Indonesia's president defended a decision to raise fuel prices beginning today as the only way to stave off an economic crisis, while calling on thousands of demonstrators who have taken to the streets to refrain from violence.
"Anarchy will only deter investment," President Susilo Bambang Yudhoyono said hours before the size of the hike was to be announced.
Ministers said the cost of gasoline, diesel fuel and kerosene could climb by as much as 50 percent -- pushing up the price of everything from rice to cigarettes in the sprawling country of 220 million people, half of whom live on less than US$2 a day.
PHOTO: AFP
Demonstrations in 17 cities were small and scattered, though numbers swelled in the predominantly Muslim nation after Friday prayers, with thousands turning out.
Soldiers and riot police patrolled major traffic intersections and strategic locations across the capital, including the presidential palace, parliament and some gas stations.
The price hikes follow Yudhoyono's decision to slash fuel subsidies that have helped protect Indonesia's poorest from spiraling global prices for years, but also threatened to blow the cash-strapped government's budget. Last year, the government doled out US$7.4 billion for the subsidies -- more than the international community has pledged on rebuilding efforts in countries hit by last year's tsunami.
"I realize that this is not a popular policy, a bitter pill that we have to swallow, but we have to do it to save the nation's budget and the future of the country," Yudhoyono said at the opening of a new Honda motor plant outside of Jakarta.
Motorists hoping to fill their tanks with cheap gas formed long lines at gas stations nationwide. Some stations were closed, hanging up signs that said "Sorry, we've run out." So far the demonstrations have been smaller than expected, given the size of the country and its history of massive street rallies, cheering investors. The Indonesian stock market and the local currency have taken a hit recently amid the economic uncertainty.
"Investors are just relieved the fuel price hike demonstrations haven't happened," one dealer said on condition of anonymity. "There really isn't much other news to boost the market," the dealer added.
Despite being Southeast Asia's only member of OPEC, Indonesia has to import oil because of decades of declining investment in exploration and extraction due to corruption and a weak legal system that makes people wary of doing business here. Everyone agrees that the current level of subsidies -- which allow Indonesian motorists to fill up for less than US$0.25 per liter -- are unsustainable. Still, raising prices is a sensitive issue in Indonesia, where a massive hike in 1998 triggered rioting that helped topple former dictator Suharto.
OPTIMISTIC: A Philippine Air Force spokeswoman said the military believed the crew were safe and were hopeful that they and the jet would be recovered A Philippine Air Force FA-50 jet and its two-person crew are missing after flying in support of ground forces fighting communist rebels in the southern Mindanao region, a military official said yesterday. Philippine Air Force spokeswoman Colonel Consuelo Castillo said the jet was flying “over land” on the way to its target area when it went missing during a “tactical night operation in support of our ground troops.” While she declined to provide mission specifics, Philippine Army spokesman Colonel Louie Dema-ala confirmed that the missing FA-50 was part of a squadron sent “to provide air support” to troops fighting communist rebels in
PROBE: Last week, Romanian prosecutors launched a criminal investigation against presidential candidate Calin Georgescu accusing him of supporting fascist groups Tens of thousands of protesters gathered in Romania’s capital on Saturday in the latest anti-government demonstration by far-right groups after a top court canceled a presidential election in the EU country last year. Protesters converged in front of the government building in Bucharest, waving Romania’s tricolor flags and chanting slogans such as “down with the government” and “thieves.” Many expressed support for Calin Georgescu, who emerged as the frontrunner in December’s canceled election, and demanded they be resumed from the second round. George Simion, the leader of the far-right Alliance for the Unity of Romanians (AUR), which organized the protest,
ECONOMIC DISTORTION? The US commerce secretary’s remarks echoed Elon Musk’s arguments that spending by the government does not create value for the economy US Secretary of Commerce Howard Lutnick on Sunday said that government spending could be separated from GDP reports, in response to questions about whether the spending cuts pushed by Elon Musk’s Department of Government Efficiency could possibly cause an economic downturn. “You know that governments historically have messed with GDP,” Lutnick said on Fox News Channel’s Sunday Morning Futures. “They count government spending as part of GDP. So I’m going to separate those two and make it transparent.” Doing so could potentially complicate or distort a fundamental measure of the US economy’s health. Government spending is traditionally included in the GDP because
Hundreds of people in rainbow colors gathered on Saturday in South Africa’s tourist magnet Cape Town to honor the world’s first openly gay imam, who was killed last month. Muhsin Hendricks, who ran a mosque for marginalized Muslims, was shot dead last month near the southern city of Gqeberha. “I was heartbroken. I think it’s sad especially how far we’ve come, considering how progressive South Africa has been,” attendee Keisha Jensen said. Led by motorcycle riders, the mostly young crowd walked through the streets of the coastal city, some waving placards emblazoned with Hendricks’s image and reading: “#JUSTICEFORMUHSIN.” No arrest
RSS