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conomists and executives are saying that President Susilo Bambang Yudhoyono is unlikely to introduce unpopular policies before the next elections in 2014, although he said he might do so in a speech last week.

Speaking before the Cabinet at the Bogor State Palace on Friday, Yudhoyono said that the government might embark on “unpopular” policies for the sake of economic security in 2013.

“I want the people of Indonesia to understand our reasoning if we implement unpopular policies. Please believe that whatever we do, we will continue to protect the people, especially those on lower incomes,” Yudhoyono said.

The government’s proposed budget for 2013 has been criticized for increasing the energy subsidy to Rp 274.74 trillion (US$28.9 billion), while business executives have asked that the subsidy be slashed in favor of increased capital expenditure.

Indonesian Institute of Sciences (LIPI) economist Latif Adam said that it would be unlikely for the government to introduce potentially unpopular policies in the medium term, such as raising the price of subsidized fuel to reduce pressure on the state budget.

“The year 2013 will be a highly politicized period as it is nearing the 2014 general elections. I believe that the government’s agenda to maintain a good political image will be more crucial for executive policy makers than to properly manage the economy,” Latif said on Sunday.

Fuel is not the only subsidy that the central government has evinced interest in cutting. Finance Minister Agus Martowardojo previously said that the government would introduce plans to gradually raise electricity rates for consumers across the board to book an overall 10 percent increase in rates by the end of 2013.

The government has estimated that it might reap upwards of Rp 12 trillion from the rate increase that could be allocated for additional capital spending, which has been budgeted at Rp 193.83 trillion — a figure that critics say is not enough for sustainable economic growth.

Separately, Indonesian Employers Association (Apindo) chairman Sofjan Wanandi said that he doubted the government would cut subsidies, dismissing Yudhoyono’s speech as inadequate for executives who were expecting significant increases in capital spending.

“The idea to cut subsidies to increase the allocation for infrastructure has been raised for the last eight years and, as of now, no concrete measures have been taken by the government,” Sofjan said.

Bank Mandiri economist Destry Damayanti said that Yudhoyono’s speech could be evidence of a commitment to boost electricity rates next year, although she wanted the government to be more clear on its intention to cut fuel subsidies.

“I have yet to see any clear policy on subsidies, except on electricity subsidies,” she said.