$30b Set Aside to Fund Regional Development

The government has plans to allocate more than Rp 300 trillion to regional areas in 2010 to support the implementation of fiscal decentralization.

President Susilo Bambang Yudhoyono referred to the funding measures, totaling Rp 309.8 trillion ($30.67 billion), during his address to a special plenary session of the Regional Representatives Council (DPD) on national development in Jakarta on Wednesday.

“Of the total amount of funds to be transferred to the regions, the equalization funds are envisaged to reach Rp 293 trillion, or an increase of Rp 7.7 trillion compared to the projected realization in 2009,” Yudhoyono said.

He added that the budget would be distributed in the form of shared funds (DBH), totaling Rp 76.6 trillion; general allocation funds (DAU), to the tune of Rp 195.8 trillion; and special allocation funds (DAK), worth Rp 20.6 trillion.

The president also said Special Autonomy Funds (Otsus) allocated for Aceh, Papua and West Papua provinces, were projected to reach Rp 8.9 trillion.

“I hope that the Special Autonomy Funds can be spent optimally, in order to extricate the regions concerned from their disadvantaged position in providing services in health, education and infrastructure. However, I also request that a more effective monitoring of the use of Otsus funds be applied,” Yudhoyono said.

The president said that starting in 2010, changes would be made to the allocation of shared funds from excises on tobacco products by including tobacco-producing regions.

Moreover, he said the government would also allocate geothermal shared funds as part of the natural resources shared funds (DBH SDA).

From his experience over the past four years, Yudhoyono said the prices of oil, gas and coal were expected to keep fluctuating, resulting in unpredictable revenue from the natural resources sector.

“I should remind the regions relying on DBH SDA funds to improve their ability to anticipate changes as well as to manage the fluctuating prices of natural resources and the region’s revenue,” he said. Antara

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