SBY asks for rapid disbursement of state budget
The Jakarta Post, Jakarta - 29/12/2010
President Susilo Bambang Yudhoyono told state officials on Tuesday not to be wary of spending state funds to ensure that all development projects could be implemented on schedule.
Yudhoyono called on officials to spend next year’s budget faster than this year so government expenditure, especially for infrastructure projects, could help stimulate economic growth.
However, he also warned that all required procedures should be met to steer clear of corruption, collusion, nepotism and other irregularities. “[State officials] should receive clear guidance and assistance to not hesitate. Don’t cease supporting development projects over fears [of being accused of committing graft],” he said during a ceremony at the Presidential Palace in Jakarta to present the budget implementation entry lists (DIPA).
State spending has been slow this year. At the end of June, only 32 percent of state funds had been disbursed. As of Dec. 23, the budget disbursement had reached 83.1 percent, but most of the funds were only spent in the last few months.
The slow spending is partly caused by the rigid procedures used in tenders for the procurement of both goods and services. The fact that many officials in charge in procurement lack the capacity to do their jobs has also been blamed as another factor.
In his speech, the President instructed government offices to appoint qualified people to handle development projects so they knew what they had to do. “Increase internal supervision, monitoring and evaluation on every project,” he was quoted as saying by Antara news agency.
Yudhoyono acknowledged that practices of marking up goods and services were widespread and promised to strengthen controls to eliminate such practices. “The continued existence of this practice hurts the country,” he added.
Finance Minister Agus Martowardojo, however, expressed optimism that the budget disbursement could be accelerated in the last week of the year to Rp 1,097.5 trillion (US$121.282 billion) by year-end, or 95.9 percent.
“There are currently 11,600 SPMs [letters of instruction for payment] totaling Rp 38 trillion that will be disbursed. Money will continue to flow in the next few days,” Agus said at the Finance Ministry on Tuesday.
Along with domestic consumption and investment, government spending is expected to play a major role in accelerating GDP growth.
Indonesia’s economy is set to expand by 6 percent this year, higher than the official target of 5.8 percent in the revised version of the 2010 state budget.
The government predicts the country’s economy would grow 6.4 percent in 2011 and 7.7 percent by the end of Yudhoyono’s term, higher than that of developed nations such as the US, countries in Europe and Japan, where economic growth has been slowed to less than 5 percent since the US-led global economic slowdown in 2008.
“A December issue of The Economist has an article titled The World in 2011. It calls Indonesia a new power of the global economy that has good economic prospects due to its resilience in times of global crisis,” Yudhoyono was quoted as saying by news portal detikfinance.com.
He said he saw the need to improve the slow budget disbursement next year to support economic growth. Rp 1,229 trillion of the 2011 state budget is allocated for government spending.