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(Jakarta Post) President Joko Widodo: Reducing Fuel Subsidy, I am ready to be unpopular
President Joko “Jokowi” Widodo has said that he is ready to be seen as unpopular regarding the government’s plan to cut fuel subsidies.
“I became a leader not to become popular. That is the responsibility of a leader. Every policy has its own risk,” Jokowi said as quoted by Antara news agency late Thursday.
He said that Indonesians were very consumptive. “We burn Rp 714 trillion [on fuel] every day,” he said, adding that such a figure was enough to build around 1,400 dams across Indonesia.
“Fuel subsidies will be diverted to more productive sectors, to [build] irrigation systems, dams, subsidies for farmers and fishermen,” the President said.
Previously, former president Susilo Bambang Yudhoyono’s son, Edhie “Ibas” Baskoro, who is also the head of the Democratic Party faction at the House of Representatives, criticized Jokowi’s decision to cut fuel subsidies this year.
Ibas said that the decision was unreasonable because world oil prices continued to decline to the level of US$80 per barrel.
“If indeed the condition of current [oil prices] is stable or even lower, then for what reason is [the government] reducing the [fuel] subsidy?” he asked on Thursday as quoted by kompas.com, stressing that the statement was his own opinion.
Ibas said that current conditions were different to those during his father’s tenure, when the world’s oil prices soared to $100 per barrel.
However, economists do not expect Jokowi to withdraw from implementing fuel-subsidy reforms, despite the drop in world oil prices, saying that now is the ideal moment for Jokowi to raise fuel prices.
“The government should act swiftly to adjust fuel subsidies. Such an action will not only counter any potential market doubts about the new administration but also bolster belief in its ability to execute the reform agendas investors have long wanted, thereby reclaiming market confidence,” Mandiri Sekuritas economists led by Aldian Taloputra wrote in a research note recently.