Understanding fuel subsidy cuts 'a piece of cake'<\/p>\n
Endy M. Bayuni, Jakarta<\/p>\n
More than two weeks after the stiff hikes in domestic fuel
\nprices, many people still don't get the government's rationale
\nfor slashing the fuel subsidies, at least, this would appear to
\nbe the case if their continued opposition to the increases are
\nanything to go by.<\/p>\n
Perhaps an analogy with a piece of cake would help improve
\ntheir understanding of the issue.<\/p>\n
Imagine a family of 10 having to share a cake. What would the
\nbest and fairest way to divide it be?<\/p>\n
One way would be to cut it into 10 equal slices and thus
\neveryone gets an equal share. Another would be to cut it into
\ndifferent sizes, giving the larger ones to the bigger members of
\nthe family as they simply eat more than the rest. Alternatively,
\nthe smaller members could get the larger slices as they actually
\nneed to eat more.<\/p>\n
Either of these three alternatives could qualify as the best
\nand fairest way, depending on the circumstances, and also
\ndepending from whose perspective you look at it.<\/p>\n
Now substitute the cake with the Rp 140 trillion-something
\nthat the government would have had to fork out to subsidize
\ndomestic fuel consumption if it had not increased fuel prices by
\nan average of more than 100 percent at the start of the month.<\/p>\n
Under the existing system, and still using the cake analogy,
\nthe subsidy pie is cut in different sizes, with the wealthy among
\nus inevitably getting the bigger slices as they drive more cars
\nand have larger houses to light up.<\/p>\n
The poorer among us get smaller slices as they don't own
\nor even drive a car or motorcycle, and they probably use public
\ntransportation infrequently. Those of us in the middle get
\ndifferent sizes, depending on how often we fill up at the gas
\nstation, or how frequently we use public transportation.<\/p>\n
Is the current system of distributing the cake, which is
\nessentially taxpayers' money, fair and defensible? It's hard to
\nimagine why anyone could defend this system, but there you go.
\nThis is democracy where everything is possible.<\/p>\n
The fuel subsidy system is morally reprehensible as most of
\nthe money, which is essentially public money, goes to people who
\nneed help the least.<\/p>\n
It's like the fattest members of the family getting the
\nbiggest slices of the pie. One could stretch the argument a bit
\nand say that it's like the government playing the opposite of
\nRobin Hood: Taking the money from the poor and giving it to the
\nrich.<\/p>\n
In all likelihood, it is this immorality that led to a
\nprominent and popular Muslim preacher to appear in a government
\nad defending the hefty increases in fuel prices on Oct. 1. Surely it
\ncould not have been money or ignorance on his part. Sadly, the
\npreacher succumbed to pressure from the opposition camp for fear
\nof losing his popularity and has since asked that the TV ad be
\nwithdrawn.<\/p>\n
The increase in fuel prices essentially is an attempt to
\nredress the balance in the way that the government cake is
\ndivided in this country.<\/p>\n
Even after the increases, the arrangements are still far from
\nbeing fair.<\/p>\n
For this year at any rate, with the fuel subsidies limited by
\nlegislation enacted by the House of Representatives to a more
\n\"manageable\" figure of Rp 89 trillion, the rich among us will
\ncontinue to get the larger slices of the pie.<\/p>\n
But at least, now a slice of the original Rp 140-something
\ntrillion of the estimated fuel subsidy pie has been allocated to
\nthe poor through the government's direct cash payment scheme. The
\ncut in the fuel subsidies should, at least in theory, free up
\nfunds for other far more worthy projects, including health and
\neducation in particular, which again will benefit the poor.<\/p>\n
Both the government and those who doggedly oppose the
\nincreases in fuel prices are, of course, claiming to speak and
\nfight on behalf of the people, and the poor in particular.<\/p>\n
While understanding the rationale for slashing the subsidies
\nmay be easy, understanding the politics behind the controversy
\nthat has blown up in their wake is definitely, excuse the pun, no
\npiece of cake.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/understanding-fuel-subsidy-cuts-a-piece-of-cake-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}