3 ms·

Depends on how you define "on strike full retard", at least where I live (Indonesia), it is spot on. Some context: Indonesian govt. subsidizes fuel to quite a

Depends on how you define "on strike full retard", at least where I live (Indonesia), it is spot on. Some context: Indonesian govt. subsidizes fuel to quite a large degree, up to ~50% of relative to petrol prices. Over the years, they've been trying to draw down, but it's a touchy subject. Last year, ~10% of state budget was spent on fuel subsidies (to give us a sense of scale). sources: indonesian Ministry of Finance state budget 2018 https://www.kemenkeu.go.id/apbn2018 https://www.kemenkeu.go.id/apbn2018 CNN indonesia post saying fuel subsidies was over the alloted budget: https://www.cnnindonesia.com/ekonomi/20190102172609-532-358006/subsidi-energi-di-apbn-2018-bengkak-jadi-rp1535-triliun https://www.cnnindonesia.com/ekonomi/20190102172609-532-3580... - sub) edit: some posterity

simonh 7y ago
Fuel subsidies in a lot of developing countries are politically weird. They mostly benefit wealthier people, but are most ardently supported by poorer people. It's difficult to disentangle.
- esyir 7y ago
  People like free stuff, and after some time, it becomes expected. Moreover, think of it in the opposite direction. Imagine a getting hit with a 10% tax increase even if a richer guy gets 15%. Him being taxed more doesn't necessarily make that 10 feel much better.
evrydayhustling 7y ago
Thanks for cluing me into the interesting history of Indonesian subsidies. Here's a good analysis for English readers [1]. It looks like fuel subsidies were very high 5y ago, when oil was at 2x today, and have come off significantly since. I'd argue that this is exactly the sort of price stabilization mechanism that makes oil volatility less scary it sounds on its face. The government is centralizing (and, more controversially, socializing) the financial cost of creating internal price stability. This is actually pretty common, and I'm not sure 10% of budget (at peak) is as outsized as it sounds. In the USA, this takes the form of buying and releasing oil from the strategic reserve, but also in a mountain of foreign policy (read: military) spending on maintaining stable supply lines for energy trading. [1] https://worldview.stratfor.com/article/indonesia-energy-reform-takes-back-seat-pragmatism-jokowi-oil-gas-subsidies https://worldview.stratfor.com/article/indonesia-energy-refo...

simonh 7y ago

Fuel subsidies in a lot of developing countries are politically weird. They mostly benefit wealthier people, but are most ardently supported by poorer people. It's difficult to disentangle.

esyir 7y ago
People like free stuff, and after some time, it becomes expected. Moreover, think of it in the opposite direction. Imagine a getting hit with a 10% tax increase even if a richer guy gets 15%. Him being taxed more doesn't necessarily make that 10 feel much better.

evrydayhustling 7y ago

Thanks for cluing me into the interesting history of Indonesian subsidies. Here's a good analysis for English readers [1]. It looks like fuel subsidies were very high 5y ago, when oil was at 2x today, and have come off significantly since. I'd argue that this is exactly the sort of price stabilization mechanism that makes oil volatility less scary it sounds on its face. The government is centralizing (and, more controversially, socializing) the financial cost of creating internal price stability. This is actually pretty common, and I'm not sure 10% of budget (at peak) is as outsized as it sounds. In the USA, this takes the form of buying and releasing oil from the strategic reserve, but also in a mountain of foreign policy (read: military) spending on maintaining stable supply lines for energy trading. [1] https://worldview.stratfor.com/article/indonesia-energy-reform-takes-back-seat-pragmatism-jokowi-oil-gas-subsidies https://worldview.stratfor.com/article/indonesia-energy-refo...