Cut Dian R. D. Agustina

Cut Dian Agustina, born 1977, is an Indonesian national. She is an economist by training and profession. She received her BA degree in economics from University of Indonesia and earned her master degree (specializing on Economics of Development) from the Institute of Social Studies, the Hague, Netherlands. She has 10 years of working experience in international development agency based in Indonesia. She has worked as research assistant in United Nations Support Facility for Indonesia Recovery and consultant in the World Bank Jakarta in early of her career. Currently, she is an economist in the Poverty Reduction and Economic Management Unit of the World Bank Jakarta. Her interest includes intergovernmental fiscal relations, public finance, and economic policy design. 

Fiscal decentralization in Indonesia

Indonesia is one of the most decentralized resource-rich countries in the world. About a quarter of consolidated revenues are derived from oil and gas income through taxes, revenue sharing contracts, and profits of the state-owned oil company Pertamina; making oil and gas production a major source of government income (Agustina et al. 2008). Given Indonesia’s decentralized system, the research will analyze how the Indonesia’s fuel policy affects the regional fiscal position. The research will cover several aspects: first, it will estimate the regional distributional effect of the existing oil and gas related policies, separately from the revenue and expenditure side. From the revenue perspective, it will analyze the distribution of oil and gas revenue from central to province and district both from revenue sharing scheme and block grant scheme. While from the expenditure perspective, it will analyze the oil and gas related expenses in terms of the consumption on gasoline, diesel, and kerosene at the regional level. Second, the research will analyze the regional impact of government’s policy on the inclusion of fuel subsidy into the allocation of block grant to sub-national government's budget as well as the affect of the proposed elimination of fuel subsidy altogether to provinces and districts.