In order to give some credibility to the lip service that the government has been paying to its “war on poverty” the Minister of Finance has issued Regulation No. 168/PMK.07/2009.Poverty, like any statistical data, can fluctuate according to what measures and figures are used to define poverty. However, at least in an anecdotal sense, there is plenty of proof that poverty, and more importantly abject poverty, remain a major concern in regards to Indonesia’s long-term development.
To this end, there is clearly a need for funding for poverty eradication programs. It is also clear that this national program must involve both the central and regional governments in a coordinated funding effort. It is also important that the management of these poverty eradication programs are efficient, economical, effective, transparent, and responsible.
Generally, the funding of poverty eradication programs will come from the State Budget or the relevant Regional Budgets of the regions where the programs are to be implemented. However, there may be instances where the central and regional governments’ pool funds for particular programs. The underlying principle is that any funding initiative is to be contained in an agreement signed between the central and respective regional government.
It must be noted that the funding that may be allocated under this regulation through Joint Affairs Funding (Dana Urusan Bersama / DUB) and Regional Joint Affairs Funding (Dana Daerah Urusan Bersama / DDUB) is restricted to village and city empowerment programs that provide Direct Community Assistance (Bantuan Langsung Masyarakat / BLM).
The joint effort is comprehensive in that not only do the central and respective regional governments sign-off on any agreed plan of poverty eradication and then incorporate that agreement into their respective annual work plans, but the relevant departments and other institutions of state are required to incorporate the plans into their respective annual work plans as well.
The regulation sets out four basic groups based on the relevant Fiscal Index (FI) and Percentage of Poor Citizens Index (PPCI). Group 1 are regions where the FI and the PPCI are above national averages; Group 2 is where the FI is below the national average but the PPCI is above the national average; Group 3 is where both the FI and the PPCI are below the national average; and Group 4 is where the FI is above the national average but the PPCI is below the national average.
The minister will establish baselines for the FI and the PPCI. These baselines figures are then to be used as a means of targeting allocations to regions with the most desperate of needs with respect to poverty eradication. However, Article 7 stipulates that the level of funding will be ultimately determined not only by the needs of citizens as a result of their poverty, but also by the available resources of the governments involved.
DUB funds are to be released directly to the participating community members in the form of cash. Once these disbursements have been the recipients have three months from the conclusion of the relevant financial year to make use of the funds provided. The funds must also be used in a manner consistent with the agreed plan.
Essentially, the reporting of the DUB and the DDUB are to be in the form of financial reports. These reports are to include, among other matters, the realization of budget allocations and any notes on the content of the report. Furthermore, the reports are to comply with the accounting and reporting systems applicable to central government financial reporting. In conjunction with the reporting requirements there are also explicit provisions set out in the regulation with respect to information management.
The regulation has been in force since 4 November 2009.
In order to give some credibility to the lip service that the government has been paying to its “war on poverty” the Minister of Finance has issued Regulation No. 168/PMK.07/2009.Poverty, like any statistical data, can fluctuate according to what measures and figures are used to define poverty. However, at least in an anecdotal sense, there is plenty of proof that poverty, and more importantly abject poverty, remain a major concern in regards to Indonesia’s long-term development.
To this end, there is clearly a need for funding for poverty eradication programs. It is also clear that this national program must involve both the central and regional governments in a coordinated funding effort. It is also important that the management of these poverty eradication programs are efficient, economical, effective, transparent, and responsible.
Generally, the funding of poverty eradication programs will come from the State Budget or the relevant Regional Budgets of the regions where the programs are to be implemented. However, there may be instances where the central and regional governments’ pool funds for particular programs. The underlying principle is that any funding initiative is to be contained in an agreement signed between the central and respective regional government.
It must be noted that the funding that may be allocated under this regulation through Joint Affairs Funding (Dana Urusan Bersama / DUB) and Regional Joint Affairs Funding (Dana Daerah Urusan Bersama / DDUB) is restricted to village and city empowerment programs that provide Direct Community Assistance (Bantuan Langsung Masyarakat / BLM).
The joint effort is comprehensive in that not only do the central and respective regional governments sign-off on any agreed plan of poverty eradication and then incorporate that agreement into their respective annual work plans, but the relevant departments and other institutions of state are required to incorporate the plans into their respective annual work plans as well.
The regulation sets out four basic groups based on the relevant Fiscal Index (FI) and Percentage of Poor Citizens Index (PPCI). Group 1 are regions where the FI and the PPCI are above national averages; Group 2 is where the FI is below the national average but the PPCI is above the national average; Group 3 is where both the FI and the PPCI are below the national average; and Group 4 is where the FI is above the national average but the PPCI is below the national average.
The minister will establish baselines for the FI and the PPCI. These baselines figures are then to be used as a means of targeting allocations to regions with the most desperate of needs with respect to poverty eradication. However, Article 7 stipulates that the level of funding will be ultimately determined not only by the needs of citizens as a result of their poverty, but also by the available resources of the governments involved.
DUB funds are to be released directly to the participating community members in the form of cash. Once these disbursements have been the recipients have three months from the conclusion of the relevant financial year to make use of the funds provided. The funds must also be used in a manner consistent with the agreed plan.
Essentially, the reporting of the DUB and the DDUB are to be in the form of financial reports. These reports are to include, among other matters, the realization of budget allocations and any notes on the content of the report. Furthermore, the reports are to comply with the accounting and reporting systems applicable to central government financial reporting. In conjunction with the reporting requirements there are also explicit provisions set out in the regulation with respect to information management.
The regulation has been in force since 4 November 2009.
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