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)