Jakarta gets Rp 46b from central government

Novan Iman Santosa, The Jakarta Post, Jakarta

The Central Government has doubled the funds for Jakarta, to compensate for the phased-out fuel subsidy, from Rp 23.66 billion last year to Rp 46.73 billion (US$5.19 million) this year.

Transportation Minister Agum Gumelar symbolically handed over the compensation fund to a group of Jakarta residents at the Koja Hospital, North Jakarta, on Thursday.

Earlier, Agum told Governor Sutiyoso at City Hall to carefully control and supervise the disbursement, although it was carried out directly by the central government.

The fuel subsidy is being withdrawn in stages to help ease the central government's financial burden. The government is expected to completely withdraw it by 2004, leaving fuel prices here the same as they are internationally.

In 2002, the fuel subsidy is being reduced from Rp 41.5 trillion to Rp 30 trillion so that the government will make a saving of Rp 11.5 trillion, of which some Rp 2.85 trillion is being used in a compensation scheme for people on low incomes nationwide, while the remaining Rp 8.65 trillion is being used to reinvigorate the national economy.

"In general, disbursement of the funds has been carried out successfully in Jakarta," Sutiyoso said in his prepared statement.

"However, there are still several disbursement problems to overcome."

Sutiyoso acknowledged that there was a need to improve coordination between ministries and city administration agencies.

Of the Rp 46.73 billion compensation fund, Rp 16.51 billion will be used for education, both by the Ministries of National Education (Rp 7.82 billion) and of Religious Affairs (Rp 8.69 billion).

The second-largest portion, Rp 11.64 billion, will be used by the health sector. The Ministry of Health is using the funds to pay for a health referral service (for admitting patients to hospital), generic drugs and hepatitis B vaccines.

Those on low incomes will also have access to cheap rice through Bulog, using up a further Rp 6.25 billion.

Another Rp 6 billion is slated for social services, targeting institutions that cater for senior citizens, disabled residents and orphaned children.

The compensation fund will also provide a potable water supply, worth Rp 3.78 billion, a Rp 1.6 billion loan to small- and medium-sized enterprises and loans totaling Rp 950 million for fishermen.

The termination of fuel subsidy has resulted in an increase of Rp 175,000 per month in living costs per low-income family. But the combined services financed by the compensation fund have returned Rp 356,250 to the poor, according to government statistics.