GSI Workshop - Reforming Energy Subsidies in Indonesia: Status, Challenges, and Impacts
JAKARTA – 5 July 2011 – In an effort to improve public awareness on the options and impacts of energy subsidy reform in Indonesia, the IISD’s Global Subsidies Initiative, the Trade Knowledge Network (TKN) and the Institute for Essential Services Reform convened a one-day workshop for civil society to assess the government of Indonesia’s strategies for reforming fuel subsidies.
Indonesia has some of the highest energy subsidies in the world. These subsidies were put in place to make energy more affordable, particularly for poor people. However, overwhelming evidence suggests that most of the subsidies go to wealthier citizens. In addition, the subsidies interfere with energy supplies and economic development by reducing investment in energy infrastructure, wasting government resources and undermining Indonesia’s international competitiveness.
At the same time, however, poor households—especially those in urban areas—depend on subsidies to make energy affordable. For these people, expenditure on energy takes up a larger portion of their budget than it does for the wealthy. Energy price rises and possible inflation can put poor households under severe financial stress.
For an introduction to energy subsidies in Indonesia, see the GSI's Citizen's Guide to Energy Subsidies in Indonesia.
For more information about this event, please contact Alexander Chandra, TKN Coordinator South East Asia, at achandraATiisd.org