After a wave of militant protests and direct action from students and
unions in Indonesia, the government there has said that it will reconsider
its plans to pay off IMF/WB debts by raising the prices of fuel oil,
electricity, and telephone service.
The effects of these price hikes were mostly shouldered by the poor. The
fuel oil hikes have been devastating to Indonesia's rural communities, who
depend on kerosene for cooking, as well as fuel for farm machinery. The
cost to Indonesian's urban population has been just as great, with the
newly impoverished forced to depend on government handouts of rice to eat.
Those handouts are handled by the Bureau of Logistics (Bulog), widely seen
as corrupt in the wake of scandals in the wake of failed disaster relief
efforts.
The protests in Indonesia have been an embarassment to the regime of
President Megawati, whose Nationalist party was elected after a similar
wave of protests forced out her three predecessors, former dictator
Suharto, his immediate successor B.J. Habibe, and moderate Muslim cleric
Abdurrahman Wahid.
Protests in cities on the island of Sulawesi, including the commandeering
of fuel trucks in Makassar and the stoning of the Nationalist headquarters
in Palu, forced Megawati to cancel visits there. Additionally, student
protests outside the presidential palace were stopped just short of siege.
The protests started just after the announcement of the price hikes, and
are taking place as IMF technocrats visit the country to rate Indonesia's
"progress" with structural reforms.
The protests have caused a split in the president's party, and as a result
the government announced on 15 January that it would delay hiking telephone
costs, and would also reconsider the fuel oil and electricity hikes.
The government hopes that this will cool off students and labor militants,
who have demanded the resignation of the president and vice president.
Establishment politicians have been raising concerns over this talk,
especially ahead of Indonesian elections in 2004.
Those elections will be the first under Indonesia's new Constitution, which
was revised to eliminate set-aside seats for the military (a base of
support for Suharto's Golkar Party) as well as the direct election of the
president.
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