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Page added on February 28, 2008

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Indonesia blackouts may be sign of dark years ahead

JAKARTA, Feb 28 (Reuters) – Sudden blackouts on two key Indonesian islands last week may be just the start of a spiralling two-year power crisis that could stymie economic growth, curtail resource exports and trigger social unrest.

Outages on the main commercial islands of Java and Bali, the country’s worst since a day-long blackout brought Jakarta to a halt in August 2005, were due to storms that hit coal deliveries and exposed the precarious balance of Indonesia’s power supply.

After chronic underinvestment and steadily growing demand from an economy growing at its fastest pace in a decade, analysts now see a crisis on the horizon for the world’s fourth-most populous nation, which holds elections next year.

“The situation in Indonesia is worse than anywhere else in Asia,” says Joseph Jacobelli, head of Asia-Pacific utilities research at Merrill Lynch.


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