Kadin Asks The Government Not To Abolish Fuel And Social Assistance Subsidies To Maintain People's Purchasing Power

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Chamber of Commerce and Industry (Kadin) has asked the government not to abolish a number of incentive policies to maintain people's purchasing power, such as fuel subsidies (BBM), social assistance and labor wages.

Deputy Chairperson of the Indonesian Chamber of Commerce and Industry for Fiscal and Public Policy Suryadi Sasmita assessed that these policies were very sensitive and became a concern for the business world over domestic economic conditions and stability.

"We want the government to provide incentives (this) will continue to be held until next year, especially for the community. If possible, don't remove the subsidies for fuel, because these small people, their purchasing power is still depressed," he said in a webinar "Prospects of Indonesia's Economic Recovery in the Middle East." Geopolitical Changes After the Pandemic", reported by Antara, Wednesday, August 3.

However, Suryadi also understands that the subsidy policy will also affect Indonesia's fiscal condition.

"Where if it is not subsidized, the effect will be on MSMEs. But if it is subsidized, how do we have a fiscal, is it enough?" he said.

Not only subsidies and incentives to the public, Suryadi also asked the government to provide incentives for the business world, one of which is the property and banking sectors.

"Banks should also not raise interest rates if possible, if they can be maintained so that inflation does not fall in such a way," he said.

This is because Indonesia is considered to have been able to keep its inflation at a controlled level. Compared to other countries such as the US, for example, the inflation rate is three times higher than its economic growth, so it has a negative impact on the country's economy.

Kadin, continued Suryadi, admitted that in the midst of current conditions, the business world still has concerns over uncontrolled external risks such as the wars between Ukraine and Russia and disease outbreaks, including pandemics, which have not yet fully recovered.

In addition, the business world also desperately needs business certainty and consistent and sustainable application of regulations.