INDONESIA: Protesters Challenge Price Increases

Hundreds of protesters in Palu, Central Sulawesi, threw rocks at the provincial headquarters of President Megawati Sukarnoputri's political party.
Police fired off at least two rounds of warning shots.

There have been daily protests since the government increased fuel prices by 22% a fortnight ago as part of a package of economic reforms approved by the International Monetary Fund. Electricity and telephone charges were also increased - a move praised by economists as a necessary step towards balancing Indonesia's budget deficit.

Several people received minor injuries from the rock-throwing incident in Palu, the Associated Press news agency reported.

President Megawati had been due to visit the province on Wednesday but the trip was cancelled. No reason was given for the cancellation, but officials said the president would instead hold meetings on the price rise protests.

Megawati holding firm

There were protests in at least five other cities in Indonesia on Wednesday, media reports said.In the capital Jakarta, dozens of students burned tyres and briefly hijacked a fuel truck which they drove around a main roundabout. Later, several hundred students marched to the state palace.

There have been some calls for President Megawati to resign over the price rises, though the BBC's Rachel Harvey in Jakarta says support for such a move is not clear.

Indonesia's military chief, General Endriartono Sutarto, has warned protesters not to try to overthrow the government.

"We'll stand by the government if the protests aim at toppling the government," the Jakarta Post newspaper quoted him as saying.

The government has defended the price rises, and has allocated 3.1 trillion rupiah ($346m) as financial aid for the poor to compensate for the price rises.
Kerosene, widely used by the poor as a cooking fuel, remains heavily subsidised for domestic use.Parliament approved the price rises last year, but several MPs have since changed their minds and have called for the government to reverse the policy.

Sharp rises in fuel prices at the height of the financial crisis in May 1998 triggered rioting which contributed to the fall of then-President Suharto. Since then, the government has brought in a series of further price hikes which have prompted protests, but not serious rioting.

In addition to the 22% fuel hike, electricity charges went up by 6% on 1 January, with three further quarterly increases of 6% due this year. Telephone charges were also increased by an average of 15%.

AMP Section Name:Privatization
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