NGOs help govt oversee social safety net program

JAKARTA (JP): Universities and non-governmental organizations have been involved in the monitoring of the country's multi- billion dollar social safety net program to ensure aid reaches targeted population groups, a senior official has said.

National Development Planning Board (Bappenas) Chairman Boediono said on Friday that the involvement of such experienced independent institutions would ensure that the internationally financed subsidy program would not fall prey to malfeasance.

"The monitoring system has been strengthened with the participation of these independent institutions. We hope that the allocation of the subsidies will be more effective and the state financial burden for the subsidies can be gradually lessened," he told the House of Representatives Commission VIII on finance and budget.

The World Bank last month warned the government that international financial support for the social safety net program would be stopped unless it could ensure that the aid directed for the needy could be distributed without being abused by corrupt government officials.

The warning followed news reports that some 20 percent of the bank's aid to the country had been ill-used by government officials.

The international community has pledged a total of US$14 billion in aid, mostly to finance the country's 1998/1999 social safety net program designed to help the poor survive the economic crisis.

As much as half of the country's more than 200 million people are believed to be currently living below the poverty line as a result of massive layoffs and weaker purchasing power.

Boediono said the government had allocated Rp 17.25 trillion in the current fiscal year ending in March next year to fight the increasing poverty problem.

The social safety net program focuses, among other things, on establishing food security and employment creation.

He added, however, that the government had revised its subsidy strategy. Instead of subsidizing certain basic food commodities, it was now directly distributing heavily subsidized rice to targeted groups.

The previous policy of subsidizing market prices for basic foodstuffs was deemed less effective since higher-income people could also benefit from the expenditures.

In July, the government launched a program to provide 10 kg of rice per month to the country's poorest families at a price of Rp 1,000 per kg, less than half the current market price.

As of last month, the program covered more than four million families and is expected to exceed seven million this month -- less than half of the 15 million family target.

Boediono said that due to the limited budget, the government could only provide rice to the poor at subsidized prices, not other commodities.

"We will try to improve the distribution system and cut various levies which have caused soaring market prices for the other commodities," he said.

The World Bank had said that fighting corruption was key to the return of confidence in the country and economic recovery.

Boediono also said that the key to recovery was the return of both domestic and foreign investor confidence.

"We have to convince them that our country is a safe, fair and profitable place to do business," he said.

"If our economic reform programs go well, we can expect a turning point for economic growth by 1999/2000."

The achievements of 30 years of economic development will not disappear despite the worst economic crisis to hit the country in decades, he said, pointing to the Indonesia's established infrastructure, skillful human resources and past economic deregulations which had improved efficiency in certain sectors. (rei)