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Stimulus plan at risk as spending blocked by lawmakers

Source
Jakarta Globe - May 14, 2009

In a single evening on Wednesday, lawmakers managed to block almost Rp 1 trillion ($97 million) of the central government's Rp 12 trillion package on vital infrastructure spending, part of the larger Rp 73.3 trillion stimulus package, stoking fears among analysts that delays could cut into he country's already flagging economic growth.

The House of Representatives budgetary commission blocked a Rp 650 billion infrastructure plan proposed by Ministry of Agriculture for irrigation and road construction. Committee members argued that the ministry's stimulus program differed from the one proposed by the Ministry in February.

The same night, Commission VI overseeing trade blocked a Rp 325 billion plan by the Ministry of Trade to revitalize the nation's traditional markets, due to technical issues and complaints from lawmakers. Of the Rp 325 billion, the bulk – Rp 225 billion – was to go to revamping selected traditional markets, with the remainder to be spent revamping state commodity warehouses.

While lawmaker blame the ministries for submitting flawed programs, observers are questioning why the House, which approved the stimulus package in February, was now blocking the package and whether they have the legal authority to do so. Amid the bickering, the bottom line is that economic growth could stall in the absence of state spending.

"Two ministries' stimulus plans have been blocked by the [House]," said Juniman, an economist with Bank Internasional Indonesia. "If at the end the stimulus package does not go ahead, our economic growth could just grow by 3.5 percent this year."

Meanwhile, the nation's traditional market retailers are threatening mass shutdowns around the country if they do not see some money soon.

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