Tuesday, 9 July 2013


Oil fuel (BBM) price hike is unavoidable because the governments must reduce fuel price subsidy which is obviously enjoyed by those who are financially capable, instead of the poor. However, despite that fact that the reduction in fuel subsidy will raise prices of goods and services, the fuel price hike will provide benefits to at least 33 million poor people, both in urban and rural areas.
Minister public works, Djoko Kirmanto, said that the benefits o fuel price hike that will be enjoyed by the poor will happen, because the government would use the money from reduction of fuel subsidy as compensation to those who will be affected by the rise in fuel prices. With the compensation, the poor are expected to raise their standard of living.           
In infrastructure, the government’s gives compensation funds amounting to Rp.6 trillion which will be used for program for Acceleration and Expansion of development of public works infrastructures which consist of three programs.
First, program of development of Drinking Water Supply intended for poor communities, especially in 285 villages/regencies who are prone to water scarcity, 318 fishing villages, and low-income communities in 341 water-scarce areas. Second, Water Resources Infrastructure Program, among others, the provision of raw water and reservoir development in 93 water-scarce regencies/cities, small irrigation repair in 4,000 villages as well as construction of coastal protection and boat moorings for fishermen and water resource infrastructure repair due to natural disasters.
Another program is Residential Infrastructures (drinking water, sanitation, jetty, roads and bridges, and irrigation networks in the villages/sub districts) worth Rp2 trillion through community empowerment program. The ministry of public works is targeting 7,300 villages/sub districts.
Total workers absorbed from the three programs is 105 million people per day consisting of 80 million people per day in Drinking Water Supply Program, and 24 million people per day in Water Resource Infrastructure Program.
The minister of public works believes that the provision of compensation for the poor will not miss the target, because the government imposes some criteria in providing the compensation. Residential infrastructure program, for example, will only be given to sub districts with poverty rates of above 40%. While for the village-scale, residential infrastructure program will only be given to villages with poverty rates of above 50%.
Actually, the provision of compensation as a result of reduction of fuel price subsidy for infrastructure repairs to the poor communities in rural and urban areas was once implemented during the administration of Megawati of under the name of “Fuel Subsidy Reduction Compensation Program (PKPS). Because the program, according to audit results of the State Finance and Development Comptroller (BPKP) was considered successful and has a small leakage rate, the government now re-implements it for the same purpose. “We re-implement the program because there are no poor communities who do not like the program. Everybody likes it because the benefits can be enjoyed”, the minister said. (E)  

Business News - June 12,2013 

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