• Home
  • About RSIS
    • Introduction
    • Building the Foundations
    • Welcome Message
    • Board of Governors
    • Staff Profiles
      • Executive Deputy Chairman’s Office
      • Dean’s Office
      • Management
      • Distinguished Fellows
      • Faculty and Research
      • Associate Research Fellows, Senior Analysts and Research Analysts
      • Visiting Fellows
      • Adjunct Fellows
      • Administrative Staff
    • Honours and Awards for RSIS Staff and Students
    • RSIS Endowment Fund
    • Endowed Professorships
    • Career Opportunities
    • Getting to RSIS
  • Research
    • Research Centres
      • Centre for Multilateralism Studies (CMS)
      • Centre for Non-Traditional Security Studies (NTS Centre)
      • Centre of Excellence for National Security (CENS)
      • Institute of Defence and Strategic Studies (IDSS)
      • International Centre for Political Violence and Terrorism Research (ICPVTR)
    • Research Programmes
      • National Security Studies Programme (NSSP)
      • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
    • Future Issues and Technology Cluster
    • [email protected] Newsletter
    • Other Research
      • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
    • Graduate Programmes Office
    • Overview
    • MSc (Asian Studies)
    • MSc (International Political Economy)
    • MSc (International Relations)
    • MSc (Strategic Studies)
    • NTU-Warwick Double Masters Programme
    • PhD Programme
    • Exchange Partners and Programmes
    • How to Apply
    • Financial Assistance
    • Meet the Admissions Team: Information Sessions and other events
    • RSIS Alumni
  • Alumni & Networks
    • Alumni
    • Asia-Pacific Programme for Senior Military Officers (APPSMO)
    • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
    • SRP Executive Programme
    • Terrorism Analyst Training Course (TATC)
  • Publications
    • RSIS Publications
      • Annual Reviews
      • Books
      • Bulletins and Newsletters
      • Commentaries
      • Counter Terrorist Trends and Analyses
      • Commemorative / Event Reports
      • IDSS Paper
      • Interreligious Relations
      • Monographs
      • NTS Insight
      • Policy Reports
      • Working Papers
      • RSIS Publications for the Year
    • Glossary of Abbreviations
    • External Publications
      • Authored Books
      • Journal Articles
      • Edited Books
      • Chapters in Edited Books
      • Policy Reports
      • Working Papers
      • Op-Eds
      • External Publications for the Year
    • Policy-relevant Articles Given RSIS Award
  • Media
    • Great Powers
    • Sustainable Security
    • Other Resource Pages
    • Media Highlights
    • News Releases
    • Speeches
    • Vidcast Channel
    • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
Facebook
Twitter
YouTube
RSISVideoCast RSISVideoCast rsis.sg
Linkedin
instagram instagram rsis.sg
RSS
  • Home
  • About RSIS
      • Introduction
      • Building the Foundations
      • Welcome Message
      • Board of Governors
      • Staff Profiles
        • Executive Deputy Chairman’s Office
        • Dean’s Office
        • Management
        • Distinguished Fellows
        • Faculty and Research
        • Associate Research Fellows, Senior Analysts and Research Analysts
        • Visiting Fellows
        • Adjunct Fellows
        • Administrative Staff
      • Honours and Awards for RSIS Staff and Students
      • RSIS Endowment Fund
      • Endowed Professorships
      • Career Opportunities
      • Getting to RSIS
  • Research
      • Research Centres
        • Centre for Multilateralism Studies (CMS)
        • Centre for Non-Traditional Security Studies (NTS Centre)
        • Centre of Excellence for National Security (CENS)
        • Institute of Defence and Strategic Studies (IDSS)
        • International Centre for Political Violence and Terrorism Research (ICPVTR)
      • Research Programmes
        • National Security Studies Programme (NSSP)
        • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
      • Future Issues and Technology Cluster
      • [email protected] Newsletter
      • Other Research
        • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
      • Graduate Programmes Office
      • Overview
      • MSc (Asian Studies)
      • MSc (International Political Economy)
      • MSc (International Relations)
      • MSc (Strategic Studies)
      • NTU-Warwick Double Masters Programme
      • PhD Programme
      • Exchange Partners and Programmes
      • How to Apply
      • Financial Assistance
      • Meet the Admissions Team: Information Sessions and other events
      • RSIS Alumni
  • Alumni & Networks
      • Alumni
      • Asia-Pacific Programme for Senior Military Officers (APPSMO)
      • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
      • SRP Executive Programme
      • Terrorism Analyst Training Course (TATC)
  • Publications
      • RSIS Publications
        • Annual Reviews
        • Books
        • Bulletins and Newsletters
        • Commentaries
        • Counter Terrorist Trends and Analyses
        • Commemorative / Event Reports
        • IDSS Paper
        • Interreligious Relations
        • Monographs
        • NTS Insight
        • Policy Reports
        • Working Papers
        • RSIS Publications for the Year
      • Glossary of Abbreviations
      • External Publications
        • Authored Books
        • Journal Articles
        • Edited Books
        • Chapters in Edited Books
        • Policy Reports
        • Working Papers
        • Op-Eds
        • External Publications for the Year
      • Policy-relevant Articles Given RSIS Award
  • Media
      • Great Powers
      • Sustainable Security
      • Other Resource Pages
      • Media Highlights
      • News Releases
      • Speeches
      • Vidcast Channel
      • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
  • instagram instagram rsis.sg
Connect

