Indonesian students ride on a boat as they head to school at Sikakap, on Mentawai Island, in Indonesia, Tuesday, Nov. 2, 2010.
JAKARTA, KOMPAS.com – The government is expected to write off debts it has provided under the small-holder’s credit (LUR) scheme for the victims of flash floods in Wasior, West Papua, Mt Merapi eruption in Central Java and earthquake/tsunami in Mentawai Islands in West Sumatra.
“We will do our best to write off their KUR debts. The victims of natural disasters in Wasior, Merapi and Mentawai must be freed from their KUR debts,” Minister for Cooperatives, Small and Medium-Scale Enterprises (UKM), Sjarifuddin Hasan, said here on Sunday.
The ministry of cooperatives and UKM will therefore directly take stock in the field of the number of KUR debtors and conduct a cross-check in its data base to ensure the number of KUR recipients who needed to be freed from repayment obligations.
“We will write off their debts and do our best to provide them with another credit so that they would be able to re-activate and recover economic activities in their respective regions,” the minister said.
Three natural disasters, particularly the Mentawai and Merapi ones, are at present in the stage of emergency response where all government agencies and ministries are being mobilized to help provide assistance in accordance with their respective duties and authorities. After that the regions would enter the stage of reconstruction and rehabilitation.
“We will get down there to assist them in recovering their economy and rebuilding their future,” the minister said.
In Mentawai for example, the earthquake and its subsequent tsunami have affected KUM clusters which produced handicraft products and local handicraft souvenirs. In Yoyakarta and Central Java, which were impacted by Mt Merapi eruption, several tourist destination villages which also UKM production centers were affected by the mount eruption.
“We are concerned with the disasters there but we will make a joint effort to recover the economic activities there so that the wheel of economy would roll on again,” Minister Sjarifuddin Hasan said.
Besides, the government will also write off the debts of cow breeders who were affected by the eruptions of Mt Merapi in Central Java and Yogyakarta, according to Guritno Kusumo, secretary to the minister for cooperatives and UKM.
“The government will also help repair cooperatives and UMK equipment which was damaged by eruptions,” he said.
The government has also set aside Rp3 trillion for social affairs assistance, which in the past was known as rotating funds.
“The ministry of cooperatives and UKM this year predicts Rp1.2 trillion in rotating funds that could be repaid by cooperatives,” he said.
According to him, recipients of social affairs assistance had no obligation to repay it but the ministry of cooperatives and UMK hoped the funds would be rotated. Head of Industry, Trade and Cooperatives Service of Yogyakarta Astungkoro said that there were two cooperatives which were affected by Merapi eruptions in Sleman, namely the Kaliurang UPP and Sarono Makmur cooperatives.
These cooperatives among others managed cow breeding. He said that there were 325 cows which were killed by the eruptions there, of which 172 belonged to the Kaliurang UPP cooperatives.
“We are still counting losses which had to be borne by the cooperatives and UKM as a result of the mount eruption,” he said. Hopefully this would be compensated by the government.
In the meantime, the Indonesian Native Businessmen Association (HPPI) also called on the government to reschedule the credits it had provided to micro-small and medium-sized businesses (UMKM) which have become the victims of natural disasters, particularly Mt Merapi eruption.
“The government should take a special policy regarding the fate of businesses which are affected by the Mt Merapi eruptions,” Deputy Secretary General of HPPI Herman H Suropo said.
Rescheduling could be imposed in a period of three to six months, or in an unspecified period due to the unpredictable condition of Mt Merapi, which has erupted several times and killed at least 135 people and caused the evacuation of 283,000 others since October 26, 2010.
Herman said that the government needed to issue the policy for the rescheduling of the victims’ credits because it was important for businesses to boost the real sector there in the post disaster period.
Thus, HPPI hailed the government decision to compensate the local people’s cattle and animals which were killed in in Mt Merapi eruption. The government could also take the same policy for UMKM businesses in the danger zones.
“Hundreds of pondoh zalacca palm farmers, restaurants and home industry businesses in Kaliurang, Yogyakarta, and also hotels within a radius of 20 kilometers from Merapi are affected by eruptions,” Herman said.
He said that based on the idea of the Indonesian Red Cross (PMI) Chairman Jusuf Kalla, the disaster handling should consist of three phases, namely emergency response where the victims must be evacuated and safeguarded, rehabilitation of disaster locations by reconstructing people’s settlements and recovery where businesses and economy in the disaster regions are rebuilt.
“In this case, rescheduling of UMKM credits can be done during the third phase of the disaster handling. The aim is to revive the spirit of UMKM players,” Herman said.