Wed, 09 Mar 2005


Managing fuel price compensation fund

From Republika

Various demonstrations have been held to oppose the fuel price increases. Prices of daily needs even began to climb before the fuel price hike. The president has warned against uncontrolled protests that may produce undesirable consequences.

It is also our view that such "demos" should not worsen the present situation and that should lead to some solution. The higher fuel prices must never increase the number of poor people because the low-income assistance fund -- to offset the price hikes -- derived from subsidies will be fully spent to assist the poor.

The president has promised to draw up a concept of transfer for the fund that will not be vulnerable to mismanagement, let alone corruption. Any error in spending the funds will invite public reaction because the cost of living has been rising.

The nation is indeed under unfavorable circumstances, in which fuel prices have had to be raised before any economic improvement can be made to open job opportunities and relieve poverty. Therefore, economical budget spending should become part of the employment creation and poverty reduction effort.