The recent issue of the fuel price resulted in a lot of mass protests by students in many provinces in Indonesia and also protests from activists and civil societies. It is seen that the decreasing subsidy for fuel will give more financial burden for people, but will it?
Previously during the reign of former President Susilo Bambang Yudhoyono (SBY), the fuel price was also increasing, and the subsidy was switched to education sector that resulted free education in primary school and junior school (now until high school).
Government was planning that the subsidy should be spent for more important sector instead of consumption as the government aimed to increase the number of certified human resources, national literacy level, and national education level.
The aid for consumptive item such as fuel is not a strategic spending from economic point of view. The government aid should be on more productive and fundamental sector such as education. Spending on strategic sector must be done especially under current situation when countries are recovering from the pandemic effect.
Stimulation to economy and gearing more resilient human capital are way more important than fuel price. Subsidy on fuel is pure waste of national spending.