Meeting on poverty

Meeting on poverty

President Soeharto has further improved top-level coordination
and supervision of the national drive against poverty through a
special cabinet meeting. The first of what will be a quarterly
cabinet meeting was held on Tuesday for four-and-a-half hours.
The session was chaired by the President, who was accompanied by
Vice President Try Sutrisno, seven ministers and the governor of
the central bank.

With so many poverty alleviation programs currently underway,
sponsored by the government and private organizations, better
coordination and more effective supervision are warranted.

Interministerial coordination is necessary for the effective
execution of poverty alleviation programs, due to the different
characteristics of the targeted people. Programs often involve
cross-sectoral activities which, in the absence of good
coordination, could be hindered by bureaucratic competition and
jealousy.

Poverty has decreased from 13.7 percent of the total
population in 1993 to 11.3 percent in 1996 (still more than 22
million people), but it has increasingly become localized with
different characteristics specific to geographical location,
household size, education, gender and age. These different
characteristics call for poverty alleviation projects, which are
designed specifically for the diverse target groups.

One may indirectly connect the launching of the cabinet
session to the recent wave of riots in several districts. Many
social scientists have partly blamed the riots on the widening
gap between the rich and poor, and the increasing concentration
of wealth in the hands of several business groups.

But as we argued earlier, better coordination and supervision
are necessary now, not only to improve the effectiveness of
various poverty reduction programs, but also to prevent
overlapping and inefficiency. Moreover, as Coordinating Minister
for Production and Distribution Hartarto explained after the
cabinet session, the meeting's agenda, besides including anti-
poverty programs, also covered matters related the development of
cooperatives and small and medium-sized businesses.

The meeting, for example, discussed efforts to ensure that
credit for small and medium-sized businesses reaches its targets.
This apparently followed up the recent ruling by the central bank
which requires both domestic and foreign banks to allocate a
specified portion of credit to small businesses. The ministers
also exchanged views on how to facilitate more partnerships
between cooperatives and small and medium-sized firms, on one
hand, and big businesses on the other.

The ministers were instructed by the President to design
programs which would enhance partnerships between big retail
chains and local cooperatives and small firms and to close towns
in regencies to new big retail chains. The role of venture
capital companies in the provinces to enhance the growth of small
start-up businesses was also emphasized.

The special cabinet meeting was also quite important in that
it once again demonstrated the government's strong commitment to
enhancing equity development. It also served to strengthen the
message that poverty reduction and broader-based economic growth
are keys to the sustainability of overall development. The
development process can only be sustained by national stability,
which in turn can only be maintained if all people share in the
growth and if the economy is strengthened by a broadened range of
business.