Effects of the Gas Subsidy Reduction in Kupang

By Josh Gehret

If something happens that you don’t like, it’s the government’s fault.

I know enough to know how convenient an excuse that is, and how complex such accusations against the state can be. I usually hesitate to criticize governments, because after all, they have a difficult job. This is especially true in Indonesia, where moving from one island to another means changing cultures, religion, language, values, and basic standards of living. Because of such stark changes from island to island, it is very challenging for the central government (under the newly elected President Joko Widodo) to implement country-wide policies because of the varying levels of infrastructure on each island. Policies which work quite well on Java may have vastly different effects in the more remote parts of the island nation.

In this article, I will address two issues and attempt to show how they are connected: the reduction in government subsidized gas (resulting in a 2,000 Rp increase in the cost of gas per liter) and the poor infrastructure in Kupang, specifically as it relates to electrical supply in the city. I should clarify that my knowledge of Indonesian government bureaucracy is limited primarily to immigration policy (which was no picnic), so I can only imagine how complicated it can get for more difficult issues such as gas subsidies and infrastructure problems.

After a paltry four months in Kupang, even I have gotten to witness (and be frustrated by) some of the on-the-ground effects of national government policy. On the whole, my political bias is one of support for President Widodo (affectionately known to most as President Jokowi), but it’s hard to ignore the harsh impact that the reduction of the gas subsidy has had on Kupang.

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In order for you to get a full appreciation of how these recent shifts in government policy and how the poor infrastructure in Kupang has affected people, some background information is necessary about the place I live.

Kupang is on the island of Timur, in the province of Nusa Tenggara Timur (hereafter known as NTT), which roughly translates to the South-eastern Island province—timur literally means “east.” NTT is composed of many small islands, but there are larger islands that dominate the region culturally, linguistically, and with respect to religion. These primary islands are Flores, Alor, Rote, Timur, and Sumba, with these larger islands containing several different tribes and ethnic groups with many different languages and dialects.

Roughly 80% of the province’s residents are Christian (about a 50/50 split between Catholicism and Protestantism), with the remaining 20% composed of Muslims, Hindus, and local Animistic religious traditions.

Geographically, NTT is one of the driest regions of Indonesia. The rainy season lasts a paltry three months and even then, it only rains every few days for twenty to thirty minutes on average. Timur is highly dependent on importing food from the wetter regions of Indonesia, and water outages are frequent and long-lasting. I usually only get water for a few hours a day, long enough for me to fill my bak mandi, a large basin that holds spare water, which is enough for my twice-a-day baths, washing my feet when I take a gander through the dusty streets, washing dishes, brushing my teeth, and flushing the toilet. There has only been one water outage that lasted for more than 24 hours since I’ve been here, but it isn’t hard to understand why it is important for someone to be home to fill multiple containers of water (when the water comes on at inconsistent times) to have ample water for one’s family for the day, especially considering many people need water for an additional purpose that I use an outside service for: washing clothes.

Kupang is an interesting place to be because, as the capital city of NTT, it is a place where people of many different languages and cultures come together. Few people consider themselves to be from Kupang, although many were born in the hospital here, and claim themselves as from a surrounding island or neighboring village. Many come here to attend one of the many universities, if they cannot afford to go to university in Java or Bali. Kupang is the crossroads city of NTT, and as such it is a fascinating place.

As the regional capital, one might imagine that Kupang has the resources expected of a “capital city.” At least I did, when I was told I would be placed in Kupang. Being from New York City, I have an (over-bloated) image of what a city is supposed to look like. Kupang certainly does have some resources: universities, hospitals, a bookstore, a Western-style supermarket, and even a few hotels. However, in this author’s opinion it is a city by virtue of being larger than a village. Aside from two or three main streets that act as the center of business and activity, the immediate surroundings beyond these central streets are fairly quiet. Kupang is a place where people come from modest backgrounds and are accustomed to simple lives. There are few places beyond karaoke joints to spend expendable income (no movie theater, for example). Expendable income is not much of a concept in NTT.

However, everyone needs certain things: food and water. In the modern age, one can add electricity and gasoline. In Kupang, these things are provided by the government. In fact, without an organized government, the city would not be able to sustain the population that it does. Timur simply does not have the resources. The city would not be able to exist as such without support from the central government.

Subsidizing gas cost the government about 212 trillion rupiah in 2012 (roughly 21 million US dollars), about 21% of the central government’s budget.  Jokowi’s decision to reduce the gas subsidy has been lauded as a bold and wise move for reform in Indonesia, as the gas subsidy tends to help the upper and middles classes of Indonesians who drive a lot more than the lower classes {1}.

