Program on reducing poverty

Program on reducing poverty

In response to an article that appeared on page 2 of The
Jakarta Post on April 17, on a new crash program to revive the
Indonesian economy proposed by an economist from the United
Nations Support Facility for Indonesian Recovery (UNSFIR), I
would like to offer the following comments:

While this idea is very populist, there are concerns that
could be raised regarding the effectiveness of past crash
programs in actually alleviating the suffering of poor
Indonesians. These programs were not effective, given that they
were not well targeted and were vulnerable to significant
leakages, which made them less successful in achieving their aim
to reduce poverty among Indonesians.

Introducing a similar program without significant reform in
governance would doom the program from the start. The program
should be carefully monitored by independent observers so that
possible abuses could be kept to a minimum, allowing the program
to fully meet its intended goals.

To minimize leakages, the program should be delivered by the
private sector or by non-governmental organizations instead of by
government agencies, which were the source of the leakages in
past crash programs.

Lastly, the crash program should not be created by generating
new budget deficits that would increase the nation's inflation
rate. Doing so would only damage Indonesia's macroeconomic
stability and hamper our recovery from the prolonged economic
crisis.

ALEX ARIFIANTO
The SMERU Research Institute
Jakarta