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Sri Mulyani responds to World Bank's criticism on village fund

Tempo - January 30, 2020

Fajar Pebrianto, Jakarta – The World Bank voiced its criticism on the distribution formula of Village Fund and the General Allocation Funds (DAU) currently executed by the Indonesian government.

During a discussion of the World Bank today, January 30, at SCBD Jakarta, Lead Economist Vivi Alatas said there is still a gap in the allocation per capita between recipient regions with large and small populations. She opined the budget was not set based on the performance, but rather than the absorption thus far.

Therefore, Vivi suggested the distribution of the two funding programs be applied in consideration of the performance aspect so that the impact will be felt by the public.

Minister Sri Mulyani who attended the event expressed her gratitude for the recommendations, promising to further improve the distribution formula. "This is in line with the government's thinking," she said.

In 2020, the government earmarked a total of Rp72 trillion for Village Fund, higher from last year's Rp70 trillion.

Sri Mulyani said the government has already disbursed the rural funds. The Finance Ministry, she added, kept some Rp15 trillion of the total figure. "We keep it as a reward for regions that are doing the right thing," she said.

Source: https://en.tempo.co/read/1301494/sri-mulyani-responds-to-world-banks-criticism-on-village-fund