Troops and police have been deployed on the streets of the town of Kragan on the Indonesian island of Java after several shops were damaged by a crowd protesting over rising prices.

The violence began after unfounded rumours spread of an imminent increase in the price of fuel used for cooking.

Economic woes have led to panic buying

There have been several other outbreaks of violence in rural Indonesia over the past three weeks connected to price rises.There has also been some panic buying in the capital, Jakarta.

Local officials in the coastal town of Kragan say an angry crowd of around a hundred people rampaged through shops for four hours before the security forces were able to bring the situation under control.

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Under the terms of an economic reform package agreed with the International Monetary Fund, the government is planning to reduce the subsidies which keep down the price of petrol, but it will keep subsidies for kerosene, which is used for cooking.

A BBC correspondent in Jakarta says this is always a sensitive time in Indonesia, as families spend a large portion of their income on food and gifts in the lead up to the Muslim Eid al-Fitr holiday.

This year, tension has been much higher because of the economic crisis which has pushed food prices even higher and put millions of people out of work.

Some members of Indonesia's ethnic Chinese community have expressed concern over rising hostility from the majority Muslims. The Chinese, who make up just three per cent of the population but control much of the country's wealth, are often targetted during periods of economic hardship.

The correspondent says many of the shops attacked during these latest incidents are owned by ethnic Chinese. The authorities have responded by trying to increase the supplies of cheap food and insisting that the Chinese keep a low profile.

As in previous years, public celebrations of Chinese New Year have been banned in Jakarta.

The authorities are blaming a drought in much of the country and the collapse of the value of the Indonesian currency for the price rises.
 

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