Uproar over price hikes

The government has two options for coping with the massive public opposition to the increases in the prices of fuels, electricity and telephone calls that were effected simultaneously last Wednesday.

President Megawati Soekarnoputri could review the phasing-in of the price hikes or go all out to enforce wholesale the painful measure.

Which ever of the alternatives would be taken, though, one thing is certain. No amount of military or police would be able to safeguard the measure if the majority considered it grossly unfair and if the climate did not convince the public that everyone would share the burden equally.

The government should realize that the timing and the sequencing of the price increases was completely wrong. It was indeed a gross mistake for the government to have decreed the simultaneous utility price increases without adequate preconditioning of the people.

It was further a blatant insult to the public's sense of justice to increase the burden on the public at the same time as the government was releasing from criminal charges the largest conglomerate debtors, who are held by the public as partly responsible for the economic crisis.

This inconsistency created the perception that the burdens inflicted by the economic crisis are not equally shared between the different groups of people.

The massive public protest against the price policy should again jolt the government to the painful realization that approval from the House of Representatives does not always amount to national political consensus nor to public acceptance or support. This means that the government should always go all out to sell its policies to the public.

However, the policy cannot be sold in a vacuum, meaning that the environment should support the credibility of the policy and the government. This requires the government to work harder to convince the people that it has shared its fair share of burden by strictly implementing austerity measures, minimizing waste caused by inefficiency and corruption, and dealing firmly and quickly with conglomerates alleged to have been partly responsible for bankrupting the economy.

It is not yet too late for the government to review the policy and take corrective measures such as gradually spacing in the price increases with the least damage to fiscal sustainability and macroeconomic stability.

But even this corrective measure would not automatically gain public support if the government failed to reach out to the people, explaining: How crucial the policy is for preventing the national economy from collapsing; how uneconomically low utility prices would eventually cause a massive disruption in the supply of utilities and cause the state budget deficit to explode to uncontrollable levels and spiraling inflation; how the subsidized fuels have so far been enjoyed mostly by the well-to-do families; how the wide differences between domestic and international fuel prices had been exploited by profiteers by smuggling cheap fuels overseas; how the government would contain the inflationary pressures from the price hikes; how the government would ensure that the Rp 4 trillion appropriated for social safety-net funds would reach the targeted poor families.

Given the wide-ranging impacts of the price increases, separate individual briefings by economics ministers to the mass media or politicians would not be effective to gain public support.

It should be President Megawati herself who should lead the communication campaign by personally addressing the nation, talking honestly to the people and appealing for their understanding and support.

Megawati should have realized how her late father, Sukarno, the first president of the country, had succeeded, through effective communications and lively public speeches to the nation, in rallying public support and convincing people to make sacrifices, even during the most difficult times of their lives.

Megawati is obviously not as good and effective an orator and communicator as her late father, but as a woman and housewife she could offset her inability to make lively speeches by appealing to the emotions of the people.

The general public is by and large already aware of how difficult overall conditions are due to the multi-dimensional crisis that has gripped the nation since 1997 and how painful the reform measures needed to resolve the crisis are. A steady dose of good, honest communications with the people would be effective to maintain such awareness and understanding.

But such an understanding would not automatically lead to a willingness to put up with additional sacrifices, if the government does not show strong leadership, a high sense of crisis and a high sense of urgency in coping with the crisis and was not able to convince the public that the burdens are equitably shared between the different groups of the people.