By Fergus Jensen
JAKARTA May 31 Indonesians demanding more
subsidised fuel have eased a blockade of the rivers used to ship
coal out of the main producing region, an official said on
Thursday, defusing another protest that highlighted income
inequality in the booming economy.
Rising commodity exports are contributing to strong economic
growth in Indonesia and creating millionaires faster than
anywhere else in the world, but workers have pushed for a
greater share of the wealth through a series of violent protests
and strikes in the past year.
Indonesia is the world's biggest thermal coal exporter and
hundreds of activists had used small boats to block the Mahakam
and Barito rivers in Kalimantan province which are used to
transport at least 15 percent of the total coal output.
The protesters wanted to pressure the government to allocate
more subsidised vehicle fuel to their resource-rich province,
where motorists are queuing for hours at fuelling stations for
The blockade, however, failed to stop coal shipments by
Kalimantan's main miners, with officials from Bayan Resources
, Indo Tambangraya Megah and Harum Energy
saying that cargoes were flowing out unhindered.
"We had a few barges held at the Mahakam bridge at Samarinda
by demonstrators demanding the government increase the
allocation for the subsidised fuel," said Alastair McLeod, chief
financial officer at Bayan Resources.
"It is all back to normal, and all the barges that were
delayed have already departed for their respective ports."
THE POLITICS OF CHEAP FUEL
The central government has restricted supplies of subsidised
fuel, which costs nearly half as much as regular fuel, to try to
stop a surge in oil prices hurting its budget deficit.
The governors of Kalimantan, who had threatened to cut off
resource exports if their region did not get more cheap fuel,
had recently lobbied officials in Jakarta, but it was not
immediately clear if the government had ceded to their demands.
The head of the Indonesian Coal Mining Association, however,
expects the government will increase the subsidied fuel quota to
Kalimantan. "I don't think the situation will take much longer
to stabilise," said Supriatna Suhala.
Protests over fuel price hikes contributed to the downfall
of autocratic leader Suharto in 1998, and the issue remains
politically sensitive in a nation where 30 million, or over 12
percent, of the population is poor.
The parliament rejected a government proposal to ease fuel
subsidises in April and the government has since backtracked on
measures requiring large private cars to only use non-subsidised
An executive at Indo Tambangraya Megah said protesters were
still trying to stop fuel barges heading up the river. Resource
firms have also been using subsidised fuel.
(Additional reporting by Michael Taylor and Janeman Latul;
Writing by Neil Chatterjee; editing by Miral Fahmy)