Fiscal Stimulus Opens 3 Millions Jobs

VIVAnews - The budgeting committee together with the government agreed to add fiscal stimulus for infrastructure expenditure valuing Rp 12.2 trillion (US$1.03 billion). The figure is an increase of Rp 2 trillion compared to the government's original suggestion of Rp 10.2 trillion.

The head of Fiscal Analysis Agency, Anggito Abimanyu, said that the additional two trillion will be used for, among others, village roads development, irrigation, and several roads in the regency/city development.

"We decided on this figure because the stimulus prospect can create jobs," said Abimanyu.

In addition, by choosing the alternative to develop villages and regencies, it is expected that the development will run faster. "To build village roads, [we] don't have to buy the land, so the [labor] absorption becomes faster," he said.

According to head of the National Development Planning Agency (Bappenas), Paskah Suzetta, the project will absorb up to three millions labors.

"Our calculation is based on the assumption that for every one percent growth around 431-450,000 labors will be absorbed," said Suzetta.

Based on clarification from the government through the Finance Minister, the stimulus package is given to raise the people's purchasing power and to resolve massive layoffs through labor intensive infrastructure construction.

Through this fiscal stimulus, it is expected that the 2009 economy will grow to 4-5 percent. This growth is higher than the global economic growth which is projected to be 0.5 percent.

Suzetta said that with 5 percent growth level, it is calculated that the poverty level would be at 12-13 percent. If the growth level can be reached, the poverty level can to pushed lower than 2008 which was around 15 percent.

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Translated by: Ariyantri E. Tarman