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Hundreds protest Indonesia price hikes near palace

JAKARTA: Hundreds of Indonesian left-wingers demonstrated near the presidential palace on Monday in protest at government plans to slash fuel and electricity subsidies.

Around 500 supporters of the left-wing People's Democratic Party (PRD) staged the protest as its leader Budiman Sudjatmiko met President Abdurrahman Wahid. "People united cannot be defeated," they chanted.

Police looked on but there was no violence. The protesters held banners which read: "Reject the hike in fuel and electricity prices".

Afterwards Sudjatmiko, recently freed from jail by Wahid under a presidential amnesty, told reporters that the president had told him moves to cut the subsidies were intended to ensure Indonesia would not ultimately depend on foreign donors.

Indonesia announced on Friday that it would raise top-end electricity prices by an average 29 percent from April 1. It also plans to cut fuel subsidies.

Jakarta is dependent on a more than $45 billion aid package led by the International Monetary Fund, which is pushing hard for subsidies to be cut.

However, an earlier attempt to cut fuel subsidies in 1998 was followed by mass rioting that contributed to the fall of President Suharto shortly after.

Sudjatmiko was jailed by Suharto after riots in July 1996, but was freed late last year after Wahid's election.-Reuters