Billions of dollars from the International Monetary Fund began flowing into the Indonesian economy yesterday. But to qualify, Jakarta sharply raised the price of fuel, electricity and transport for the country's 200 million population, heightening the danger of a social explosion.
Petrol prices went up 71 per cent in line with the IMF conditions for its US$43 billion rescue package for the Indonesian economy, which includes the removal of costly subsidies on fuel and all basic commodities, except rice.
Yesterday the cost of kerosene, the cooking fuel used by the poor, went up 40 per cent, diesel fuel was increased by 35 per cent, and diesel used by factories 28 per cent. Bus fares went up between 33 and 40 per cent and commuter train tickets in Jakarta doubled in price. Electricity tariffs will increase by 20 per cent this month and a further 20 per cent in August and November.
The Indonesian Consumer Association warned that the increases could cause "social turbulence and panic", coming on top of growing unemployment and sharp rises in food prices. "The people's burden is already heavy enough; with prices going up more and more, how are they going to survive?" the association's chairwoman, Ms Tini Hadat, said. "I am afraid this will cause social turbulence and panic."
Indonesia's military command has responded to student demonstrations against President Suharto by warning that a crackdown is planned.
"There is proof that if students go out on the campus, the protests become uncontrollable," the Defence Minister, Gen Wiranto, said on Monday after meeting Gen Suharto. "Therefore I have ordered the military to take stern action against activities that are clearly moving toward anarchy."
However, support for the student rallies which the police have largely confined to university campuses seems to be growing, with angry citizens joining in. The worst violence this week took place in the North Sumatra city of Medan on Monday where two people were reportedly shot and wounded as a 1,000-strong mob burned a police post, a shopping mall and several cars.
Police fired tear gas at about 1,500 students yesterday in Medan, a key commodities centre with a population of two million, as they tried to leave university grounds to rally on the streets.
Protests also took place in the capital Jakarta and Surabaya, Yogyakarta and Bandung. Despite the military warning, protesting students in Jakarta were allowed to leave university grounds yesterday to make a campus-to-campus protest march.
Reports about the disappearance of student and opposition activists have become persistent, with the US State Department urging Indonesia to look into allegations that opposition activist, Mr Pius Lustrilanang, was abducted and tortured. The 30-yearold protest leader was released and is said to have fled to the Netherlands. At a news conference on Monday in Jakarta he said he had been kidnapped, beaten and subjected to electric shocks. He said kidnapped government opponents were being taken to a secret interrogation centre in the Jakarta area.
The father of Mr Andi Arief (27) claimed his son was abducted from the family shop last month after leading student demonstrations in the Sumatran province of Lampung. He said he had been chained to a chair for three days and threatened with guns.
Some 14 students and opposition activists were reported to have disappeared in Indonesia in the past few months. The government denies any knowledge of their whereabouts but has promised an investigation. Nine have returned home, but five remain missing.
The Indonesian Human Rights Commission said in a statement: "There is now a growing perception among the public that there is a possibility the state security apparatus is involved. These forced disappearances are terrible violations of human rights. They caused suffering on the part of the victims and their families, spread fear among the society and tarnished the image of the nation."
A delegation of some 50 students testified at the office of the Indonesian Human Rights Commission that at least 100 protesters were injured in Jakarta in clashes during the weekend in which police used rubber bullets and beat students with sticks, breaking several skulls.
Gen Suharto told leaders of the country's three legal political parties in a rare crisis meeting on Monday there would be no political reform for at least five years and indicated his government would crack down on attempts to disrupt national stability.
The Home Affairs Minister, Mr Hartono, quoted Gen Suharto as saying: "If there is any intention for political reform, it should be prepared for the year 2003 after the present government finishes its term. If the people want changes, they should make good preparations for the next general elections." Meanwhile, Gen Suharto said, "Any attempts to disrupt the interests of national development and stability should be countered."
Fears of social unrest unsettled Indonesian financial markets yesterday and the approval of IMF loans failed to lift share prices or the currency. Indonesia's economic chief, Mr Ginandjar Kartasasmita, said his country expected $7 billion in international assistance over the next three months: $3 billion from the IMF, $1.5 billion from the Asian Development Bank, $1 billion from the World Bank, $1 billion from Japan, $300 million from Australia and $250 million from Malaysia.
The IMF said when it approved the release of the funds on Monday night that it would watch carefully to ensure Jakarta implemented the tough reforms to which it had agreed. Gen Suharto was quoted by senior IMF adviser Mr Prabhakar Narvekar as saying yesterday the decision to rise fuel prices had been difficult, but Indonesia would stick to the reform programme.
Payments to Jakarta had been frozen for nearly two months because of doubts about the Suharto government's commitment to economic reform. The Indonesian rupiah collapsed by 70 per cent since last July as the economy fell apart amid bank closures, rising prices, growing unemployment and sporadic riots.