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Jakarta Post

Minister gives village, local leaders pep talk on using budget to cushion COVID-19 effects

  • Arya Dipa

    The Jakarta Post

Bandung   /   Fri, March 20, 2020   /   03:35 pm
Minister gives village, local leaders pep talk on using budget to cushion COVID-19 effects Two women carry pasture grass for cattle in Parangbatu village, Tuban, East Java. Residents in the village still depend on forests for their livelihoods. (Antara/Aguk Sudarmojo)

Home Minister Tito Karnavian is urging village heads and local leaders to speed up their budget proposals to immediately get transfers from the central government and reallocate spending to prioritize the mitigation of COVID-19.

District heads should expedite the review of the village budgets (APBDes), Tito said, adding that governors, mayors and regents should encourage village leaders to file their budget proposals. Regional leaders, he added, should focus on sustaining the economy and containing COVID-19 when spending their budgets.

“For village heads, focus on labor-intensive programs. District heads should also streamline the review process. Please wrap up the process soon so the village funds could be quickly proposed to the Finance Ministry and immediately transferred,” he said in Bandung, West Java, on Wednesday.

The government has allocated Rp 72 trillion (US$4.4 billion) for village funds in the 2020 state budget. As of today only Rp 11.52 trillion, or 40 percent of the funds’ first-phase transfer, have been disbursed as many villages have yet to submit their APBDes.

“Sixty percent of the funds’ first phase hasn’t been disbursed because the villages haven’t submitted their budget proposals,” he said.

The first phase budget disbursement of village funds, which began in January, consists of 40 percent of the overall Rp 72 trillion budget for village funds, followed by 40 percent and 20 percent for phases two and three, respectively.

Home Minister Tito Karnavian salutes during the Indonesia Onward Cabinet announcement by President Joko “Jokowi” Widodo on Oct. 23, 2019. Home Minister Tito Karnavian salutes during the Indonesia Onward Cabinet announcement by President Joko “Jokowi” Widodo on Oct. 23, 2019. (JP/Seto Wardhana)

President Joko “Jokowi” Widodo has pinned his hopes on programs using village funds to maintain people’s purchasing power. The budget could be used to prioritize labor-intensive public work projects or other productive programs, he said.

Besides demanding village heads file their APBDes and disburse the village funds, Tito also urged city and provincial-level governments that had already received funding to immediately use their budgets, in order to boost cash flows and support their regions' economic activities.

Tito on March 16 issued Home Ministerial Regulation No.20/2020 on local administration response toward COVID-19, which requires local administrations to prioritize their budget use to anticipate the spread of the virus and its larger adverse impacts.

Read also: Government to front-load social, rural spending to boost household expenditure

Simultaneously, Finance Ministry Sri Mulyani Indrawati also issued Ministerial Regulation No.19/2020 on the disbursement of revenue sharing funds, general purpose grants and regional incentive funds in the financial year 2020 to mitigate the effects of COVID-19. Budgets should prioritize health systems and COVID-19 prevention, according to the regulation.

“The regulations give local leaders authority to reallocate their funds to combat COVID-19 while only giving notice to the Regional House of Representatives [DPRD],” Tito said, adding that the DPRD should keep monitoring the budget use.

Local governments need to cushion COVID-19's impact on the economy, the minister said, as small enterprises, especially at tourist destinations, are feeling the pinch because of the social distancing policy.

“The budget reallocation also needs to ensure the economy is running. If businesses remain alive, then we could survive this pandemic crisis,” Tito said.

President Jokowi on Sunday called on all Indonesians to practice what epidemiologists call social distancing, which includes minimizing nonessential travel and leaving space between one person and another in direct contact to slow the spread of COVID-19.

Indonesia confirmed 82 new COVID-19 cases on Thursday, bringing the total to 308. The government also announced there had been 25 fatalities from the disease. (mpr)