Government must guarantee food, fare prices unchanged
Government must guarantee food, fare prices unchanged
JAKARTA (JP): Five prominent non-governmental organizations,
grouped in the Civil Society Coalition on Public Policy, asked
the government on Monday to guarantee that there will be no
subsequent increase in the prices of basic commodities and
transportation fares in the next six months following an increase
in fuel prices.
"As the government has made a political decision to raise fuel
prices, it must issue a presidential decree to protect the people
from the unintended consequences, such as the soaring prices of
basic commodities and public services," Agus Pambagio, deputy
chairman of the Indonesian Consumers Foundation (YLKI), said at a
media briefing.
Agus cited a fresh field study by the coalition in 16
regencies across the country that prices of basic commodities and
public transportation fares rose by up to 20 percent a few weeks
before the official fuel price hike was introduced on Sunday.
"Actually the economic impact of the fuel price hike between 9
percent and 25 percent is relatively small.
"The fuel price hike will contribute (to other related prices)
a 3 to 5 percent hike, but in the markets the prices of basic
commodities and fares are freely soaring due to a lack of
government control," Agus said.
The study also reveals that in several regencies, such as in
Deli Serdang in North Sumatra, Lombok Timur in West Nusa
Tenggara, Buton and Kendari in Southeast Sulawesi and Wonogiri in
Central Java all have been hit by kerosene shortages.
Agus said Indonesia's letter of intent to the International
Monetary Fund (IMF) states that Indonesia must have a zero
subsidy for fuel and electricity by 2003.
"It means that fuel prices and electricity rates will be
frequently raised from now. By then, premium gasoline could cost
Rp 2,500 per liter.
"Imagine what the fuel price hike will do to people if the
country does not introduce an effective price control mechanism,
especially with the coming festive seasons (of Idul Fitri and
Christmas) where it is customary for prices to go up," Agus said.
Other members of the coalition include Debtwatch, an NGO which
monitors the disbursement and use of foreign loans, Investi-PBHI,
an investigation unit at the Indonesian Legal Aid and Human
Rights Association (PBHI), the Civil Society Independent Network
for Transparency and Accountability in Development (Jari
Indonesia) and the Jakarta News FM radio station.
The coalition has also urged the government to postpone the
disbursement of the Rp 800 billion (US$94.1 million) saved from
the fuel subsidy to be channeled through poverty alleviation
programs overseen by three ministries as it will only lead to
further corruption, said Fakhrulsyah Mega, coordinator of Jari
Indonesia.
"There is no need to disburse such an amount of money in the
name of poverty eradication as it will overlap with existing
schemes such as the Social Safety Net (JPS) program," Fakhrulsyah
said.
The Rp 800 billion fund should be used for urgent matters such
as the handling of some 750,000 people who were displaced due to
widespread violence in Buton, Pontianak, Aceh and Maluku, as well
as for education and health programs, he said.
Agus said further that the Rp 800 billion must go directly to
the revised stated budget and later be channeled through
technical departments under qualified project chiefs.
"That way if misuse of funds takes place, the project chiefs
can be held accountable," Agus said.
The three ministries involved in the use of Rp 800 billion
fund from October to December this year are the Ministry of Home
Affairs and Regional Autonomy, the Office of the State Minister
of Cooperatives and Small and Medium Enterprises and the Ministry
of Settlement and Regional Infrastructure.
The fund is the amount saved from the 12 percent reduction in
the fuel subsidy in this fiscal year from Rp 44 trillion to Rp
43.2 trillion. (edt)