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