Mega gets a reprieve, but for how long?

Price protests have not spiralled out of hand but simmering resentment could still undermine her government.


President Megawati Sukarnoputri may breathe a sigh of relief after planned nationwide demonstrations that threatened to bring the country to a grinding halt failed to materialise.

But her administration should not rest on its laurels because the public’s deep-seated resentment towards the decision to raise fuel prices and electricity and telephone rates could still undermine the government.

Increasing utility charges is a politically explosive issue in Indonesia. After all, it triggered former president Suharto’s downfall in May 1998.

Since then, successive governments have sought to push through the policy in a variegated fashion, some backing down at the last minute after a spate of violent protests. In most cases, the authorities have weathered the storm.

Over the past week, demonstrations have been the order of the day in Jakarta, Bali, Jambi, Java, Kalimantan, Maluku, North Sumatra, Papua, Riau and Sulawesi.

But they have not been able to generate the kind of momentum that would pose a serious danger to the 55-year-old in power, or that would force her to compromise.

The low turnout yesterday is proof of this. Even the stock market reacted positively, rising 1.69 per cent, in part because the demonstrations were relatively peaceful.

The protests had been billed by the media here as likely to be the biggest ever against price hikes. Some newspapers screamed that there would be 25,000 to 100,000 demonstrators in the capital alone.

But by most estimates, some 7,000 workers – joined for the first time by hundreds of businessmen – took part in the protests nationwide.

It would be inaccurate to infer from the low turnout that Indonesians are not concerned about the government’s policy. Across the social divide, people are opposed bitterly to it.

But, to the President’s benefit, many are reluctant to take part in demonstrations because of political lethargy.

Democracy is a much-vaunted concept here, but there is little desire to be involved in protest marches that clog the roads – and which contribute to creating uncertainty in the minds of investors about the economy.

Adding to this is the general aversion to plots and backroom dealings of Jakarta’s elite.

A journalist once described how a Central Java farmer switched off his television after National Assembly Chairman Amien Rais appeared and attacked the politician for being ‘an opportunist at our expense’.

Indeed, the current demonstrations smack of political opportunism. Politicians like Dr Amien and his supporters in the Reform Faction have no intention of toppling Ms Megawati. But they want to needle her, enough to dent her credibility ahead of next year’s presidential election, by waving nationalist and populist banners.

As the numbers in the streets showed again yesterday, it will be difficult for a handful of legislators to launch a concerted attack against her given that three of the largest parties in Parliament – Ms Megawati’s Indonesian Democratic Party – Struggle, Golkar and the United Development Party – stand in their way.

The government can also take comfort from fact that the student movement has been ineffective.

No one should fault Ms Megawati for raising prices and rates. Her actions show her resolve to correct economic fundamentals and stick to the prescriptions set by the International Monetary Fund.

But some believe it would have been better for Jakarta to stagger the price increases to ‘soften the blow’.

So the government may have benefited this time from the political inertia of Indonesians and the symbolic support of key parties and the armed forces.

But price hikes will continue to be a potential powder keg. The challenge confronting Ms Megawati is in choosing between painful economic recovery and dealing with an angry public who may be used by her rivals to erode her credibility.

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