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ASIET Net News 10 – March 8-14, 1999

 Democratic struggle

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Democratic strugge

Aceh students protest against Mobil Oil

International Forum for Aceh - March 10, 1999 (summary)

150 students on work experience from Syiahkuala University, Banda Aceh, who have been placed in North Aceh protested against Mobil Oil Indonesia on Monday 8/3.

The students protested with banners and by making speeches demanding that Mobil Oil take full responsibility for the environment, work force, community development. The protest took place between 10.00 and 15.00.

The students were warmly received by hundreds of local people who accused Mobil Oil of cheating them over compensation for land which the company had appropriated. Padi fields were compensated at only Rp 214/meter, whilst other land was compensated at only Rp 180/meter.

Mobil Oil reaped the reward of Acehnese natural resources whereas the Acehnese people themselves continued to be cheated by Mobil. Moreover, Mobil supported DOM (military operational zone), they shouted using megaphones.

The number of people gathered blocked the road into and out of Mobil Oil offices at Point A, and Mobil Oil workers had to leave by the airstrip road.

Dozens of local people gave food and water to the students. "We have not taken part in the demonstration, but we have helped our younger brothers and sisters who are the students according to our ability, because they struggle on our behalf," said Tengku Haji Umar, one of the local residents. He also confirmed the land compensation figures to Waspada.

Public relations officer, Muslim Basyah and H Anwar Iska as well as a number of other Mobil Oil staff were not able to do very much. They said they would accept the students proposal to meet with Mobil Oil management.

After talking with the public relations people, the students left the area in an orderly fashion at around 15.00, and returned to the subdistricts where they were posted, at Lhoksukon, Syamtalira Arun, Matang Kuli, Tanah Luas and Tanah Jambo Aye.

Students throw rocks at police in Jakarta

Associated Press - March 11, 1999

Jakarta -- Student protesters, demanding the resignation of President B.J. Habibie, threw rocks at riot police who blocked them from marching on to Parliament Thursday.

The march through central Jakarta was the latest in a series of anti-government demonstrations by students unhappy about the pace of political reform in the world's fourth-most populous nation.

Witnesses said about 300 students marched from a college campus, shouting, "Step Down Habibie!"

They were stopped by a lines of police about two kilometers from the legislature. Traffic was blocked but there were no reports of arrests or injuries.

The protests come despite a plan to hold parliamentary elections on June 7. The ballot, to be contested by 48 parties, is expected to be the most open poll held in Indonesia since 1955.

Students demand Suharto trial

Straits Times - March 10, 1999

Jakarta -- Indonesian students pressing for the trial of former President Suharto say it is the only way to restore public faith in the government of Dr B.J. Habibie, The Jakarta Post has reported.

"It cannot be denied that people really believe the present government is a continuation of that under Suharto," Mr Guntur Prisanto, organising chairman of a three-day student dialogue told the newspaper.

This meant that restoring public trust was a vital step, he said, adding that continuing the investigation into the wealth allegedly accumulated by Mr Suharto during his 32 years in power would not restore faith in the government automatically. But it would at least be a good start, he acknowledged.

The dialogue was aimed at learning the aspirations of students, especially those living outside the big cities. It involved 100 students from 51 universities and colleges, and representatives from 33 student groups in 18 provinces.

Mr Guntur said a trial for Mr Suharto, who was ousted from power last May, came up as a main subject. But he added that "frankly, issues brought up by students in Jakarta do not always reflect concerns of students in the regions".

Students in major cities like Jakarta and Surabaya have been vocal over the issue of putting Mr Suharto on trial -- and have been more critical over the pace of investigations by the Attorney-General's Office.

Concern about the pace appears to have been heightened following a leaked telephone conversation, allegedly between Dr Habibie and Attorney-General Andi Ghalib, in which they discussed the investigation.

The conversation, a transcript of which was first published in a current affairs magazine, gave the impression that the probe was just for show, to ease tensions and to spare the former Indonesian leader from facing "a people's court".

Mr Andi has denied ever holding such a conversation, but Dr Habibie has not denied that the tape is genuine, and his advisers have confirmed implicitly that it is not a fake.

Other points raised by students included a demand to eradicate corruption, collusion and nepotism at all levels; a call to end discrimination under the law; and the return of community-owned land "which was forcibly brought under the control of the government, the private sector or other related parties", the Jakarta Post reported.

[On March 11 AFP reported that some 100 students rallied outside the defense ministry to demand the resignation of armed forces chief Wiranto, for his failure to halt the violence in Ambon. Calling themselves the Rawamangun Student Forum, they chanted "Wiranto useless" and demanded that the military -- including those high-ranking officers "whose hands are stained with the people's blood" -- be held responsible for human rights violations in the past - James Balowski.]

Student power: the Indonesian example

Green Left Weekly - March 10, 1999

Chris Latham -- Last year featured the largest protest movement in the history of Indonesia. These protests, which mobilised millions of people, ended the dictator Suharto's 32- year reign. They were primarily built by students.

How did students, a section of society which we are told has no economic or political power, bring about the downfall of the region's longest surviving dictator?

The protests developed around two key issues: the economic crisis and the lack of democracy in Indonesia. The collapse of Indonesia's currency, the rupiah, in early 1998 led to massive inflation and unemployment. The International Monetary Fund's (IMF) economic restructuring package required a reduction in government subsidies on rice, cooking oil and kerosene, causing shortages and hardship for millions.

