Social Assistance should Reach Targeted Recipients

The government’s swelling spending for energy subsidies has posed a dilemma. The decision to increase subsidized oil prices in order to reduce subsidies must be made carefully.

KOMPAS/BAHANA PATRIA GUPTA (BAH)

Fishermen refuel their boat engines at Tambak Wedi Beach, Surabaya, East Java, Wednesday (16/6/2021). The government plans to reduce energy subsidies by increasing fuel prices.

President Joko “Jokowi” Widodo warned on Aug. 1 that the government’s spending for fuel subsidies, which would reach Rp 502 trillion (US$33.8 billion) this year, would be too large for Indonesia. “No country will be financially capable to finance such a large subsidy. However, once again, are we still tough enough to hold it in until now?," the President said (Kompas Aug. 2).

After a meeting at the State Palace on Aug. 12, the President mentioned the amount of energy subsidies had been very large. "Will we maintain the figure of Rp 502 trillion? Yes, if we can, thank God. It means the people will not be burdened, but if the state budget is no longer able to handle it. What should we do?” he said (Kompas Aug. 13).