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Indonesia may be pressured over subsidy

19th June 2012 | 1.522 Views
Jakarta (ANTARA News) - Indonesia`s subsidy policy could be one of the main issues to draw the attention of G-20 member countries and certain countries might possibly use it to pressure Indonesia, according to an observer.

The director of diplomacy of the Indonesia Center for Democracy, Diplomacy and Defense (IC3D), Ludiro Madu, said here on Tuesday Indonesian President Susilo Bambang Yudhoyono was aware that the issue might be made a problem in the forum.

"Susilo Bambang Yudhoyono`s stand is clear that the Indonesian government would continue to implement the policy as the subsidy is aimed at people who are badly in need of it. The President`s affirmation is very significant in the domestic as well as international context," he said.

In the domestic context he said subsidy is part of his pro-poor policy, adding subsidy is proof of the state`s presence and commitment to protecting the people and helping empower them in response to global economy.

He said the President`s affirmation on the policy reflects the government`s favor to people whose economy still requires structural support from the government.

He said President Yudhoyono had to explain that the policy could not be interpreted from economic point of view only. G-20 member countries even have to understand that the policy was needed to build the people`s economy.

"Based on the logic the policy is important for maintaining the Unitary State of Indonesia and uniting Indonesia as a nation," he said.

In the international context the policy serves as part of the country`s efforts to build its economy so that it could become a strong partner in the current globalized economy. In that context subsidy is given not to hinder economic globalization but as a step to prepare the community to play an active role in the globalized economy, he said.

"The approach is similar to that taken by advanced countries like Japan, the US and other European countries to protect their farmers from liberalization in the global economy," he said.

In view of that he said the subsidy policy is correct and G-20 member countries must not become suspicious but must even support it, he said.