JAKARTA - Former Minister of Finance, Chatib Basri, explained that the war that took place between Russia and Ukraine in Eastern Europe was expected to last for a long period of time.
According to him, the hypothesis is based on several things, such as the strong foreign exchange reserves and the Russian economy. Not to mention when viewed from the political role of Vladimir Putin, which tends to be very dominant.
On the other hand, the majority of European countries are developed countries which gives their own confidence that they have a high level of resilience to find solutions to the energy crisis created by Russia.
It is believed that this situation will have implications for the skyrocketing prices of important world commodities, which are now in an upward trend.
For this reason, Chatib suggested to the government through the Ministry of Finance to carry out comprehensive and long-term fiscal policy planning.
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“So, if we heard that the government is preparing a policy for three months, then we might have to think about how this policy can be longer. We have to prepare what kind of mitigation steps we take because this has fiscal implications", he said during an online discussion with the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, Monday, April 4.
According to Chatib, prolonged war conditions will be followed by an increase in world energy prices, rising inflation, and a slowdown in the world economy.
"This (economic slowdown) may not be felt now but in the long term it can happen", he said.
As previously reported, the government has disbursed IDR 6.15 trillion for the cooking oil BLT program for 20.5 million people. The social assistance was disbursed as a cushion for the soaring price of cooking oil as a result of the soaring price of CPO.
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