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Rising food prices a hot button issue in Indonesia presidential race

Prices of staple food have increased recently, and some voters are blaming Jokowi’s economic policy.

Rising food prices a hot button issue in Indonesia presidential race

A customer buying vegetables at Jakarta's Santa Wet Market. (Photo: Amir Yusof)

JAKARTA: The Santa Wet Market in central Jakarta was unusually quiet on Sunday morning (Apr 14).

Many vendors, including vegetable seller Dedi Chandra, smiled expectantly whenever a customer stopped to have a look.

Mr Chandra told CNA that business has been slow since the price of shallots tripled recently and the cost of garlic increased by six per cent. 

“The prices are no longer within the reach of many customers from the working class or the lower income,” he said, pointing to his empty cash register. 

“Things are of course different for the rich people who have money to spend,” added Mr Chandra.

Mr Husni Abillah, a rice vendor at the same market, added that his profit margins have suffered since the price of rice rose about three months ago. The prices have stayed high even during the current harvest season.

Rice is grown abundantly in parts of Indonesia. (Photo: Amir Yusof)

“This is what happens when we import rice, the prices remain high regardless of how much our farmers produce and our businesses are affected,” said Mr Husni, who has worked at the market for three years.

“Import of rice should be reduced, as these imports have unnecessarily taken the place of locally produced rice,” he added.

Prices of staple food in Indonesia has become an important point of contention during the campaigning period for the 2019 presidential election.

Former army general Prabowo Subianto is challenging incumbent Joko Widodo - popularly known as Jokowi - for the presidency. 

He has pointed the finger at Mr Widodo for the inflation of food prices, highlighting how an over-reliance on food imports has driven prices up.


The issue, however, seems to be more complicated.

Indonesian economist Bhima Yudhistira said that while there could be inflation of food prices in the second quarter of 2019, the recent spike was because of seasonal factors rather than the economic policy of the incumbent president.

He outlined that food prices fell by 0.37 per cent in the first quarter of 2019, due to lower demand and the government's efforts to improve supply by importing food.

“In the last four years, inflation has been very low, in the 3 to 3.5 per cent range," noted Mr Yudhistira.

“If there is inflation in the second quarter, I don’t think it is related to the election. It could more likely be due to seasonal factors like Ramadan and (Hari Raya) Aidilfitri,” he added.

Mr Subianto, who is popularly known as Prabowo, has blamed Jokowi’s agriculture policies for rising imports of commodities such as sugar, wheat and corn. He said the imports have adversely impacted the market for locally produced crops.

The prices of some items like ginger and shallots have increased recently in Jakarta. (Photo: Amir Yusof)

Imports for basic commodities jumped 33 per cent in 2018, according to the trade ministry.

If elected, Mr Subianto has promised that prices for daily necessities like food will be reduced in his first 100 days in office, by halting imports of food crops to help local farmers.

READ: Winds of change blowing towards Prabowo in key Indonesian election battleground

Mr Chandra, the vegetable vendor, said reducing food imports is a positive move as local farmers, vendors and consumers would benefit.

“Previously, Jokowi promised that we would be independent and said he would stop importing food. But how come this promise has not been kept?” said the vendor, who sells ginger imported from Thailand and China, among other things.


The price hike has also impacted those who operate warungs, or small restaurants in Jakarta.

Mr Azril Mohammad Rasha, who manages an Indomie warung in south Jakarta, said he has increased the selling prices for his instant noodle dishes by around 2,000 rupiah (US$0.14) six months ago, due to a hike in prices of raw vegetables and gas.

He raised prices further recently, citing the seasonal hike in prices of ingredients during Ramadan.

Indomie is a dish that is well liked by many Indonesians. Warungs selling it have been forced to increase prices due to more costly ingredients. (Photo: Amir Yusof)

One of his customers, Mr Marulloh, who goes by one name, said that while the prices of the noodles are still affordable, the situation could change if the hike continues.

“For those who do not have a large income, like myself, this is the best place to have our meal.

Indomie allows those with a limited budget to have good food. I hope it stays that way,” he said.

Mr Yudhistira, the economist, pointed out that Mr Subianto’s promises to reduce prices would appeal to many rural voters, and this could boost his chances of winning the election which will be held on Wednesday. 

READ: As Indonesia's Widodo seeks a second term, rural voters have some doubts

“Farmers and fishermen (could be convinced) and this group could eventually be the swing voters. They are disappointed by Jokowi’s failure to fulfil his promises to decrease imports made during his 2014 presidential campaign,” he added.

However, Mr Yudhistira stated that Prabowo’s pledge to lower prices by decreasing imports is an incorrect concept. “I don't think it is possible, it is just another populist pledge,” he said.

Mr Yudhistira explained that the process of enhancing Indonesia's self-sufficiency in food should be done gradually, as the elected government may face backlash from overseas if it hastily pushes an anti-import agenda.

“During the first year (after being elected), data needs to be collected on food production and consumption,” he said.

“During the second and third year, the government should implement programmes to boost production of local crops,” he added. And in the fourth year, the government should begin to decrease food imports.

READ: 'Identity politics': How Indonesia's presidential race is run

Mr Azril, the Indomie seller told CNA that regardless of who becomes president, he hopes that reducing the price of raw food becomes a priority.

“We hope the new government would lower food prices, so that everyone would still be able to eat,” he said. “This is a basic necessity.”

Source: CNA/am(aw)


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