Fast Utilization Of Regional Funds Could Boost Growth: Finance Minister

Jakarta (Antara Bali) - An acceleration in the utilization of regional funds by regional governments could fuel national economic growth, Finance Minister Bambang Brodjonegoro said on Friday.

"Regional governments should now begin working so that regional transfers of funds in the form of special allocation funds (DAK) or general allocation funds (DAU) have a positive impact on growth. If regional governments immediately use half of the funds, it will have a significant impact," Brodjonegoro said.

He added that between 2011 and June, 2015, regional government funds amounting to Rp273.5 trillion had remained unused in banks. This amount could potentially increase if regional governments found no use for these funds.

This condition could hamper the funding of regional expenditures, particularly capital expenditures to build infrastructure facilities needed to encourage and improve economic performance.

"The regional governments are still lacking in efforts aimed at creating a stimulus, even though the unspent funds have extraordinary potential to stimulate the economy. The funds should therefore not remain unused in banks," the minister stressed.

Brodjonegoro pointed out that the Central Kalimantan Province was able to improve its economic performance during the first semester of 2015 because it was able to utilize 50 percent of its allocated expenditure. This could be compared with other provinces whose economic development had slowed down.

"The Central Kalimantan Province recorded its best economic performance. After enquiries were made, it was revealed that the province had up to the end of July, used half of its expenditure funds. Other provinces had only used some 20 to 30 percent of their expenditure funds. So, the impact of the funds' use on growth was evident," Brodjonegoro said.

The central government has announced its draft budget for 2016, which has been set at Rp2,121.3 trillion, comprising of central government spending of Rp1,339.1 trillion, spending on ministries and state institutions pegged at Rp558.7 trillion and transfers to regions and villages estimated at Rp782,2 trillion.

The Rp782.2 trillion transfers to regions and villages rose by about Rp117.6 trillion, compared with the same funds allocated in the revised 2015 State Budget, which amounted to Rp664. Trillion.  

The transfers to regions and village funds in the draft 2016 state budget surpassed the allocation of funds earmarked for ministries/institutions' expenditures for the first time and were pegged at Rp780.4 trillion. (WDY)