Indonesia's President Pulls Off A Key Reform
On Feb. 28, the calculated gamble of Indonesian President Soesilo Bambang Yudhoyono to cut fuel subsidies won applause from the financial markets and, apparently, grudging acceptance from the public. The reform, which raised prices for gasoline, diesel, and other fuels by 30%, sparked a 1.8% jump on the Jakarta stock market. Street protests against the move broke out in several cities but quickly fizzled out -- a big change from 1998 and 2003, when thousands protested efforts at fuel price reform. Yudhoyono's deft handling of the fuel issue will strengthen his hand as he tries to implement an ambitious agenda to boost infrastructure spending and lift economic growth from last year's 5% to 7% by 2007.
Edited by Rose Brady