Low-Cost Green Car Program met with doubt

Motorcycles are the most common form of transportation in Indonesia, but that may change with the L (Max Bevilacqua/Indonesiaful)

Motorcycles are the most common form of transportation in Indonesia, but that may change with the new LCGC Program. (Max Bevilacqua/Indonesiaful)

As an ETA living in West Java, one of the first words to enter my vocabulary was macet, or traffic.  I live in a suburb of Greater Jakarta called Parung. According to Google Maps, Parung is a measly one-hour commute to the center of Jakarta. Unfortunately, Google’s estimated travel time isn’t much more than a pipe dream here. My students and co-workers allow themselves at least three hours to travel into the city by car. The commute time can be considerably longer on weekends.

There are a few ways one can pass the time while parked on one of Jakarta’s smog-filled highways: I often find myself admiring intrepid motorcyclists, fending off street vendors, or discussing the traffic itself. These traffic-saturated conversations have repeatedly ended with my Indonesian friends lamenting the central government’s new Low-Cost Green Car (LCGC) Program.

The LCGC Program, which was signed into law by President Yudhoyono this May, incentivizes the sale of affordable and fuel-efficient vehicles in Indonesia. Car purchases have largely been a privilege for upper-class Indonesians until this year. Since a minority of the population can afford to own automobiles, they are considered luxury items and are taxed as such under Indonesia’s luxury goods import tax. A 10 to 75 percent import tax is currently imposed on all imported vehicles. My headmaster, for example, paid about $40,000 for his SUV. The same vehicle would have cost my parents $25,000 in America.

Indonesia’s auto market may change considerably thanks to the LCGC program. The program eliminates the luxury tax on vehicles with a maximum engine capacity of 1,200 cc and a minimum fuel consumption of 20 kilometers per liter. Only vehicles assembled in Indonesia will qualify for the tax exemption. Additionally, qualifying vehicles must have a retail price of about Rp 100 million or less. Lawmakers hope the program will boost Indonesia’s domestic car industry, expand manufacturing jobs, and promote car sales by middle- and low-income Indonesians.

Many of my friends fit directly into the class of Indonesians whom the LCGC program ostensibly aims to benefit. They’re avid consumers within Indonesia’s middle-class who schlep to work each day via motorbike or angkot (a public minibus). Despite their candidacy, I have yet to speak with anyone who is pleased by the program.  All believe that it will further clog Greater Jakarta’s jammed streets and extend an already painful commute. They also doubt that the program will be environmentally beneficial. One teacher pointed out that fuel emissions would likely increase since many of the individuals who will take advantage of the program will be first-time car buyers. It seems the program emboldens public frustration with the government rather than satisfaction.

The men and women I spoke with share a strong preference for investment in a better-quality public transit system.  They mirror the opinion of Jakarta’s Governor, Joko Widodo. Jokowi, as he is fondly called, publicly voiced his frustration over the program in September. Improved public transportation is a centerpiece of Jokowi’s agenda in Jakarta. Indeed, this month Jakarta broke ground on the city’s first mass rapid transit (MRT) system. The system has been discussed for decades, but has only come to fruition under Jokowi’s leadership. Jokowi fears that the LCGC program will counter Jakarta’s progress towards a palatable transit system.

The new program is set to begin in the coming months despite these concerns. Toyota Astra Motor, Astra Daihatsu Motor, and Honda Prospect Motor each have products ready to enter the Indonesian market. As the LCGC program rolls out, it will be interesting to see how urbanites in Jakarta, as well as Indonesians in other areas, cope with a new set of frustrated drivers. I, for one, hope it will not lead to more hours in the car.

About the author: Elizabeth Kennedy is a Fulbright English Teaching Assistant in Parung, Indonesia. She graduated from Occidental College in 2012 with a degree in Diplomacy and World Affairs. When Elizabeth is not sitting in traffic or running from a rainstorm, she enjoys dancing with her students and eating rujak.

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