THE IMPACT OF FOSSIL-FUEL SUBSIDY REFORM TO REGIONAL GROWTH IN INDONESIA

• Main Author: AWALUDDIN ALAFGHANI (NIM 29115378), M.
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/23013
• Institution: Institut Teknologi Bandung

Indonesia as an oil producer country has implemented energy subsidy policy for long <br /> <br /> <br /> time. As the time passed, the resources are limited and the decline of oil production <br /> <br /> <br /> moreover since 2003 Indonesia became net oil importer country. The government <br /> <br /> <br /> have done several fuel subsidy reforms as the high burden of subsidy in the state <br /> <br /> <br /> budget. <br /> <br /> <br /> The impact of fuel subsidy reform to the economic growth is researced in this final <br /> <br /> <br /> project by focusing in thirthy three provinces in Indonesia. The econometric approach <br /> <br /> <br /> is applied with panel regression to measure the impact using three independent <br /> <br /> <br /> variables, pricegap as subsidy indicator, number of school participation age 15-18 <br /> <br /> <br /> years old as education variable and number of constructions finished as infrastructure <br /> <br /> <br /> indicator. The dependent variable for economic growth is the growth of gross <br /> <br /> <br /> domestic regional bruto. <br /> <br /> <br /> The research conclude that the fossil fuel subsidy is positively impact the regional <br /> <br /> <br /> economic growth, the reduction of the amount of subsidy would decrease the regional <br /> <br /> <br /> economic growth. <br />