Widespread dissatisfaction with Suharto was expressed in the lead-up to the March 10 meeting of the People's Consultative Assembly (MPR), Indonesia's parliament. This reflected a growing recognition that the MPR was simply a "rubber stamp" for decisions already taken by Suharto and the ruling elite.

On March 10 in Yogyakarta, the day of Suharto's reappointment as president for a seventh five-year term, 10,000 students marched chanting, "Bring down prices, bring down Suharto!".

Throughout 1998, the Suharto and B.J. Habibie regimes had attempted to intimidate and smash the student movement. At first attacking protests that attempted to leave campus, the regime became increasing desperate as the rallies began to grow and become more radical. They resorted to abducting, murdering and torturing student activists, and firing on protests.

These attacks only served to highlight the need for change and strengthened public awareness that students were suffering at the hands of the military because they were fighting for the people. The shooting of four students at Trisakti University on May 12 provoked outrage throughout Indonesia.

Between May 14 and 20, students took over the state-owned radio stations in Surabaya, Malang and Semarang, and the TV stations in Padang, West Sumatra. Occupations of regional parliament buildings occurred in a number of cities.

In Jakarta, students met after the shootings to discuss tactics. The more radical students proposed the mobilisation of workers, who were ready to join the students for the May 20 rallies. In a debate within the Jakarta-wide Forum Korta (Forkot), conservative students from the Tertiary Students' Student Senates argued that the involvement of non-students would lead to rioting.

The radical People's Democratic Party (PRD) argued that the urban poor would come out on the streets anyway and that students should build alliances with these forces and provide clear political direction. The more conservative students won the vote.

On May 20, approximately 500,000 people mobilised in Yogyakarta. In Jakarta, 150,000 occupied the grounds around the parliament. Forkot students established check points to physically prevent people without a student card from joining the protest.

Suharto's Resignation

In the face of mounting opposition, Suharto resigned from the presidency on the morning of May 21. Suharto's resignation and his replacement by Habibie had a demobilising effect on the movement. How could a movement which had succeeded in removing a dictator be mollified with such small concessions?

Suharto resigned not because of the immediate impact of the movement but because the regime feared the protests could escalate and the radicalisation deepen. Such a development could have resulted in the student movement in Jakarta following the lead of students in regional cities by forging links with peasants, the urban poor and workers. Suharto's resignation removed the focus of mass anger without requiring any real reforms or redistribution of the vast assets controlled by Suharto and his family.

The more radical students did attempt to restart the student mobilisations in late June to call for Habibie's resignation. These protests were met by counter-mobilisations by conservative students who argued it was necessary to give Habibie time to prove himself.

On November 9 to 13, a special session of the MPR, composed of the same individuals who had re-elected Suharto president in March, met to set the date for national elections and determine the composition of the parliament. On November 11 to 14, mass protests occurred in Jakarta against the session. Four demands united the protesters: reject the special session of the MPR; abolish the dual role of the armed forces (called dwifungsi); put Suharto on trial; and establish a provisional government.

There was some disagreement about what was meant by a "provisional government". The Jakarta Student Senate Communication Forum demanded a presidium made up of figures in the political elite who have real mass support and a reputation of being free of corruption. Forkot demanded a people's committee comprising a broad range of figures and organisations active in the democracy movement.

The PRD, the Student and People's Committee for Democracy, Workers' Committee for Reformation Action (KOBAR) and Megawati Supporters' Committee campaigned for a democratic coalition government made up of progressive forces that have struggled consistently for democracy. They argued that it should be controlled by people's councils established from the district level.

The early protests mainly consisted of university students, although some urban poor were involved. The number of urban poor, however, grew to massive proportions in the later protests. The first day mobilised 5000 people, and the second day drew 10,000. On the third day, November 13, the numbers reached almost a million and virtually surrounded the parliament.

The protests were attacked by 30,000 troops and brigades of thugs (pan swakarsa) armed with sharpened bamboo. Eleven protesters were killed by the military. During the fighting, the urban poor defended the students, killing four members of the pan swakarsa. They placed 20,000 rupiah notes on the bodies to indicate they were paid vigilantes.

Organising Workers

Students involved in the PRD and its student organisation, Students in Solidarity for Democracy in Indonesia, have played an important role in organising workers in Indonesia. Through establishing the Indonesian Centre for Labour Struggle and involvement in KOBAR, the PRD has fought for workers' right to organise in trade unions.

The movement has undermined the government's propaganda that workers were being "used" by "communists". It has become easier to involve workers in actions around political, as well as economic demands.

The national elections scheduled for June 7 will dominate Indonesian politics in 1999. Many students will act as election monitors. The PRD's participation will allow it to reach many people and will highlight that it is the only party to oppose the IMF's austerity package and to consistently call for an end to the military's involvement in politics.

The dramatic events in Indonesia show the power of student political protest. Students were able to detonate a mass movement for democracy and continue to lead the movement for fundamental change.

Political prisoner sends greetings on IWD

Green Left Weekly - March 10, 1999

Following is the text of an International Women's Day message to Australian activists from Indonesia's only woman political prisoner, DITA SARI. Sari, a leader of the People's Democratic Party, is serving a five-year sentence in Tangerang Women's Prison in Jakarta for daring to struggle for workers' rights in her country.

