Today, The Indonesian
government is dealing with a crucial problem in budgeting. The government allocates large
energy subsidy in 2013. The energy subsidy is defined as a sum of money granted
by government to aid person or group for reducing fuel price in the market. The
subsidy, which is a part of the Indonesian budget, should be prudently granted.
Firstly, the huge subsidy
can risk the Indonesian economic. By 2013, the energy subsidy based on
Indonesia budget attains IDR 247 trillion. It means that the subsidy is
approximately 24% of Indonesian expenditure. On the other hand, the global price
of petroleum increases significantly. By assuming that the domestic demand of
petroleum is stable, the subsidy would skyrocket because of the global price of
petroleum. Moreover, if the subsidy
rises significantly, the budget structure will change too. Consequently, some productive
expenditures may be reduced or the new debt may be ballooning. For example,
when petroleum price climbs too high, productive expenditure, such as development of infrastructures will be cut. In addition, the new debt containing interest will burden the budget.
Furthermore, the energy
subsidy may not achieve its main purpose which is managing inflation. However, about 70% of the subsidy is used by individual
and household, while the remaining is used by manufacturing and public
transportation. As a result, the subsidy
will not achieve main goal because most of subsidy
is used by individual, instead of the productive sector such as manufacture and business.
In conclusion, the
Indonesian government has to manage the energy subsidy carefully because the large
subsidy may harm Indonesian economy and it may miss the main goal which is
managing inflation. The government should reduce the amount of subsidy because
the global price of petroleum increases significantly during 2013.
===============================================
*lagi belajar menulis single sided essay :D
