Society Magazine

Protests in Indonesia Fueled By Price Hikes

Posted on the 30 March 2012 by Ronnienolan @RonnieNolan

Today’s the climax ladies & gentlemen. As Indonesia’s House of Representatives (DPR) is holding a meeting to vote on a proposed bill to cut down on fuel subsidies, thousands of protesters are rallying outside the Parliament Building to oppose the cut that would result in fuel price increase. Since Suharto became Indonesia’s President in 1967, the government has heavily subsidized certain fuels, particularly kerosene and gasoline, to help protect the purchasing power the populace in the then-nascent Republic. The proposed subsidy cut will increase the price of gasoline from Rp4,500/liter (US$0.49) to Rp6,000/liter (US$0.65)

Since the bill was first proposed in February, protests have been held in several major cities across the country, with a few having erupted into violence. With that in mind, the government have deployed 14,000 police officers and 8,000 soldiers from the national army (TNI-AD) today to secure key locations in Jakarta, including the Parliament Building, the Presidential Palace and Soekarno-Hatta International Airport.

Indonesia spends US$18.5 Billion last year on fuel subsidies. This constitutes some 15% of the national budget for FY2011 and is higher than government spending on healthcare and education for that year, combined. That is also more than what was allocated for infrastructure development in 2011. Definitely more than the spending allocated for poverty alleviation, and it is far higher than what we spend on the military and police combined.

There is something wrong with government subsidies of fuel, an intervention in what should effectively be a free market. There is something definitely wrong with a government that spends more on subsidizing fuel than it does on the welfare of its people. This is, categorically and without a doubt, the biggest wasteful spending in our government budget.

Looking at those figures, I am glad that our Finance Minister, Agus Martowardojo and Energy & Mineral Resources Minister, Jero Wacik, have the eyes and brains to put two and two together and see where this will lead to if left unattended. I am not glad that this proposal have received so much opposition, particularly the last minute turn-coat move by Golkar, Indonesia’s second largest party and supposedly part of the coalition that (used to) support the plan for a subsidy cut.

Protests Fueled By Price Hikes, Demonstration of Our Addiction?

Last minute turn-around? Quite the d*ck move, I must say.

Given his background, Golkar party chairman Aburizal Bakrie definitely understands the imperative of a subsidy cut. In fact, he used to be pretty outspoken about the need to cut back on fuel subsidies. So, there is no doubt that this last-minute U-turn is a political move to score some points with the protesters in hope winning an advantage in the 2014 Presidential Election, which he is contesting.

But waiting until after the 2014 election for a subsidy cut will leave our budget for the next three years in the red, in addition to the prospect of a total traffic gridlock in the capital city of Jakarta, which will no doubt paralyze Indonesia’s economy. This is especially a nightmare scenario because Greater Jakarta (the capital and its surrounding satellites) constitutes some 23% of all economic activities in Indonesia. Already, the daily traffic gridlock in Jakarta cost the economy Rp45 Trillion (US$5 Billion) in losses last year. That’s Rp123 Billion per day (US$13.5 million)! We sure could use less traffic jams.

Protests Fueled By Price Hikes, Demonstration of Our Addiction?

Just another normal morning commute. Move along, nothing to see here.

Circus & Games for The Masses

While this country’s representatives are playing their “wayang” game, the worst is really seen from the protests erupting across Indonesia’s major cities over the last month. Now, it is bad enough that these protests happen, it is worst still because these protests are led by, and composed mainly of, college-educated students.

What, has basic arithmetic suddenly became a course for Doctorates in Mathematics?

Well, because that’s what these protests are telling us.

It is one thing to protest the fuel subsidy cut due to its impact on inflation, especially of basic commodities such as food, it is another thing to protest it on the ground of its impact on their lifestyle. If the basis for protest is the increase in basic commodity prices, which will impact the poor the most, then the providence for cash handouts to needy households should be able to take care of it. However, the protest here is not based on that. The protest here is the same kind of thing that will happen if you take drugs out of the drug addict. Drugs aren’t necessary for survival and people can live well and healthy enough without it. However, once you’re addicted to that lifestyle, it becomes difficult to let it go, even if your wallet says you just can’t take it anymore.

This, in a way, is also a sad reflection of what has become of the state of education in my country. Exactly the sector that has been put to the back burner for so long thanks to preferential (mis)allocation of funds towards fuel subsidies. Undergraduates who cannot see beyond their own short-term interests in favor of the interests of the nation as a whole will be a detriment to the country’s future. And the fact that it is they who will form the backbone of my generation is enough to give me the cold sweat.

What’s Wrong With Little Jam If I Can Has Nice Scooter? Everybody Has Them Scooters!

Protests Fueled By Price Hikes, Demonstration of Our Addiction?

The smoothest traffic flow since last Thursday.

It is no secret that Indonesians love their private transportation. That’s fine really, but if you can’t pay Rp6,000 for a liter of gas, you should be taking public transportation, not driving your own car or owning your own scooter. Alas, we have built our country on the assumption of cheap gas, taxing our productive and law-abiding citizens to pay for the benefits of the undeserving. I don’t think the poor sees a big problem if it becomes more expensive to drive a car. Neither do I see that it is a problem if college kids can’t have their motorcycles. After all, we do have such a strange thing called public transportation and this moronic exercise called …. um, walking.

Public transport providers have little reason to complain, if anything, this signals a windfall for them. They can just hike up their fares a cent or two, and people who can no longer afford to keep their scooters and their car can switch over to them, or taxis if that’s what they would like. We can have less traffic jams with less private vehicles clogging up the road and the subsidies can be re-allocated towards more meaningful things, like healthcare, education and infrastructure development. So, there’s no problem, right?

Wrong. Think about what people would say if you don’t drive your own car. Think about what they’ll say if you don’t have your own motorbike. Think about what they’ll say! The proposed policy is good for the country and all but it doesn’t solve the most important problem in the world, my self worth. What it comes down to is really a pissing contest, a contest to see who’s got it the biggest in their trousers. And by that, I am, of course, talking about the biggest wad of cash.

This is the problem that matters. To have self-worth, I must have what everybody else has. I must have my own scooter, drive my own car, have the latest smart phone and the latest computer on the market. I must have all of that, or I’m not part of the crowd. I’m not part of the “in” crowd, the crowd that matters. Indonesians even have a word for it, we call it “gengsi”.

“Gengsi” is a condition, a way of life and if I can say honestly, it is a social disease. “Gengsi” is to have what everyone else has, to have the latest and the best (more like best marketed, amirite?). “Gengsi” is the institutional imperative, the desire to follow what “everybody” is following regardless of reason. That is how people feel they can measure their self-worth, by fulfilling their “gengsi”. It is a great blessing for corporations that Indonesians have this thing called “gengsi”. However, where the collective national future is concerned, I hope that instead of “gengsi”, we could decide using this really ancient and eccentric thing called “logic”. That should help to put some sanity into the discussion and allow us to reach the best conclusion for our future.

Protests Fueled By Price Hikes, Demonstration of Our Addiction?

Why would I want to do something stupid like taking public transport or walking when I can get into a traffic jam, just like everybody else?

Unfortunately, we don’t seem to be a sane nation. Not yet at least. The current debacle faced over this decision, to cut or not to cut fuel subsidies, is a indication of our addiction. What should have been a no brainer has become an issue that is being dragged and politicized. This condition will have to be cured. We have to cure ourselves off of our addiction.  Not just our addiction to cheap oil but also our addiction to “Gengsi”. Only when we have weaned ourselves from these addictions can we build this country on a stronger and more sane foundation.


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