Central Banking

Firstly , everyone shock that the government announce will increase the price of petroleum 15 % on april 1th,all the element of citizen debating about increasing petroleum price.the greatest reaction come from poor people and student,they were disagree about the news.The goverment said the increase petroleum gas to tend the budget or the budget in deficit.The other reason is exchange rate,inflation and growth rate.The central bank still keep the inflation rate below 5,5% before april 1th but the IHSG in strong position.

The Central bank has predict the next if the price increase.but if i were the cental banker i will follow goverment,it means that if the price increase automaticly increase the inflation rate and influence other aspect or we can say multiplier effect in life such as increasing price in cost of transportation,food,etc.The greatest effect is unemployment,increase the number of poverty,increase the living cost,and shifting of the social conditon (such as big gap between richer and poorer).The effect will attack the poorer,they will totally can’t live in this is such condition because can’t buy the needed things because higher price.

The unemployment will increase because the company will reduce the employee to reduce the cost of factor production,it will happen and the social conflict will happen such as demonstration.The citizen and university student was demonstration before april 1th to protest about the increase petroleum price.On march 30th,The goverment held paripurna meeting to discuss and adding some point in UU pasal 6a said “The government could increase the price in certain condition.which is 15 % or in 6 month”.The meeting finnish at 01.00 am and decide the cancelliation of increasing price in six month.

After the paripurna meeting the goverment pending the policy to increase the petroleum,the condition is going well.The citizen was stop the demostration,but what will happen in six month later will re-run again such demonstration,anarkys condition,social conflict and economy effect for surely.

Increase in all aspect will happen and the central banking will increase the inflation rate 6,8% and increase exchange rate.But the increase price of petroleum can save the economy,economy will growth 7%.The goverment can stabile balance of payment.We can say here,the increase petroleum price have positive impact and negative impact.The goverment should save the balance of payment or save the budget with the perfect allocation budget and good coordination.

What if government cancels to raise the oil prices in the next period? For me,i will minimize anggaran pembelanjaan negara or APBN so we could arrange APBN rightly and coordinated and also continue what goverment do,the step implemetation APBNP (langkah implementasi Anggaran Pendapatan dan Belanja Negara Perubahan).

Make the innovation such as save the energy so the budget for energy will minimizing and also persue the foreign to invest in Indonesia.so many things we can do to improve our economy growth such as conversion petroleum to gas (BBM to BBG).Reducing the number of coruptor and also exsecution the curoptor based on how much the coruption also keep the tax flows safely.if we can do that,the budget will not deficit and the economy will grow up,the inflation will stay in rate.