Front-end loading -- Susilo's best political option<\/p>\n
Meidyatama Suryodiningrat, The Jakarta Post, Jakarta<\/p>\n
It has not been a good year for Indonesia's first democratically
\nelected president.<\/p>\n
Before the end of the year, Susilo Bambang Yudhoyono will
\nagain have to decide on a policy that is likely to cause "misery"
\nfor millions by reducing the fuel subsidies further and thus
\nraising fuel prices again, after a 30 percent increase in March.<\/p>\n
Though the exact figures for the second price hike this year
\nhave yet to be determined, Indonesians are facing the prospect of
\nan accumulative 50 to 60 percent increase in fuel prices by the
\nyear's end.<\/p>\n
In any other developing country, the government would be
\ntoppled by having to impose such "unsympathetic" policies. The
\nMay 1998 mayhem and the fall of President Soeharto, which were
\npreceded by fuel price hikes remain fresh in citizens' memories.
\nThis grim fact undoubtedly adds to Susilo's indecisiveness on
\nthis issue. But it is a decision Susilo has to make, and soon.<\/p>\n
From a political viewpoint, it is also the best strategic
\noption available. Peculiarly, despite what some may initially
\npredict, it involves the least risk for sustaining his long-term
\npolitical clout.<\/p>\n
The fact that the hikes come at the end of the year (January
\nat the latest), is awful timing. It is a period filled with
\ntripwires that can be politically destabilizing.<\/p>\n
The final months of the year have traditionally been a period
\nof high inflation, high mass mobility, increased urban migration
\nand frequent religious unrest.<\/p>\n
Demonstrations in protest of the planned increases are already
\npopping up on the streets and can easily be radicalized by the
\nusual labor discontent as a result of possible unpaid Idul Fitri
\nbonuses that many companies will be unable to pay in October.<\/p>\n
However, unlike 1998, Susilo still has control of the
\npolitical levers, even though he does not have much control over
\nthe economic ones. Despite backbench grumbling, he retains
\nmajority support in the House of Representatives. There are a few
\npolitical opponents who can engage in a destabilizing maneuver,
\nwhich can place Susilo's presidency in jeopardy.<\/p>\n
More importantly, the yearning for political change is simply
\nnot in people's hearts. Indonesians are still burdened by reform
\nfatigue. They simply are not prepared to go through another
\npolitical upheaval. Less than a year ago, he was sworn in with
\nthe kind of legitimacy and mandate no other president previously
\nhad. That political currency remains of worth today, albeit with
\nslightly lesser value.<\/p>\n
Given the lethargy of his government, Susilo's administration
\nhas also lost the market's confidence. Hence, there is absolutely
\nnothing to be gained politically by not raising fuel prices.<\/p>\n
By approving the increases now, Susilo can begin to regain
\nmarket confidence. Once the market looks up, prospects for the
\neconomy as a whole will gradually improve.<\/p>\n
With or without the fuel price increases, Susilo's popularity
\nrating is bound to fall after the highs of last year's election
\ncampaigns.<\/p>\n
A proven political dictum heeded by politicians around the
\nworld is that of "front-end loading". That is to issue unpopular
\npolicies at the beginning of one's term in office.<\/p>\n
The public has a short memory, and Susilo is barely a year
\ninto his presidency. No matter how cruel policies are presently
\nperceived, discontent can be defused by populist policies closer
\nto election time.<\/p>\n
It is better to be popular at the end of his presidency than
\nat the beginning.<\/p>\n
These conditions, however, are dependent upon certain short-
\nterm caveats.<\/p>\n
The first is that the impending fuel price hikes are
\n"significant" enough to ensure that no further increases are
\nimposed in 2006.<\/p>\n
The second is a legible sprinkling of some "sweets" for the
\npeople such as welfare subsidies and other assistance to the poor
\nso the government can make a stronger case that the money saved
\nas a result of the fuel subsidy cut are truly being distributed
\nto the public. The government has already begun this, and plans
\nto disburse in October over Rp 4.5 trillion in direct monetary
\nassistance to poor families.<\/p>\n
Plans to raise civil servants' wages by mid-2006 also helps in
\nthis respect.<\/p>\n
The third caveat is a more recent political development. The
\ngovernment must ensure that it thoroughly resolves the issue of
\noil smuggling. This issue directly touches on the public's sense
\nof justice. It is one thing for the whole nation to be suffering
\ntogether, it is another when certain people are known to be
\nprofiting from the misery.<\/p>\n
If these conditions are met, there is no reason why this
\ngovernment by next September will not be looking at a slightly
\nbetter outlook.<\/p>",
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