When wealth \"trickles up\"<\/p>\n
The World Bank country director for Indonesia was recently
\nreported in The Jakarta Post as saying that electricity and fuel
\nsubsidies must be accepted if there is to be enough money for
\nsuch essentials as education. This would be a fair point if it
\nweren't for the fact that upwards of US$150 billion is leaking
\nfrom Indonesia's power sector to Independent Power Producers
\nunder the terms of imprudent privatization deals of the 1990s and
\nthe litigation that is unfolding as a consequence in European
\ncourts.<\/p>\n
On top of this, around a third of all power generated in
\nIndonesia is wasted and many of the power plants that were so
\nexpensive to build and keep, weren't necessary in the first
\nplace. These amounts dwarf the two or three billion in loans the
\nWorld Bank might dispense at this-weeks' CGI meeting in Bali,
\nironically enough on the condition of further fuel and power
\nprice hikes rather than a genuine and comprehensive overhaul of
\nthe energy sector.<\/p>\n
Subsidy reform and sectoral restructuring is essential for
\nIndonesia to attain an energy policy that protects the broader
\npublic interest and promotes rural development, long-term
\nnational autonomy and sustainable natural resource and
\nenvironmental management.<\/p>\n
But energy subsidy reform and privatization on their own can't
\nsolve the myriad budgetary problems that result from what remain
\nat best opaque policy processes. Each year, the World Bank and
\nIMF tell Indonesians, through their government, that they must
\nsustain price hikes for their own good and that of the nation.
\nBut until they can be sure that this time the policy advice is
\ngood and that their sacrifice is actually going to serve a
\npurpose, people are surely quite right to object.<\/p>\n
OPHELIA COWELL, Energy Research Coordinator, The Transnational
\nInstitute, Denpasar, Bali<\/p>",
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"sponsor": "Okusi Associates",
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