Jokowi plans to eliminate fuel subsidies
JAKARTA, Indonesia – How does candidate Joko Widodo or Jokowi plan to jumpstart the economy, as well as confront problems like traffic and fuel subsidies?
Maria Ressa filed this video blog.
Macet banget- the traffic is bad.
It’s a phrase you hear often in Jakarta.
Just two days ago, we were stuck for more than 6 hours in start and stop traffic like the one you see behind me.
It’s something you think about that is personally inconvenient but the traffic has become so bad that it’s now an issue of national concern.
Part of the problem now is that traffic in Jakarta alone is estimated to cost 0.6% of Indonesia’s GDP.
One of the reason’s it’s so bad is not just because of the infrastructure, the state of its roads and highways, also because gas is so cheap!
A liter of fuel costs about P24, half what it costs in the Philippines or about 50 cents, far cheaper than what it is in the United States.
The Indonesian government subsidizes the fuel.
About 27% of the 2014 budget goes to fuel subsidies – that is more than all of the its capital expenditure, including what it spends on infrastructure.
This is one of the biggest challenges for Indonesia’s next leader.
MARI PANGESTU, TOURISM MINISTER: Transportation logistics are the big challenge of Indonesia. All the studies show our lack of competitiveness is because of the infrastructure and the logistics. Traffic, and just getting people, getting goods to move efficiently and effectively … and telecommunications even. These are the big challenges for the incoming government.
The man leading in the presidential quick count, Joko Widodo, says he plans to cut subsidies, but there are political costs so he plans to stop the subsidies in phases.
ANIES BASWEDAN, JOKOWI SPOKESMAN: Part of the large portions of the subsidy goes to electric generating activities. So Indonesian power plants are also using subsidized fuel. And that is an issue. And the idea is to convert that into coal base. Or natural gas base. Instead of using fuel. And stop the subsidy. We still need to retain subsidy to the low income families.
Indonesia’s 250 million people, the world's largest Muslim population, is an economic lynchpin for Southeast Asia.
It’s important that the next leader gets its policies right. That leader will be announced officially announced on July 22.
Meanwhile, don’t expect the traffic in Jakarta to get better any time soon.
Maria Ressa, Rappler, Jakarta. – Rappler.com