SBY meets with House leaders
on fuel subsidy

President Susilo Bambang Yudhoyono met with House of Representatives leaders at his office in Jakarta on Monday, to discuss the government’s planned increase in subsidized fuel prices and related compensation programs.

House Speaker Marzuki Alie of Yudhoyono’s Democratic Party, as well as deputy speakers Pramono Anung (Indonesian Democratic Party of Struggle), Priyo Budi Santoso (Golkar Party), Sohibul Iman (Prosperous Justice Party), and Taufik Kurniawan (National Mandate Party), arrived at the State Palace at 8.30 a.m.

Yudhoyono was accompanied by Vice President Boediono and several Cabinet members including Coordinating Economic Minister, and currently acting finance minister, Hatta Rajasa; Coordinating People’s Welfare Minister Agung Laksono; Coordinating Politics, Legal, and Security Affairs Minister Djoko Suyanto; Energy and Mineral Resources

Minister Jero Wacik; State Secretary Sudi Silalahi; and National Development Planning Minister Armida Alisjahbana.

“This meeting is not aimed at reaching an agreement. There will be a formal mechanism for that in accordance with the law. Through this meeting, together we will focus on the actual issues in the economic sector so we can discuss what the government and the House can do to address them,” Yudhoyono said upon opening the meeting which then continued behind closed doors.

After the meeting, Priyo told journalists that Yudhoyono had presented the reasons behind the government’s plan to raise the prices of subsidized fuels.

“We understand the President’s explanation. The state budget allocated to subsidize fuels is ballooning and is threatening the health of our economy,” the seasoned lawmaker told journalists.

Priyo said that the government had attempted to convince the House’s leadership about the importance of four compensation programs for the poor, who would be severely impacted by the fuel price hike.

Among the programs was temporary direct cash assistance (BLSM) which many believe would be modeled on 2009’s controversial direct cash assistance (BLT).

“The President asked us to understand the importance of providing social protection programs, such as rice for the poor and direct cash assistance. We basically understand that but the programs can only be launched with approval of all factions at the House,” Priyo said.

Politicians, from both the government coalition and the opposition, have voiced rejection of the BLSM program, saying it is not a sustainable solution and would be prone to politicization ahead of the 2014 elections.

Politicians and observers have suggested that the government shouldtransfer most of the funds released by the reduced fuel subsidy to the construction of infrastructure and basic facilities such as in education

and health.

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