Indonesian Rioters

President Yudhoyono must be quite the nervous man right now. In our last Bali BS Update, we reported the considerable Bali Terrorism Risk increase for September and October. Now the president is going to increase domestic fuel prices in October, reportedly by a massive 50%. People may remember fuel price increases sparked riots in Indonesia, including Bali in the late 90’s which were a large part of the reason Suharto was knocked out of office. Already Indonesian television has raised the less than palatable specter that gasoline prices at the pumps are likely to double in time, a very short time. Presently 2,400 rp a liter, if the price of crude oil remains above US$70 a barrel, the Indonesian government stops subsidizing gasoline and the Indonesian Rupiah remains weak against the US dollar, all of which analysts predict, then the price at the pumps would reach 5,000 rp per liter and very soon. Bear in mind tens of millions of Indonesians live on less than $1 or $2 a day, and what is the name of this recipe?

The Indonesian government has promised to pay cash subsidies to the poorest families to offset these increases, but the promise and the method seems destined to failure and could well mean nothing gets to the people President Yudhoyono claims he is going to help. First, his own development minister, Sri Mulyani Indrawati, whose department will be responsible for distributing these cash subsidies states the President’s promised total funding amount can not be met; the actual total fund will hopefully be just under 65% what the president said it would be. But, can you see the other problem in all of this? Yes, that’s right, it’s the word “cash”. The Indonesian government is going to pay a cash subsidy to the poor, not give them petrol vouchers. In what is probably the world’s most corrupt country, the average poor man on the street, reporting from experience, says they do not expect to get anything. What an apparently foolish program, cash subsidies; how much of that is likely to be stolen (filtered off) by the corrupt officials involved?

Sorry, did you think the president was fighting corruption right now? We think you should read our corresponding article; President Yudhoyono (the stinking president?).

It is not just doubling pump prices that will likely turn the smiling Balinese into snarling tribesmen yet again. For with the spiraling gasoline prices also go gas and household goods prices. Gas that feeds the nation’s furnaces, that makes the ceramic bowls, the tofu, kilns the wood for furniture; already thousands of workers around Indonesia have been laid off because the companies that employed them can no longer compete and afford the current gas prices. So it is not just about petrol prices. It is about fewer people being in work and much higher domestic product prices on top.

Of course the irony is that Indonesia actually has more than sufficient gas and oil reserves under its land and sea to provide all of its nation’s needs, and plenty of surplus to export and bring in valuable foreign currency. So why is Indonesia in such a state? Because of restrictive practices (a state monopoly) and corruption of course. Up until recently, when Indonesia figuratively fell to its knees petroleum wise, Indonesian oil company Pertamina was solely responsible for exploration, drilling, extraction, processing and distribution. Such was the terrible management and incredible corruption within this state owned company that it continually declined. Once again the Indonesian people can thank corruption for the state they are in now.

You may remember our report on what Indonesian Corruption actually costs each of its citizens (if you were to base this on corruption levels over what Hong Kong has), over 10 years it could be as much as an astonishing $2000 per year per household. One reader of our Bali BS Updates suggested we try to somehow fuel (not our pun) or even coordinate civil protest in Bali with the slogan for each citizen to chant at any riots; “Corruption costs me US$2000 a year, lost me my job and doubled the price of petrol in just 12 months! How are you doing President Yudhoyono?” However, we are sure the people of Bali and Indonesia will come up with their own slogans if they feel inclined towards civil unrest, and we are not able to participate in the matters the reader suggested for legal reasons. But we are sure the Balinese are not going to be happy about making their devalued Rupiah wages go further still because of inflation and sky rocketing fuel prices.

The president has already stated that the next fuel hike will take place in October, 2005, and that fuel subsidies will end completely by the end of 2006.

The trouble is the every day people of Bali and Indonesia can simply not afford this, and the president seems to be doing absolutely nothing past paying it lip service about the root cause, corruption. We therefore urge potential visitors to and investors in Bali to give the president a helping hand; tell him in no uncertain terms you are going to boycott Bali / Indonesia until the corruption stops, because only when it does will he be able to solve his country’s problems. And if enough foreigners stay away from Indonesia while at the same time saying “I want to come on holiday / invest, but…” With tourism being Indonesia’s third largest industry and foreign investment being desperately sought, your holding back on the dollars Yudhoyono needs may well make all the difference. And if the President actually truly tackles corruption as a result, you can credit yourself with protecting your interests and your safety while actually helping the Balinese.

You can email the president via his so called (we believe completely ineffective) “Indonesian Corruption Commission” at pengaduan@kpk.go.id or better still amien.sunaryadi@attglobal.net (personal email address of one of the commissioners); Just send your email attention: President Susilo Bambang Yudhoyono via Amien Sunaryadi.

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