Dessy Sagita, Jakarta – Efforts to alleviate poverty through community empowerment programs are being held back by corruption and vested interests within the government, an official with those programs said on Thursday.

The Coordinating Ministry for People's Welfare runs a variety of programs under its National Program for Community Empowerment (PNPM), including micro- credit schemes.

But Sujana Rojat, the ministry official in charge of the PNPM, said the program was rife with corruption, though not on the scale of other government institutions.

"About 0.8 percent of our annual budget, or about Rp 100 billion [$11.2 million], is embezzled every year on average," he said on Thursday. "If we gave that same amount to a single district, there would be no more poor people there."

He blamed the corruption within the PNPM partly on the permissive culture in Indonesia, saying that people tended not to report embezzlement. Sujana also said the effectiveness of PNPM schemes was hampered by the fact that the implementation teams were poorly coordinated and worked independently.

He said that because the funds for PNPM schemes were transferred directly into accounts opened by recipients but that could also be accessed by facilitators, there had been numerous cases of facilitators taking the money and fleeing with it. One such facilitator reportedly made off with Rp 900 million, Sujana said.

His minister, he added, had set up an account on the social networking site Facebook to allow fund recipients and facilitators to report violations.

While he acknowledged the problem of corruption, Sujana rebuffed criticism by a coalition of budget watchdogs that the PNPM was a waste of money.

Last month, the Indonesian Forum for Budget Transparency (Fitra) questioned the effectiveness of the schemes under the PNPM. It said that while the government had earmarked Rp 3.9 trillion for the program in 2007, and proposed Rp 11.8 trillion for 2011, the actual progress on poverty alleviation was debatable.

Yuna Farhan, the Fitra secretary general, said the government had burdened itself with extra debt by borrowing an additional $744 million from the World Bank for the PNPM.

But Sujana said Indonesia had reduced the poverty rate by an average 0.8 percent a year, according to the CIA World Factbook, and the PNPM deserved some of the credit.

"That means that every year, two million people here rise out of poverty," he said. "That is the fastest poverty reduction rate in the world, faster even than China's."

He also said it was unfair to call the PNPM's effectiveness into question, given that its annual budget was just a fraction of the total Rp 80 trillion allocated for poverty alleviation every year.