Dear sisters, This is the third time I have written to you from my prison cell. Three years have passed suddenly, and many changes have taken place. Even though the form and method of our struggle also changes, I'm completely sure we keep the same high spirit alive in our hearts.

On this historical event, I would like to share with all my sisters around the world who search for freedom and justice for the oppressed groups in their society.

My country, as you may know, is going through a hard and deep crisis. The distressed economy has affected not only families in the city, but also millions of children, women and men in the rural area. Millions of workers have lost their jobs. Almost 20% of Indonesian children have dropped out of school. The prices of basic commodities have increased day by day.

I read in the newspapers about all the suffering from behind the prison wall. I read about riots, killings and criminal actions.

I also read about the political dynamic which is intensifying -- the hundreds of political parties announced every week. In this kind of situation, what is women's position and what role can they play in my country?

For years we have tried to open the door that leads to a more democratic state. For years we have fought for better wages and respect for the political rights of the working people. For years also we've lived in terror, fear and under the traumatic shadow of violence. Now the door is finally open; this is not a gift from heaven, but the gift of long struggle and sacrifice.

In my cell, I often think about the women workers of my union. I finally realise that this is the time for Indonesian women to take up every space and opportunity that comes during the democratic process.

Every opportunity that is produced by our historical fight must be fulfilled by women. We need lots of strength and power to overcome the crisis and I believe women should be the main part of this strength, play decisive roles in the political field and start to take the leadership in every sector they are involved in.

Democracy without the equal treatment of the sexes is only democracy in appearance. Equal treatment will also be a gift of the continuous fight against all kinds of discrimination around us.

Now, women have to chose whether to become a victim or a fighter. Sisters, three years in prison has made me learn my lesson well. In the middle of various political issues, women's prison seems to be a silent community. It is not isolated from the world, but it's not completely part of our surroundings. But, still messages of solidarity from many parts of the world reach my cell. It feels like every time a letter of solidarity arrives the rose in my cell blossoms. That is a very warm feeling, that is what I would like to share with you, through this letter.

I wish I could be there, like I was four years ago. I miss being at the IWD rally with sisters in Perth and Sydney. Thank you for all the solidarity you have given to me. I hope to see you in the next, better, time.

Dita Sari Chairperson Indonesian Centre for Labour Struggle

More than 200 arrested in IWD protests

Agence France Presse - March 8, 1999

Jakarta -- Indonesian police arrested more than 200 protestors in separate demonstrations marking International Women's Day on Monday, witnesses said,

In the first sweep policemen and policewomen rounded up 59 women protesting against violence against women and other human rights abuses outside the local office of the United Nations, witnesses said.

There was no violence as the police bundled them into buses. They were driven off singing protest songs. Police said they had not applied for a permit to demonstrate.

Earlier the women, most of them students, and a few men had tied purple ribbons onto the arms of the riot police stationed in front of the UN building on Jakarta's Thamrin boulevard.

In the second protest the military hauled in some 150 students and other protesters at the back entrance of the Defence Ministry.

"Stop the violence against women ... investigate all the cases of violence against women in Aceh, Ambon and East Timor," the group said in a statement, referring to troubled areas where many rapes are blamed on the military.

The protesters, who also object to the military's role in politics, were peacefully rounded up by some 300 troops and loaded onto four military trucks. "Revolution, revolution till we die," the group of men and women chanted as they stepped into the trucks.

Earlier Monday a separate group of some 100 women migrant workers staged a noisy protest in front of the Ministry for Women's Affairs demanding better protection for housemaids and domestics working in foreign countries.

Banging pans and other kitchen utensils, they waved placards reading "We need protection, we're not slaves!" and "Unite migrant workers."

The protest was organized by the domestic servant section of the Union of Indonesian Migrant Workers.

The group said in a statement that domestics working overseas were the group most susceptible to exploitation and violence.

The situation is aggravated by the government's "ignorance" of their problems, with officials often dismissing them with degrading comments, the group said.

Indonesians working in foreign countries, thousands of them in the Middle East, are mainly manual workers or domestics.

The protest coincided with an international seminar on businesswomen and entrepreneurship, which was opened by President B.J Habibie.
 
East Timor

East Timor: skills drain away

Financial Times (UK) - March 13 1999

Sander Thoenes -- The prospect that Indonesia may annul the 1975 annexation of East Timor before the end of this year, following a vote in which Timorese are expected to reject an offer of autonomy, has sent thousands of non-Timorese packing. As they hold most of the skilled jobs, own most of the shops and hold most of the funds, they are taking East Timor's economic infrastructure with them.

The hospital in Dili has not a single surgeon left, only half of the doctors it used to have, and a fraction of the medicine it needs. Some 2,950 of 3,660 state high school teachers have asked for a transfer.

Half the shops have closed and supplies are falling as fewer and fewer ships bring in goods from Indonesia. Bereft of garages or spare parts, public transport is at risk as well.

East Timorese accuse the Indonesian military of encouraging the exodus by blocking food supplies and setting up paramilitary groups, which have killed dozens of pro-independence activists in recent weeks and sown fear of civil war.

"There is a campaign to make it seem East Timor is not ready for independence," said Arlindo Marcal, preacher at the protestant church in Dili. "I don't see any other source of conflict than the military."

