New food riots hit crisis-stricken Indonesia

There were food riots in Indonesia yesterday, as people prepared for a holiday which may mark a watershed in its economic crisis. Richard Lloyd Parry, in Java, reports.

The two-day Chinese New Year, which ends today, will be followed tomorrow by Id al-Fitr, marking the end of the month of Ramadan for the 180 million Muslims in Indonesia.

When shops and offices reopen next week, the country could find itself over the worst, or bogged down still deeper in the social unrest cause by what has, until now, remained largely an economic problem.

Share prices rose yesterday, the day after the government announced banking reforms and a programme to reschedule debts owed by private companies to foreign banks. The measures, supported by the use of central bank reserves to strengthen the rupiah, appear to have been timed to boost morale in advance of the holiday.

If all goes to plan, Indonesians will return to work next week to embark on the long and painful task of rebuilding their economy, but without the risk of further plummets in the price of the rupiah which have undermined foreign confidence so disastrously. But it may mark a watershed of a different kind, as personal hardship brought about by the crisis hits home for the first time.

Newspapers in the city of Surabaya yesterday carried reports of riots in remote coastal towns in Central Java earlier this week. In Kragan and Sarang, near the border between Central and East Java, mobs smashed and looted shops owned by ethnic Chinese after rumours that they had raised the price of kerosene used in cooking stoves. A truck was burned and a church damaged but, according to local people, nobody was hurt and police and troops had restored order by yesterday.

Id al-Fitr, when Muslims celebrate the end of a month of fasting, is the closest thing Indonesia has to Christmas, a time when families return to their home towns to feast and exchange presents. It is traditionally the time when workers are rewarded by bonuses, but with most Indonesian companies technically insolvent, many people will return to their families without extra holiday pay.

The rising cost of basic foods will put a further dampener on the festivities. Public celebrations of the Lunar New Year are banned in Indonesia, but the proximity of the Muslim and Chinese festivals also raises opportunities for ethnic tension.

But the real test will come when the holidays end. So far there have been widespread forecasts of rising unemployment, but few sackings. The fear is that thousands of Indonesians will make the return journey next week to find their jobs gone.

In Singapore, which has suffered much less than Indonesia, the prime minister Goh Chok Tong delivered a pessimistic New Year message. "Bonuses will be smaller," he said. "More workers will be retrenched and finding new jobs will be more difficult for them."

Indonesia and arms, letters, page 20