Fuel subsidies -- legalized daylight robbery

Endy M. Bayuni, The Jakarta Post, Jakarta

Anyone looking for an explanation as to why we as a nation are so corrupt while still professing to be a very religious people -- a question that President Susilo Bambang Yudhoyono posed when opening the Muhammadiyah congress just over a week ago -- should not look further than our collective attitude toward the government's policy to subsidize domestic fuel prices.

The fuel subsidy, to use the government's argument when it hiked domestic fuel prices by 29 percent in March, amounts to a transfer of resources from people in the low-income bracket to those in higher income brackets. Since the latter are the ones who use or consume fuel the most, they take the lion's share of the subsidy. In simple and not-so economic-speake, we are taking money away from the poor and giving it to the rich.

This is robbery, not only committed right before our very nose, but also carried out with our full support, consent and blessings.

Our collective indifference to this crime of taking what is not rightfully ours, and depriving the poor of what they are entitled to, makes this a legitimized corruption conducted by the state on behalf of the nation's elite.

The size of this theft, more than $11 billion this year by the government's own calculation, dwarfs all other corruption cases that have been investigated to date, a figure matched probably only if and when (though unlikely now) the government brings former president Soeharto to trial for bankrupting the country.

And with oil prices in the world market continuing to rise above $60 a barrel, the subsidy will keep on climbing because the government has made it clear that it has no intention of raising domestic fuel prices further this year.

Our silence and indifference to this anomaly explains a great deal about our own ambivalence toward corruption.

We loath and attack corruption, and voted Susilo Bambang Yudhoyono president last year on his anticorruption platform. Everyone today claims to be with the reformist camp, and everyone sings the same anticorruption tune.

But, as our attitude toward domestic fuel prices shows, we draw the line when it hurts our own interests. Fighting corruption yes, but leave us alone.

Just about everyone in this country, with the exception of the poorest among us, is in this complicity. Our collective silence makes us part of the conspiracy to rob the poor of their rights. The government, which only four months ago called the subsidy immoral, is now totally silent on the issue even as the subsidy is soaring. The House of Representatives, religious leaders, the non-governmental organizations and the media, who all claim to speak on behalf of the poor and fight for their interests -- are not saying a word that this is wrong.

It's no use blaming President Susilo Bambang Yudhoyono for his decision to maintain the fuel subsidy, however high the global oil prices go up to. He is only doing what the politically powerful and the elite are asking him to do: Don't raise the fuel prices because it will hurt us. Implicit in this message is that they can hurt him too politically if he does.

The trouble with the government's economic team being managed mostly by businessmen rather than economists is that they obviously have vested interests in keeping domestic fuel prices low to help their business friends. Any first-year undergrad economic student however know that there is a huge opportunity being lost or foregone by maintaining this subsidy.

That $11 billion would be better spent on providing free health care for the poor, and free education for the government's own nine-year compulsory education program.

Or what about the reconstruction of Aceh and Nias, which will absorb some $5 billion in funds raised abroad? Wouldn't those foreigners who have generously donated their money for the tsunami victims feel offended if they knew that wealthy Indonesians are burning fuel like there is no tomorrow?

And what about raising our defense spending, so that our military personnel can have a decent salary and weaponry to regain the respect of the people.

We are not the only country that has been hurt by soaring global oil prices. But Indonesia is one of the few countries which is trying to spend its way out of the oil crisis, to the tune of more than $11 billion, instead of tackling the problem head-on.

And it is money that we don't really have, or certainly don't own. This is corruption pure and simple. And we let it pass because almost all of us are in the take.

Does anyone still believe that Indonesia is serious about eradicating corruption? I rest my case.

The writer is chief editor of The Jakarta Post.