Letztes Update:
20181120132418

Background on Economic Freedom in Indonesia

18:22
06.09.2018

By 2030 the countries of the Association of Southeast Asian Nations will collectively represent the world's fourth-largest economy. Inseparable from this outlook as there is a causal relationship between energy consumption and economic growth, energy demand in Indonesia is rapidly increasing because of high economic growth. 

Energy plays an important role in economic development worldwide.

Electricity demand in Indonesia has risen rapidly in recent years. Public discussion about electricity tariff and its accessibility is regularly covered in the media; whether about the plan of raising electricity tariff, the quality of electricity and the role of Perusahaan Listrik Negara (PLN) as State-Owned Enterprises which has a constitutionally mandated monopoly on the transmission and distribution of power in Indonesia.

In regard to the energy, particularly in electric power industry, as reported in The Jakarta Post (06/04/2018), President Joko “Jokowi” Widodo has insisted on maintaining the current prices of electricity and certain types of fuel until at least the end of 2019, when he completes his term, saying it was part of an effort to preserve the people’s purchasing power.

Citing from Lowy Institute, Indonesia has made recent progress on electrification (up from 85% in 2014 to 93% in 2017), but per capita electricity consumption trails well behind regional peers Vietnam (almost two times higher), Thailand (four times higher), and Malaysia (five times higher). This burdens households and businesses alike, and the scarcity of electricity, especially beyond population-rich Java, also undercuts efforts to foster downstream industries. 

With the current condition, to ensure Indonesia development, there is a need for cooperation and "openness" towards the private sector in supporting the growth and reliability of the Indonesian electric power sector.

Muditha Skolastika