Geo Energi - September 2013

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Beware, Multidimentional Crisis

Rupiah price keeps slipping, now reaches 11,000 rupiah for one US dollars. This condition will lead to unfavorable situations. Commodity prices will fly high while people on the ground scream.

Rupiah crisis has struck the nation, rendering it powerless. The dependency on US dollars pushes our economy to unclear situation because commodities are decided based on US dollars.

Energy sector receives the most severe blow. Recently government increased the prices of fuel with subsidy from 4,500 rupiah to 6,500 rupiah a litre for Premium grade fuel and 5,500 for Solar grade fuel. Grassroot must endure the burden: prices of basic commodities skyrocketed in an instant, even higher than fuel price increase. The misery does not seem to come to an end. While inflation occurs because of fuel, rupiah is getting very weak.

Not only that, increase in global oil prices will haunt the economy. This could lead to government’s increased expense followed by commodity prices increase even more uncontrollably.

Our economy was relatively stable before new fuel price had been put into effect. There should have been no need to panic over crisis of economy in Europe. In fact, we could have been standing strong in terms of energy and food supply. We panic because we officially has become pure importer of oil and gas. Not only that, we also have become an importer for household goods and food.

The National Statistics Agency (BPS) noted there are at least nine kinds of food still being shipped to Indonesia, such as potato, cassava, oat, flour, soy bean, rice, corn, ginger, and fruits. The food is actually can be planted in Indonesia because this country has good climate. Ironically, we import them.

Other consumer goods like food, drink, cigarette, drug, cosmetics and other household are still imported. Even earpicks. Agus Martowardoyo, the Governor of the Bank of Indonesia keeps reminding government to maintain food supply. The central bank has noted that the inflation in July hiked 8.61%% or 3.29%% monthly. In line with monthly survey, inflation in August has reached over 1%%.

Government might warn, but how can this nation stand tall if its goods are still being imported. Not only that, government must learn to accept the situation. Like what is said by the Ministry of Social Affair Salim Segaf Al- Jufri. He insisted that weak rupiah exhange rate does not bring bad effect to people in middle and lower economic class. The effect is only felt by big business, especially, according to Salim, export and import business. Meanwhile, Salim sees that the middle and lower economic class can survive like what happened in 1998.

“Do poor people use dollar? What poor people get is the national product,” said Salim during his visit to a resident on Jalan Lebak Bulus V, Fatmawati, West Cilandak, South Jakarta, Saturday (August 24, 2013).

This fundamental problem can not be tackled with just warnings or putting down facts presented to government. There should be a real action. Government has issued four policies to respond this economical shake. But government must act fast to overcome this kind of situation.