Protecting the poor and safeguarding the economy
Dipo Alam, Cabinet
Secretary of the Second United Cabinet of the Republic of Indonesia
SUMBER : JAKARTA POST, 03 April 2012
“No government wishes to burden its people, but we have to protect them from
global shocks,” President Susilo Bambang Yudhoyono stated during a press
conference in Beijing recently.
Over the weekend, the President delivered another press conference explaining the government’s response to the House of Representatives’ plenary to revise the state budget, which included a decision to delay a fuel-price hike.
“Most of the amendments proposed by the government have been accepted, with the general thrust of the bill fully supported by the House,” Yudhoyono said.
The debate over the fuel-price hike has been rife since March, and has been marked by the twisting of information by the media and the travesty of some political parties that claim to defend people’s best interests.
If we look closer at the argument, it was never about fuel prices, but the need to adjust the 2012 state budget due to the assumptions made in December 2011 — subsequently proven invalid — on the global price of oil, which in the budget had been set at US$90 per barrel.
Three months later, it reached $122 per barrel. Hence, as the House has now approved, the government should adjust the fuel subsidy if the world oil price climbs by an average of 15 percent over a six-month period.
No government wishes to lay such a fiscal burden on the shoulders of its taxpayers. Even though it possesses a budget deficit to gross domestic product (GDP) ratio of 1.5 percent, and has plenty of fiscal space reaching 2.3 percent, with even a ceiling of 3 percent as stipulated by law, the Indonesian government is not willing to throw away good money.
In the long run, it’s about liberating people from their potential addiction to oil.
And yet protesters and political parties exploited the debate to show off their heroic stances. We have a phrase for this, pahlawan kesiangan, or wannabe hero, namely a person that lacks sufficient comprehension of a matter and pursues a populist goal.
As a former student activist in my early years, I know the difference between the successful delivery of a message and avoiding violent provocation. Last week’s demonstrations failed on both accounts.
Demonstrations are welcomed as part of democracy but protesters should not resort to vandalism or commit acts of anarchism, let alone harass the public. Indonesians need to organize demonstrations in a civilized manner without disrupting the activities of the community.
Hence, the demonstrations last week reflected the politics of violence and were deeply regrettable.
The protesters forced their will in the name of the people in the hope of influencing the views of the general public. But let me congratulate the brave policemen and women who stood their ground peacefully and patiently, and express my disappointment with the television stations that misled the public with their reports on the role of some political parties, which in fact only provoked the public.
These rancorous demonstrations did not affect the Indonesian stock market, however. In fact, the Indonesian rupiah strengthened to Rp 9,150 against the greenback and the Indonesian composite index was up by 16.384 points, reaching 4,121.551.
And while the demonstrators screamed against an increase in fuel prices, it was worth noting that Indonesia possessed the cheapest fuel prices in the world.
Translated into rupiah, the price of fuel in the UK is Rp 19,872 per liter; in Australia, it is Rp 19,200; in Canada, Rp 11,500; in Japan, Rp 9,192; and in the US, Rp 8,700. In its neighboring ASEAN countries, Indonesia’s fuel price is also the cheapest, compared with Singapore where fuel costs Rp 11,500; Thailand with Rp 8,777; and even Vietnam with Rp 7,759.
The price of fuel in Indonesia will remain the cheapest even if we push to increase it to Rp 6,000 per liter. The government is cognizant of the need to provide additional social protection, as analysts have suggested that inflation could go beyond the current 3.7 percent level.
Hence, we will provide support for social programs for around 30 percent of Indonesian people or 18.5 million households, especially blue-collar workers, farmers, fishermen and other impoverished people.
We expect to provide cash assistance for the poor (BLSM), which will give Rp 150,000 per month per household and, at the same time, provide rice for the poor for 14 months in case the fuel price increases. We will allocate transportation management incentives worth Rp 5 trillion and provide scholarships for low-income students with as much as Rp 5.9 trillion, while facilitating the creation of many more affordable markets.
In parallel, the government recently returned home from strengthening its bilateral relations with Asian strategic partners like China and South Korea.
We have cemented private-sector partnerships with mainland Chinese, Hong Kong and Korean investors and traders.
At the same time, Yudhoyono was calling out for global nuclear security at the historic, second Nuclear Security Summit in Seoul.
On the sidelines of the state visit, Yudhoyono held bilateral meetings with leaders from Norway, Denmark, Ukraine, the UK and Pakistan, where we opened new trade opportunities in defense, green economic growth and new partnerships to support the investment needs of the Master Plan for Indonesia’s Economic Growth.
These visits were key milestones for Indonesian bilateral relations with China and Korea, and also a testament to the countries’ resilience to global shocks, namely the volatile global economy, the uncertain political and security tensions in Syria, the Hormuz Strait, and the threat of nuclear terrorism.
Vice President Boediono will lead the Indonesian delegation this week to the ASEAN Economic Summit in Cambodia, which I will also attend, to continue the positive momentum of Indonesia’s foreign relations and bolster already strong bilateral relations.
As we pass the economic growth mark and join the prestigious “Trillion Dollar Economy Group of Countries”, we know there are still many policies that need to be adjusted to ensure sustainable and equal growth. Indonesia has come a long way since 1998 when the economy collapsed.
For Indonesia, the path to greater progress has now been established for the next decade, with a view to having the country enter the top-five economies by the middle of the century.