This reporter saw five truckloads of Timorese paramilitary under the command of three men of Javanese appearance with military style crewcuts. Even pro-Indonesian Timorese say the gangs were armed by the Indonesian military.

Diplomats, too, believe at least some of the current hardship in East Timor has been orchestrated by the hardliners in the Indonesian government, part of an effort to persuade liberals in Jakarta, foreign countries and the East Timorese themselves that autonomy would be better than independence.

Earlier this week Indonesia delayed its proposal on East Timor's status to the United Nations, raising concern that it had changed its mind on a January pledge to grant independence if an earlier offer of autonomy were rejected. It then suddenly dropped opposition to a direct vote in East Timor on the issue, however, leaving its autonomy proposal looking rather academic, as most Timorese are expected to opt for independence.

However much exaggerated, the exodus underscores the real cost of breaking away from Indonesia. Many migrants said they would leave even if East Timor managed to make a peaceful transition to independence, simply because they risked losing citizenship, civil service pay and, for traders, privileged access to credit and licences that helped keep Timorese marginalised in their own economy.

Many proponents of independence are confident that an offshore oil and gas field, large coffee plantations, marble mines and generous foreign aid would fill that void. "To feed the East Timorese will not be so difficult," says Jose Reis, member of CNRT, an umbrella for East Timorese groups. "East Timor has a lot of potential. And the world won't close its eyes on East Timor."

But the Timor Gap oil and gas field, shared with Australia, remains a dream until significant reserves are found. It is separated from the Timor island by a deep trough, making East Timor less attractive as a support base or processing site.

The military has plundered coffee plantations, marble deposits, teak and sandalwood, and torched large tracks of forest to chase rebels out of hiding. The large coffee plantations have been run into the ground by a company tied to Indonesian generals, who also monopolised the coffee trade and discouraged farming by offering low prices.

Politically, East Timor is far from secure as well. It is divided in tribes, languages and old rivalries, deepened in recent years as some opted to collaborate with Indonesia while others joined the guerrillas. Centuries of Portuguese colonialisation and 24 years of war and occupation have ill prepared the Timorese for ruling themselves, let alone a surprise independence.

CNRT is seen as a model for a new coalition government of East Timor but the organisation counts only 10 full-time volunteers. Its candidate for the presidency, Jose Alexandre "Xanana" Gusmao, is a popular rebel leader whose only proven skill is guerrilla warfare.

"If CNRT does not get its act together, a feudal structure will take its place," adds Rui Lourenco da Costa, a human rights activist. "Xanana is democratic but he could be a dictator because some of the people around him are not. They have no experience with democracy."

Mr Marcal insists that the East Timorese needs are small. "It's not like we're expecting to build a state like Singapore," he says. "We want to feel safe and have enough to eat. Walking the street at night and not being afraid -- that is independence. That won't be such a problem."

Armed militias sow fear in East Timor

Reuters - March 12, 1999

Andrew Marshall, Maubara -- A pro-Indonesia militia controls this town. Men armed with rifles, spearguns and knives patrol the streets.

Maubara has been torn apart. Thousands have fled in fear for their lives. But the men accused of causing the trouble say it is not their fault.

"People who say we spread terror, that we have driven people out, are lying," said Manuel Sousa, commander of the Besi Merah Putih (Red and White Iron) militia, which has taken its name from the colours of the Indonesian flag.

"It is the pro-independence forces who are doing this. The reason Besi Merah Putih must exist is to stop their intimidation, to defend ourselves."

The prospect of independence has left a bitter gulf between East Timorese who want to stay part of Indonesia and those demanding freedom.

In Maubara, on Timor's north coast some 45 km (30 miles) west of the capital Dili, the result has been violence, intimidation and deepening poverty. Besi Merah Putih has taken over the town.

Scared of dying

In the nearby town of Liquica thousands of people from Maubara have a different view of Besi Merah Putih. They are staying in dozens of houses, school buildings and offices after fleeing their town. Food is short.

"I left because of the intimidation, the terror," said stall owner Costoalo Dos Santos, 27. Asked who drove him out, he said: "Besi Merah Putih."

A nun in a centre providing food says more than 2,000 people have come. "They believe if they return, they will die," said Sister Pascalia.

Back in Maubara, Sousa's command post is a thatched wooden building. Sitting inside, surrounded by members of his rag-tag army, Sousa said his militia set up its base there last month after constant threats from pro-independence guerrillas.

The red and white flag of Indonesia, which invaded the former Portuguese colony in 1975, flies over his headquarters. Some 200,000 East Timorese -- over a quarter of the population -- died through war, starvation and disease as a result of the invasion. "The people here do not want independence. They want to live in peace and be free from fear," Sousa said.

A war to come?

Dozens of armed pro-Indonesia militias have gone on the offensive in recent months, stung by Indonesia's announcement in January that it may give the former Portuguese colony independence if an offer of autonomy is rejected.

UN Secretary-General Kofi Annan announced on Thursday that Indonesia and Portugal had agreed on a "direct" ballot for the people of East Timor to decide whether they wanted autonomy or independence, although specific details had yet to be agreed.

Also on Thursday, jailed East Timor guerrilla leader Xanana Gusmao and the commander of pro-Indonesia militias in the territory said they had agreed to discuss its future peacefully.

