BLT Becomes SBY's Ninja Way To Relieve People's Anger About The 2005 Fuel Price Increase

A mother collects Direct Cash Assistance (BLT) funds at the Post Office. BLT is a free money aid program in Indonesia that is being promoted by the government in anticipation of rising fuel prices. (Wikipedia)

JAKARTA - The increase in the price of fuel oil (BBM) twice in (March and October) 2005 is so memorable. All Indonesian people were devastated by it. The increase in fuel prices forced the prices of other goods to increase as well. People are in danger of falling into poverty. President Susilo Bambang Yudhoyono (SBY) did not remain silent. Fuel compensation, which is commonly known as Direct Cash Assistance (BLT), is an invitation. The program is considered a savior. However, reality says otherwise. BLT is not an effective solution.

The condition of the Indonesian economy at the beginning of the reign of President SBY was not doing well. The world oil price which reached 150 US dollars per barrel became the origin. The rescue agenda was echoed. Because, sticking with the decision not to increase fuel prices is not considered a way out. Moreover, at that time the existence of the state was at stake.

SBY also put on his body. He tried to consider suggestions from several parties. Even though SBY finally chose to take an unpopular decision, many parties opposed it. SBY chose to increase the price of fuel as the main option to keep the wheels of the Indonesian economy turning.

The government also raised fuel prices twice in March and October 2005. The most noticeable increase was the premium in March from Rp1,810 to Rp2,400 per liter. In October, Premium from 2,400 to Rp 4,500 per liter.

Susilo Bambang Yudhoyono (SBY), the first President of Indonesia to introduce Cash Transfer (BLT) in 2005. (Wikimedia Commons)

SBY said that the increase was for the benefit of the people. The government also does not forget the fact that the increase will have an impact on many things. Especially the increase in the prices of other goods. As a strategy, SBY prepared compensation in the form of BLT. The aid is expected to help the people in going through the most difficult times amidst high world oil prices.

“I think everyone admits that the increase in fuel prices that occurred was very sharp. The increase in kerosene is indeed very large. The increase in the price of kerosene which is considered outrageous may also be due to the unreasonably low price of kerosene before. Even in oil-producing countries such as Kuwait and Brunei Darussalam, the price of kerosene is around Rp. 1,400 and Rp. 1,200. In comparison, in Indonesia it is only IDR 700 per liter.”

“The increase in the price of Premium and Diesel, which has reached 80 percent and 77 percent of the international price, if not matched by the increase in the price of kerosene, will only lead to oplosan and make kerosene unavailable in the market, because we know that kerosene is easy to use by consumers. industry and can replace diesel oil in oplosan. Right now, with prices that have been raised, scarcity can still occur,” said Muhammad Chatib Basri in his article in Tempo Magazine entitled Fuel Price Increase: Is it Rational? (2005).

Cash Direct Assistance

The second fuel price hike in October 2005 also had a significant impact on the lower classes. For them, the increase in fuel prices makes the poor fall deeper into poverty. The government is also planning. BLT (BBM subsidy) is deified as a solution.

BLT was first distributed in October with a target of 19.2 million poor families. Compensation for the increase in fuel prices is provided by the government in the form of direct cash funds of Rp. 100,000 per month to every head of a poor household. The funds can be withdrawn every three months. However, the division will not be sufficient to meet many of the necessities of life.

"It seems an impossible thing. Just to cover the increase in the price of kerosene, which is needed by most poor families both for cooking and selling fried foods on the roadside, is not enough at all. Moreover, to cover the increase in the prices of other basic needs, which has been creeping up ahead of the official announcement of the fuel price hike, it doesn't seem adequate at all.”

Illustration of a Public Fuel Filling Station (SPBU). (Wikimedia Commons)

“For poor families who receive direct cash funds, of course, they are well aware that there will be no meaning in the amount of Rp. 100,000 per month, if they have to be spent when the prices of their basic needs are skyrocketing. Under these conditions, the concern that arises is that the direct cash recipient does not use the money to buy necessities, but to buy dreams in broad daylight by installing a lottery (Totoan Dark)," Fahmy Radhi in the book Pro-People Economic Policy (2008) .

There have also been criticisms of BLT. Many of them claim that BLT is an outdated idea that actually prolongs the duration of poverty in Indonesia. Moreover, the distribution of BLT itself is often not on target and is full of potential for budget irregularities.

Other criticisms reveal that giving BLT by the government is considered not to educate the public and will make people lazy. The presence of BLT actually did not bring much change. Poverty is not even reduced, quite the opposite. Poverty is increasing.

“The BLT program is considered to be the government's way to facilitate problem solving, so that the poor are not poor, they are given financial assistance. That's a linear and easy way of thinking, but not a long-term problem solving. With the BLT, poverty is not even reduced, but on the contrary. People who were not poor suddenly admit that they are poor because there is assistance from the government.”

"Thinking of alleviating poverty is not by giving BLT, but inviting people to work hard and smart, not making them beggars and sacrificing their self-respect, but people must be encouraged, empowered, accompanied and guided so that they are able to live independently and uphold their dignity," closed Joko Indro Cahyono in the book Mr. HARY: From Oplet Driver to World Family Planning President (2020).