Govt not ready to channel fuel subsidies to the needy
Monday, October 2 2000 - 04:00 AM WIB
The government is not yet ready to channel Rp 800 billion fuel subsidy funds to those who are qualified to receive the money despite the implementation of the 12 percent fuel price increase affective on Sunday.
The Ministry of Settlement and Regional Infrastructure and the Office of the State Minister of Cooperatives, Small and Medium Enterprises - tasked to disburse the funds - said they would channel the funds starting the second or the third weeks of this month.
Of the Rp 800 billion funds, Rp 250 billion would be disbursed by the Ministry of Settlement and Regional Infrastructure to poor villages to build public infrastructure such as roads, bridges and the like.
Then, the Office of the State Minister of Cooperatives, Small and Medium Enterprises has been tasked to disburse Rp 350 billion as a revolving funds to village-level cooperatives or village-scaled financial units.
The remaining Rp 200 billion would be extended in cash to poor families by the Ministry of Home Affairs, in cooperation with the National Planning Development Board.
Minister of Settlement and Regional Infrastructure Erna Witoelar said her office was still evaluating the profiles of villages submitted by local administrations.
"Hopefully, the fund will be able to be disbursed in the second week of October," Erna said.
She added that the Rp 250 billion funds would be channeled to around 4,000 villages outside Java island to build local infrastructure. Each village would get Rp 35 million to Rp 150 million.
"The system to disburse the fund would differ with that in the disbursement of social safety net fund that was full of leakage," Erna said.
Meanwhile, a deputy to the state minister of cooperatives, small and medium enterprises, Deswandhy Agusman, said that his office would start channeling the Rp 350 billion subsidy fund in the second or third week of this month.
He noted that the funds would be channeled to village-level cooperatives, saving-lending units and other micro financial units through state-owned Bank Rakyat Indonesia and provincial development banks.
Nevertheless, the Indonesian Consumer Foundation (YLKI) slammed the government's systems in disbursing the fuel subsidy funds. YLKI executive Tini Hada said that the current disbursement system of funds, if implemented, would go through various leakage just like in the disbursement of social safety net funds - funds provided by international donors for the poor to help them contain the impacts of the economic crisis.
She suggested that the government channeled the funds by increasing education budget, and improving healthcare for the poor.
And the chairman of the Association of Pharmacy Producers, Anthony Ch. Sunardjo, said that the impacts of the fuel price increase to production costs would be negligence, compared to other production factors such as electricity tariffs, wages and the fall of the rupiah against the U.S. dollar.
From Santiago, Chile, President Abdurrahman Wahid called on the people, including labors, to refrain from staging protests against fuel price increase. (*)