Abdul Khalik and Aditya Suharmoko, Jakarta – The quick disbursement of cash aid to lower income families has tempered protests after the government raised fuel prices, helping President Susilo Bambang Yudhoyono avoid political fallout from the controversial decision, observers say.
They said groups opposed to the price increases, including political parties, non-governmental organizations and students, have failed to consolidate due to divergent interests and motives, undercutting the fight against the fuel price rises.
Indra J. Pilliang of the Centre for Strategic and International Studies (CSIS) said here Monday the government should be given credit for its quick disbursement of cash assistance to the poor.
"The efficient implementation of the direct cash aid program has stopped oppositional moves from accumulating into widespread protests," he told The Jakarta Post.
After weeks of uncertainty, the government raised fuel prices by an average of 28.7 percent last Friday to help salvage the state budget, which has been strained by soaring crude oil prices.
Starting Saturday, the price of Premium gasoline rose to Rp 6,000 (65 US cents) a liter from Rp 4,500, a liter of diesel went from Rp 4,300 to Rp 5,500 and kerosene from Rp 2,000 to Rp 2,500.
To help offset the impact on the poor, the government is providing cash transfers of Rp 100,000 per month and 15 kilograms of subsidized rice to 19.1 million low-income families through the end of 2008.
Lawmaker Harry Azhar Azis of the Golkar Party agreed the fuel price increases would not hurt President Yudhoyono's popularity ahead of the 2009 elections due to the success of the cash aid program.
"In fact, it is highly possible that cash assistance will boost Yudhoyono's chance of reelection, as people will feel that they received money in a time of need from Yudhoyono, and will be thankful despite the fuel prices increases," he said.
Addressing participants of the Indonesian Regional Investment Forum in Jakarta on Monday, Yudhoyono said raising fuel prices was a difficult decision that could have political repercussions.
"But this is not a popularity contest, not when it comes to saving our economy and protecting our people. Leadership is not about taking the easy option. It is about making necessary decisions, no matter how difficult they are," he said. Both Indra and Harry said Yudhoyono has also been helped by the deep divisions between opposition groups in the House of Representatives and among students across the country.
"The protests have been very sporadic and divided. There is no genuine move, as every protest is used by others to blame the government. Students have been hesitant for fear they will be used by certain groups to undermine Yudhoyono," Indra said.
Chairman of the Indonesian Students Executive Council, Budiyanto, said student groups were divided over how to respond to the fuel price policy. He said some students wanted to seek support from lawmakers at the regional level, while others wanted to confront Yudhoyono directly at the Presidential Palace.
Lawmaker Ganjar Pranowo, however, warned Yudhoyono not to raise domestic fuel prices further, as global oil prices hit $132.7 a barrel on Monday. "What if global oil prices reach $142 per barrel this year? Will the government again raise domestic fuel prices? I think the answer is we have to increase our oil production," he said.