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

Arrested Football Officials Come Mainly From the Americas

US Justice Department alleges defendants participated in 24-year scheme to enrich themselves through corruption of international soccer More

Video Kenyans Lament Al-Shabab's Recruitment of Youths

VOA travels to Isiolo, where residents share their fears, struggles to get loved ones back from Somalia-based militant group More

This US Epidemic Keeps Getting Worse

One in 4 Americans suffers from this condition More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensionsi
X
May 26, 2015 11:11 PM
When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.

VOA Blogs