Government to Skip Local Level For Quick Stimulus Delivery

The Jakarta Globe, Dion Bisara & Muhamad Al Azhari, March 26, 2009

The government plans to bypass local legislatures when it distributes the stimulus fund for infrastructure projects worth Rp 12.2 trillion ($1.06 billion) to local governments, to ensure funds are disbursed on time, the chief economics minister said on Wednesday.

Finance Minister Sri Mulyani Indrawati said that the decision not to employ the regulation on decentralization and assistance was taken after consultation with the Supreme Audit Agency, or BPK.

As part of the central government’s regional autonomy limitations, the regulation gives direct powers to provincial governments, municipalities and districts to take over the management of projects, including handling their own spending.

Sri Mulyani explained that the stimulus package contained projects that, under the Law on Regional Autonomy, would usually have to be managed by local governments.

Normally this would mean central government money would be distributed through a special allocation fund, or DAK, which would have to be approved by local legislatures when they reconvened in the month of August, Sri Mulyani said.

Presently, these legislatures are in a long recess because of the general elections, which kick off next month, Sri Mulyani said.

The government had planned to start disbursing funds in March, but the process was delayed when the House of Representatives, which has to approve government ministries’ proposals, was unhappy with their spending plans.