News / Asia

Indonesia's New President Discusses Budget With Predecessor

Indonesia's President Susilo Bambang Yudhoyono, right, greets President-elect Joko Widodo during their meeting in Bali, Aug. 27, 2014.
Indonesia's President Susilo Bambang Yudhoyono, right, greets President-elect Joko Widodo during their meeting in Bali, Aug. 27, 2014.
Reuters

Indonesia's president-elect Joko Widodo discussed the national budget with the outgoing leader in Bali late on Wednesday, indicating the two administrations will cooperate in tackling massive fuel subsidies before the handover of power in October.

The former OPEC member is struggling to contain ballooning fuel subsidy costs, which have widened the current account deficit and left little room in the budget for Widodo's much needed reforms.

Raising fuel prices is a sensitive issue that could potentially unleash mass protests against the Widodo's government within weeks of him taking office.

Any hike in fuel prices is likely to hit hardest the nearly 40 percent of Indonesians who live under or near the poverty line and, according to Widodo's advisers, will be accompanied by a compensation package for the poor.

Earlier on Wednesday, Indonesia's state-owned Pertamina halted a week-old program aimed at curtailing the use of subsidized fuel, after its implementation led to panic buying and long queues at petrol stations.

“I asked for [Susilo Bambang Yudhoyono's] thoughts and views about the 2015 budget ... but details will be discussed later by the transition team and current ministers,” Widodo said in a statement following a two-hour, closed-door meeting on the resort island.

Yudhoyono said he was “morally obliged to help the next government and the president-elect”, adding the meeting was the first of more to come.

Neither Yudhoyono nor Widodo went into further detail.

Widodo and his transition office hope to reach a deal with Yudhoyono's government on tackling fuel subsidies before the new administration takes office.

Any decision on fuel subsidies before Widodo's inauguration on Oct. 20 is not expected to come into effect until November.

Fuel subsidies cost the government around $20 billion a year, or nearly 20 percent of its total budget.

Pertamina, the country's main retailer of subsidized fuel, cut the amount of subsidized diesel and gasoline available at fuel stations starting on Aug. 18 to ensure that it did not surpass its fuel quota for the year.

But the measure backfired as drivers did not use more alternative fuels, and instead queued for hours at petrol stations waiting for the limited subsidized gasoline and diesel.

Chief Economics Minister Chairul Tanjung instructed Pertamina on Tuesday to halt its program.

“There will be no more limits. If Pertamina is over the quota later, we will not be blamed,” Hanung Budya, director of marketing and trading for the state oil company, told reporters.

Pertamina said it expected to hit its fuel subsidy quota for diesel around Dec. 5 and gasoline two weeks later.

Suhartoko said the government will likely face an additional eight trillion rupiah ($685 million) in fuel subsidy costs to cover the extra supply this year.

Indonesian fuel prices are some of the cheapest in the region, currently priced at 6,500 rupiah ($0.56) a liter for gasoline and 5,500 rupiah for diesel.   (1 US dollar = 11,680 Indonesian rupiah)  

You May Like

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the US are seeing gas prices dip below $3 a gallon More

Afghan Women's Soccer Team Building for the Future

A four-team female league was recently set up in Kabul; It will help identify players for the national team More

Video Tensions Build on Korean Peninsula Amid Military Drills

Pyongyang threatens nuclear test as joint US, S. Korean exercises show forces’ capabilities More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid