Reforestation funds to be used to finance safety net project

JAKARTA (JP): Labor-intensive projects in the forestry sector will continue, despite cancellation of the social safety net funds used to finance the projects.

Minister of Forestry and Plantations Muslimin Nasution said on Tuesday the ministry would use reforestation funds to finance the projects.

"We will need at least Rp 200 billion to save the projects," he said.

Muslimin said the ministry was allocated Rp 490 billion in social safety net funds since the projects started late last year until the end of June. Over Rp 200 billion of the funds had been used.

The reforestation fund is a mandatory fee imposed by the government on forest concessionaires to ensure forests are managed in an environmentally sustainable manner. The size of the fee depends on the volume and type of timber felled.

The ministry's secretary general Oetomo said the projects, which started late last year, are aimed at improving farmers's living standards by allowing them to plant crops on unused land on timber estates and in plantation areas.

The funds had been used to buy and distribute crop seeds to be planted by farmers, he said.

"The seed will be useless and farmers will be very disappointed and angry if we stop the projects."

Chairman of the National Development Planning Board Boediono, said on Monday the government would stop disbursing the safety net funds to labor-intensive projects in the forestry and manpower sector, because the projects were ineffective.

He said it would be better if the fund was consolidated in new programs, which are still under review between the government and the World Bank.

Under discussion are ways to improve the effectiveness of the social safety net program in an effort to maintain international financial support and restrict possible abuse of the program.

The social safety net program, designed to help the poor survive the current economic crisis, is under fire. Last month, media reports detailed that some Rp 8 trillion of the program's Rp 17.9 trillion budget in the 1998/1999 fiscal year failed to reach its intended targets, namely laid-off workers and people facing food shortages.

Boediono said the government was considering disbursing some Rp 6 trillion (US$689 million) in social safety net funds, chiefly derived from international donors, in the 1999/2000 fiscal year ending in March.

The World Bank has committed providing some $600 million to finance the social safety net program in the current fiscal year.

The $600 million was initially scheduled to be released before the 1998/1999 fiscal year ended in March, but was delayed because the government failed to provide a reliable system to monitor the disbursement of the money.

Muslimin questioned the decision of the National Development Training Board (Bappenas), saying farmers were also the intended beneficiaries of the social safety net programs. (gis)