Indra Harsaputra, Surabaya – Despite numerous government poverty-alleviation programs, the number of low-income people continues rising, underlining the difficulty of eradicating poverty in the country.

An economic observer in East Java, Wilopo, said of the province's 36 million people in 2006, 13 million were low-income. That figure is up from 10.5 million in 2005. Wilopo said this was the result of the fuel price hikes in 2005.

The provincial economy took another blow with the 2006 mudflow disaster in Sidoarjo, which paralyzed the economic sector in the province, which cut major transportation links, forced factory closures and destroyed infrastructure.

Unemployment in the province jumped to 1.96 million people as a direct result of the mudflow, which submerged at least 20 large factories, putting about 3,000 people out of work.

In response, in 2006 the East Java provincial administration launched a program to offset the effects of the fuel price increases and alleviate poverty. Part of the program has been introducing labor-intensive projects to provide jobs for low-income people.

The administration also has offered programs such as the village/subdistrict economic empowerment program, provided soft loans to prospective migrant workers through employment agencies and loans to small and medium enterprises, on the condition they hire low-income people and do not lay off workers.

However, many of these initiatives, such as soft loans aimed at developing micro businesses in villages, have failed because of unpaid loans by debtors.

Head of the Regional Resources Research and Development Center at November 10 Surabaya Institute of Technology, Agnes Tuti Rumiati, said a number of low-income people who received soft loans to set up small businesses spent the money instead on food and other basic necessities.

"I was surprised that the number of poor people had risen although the government disbursed soft loans in Tuban. But after I checked into the matter, some of them had spent the loans to buy rice and other foodstuffs," she told The Jakarta Post.

Agnes said the government needed to conduct a comprehensive study on poverty in East Java, to determine the true needs of low-income families in East Java.