"This is the first meeting and we have committed to peace," Gusmao said at a joint news conference with Joao Da Silva Tavares, after an hour and a half of discussions.

But despite the talk, many people fear outright civil war may be just around the corner. Many of Sousa's militiamen look more confused and afraid than dangerous. He says there are 800 in total.

Amnesty International has said armed militias were behind recent human rights abuses in East Timor. Resistance leaders have accused Indonesia of arming and encouraging the groups to spread fear and instability.

Sousa denies he has received any help from Indonesia or its armed forces, known as ABRI. "We have got nothing from ABRI, nothing from the authorities. We have done this ourselves." And those who have fled should return, he says. "They have no reason to be afraid.

Gusmao welcomes accord on Timor vote

Agence France Presse - March 12, 1999

Jakarta -- Jailed East Timor rebel leader Xanana Gusmao on Friday led international praise for Indonesia's agreement to hold a direct vote in East Timor that could speed the process to independence.

Australia, which fears it could bear the brunt of any refugee exodus from the territory, also welcomed the accord between Indonesia and Portugual. But it has doubled its combat-ready troop strength amid lingering concerns over events in East Timor.

In a statement issued from the Jakarta house where he is held in detention, Gusmao said a direct vote on Indonesia's autonomy offer for the former Portuguese colony conformed with "the principles of democracy and representative opinion."

"The Republic of Indonesia, by accepting to carry out a method of consultation which respects these two basic principles, took an important step," the statement said.

Indonesia and Portugal agreed at the United Nations in New York on Thursday that there would be a UN-sponsored direct vote on an autonomy package to be offered by the Indonesian government. Indonesian Foreign Minister Ali Alatas said in New York he had agreed the vote would be a referendum in all but name.

Gusmao said he was "sure that the people of East Timor would be able to once again offer proof of the political maturity demanded of them at this crucial phase.

"The people of East Timor know that they are not alone, and they have received numerous guarantees of moral, political and of economic support for the period of transition towards independence," he added.

Speaking to reporters later, Gusmao sounded a more cautious note, saying he did not yet know the mechanism agreed to. He also said a referendum, which has been ruled out by Indonesia, was still the "most democratic and fair" measure.

"I think it would [take very] little time, there are only 800,000 people there," he said, adding that he had heard that a UN team would be sent to East Timor to study other options to determine popular mood.

Commenting on a proposal for a ceasefire, made by the head of an Indonesian-armed militia group Thursday, Gusmao said he needed time to think it over.

"We [would] need a neutral body to monitor and implement a cease fire," he said, adding that a precondition would be an Indonesian troop withdrawal.

Gusmao is serving a 20-year-term imposed in 1992 for plotting against the state and illegal possession of arms. He was recently transferred from prison to effective house arrest.

Exiled East Timor resistance leader Jose Ramos Horta, a Nobel peace prize winner, cast doubt on the promised ballot, saying Indonesia could not be trusted.

"The Indonesians have not given us any reason to trust them," Horta said. "I judge them on their actions on the ground and not their promises. Their actions speak much louder." Australian Foreign Minister Alexander Downer said the New York accord was a positive sign. But Australia has already ordered that a new force of 3,000 combat troops be sent to Darwin, staging post for East Timor, 600 kilometres to the north, doubling to 6,000 the number of troops on 28-day deployment alert.

Downer said while details of the UN agreement still had to be finalised, he noted that UN Secretary General Kofi Annan had spoken of finding a ballot which was as direct and democratic as possible.

"I look forward in the weeks ahead to further progress -- in particular finalisation of an autonomy package, as well as movement forward on the agreed method for consulting the East Timorese on that autonomy package," Downer said.

He also welcomed the Jakarta meeting between Gusmao and pro- Indonesia militia leader Joao Tavares as vital step in reducing tensions.

Factions agree to work towards peace

Agence France Presse - March 11, 1999

Jakarta -- The heads of warring factions in East Timor Thursday said they had agreed to work towards peace after a landmark meeting on hostilities in the strife-torn territory.

"We both agreed to put down our guns, stop terrorizing one another and making false statements, because for the past 23 years we have been enemies," pro-Indonesian militia leader Joao Tavares said here after a one-hour meeting with rebel chief Xanana Gusmao.

"Peace will start today," he said in a joint press conference with Gusmao held in three languages -- English, Portuguese and Indonesian -- in which the two symbolically embraced one another.

But Gusmao said a ceasefire was not yet a reality. First, he said, he had to study a document given him by Tavares. "This agreement we made is to create a peaceful atmosphere," Gusmao said.

"We have agreed to create, from the top down, an atmosphere where people can be respectful to each other, stop the violence, and eliminate the hate," he added in Indonesian.

"Depending on the situation, we can go [from] this meeting as a beginning of a possible cease fire. The most important thing is that we have both agreed that starting today we will try hard, including those in the armed groups, among the youth groups and among the people themselves to try and create a peaceful situation."

The Gusmao-Tavares meeting Thursday was held in the office of the director general of correctional facilties, a last minute compromise between Gusmao, who had wanted it held in the house where he is being held following his transfer from prison, and the pro-Indonesians, who refused to go there.

Observers here noted Gusmao's previous position had been that any ceasefire in the former Portuguese colony invaded by Indonesian in 1975 should be with the Indonesian armed forces, not with the Indonesian-army raised and armed East Timorese militia, represented by Tavares.

