North Sulawesi daunted by prospect of bankruptcy

North Sulawesi daunted by prospect of bankruptcy

MANADO, North Sulawesi (JP): While regional autonomy is being
hailed in many areas, the prospect of it is having some fearful
consequences, such as in North Sulawesi where the provincial
administration is haunted by the specter of bankruptcy.

One reason is that in the past some 80 percent of income in
the provincial budget was bankrolled by the central government.

Efforts by Governor A.J. Sondakh late last year to lobby for
some Rp 400 billion from the central government for the
provincial 2001 budget were less than successful.

The central government allocated "only" Rp 121 billion for the
province's general allocation budget.

Panic crept in some provincial corner as it was announced that
the sum would also have to be shared with the newly emerging
province of Gorontalo, the establishment of which has been
approved by the House of Representatives.

North Sulawesi comprises an area of 14,954 square kilometers
and has a population of nearly two million. Gorontalo is 12,864
square kilometers and has a population of about 800,000.

The northern Sulawesi area as a whole is known for, among
other things, clove production.

Gorontalo will get Rp 45 billion, leaving North Sulawesi to
make do with the remaining Rp 76 billion.

Hengky Baramuli, a legislator representing the province,
blamed the situation on poor coordination by the governor and his
administration.

Despite being a native son of the province sitting on the
budget committee at the House of Representatives, Hengky claimed
that he was never approached about how much his home province
needed.

"I never knew that the province needed Rp 400 billion. I only
discovered it when it was discussed at the House in November
2000, and by that time it was too late to do any effective
lobbying," he remarked.

Among the most immediate concerns is the payment of civil
servants' salaries in North Sulawesi.

The provincial administration has said that it will try to
boost local income by raising taxes.

However, Hengky warned that taxes should be raised
proportionally. "Don't choke taxpayers," he warned.

He added that raising taxes would probably only be able to
cover the shortage in civil servants' wages and questioned how
other sectors would be financed.

Speaker for the North Sulawesi provincial council, Syahrial
Damapolii, seemed more optimistic.

He pointed out that in 2000, local provincial income was only
expected to be about Rp 19 billion. But by the end of year the
province received quite a windfall as the total provincial income
reached some Rp 39 billion.

"I'm quite optimistic ... Looking at a new phenomenon where
new investments are coming in," he said.

Syahrial also urged people not to panic, saying that a
delegation of councillors and from the provincial administration
earlier this week left for Jakarta to meet with officials at the
home ministry to renegotiate the allocation of the general
allocation budget for North Sulawesi.

He claimed that initial reports were promising not only for
North Sulawesi but also for six other provinces faced with the
possibility of bankruptcy. Syahrial did not name the other
provinces.

Such was Syahrial's optimism that he boasted that "the (new)
funds allocated by the minister of home affairs is not only Rp
400 billion but even more than that.

"We only need to wait for a ministerial decree to make it
official."

Sounding a word of caution, Syahrial still stressed the need
for the province to seek other avenues of revenue. (48)