More funds earmarked for poverty alleviation

More funds earmarked for poverty alleviation

JAKARTA (JP): The government has allocated Rp 330 billion
($150 million) for the development of basic infrastructure during
the next 1995-1996 fiscal year in 7,800 of the 22,097 villages
classified as poverty areas, Director General for Rural Community
Development H.H. Siagian said yesterday.

The infrastructure development budget will be provided on top
of the Rp 473.73 billion in financial grants to be extended to
the 22,097 poverty pockets in the same year, Siagian told a press
discussion on poverty alleviation.

"Experiences from the first year of implementation of the
poverty alleviation program show that infrastructure such as
transportation and communications are crucial for supporting the
program," he added.

Siagian said access to a local market, for example, is crucial
for supporting the agribusiness ventures already developed by the
poor people who have received the financial grant.

The one-day meeting was organized by the Pena Kencana
Nusadwipa discussion forum headed by Ahmad Adirsyah.

Under the concerted poverty alleviation program launched last
April, each of the villages classified as impoverished is
provided with Rp 20 million in annual aid to be used by the
people as seed capital for economic activities.

Gunawan Sumodiningrat, chief of the District and Rural
Development Bureau at the National Development Planning Agency
said the use of the grant is based on a grass-roots decision
making process.

"The government does not intervene in the way the grant is
used. It is the target of poor people themselves who decide on
how to use the fund according to the basic guidelines set by the
government," Gunawan added.

Latest estimates based on the 1993 National Social and
Economic Survey by the Central Bureau of Statistics put the total
number of people living below the poverty line at about 26
million, or 13.6 percent of the total population in that year.

The poverty line is drawn on the basis of a minimum daily
calorie intake of 2,100 and a certain quantity of non-food
consumer goods and services.

"We include 52 food commodities and 42 non-food consumer goods
and services to determine the poverty line," Soegito, chief of
the Central Bureau of Statistics said.

Based on the prices of the quantities of food and non-food
commodities and services in 1993, the poverty line for the urban
areas was set at a monthly expenditure of Rp 27,905 ($12.6) and
Rp 18,244 for the rural areas.

Revision

"We will revise the monthly expenditures based on the
commodities every year to adjust for inflation," Soegito added.

In 1990, for example, the poverty line was set at a monthly
expenditure of Rp 20,600 in urban areas and Rp 13,295 in rural
areas.

Siagian, who together with Gunawan supervise the poverty
alleviation program, said that during the first eight months of
the program implementation, 81 percent of the Rp 389.27 billion
total grant allocation had been disbursed in 19,081 poverty areas
or villages.

"A great portion of the fund was used by the people as capital
for dairy development, retail trade and other farming
activities," Siagian said.

He added that despite some shortcomings, which are normal in
view of the novelty of the program, the injection of Rp 20
million for every poor village has greatly assisted the aim of
people to raise their incomes through various farming or non-
farming activities.

The government hopes that by the completion of the three year
concerted poverty alleviation program in 1997, the poor people
would have developed sustainable means of earnings by using the
accumulated grant as revolving capital.

However, Gunawan reiterated the importance of cooperation on
the part of other government agencies, notably local service
agencies and non-governmental organizations, to make the program
a complete success.

"Our main concern is how to make the businesses developed by
the poor people with the grant sustainable even after the annual
grant is stopped," Siagian said.(vin)