Prices that bounce

Participation, Power and Social Change Research at IDS

Naomi Hossain

I’m just back from South Kalimantan, part of Indonesian Borneo, where the idea that future food prices are likely to be jump even higher because of extreme weather events feels very real. Climate, energy, food and global economic crisis all feature in an alarming combination of volatilities. In the Banjarese community where IDS partners SMERU have been researching the social impacts of crisis since 2009, most people are rubber tappers. The past year has been particularly up-and-down, mainly down, even by the elastic standards of rubber producers.

We went to see one family, where the newly-single mother and household head – call her Siti – panicked when she saw us. ‘I’ve already paid’, she said. ‘I’ve paid for this month’. She thought we were debt collectors and was already behind on her first (I suspect also last) installment for her new motorbike, easily the most popular means…

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Why predict a riot?

Participation, Power and Social Change Research at IDS

Naomi Hossain

Like millions of Indonesians, I watched the protests against the fuel subsidy cut as it was debated in Parliament last week. They were at it (debating, not protesting) into the wee hours; in the end, the protests were big and ugly enough for the opposition and coalition partners to hold the ruling party to ransom. They fudged it, agreeing that if the global fuel price goes up a lot, they will act. Result? Unruly politics – 1; responsible fiscal policy – 0.

Technocrats and policy types all agree the fuel subsidy is A Bad Thing. It cost US$18bn last year- more than half of spending on education (US$£32bn). The Iran situation will increase global fuel prices. 60-70% of the fuel subsidy benefits the richest 40% of Indonesians. But because fuel subsidies are so economically irrational, technocrats and policy types fail to analyse the political responses and easily discount…

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