Subsidy for education left undelivered to 11 provinces

Rendi A. Witular and Slamet Susanto, The Jakarta Post, Jakarta/Yogyakarta

With another fuel price hike looming, low-income assistance funds from a fuel price increase in March have not been fully delivered to the education sector.

Minister of National Education Bambang Sudibyo said nearly Rp 2 trillion (US$200 million) in funds had not been distributed properly by local administrations to designated schools.

"There are several problems hindering the transfer of the funds, such as a lack of leadership in local governments and insufficient banking infrastructure in some remote areas," Bambang said after a Cabinet meeting on Tuesday.

Following the increase in fuel prices in March, the central government allocated Rp 5.13 trillion as an indirect subsidy for the education sector. The money is part of Rp 17.8 trillion in low-income assistance funds to be disbursed to the poor this year.

Bambang said some Rp 3.18 trillion of the subsidy for the education sector had reached targeted schools, while Rp 1.46 trillion had yet to be channeled by local administrations for a number of reasons. Another Rp 478 billion was never received by local administrations because of bank transfer and leadership problems.

Among the provinces experiencing trouble delivering the funds to schools are Banten, Jambi, East Kalimantan, Central Kalimantan, South Kalimantan, Maluku, North Sulawesi, Riau Islands, North Sumatra, Papua and West Irian Jaya.

Since the rule of former president Soeharto, the government has provided assistance for low-income people in the form of indirect subsidies, such as inexpensive rice and projects in the fields of education, health and rural infrastructure.

Bambang said the Ministry of Home Affairs would dispatch officials to help provinces deliver the funds to schools.

The government announced on Monday that it planned to further raise fuel prices before Idul Fitri. After this next price increase, the government will directly pay out Rp 100,000 in cash each month to 15.5 million families, or some 64 million people, living on or below the poverty line.

People will be able to collect the money at post offices or Bank Rakyat Indonesia branches.

In Yogyakarta, Minister of Social Services Bachtiar Chamsyah said making cash payments to low-income individuals was not the best solution, but at least it would help prevent social upheaval.

"We expect the money to help people hit hardest by the soaring fuel prices. After three months we will evaluate the scheme," Bachtiar said.

The government will raise fuel prices in response to increasing oil prices in the international market. If current fuel prices are maintained, it is estimated the state budget would soar to Rp 145 trillion.