Indonesia's SBY Confronts a Subsidy Cut…

Indonesian President Susilo Bambang Yudhoyono’s government is facing a major test of its staying power, with thousands of demonstrators across the country protesting plans to modify fuel subsidies that cut the price of fuel nearly in half. Yudhoyono’s Democratic Party-led government already has been beset with a long series of scandals that have sapped its popularity and cut into its credibility. In the past, Indonesian governments have had a habit of caving in to such protest. However, say political analysts in Jakarta, the decision to cut the amount of the subsidy will likely prevail via a required vote in the House of Representatives, although there are political considerations. The feeling is that if Golkar, the second-biggest party in Yudhoyono’s ruling coalition, remains solidly behind the plan, the government will probably cut the subsidy.

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