Tuesday, July 2, 2013

Cash assistance to the poor may be ineffective: National Statistics Agency

Kompas - July 2, 2013

According to National Development Planning Board (Bappenas) Chief Armida Salsiah Alisjahbana, BLSM is one means to prevent poor household's purchasing power from being eroded by inflation. The increase in the price of subsidised fuel will cause inflation to skyrocket with Bank Indonesia (the central bank) predicting its contribution to inflation will be as high as 2.46 percent.

Meaning that if part of the BSLM is used to pay of debts, then ordinary people's purchasing power will not be maintained as the government hopes. Let alone if a part of it is use to buy cigarettes.

Referring to research by the Demographic Institute at the University of Indonesia's Faculty of Economics, spending on cigarettes exceeds that of essentials in the poorest households. According to one of its researchers, Abdillah Ahsan, 47.74 percent of the poorest households were smokers in 2005. In 2009, this increased to 57.1 percent.

The BPS notes that cigarettes were one of the commodities that had a huge impact on the increase in poverty in March 2013. Out of nine consumable commodities cigarettes were in second place after rice. In cities cigarettes contributed as much as 8.82 percent to the increase in poverty. While in rural areas it contributed 7.48 percent. (LAS/MAS/ACI)

[BLSM Bisa Melempem: Rokok menggerus daya beli keluarga termiskin – Kompas. 2 Juli, 2013. Translated by James Balowski for the Indoleft news service.]