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In the Midst of Protest, Hopes of Reform in Indonesia

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In the Midst of Protest, Hopes of Reform in Indonesia

Protests against the recent reduction in fuel subsidies speak to a deeper discontent with the country’s direction under President Joko Widodo.

In the Midst of Protest, Hopes of Reform in Indonesia

Protesters light up flares during a rally demanding that the government revoke its decision to raise fuel prices in Jakarta, Indonesia, September 13, 2022.

Credit: AP Photo/Dita Alangkara

Over the past few weeks, tens of thousands of students and labor union activists have held demonstrations across 35 cities in Indonesia to express their anger over the government’s recent decision to reduce fuel subsidies.

Chanting “lower the price of oil or down with Jokowi,” students and blue-collar workers have a valid reason to be upset with the president.

In the midst of the COVID-19 pandemic, with incessant lockdowns and quarantines, most Indonesian households saw a substantial decline in their earnings and very few actually received the social assistance funds they were promised by the government.

When the pandemic started to wane, there was finally a wave of optimism that there would be an economic recovery and peoples’ lives would return to normal. Then, with the outbreak of war in Ukraine and the ensuing food inflation along with hefty increases in oil and gas prices, many economies in the developing world fell into recession.

In a state of despair, anti-government protesters filled the streets of Latin America and South Asia. Food insecurity eventually became the new threat, and with malnourishment and famine spreading rapidly in Africa, we are now facing a nearly unprecedented period of civil unrest and political instability across the world.

For a while, Indonesia, the giant of Southeast Asia, was not faced with such problems. As a large exporter of natural resources, it has benefited from the windfalls of the spike in global commodity prices. And with subsidized prices for fuel, lower-income Indonesians could still afford to drive their motorcycles to work with enough left over to pay their household expenses.

No longer. After the reduction in the fuel subsidies led the price of petrol and diesel to jump by around 30 percent, the majority of Indonesians have suddenly found themselves in financial straits. While general inflation is estimated to be only 5.5 percent, food inflation is more than double that amount at 11.5 percent and could easily increase to 15 percent by the end of this year.

Having less disposable income due to higher food costs is not the only problem. One must also keep in mind that the vast majority of Indonesians, around 240 million people, rely upon their motorcycles for transport. These are the people most badly hurt by the government’s decision to partially reduce oil and gas subsidies.

Making matters even worse for the average Indonesian are economic policy decisions by the Jokowi administration that have made the cost of living even higher than is absolutely necessary:  an increase in electricity prices, higher value-added taxes, hikes in national health insurance premiums, and a cap on increases in minimum wages that is set at a miserly 1.09 percent.

While our GDP is set to grow by over 5 percent this year, what most economists waxing eloquent about Indonesia fail to take into account is a lot of that growth can be attributed to external factors, namely the increases in global prices for commodities. Such windfalls hugely benefit the tycoons who own concessions for natural resources such as coal, minerals, and palm oil, but for the majority of Indonesians, there is little reason to celebrate their country’s macroeconomic performance.

Increasing poverty and an administration that hardly cares about the economic well-being of the average Indonesian are the proximate triggers of anti-government demonstrations. At the same time, there are many other longer-standing issues that have caused disappointment and pent-up frustrations with the government.

Especially irksome for the student movement is the Jokowi administration’s poor track record on democracy and the dramatic backsliding that has occurred since he first came to power in 2014. Today’s student protesters are aware that their alumni in 1998 were the vanguard that brought down the Suharto regime and opened the door to democratic reform.

Students and their supporters are resentful of the fact that Jokowi, purportedly a non-elitist and a man of the people, has slowly but surely turned back the clock to the point where our country has returned to illiberal politics: democratic institutions such as the anti-corruption agency have been undermined, freedom of speech has become severely limited, and the media has become a tool of elitist politicians.

Our military, which was reformed after the fall of Suharto, is a laudable exception in Indonesia’s faltering democracy, but unfortunately, the national police have become even more corrupt and some of its top officers have been publicly exposed for their involvement in the drug trade, gambling, and money laundering. Rather than attempt to reform their ranks, the Jokowi administration instead has turned a blind eye as the police are being used to intimidate opposition leaders.

As elsewhere, student groups and labor unions can be relied upon to be a voice of reason and conscience. There is little reason to believe that Jokowi and his inner circle would return to a more just and equitable form of governance without the drumbeat of protest outside their doors. Hopefully, today’s movement, as was the case in 1998, will make a difference.