Something for everyone, or almost everyone

Endy M. Bayuni, Deputy Chief Editor, The Jakarta Post, Jakarta

There was something for almost everyone in the government's decision to roll back the increase in the prices of basic utilities this week following massive street protests nationwide.

Everybody that is, except, the poor, especially the rural poor, who were constantly used by both parties -- those in government who wanted to increase the prices at the start of the year, and those outside who vehemently opposed them.

The decision to scale down the increases in the prices of some types of fuel, to offer discounts for electricity users and to postpone the hikes in fixed line telephone rates, reflects how political power is distributed in Indonesia, which essentially is still heavily skewed towards the urban middle class.

Some people may call the decision a political compromise, but it was more like an administration buckling under pressure from the potential threat of an urban middle class revolt.

The corridors of power in Indonesia are dominated by the powerful urban middle class. A tiny minority actually, one estimate put it at between 10 percent and 20 percent out of a total population of 210 million people. This group, nonetheless, determines the fate of a government.

President Megawati Soekarnoputri certainly did not wish to take her chances with the urban middle class, which was angered by this month's price hikes. One does not mess around with a group of people who, in 1998, brought down one of the world's longest serving and most ruthless tyrants -- Soeharto -- because their interests were hurt by the economic crisis.

The street protests against the hikes, which began soon after they were announced, quickly turned into an outright anti- government stance, with some demanding the replacement of President Megawati and Vice President Hamzah Haz.

The demonstrations we saw these last two weeks were not just another one of those series of demonstrations that would dissipate after a few days.

At least, that was how the government saw them.

Having initially stood its ground in the face of the protests, the government succumbed to pressure when it saw the protests expanding, at times turning ugly and violent, and the demands widened to more than just lowering prices.

These demonstrations saw the gathering of a collection of odd bedfellows, each with its own political agenda, but all united against the price hikes.

One massive demonstration in Jakarta, for example, saw workers from various unions, from the radical to the moderate ones, marching alongside employers and business owners. Students from different and even opposite ideologies took to the streets shoulder to shoulder. Then there was the group of housewives with their pots and pans.

The scene of demonstrations by this eclectic coalition, albeit small, was enough to invoke the memories of May 1998 that brought about the collapse of the powerful New Order regime -- a feat once considered nearly impossible.

Around the same time, a severe financial crisis hit the nation hard in late 1997. There were the daily street protests that started in January 1998 and grew larger by the day.

There was the hike in fuel prices in May which triggered even larger anti-government protests. Then, there was the shooting of student demonstrators outside Trisakti University in Jakarta that prompted even larger protests that soon turned into a massive unrest. The rest, as they say, is history.

The May 1998 revolt was essentially the work of Indonesia's middle class who, having enjoyed the benefits of Soeharto's rule for three decades, decided to get rid of him because he had stopped delivering the goods.

The reaction we saw at the start of this month was also essentially a middle class phenomena, one that sees its interests being threatened by the price increases that would hurt them much more than it would hurt the poor, who are already resilient.

The threat against Megawati's regime is real.

Having earlier dismissed the demonstrations, Megawati was forced to reconsider that opinion when it became clear that the protests were moving beyond simply demanding lower prices.

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono claimed that he had intelligence information that some political groups were using the demonstrators to bring down the government. He said these groups were planning to create martyrs that would surely trigger 1998- style unrest.

The President had earlier defended the price hikes in the name of the poor people. And the policy does make economic sense: These increases would slash subsidies that have been enjoyed mostly by the better off urban middle class people.

The statistics make a compelling case for these increases: Only 55 percent of Indonesians have access to electricity. Less than 4 percent of all Indonesian households have fixed telephone lines. The fuel subsidy, which costs the government trillions of rupiah, is enjoyed largely by people with cars and brightly lit houses. The more cars and more houses you have, the more of the state subsidies you enjoy. Industrial users also greatly benefit from the fuel subsidy.

The money that would have been generated or saved from the price increases in fuel, telephone and electricity would allow the government to finance programs to help the poor.

But with street protests growing to the point that was deemed threatening to the stability of the government, compromise became inevitable. The goal of this exercise was to find a compromise that would appease the urban middle class -- the people who really matter politically to the stability of the regime.

Thus, the increase in the telephone charge has been postponed and the price of industrial diesel fuel was lowered to help businesses. Thus, the price of automotive diesel fuel was cut to help the public transportation companies, which essentially serve the urban lower to middle income groups.

There was, in short, something for everyone, except the very poorest, in this week's political compromise. Industrialists won, the urban middle class won, and the working class with jobs, who commute to work, won.

The wealthy, corrupt tycoons involved in the bank bailout scandal of course, were the biggest winners. They had quietly won the biggest concessions of all from the government when Megawati decided to release them of their massive debt obligations and discharge them of criminal prosecution a day after the price hikes were announced.

The poorest are the real losers in this middle class complicity. Not only did they get nothing out of this political compromise, but the electricity and telephone companies said that they might be forced to review their investment programs to widen their reach because there will now be less money available.

We can all claim that Indonesia is far more democratic than it was four or five years ago, but the poor, and particularly the rural poor, are not all that much better off, because their voice is rarely heard.