Social safety net program set to continue

JAKARTA (JP): The government will continue the social safety net program despite a possible suspension of international aid to Indonesia, National Development Planning Board chairman Boediono said here on Tuesday.

"The government's social program in helping the poor such as the social safety net program (JPS) will continue," he said, adding that the government would use existing funds to finance the project.

The International Monetary Fund (IMF) and the World Bank threatened last week to suspend the disbursement of their loans if the government failed to swiftly and satisfactorily resolve the Bank Bali scandal. The suspension will affect the US$600 million in soft loans from the World Bank to support the social safety net adjustments.

The social safety net loan was initially scheduled for release in March, but was delayed by the bank following reports from non- governmental organizations of political abuse in aid disbursement in gaining voters for the June general election.

The government has allocated some Rp 6 trillion for the social safety net program during the 1999/2000 fiscal year to help the poor cope with the economic crisis.

Boediono said the IMF had delayed its review mission, which was scheduled to take place by the end of this month, until the Bank Bali case, which involves the questionable transfer of Rp 546 billion from the bank to a company linked to the ruling Golkar Party, is solved.

The review postponement would mean a delay in the disbursement of the agency's loan installment of $460 million for October.

The agency has organized $43 billion in international bailout funds to help Indonesia cope with its worst ever crisis, of which $12.3 billion will come from its own coffers.

"The IMF has called on the government to satisfactorily solve the Bali case, while the time span is not a question," Boediono said.

He said the possible suspension would not distract the government's efforts in carrying out its fiscal and monetary policies in accordance with the economic reform program agreed with the IMF.

"We will adjust our programs with the funds available at the time. We will be very flexible in running the programs," Boediono added. (01)