REPUBLIKA.CO.ID, JAKARTA -- Minister for National Development Planning Sofyan Djalil on Wednesday responded to the World Bank's criticism regarding the mechanism of allocating village funds which, it said, could cause imbalances.

Sofyan is also Head of the National Development Planning Board (Bappenas).

Sofyan said the main objective of the village funds is to develop public infrastructure that will have a multiplying impact on the people's economy in villages.

He said that it was not correct to say that the village funds designed as direct incentives to be handed out to the poor and prone-to-poverty people in the regions.

"The village funds are not provided directly to the poor people in villages. The funds are used to build public infrastructure facilities to increase the absorption capacity of the labor-intensive sector in villages," the minister said.

He said most of the funds were used to develop public infrastructure which involved and empowered the people in rural areas.

The minister said the government could increase the productivity and improve the welfare of village people by empowering and involving them in the construction of public facilities.

Thus, the economic benefit accruing through infrastructure development could be multiplied. "So, what is needed is to improve the quality of guidance for the villagers," he added.

World Bank economist Ndiame Diop said in a report on Monday (Dec. 15) that the 90-10 percent village fund allocation formula could create imbalances among villagers.

Some 90 percent of the funds are equally allocated to each village while only 10 percent are distributed based on the demography and geography criteria.

"Such an allocation formula has created imbalances, in which a highly populated village receives almost the same amount of village funds as a less populated village. For the big village, a small amount of village funds will not be enough for them to develop," World Bank (WB) economist Ndiame Diop said during the launch of the WB Indonesia Economic Quarterly report on Tuesday.

Several key factors, such as population size, poverty levels, land area and geographic difficulties, have not been taken into consideration in the allocation of funds for each village. Only about 10 percent of village funds are allocated after considering those factors, but the remaining 90 percent are allocated equally per village.

Village funds have also increased to Rp46 trillion in 2016 from Rp20.7 trillion in 2015.

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