Energy Diversification is a Must, Declares Bank Indonesia

 
Fathan Qorib, Robert Sidauruk
 
The Government is again being reminded to give serious attention to the nation’s long term national energy plan through the realization of action on energy diversification. The reminder this time came from Mirza Adityaswara, Deputy Governor of Bank Indonesia (BI).
 
“Energy diversification is a must to safe national energy on a long term basis,” said Mr. Adityaswara in Jakarta last Friday.
 
BI has reminded the Government of this problem as Indonesia is still heavily dependent on fossil fuels. This is evident from the value of imported oil and gas that remains high, and has reached USD 3.5 – 3.9 billion under the latest State Budget.
 
To a certain extent, these imports also burden the State Budget, even though in recent times Indonesia has recorded positive trends in its balance of trade and reached IDR 680 million in the first trimester this year. This surplus, as Mr. Adityaswara explained, is a result of low seasonal import activity compared to the same period last year.
 
Mr. Adityaswara is of the view that the surplus will not last long if there is no significant policy on energy diversification. He further suggests that the Government should start to take real action on energy diversification, such as utilizing geothermal energy, increased use of gas, and policy on solar energy.
 
“Without diversification, the import value of oil and gas will surely oppress the national balance of trade and payment,” Mr. Adityaswara said.
 
BI is currently monitoring a predicted escalation of economic activity in the second and third trimesters this year to avoid excessive negative impacts on the balance of trade.
 
“Import activities usually reach higher levels in the second and third trimesters. If this is not balanced with high export activity, then it will be likely affect the national balance of trade,” explained Mr. Mirza.
 
(hot/kc)