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The start of 2003 saw Indonesia go through a familiar political ritual. On 1 January, the government announced that it was reducing subsidies on fuel, electricity and telephone charges. As a result, the prices of electricity and telephone charges rose between 6 and 15 per cent, while fuel prices rose from between 60 to 440 rupiah per litre, depending on the type of fuel involved.
The price rises had been long-planned, as part of the Indonesian government’s agreements with the IMF and major international donors. Even so, they immediately triggered protests. In every major urban centre, polyglot coalitions of student, labour and other activist groups organised street demonstrations. In most places, the protests were not large, but they were very militant. In some places, echoing the 'reformasi' protests, which forced President Suharto out of office four-and-a-half years ago, students occupied Radio Republik Indonesia offices and broadcast their demands. They hijacked fuel trucks and rocked the gates of the national parliament building. Some sang songs calling for 'revolution'.
Unlike in 1998, however, the students lacked a clear political leadership or program. On 22 January, a Koalisi Nasional was formed which brings together some forty, mostly small, trade unions, student groups and the like. Its aims include conducting 'open resistance to the government', but it contains few credible political leaders with proven mass support. Instead, it is a rag-tag grouping of relatively minor figures such as Eros Djarot, a one-time movie producer and former confidante of President Megawati, as well as Megawati’s own estranged sister, Rachmawati. There are even reports that former stalwarts of the old Suharto era, such as General Wiranto, were encouraging students and offering them financial support.
Some of the more radical groups, again echoing 1998, called for the overthrow of the government and the immediate formation of a ‘presidium' to replace it. But there was no clear picture as to who would sit on this presidium, nor how they would be chosen.
The protest movement has little chance of success. But it does articulate a deeply held sense of grievance. The economic crisis has gone on for over five years now, and there is little sign that Indonesia is approaching, let alone is about to turn, the corner. During conversations with ordinary Indonesians during a visit to Jakarta in January-February, I was struck by the intense sense of disillusionment with the entire political class. There is a widespread belief that corruption has a deep hold. Stories about the president’s husband, Taufik Kiemas, and his business activities were especially commonplace and seemed to generate particular resentment. Opinion polls suggest a dramatic decline in public confidence in the major political parties, although it is especially pronounced for the President’s own PDI-P.
The response of Megawati and her government to the protests and criticisms was revealing. The president and her ministers were neither able to effectively explain the reasons for the price rise, nor stick to their own policy. As the protests gathered steam, the major parties in parliament (who had previously approved the price rise but now hoped to gain political mileage from the government’s discomfiture) joined calls for the price increases to be reviewed. In the end a compromise solution was reached, by which part of the price rises were postponed.
In the weeks that followed, Megawati revealed her personal feelings in a series of meetings with her party supporters. Using colloquial language peppered with Javanese phrases, she expressed her anger regarding the protestors. She was particularly affronted by those who had trampled on or burned her portrait, telling one crowd that such people made her want to 'vomit, like boiling lava or magma from a volcano', but that she usually restrained herself not wanting to lower herself to the level of her critics. She also attacked the media, saying that it was unfair, one-sided and finicky (njlimet) in its reporting of her government.
Megawati’s response was indicative of the political malaise gripping the country. Indonesia’s political elite and the civil society movement, which had propelled that elite to power, have parted ways, seemingly irrevocably. But the sense of disillusionment and directionlessness is all-pervasive. Not even the protestors can muster the vision and unity of purpose they had a few years ago.
WATCHPOINT: The government's ability to help the poor bear the brunt of the price increases through kerosene and electricity subsidies; and, its perceived sense of urgency (or lack thereof) in tackling waste and corruption within its own ranks will impact crucially on public confidence and on the possibility of future social unrest.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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