P

erhaps more than anything else, it is the price of fuel that influences the cost of almost everything, touching the lives of just about everybody in the country. Ever since the decision was floated as a trial balloon in February, the rumor mill has been working overtime. We’ve heard just about everything. Dark plots of a military coup right through to large-scale rioting that will set the country ablaze are among the stories that have done the rounds. The Blackberry Messenger, or BBM as it is popularly known, has been one of the instruments to engage in the ongoing and all-embracing debate on the other BBM, also the acronym for Bahan Bakar Minyak.

The impact on the KADIN-Roy Morgan Consumer Confidence index was immediate and punishing. The rating shed over 10 points in a single month, bringing back memories of a similar plunge the last time a raise was introduced. Commenting on the February results, Suryo Sulisto, chairman of KADIN, said, “This had to happen, it was inevitable. This is a good time for the fuel price hike to be introduced. Consumer confidence has been riding sky-high for a very long time, despite the gloom worldwide. It was time to burst the bubble. The increase will bring fuel prices closer to realistic levels. The subsidies have been too much for too long. Hopefully, some much-needed attention will finally be paid to the development of infrastructure and essential services.”

The Bank Indonesia monthly rating also dived, shedding six points. No surprise. But the difference between the two ratings made one noticeable difference crystal clear. The prospect of the hike is being received with even greater trepidation outside of the selected cities surveyed by the central bank each month. A look at the details will reveal the extent of the shock. Consumer confidence is down 10.2 points in February, the lowest since September 2010, when it stood at 132.3. Now it is two points lower than the 138.8 registered exactly a year ago in February of 2011.

The month’s big fall was driven by decreasing confidence across all components of the survey. In terms of personal finances 37 percent, down four points, say their family is ‘better off’ financially than a year ago. This continues to compare favorably with the 18 percent, up six points, who say their family is ‘worse off’ financially than a year ago. But the good news is that 54 percent of Indonesians still expect their family to be ‘better off’ financially this time next year. Remaining in the majority, the drop from the high of January was a mere five percentage points. I say a mere five points because the drop is relatively small in comparison with the overall crash of the index by 10 points. Similarly, the number of people who expect to be ‘worse off’ financially went up to just seven percent, up by only four points. Under the circumstances, these drops aren’t as severe as I would have expected.

In terms of the economy, 74 percent of Indonesians continue to believe that the nation will enjoy ‘good times’ financially during the next twelve months. In contrast, 26 percent, up six, say we’ll have ‘bad times’ financially. An overwhelming majority of 82 percent, down five, remain convinced that Indonesia will have ‘good times’ economically over the next five years. The people who expect ‘bad times’ economically went up by five points, to a relatively small 17 percent of the population.

A slight majority of Indonesians, 51 percent down five, continue to say ‘now is a good time to buy’ major household items. This is now closer to the 46 percent, up six points, who believe ‘now is a bad time to buy’ something like a refrigerator or TV set. Remarkably robust, under the circumstances.

To put this all in perspective, it’s an appropriate time to make a comparison with our wealthy neighbours down under. Indonesia’s score of 136.8 in these troubled times, is still higher than Australia’s best-ever of 133.2 in January 2005. These are the ratings from the same questions being asked for 40 years in Australia and seven in Indonesia, by the same institution in both countries, Roy Morgan Research. Even if we were to accept the usual stereo-typing of ‘optimistic Indonesians’ and ‘realistic Australians’, the confidence in both today and tomorrow expressed across the archipelago augurs well.

The prognosis is visible in the recent pages of Indonesia’s eco-political history. I expect confidence levels to drop some more in March and April. I’m not a fortune-teller but if the past is anything to go by, expect a plateau by June and the climb back upwards again, commencing July.

Is this why a beguilingly confident President Yudhoyono is off to China this week, ahead of the much-touted demonstrations starting today? Strange timing. And how much of the savings in subsidies will go to the common good and how much to the country’s Gayuses and Nazaruddins? Two questions I thought that were worth asking. Go figure.

The monthly rating is based on 2,106 face-to-face interviews conducted throughout Indonesia, not just a handful of cities. Men and women aged 14 and over were randomly selected during the month of February 2012.

The writer can be contacted at debnath.guharoy@roymorgan.com