Handouts are a quick fix only

Trihadi Saptoadi ,  Jakarta   |  Mon, 06/02/2008 12:48 PM  |  Opinion

Starting June, the government will distribute direct cash assistance (BLT) to 19.1 million poor families nationwide. Each family will receive Rp 100,000 (US$11) per month, with total aid distributed through December amounting to Rp 13-14 trillion.

The purpose of the aid is to support the lives of poor people affected by the fuel prices increase.

As soon as the plan was announced, it encountered pros and cons. The poorest communities, which also received BLT in 2005, were happy as they stand to gain additional income. Some observers also agreed the BLT would help slightly lessen the burden of the poor amid increasing prices in basic commodities.

However, the BLT program cons were heard even louder. Critics feel that BLT will have no impact on the poor.

Why, then, was BLT chosen?

If we analyze it objectively, there are certainly some strong reasons leading the government to reapply the BLT program.

First, the BLT program is indeed going to help the lives of some of poorest. The additional income will be able to cover a family's income deficit to fulfill their basic needs. This can be used, for example, to cover the lack of rice, pay the electricity or to buy kerosene.

Second, the compensation program will quickly improve the income of the poor community. For the few millions of people who live just below the poverty line, the additional income will raise their status to at least slightly above the poverty line.

The injection of the BLT might reduce the poverty level in Indonesia from 37 million as announced by the Central Statistics Agency in 2007. Therefore, we may see that there are also some political interests in implementing the BLT program.

BTL will not solve the roots of poverty. It is not sufficient to start even a very small business. The compensation aid will only be enough to cover some expenses as the result of the fuel prices increase.

Almost all people who receive BLT have no entrepreneurial skills, therefore the aid will not be used for productive business.

The government has set up three policies to eradicate poverty: through social protection (cheap rice distribution, health insurance, education subsidy), community empowerment and the strengthening of small and micro business. The total funding allocated for these three sectors is about Rp 60 trillion this year. With an additional Rp 20 trillion from the fuel subsidy savings, the support for poverty eradication will reach Rp 80 trillion -- a very significant amount if used optimally and effectively.

The program is not without opposition. Karanganyar Regent Rini Iriani asked the government to reconsider the BLT program because it would destroy years of efforts to empower communities. She said BLT would only "educate" people to become beggars.

The BLT program, plus the trillions of rupiah allocated for community empowerment this year, would be much more educational and impactful if it was used for a food-for-work program, nutrition improvement or additional education assistance for poor communities.

The local government could be involved in encouraging the community to work in building various infrastructures such as village roads, irrigation, school rehabilitation, sanitation improvement and clean water facilities among many others.

The income obtained from hard work comes with a different feeling. Their self dignity and confidence would be significantly boosted. At the next level, with appropriate coaching, they would be able to step up to a higher class -- to access small and micro business funding to release them from the chain of poverty.

Other options to be considered are giving away the BLT to a more selected target group -- for instance, to the nutritional improvement of children under the age of five. Millions of Indonesian's children lack nutrition. The food price increase, especially for baby food, will threaten their lives.

Instead of sharing money through BLT, it would better to consider distributing aid in the form of direct scholarships through schools to prevent dropping out.

BLT distribution will trigger horizontal conflicts. The house of a district head was destroyed because he did not want to assign "poor" status to some community members. Personal interests of village heads or other government officials at the village level can sometimes lead to biased determinations of who gets categorized as poor and not.

Considering the importance of national unity and appropriate support to improve poor communities' welfare, it is urgent to create more effective actions to eliminate poverty. We have to start synchronizing the short-term efforts with the long-term goal we want to achieve.

The writer is the national director of World Vision Indonesia, an international humanitarian organization working to overcome poverty and injustice. He can be reached at trihadi_saptoadi@wvi.org

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