Govt disburses $202 million for 5 million poor families via village funds program

The government has disbursed around Rp 2.99 trillion (US$202 million) in cash assistance to almost 5 million families through the village funds program as it mulls increasing the village fund budget to protect households at greatest risk of falling into poverty amid the COVID-19 outbreak.

Villages, Disadvantaged Regions and Transmigration Minister Abdul Halim Iskandar said on Wednesday that more than 47,000 villages had disbursed Rp 600,000 to each registered family through both cashless and cash transfers. In total, some 63,000 villages of the nearly 75,000 villages in Indonesia have received village funds from the government, he added.

“We will continue to disburse cash transfers despite Idul Fitri [holiday break],” Abdul told reporters during a media briefing. Several challenges had prevented more rapid disbursement, including a lack of infrastructure and changes in village administrations, he said.

“Some regions have yet to disburse the funds because of difficulties in reaching households, such as in Papua and East Kalimantan, as well as because of changes in village administrations,” he said. “These are the main factors that have made the disbursement relatively slow.”

The government expects 1.89 million to 4.89 million individuals to fall below the poverty line amid the COVID-19 outbreak. Meanwhile, 3 million to 5.23 million individuals may lose their jobs as the pandemic brings economic activity to a standstill, according to official estimates.

In a fourth stimulus package announced on May 19, the government will roll out a Rp 641.17 trillion economic recovery stimulus to strengthen social safety net programs, help micro, small and medium businesses (MSMEs) and bail out state-owned enterprises (SOEs).

“We hope it will soften the economic impacts of the crisis but it will not be sufficient to substitute for all losses in spending,” Finance Minister Sri Mulyani Indrawati said recently.

The government plans to increase its spending on village fund cash assistance to Rp 31.8 trillion, after previously allocating Rp 21.2 trillion. It will provide Rp 600,000 per month for three months to families that meet certain criteria, such as having a family member who has lost their job and having not received assistance via the Family Hope Program (PKH) or the staple-food card program. An additional Rp 300,000 may be provided to families for another three months.

“We are still considering whether to boost the village funds,” Abdul said. “The regulation has been prepared but we are still waiting for the green light from the President.”

Abdul added that the cash assistance would be received by 8 million families in total, far lower than the previous estimate of 12 million families.

If you want to help in the fight against COVID-19, we have compiled an up-to-date list of community initiatives designed to aid medical workers and low-income people in this article. Link: [UPDATED] Anti-COVID-19 initiatives: Helping Indonesia fight the outbreak