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JAKARTA - A fuel hike that will hit Indonesia's poor hard came into effect Tuesday, but the expected large-scale demonstrations failed to materialize as the government promised to beef-up anti-poverty assistance programs. The government announced late Monday it was cutting fuel subsidies, amounting to an average 29 percent increase in prices from gasoline to diesel oil. Fuel prices have been a sensitive topic since riots over a price hike in 1998 hastened the collapse of former President Suharto's dictatorship.
The news angered many poor Indonesians who depend on cheap fuel to earn a living and who feared the hike could result in higher prices for basic commodities. But few took to the streets, leaving it to university students who held small, largely peaceful protests across the country. Hundreds of students held noisy protests outside the presidential palace in Jakarta while hundreds of others burned tires in the South Sulawesi city of Makassar. Minibus drivers also went on strike in several Indonesian cities to protest the hike.
Authorities put 13,000 police and other security forces on alert in Jakarta on Tuesday as a precaution but protests were largely peaceful. "Police will talk to protesters on the ground to be peaceful and we will also call on the protesters not to act out any sort of violent protest,'' said Col. Zainuri Lubis, a national police spokesman. The scenes were in sharp contrast to a massive protest in early 2003 that greeted former President Megawati Sukarnoputri after she raised fuel and other utility prices. The protests lasted for weeks and forced Megawati to roll back the price hikes.
Aburizal Bakrie, coordinating minister for the economy, said the decision was made to help offset world oil prices of US$35 (euro26.4) a barrel, which would force the government to spend up to 60.1 trillion rupiah (US$6.4 billion; euro4.83 billion) on fuel subsidies. President Susilo Bambang Yudhoyono backed the decision despite opposition from the legislature. The government has promised that some of the money saved in the subsidy cuts would be spent on improving schools and housing for the poor. But many critics are concerned that the funds could be lost to corruption, which is endemic at all levels of Indonesian society.
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