Getting to RSIS

Map

Address

Nanyang Technological University
Block S4, Level B3,
50 Nanyang Avenue,
Singapore 639798

View location on Google maps Click here for directions to RSIS

Get in Touch

    Connect with Us

      rsis.ntu
      rsis_ntu
      rsisntu
    RSISVideoCast RSISVideoCast rsisvideocast
      school/rsis-ntu
    instagram instagram rsis.sg
      RSS
    Subscribe to RSIS Publications
    Subscribe to RSIS Events

    RSIS Intranet

    S. Rajaratnam School of International Studies Think Tank and Graduate School Ponder The Improbable Since 1966
    Nanyang Technological University Nanyang Technological University

    Skip to content

     
    • RSIS
    • BlogsEnergy and Human SecurityDirect Cash Transfers: Why They Remain Essential in Indonesia’s Fuel Subsidy Cuts

    Direct Cash Transfers: Why They Remain Essential in Indonesia’s Fuel Subsidy Cuts

    The Indonesian government has recently cut fuel subsidies and raised fuel prices. Similar to the 2005 and 2008 fuel price hikes, the government provided unconditional direct cash transfers to poor households with the aim of helping them cope with the impacts of such price increases.

    The recent decision to deploy the IDR 9.33 trillion (SGD 1.18 billion) worth of temporary direct cash transfers (BLSM) was controversial. Oppositions discern vested political interests as such disbursements inevitably heighten popular support for the ruling party. Such measures are also perceived to nurture hand-out mentalities and increase dependencies instead of empowering poor people to get out of poverty definitively. Questionable survey methods, lack of accuracy in identifying beneficiaries, protests and chaotic incidents during disbursement in some areas, and irresponsible use of the money given are among other criticisms directed towards this initiative.

    While all these concerns are not baseless, the elimination of direct cash transfers in the face of fuel price increase is unthinkable. Despite some irregularities, the 2005 and 2008 direct cash transfers (BLTs) have set a precedent for subsequent social protection programs aimed at cushioning the impacts of fuel price rise. In March 2007, although possible statistical errors were acknowledged, the percentage of poor households was successfully stunted at 16.58% from a previous estimated rise to 22%. Contrary to the belief that the recipients would spend their money on cigarettes or alcohol, a large majority of them turned out to use the extra cash to buy rice. There was also lack of evidence that pointed to complacency and reduced labour force participation. In general, the distributed cash had resulted in stronger purchasing power and benefited the poor to meeting their daily needs.

    The current disbursement of BLSMs is clearly modelled after the success of previous cash transfers. In comparison to medium to long-term social protection programs, such as job creation through funding for small to medium enterprises (SMEs), direct cash transfer is indeed very effective in mitigating the immediate sting of fuel price rises. Its winning advantage lies in its ability to temporarily curb swelling economic and social grievances while other measures are being taken to control the damage resulting from price changes. The 4-month disbursement period is drawn based on confidence that impacts of inflation would become insignificant in the fourth month. To date, it has successfully averted widespread protests, riots, and other destabilising occurrences.

    In this light, it is apparent that direct cash transfers are indispensable in minimising aversion to price reforms. Admittedly, there is a wide room for improvements in terms of logistics and implementation. As far as the purpose is concerned, however, oppositions attempting to problematise these measures and label them as politically-charged initiatives would likely find their efforts futile. Fuel subsidies may further be reduced in the future and the expectation for extra cash would hold among poor households. What is critical therefore is in ensuring that such cash transfer programs are crafted within a wider long-term poverty eradication strategy and improvements are pursued to attain maximum impact.

    This blog post has been written by Margareth Sembiring. She is a Research Analyst at the Centre for Non–Traditional Security (NTS) Studies in the S. Rajaratnam School of International Studies (RSIS).


    Last updated on 17/07/2013

    Back to top

    Terms of Use | Privacy Statement
    Copyright © S. Rajaratnam School of International Studies. All rights reserved.
    This site uses cookies to offer you a better browsing experience. By continuing, you are agreeing to the use of cookies on your device as described in our privacy policy. Learn more
    OK
    Latest Book
    Direct Cash Transfers: Why They Remain Essential in Indonesia’s Fuel Subsidy Cuts

    The Indonesian government has recently cut fuel subsidies and rai ...

    more info