Last week, Gusmao told a French journalist: "Who is Tavares, he is nothing. He has proclaimed himself commander in chief but I don't remember seeing him in the jungle fighting."

But Gusmao, who is serving a 20-year jail sentence for armed rebellion against the state, sounded a note of hope the talks could and should continue.

"I think all East Timorese people are conscious it is time to do something to put an end to 23 years" of conflict Xanana said.

"We realize it is time to make peace [among ourselves]," he added referring to a sudden offer by Jakarta of broad autonomy or independence after decades of virtual military occupation.

Asked what the next move was, Gusmao replied in Portuguese: "From here we try to build mutual respect and try to avoid all the bad feeling that we have [had] in the past 23 years."

Gusmao led the armed wing of the Fretilin independence movement in East Timor before he was caught by Indonesian troops in November of 1992. He has said that if free choice is given to the people of East Timor he is sure they will opt for independence, not autonomy.

He told US Secretary of State Madeleine Albright last week that he envisaged East Timorese from both sides -- the pro- independence and Indonesian-armed militia -- forming a united police force with the help of the United Nations.

On East Timor, the state news agency Antara reported Thursday that at least 2,400 Indonesians had fled in the past two weeks, fearing their time in the former Portuguese colony was over.

Antara quoted Saidoe, the district chief of Buton in southeast Sulawesi island, as saying 422 settlers arrived aboard two ships on Wednesday in anticipation of rising unrest.

PDI advocates defense of East Timor

Indonesian Observer - March 11, 1999

Jakarta -- Opposition leader Megawati Soekarnoputri has claimed her party won't oppose independence for East Timor, but as long as the province remains part of Indonesia, the military has every right to defend it, says one of her aides.

Theo Syafei, deputy chairman of the Indonesian Democratic Party of Struggle (PDI Perjuangan) says that despite the government's plan to grant the East Timor either autonomy or independence, the territory is still an integral part of Indonesia.

"As long as we have the decree from the People's Consultative Assembly [MPR] stating that East Timor is legally part of Indonesia, every citizen must defend the territory," Theo told journalists at a seminar on Tuesday.

The seminar on the East Timor Issue was organized by a group called Solidarity for Peace in East Timor (Solidamor) and held in Jakarta at Wisma Antara.

Theo said that if the decree is withdrawn and replaced by a new regulation granting East Timor independence, there should first be a "majority vote" in favor of the move.

However, the government has so far refused to allow the East Timorese people to hold a referendum to determine their future.

Theo said he doesn't understand why the government has decided to offer East Timor either wide-ranging autonomy or independence.

"If we are offering a referendum on East Timor's independence, it would seem as if we are a colonizer. And if we decide to go ahead with a referendum, why don't we do the same thing in Aceh and Irian Jaya? We must consider whether we've held East Timor hostage for the past 22 years," he said.

Indonesia invaded the former Portuguese colony in 1975 and annexed it the following year in a move never recognized by the United Nations.

Theo, a retired lieutenant general, once served as chief of the Udayana Military Command, which covers much of eastern Indonesia, including East Timor.

President B.J. Habibie has said he wants the East Timor issue resolved by January 1, 2000, although the UN and Foreign Affairs Ministry say April 2000 would be a more realistic date.

Theo said the government's plan to grant wide-ranging autonomy to East Timor needs to be further justified, lest other provinces also demand a similar status.

For example, he said, why doesn't the government offer autonomy to Yogyakarta, in a token of appreciation for the many services the province has rendered the country.

"What's the criteria for a province to get the autonomy option? I think the decision was probably just the result of panicking within [President B.J.] Habibies's government," Theo said.

Megawati recently said she wanted East Timor to remain an integral part of Indonesia. But according to Australian Ambassador John McCarthy, she will not oppose independence for East Timor if elected president.

Smooth

Unlike PDI Perjuangan's somewhat ambivalent stance on East Timor, the National Mandate Party (PAN) insists there should be a referendum on independence.

PAN executive Abdilah Toha said the transition to independence in East Timor must be smooth, rational, peaceful and democratic.

He said the government has failed to deal with East Timor appropriately because of a "centralized approach" and also because it brought so much corruption into the region.

"At the declaration of our party on August 23 last year, PAN said it will consistently back the referendum option for East Timor," he said.

"However, the referendum must be done step by step. It can't be done drastically. Indonesia is morally obliged to assist the East Timorese people in their bid to achieve freedom," he added.

"Indonesia shouldn't make the same mistake the Portuguese did. The Portuguese virtually threw their hands in the air and walked away from that isolated outpost."

Toha said that if PAN wins the election, it's East Timor policy will be implemented in thee stages. First, the territory would receive wide-ranging autonomy and its people would form a transitional government to reconcile conflicting factions within society.

Second, peacekeeping forces should be sent in to disarm pro and anti-independence factions. And third, a referendum should be held to determine whether East Timor remains part of Indonesia.

If a strong peacekeeping mission is sent to East Timor, its members should not include pro-Jakarta civilian security units, said PDI Perjuangan's Theo.

Sri Bintang Pamungkas, chairman of the United Indonesian Democratic Party (PUDI), said the autonomy option is the best solution in the short-term.

