VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

The government's policy to reduce subsidies for fuel oil (BBM) has made the Indonesian economy stronger. This was conveyed by the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.

"Regarding the subsidy, there really is no choice, we have to do it. I think it will make the Indonesian economy stronger in the future because subsidies are getting less and less," Luhut told reporters, Wednesday (7/9/2022).

Therefore, he said, the reduced subsidy burden would be better for the state's finances. Luhut said the smaller the subsidy released to the market mechanism, the better.

"But we can't be purely a 100 percent market mechanism. Because our people are small, we still have to give subsidies, but subsidies are right on target," he said.

On the other hand, Luhut said, Indonesia's economic performance is one of the best in the midst of world pressure. Indonesia's inflation rate in August 2022 was at 4.69 percent.

"This is quite good when compared to world countries. Like Russia at 15 percent or the US at 8.5 percent," he said.

Likewise, economic growth is still at 5.44 percent in the second quarter of 2022. This figure is considered an indicator of a fast and strong economic recovery after the pandemic.

"I think we can see that we are all doing well, our inflation is still maintained at 4.9 percent. Actually, our biggest inflation comes from food to 11.4 percent. But we can suppress it," he said.

Luhut also said that the structure of transportation costs is among the largest in numbers, especially with the increase in fuel prices. However, the government's policy of providing assistance in diverting fuel subsidies will be able to suppress inflation in the transportation sector.

"So the transportation will be given subsidy funds, the funds are already in the regions. Now it's just the legal umbrella, I think it has been signed today," he said. (RRI)

The government targets the New and Renewable Energy (EBET) mix of 23 percent by 2025. Energy Watch Executive Director Mamit Setiawan hopes that the target can be achieved.

To achieve this target, it is hoped that there will be cooperation from various parties. Be it the government, legislators, the private sector, and the community.

"It takes time and seriousness for all parties," he told Pro3 RRI, Wednesday (7/9/2022). "Because without serious political will, this huge potential cannot be optimized."

Mamit emphasized that Indonesia's EBET resource potential is extraordinary. This makes Indonesia's future bright.

"Because of what we don't have for EBET," said this energy policy observer. "We have what is called geothermal, solar, wind power, biomass, not to mention ocean currents, nitrogen, and ethanol."

However, Mamit emphasized again, it takes strong will from all parties to develop EBET. For example, the Indonesian House of Representatives and the government immediately ratify the EBET Bill (RUU) into law.

"One of the keys to pursuing this target is the EBET Bill, which is still being discussed," he said. "When this Law is passed, and also presented to the public then this will be the entry point for the development of EBET."

He then appreciated the government's step in developing EBET technology, namely developing a Rooftop Solar Power Plant (PLTS). "The Rooftop PLTS program and the biofuel program are one of the efforts to accelerate the pursuit of the energy acquisition target," he said.

Mamit also appreciated the government's steps to provide various conveniences for electric vehicle users, through fiscal policy. It is hoped that similar facilities will be provided by the government to investors.

"The more support for technology development, it is hoped that this EBET will be much cheaper and cheaper," he said. "Hopefully this will become even easier in the future so that our target can be achieved."

The Presidential Palace has officially started using electricity from the utilization of EBET. The use of EBET is a step to deal with climate change and realize a clean energy transition, according to the direction of President Joko Widodo.

PT PLN handed over EBET certificates (REC) and support for Battery-Based Electric Motorized Vehicles (KLBB) to five Presidential Palaces. The certificate was handed over in the courtyard of the Presidential Secretariat Office, Jakarta, Tuesday this week. (RRI)

Vice President Ma'ruf Amin said the government was trying to strengthen the supply and supply chain of basic needs. The goal is not to cause disruption to the distribution of goods and services.

This strategic effort to restore the national economy also maintains the production and distribution of basic necessities down to the grassroots. "So that inflation can be controlled, so that it does not burden the household economy," said Vice President Ma'ruf Amin when opening the 19th Plenary Session of the Association of Indonesian Faculty of Economics and Business (AFEBI) and the 2022 Halal Summit, at the Wyndham Hotel, Palembang, South Sumatra ( South Sumatra), Wednesday (7/9/2022).

The vice president said another strategy that needs to be done is to organize fiscal and monetary policies. This must also be done carefully and effectively in order to maintain macroeconomic stability.

“Policies must be effective and focused on targets. For example, subsidies are intended for vulnerable groups of people and the budget is allocated effectively according to priorities," he said.

“Pandemics give birth to new ways of working and innovation and accelerating digital transformation. Innovation and digitalization should reach all groups of people in order to become a medium of progress and growth, not to foster inequality," he said.

The Vice President added that another effort to sharpen development to balance growth and equity is to develop the Islamic economy and finance. This economic concept is inclusive for all citizens and complementary to the national economic system.

“The government is very serious about promoting the Islamic economy and finance. The progress so far is very good,” said the Vice President.

The Governor of South Sumatra, Herman Deru, supported the organization of the event initiated by AFEBI. Because, according to him, this shows that more and more interdisciplinary research is being carried out.

“With collaboration, maximum results will be obtained to develop Indonesia. This means that research-based development will certainly produce much better results,” said Herman Deru. (RRI)

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan stated that the government's choice to reduce fuel subsidies is expected to make Indonesia's economy stronger.

"Regarding the subsidies, there was no choice; we had to do it. If we do it, I think it will make Indonesia's economy stronger in the future because the subsidies are getting less and less," the minister stated during a Focus Group Discussion (FGD) on Undersea Cable Investment in Indonesia that was monitored online here on Wednesday.

According to Pandjaitan, the reduced subsidy burden will be better for state finance. He also said that the smaller the subsidies released to the market mechanism, the better it will be.

"However, it is impossible for us to be purely a 100-percent market mechanism because we must still provide subsidies to our low-income people, but subsidies that are right on target," he remarked.

The minister further highlighted that Indonesia's economic performance is still one of the best amid pressures experienced by the world. Indonesia's inflation rate in August 2022 stood at 4.69 percent (YoY), which is deemed quite good as compared to other countries, such as Russia, at 15 percent, or the US, at 8.5 percent.

Likewise, Indonesia's economic growth is still at 5.44 percent in the second quarter of 2022. This figure is considered to be an indicator of fast and robust economic recovery after the pandemic.

The minister admitted that the structure of transportation costs is among the highest in terms of figures, especially with the increase in fuel prices.

However, he expressed optimism that the government's policy to provide social assistance diverted from fuel subsidies, whose funds are already available in regional governments, will be able to suppress inflation in the transportation sector.

Earlier, the government, on Saturday, September 3, raised the price of subsidized Pertalite fuel, from Rp7,650 per liter to Rp10 thousand per liter; subsidized diesel, from Rp5,150 per liter to Rp6,800 per liter; and non-subsidized Pertamax, from Rp12,500 to Rp14,500 per liter.

This increase was applied since the government shifted the fuel subsidies to social assistance on account of the fact that the number of energy subsidies and compensation taken from the state budget had reached Rp502.4 trillion, including energy subsidies of Rp208.9 trillion and energy compensation of Rp293.5 trillion. (Antaranews)