Utility hike won't increase poor population

Utility hike won't increase poor population

The Jakarta Post, Jakarta

The recent utility price hikes policy should not inflate the
number of the country's poor this year, because the government
was providing a welfare program and fiscal stimulus policy, chief
of the Central Statistics Agency (BPS) Soedarti Surbaki said on
Friday.

"If the government was to do nothing, then the number of poor
people will increase. But in this case, the government has taken
some measures," she said, and added that the various planned
measures should raise the income of poor people by around 10
percent.

She said that there were around 3.8 million people currently
living in poverty, representing some 18 percent of the country's
210 million population.

The government earlier this month raised fuel prices,
electricity tariffs, and telephone charges in a bid to cut down
expensive subsidies and to help the ailing state-owned utilities
firms.

Critics have said that the simultaneous increase in the
utility prices amid the current weak purchasing power of the
people would cause prices to soar and thus increase the number of
the poor population, while overly burdened companies would lay
off some of their workers.

But the government has taken a number countermeasures to
minimize the impact of the price hikes on low-income people and
small businesses.

The government has allocated some Rp 4.4 trillion in a welfare
program, which includes provisions of cheap rice and subsidies
for education and health care. A fiscal stimulus policy which
includes tax break facilities for businesses has also been
announced.

BPS defines "poor people" as those whose caloric intake is
less than 2,100 kilocalories per day, or those who make an income
of less than Rp 90,000 per month for those living in cities and
less than Rp 70,000-Rp 80,000 per month for those living in
villages.

Some analysts earlier said that although the utility price
hikes would not increase the number of poor people here, the
policy would prevent the government from reaching its target of
decreasing poverty rates to around 15 percent of the population
this year.

They also pointed out that the price hikes would slow down
this year's economic growth and push up inflation, both of which
would create additional pressure on low-income families.