Infrastructure Becomes a Priority

April 30, 2015, KOMPAS

Disbursement of Funds to the Regions Reaches Rp 100 Billion

JAKARTA, KOMPAS – The infrastructure sector remains a priority in the national development plan of 2016. Development in the sector is focused on agriculture and transportation. To that end, the government plans to increase funding to the regions to up to Rp 100 billion per region.

President Joko Widodo affirmed there will be an increased transfer of funds from the central government to the regions to Rp 106 trillion. The fund transfer is larger than that given in 2015 worth Rp 20.7 trillion. “Looking ahead, a lot of funds from the central government will flow to the regions,” said President Jokowi, while attending the 2015 National Development Planning Meeting (Musrembangnas) in Jakarta, Wednesday (29 April).

The value of funds from the central government to local governments (pemdas) of provincial, city and regency levels varies, depending on several things, among others, the land area, population, governance indicators, corruption index, and budget absorption.

The President asserted that the funding support from the central government is not permanent. A region may not get funding continuously in subsequent years. Injection of the support funds is given because a lot of regions still have meagre development spendings.

The provision of central government funds to the regions will be outlined in a presidential instruction (Inpres), which manifests a synergy of proposed programmes from the regions and priority programmes of the central government. “There will be Inpres on SMK (vocational high schools), Inpres on educational facilities, and Inpres on roads, that sort of things,” said Jokowi.

Vice President, Jusuf Kalla, said that infrastructure development is absolutely needed to stimulate economic growth. He asked for infrastructure development to be accelerated, using the development budgets at both the central government and regional government levels. This year, the government has allocated an infrastructure budget of around Rp 300 trillion.

Finance Minister, Bambang PS Brodjonegoro, stated that the programme for the allocation of funds worth Rp 100 billion per regency and city is a part of the main thrusts of fiscal policy in 2016.

Based on regional needs
Looking ahead, the central government will transfer more funds to local governments for infrastructure development. “The programme is an affirmative policy, or an effort to increase the allocation of funds specifically for infrastructure. We also plan to increase village funds from Rp 20 trillion to Rp 40 trillion,” Bambang said.

According to Home Affairs Minister, Tjahjo Kumolo, the programme of Rp 100 billion funding allocation is based on local needs. Regional governments should make careful planning of infrastructure development. “Financial transparency should be prioritised. Local governments and village governments have to plan and manage the finances well and cleanly. The regional development monies should not be eroded,” he said. (NDY/HEN)

PROPORTION OF PERSONNEL EXPENDITURE AND CAPITAL EXPENDITURE AS OPPOSED TO TOTAL REGIONAL EXPENDITURE

Proportion of Personnel Expenditure against Total APBD (Percent)

2011 2012 2013 2014
Regency/City Governments 51 51 49 47
Provincial Governments 25 20 18 17
Provincial/Regency/City Governments 44 42 40 39

Proportion of Capital Expenditure against Total APBD (Percent)

2011 2012 2013 2014
Regency/City Governments 23 24 25 26
Provincial Governments 21 18 20 24
Provincial/Regency/City Governments 22 22 24 25

Personnel Expenditure: Budgetary spending for payment of civil servants’ salaries, as well as other remuneration incomes attached to salaries

Capital Expenditure: Budgetary spending used in order to get or to add to fixed assets and other assets that give benefit for more than one accounting cycle. Capital expenditure is expected to continue rising in order to push for infrastructure development, as well as to stimulate investments and regional economic growth.

Source: “Kompas” Litbang/ARM, processed from papers of National Development Plan Meeting 2016; Ministry of Home Affairs

INFOGRAPHICS: ISMAWADI

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