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Government urged to cancel wasteful capital city project, use money for fuel subsidies

CNN Indonesia - September 9, 2022

Jakarta – The Mining Advocacy Network (Jatam) is urging the government to divert funds for the construction of the new capital city (IKN) in East Kalimantan to pay for fuel (BBM) subsidies.

According to East Kalimantan Jatam campaigner Mareta Sari, the government should have cancelled the new capital city project rather than stopping fuel subsidies. "Cancel the new capital city [project], divert the funds to subsidise BBM", said Sari in a press release on Friday September 9.

Sari said that during his presidency, President Joko "Jokowi" Widodo has raised the price of fuel seven times. She said that raising fuel prices automatically causes the price of basic commodities throughout Indonesia to increase.

According to the plan, one of the sources of funds for the construction of the new capital city is from the state budget. Out of a total cost of around 486 trillion rupiah, some 19 percent or around 97 trillion rupiah will be allocated from the state budget.

According to Sari, this could be diverted to pay for energy subsidies. According to the government meanwhile, fuel subsidies in 2020 have already reached 502 trillion rupiah.

"Looking at the spending needs for BBM in 2022, by providing a budget of 97 trillion rupiah it would in fact be able to reduce state spending for BBM by as much as 20 percent", said Sari.

"But in the midst of the current situation Joko Widodo is continuing with the construction of the IKN mega project in East Kalimantan", she said.

Aside from depleting public money, Sari is of the view that the capital city mega project is taking away the livelihoods of the Balik tribe traditional community and benefiting land lords.

"On the 256,000 hectares of land for the IKN there are 162 concessions ranging from commercial forestry, plantations, palm oil to coal [mines] which are owned by the oligarchy", she said.

On Saturday September 3, the government decided to increase the price of subsidised fuel. As a consequence of this, people in various parts of the country have held demonstrations against the price hike. (yla/tsa)

[Translated by James Balowski. The original title of the article was "Jatam Desak Dana Pembangunan IKN Dialihkan ke Subsidi BBM".]

Source: https://www.cnnindonesia.com/nasional/20220909120736-20-845603/jatam-desak-dana-pembangunan-ikn-dialihkan-ke-subsidi-bb