Trimming the gas subsidy (which raises the cost of a liter of gas from 6,500 a liter to 8,500 a liter, a twenty cent increase in US dollars) saves the central government over 100 trillion rupiah a year, and that saved money is supposed to be funneled to bettering the infrastructure of Indonesia (such as improving roads, electricity, and water supply) across the archipelago, according to Finance Minister Bambang Brodjonegoro {2}. In addition, the more disadvantaged people who will be more seriously impacted by the rising gas prices are supposed to be receiving special vouchers to help them afford the rising costs. All this sounds great, right?

When the government fails to provide a resource that it has long provided, the effects are felt strongly in a place like Kupang that is extremely reliant on the central government for things the people view as necessities. Most people in Kupang have a very laissez-faire relationship with the central government. We are far from Jakarta. We have few resources, in our classrooms and in our city. But people are generally happy. They have what they need. Most people do not care about the politics of Java.

On Tuesday, November 18th, 2014, the central government reduced its gasoline subsidy. On Wednesday, November 19th, the bemos went on strike. On Thursday, November 20th, the fare went up.

The subsidy cut sparked protests, largely peaceful, throughout Indonesia {3}. There haven’t been any organized protests apart from the bemo strike in Kupang, but it has been interesting watching the effects unfold in the city.

Bemos are the primary public transportation system for many people in Kupang. (For  more information about bemos as public transportation, see this Indonesiaful article about angkots and bemos.) Generally, the people who use bemos are: A) people who are not yet old enough to drive a motorcycle B) people who are in Kupang temporarily and would not find it financially prudent to purchase a motorcycle C) People who cannot afford a motorcycle and D) people who cannot drive a motorcycle for physical/health reasons.

Photo by Nick Hughes

Photo by Nick Hughes

This means: A) school children B) college students C) poorer people and D) old ladies. While bemos are far from the most efficient means of transport in the city, they are dirt cheap. One of the smallest bills (that is worth something) in Indonesian rupiah is the 2,000 Rp bill. It doesn’t matter who you are, you have a few 2,000 Rp bills crumpled in your pocket or stashed in your wallet. It is the “spare change” bill. If you buy something at the market and get change, you’ll probably get some 2,000 Rp bills, or some 1,000 Rp coins.

(For the interested/informed reader, 1,000 Rp bills exist, but they tend to be rarer than the coin and only found as change in well-frequented supermarkets, at least in Kupang.)

This spare change bill of 2,000 Rp is bemo fare. It will take you anywhere along the route, from down the block to the other side of the city in the pimped out, music blasting, cramped, recklessly driven (and with the occasionally-tipsy-random-friend-of-the-driver collecting fare) bemos, which fill the streets of Kupang. They aren’t always reliable and they run during really weird hours and have odd routes, but once you know the nuances of the system it’s a very convenient one to utilize.

In an all-too-familiar narrative to Americans, rising gas prices affect us universally and leave everyone feeling helpless in the same boat. You must continue living your life, but you must also find a way to weather the cost of rising gas prices.

Bemo fare rose from 2,000 to 3,000 rupiah overnight. A round trip journey now costs three bemo fares instead of two. The number of students coming into the teacher room to ask for a spare 1,000 Rp coin was staggering, because the spare change bill is no longer enough for a bemo. Teachers and students alike rifle through their purses and wallets looking for exact change, because bemo drivers will not hesitate to keep the change from a 5,000 Rp bill or give you only 1,000 Rp back. Students have been walking home in droves. Bemo drivers turn people down (especially students) if they can’t show that they have the required tiga ribu rupiah.

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The cost has also impacted ojek prices, the motorcycle taxis that also double as the alternative to bemos that now run about 10,000 Rp, as opposed to the previous 7-8,000. Motorcycles are convenient to those who own them but they guzzle gas pretty quick, and the average joe needs to refuel every two or three days (or more frequently if you do anything outside of the work/home routine) and need to spend an extra 20-25,000 Rp to do so. That’s the cost of two street meals.

Or it would have been, if the street food prices hadn’t gone up, too.

It has been an impact that has been felt by all, but most especially (as in most cases with something like this) by the disadvantaged of the city. The collectivist culture of Indonesia means there are few people who are homeless, because family takes care of family, but not every family is big. There are single moms at my school who have to pay for themselves and their kids on the way back home, and the rise in cost is quite harsh. Some university students are far from home and don’t have jobs and have been resorting to eat at the canteen, the school cafeteria usually frequented by students and the lone bule teacher. School students take the hike home in the heat after an already long day in a hot classroom.

But it’s okay, right? Because the money is going to go towards infrastructure and roads and more consistent water supply and less blackouts, right? What is the infrastructure of such things in Kupang?

Power outages are not uncommon in Indonesia. In fact, they are a certainty of life here.

Kupang is no different. When I first arrived here, I had about one outage a week and it would last for no more than three hours. If they happen during the day, you take a walk, go outside, read, or maybe run some errands. If they happen at night, you put all your plans on hold and either sleep or if you’re desperate, walk (or motorbike, if you have that resource) to a district of the city that has power.

