Requiring recipients to use mobile apps could hamper efforts to distribute much-needed subsidized goods

App-based monitoring of subsidized distribution of cooking oil and fuel may deny access to intended beneficiaries from low-income families.

The Indonesian government’s decision to use two existing mobile apps as a tool to monitor precise distribution could potentially prevent the poor from accessing these subsidized products.

Indeed, they have relatively limited access to smartphones and the Internet, and a low technological culture. Instead, the government should identify beneficiaries based on data provided by the Ministry of Social Affairs.

Digitization of grants

Recently, the government moved forward with plans to use the PeduliLindungi and MyPertamina apps to allow the public to buy subsidized cooking oil and fuel.

The price of cooking oil has skyrocketed over the past two months. Meanwhile, Pertalite, with an octane rating of 90, is currently the cheapest type of subsidized fuel after the government raised the price of Pertamax in early April.

In response to public outcry over unaffordable cooking oil, the government issued a regulation in May that mandates the distribution of cheap bulk cooking oil to the public from the lower income bracket (25% of the population with the lowest incomes), as well as as micro and small enterprises. It comes with a predetermined maximum retail price of Rp 14,000 per liter or Rp 15,500 per kilogram, which is priced below the current market price.

Meanwhile, the government has also ordered state oil company Pertamina to limit the distribution of Pertalite by prohibiting the use of the product in “luxury” personal vehicles – identified as those with an engine capacity of 2000cc and above .

The government says these apps can serve as a surveillance tool to mitigate leaks, prevent diversion of supply and ensure targeted distribution of subsidized goods.

Experts from various backgrounds, from Internet users to recipients – commentators from various groups have objected to this claim.

Use of apps can harm the distribution of subsidized goods

In our view, the government’s plan is not what these apps were designed for.

PeduliLindungi was created as a platform to monitor the COVID-19 pandemic. Meanwhile, MyPertamina is intended for non-cash transactions of fuel purchases at gas stations.

Additionally, and more importantly, this system will undoubtedly become very cumbersome for the community.

Since the plan was unveiled, people in the lower income bracket – who are expected to be the main users of these subsidized products – have complained about the idea, citing likely ineffectiveness and inefficiency in distribution. Some also raise concerns about data security.

Their concerns are valid.

The National Socio-Economic Survey (SUSENAS) database of the National Statistics Agency (BPS) shows that many Indonesians still lack access to digital services. The survey showed that up to 34% of adult citizens do not use a mobile phone. The survey also indicates that 52.3% of the population still does not have access to the Internet today.

This distribution mechanism is inconsistent with the type of “Java-centric” policy that, in many cases, the government issues in favor of most Indonesian citizens living on the island. Data shows that adult citizens without mobile phones or internet access in Java, Indonesia’s most developed island, account for 34.27% and 56.7%.

Based on SUSENAS 2021, one in four low to middle income people do not own a cellphone or smartphone and do not have access to the internet.

The government’s solution to those without mobile phones or internet access is to allow offline purchases using an identity card number (NIK). Unfortunately, SUSENAS also states that 9.3 million adult citizens do not have this number.

This shows that the government’s plan to use PeduliLindungi and MyPertamina is a miscalculation that ignores these facts.

Additionally, although downloaded by more than 98 million users, PeduliLindungi only has 60 million active users despite being a mandatory app during the pandemic, according to the health ministry in late May. As for MyPertamina, the app has only been downloaded 6 million times.

The government will need to ascertain which of the 60 million active users of PeduliLindungi and 6 million users of MyPertamina are the intended recipients of the subsidized cooking oil and fuel.

Moreover, the figure does not even reflect the total number of citizens who are entitled to these subsidized products. Indonesia has 26.5 million people living below the poverty line. This figure does not include the lower-middle population who are also eligible as recipients of subsidized goods.

We believe the government is doing complex things that should have been simple. Rather, her decision may have created the perception that she cannot handle domestic trade and the distribution of basic needs.

Instead of making it easier for those in need to access cheap cooking oil and fuel, this policy may actually limit it.

Back to basics

We believe that the Prosperous Family Card (Kartu Keluarga Sejahtera/KKS) and the Family Hope Program (Program Keluarga Harapan/PKH) are better databases that the government can use to ensure proper distribution.

The Ministry of Social Affairs programs the KKS and PKH to provide conditional social assistance to low-income families. The databases of these two cards are superior to those of PeduliLindungi, especially in identifying beneficiaries of subsidized cooking oil and fuel.

Families benefiting from these programs are registered in the integrated social protection data (Data Terpadu Kesejahteraan Sosial/DTKS). This electronic database contains social, economic and demographic information on approximately 99 million Indonesians with the lowest social status.

Moreover, DTKS not only contains data on the poor, but also on lower middle income people and micro, small and medium enterprises, who are regular buyers of cheap cooking oil and fuel.

Therefore, with the data from the KKS and PKH programs, their use would be more appropriate to ensure proper distribution of cooking oil and fuel than using PeduliLindungi and MyPertamina.

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