Official Claims Fuel Price Increase will Improve Public Welfare

TEMPO.CO, Jakarta - National Development Planning Minister Andrinof Chaniago is certain that the House of Representatives (DPR) will accept the government's reason for increasing fuel price because the policy was made to achieve long-term goals and to improve public welfare. "I can't imagine a reason why DPR would reject [the policy]," said Andrinof last Friday, November 21, 2014.

Adrinof explained that the government has drafted a policy projection that focuses on infrastructure fo the next five years. He added that the government need around Rp 5,000 trillion is needed to build reservoirs, airports, roads, ports, power plants, markets and other infrastructure. "Re-allocating fuel subsidy is far more effective compared to subsidizing car owners," said Andrinof.

Coordinating Minister for Economic Affairs Sofyan Djalil, said that altering fuel subsidy to other sectors will hopefully accelerate the progress of development programs aimed at improving public welfare.

In an interview with Tempo last month, Sofyan said that the lack of infrastructure must be addressed by channeling fuel subsidy to productive sectors.

Enny Sri Hartati, economist from the Institute for Development of Economics and Finance (Indef), said that the government's decision to increase fuel price to lift the burden off of the state budget can be accepted if Jokowi had already prepared a plan for to reallocate the funds to productive sectors. Jokowi also needed to convince the DPR that the government has prepared steps to mitigate the effects of the fuel price increase.

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