Economic Woes Overshadow Anniversary

SoehartoPeople across the country took to the streets in angry protests over the soaring cost of food and a planned fuel price hike on Wednesday, as an economic “crisis” overshadowed the 10th anniversary of Suharto’s fall.

Demonstrators slammed the government’s plans to raise the subsidized cost of fuel by an average 28.7 percent to protect the budget from record world oil prices.

The country has experienced almost daily protests against the fuel price plans in recent weeks, but tensions were higher on Wednesday exactly a decade after the collapse of Suharto’s military-led regime.

A similar announcement of a fuel price rise triggered the mass protests that eventually forced the late dictator to resign on May 21, 1998 after three decades in power.

In contrast to Suharto, President Susilo Bambang Yudhoyono – the country’s first directly-elected leader – welcomed the fuel protests as a healthy exercise of democracy.

“In democracy, protests are normal as long as they are orderly,” he said.

Suharto died in January without facing justice for widespread abuses or billions of dollars he allegedly stole from the state.

And while many Indonesians complain that the pace of democratic reform is too slow in the post-Suharto years, such issues came a distant second to the economy on the list of protesters’ complaints Wednesday.

Police made 17 arrests outside the presidential palace in Jakarta when members of a radical student group, part of about 1,000 protesters, hurled a molotov cocktail and scuffled with security forces.

Yudhoyono, who is under mounting pressure to bring inflation under control ahead of elections next year, has said he has no choice but to slash fuel subsidies to prevent a massive blowout in the budget deficit.

Finance Minister Sri Mulyani told the state-run Antara news agency fuel prices would rise 28.7 percent on average but the hikes would not be introduced until the government had settled on a compensation package for the poor.

Such a rise would see the cost of premium gasoline in Southeast Asia’s biggest economy climb to Rp5,790 (63 US cents) a liter from the current price of Rp4,500.

The fuel subsidies were based on assumed oil prices of around 95 dollars a barrel but the cost of crude surged past $130 a barrel for the first time on Wednesday.

But protesters on the traffic-choked streets of Jakarta – where people pay the lowest fuel prices in Southeast Asia – said there were better ways to counter the impact of high oil prices.

“The government must renegotiate with oil exploration companies dominated by foreign countries to ask for more profits. If they don’t agree, we have to take firm measures to take over those companies,” said Rudi, a protester.

Sri, a housewife, said: “The rise of fuel prices will strangle us. It’s hard for a housewife like me as the price of everything has risen even before the announcement” of the fuel price hike.

Economy Minister Budiono warned, however, that any delay would only worsen Indonesia’s predicament.

“There are things that we should do if fuel prices aren’t raised, and after consideration it will be much heavier for us all to bear,” he said.

In addition to rallies in Jakarta, several thousand students occupied the West Sumatra council building in the provincial capital of Padang, and 15,000 farmers gathered at the Garut district council in West Java, news reports said.

Another 2,000 students in Makassar in eastern Indonesia formed a convoy of motorcycles, trucks and cars and drove to a downtown monument and the regional parliament.

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