On utility price hikes

On utility price hikes

From Bisnis Indonesia

In response to the recent price hikes which the government
argues would remove price disparity, I would like to give the
following comments and suggestions:

Price disparity will lead to speculative practices, smuggling
and corruption, making the government's intention to provide
subsidies by reducing the prices of basic commodities
counterproductive.

If the government is really concerned about the lives of the
people in the low income brackets, it can give a direct subsidy
to them, but the government must not fix basic commodities at a
lower price than strategic goods, because it will eventually lead
to smuggling and price disparity.

The government must, of course, be careful in determining the
kind of assistance to be rendered: Some points to be taken into
consideration:

* Identify the basic needs of the people in the low-income
brackets.

* Select the kind of assistance, particularly that related to
their basic needs.

* Determine the kind of assistance which has the smallest risk of
corruption in distribution.

* Determine the institutions to be involved in channeling the
assistance, preferably religious institutions.

* Determine the system of supervision.

* Prevent selected institutions from being influenced by
political organizations.

In addition, the government must immediately set up a reliable
distribution system according to the kinds of assistance
rendered, e.g: To help the people in relieving their burden in
electricity, the government must determine the limit of
electricity used in kilowatts hours and install electrical gauges
in places which allow easy meter reading.

In the education sector, the government must give teachers
allowances which can be paid through post offices and banks.

SEJATNA SOENOESOEBRATA, Jakarta