[Kabar-indonesia] Kalla urges regions to start spending development funds

[Joyo at aol.com]

The Jakarta Post 
Saturday, July 1, 2006

Kalla urges regions to start spending development
funds

The Jakarta Post, Jakarta

Vice President Jusuf Kalla urged the country's local
administrations Friday to immediately start spending
the investment funds they had been given on planned
projects, or at the very least disburse them to
farmers as loans.

"Rather than let the funds sit idle, the
administrations could convert them into loans that
would benefit the people. I believe, however, that
these decisions (to invest the funds in central bank
instruments) cannot be absolutely categorized as wrong
provided that the projects are commenced soon," said
Kalla.

He said he believed that the local administrations
were just adopting a "safety" approach by keeping the
funds invested in central bank SBI notes pending the
completion of the tender processes for the planned
projects.

The government is concerned that Rp 43 trillion
(US$4.5 billion) worth of development funds disbursed
to the regions have not been used for their intended
purposes, but have rather been invested in central
bank instruments, thereby undermining the government's
efforts to achieve higher economic growth through
greater capital spending.

Such a situation would only result in additional costs
for Bank Indonesia and the government in the form of
interest payments, instead of the economic benefits
that the capital funds were supposed to generate.

However, Kalla did not say whether any sanctions would
be imposed on governors, regents or mayors who refused
to put the funds to good use.

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Joyo Indonesia News Service
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