Govt, House delay hike in phone rates

Kurniawan Hari and Ade Tiarma Siboro, The Jakarta Post, Jakarta

The government and the House of Representatives have agreed to delay the increase in telephone rates indefinitely and pledged to reassess the fuel and electricity price hikes in an effort to contain the two-week nationwide protests against them.

Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti said that the government would publicly announce the decision after a discussion on the fuel and power price hikes was finished in the next few days.

"The relevant ministers will announce the government's decision on the fuel, power and telephone price hikes on Thursday," he said after a consultation meeting with the House and relevant factions late on Wednesday.

Also representing the government at the consultation meeting were Coordinating Minister for Security and Political Affairs Susilo Bambang Yudhoyono, Coordinating Minister for People's Welfare Yusuf Kalla, Minister of Transportation Agum Gumelar, Minister of Mining and Energy Purnomo Yusgiantoro and Minister of Home Affairs Hari Sabarno.

House Speaker Akbar Tandjung called on the people to understand the government's recent decision, saying that the price rises had the approval of the House and they were a part of the national development program (Propenas).

"However, the House took the initiative to call the government to revise the latter's decision since it had met with opposition from a total of 38 provincial and regional legislative councils and sparked mass protests nationwide over the last two weeks," he said.

Akbar said that during the meeting, Minister of Transportation Agum Gumelar had shown his good will by suspending the telephone rate hike but he could not say when the suspension would be lifted.

He said the government had signaled that it would reduce the increases in fuel and electricity prices and the relevant ministers were expected to make an objective calculation.

Endin Akhmad Jalaluddin Soefihara of the United Development Party (PPP) appreciated the government's new decision, saying that it was in line with the top security minister's warning of an escalation in protests over the next few days should the government decline to revise its decision.

The increases of up to 22 percent in fuel prices, six percent in electricity rates and 15 percent in telephone rates sparked protests and met with opposition from regional legislatures as well as affecting people from the low and middle-income groups.

Responding to the demonstrations, President Megawati said the government's decision was not popular but it had no other alternative than to raise the prices.

The Indonesian Democratic Party of Struggle (PDI Perjuangan), which Megawati chairs, has supported the President's decision, but made calls for the cancellation of rate hikes in the transportation sector.

Rallies held by students, labor unions, businessmen and other groups against the price hikes have entered their second week, with protesters claiming that the hikes will only hurt the poor.

But the government said the decision to raise utility prices would help finance the 2003 state budget and not hurt the poor.

It said that the increase in fuel prices would mainly affect motor vehicle owners in the middle class who spend up to 10 percent of their income on fuel.

The government also argued that the increases would eventually lead to allowing the masses greater access to basic necessities, such as power and telephone.