However, he said the East Timor issue should be resolved as soon as possible, preferably before the June 7 general election.

He said PUDI has a four-point solution to the East Timor issue. First, the Indonesian military must withdraw. Second, all feuding factions of locals must implement a ceasefire. Third, jailed East Timorese freedom fighter Xanana Gusmao must be released. And fourth, the United Nations should decide on what happens next.

Sri Bintang said the East Timorese shouldn't be allowed to vote in the June election because they have enough problems already and are likely to secede.

Indonesia denies "back-pedaling"

Agence France Presse - March 10, 1999

United Nations -- Indonesia on Wednesday denied "back- pedaling" on autonomy proposals for East Timor, but ruled out an agreement on a draft autonomy package at current talks here.

Indonesian Foreign Minister Ali Alatas dashed hopes of an early agreement on the autonomy package as he arrived for talks with his Portuguese counterpart Jaime Gama and UN Secretary- General Kofi Annan.

In comments to reporters, he rejected Portuguese accusations that Jakarta was back-tracking, while Gama said he was seeking clarifications about the Indonesian position and wished to hear "one view" from Jakarta.

Portugal and Indonesia have been negotiating a draft autonomy package under UN auspices, and hopes had run high in recent days that agreement could be reached during the two days of ministerial talks here.

But Alatas cast a chill over the UN talks on Monday by announcing after a cabinet meeting in Jakarta that "some revisions" were needed to the proposals and that the process would take time.

The talks here are also due to focus on UN compromise proposals for an indirect vote by the East Timorese, who would elect a consultative assembly that would decide whether to accept autonomy or prepare for independence.

Alatas repeated Wednesday that if the East Timorese reject the wide-ranging autonomy proposals, Jakarta would let the former Portuguese colony "part ways" with Indonesia, which annexed East Timor in 1976.

"We still hope that we will meet this self-imposed deadline of April," for completing the autonomy package, Alatas said.

But he added: "it turns out now that we can't really wrap up the talks at this meeting as we hoped before, because there are still a few aspects which need to be further discussed." He said he would explain details to the Portuguese delegation at the talks.

Gama said he would demand a "clarification" from Alatas on whether Jakarta intended to give East Timor autonomy, or independence, or "short-range autonomy."

"All of us recognize that Indonesia is quite oscillating in an unpredictable manner in this negotiation," he said.

Gama expressed concern that "there is backwards movement on the Indonesian side regarding autonomy." But Alatas strongly rejected such suggestions.

"We are not back-pedaling, we are not backtracking. I'm sorry for the statement made by my colleague Jaime Gama, which I consider highly speculative and not based on facts," Alatas said.

Gama said that he hoped Jakarta would remain firm in offering the Timorese independence if the autonomy option is rejected.

He also expressed the hope that the Indonesians would not backtrack on the compromise regarding "a UN-sponsored consultation of the East Timorese." Indonesia is rejecting a referendum on the future of East Timor, fearing that other restive provinces in the sprawling archipelago could demand a similar vote.

UN officials hoped that the compromise proposal for the election of a consultative assembly would be acceptable to Lisbon, which is calling for a democratic vote, and Jakarta.

There is mounting concern here that unrest in East Timor between pro-integrationist and pro-independence factions could be fueled by further delay in reaching agreement on the draft autonomy package.

The draft plan provides for Indonesia to retain control over foreign affairs, defence and the economy.

The Indonesian government has denied accusations it has been arming civilians, and Annan said last week he had no reason to believe there was "a deliberate policy to destabilise East Timor." Indonesia is largely Moslem, while the vast majority of the 800,000 East Timorese are Roman Catholic.

Death by cruel neglect in East Timor

Sydney Morning Herald - March 10, 1999

Lindsay Murdoch, Dili -- Warnings by East Timor aid workers and political leaders of a pending food and health disaster have been reinforced by a grim diagnosis from the only foreign doctor working in the territory, who says between 50 and 100 Timorese are already dying every day from curable diseases.

United States-born Dr Dan Murphy told the Herald that East Timor's 850,000 people had already been abandoned by Indonesia, whose President, Dr B.J. Habibie, has said the troubled territory may become independent by next January.

Dr Murphy said that every day scores of Indonesians working in government departments including hospitals, clinics and schools were leaving East Timor, fearing revenge attacks after Jakarta's 23-year often brutal rule.

"The health system has collapsed. Schools are not functioning well. Supplies are limited," Dr Murphy said in Dili, where he treats between 100 and 200 people each day in a Catholic-run clinic.

Dr Murphy said mothers were dying during childbirth, while others were dying from diarrhoea, malnutrition and tuberculosis, which was common.

"I can't imagine a country with more tuberculosis than Timor," he said. "People are not dying here of old age. They are dying of preventable and curable diseases."

Dr Murphy said it was clear Indonesia had a deliberate policy not to allow medical supplies into East Timor from outside Indonesia, including Australia, where aid groups say they are ready to help.

But other residents say it is not clear that the shortages are being deliberately engineered. They told AAP yesterday that food stocks had run down in East Timor and that suppliers were not willing to risk not being paid for large shipments.

The Dili director of the Catholic relief agency Caritas, Father Franciscus Parreto, said there was no proof of manipulation, though it was possible. But the price of rice had certainly almost doubled in some cases. "Because prices are expensive, many people cannot afford to buy rice," he said.

