- VIVAnews/Ikhwan Yanuar
VIVAnews – The World Bank voices its concern over the rise of Indonesia's fuel use within the past few years. The nation is claimed to have been 'victim' of its economic growth.
“Indonesia has become ‘victim’ of its own economic success,” said Chief Economist of the World Bank for Indonesia, Shubham Chadhuri, in Jakarta, on Wednesday.
Shubham explained that the country's improving economy has boosted the number of cars and motorcycles, causing fuel use to go uphill.
“It turns out that the consumption is always higher than what the government had projected at the beginning of the year,” he said.
The World Bank also deemed that Indonesia’s fiscal condition in 2008, during the rise of financial crisis, differed from the current situation. Four years ago, the government was able to cope with the world’s oil price boom following the solid financial condition.
During the period, Indonesia was viewed as capable of financing the subsidy budget. In 2008, the government actually had a choice to reduce the subsidy in order to fix the situation.
However, along with the soaring world’s crude oil price, Indonesia’s gross domestic product (GDP) also dipped. On the other hand, more people started using subsidized fuel.
The government has no choice but to set up new pricing of the subsidized fuel.
