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Jakarta Post

Hatta denies receiving fund from oil broker, Cabinet seat offers

After more than a decade serving in different ministerial posts, National Mandate Party (PAN) chairman Hatta Rajasa is running to be the vice president of Gerindra Party presidential candidate Prabowo Subianto

Hans Nicholas Jong (The Jakarta Post)
Jakarta
Mon, June 9, 2014

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Hatta denies receiving fund from oil broker, Cabinet seat offers

A

em>After more than a decade serving in different ministerial posts, National Mandate Party (PAN) chairman Hatta Rajasa is running to be the vice president of Gerindra Party presidential candidate Prabowo Subianto. The
father-in-law of President Susilo Bambang Yudhoyono'€™s son Edhie '€œIbas'€ Baskoro Yudhoyono recently talked to
The Jakarta Post'€™s Hans Nicholas Jong about the course he and Prabowo would set for the country if elected as well as the circulating rumors surrounding his candidacy. Here are excerpts of the interview:

Question: How many Cabinet seats did Prabowo offer in exchange for the support of the National Mandate Party (PAN)?

Answer: Let me ask you this. Do you believe that our rival [Joko '€œJokowi'€ Widodo of the Indonesia Democratic Party of Struggle] would form a coalition without any transactions or certain kinds of deals? Why do they have to bring up this issue every time? I know Cak Imin [National Awakening Party chairman Muhaimin Iskandar] very well. I fully believe that he and others have been promised something. I am trying to avoid such deals. So there are no such transactions involved in our coalition.

So does that mean that your Cabinet will not be filled with people affiliated with political parties?

That'€™s true.

Do you know businessman Muhammad Reza Chalid [widely alleged as the country'€™s largest broker of subsidized fuel and oil imports]?

Why do you ask that? I don'€™t have any business relations with him. But we'€™ve been friends for decades.

How do you know him?

Through the Majelis Dzikir [prayer group]. I know he has business in fuel and oil imports, but that is not related to me. Why don'€™t you ask [state oil and gas company] Pertamina? Why do you have to ask
me this?

Is it true that Reza provides financial backing for your campaign?

Ngawur [that'€™s absurd].

So what is the current situation with your campaign financing?

Most big conglomerates and businessmen are on the other side. We don'€™t even have [newspaper] ads. We know the cost of putting ads in Kompas. Just look at all the newspapers, the ads are all Jokowi'€™s. Therefore, we want to rely on our cadres to finance our campaign.

What will be the economic policy should you be elected as the vice president?

We will use the principle of continuity in change because the essence of our development is like that. We will emphasize the development of infrastructure.

As a former coordinating economic minister, I know that problems in infrastructure are creating disparities in our economy. Our Gini ratio [a measurement of a nation'€™s income inequality] is high. For example, the cause of high mortality among mothers and children is not because of lacking health facilities but of connectivity. Our economic development in the future will be focused on balancing consumption, investment and production.

So there will be a need to improve access to health?

Yes. For example, we have the vaccine but it cannot be stored because the electricity is not available. While I acknowledge that there has been a lot of improvement in that area, we still need to work on that. Just look at this road [pointing at the traffic jam halting the campaign bus used by Hatta]. How much energy is being wasted.

This could cause our economic growth to stagnate because investment will slow on the back of insufficient infrastructure. Our next priority is also to lessen the economic gap between regions. The gap is already great. Look at the poor people. Their income growth is only 2 to 3 percent, whereas our middle class enjoys much more than that. That is why we are thinking about social protection programs.

How do you plan on doing that?

We have to increase our income and better manage our subsidy so that we have enough to spend. If we are talking about social protection, do not limit that to financial assistance. What is important is to increase livelihoods through jobs. Based on our development master plan, the development of basic infrastructure '€” such as sanitation, clean water, electricity and so on '€” must be finished by 2019. That could release people from absolute poverty. There are many poor people in Java but the poverty level in eastern Indonesia is greater.

What is your take on the fuel subsidy?

We have to be really careful managing the subsidy in a time of economic shock as our low-income people would suffer the most [from a cut]. So if there is a crisis, it is no longer possible to maintain the current pattern of the subsidy. There is a need to lower the fuel subsidy for the haves while maintaining it for the poor. It is a matter of how we manage the subsidy because the law obliges us to provide that. The problem with our subsidy is that we are pegging the fuel price and distorting the market.

This is inefficient because it enables all people to enjoy the subsidy. Just imagine someone who owns a Kijang Innova car. If he fills his car'€™s tank with 10 liters of fuel every day, just multiply that by Rp 5,000 (42 US cents). It means that he receives Rp 50,000 (US$4.22) from the state. Does he really need that Rp 50,000? The answer is no. So the subsidy needs to be just. This is a problem we are looking to resolve. If we could push the use of gas more aggressively then of course we could ease the subsidy burden without having to increase the subsidized fuel price.

Does that mean that you won'€™t increase the price of subsidized fuel?

It is something that every government has done. But it is done as a last resort. We realize that this subsidy burden has disturbed the economy. Increasing the subsidized fuel price should ideally be in line with the purchasing power of our people.

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