The scholarships program

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The scholarships program was designed to encourage children to remain at

school. It was designed as a direct cash transfer to students to increase the

possibility of their continuing their studies on to the next school level. No

restrictions were placed on how the money was to be spent, and students

or their families were able to use it for any other expenses in addition

to school fees. The scholarships provide monthly cash payments of Rp

10 000, Rp 20 000 and Rp 25 000 for primary, lower secondary and upper

secondary school students respectively. This was equivalent to only US

$1.33, US $2.67 and US $3.33, respectively, using the exchange rate of Rp

7500 per US $1 that applied at the establishment of the program in 1998.

Nonetheless according to one estimate, these amounts generally covered

the cost of school fees and charges.34

The government planned that the scholarships would reach a target of

around 6 per cent of all elementary school students, 17 per cent of all lower

secondary school students, and 10 per cent of all upper secondary school

students nationwide, including students attending private and religious

schools. Scholarships were only to be made available to those students

who were:

• Enrolled as students in the fi nal three grades in primary school and

all three grades in both lower and upper secondary school,

• Recent dropouts or those students in danger of leaving school because

of economic factors, and

• Not in receipt of any other scholarships.

Also as an additional criterion at least 50 per cent of the scholarships were

to be allocated to female students.

Authority to decide upon the allocation of the scholarship funds was

decentralized to district and school committees, but the funds themselves

were distributed directly to the student benefi ciaries through local post

offi ces. This mechanism of channeling funds directly from the central

government to the recipients was one of the program’s most innovative

measures, overcoming unnecessary delays in receiving payments and

reducing leakage.35

The allocation of scholarships to districts and to schools was based on the

estimated impact of the Crisis on poverty in each district. Poorer districts

and schools received a relatively larger allocation of scholarships. However,

the original allocations to districts in 1998 were based on school population

and 1996 district poverty indices. These criteria proved to be only partially

effective, and did not refl ect the actual impact of the Crisis, which, as we

have seen, affected some parts of the country far more seriously than others,

such as the urban areas of Java (CIMU, 2000a: 15).

The number of scholarships to particular schools and the distribution

of these to students relied heavily on local knowledge and community

participation. This decision was based on the premise that local authorities

are more capable of identifying the poor. Much of the criticism of the

program focused on the fact that, initially, it failed to identify the poorest

districts and those areas hit hardest by the Crisis (Sparrow, 2003b). School

committees, consisting of teachers, parents and respected fi gures in the

community, were established in the schools to which the scholarships

were allocated. These committees were required to select the children to

receive the scholarships, based on a consideration of family socio-economic

background, emphasizing criteria such as families living in poverty, single

parents and large households, or the family’s welfare status according to the

BKKBN classifi cation. Generally, each school nominated as many students

as possible. However, as there were far more potential applicants than

available scholarships, the school committees were given some freedom to

modify the guidelines they used to determine scholarship recipients (Jones,

2003: 81–2). In many cases, school committees also considered several

additional factors such as the travel distance to and from school, the history

of children dropping out, academic performance, and the submission of a

poverty statement from the head of the village. Some schools even rotated

the scholarships between student recipients on a monthly basis so that a

larger number of students were able to receive some assistance, even though

this was not strictly in conformity with the program guidelines.