Figure 1. Senior Director of BCG Center for Energy Impact, Jamie Webster, led the FGD session.
The Purnomo Yusgiantoro Center (PYC) was invited to a Focus Group Discussion (FGD) held by Pertamina on Tuesday, November 19, 2019. The FGD theme was energy economics, and there were many domestic and international experts attended the event. The domestic institutions were the Coordinating Ministry for Economic Affairs of the Republic of Indonesia, Ministry of Energy and Mineral Resources of the Republic of Indonesia, Ministry of National Development Planning of the Republic of Indonesia, Bank Indonesia, and SKK Migas. The institutions from abroad were PETRONAS, PTT Thailand, Petro Vietnam, and BCG Centre for Energy Impact.
There were several key points that wrapped up the session. First, most experts agreed that the global or regional economy is full of uncertainty shadowed with the recession potential that may take place in the medium run (e.g., 18 months). Second, many still share optimism on the economy in both the region and Indonesia facing the potential global recession. Third, there is a need to accelerate the Foreign Direct Investment (FDI) in Indonesia. One of the sectors that could be explored more is an export-oriented investment. This sector should become a priority to overcome the current account deficit.
Fourth, giving direct subsidy to the poor instead of on commodity. This way, the subsidy would reach the intended target and could tighten the current high spending on subsidy, especially energy subsidy. Fifth, there are concerns over the domestic industry readiness for taking advantage of EV transition. Sixth, the energy transition issue should be managed properly by setting the short term and long-term plans. The short-term focus should be on fossil infrastructure as coal, oil, and gas will still be the majority of energy sources in Indonesia. At the same time, Indonesia also has to develop renewable energy by focusing on the most promising one in terms of resources, cost, and reliability.