Prices Are Increasing, Life Is Getting Harder

Illustration of a gas station (photo: Antara)

JAKARTA - Pertamax prices have gone up. This increase follows the price of gas 12 kilograms earlier. VAT also increased from 10 to 11 percent. That's not enough. The government also gave a signal that the price of 3 kilograms of gas, pertalite, and electricity would rise.

President Jokowi in a plenary cabinet meeting last Tuesday acknowledged that the increase was inevitable. Moreover, the global economy is currently in turmoil and causing inflation in various countries, not only Indonesia.

One of the countries that are said to be experiencing inflation is the United States, which has now reached 7.9 percent. Usually, inflation is below one percent.

Similar conditions also occur in a number of other countries. Turkey for example. Inflation reached 54 percent. With this condition, the basic needs in the country also increase.

Jokowi said, as reported by the State Secretariat's official YouTube, from these numbers, the government has tried to prevent an increase, but the situation is not possible.

"It's impossible for us not to increase what is called BBM. It's impossible. That's why yesterday Pertamax went up," said President Jokowi.

To help the people, the government has issued several programs. Starting from BLT, social assistance, and other assistance. The question is, how long will the people last?

The Central Statistics Agency (BPS) noted that the poor in Indonesia as of September 2021 reached 26.50 million people or 9.71 percent.

Head of BPS Margo Yuwono in a press conference on Monday (17/1/2022) said that compared to March 2021, the number of poor people decreased by 1.04 million people. When compared to September 2020, it decreased by 1.05 million people.

According to Margo, this condition indicates an improvement during the COVID-19 pandemic, when compared to 2019, where a pandemic has not yet occurred, the number of poor people is still much higher.

Margo explained that the poverty rate was also influenced by rising commodity prices. Based on BPS records, commodities that experienced an increase and contributed to the poverty line were beef, sweetened condensed milk, cooking oil, wheat flour, and mackerel.

Because the Head of BPS on that occasion also revealed the poverty line (GK) in September 2021 alone reached IDR 486,168 per capita per month. The number is up 2.89 percent from IDR 472,525 per capita in March 2021 and an increase of 5.93 percent compared to September 2020. If the average per capita expenditure of the poor is less than the GK, they are categorized as poor.

Can you imagine if the increase in VAT, gas, fuel, electricity, cooking oil, and tolls occurred in the not too distant future? Will it not add new poor people?

Moreover, as stated by the President Director of PT Pertamina (Persero) Nicke Widyawati in a hearing with Commission VII DPR RI, last Wednesday (6/4/2022), 93 percent of the people in Indonesia have used 3 kilograms (kg) LPG gas. A very large number.

Indeed, to ease the burden on the community, the government carried out a short-term assistance program in the form of BLT (direct cash assistance). One of them is BLT cooking oil. The assistance will be given to 20.5 million families included in the Non-Cash Food Assistance (BPNT) and Family Hope Program (PKH) lists, as well as 2.5 million street vendors selling fried food, President Jokowi said in an announcement broadcasted via the YouTube channel of Presidential Secretariat.

Assistance is given in the amount of IDR 100,000 per month. The government will provide the assistance for three months at a time, namely April, May, and June which will be paid in advance in April 2022 in the amount of IDR 300 thousand.

In addition to BLT for cooking oil, the government also issued assistance for workers whose wages were below IDR 3.5 million, amounting to IDR 1 million. Also BLT for MSMEs.

However, it seems that is not enough. Due to government policies, according to observers as published in several media, the increase in VAT and plans to increase electricity and non-subsidized fuel have the potential to become variables for rising inflation above the projected inflation limit this year, which is around 4 percent.

And, as is known, Indonesia has just experienced a COVID-19 pandemic. As a result of this pandemic, many sectors are affected. Not a few people experience layoffs. Indeed, as stated by President Jokowi, the government's decision to make this decision is a very difficult choice. However, there may be another way to go. Raising several products that affect the lives of many people at almost the same time is certainly not a wise choice. Price adjustments or the people's version of most price increases have the potential to suppress people's purchasing power. It can also increase the poverty line or increase the number of poor people. Because 2022 is actually a transition year for economic recovery. Moreover, there is a risk of the emergence of a new variant of COVID-19 that could disrupt the economic recovery process. Poor people.