Something for everyone, or almost everyone

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.