Indonesia has a longstanding relationship with energy subsidies. For more than 40 years, these subsidies have been part of the lives of millions of Indonesians every day. For good and bad. 

In Indonesia and elsewhere, subsidies are often put in place to support the poor, but sadly end up benefiting mostly middle and upper income households. As these groups are normally also politically influential, subsidies are persistently stubborn and challenging to remove for just about any government. 

Nevertheless, Indonesia has shown that fossil fuel subsidies can indeed be tackled. Last year, the Jokowi administration cut around IDR 200 trillion (USD 15 billion) from gasoline and diesel reforms, freeing up much needed money to invest in people and society. These are real achievements that hold many promises, not only for Indonesia, but for the international community as a whole.

This weekend, the Group of Twenty ( G20 ) met in Hangzhou, China, to discuss a range of issues, including that of fossil fuel subsidy reform. On the table in Hangzhou—yet again—was the G20 commitment from 2009 to “phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption”. 

Unfortunately, by merely repeating this same old pledge, the G20 is at a near-standstill. Leaders addressing subsidies, like Indonesia, should step up and see this standstill as an opportunity to show international leadership on the issue, by calling on the G20 to address three key weaknesses in the existing pledge. 

One is that G20 countries have so far only promised to remove “inefficient” subsidies. There is no agreement, however, as to what might be an efficient subsidy or not. By including the word “inefficient” some governments have avoided action. While the G20 may not come to agreement on this issue immediately, Indonesia should not hold back from clarifying what this means in a national context. The government has already taken significant strides to make fuel subsidies more efficient, and LPG and electricity subsidy reform is in the pipeline. These reforms will almost exclusively be focused on reducing inefficiency through better targeting of subsidy recipients, ensuring that poor households are actually the ones benefiting.  

Second, in some G20 countries, governments are not fully transparent about subsidies. In Indonesia, the large majority of fossil fuel subsidies are not secret; they are publicly apparent in the state budget. Likewise, Indonesia has volunteered to share subsidy inventories with other G20 countries such as the US, China, Germany and Mexico through the peer review process. But other countries still need to follow suit.  

Third, there should be a deadline for the commitment. By when are G20 countries willing to remove fossil fuel subsidies? What is to be understood by “medium term” from the commitment in 2009? Now, in 2016, seven years after the commitment was made, it’s about time to establish a deadline. In a statement delivered to all G20 Finance Ministers in June, more than 200 civil society organizations called on the G20 to phase out subsidies by 2020, starting with the elimination of all subsidies for fossil fuel exploration and coal production.  

It’s time for the G20 to deliver on fossil fuel subsidy reform. And the progress that Indonesia has made at home in removing inefficient subsidies puts it in a good spot to show leadership abroad. 

This article was originally published in the Jakarta Post on 8 September, 2016.