to Energy Subsidies in Indonesia

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28 Οκτ 2013 (πριν από 3 χρόνια και 7 μήνες)

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A Citizens’ Guide

to Energy Subsidies in Indonesia

Learning from international experience

Damon Vis
-
Dunbar, IISD

12 October 2012

Fossil
-
fuel subsidies: A global snapshot


IEA
estimates for
consumption
subsidies 37 countries:

2009:


$312 billion

2010:


$409 billion


Without
further reform, spending on fossil
-
fuel
consumption subsidies is set to reach $660 billion in
2020, or 0.7% of global
GDP


GSI estimates + $100 billion for subsidies to
producers






Global
Fossil
-
Fuel
Subsidies

Source IEA World Energy Outlook 2011






Missing the right target: poor consumers






Share of fossil
-
fuel subsidies received by the lowest 20%
income group,
2010
Source: IEA, World Energy Outlook, 2011

Recent experience in other countries


Iran, 2010


Allocated subsidy savings:


50% households


30% business


20% government costs


Cash transfers not
targeted, early payments


Expansion of banking
system for cash transfers
& micro
-
credit


Timing & measures to
control inflation



Nigeria, 2012


Raised prices of gasoline
N65 to
N141/
litre

with no warning


S
erious corruption issues to
address


L
ack of trust in government
support measures


Public demonstrations led to
backtracking of reform


although prices still increased
(N97/
litre
)


Civil society
recognise

need for
subsidy reform but want
corruption addressed first

5 key principles for reform


Development focused


reform is an opportunity
to invest
resources into more effective social welfare programs and
other development priorities


Inclusive



policy
-
makers understand concerns of affected
groups and mitigate negative impacts as part of reform plan


Transparency & public communication


public
understands rationale for reform including costs and benefits,
and decision
-
making process and plan for reform


Short & long
-
term planning



managing short
-
term crises
with longer
-
term vision and strategy


Well researched & prepared


evaluate a range of reform
options, learn from experience of other countries






Complementary policies to consider

Industry/business

-

Support to restructure sectors
e.g. retraining programmes

-

Measures to improve energy
efficiency

-

Investments in infrastructure

Social

-

Cash transfers: (un)conditional

-

Social safety nets, pensions,
health insurance

-

Increase (minimum) wages

-

Pro
-
poor expenditure

Energy


-

Investment in rural
electrification, renewable or
alternative energies

-

Energy conservation, energy
security, energy efficiency
policies

Macro
-
economic

-

Policies to manage inflation

-

Strengthen market forces and
encourage competition

Banking

-

Can help roll out cash transfers

-

Credit facilities, e.g. for SMEs
and micro
-
credit


Transport

-

Expanding public transport
systems

-

Alternatives for freight (rail or
inland waterways)

-

Transitional support for taxi
drivers

Alternative social assistance mechanisms


Ghana, 2005


Primary & junior
school fees eliminated


Increased health care
funding for poorest


Increased investment in
mass urban transport


Extra funds available
for rural electrification



Jordan, 2008


Minimum wage & public services
wage increased


One
-
time bonus for low
-
income
gov.

employees & pensioners


Electricity subsidies continued


Food subsidies increased


Reduction of certain import
duties

Building public support: Three elements



Governance



Public Consultation



Communication


Discussions points


Does the government have an effective reform
strategy?


How can civil society participate more effectively in
the government’s reform process?


What opportunities exist to raise public awareness
about fossil
-
fuel subsidies and their impacts?


What sorts of social protection or other measures
are necessary to support reform?


www.iisd.org/gsi

Thank You