Riyadi Suparno, Jakarta – President Susilo Bambang Yudhoyono has learned the lesson the easy way. When he cut fuel prices twice in December, his popularity rose sharply – and so did that of his Democratic Party (PD).
To widen his lead over his opponents, the President further cut fuel prices last week, with subsidized Premium and diesel fuel now at Rp 4,500 (40 US cents), as opposed to Rp 6,000 in November.
Fuel price cuts are real incentives the people enjoy. And people respond to incentives rationally. As a result, those who are happy with the price cuts will likely vote for President Yudhoyono and his Democratic Party – as indicated by recent surveys.
Three surveys by noted research institutions, that is, the Indonesian Survey Institute (LSI), the Reform Institute and the Institute for Economic and Social Information, Education and Studies (LP3ES), have predicted Yudhoyono will win the presidential election in a landslide.
The three surveys also put Yudhoyono's Democratic Party at the top of the list, defeating the country's two traditional biggest parties – the Golkar Party and the Indonesian Democratic Party of Struggle (PDI-P).
It is indeed a big surprise that the Democratic Party, which in 2004 came in at a distant third (with 7 percent, as opposed to Golkar's 20.5 percent and PDI-P's 18 percent), now sits at the top.
Many do not believe it, and they succumb to the temptation to question the surveys' validity. But when three surveys reveal similar results, there must be some truth in it.
Their disbelief is not without reason. Before December, all surveys consistently put the Democratic Party at number three, after PDI-P and Golkar.
Also, Yudhoyono's popularity continued to fall – especially after the government increased fuel prices in May of last year – and at one point he even slipped to number two behind Megawati Soekarnoputri, chairperson of PDI-P.
Fuel prices are indeed at play here. But the bigger question is why Vice President Jusuf Kalla and his Golkar Party did not benefit from the cuts.
Apparently, voters – or in this case survey respondents – do not see Kalla as having a role in the price reductions, although in some cases he made statements about possible cuts even before the government announced them.
Furthermore, voters do not see Golkar as an integral part of the government. Again, there is some truth here. Unlike the Democratic Party, which always stands behind all government policies, Golkar is choosey in what it supports. In some cases, it even goes against the government.
Fuel price cuts are in fact an obvious means of vote buying. PDI-P knows that, Golkar knows that and all politicians know that. The problem is these parties and politicians cannot criticize the fuel price cuts. Any move voicing opposition to this would be unpopular.
Yudhoyono has also given other incentives to voters. These include cash transfers to low-income people, school operational assistance, microcredit loans and various employment creation programs.
All these programs have born fruit, that is, rising popularity for Yudhoyono and his party. But maintaining popularity is a lot harder than gaining it.
The real challenge will be during the next three months leading up to April 9, when voters will cast their votes in legislative elections. During this time, the domestic economic situation will be a key determinant for Yudhoyono and the Democratic Party.
Fuel price cuts are indeed a good vote booster, but Yudhoyono has to do more to prevent the economy from drastically slowing down. Early indicators show that, in the first quarter of this year, the economy is already starting to slide.
Yudhoyono must have realized this was happening, and that's probably why he asked his finance minister to increase spending to stimulate the economy.
If and when Yudhoyono fails on the economy, his opponents will benefit. This is decisively the time for undecided voters to decide.