Indonesia's Prabowo aims to save $13.3 billion with energy subsidies cuts

19/10/2024

Indonesia's President-elect Prabowo Subianto plans to cut energy subsidies and will give cash handouts to families in need, his key economic adviser said.

Burhanuddin Abdullah told a business forum that the new government could save up to 200 trillion rupiah ($13.3 billion) with well-targeted energy subsidies.

"We want to improve data ... so that subsidies can be given as cash transfers directly ... to families that deserve it. That's what we're going to do," he said.

The 2025 budget has planned spending of 3,621 trillion rupiah but most of that will go towards debt repayment and other obligations, so savings are needed to fund new programmes, he said.

Indonesian President-elect Prabowo Subianto gestures as he attends the annual State of the Nation Address at the parliament building, ahead of the country's Independence Day, in Jakarta, Indonesia, August 16, 2024.

Fuel subsidies were 500 trillion rupiah last year, accounting for around 16% of budget spending. Indonesia currently subsidises certain types of fuel and electricity tariffs, a policy that has kept inflation low but has exposed state coffers to swings in global oil prices.

Burhanuddin also said private companies will play an important role in helping Prabowo - who takes office on Oct. 20 - with his goal of lifting economic growth to 8% from 5% currently as they will be invited to invest in infrastructure projects such as seaports.

Deputy Finance Minister Thomas Djiwandono has also told Reuters Prabowoseeking foreign investment in public-private partnerships for the management of airports.

The government will work to smooth the investment process, he said, noting rate cuts in Indonesia and abroad will be helpful to the economy. He added that he hoped the Indonesian central bank - which cut its key policy rate by 25 bps to 6.00% this month, just ahead of the U.S. Federal Reserve's cut - will reduce rates further.

Burhanuddin, who was the country's central bank governor from 2003 to 2008, said the incoming government will also look to deepen local financial markets as part of a drive to retain export receipts in domestic markets.

"One of the goals is to make investors are comfortable to save their money (in Indonesia)," he added.

The current government has been trying to make exporters, especially in the natural resources sector, comply with a rule on retaining foreign exchange earnings in an effort to boost foreign reserves after the rupiah came under pressure earlier this year.

According to Reuters

Same Category

Energy Efficiency in Food Processing: Strategies for Cutting Costs and Lowering Emissions

07/11/2024

Steel Industry: How to Make Significant Energy Savings 07/11/2024
Energy saving tips for manufacturers 07/11/2024
Energy efficiency and decarbonization are key for the aluminum supply chain 06/11/2024
Energy-efficient climate control for the fish processing industry 06/11/2024

Energy efficiency and climate neutrality in Europe’s real estate sector: striving for sustainable building practices 05/11/2024

According to the European Commission, buildings in the European Union are responsible for 40% of final energy consumption in the European Union and 36% of its energy-related greenhouse gas emissions, while 75% of the European Union’s buildings are still energy inefficient and 85-95% of the buildings that exist today will continue to exist in 2050.
How to maximise your fridge’s efficiency: ‘Don’t trust the settings – they’re aspirational’ 05/11/2024

The Australian summer is as good a time as any to make sure your fridge and freezer are in peak condition – and to buy your own thermometer
Thermophotovoltaics demonstrate potential for cost-effective energy generation 05/11/2024

As the world shifts towards sustainable energy solutions, researchers are exploring innovative technologies that can efficiently convert heat into electricity.
US develops portable device that extracts water from air using 50% less energy 05/11/2024

The device uses special materials that change temperature when stretched or compressed, allowing it to cool the air and condense water vapor with minimal energy use.
A high-renewables grid with faster transmission buildout can save $270 billion or more 04/11/2024

The U.S. Department of Energy found increasing levels of savings under a high-renewables grid across three transmission frameworks: first, accelerated transmission expansion, then point-to-point high-voltage direct current (HVDC) transmission, then HVDC using more flexibly sized multiterminal converters.
How Energy-Efficient Components Transform Industrial Automation 04/11/2024

The use of energy-efficient components in the design of automation systems does much more than save energy and support corporate sustainability goals.
Advancing energy efficiency at UNDP Iran 04/11/2024

In Iran, the energy sector is the largest contributor to carbon emissions.These sectors exert significant pressure on energy resources and contribute substantially to carbon emissions. Recognizing these challenges, UNDP Iran has spearheaded transformative initiatives in sustainable energy and operational efficiency at UN facilities.
This NYC high-rise is using heat pumps and waste heat to cut fossil fuels 03/11/2024

The cutting-edge, state-backed project at 345 Hudson could be a model for other big buildings sprinting to comply with the city’s building decarbonization law.