However, since the start of the rainy season the power outages have been more frequent. They generally happen two or three times a week and the serious ones last all day. They’ve been hitting different districts of the city like clockwork, one day Walikota, the next day Oepura, the next day Oebufu, etc., and then repeating the cycle.

I asked a co-teacher if there were usually power outages with greater regularity this time of year, or if there were simply “bad months” where they happen more frequently and there’s nothing anyone can do. Apparently the increasing frequency of power outages has also been an anomaly.

Who is responsible for maintaining the city generators? The local government, with the costs subsidized by the central government, the teacher explained, but apparently the maintenance has been poor and the problems have worsened. To compensate, the power companies are conserving what they have by hitting the kill switch on certain neighborhoods before bringing it back and killing another neighborhood. Again, the power outages aren’t necessarily debilitating. I have had the pleasure of dining with several Indonesian families during blackouts and these dinners have actually been kind of fun. Indonesians know how to roll with the punches.

However, they do halt life. What about the important things that needs to get done? Delayed. As a teacher, I see this debilitation in little ways that don’t necessarily kill me, but I know they hurt students. Exams are very important in the Indonesian education system and a bad exam score can literally make or break your future. That on its own is enough pressure for a student to deal with, but then they have to study in the dark or finish homework in a blackout.

The largest university in Kupang, Undana Penfui, has been without electricity and running water for almost a month.

Infrastructure is a problem, and a problem that Jokowi’s administration has promised to address with the excess money saved from reducing the gas subsidy. Costs have risen for everyone, and not just for transportation services. Even the Ibus at the canteen charge an extra 500 Rp for ramen.

People are reasonable. They recognize that this cut was a necessary one, and one that has long term benefits for the country. Many teachers admit grumpily while rifling for change that it is a necessary step taken by Jokowi, and even that he was brave in following through on an unpopular but necessary step. A cut that has immediate detrimental effects and results in only long-term positive effects is bound to be unpopular though, and it’s no different here.

Kupang is a strange, confusing, and wonderful city. It is complex and fascinating. I have learned a lot about being thankful for what I have and appreciating life that is so different from America. However, everyone needs basic things to live, and when it is the responsibility of the government to supply these necessities to a part of the country that already has so little, the ripples are resounding. Is it something the people of Kupang can survive? Yes. Will they see tangible results in infrastructure improvement (reliable water and power) as a result of the subsidy reduction? We hope so.

Now, one month after the gas subsidy reduction, the dust has settled a little bit. Bemo fares have stabilized at 2,500 Rp. Having a spare 5,000 Rp in your wallet for gas is more of a norm now, instead of an anomaly. People adjust and continue to live life. They continue to laugh, struggle, disappoint and smile as they did before. Their lives are still busy. The semester tests are happening and the holidays are coming up. But people are not invincible. Even something as simple as a slight increase in gas and bemo fare in the name of better infrastructure can weaken the faith of people in the central government in an already remote province. The little things add up. And it scares me to think, if the government doesn’t support the people of NTT in the ways it has promised with water and power improvements, what will be the next little thing that breaks the camel’s back?

Sources:

{1} Diop, Ndiame. “Why is Reducing Energy Subsidies a Prudent, Fair, and Transformative Policy for Indonesia?” Economic Premise: The World Bank. March 2014, No. 136. Accessed 17 December 2014. http://siteresources.worldbank.org/EXTPREMNET/Resources/EP140.pdf

{2} Al Azhari, Muhamad, and Dion Bisara. “Jokowi Eyes Infrastructure Focus with Fuel Subsidy Cut.” The Jakarta Globe. Nov. 18, 2014. Accessed 17 December 2014. http://thejakartaglobe.beritasatu.com/business/jokowi-eyes-infrastructure-focus-fuel-subsidy-cut/

{3} “Fuel’s Errand.” The Economist. Nov. 22, 2014. Accessed 17 December 2014. http://www.economist.com/news/asia/21633877-jokowi-trims-indonesias-inefficient-popular-petrol-subsidies-fuels-errand

About the author: Josh Gehret is a Fulbright English Teaching Assistant placed in Kupang, Nusa Tenggara Timur (2014-2015). He graduated from the University of Maryland, Baltimore County with degrees in English Communications and Ancient Studies. He enjoys long walks on the beach and watching the sunsets in Kupang and bragging about it, despite severely missing sweater weather. 

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3 thoughts on “Effects of the Gas Subsidy Reduction in Kupang

  1. I recently drove past a sign reading (more or less) “Gas prices have gone up. Don’t panic! We can still live! There is welfare available.”
    I know there are supposed to be subsidies for the poorest regions and families, to help mitigate the effects of rising gas prices (and thus focus the financial consequences to middle- and upper-class Indonesians) but I haven’t heard anything about how or when these subsidies are or will be distributed.
    Does anyone know more?

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