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Indonesian government in rush to spend by end of year

Source
Jakarta Globe - December 28, 2011

Dion Bisara – Government agencies and departments have been in a late-season rush to meet spending targets, data from the Ministry of Finance showed.

On Dec. 7, the government had spent 51 percent of the targeted Rp 140.95 trillion ($15.5 billion) set in the revised 2011 budget. But by Dec. 27, that had risen to 76.5 percent, according to ministry data.

So in 20 days, the government accounted for 25.5 percent of its allotted annual spending. Hatta Rajasa, the chief economics minister, said this month that budget disbursements were concentrated at the end of the year because agencies and departments had to complete a time-consuming procurement process before the Ministry of Finance could release the money.

One problem, he said, is that tender procedures do not allow for single bidders, even when there is no other party capable or qualified for a project. That means the process is put on hold until a second bidder can be found, and usually finishes at the end of the year.

In an effort to deal with the problem, Finance Minister Agus Martowardojo said on Wednesday that agencies and departments would be allowed to begin the process earlier. "So we hope the disbursements can be much earlier [next year]," he said.

He said that as of Tuesday, the budget deficit, which stands at 0.64 percent of the nation's projected gross domestic product, was still short of the target. That's partly because overall spending as of Tuesday had only reached Rp 1,165 trillion, or just 88.2 percent of the target.

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