KUR or KURaP

ON November 5th 2007 the President of Republic of Indonesia has launched the People’s Entrepreneurship Credit (Kredit Usaha Rakyat, KUR). This program, under responsibility from the Ministry of Cooperatives and Small and Micro Enterprises, existed in order to facilitate poor people to get access to the financial services. This program hoped to reach the poor people to get capital to start their own micro enterprises. Until the end of 2007, realization of KUR is 485 billion rupiahs (about 9200 rupiah is similar with 1 dollar USA). The last data I got from Coordinating Team for Poverty Alleviation, Ministry for Coordinating People Welfare mention that on March 31st 2008 the number hit the amount 3 trillion rupiahs (Rp 3.276 trillion) and the customer close to 187.860 people.
I have some idea to read the implementation of KUR. Better that we see the ‘location’ of the realization of KUR –not just ‘how much’ the money to be dropped. To implement the mottos ‘employment, income, and growth’ KUR must be replicable for poor people in rural, and working in agriculture. How if the name of the program not jus KUR but KURP or more provocative we can use the abbreviation of “KURaP DiiSeP” (Kredit Usaha Rakyat Perdesaan di Sektor Pertanian: Urban People’s Entrepreneurship Credit in Agricultural Sector). Ridiculous of bank KUR just services to the urban people like in Jakarta –because it is a kind of trade off program with the Official Jakarta’s project to decrease the number of informal micro entrepreneur.
Marguerite Robinson ever wrote about the learn lesson of BRI in Indonesia. The reform of BRI's microbanking system was undertaken in order to bring about a major increase in the availability of financial services-initially a profitable financial for the rural population and later for low-income urban residents as well. BRI is state owned bank.

KUR should become a special services that are widely available in rural areas and in low-income urban neighborhoods help the poor improve their financial security, allow them to take longstanding advantage of business opportunities, and facilitate the growth of their enterprises.
In Indonesia sustainable microfinance in the formal sector began in 1970 with interest in the the opening of Bank Dagang Bali (BDB), a private bank in Bali, and attained nationwide coverage with the 1984 restructuring of the unit desa, or local banking -emerging, system of the state-owned Bank Rakyat Indonesia (BRI).

According to empower the rural poor people who work in agricultuture, in the 1970s BRI opened more than 3,500 village units to channel subsidized government credit to rice farmers through BIMAS. It is a tremendous program under supervising by almarhum Soeharto. Bimas or “Bimbingan Massal” is the credit component of Indonesia's massive rice intensification program. As it turned out, the rice intensification program was highly successful, but its credit component was not. The long-term results of BIMAS were similar to those found in many developing countries. The subsidized loans, being at below-market interest rates and so in demand by wealthier farmers, often did not reach poor farmers. Moreover, arrears and losses were high. The program was phased out in 1985.
The Bimas program has passed away but we have to learn about. KUR must be focused to rural poor people who live and work in agriculture. Not just how much money to be dropped. Go to our beloved village, back to rural. focused on agriculture…

Huurrray... Im Graduate

FINALLY, I am graduated. I reach the master degree. How happy I am. After waiting for 3 years, at July 2nd I have followed the comprehend test. On 4th July MPKP called me and told that I have passed the examination (thesis and economic subject). Next on 30th August I will go along graduation ceremony to became ‘master in economic’ at Faculty of Economic, University of Indonesia. My program course is “Master of Planning and Public Policy”. My thesis theme is “Spatial Analysis for Poverty Alleviation Program: Kelompok Usaha Bersama (KUBE/ Cooperative Micro Business Group)”. This thesis for fulfilled master degree is under supported by Doctor Jossy Moeis as my promoter. Ladies andf gentlemen, here is my ABSTRACT refer to the thesis.
The poverty alleviation program has established for long time in Indonesia history. Poverty oriented development program started systematically in 1975/ 1976 when the success of Repelita 1st (Repelita: Rencana Pembangunan Lima Tahun, Development Planning for 5 Years) in speeding up growth also reveal serious income distribution inequalities. Another version –quoted from Smeru-mention that despite the fact that a large number of Indonesians were living in poverty, poverty eradication was never clearly set as a development goal in the first five rounds of the Five Year Development Plan (Pelita I to V) between 1969 and 1994. Only in 1994, at the start of Pelita VI did the government explicitly identify the target for reduction and eventual elimination of poverty. Several direct and indirect approaches have been employed in order to alleviate poverty in Indoensia. Among the direct poverty reduction efforts launched, four of the initial major program were: (i) the Presidential Instruction on Disadvantaged Villages or Inpes Desa Tertinggal; (ii) the Family Welfare Development Program or Takesra/ Kukesra; (iii) the Income Generating Project for Marginal Farmers or Program Peningkatan Pendapatan Petani/ nelayan Kecil (P4K); and (iv) the twin Urban Poverty Reduction Program (P2KP), and Kecamatan Development Program (PPK).
In 1982 Department of Social Affairs launched Kelompok Usaha Bersama -KUBE/ Cooperative Micro Business Group -as an effort to eradicate the number of ‘fakir miskin’ people. Fakir miskin similar with the poorest of the poor. KUBE is a group of poor families created based on their choice, co interacting to each other, living in a certain areas with the purpose of improving the productivity of their members, building harmonious social relation, fulfilling the needs of their member, solving social problems existing around them and becoming the mean of co-partnering business activities.
According to management principles, poverty alleviation program could be devided into activities: planning, organizing, leading/ actuating, and controlling. Planning, essential to the success of any program, is typically includes identifying goals, objectives, methods, resources needed to carry out methods. In this research planning is identified as the way of choosing regency/ municipalities (kabupaten/ kota) as location of the program. The method of KUBE program due to choose some priorities regency/ municipalities is the total number of fakir miskin or the poorest of the poor in that area. This research focus on how the KUBE program could catch-up the spatial concentration due to poverty enclave under region of kabupaten/ kota.

The other goal of this research are first to show a descriptive pattern of spatial concentration of poverty in Indonesia especially in Java, measure inequalities in poverty rate between provinces in Java. Seccond to know how the KUBE’s people reach the benefit of spatial concentration. On the year of 2004/ 2005, KUBE program under scheme of Micro Finance Institution –collaboration with Pinbuk or Pusat Inkubasi Bisnis Usaha Kecil (Incubation Center for Small Medium Enterprise). On 2006 the program named with Surat Kuasa Pengguna Anggaran or SKPA (Authorization Letter Budget Spender) –Department Social Affair give authority to the head of Social Institution in kabupaten/ kota to use the money, and 2007 with Bantuan Langsung Pemberdayaan Sosial (BLPS) or direct transfer for social empowerment. The result of this research showed that, although the concept of BLPS is better off than the other schemes in order to catch-up the spatial concentration but BLPS’s implementation of choosing regency/ municipalities is not better than the other –or than the previous years. The other conclusion, based on qualitative research in kecamatan Wedi kabupaten Klaten and kecamatan Minggir kabupaten Sleman, showed that the mechanism to choose KUBE member must be aware of market –besides input and labor resource. I use Kruskall-Wallis test, Wilcoxon test, and Theil Index to explain how right/ wrong the poverty enclave to be implemented in KUBE Program. yuni andono ahmad