TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Jokowi wants integrated programs on poverty reduction
President Joko âJokowiâ Widodo instructed all relevant ministers to consolidate all programs on poverty reduction to anticipate the growing number of poor people amid the economic slowdown and volatility in food prices
Change Size
President Joko 'Jokowi' Widodo instructed all relevant ministers to consolidate all programs on poverty reduction to anticipate the growing number of poor people amid the economic slowdown and volatility in food prices.
The government will start a pilot project on the integrated poverty reduction program in Brebes, Central Java, which is known as home to many shallot farmers who often see sharp fluctuations in prices. This project aims to establish an equilibrium in the price of the commodity that will benefit both producers and consumers.
The decision was made after Jokowi gathered the ministers, along with Bank Indonesia (BI), the Financial Services Authority (OJK) and the State Logistics Agency (Bulog) in a meeting on Wednesday at the State Palace.
'We will work together to bring more stable prices, which will establish more balance for the customers and farmers,' Coordinating Economic Minister Darmin Nasution said.
BI Governor Agus Martowardojo, Bulog president director Djarot Kusumayakti, Bank Rakyat Indonesia (BRI) president director Asmawi Syam, Bank Negara Indonesia (BNI) president director Achmad Baiquni and Bank Mandiri president director Budi Gunadi Sadikin were also present.
The government seeks to consolidate each ministry's existing poverty eradication program under the pilot project, which will then be duplicated in other areas if deemed successful. 'It can also cover rice farmers, community-based handicrafts, or centers of tourism in the future,' Darmin added.
Darmin said the government had also asked state banks to participate by channeling subsidized microloans, the Micro Credit Program (KUR), to farmers.
Last year, the government launched non-cash assistance programs for low-income families with the issuance of the Indonesian Health Card (KIS), the Indonesian Smart Card (KIP) and the Prosperous Family Savings Card (KKS).
The country aims to lower the poverty rate to between 9 and 10 percent this year, according to the 2016 state budget, down from last year's target of 10.3 percent. The unemployment rate is expected to fall to between 5.2 and 5.5 percent from the 5.6 percent target in the 2015 state budget, while the Gini ratio is expected to hover at 0.39, down slightly from last year's position of 0.40.
However, spiking food prices and rising inflation have so far become an obstacle for the government to reach the target.
Data from the Central Statistics Agency (BPS) show that food remains the biggest contributor to inflation as a result of insufficient domestic supply and poor distribution. The year-to-date inflation rate of food stood at 1.6 percent as of February, while the year-on-year rate stayed at 7.55 percent.
According to the BPS data, the number of poor people increased from 27.73 million in September 2014 to 28.59 million in March 2015, with that trend continuing as economic growth declines. Moreover, the World Bank determined a poverty indicator of US$1.9 per day in 2011, but Indonesia is still applying $1 per day.
Agus said BI would step up the work with the regional inflation controlling team (TPID) to bring down inflation to within its target band of 3 to 5 percent in 2016.
Jokowi also told his ministers that he wanted to see a better distribution rate of the three cards next month, as well as improved an allocation rate of the KUR this year, despite last year's failure to reach the KUR target.
This year, the state banks have allocated Rp 91.5 trillion in KUR funds and have channeled up to Rp 22.5 trillion as of now. Last year the total loans disbursed to 960,424 customers by the KUR reached Rp 21.4 trillion, lower than the Rp 30 trillion target.
The state banks' top bosses said they were ready to channel the KUR under the pilot project in Brebes.
A researcher of population and policy studies at Gadjah Mada University, Mulyadi Sumarto, said inflation can be at the core of poverty and the government must pay attention to it.
'Poor people will not be able to purchase staple foods if the prices keep rising and people who are close to the poverty line will cross it,' he said after a discussion on the 'Welfare State and Social Justice'.
Mulyadi also questioned the efficiency of the three cards in the non-cash assistance programs, although he acknowledged that Indonesians, especially those with low income, need those cards.
He cited an Indonesian Family Life Survey covering 2012 and 2013, which indicates that more than 50 percent of poor people purchased only 3 to 5 kilograms of subsidized rice, while the government provided 15 kilograms per family monthly. (wnd)
