDT aid, the government plans to extend
infrastructure-development aid to 2,391 least-developed villages.
Each village would get Rp 132 million.

Total aid for least-developed villages will total Rp 480
billion next fiscal year, similar to the aid extended this fiscal
year.

Unlike the IDT program, the new poverty alleviation program,
which involves subsidized loans to poor families, is not financed
by the state budget.

The new program, overseen by State Minister of Population
Haryono Suyono, uses funds raised by the Dana Sejahtera Mandiri
Foundation, headed by President Soeharto.

The foundation gets its funds from donations from the
country's wealthy on the basis of a presidential decree.

Last month Soeharto issued a decree ordering firms and
individuals with annual after-tax earnings of more than Rp 100
million (US$42,000) to contribute an extra 2 percent of their
incomes as a donation to the campaign against poverty.

The decree stipulates that families entitled to assistance are
those incapable of meeting their most basic needs for clothing,
housing and food and health services.

Soeharto warned that those who failed to pay the tax would be
reprimanded with a "special flag in front of their houses, so
they could be ashamed forever". (rid)