“I ask the government to be proactive in taking strategic measures,” Abdullah remarked here on Tuesday.
According to the DPR chairperson, there are five strategic measures, namely the first, being proactive in making diplomatic efforts through international institutions, such as the United Nations (UN), to press for a ceasefire between the two countries.
He admitted that this was replete with challenges, considering the strong support of the United States (US) and the United Kingdom (UK) for Israel.
Moreover, regarding the economic benefits, the escalation in the Middle East, which pushed up the world oil prices, benefited the two large political blocs, namely China and Russia, and the US, Saudi Arabia, and Canada, which are large oil and weapons producers in the world.
Nevertheless, Abdullah expressed hope that the government would push international institutions to have a greater significance in creating world peace.
As for the second effort, he called on the government to secure oil supply to meet domestic needs, as data in 2023 showed that Indonesia depends on crude oil and oil product imports of an average of 3.5 million tons per month.
"Iran is among the 10 largest countries in the world that produces up to 3.45 million barrels of oil per day in 2023. The impact of rising world oil prices will be a big burden on our state budget," he stated.
Third, the government is urged to be proactive in preparing the state budget to face external pressures from the increase in oil prices and the depreciation of the US dollar against the rupiah.
According to Abdullah, for every Rp500 (around US$0.031) that the rupiah weakens and oil prices rise by US$10 per barrel, the subsidy or compensation budget is projected to increase by Rp100 trillion (around US$6.17 billion).
For the fourth measure, the government is urged to be proactive in ensuring the availability of US dollars for importers of strategic commodities, such as food and oil, for at least the next six months. This step is aimed at ensuring the effectiveness of hedging.
It also includes being proactive in developing more varied payment schemes to replace the US dollar by continuing to develop the local currency settlement (LCS), especially in the payment of strategic commodities in the food and energy sectors.
Lastly, as the fifth measure, the government is urged to be proactive in ensuring its ability to pay government securities (SBN) and foreign debt denominated in US dollars.
This step is deemed necessary, considering the trend of depreciation of the rupiah against the US dollar from the average limit set in the 2024 state budget.
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Translator: Imamatul Silfia, Raka Adji
Editor: Azis Kurmala
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