Surging prices in Indonesia and rising inflation may erode Jokowi’s support

JAKARTA, April 10 (Jakarta Post/ANN): President Joko “Jokowi” Widodo’s approval ratings have taken a modest hit amid rising inflation, with analysts undecided as to how far his popularity might further wane.

Indonesians have been feeling the pinch of the rising global commodity prices and an energy crisis that have been exacerbated by Russia’s invasion of Ukraine, with staple food and fuel prices soaring at home.

Bawono Kumoro from pollster Indikator Politik Indonesia said there was a possibility that the rising prices would undermine the public’s confidence in Jokowi’s administration. “High gas prices and staple goods are among the most salient issues.

People feel the immediate effects in their everyday life,” Bawono said on Thursday. “Almost every time we do a survey, in which we ask about what the most pressing problems are to them, the answers almost always are, except during the pandemic, the prices of basic necessities, unemployment, and other economic issues.”

In the past few months, cooking oil prices have risen by more than 40 percent annually, data from the Trade Ministry show. People are standing in line to buy bulk cooking oil at government-capped prices, about half of the market price, which is limited in supply.

Other staples like soybeans, sugar, wheat and beef have also risen by between 50 and 90 percent annually a week before the Islamic fasting month of Ramadan, which usually sees further price hikes as demand increases for these commodities.

Approval rating down

A recent survey by Saiful Mujani Research and Consulting (SMRC) showed that most Indonesians were still satisfied with Jokowi’s leadership as he enjoyed a 64.6 percent approval rating in March.

The rating, however, has fallen by 7.1 percentage points from 71.7 percent in December as concerns about rising prices of staples, along with the perceived worsening handling of Covid-19 and concerns over the President’s term-extension plans, have started undermining public confidence.

“This seems consistent with the decline in public optimism on the future of national economic conditions. Even though the majority of the public still appear optimistic, there has been a slight decline in the last three months,” SMRC research director Dedi Irvani said.

Deni noted that people were concerned about rising staple prices as more than 41 percent of respondents said they were not satisfied with the government’s policies in making basic needs more affordable.

The pollster arrived at that result after asking 1,027 Indonesians of voting age from March 13 to 20. SMRC said the survey result had a margin of error of 3.12 percent with a 95 percent confidence level.

Indonesians will further feel the pinch after state oil company Pertamina raised the prices of non-subsidized fuels Pertamax Turbo, Dexlite and Pertamina Dex last Friday.

The government is also expected to increase the subsidised prices of the Pertalite brand of gasoline and 3-kilogramme canisters of liquefied petroleum gas (LPG), which are usually purchased by consumers in lower-income brackets.

Economists expect domestic inflation to keep rising in the coming months in response to the removal of more price controls, higher domestic demand amid easing Covid-19 curbs and the Ramadan and Idul Fitri holidays and a hike in value-added tax (VAT) that came into effect on Friday.

There is also the risk of a continued rise in global commodity prices due to the Ukraine war.

A ‘catalyst’ On Wednesday, Jokowi instructed his ministers to keep a watchful eye on soaring domestic prices.

He told them to hold more meetings to avoid policy mistakes, and to find ways to speed up social aid disbursement and to communicate policy changes more clearly, including when the government planned to raise state-administered prices.

The President also instructed his ministers to provide cash aid for 12 million micro, small and medium enterprises (MSMEs) and direct cash assistance for cooking oil to be disbursed to 23 million homes and small businesses before Idul Fitri.

Aside from serving as a social safety net, Bawono of Indikator noted the cash aid measures could serve as a political tool to retain the confidence of voters in the lower-income brackets.

“Jokowi wouldn’t want this to be a catalyst for massive social unrest, especially when we are also facing a debate on a term extension that also has the potential to spark political turmoil,” Bawono said.

Noory Okthariza from Jakarta-based think tank Centre for Strategic and International Studies (CSIS), however, argued that it remained to be seen whether the rising prices of staple goods and inflation could take a significant toll on Jokowi’s public approval.

“We have not seen any coordinated and sustained movement from the community to put pressure on the government to change its policy regarding prices of basic necessities,” Noory said.

“This has been the case in Jokowi’s era. No matter how strong the reaction, many controversial policies continued to be passed.” – Jakarta Post/ANN