Protests against price hikes for fuel and phone charges are continuing for a second week across Indonesia. The price rises for fuel, electricity and phones are aimed at cutting back on government subsidies as the administration tries to rein in its large budget deficit. But as public pressure increases on President Megawatti Sukarnoputri, political opportunists are seen lurking in the background.

Presenter/Interviewer: Karon Snowdon, Finance correspondent

Speakers: Ditta Indah Sari, head of the National Front for Indonesian Workers Struggle; Peter Duncan, Chief Economist with consulting firm Castle Asia

Snowdon: Demonstrations have entered their fourth day. Students, trade unionists and the poor have been joined in some protests by business groups in demanding the price rises be reversed or delayed. Failing that they want the government to step aside.

Trade Union activist Ditta Indah Sari and other protest organisers say the country is being pressured by the International Monetary Fund, which insisted on subsidy cuts among other measures in return for its five billion dollar loan. Ditta Sari draws a comparison with the mass demonstrations in 1998 which toppled the dictator Soharto.

Sari: "Because yesterday Megawati has announced in Bali that she would not cancel the policy and she would face any consequences regarding this policy. So it's a declaration of a so-called war from the government against the people and we would have to respond with as strong a movement as possible."

Snowdon: Dita Indah Sari, head of the National Front for Indonesian Workers Struggle speaking on a mobile phone on her way to another demonstration outside the presidential palace.

Diesel fuel costs have soared by 22 percent, electricity is up by six, with three similar increases to follow throughout the year, telephone charges are up by an average of 15 percent.

While 60 percent of Indonesians live below or close to the poverty line, such price hikes easily get people onto the streets.

President Megawati says she has no choice to cut back subsidies on fuel and transport if Indonesia is to rid itself of the weight of foreign loans by reducing the deficit. She has said an emphatic "no" to the protestors' demands.

A major debate rages between the activits for social equity and economists who argue its the middle class and the rich who benefit most from cheap fuel and phone charges.

Peter Duncan is Chief Economist with consulting firm Castle Asia.

Duncan: "Subsidies in the past have benefitted the much wealthier elements of the community at the expense of the poorer elements of the community and the former have used the pressure of demonstrations to try to retain them. The present government is now facing up to this situation."

Snowdon: The government's biting of the subsidy bullet is risky politically. Press reports have suggested a number of meetings have taken place between former President Wahid and politicians with an eye on the top job.

House speaker Amin Rais is said to be one. His office has denied such a meeting took place. But Mr Rais did meet with a delegation of protestors led by Dita Sari just before I spoke to her. She agrees the protestors could be playing with fire by petitioning politicians to join in the demonstrators demands for policy changes.

Sari: "Of course Amin Rais and other politicians in the parliament have a very strong interest to take up our position but that doesn't mean they would make a policy that would be on the part of the people. So by drawing more forces outside the parliament together, the alternative would be much much better."