Policy Brief 04 – Subsidies in Strengthening Pro-Poverty Fiscal Policy

KEY POINTS:

1. Errors in determining subsidy schemes in fiscal policy slow down the process of poverty reduction strategies in Indonesia.
2. The interest expense on debt, especially the interest expense on recap bonds from the BLBI program, is a burden borne by the poor.
3. A subsidy policy is needed that strengthens a pro-poverty fiscal policy framework.