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Kwik Kian Gie | Kwik Kian Gie Hosts National Seminar on Fuel Subsidies

Kwik Kian Gie on 24th September 2014 hosted a national seminar on the topic of fuel subsidies in Indonesia. Featuring speeches by leading economists, academics and representatives from the incoming government’s transition team, this event provided insights into a structured course of action that could be pursued by the country in lessening its well documented spending on fuel subsidies. As a prominent business school, Kwik Kian Gie sought to present this issue in light of creating a conducive environment for business and investment but also focused on putting forward a strategy for the future that benefits the population at large.

Among the key ideas proposed during the national seminar were pricing schemes designed to place as little of a burden on society through only a gradual short term increase coupled with the implementation of a fixed, proportional per liter subsidy. As is detailed in local media coverage of the event, medium term targets related to curbing spending on fuel subsidies include the introduction of incentives and disincentives (in the form of taxes) on motor vehicles. From a long-term perspective, speakers at the seminar called for the acceleration of energy diversification programs through the reallocation of subsidies towards the development of alternative energy.

As noted by Rector of the Kwik Kian Gie School of Business, Mr Anthony Budiawan in his frequent publications on this topic; one of the issues that needs to be addressed is the disconnect between lowering spending on fuel subsidies and actively allocating the subsequent budget to programs that could provide a long term fix. Emphasized in his research is the lack of a pattern demonstrating an uptick in government spending on infrastructure or related projects when spending on fuel subsidies has fallen.

Joining Mr Budiawan as keynote speakers at the national seminar were noted economist, Dr. Iman Sugema; Director of INDEF, Dr. Enny Sri Hartati; and Dr Darmawan Prasodjo as an expert on Indonesia’s energy policy representing political party PDI-P.

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