Workers and students stage protest at Merdeka Palace

Maria Endah Hulupi and Tiarma Siboro, The Jakarta Post, Jakarta

Thousands of workers and students staged a rally in front of Merdeka Palace, Central Jakarta, on Thursday to demand that the government annul the utility price hikes introduced on the first day of the new year.

"Bring down the prices, reduce electricity and telephone tariffs," the workers shouted in front of the tightly-guarded compound.

The government raised electricity and telephone tariffs on Jan. 1 and removed fuel subsidies as part of its efforts to finance the state budget and reduce deficits.

The workers, however, charged that the simultaneous price hikes would bring more suffering to the people whose purchasing power had diminished since the economic crisis struck the country in 1997.

"The government has to review this policy...decrease the utility prices, or you two (Megawati and Hamzah Haz) have to step down," a protester yelled, waving a banner that read: "Increasing prices means killing the people".

Over 500 police personnel were deployed to monitor the protests, including around 200 police who stood guard in front of Merdeka Palace.

"Megawati-Hamzah Haz, use your brains," read one placard. Calls have been mounting for the pair to resign.

"The government has to cancel their stupid decision to raise the price of fuel," a protester shouted through a megaphone.

The House of Representatives approved the increases last year to meet demands by foreign creditors for fiscal belt-tightening. Some estimates say the higher prices could throw as many as three million people into poverty by the subsequent rise in the prices of food and transportation.

Aside from workers and students, youth wings of some political parties also took part in the rally, displaying the biggest challenge so far to the leadership of Megawati, who took over as president in July 2001.

The protesters would have entered the grounds of Merdeka Palace had the police not placed a barbed wire barrier along Jl. Medan Merdeka Utara.

A scuffle broke out when police from the Mobile Brigade (Brimob) unit attacked a vehicle carrying the protester's sound system. Two students and one security officer reportedly suffered minor injuries.

Dita Indah Sari, a labor activist from the National Front for the Struggle of Indonesian Workers (FNPBI), deplored the fact that the government had ignored the plight of the middle and lower classes and turned a deaf ear to public demands.

"It's a declaration of war. The government is challenging the public to bow to its (unpopular) decisions," she said, adding that such decisions forced the public to express their dissatisfaction through inappropriate means.

FNPBI and other elements of society, Dita said, were planning to seize gas stations belonging to Megawati's husband, businessman Taufik Kiemas, as a symbolic act of public resistance against Megawati's government, and to occupy State Logistics Agency (Bulog) and use the food stored there to feed the poor.

"We fully support their moves to take over control of such strategic facilities," she added.

"The price hike is insupportable. We cannot cope with the increased living costs," said Maladi, one of the 150 protesters grouped under the Solidarity of National Workers (Sopan), affiliated to Amien Rais's National Mandate Party (PAN).

By late afternoon, most of the Jakarta demonstrators had dispersed.

"We will continue to hold protests until the government responds to our demands. Otherwise, we won't be able to eat three times a day and we will refuse to pay taxes, electricity and the telephone bills," Maladi said.