Students besiege Presidential Palace in protest against utility price hikes

Berni K. Mustafa, The Jakarta Post, Jakarta

Thousands of students besieged the presidential palace on Wednesday in the biggest protest against the utility price hikes that the capital has seen so far, as they exerted more pressure on President Megawati Soekarnoputri to either revoke the unpopular decision or step down.

Protests also continued in other parts of the country in the second week of almost daily demonstrations since the government announced the simultaneous hikes in fuel prices and electricity and telephone charges.

About 5,000 students from more than 40 universities in Greater Jakarta joined the protest. They set fire to tires and scuffled with police in an attempt to break down the barricades and storm the palace. Some reportedly hijacked fuel trucks, although only temporarily.

But unlike last week's biggest demonstration, in which police officers clashed with protesting workers, the five-hour rally on Wednesday ended peacefully.

Two large groups of students took over the south section of Jl. Merdeka Utara, as police cordoned off the north side of the road closest to the palace.

Students carried banners accusing Megawati of ignoring the people's plight and calling for her resignation, while others burned pictures of her and Vice President Hamzah Haz and a coffin, which was meant to symbolize the death of democracy.

Their protests as well as others held elsewhere across the country came on the heels of Megawati's unpopular decisions, which many have said smack of injustice.

The government defied labor protests and pushed ahead with sales of state companies while planning to drop possible criminal charges against business tycoons, who owe the state billions of U.S. dollars.

With these decisions fresh in the public's mind, the government still went ahead and increased fuel and power prices even though it knew that this move had always been politically risky.

President Soeharto ended his 30-year rule in the wake of anti- fuel price demonstrations, which turned into violent riots.

Megawati's predecessor Abdurrahman Wahid delayed fuel price hikes several times due to street protests.

Still, raising fuel and electricity prices are necessary to save trillions of rupiah in subsidies that have been keeping utility prices falsely low.

The low energy prices were also behind rampant fuel smuggling, people's wasteful use of the commodities and the slow development of alternative energy, analysts have said.

Indonesia agreed to phase out subsidy spending as part of its economic reforms program with the International Monetary Fund (IMF).

This month, the government raised fuel prices by up to 22 percent, and electricity by an average of six percent, continuing every second quarter.

Telephone charges rose by an average of 15 percent. But the government did this by lowering rates on long distance calls and raising those on local calls, which, critics have said, hurt people in the low income group.

The government has so far withstood pressure from almost two weeks of protests held nationwide and refused to backtrack on its decisions.

The only sign of a possible compromise might come through political pressure from the House of Representatives.

Legislators have joined calls for the government to revoke the utility price increases, even though they had earlier supported them.

A meeting with the government to discuss revising the decision was held on Wednesday night, but analysts saw few chances for Megawati to revoke the increases.

She said last week that the government was determined to keep the prices at their current level and urged the public to accept her decision.

Although few believe that Megawati will be forced out of office because of the protests, analysts said she might pay the price at the 2004 general election.

In the Central Sulawesi town of Palu, anti-fuel price protesters stormed the branch office of the Indonesian Democratic Party of Struggle (PDI Perjuangan), which Megawati leads.

Her party won the 1999 election on the back of grassroots level voters, who are now making up most of the protesters rejecting her policies.

Responding to the ongoing demonstrations, the secretary to the President, Kemal Munawar, said that Megawati appeared as calm as always.

"When I met her just now, she looked just as calm as she usually is," he said after meeting the President at her residence.