Price increase fuels anger in Indonesia

JAKARTA: Opposition to the Indonesian government’s new year price hikes grew louder yesterday, as politicians urged the immediate cancellation of the increases and others warned of possible violence. 

The government decision to boost fuel prices by up to 22% on Thursday, following on an increase in electricity and telephone surcharges by as much as 15% on Wednesday, was “inappropriate” said Amien Rais, the head of the country’s top consultative body. 

“If the government wants to cover its budgetary shortcomings, then it should go after the debts of (business) conglomerates who owe trillions of rupiah and not instead raise prices that would directly affect some 60 million of the poor,” Rais was quoted as saying by Kompas newspaper. 

Gas prices were also hiked 12% in December, part of the government’s drive to reduce costly subsidies and contain the budget deficit. Electricity charges are slated to rise a further 6% each quarter. 

Economist Pande Raja Silalahi of the private Centre for Strategic and International Studies (CSIS) thinktank criticised the hikes for not being accompanied by government intentions to promote bureaucratic efficiency and fight corruption. 

“It should have been in stages, not all dumped at the same time,” he said 

“What is being shown instead to the population is differences of opinions between decision makers. We have to resign ourselves that we have an incapable government.” 

The price hikes have created an unheard of consensus between labour and business. 

An agreement was forged on Saturday among 23 labour unions and a leading business association condemning the price hikes as a blow to production costs and any possible pay hikes for workers. 

There were also rumours that labour unions were planning mass street protests for Thursday but these could not be confirmed. 

Hariyadi Sukamdani, deputy chairman of the Indonesian Entrepreneurs’ Association, said businessmen may refuse to pay tax and electricity bills if the government fails to address the popular outcry, Kompas reported. 

Soedjono, the chairman of the Indonesian Association of Advocates, was quoted by Media Indonesia as saying the price hikes ran counter to President Megawati Sukarnoputri’s own declaration of 2003 as a year without violence. 

“The policies of the government ... have the potential to spark violence,” Soedjono warned. – AFP 

  • Another perspective from The Jakarta Post, a partner of Asia News Network. 

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