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Observer: BLT Right on Target So Solution to Overcome Impact of Fuel Price Adjustment

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Jakarta – Director of the School of Global Strategic Studies (SKSG) University of Indonesia, Athor Subroto, Ph.D said BLT is a short-term solution to overcome the impact of fuel price adjustments. But various solutions can be provided to complement the Long-term solution.

It is impossible for the government to provide BLT continuously to the community due to budget constraints. However, there is a need for a more varied approach to subsidizing compared to BLT because BLT also has an impact, including increasing inflation. When purchasing power is maintained, vulnerable people will maintain optimism and not panic. This was stated by the Director of the University of Indonesia’s School of Global Strategic Studies (SKSG), Athor Subroto, Ph.D in Jakarta.

It is necessary to involve more formal communities or what is known as people governance in the distribution of BLT, where people are actively involved or contribute to the welfare of the public, said Athor.

The government’s economic team has certainly tried to calculate so that the amount of BLT can help the community’s needs. At least, the public will not lose their purchasing power, said the Director of SKSG UI.

Of course, there will still be impacts for people with middle-class economy. With the buffer from the lower society, everything will be lifted. The middle class will find it easier to innovate because they have more soft income, said the UI Economist.

Athor Subroto assessed that the transfer of fuel subsidies by the government was a good step and more targeted. Without this policy, the subsidy will continue to be enjoyed by the wealthy.

The distribution of subsidies so far has not been well targeted because subsidies in the form of goods can be obtained by all levels of society. As an economic being, everyone strives to maximize utility. From there, people from the rich will continue to take their share of subsidies and have a greater absorption capacity than the poor and vulnerable, said Athor Subroto.

Director of SKSG UI Athor Subroto said SKSG UI often holds critical discussions about the policies taken by the government, by providing critical views through policy briefs after discussions, including the impact of fuel price adjustments. Fuel price adjustments are always repeated, and we must be fully aware that fuel is a kind of core to our inflation.

If fuel prices go up, it will have a domino effect on other sectors. The impact of this inflation must be handled from various sides, including the government currently providing BLT. This will be a balance, when inflation is going to happen, there will be assistance from the government, said Athor.

On the other hand, the market still accepts this policy favorably. There are pros and cons, but the government can still handle it. Democracy is still running, everyone can have an opinion, and so far it is safe. BLT continues to be distributed so that people’s purchasing power remains strong. When investors see the movement of government policies that have been handled from various sides, investors will have more confidence by investing more in Indonesia, said Athor.

Meanwhile, a social observer from Airlangga University (Unair), Bagong Suyanto, said the same thing. According to Bagong Suyanto, the presence of Direct Cash Assistance (BLT) is expected to be a cushion for the community against the impact of fuel price adjustments.

“This is indeed a very dilemma for the government. Once it is decided that the increase in fuel prices will certainly increase the number of goods needed by the community. Then how to make people have purchasing power? That’s why the government provides BLT,” said Bagong Suyanto, a Social Observer from Airlangga University in Surabaya.

According to Bagong, the government needs to have accurate and up-to-date data so that the BLT BBM program that is launched can meet the needs of the community. The provision of BLT is indeed a form of good faith from the government. But that doesn’t mean it’s not without risk. Providing assistance like this on the other hand can actually make the community’s self-help mechanism fade and create dependence.

Meanwhile, Chairman of the Constitutional Economic Forum, Defian Cori, also said that social assistance could be used as an effort to maintain people’s purchasing power. Consideration of inflation will not be a problem if the pro-people policy is continued.

Cori also suggested that there should be an acceleration to increase the capacity of MSMEs by providing assistance. It is important for MSMEs to manage their businesses and businesses professionally. Including business management and management. “I believe that if this is done, our economic growth can be 6 percent,” he said.

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