M

ay 10, p6

The government is now facing a big problem with the increasing fuel subsidy. In 2013, the fuel subsidy was almost Rp 194 trillion (US$19.9 billion) or about 11.5 percent of the state budget.

Although the government always sets the fuel subsidy in the state budget, fuel consumption has exceeded the benchmark in the last few years. In 2012, for example, subsidized fuel consumption exceeded 45 million kiloliters, well over the target of 40 million kiloliters. (By Razali Ritonga, Jakarta)

Your comments:

The article is good, but essentially the same 'blame the victim' stance in a world where producer fuel subsidies easily overshadow consumer fuel subsidies, the latter of which this article is about.

Producer fuel subsidies are the biggest strain on Indonesia's budget and consumer subsidies, while fixed and increasing, are easy to paint as the societal and economic bogeyman.

The bottom line is (and the one I write about most) that consumer fuel subsidies are really the only claim on the country's natural resources most Indonesians have.

If this is taken away, social expenditures and better education will merely be a wish list for 'want of better change'.

There has to be a transfer that ensures everyone benefits.

Norway now offers world class engineering and offshore oil skills that the world begs for. Norway insisted on societal gain sharing among its investors (foreign mostly) for all people (not just rich or poor) when oil was first discovered in the North Sea. Producer subsidies need not apply.

The future of Indonesian energy security and security for investors resides in educational initiatives that empower locals and attract investors not more societal handouts or 'trying to transfer' the consumer subsidy away from the rich and steering more to the poor.

A rising educational tide will float all boats and make investment robust. Awareness of other methods, not a failed playbook, must be considered. Handouts are not the answer, empowerment is.

Will Hickey