Subsidy Must Come with Supporting Instruments

Kompas/Fransiskus Pati Herin

Goods transported on so-called sea-toll vessels are carried by motorboat from Saumlaki City to Selaru Island in West Maluku Tenggara regency, Maluku, on Sunday (28/1). While the vessels were hoped to bring down logistical costs, the prices of goods remain high.

MAKASSAR, KOMPAS — The subsidies in the sea toll road program must be accompanied by other instruments for minimizing price differences. This is because many factors affect the pricing mechanism in regions.

Agussalim, a lecturer at the Economics and Business School of Makassar’s Hasanuddin University, said that subsidies could not be the sea toll road program’s sole instrument for alleviating the price disparity. "Even though transportation has already been subsidized, if other pricing factors are not corrected, it is difficult to expect prices to decline," he said Tuesday (6/2).