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Social budget

Straits Times - September 8, 2001

Train crashes, crumbling schools, power blackouts and children begging on crowded intersections – these are legacies of Indonesia's budget crunch in recent years. The new budget, with its stated emphasis on social welfare and regional development, aims to address some of the inequities. This is how Indonesia intends to cut down overall spending, but still build necessary social infrastructure.

More money

  • Education: 11.6 trillion rupiah (S$2.2 billion, 19-per-cent increase). Mandatory nine years of schooling is to be enforced. More schools to be built and scholarships up for grabs.
  • Health care: 4.3 trillion rupiah (14-per-cent increase). New clinics and medical workers to take better care of the poor, elderly, handicapped and orphans.
  • Building infrastructure: 6.5 trillion rupiah (35-per-cent increase). Neglect over the past four years has caused train crashes, late airplane arrivals and traffic jams. The government now wants more roads, seaports, airports and rail tracks.
  • Energy: 3.5 trillion rupiah (41-per-cent increase) to bring power to the country's rural areas. Power lines are failing, and electricity plants are ageing. Wiring projects that have been on hold since 1997 will now get funding.
  • Agriculture: 6.6 trillion rupiah (3.8-per-cent increase) to develop agriculture, forestry and marine resources. Cheaper fertilisers for farmers and aid for plantations switching to lucrative export crops.
  • Housing: 1.01 trillion rupiah (52-per-cent increase) to house the poor, refugees and those living in disaster areas.
  • Development: 3.4 trillion rupiah (9.2-per-cent increase) to speed it up, especially for regions located in the eastern parts of Indonesia.
  • Military: 3.4 trillion rupiah (41-per-cent increase) for new tanks, boats, guns and planes.

Less money

  • Civil service: 809 billion rupiah (5.7-per-cent drop) for training, travel and other allowances.
  • Business development: 1.2 trillion rupiah (80.2-per-cent drop). Less money on sponsored road shows, but the government will focus on supporting SMEs. Local government and private sector expected to take up slack.
  • Science and technology: 602 billion rupiah (4.8-per-cent drop). Less money for research and development, but private organisations are expected to take charge.

Total revenues

  • 289.4 trillion rupiah (1.1-per-cent increase from last year, 17.1 per cent of GDP)
  • 204.2 trillion rupiah (17.2-per-cent increase) from domestic taxes.
  • 12.6 trillion rupiah (14.4-per-cent increase) from international trade taxes.
  • 72.6 trillion rupiah (28-per-cent drop) from oil, gas, mining and resources revenues.

Total expenditure

  • 332.5 trillion rupiah (2.3-per-cent drop from last year, 19.6 per cent of GDP)
  • 90.34 trillion rupiah to regional governments under decentralisation scheme.
  • 40.7 trillion rupiah pays salaries of government workers.
  • 87 trillion rupiah services Indonesia's domestic and foreign debts.
  • 46.2 trillion rupiah subsidises petrol and electricity.
  • 47.1 trillion is devoted to development budget.

Total deficit

43.03 trillion (21-per-cent drop, 2.5 per cent of GDP)

To be financed by asset sales and privatisation proceeds, and loans from international creditors.

Budget assumptions: 5-per-cent growth, 8-per-cent inflation, 8,500-rupiah exchange rate, 14-per-cent interest rate and US$22 per barrel oil price.