Post June 2008
All Around of Fuel Price Increase
In Africa, there is unique method of catching monkeys. The coconuts shell is palm-sized emptied. Inside is placed peace of fruits which is then tied to a tree. When the monkey tries to get the fruit, the monkey is trapped because its hand cannot be taken out. Four mounts ago, we did not think the global fuel price will climb steeply to $ 119.24 per barrel. Almost every nation is caught in the crisis. For Indonesia, the only way out of the crisis is reduce the fuel price subsidy.
This strategy can become better than closing the deficit burden via the debt route which is similar to the monkey trap in Africa. The hand receive debt has difficult repaying it back become caught in the debt trap.
Using multi sector attribute analysis, we should know that rising fuel price would create a shock to domestic economy by as large a magnitude as 59 percent. The hardest hit is property sector. The rising risk factor is caused by 7.8 percent variable input, i.e energy component where as other less directly impacted are iron, cement, ceramics. Other sectors getting direct hit is electricity, transport, wholesale, retail trade, processing industry, farm product and fishery.
From abovementioned seven sectors, four of them are large absorbers of the labor force in Indonesia, i.e the trade sector, processing industry, farmer product and fishery. According to this hypothesis, the increase in fuel price will have a negative impact on the labor sector. This way the increase in fuel price is such a controversial policy.
The smooth policy route which can be taken is to raise the social consciousness spirit. This is historically proven as affective when the social spirit was raised during the 1973-1974 would oil crisis in Germany. Labor circles knew that rise in oil price meant the rise of inflation and fall of living standards. Because of that, the labor circle is not demand wage increases.
On the other hand, capital-owners must be normally responsible and not just view labor cost as one of the variable of production. The worker is also the consumer who farms the demand side who would, in the final analysis, have a huge influence on the total volume of their production (Dh)