Indonesian President Likely to Weather Fuel Price Rise Uproar, Analysts Say

FUEL POLICY - JAKARTA. Thousands of people joined protests across Indonesia this week against a fuel price increase but even as anger mounts on the streets of Southeast Asia's largest economy, analysts say President Joko Widodo is well placed to weather the storm.

Under pressure to address a ballooning energy subsidy budget the president, popularly known as "Jokowi", announced on Saturday that fuel prices would be increased by about 30%, the first such increase since 2014.

Attempts by his predecessor to cut fuel subsidies were stymied by violent protests but with a commanding approval rating and a broad coalition supporting him, Jokowi is set to ride out the uproar relatively unscathed, and even position himself as a kingmaker for a 2024 election, analysts say.

"His political capital is strong enough to absorb the short-term shocks," said Sirojudin Abbas, executive director at pollster Saiful Mujani Research and Consulting.

"Protests will dissipate easily because Jokowi's team has managed the conditions quite well."

Data from the pollster showed the approval rating for Jokowi, now well into the second of the two terms the constitution allows, is above 70%, while his coalition controls almost 82% of seats in parliament.

"Jokowi is certainly bucking the trend of 'lame duck' presidency," said Kennedy Muslim, an analyst from pollster Indikator Politik.

Muslim said the anger over the fuel price could not have come at a better time for Jokowi, with his approval rating nearing an all-time high.

In addition to that, Jokowi's 2019 decision to invite his old rival, Prabowo Subianto, into his cabinet had removed a potential source of opposition, Muslim said.

"Jokowi's move early in his second term to invite his two-time political opponent Prabowo along with his Gerindra party to join the fray in his administration and parliamentary coalition proved to be a stroke of political genius in hindsight," he said.

Following a deeply polarising presidential election in 2019, and violent protests in the aftermath, Jokowi invited retired general Prabowo to become defence minister.

'OPPOSITION IS WEAK'

While civil society groups have bemoaned a hollowing out of critical voices, the coalition has allowed the Jokowi administration to manage challenges, including the COVID-19 pandemic and now, inflationary pressure.

"The coalition has done a tremendous job in pacifying potential distrust in the government," said Abbas. "This time the opposition is weak."

After weeks of speculation, Jokowi's decision to allow the fuel price to rise came as little surprise on Saturday.

Appealing to the public in a televised address, he said it was a last resort but difficult decisions had to be made.

The government has lowered fuel subsidies, which Jokowi said benefited the middle and upper classes, letting fuel prices rise but has also ramped up social assistance, including temporary cash transfers known as BLT.

"People really have hope in BLT," said Agus R. Rahman, a political analyst from the National Research and Innovation Agency (BRIN), "But the question is how long can that last. Years? No, that will be a struggle."

The cash handouts, said Rifki Mubarok, a 35-year-old factory worker who joined the protest outside parliament in Jakarta on Tuesday, would "never be enough to meet growing needs".

But Jokowi's allies are confident of solid backing for him despite the anger.

"We can't deny the political impact but the solid support from all the parties in the coalition provides political stability," said Hasto Kristianto, secretary general of the Democratic Party of Struggle, of which Jokowi is a member.

A calculation Jokowi's team appears to be making is to not only cope with global inflationary pressure but also to free up funds for the president's key projects, including a new capital city called Nusantara.

Biting the bullet on fuel prices this year rather than next should also allow Jokowi to maintain influence in the run-up to the 2024 presidential election, said Indikator's Kennedy Muslim.

"In the end, Jokowi can still be an uber-kingmaker," he said. "If he can keep playing his 'carrot and stick' approach right when it comes to managing his coalition in order to weather this inflation threat."