SBY approves cash aid for poor

Abdul Khalik, The Jakarta Post, Jakarta | Thu, 05/15/2008 1:21 AM

President Susilo Bambang Yudhoyono has issued a presidential instruction for the disbursement of Rp 14.1 trillion (US$1.55 billion) in direct cash assistance to help 19.1 million lower income households cope with planned fuel price increases.

Coordinating Minister for People's Welfare Aburizal Bakrie said late Wednesday after a Cabinet meeting the presidential instruction would serve as the legal basis for the cash disbursement program, expected to be launched in June when the government plans to raise fuel prices.

"The first phase of the program will cover a period of seven months until December. We are now printing the cash disbursement cards to be distributed across the country. We'll be ready by the third week of the month," Aburizal said.

Under the scheme, households that qualify will receive Rp 100,000 per month in compensation for the maximum 30 percent increase in fuel prices, he said.

The second phase of the program is expected to last until December next year.

Aburizal said that according to government data, the 19.1 million households that qualify for the program comprise 76.4 million people.

Paskah Suzetta, chairman of the National Development Planning Board, said the President has instructed the attorney general, Indonesian Military chief, National Police chief, governors, regents and mayors to ensure the money reached qualified households.

He warned that legal action would be taken against any officials found to be hindering the flow of funds to rightful recipients.

Finance Minister Sri Mulyani Indrawati said the government would propose the inclusion of funds for the cash disbursement program in the 2009 state budget.

"We can make sure that poor families get compensation through December 2009," she said.

The government plans to raise fuel prices to cap fuel subsidies and protect the state budget in the face of soaring global crude oil prices.

It is preparing a number of programs, including direct cash disbursements, to help lower income households cope with the higher prices.

The government has launched a Rp 13.2 trillion credit program in 4,000 districts across the country, and has extended Rp 5.3 trillion in credits to approximately 400,000 micro and small businesses.

With these programs, the government hopes to cut the poverty rate from 14 percent in 2008 to 12.5 percent in 2009.