Robert Go, Jakarta – Aid money earmarked by the government to offset the effects of fuel-price hikes on the poor will not help the needy, said activists who work with Indonesia's impoverished urban communities.

In addition to charging that the government was not budgeting enough money, experts also projected that much of the 2.85-trillion-rupiah (S$560 million) aid package would instead end up in the pockets of the country's reputedly corrupt and inefficient bureaucrats.

Bajaj driver Akhmadi, who earns S$5 a day transporting people around Central Jakarta in his small vehicle, said: "That's not enough, when you consider how many people need help. Prices are going up, and the poor have to make do as usual."

Lawyer Bagus Karbianto of Jakarta's Legal Aid Institute agreed: "There are millions of poor people. The number is increasing. The government has to spend more to address poverty issues."

But the bigger problem, according to the activists, is that most of the money, which will be administered by seven different government ministries, stands little chance of reaching its intended targets due to corruption.

Mr M. Berkah Gamulia of the Urban Poor Consortium argued: "The programmes are poorly-designed and have poor transparency. This is yet another opportunity for corruption for the bureaucrats." He further explained that the poor had not seen any benefit from similar programmes instituted by the government following last year's series of fuel-price hikes.

"Nobody knows what happened to that money from last year. No audits, no reports, no accountability," Mr Berkah said.

Indonesia will increase fuel prices by around 20 per cent before the end of January in a bid to reduce spending on fuel subsidies and keep this year's state-budget deficit under control.

The measure is also in compliance with conditions that President Megawati Sukarnoputri's administration has agreed upon with the International Monetary Fund.

International donors and lenders have long argued that Indonesia's fuel-subsidy programme, which keeps domestic prices far lower than international standards, benefits the middle class and should be lifted.

In anticipation of higher fuel prices, however, traders and distributors of staple products, including rice, have begun to charge higher prices for their goods.

Reports from various parts of the country have shown dramatic increases in the price of rice, causing panic buying and shortages.

Shortages of kerosene, used for lighting oil lamps and simple stoves, have also occurred in different parts of the country since the government said last week it would go ahead with fuel-price hikes.

Mr Bagus said: "The poor are definitely affected by higher fuel prices, not just the middle class and the rich. But I guess poor families are getting used to handling the short end of the stick."