APSN | Surge in social fund spending questioned

Home > South-East Asia >> Indonesia

Surge in social fund spending questioned

Jakarta Post - March 18, 2014

Despite scandal, Indonesia election could entrench political dynasties – Reuters. March 18, 2014
Komnas HAM declines to judge presidential hopefuls – Jakarta Post. March 17, 2014
Indonesia starts election campaign, voters set to choose radical change – Reuters. March 16, 2014
Hugely popular Jakarta governor named as Indonesia presidential candidate – Reuters. March 14, 2014
Official: Joko Widodo named 2014 presidential candidate by Megawati – Jakarta Globe. March 14, 2014

Satria Sambijantoro, Jakarta – The government has reduced the allocation for infrastructure projects by about Rp 48 trillion (US$4.27 billion) in the 2014 state budget and instead used most of the funds to finance "social-assistance programs", programs that have often been abused by relevant ministers to fund political agendas.

According to the latest budget-realization data published on the Finance Ministry's website, this year the government is allocating only Rp 184 trillion for capital expenditure, which comprises funds for infrastructure projects.

The amount is far lower than the Rp 232 trillion stipulated in the 2014 state budget that was passed in a House of Representatives plenary session in October last year.

The allocation for social-assistance programs, meanwhile, has been increased by Rp 36 trillion to Rp 92 trillion, compared to Rp 56 trillion in the government's initial budget plan.

Legislators demanded an explanation from the government for the changes as they were made without their consent. They feared that the funds could be used for social activities to lure voters during the legislative elections in April and the presidential election in July.

Arif Budimanta, an Indonesian Democratic Party of Struggle (PDI-P) lawmaker from House Commission XI overseeing the economy and finance demanded clarification from the government because there had been no consultation about the changes.

Ecky Awal Mucharam, a member of the House Budget Committee from the Prosperous Justice Party (PKS) reminded the government that any alterations to state budget fund allocations, without prior consultation with lawmakers, was against the law.

The Finance Ministry distributes funds for social-assistance programs to some ministries as part of the government's efforts to improve people's welfare and reduce poverty levels.

However, the funds are "vulnerable to abuse for political purposes", according to the People's Coalition for Fisheries Justice Indonesia (KIARA), which criticized the lack of clarity in the disbursement of Rp 595 billion in social-assistance funds given to the Maritime Affairs and Fisheries Ministry earlier this year.

At least 18 out of 34 ministers in the current administration have party-political backgrounds and are thus obliged to spend lavish sums to woo voters in the upcoming legislative elections in April.

Speaking to reporters on Monday, Finance Minister Chatib Basri acknowledged that there were changes to the allocation of funds in the 2014 state budget, but dismissed the idea that the budget was altered due to political motives.

He attributed the alterations to differences in accounting classification methods, as some infrastructure funds included economic costs that had to be classified under social-assistance funds – not capital expenditure funds – because they were unable to be calculated in real economic terms.

When asked about the substantial increase in funds earmarked for social-assistance programs, Chatib argued that it was because a sizable proportion of some ministries' budgets were accounted for in those programs. For instance, around Rp 20 trillion of the Social Affairs Ministry's budget was classified under the funding for social-assistance programs, he said.

Source: http://www.thejakartapost.com/news/2014/03/18/surge-social-fund-spending-questioned.html.