The raging demonstrations, although frightening for some, were part of a natural phase for Indonesia to reach its democratic and economic potential.
And this is something most Indonesians understand: the need to do their utmost to balance their democratic rights with safeguarding the economy. ●
Over the weekend, the President delivered another press conference explaining the government’s response to the House of Representatives’ plenary to revise the state budget, which included a decision to delay a fuel-price hike.
“Most of the amendments proposed by the government have been accepted, with the general thrust of the bill fully supported by the House,” Yudhoyono said.
The debate over the fuel-price hike has been rife since March, and has been marked by the twisting of information by the media and the travesty of some political parties that claim to defend people’s best interests.
If we look closer at the argument, it was never about fuel prices, but the need to adjust the 2012 state budget due to the assumptions made in December 2011 — subsequently proven invalid — on the global price of oil, which in the budget had been set at US$90 per barrel.
Three months later, it reached $122 per barrel. Hence, as the House has now approved, the government should adjust the fuel subsidy if the world oil price climbs by an average of 15 percent over a six-month period.
No government wishes to lay such a fiscal burden on the shoulders of its taxpayers. Even though it possesses a budget deficit to gross domestic product (GDP) ratio of 1.5 percent, and has plenty of fiscal space reaching 2.3 percent, with even a ceiling of 3 percent as stipulated by law, the Indonesian government is not willing to throw away good money.
In the long run, it’s about liberating people from their potential addiction to oil.
And yet protesters and political parties exploited the debate to show off their heroic stances. We have a phrase for this, pahlawan kesiangan, or wannabe hero, namely a person that lacks sufficient comprehension of a matter and pursues a populist goal.
As a former student activist in my early years, I know the difference between the successful delivery of a message and avoiding violent provocation. Last week’s demonstrations failed on both accounts.
Demonstrations are welcomed as part of democracy but protesters should not resort to vandalism or commit acts of anarchism, let alone harass the public. Indonesians need to organize demonstrations in a civilized manner without disrupting the activities of the community.
Hence, the demonstrations last week reflected the politics of violence and were deeply regrettable.
The protesters forced their will in the name of the people in the hope of influencing the views of the general public. But let me congratulate the brave policemen and women who stood their ground peacefully and patiently, and express my disappointment with the television stations that misled the public with their reports on the role of some political parties, which in fact only provoked the public.
These rancorous demonstrations did not affect the Indonesian stock market, however. In fact, the Indonesian rupiah strengthened to Rp 9,150 against the greenback and the Indonesian composite index was up by 16.384 points, reaching 4,121.551.
And while the demonstrators screamed against an increase in fuel prices, it was worth noting that Indonesia possessed the cheapest fuel prices in the world.
Translated into rupiah, the price of fuel in the UK is Rp 19,872 per liter; in Australia, it is Rp 19,200; in Canada, Rp 11,500; in Japan, Rp 9,192; and in the US, Rp 8,700. In its neighboring ASEAN countries, Indonesia’s fuel price is also the cheapest, compared with Singapore where fuel costs Rp 11,500; Thailand with Rp 8,777; and even Vietnam with Rp 7,759.
The price of fuel in Indonesia will remain the cheapest even if we push to increase it to Rp 6,000 per liter. The government is cognizant of the need to provide additional social protection, as analysts have suggested that inflation could go beyond the current 3.7 percent level.
Hence, we will provide support for social programs for around 30 percent of Indonesian people or 18.5 million households, especially blue-collar workers, farmers, fishermen and other impoverished people.
We expect to provide cash assistance for the poor (BLSM), which will give Rp 150,000 per month per household and, at the same time, provide rice for the poor for 14 months in case the fuel price increases. We will allocate transportation management incentives worth Rp 5 trillion and provide scholarships for low-income students with as much as Rp 5.9 trillion, while facilitating the creation of many more affordable markets.
In parallel, the government recently returned home from strengthening its bilateral relations with Asian strategic partners like China and South Korea.
We have cemented private-sector partnerships with mainland Chinese, Hong Kong and Korean investors and traders.
At the same time, Yudhoyono was calling out for global nuclear security at the historic, second Nuclear Security Summit in Seoul.
On the sidelines of the state visit, Yudhoyono held bilateral meetings with leaders from Norway, Denmark, Ukraine, the UK and Pakistan, where we opened new trade opportunities in defense, green economic growth and new partnerships to support the investment needs of the Master Plan for Indonesia’s Economic Growth.
These visits were key milestones for Indonesian bilateral relations with China and Korea, and also a testament to the countries’ resilience to global shocks, namely the volatile global economy, the uncertain political and security tensions in Syria, the Hormuz Strait, and the threat of nuclear terrorism.
Vice President Boediono will lead the Indonesian delegation this week to the ASEAN Economic Summit in Cambodia, which I will also attend, to continue the positive momentum of Indonesia’s foreign relations and bolster already strong bilateral relations.
As we pass the economic growth mark and join the prestigious “Trillion Dollar Economy Group of Countries”, we know there are still many policies that need to be adjusted to ensure sustainable and equal growth. Indonesia has come a long way since 1998 when the economy collapsed.
For Indonesia, the path to greater progress has now been established for the next decade, with a view to having the country enter the top-five economies by the middle of the century.
The raging demonstrations, although frightening for some, were part of a natural phase for Indonesia to reach its democratic and economic potential.
And this is something most Indonesians understand: the need to do their utmost to balance their democratic rights with safeguarding the economy. ●
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