Dr Murphy backed calls by pro-independence Timorese leaders, foreign aid groups operating in the territory and several countries including the United States, for an urgent international force to be sent to East Timor following the departure of at least 7,000 mostly Muslim migrants from Java and other Indonesian islands in recent weeks.

For decades non-Timorese have controlled most of East Timor's trade and held most of the key posts in Indonesian Government departments administering the territory that Indonesian troops invaded in 1975.

As Dr Murphy spoke, hundreds of non-Timorese families were being packed into an Indonesian passenger ferry bound for Sulawesi. "There is nothing for us here. We won't be back," a public servant said, before boarding with his wife and two children.

Many of an estimated 200,000 non-Timorese say they fear for their future after Jakarta offered East Timor a choice between wide-ranging autonomy and independence. Many also claim they have been the targets of violence, abuse, threats and extortion.

In Sydney, Dr Andrew MacNaughtan, of the group Timorese Aid, said many Australian organisations were ready to send medical and other supplies but their efforts had been frustrated by an inability to transport them.

"There is a growing network, particularly from the medical side in Sydney and Melbourne, which wants to help, but we have so far been unable to find ways to transport the supplies," he said.

Dr McNaughton said it appeared the situation was becoming dire in East Timor with the only medical supplies coming from Australia being carried in small parcels, such as suitcases. "If we knew a way we could do it, we could arrange for supplies to be sent almost immediately," he said.

Dr Murphy, a volunteer who has worked in poor African and South American countries, said a Sydney group wanted to send an operating theatre to Dili "but the problem is getting it in".

"Much help appears to be available from around the world. If we could only get permission to get it in it would be a big step in the right direction," he said.

Dr Murphy said three tonnes of medical supplies from Europe had failed to clear Customs in Jakarta where authorities were charging an aid organisation for storage.

"It is a sad state of affairs considering what is available here," he said. "Nothing is being done to help these people."

The Foreign Minister, Mr Downer, has agreed that an Australian aid worker can travel to East Timor to assess the worsening supply and health situation.

Pro-independence Timorese leaders have warned of a humanitarian crisis on Australia's doorstep unless drastic and urgent action is taken. Mr Antonio "Mahuno" da Costa, a former leader of the anti- Indonesian Fretilin movement, told the Herald in Dili that Australia had a moral responsibility to help in East Timor in times of crisis like this because of the assistance Timorese had given Australian soldiers during World War II.

Mr da Costa said Portugal, which ruled the territory for 400 years but abruptly abandoned it in 1975, had assured pro- independence groups it was ready to ship tonnes of emergency aid, including medical supplies, if approval was given by the Indonesian Government.

Dr Murphy said 23 church clinics were administering health care across East Timor while the main public hospital in Dili was barely functioning.

Thousands flee East Timor

Agence France Presse - March 9, 1999

Jakarta -- Some 2,000 Indonesian and pro-Indonesian residents of East Timor have fled to neighbouring East Nusa Tenggara province and thousands of teachers sent there by Jakarta have demanded transfers, the state Antara news agency said Tuesday.

"Maybe because of the situation in East Timor ... East Timorese are staying with their families in East Nusa Tenggara. The number could be 2,000 people," East Nusa Tenggara Governor Piet Tallo was quoted by Antara as saying.

Tensions have risen between pro-independence and pro- integration groups in the former Portuguese colony since Jakarta said two months ago that if East Timorese did not accept broad autonomy, it could opt for independence.

"We were always terrorized and could not live peacefully. That is why [my husband] continued to hold on to his post in Dili, while the children and myself left Dili last week," an unidentified woman was quoted as saying.

On Monday thousands of teachers from the East Timor Teachers' Forum demanded in talks with Indra Jati Sidi, a visiting official from the Ministry of Education, to be transfered to other provinces following threats by pro- independence groups.

"Their demands will be solved immediately, that is why we have come here to have direct dialogue with the teachers. The central government is paying special attention to East Timor," Sidi was quoted by Antara.

Indonesian Education Minister Juwono Sudarsono said Sunday the government was prepared to evacuate some 2,400 Indonesian teachers from East Timor and had allocated 50 billion rupiah (550,000 dollars) to finance the evacuation.

Some of the teachers who had settled in East Timor spoke out and said they had been physically abused, harassed, threatened and extorted by pro-independence residents and students for years.

"Some 400,000 rupiah (around 45 dollars) in cash has been extorted [from me] by seven people, four of whom were my own students," said ethnic-Javanese Saridjo (eds: one name), a teacher in East Timor's Viqueque region said. Most state teachers receive a meagre salary of 300,000 to 450,000 rupiah per month.

Indonesia unilaterally annexed East Timor in 1976 following a violent military invasion the previous year. The United Nations and most other countries did not recognize the annexation and still view Lisbon as the territory's official administrator.

The United Nations has since 1983 brokered tripartite talks between Jakarta and Lisbon to settle East Timor's status.

The talks took on new life with the autonomy and independence proposals, and talks between the foreign ministers of Indonesia and Portugal are currently underway in New York.

East Timorese are trying to follow the New York talks by radio, a Catholic priest in Bobonaro sub-district in East Timor said.

"For 15 years I have worked in different East Timorese villages and seen how people depended on the radio as the main medium to gather information, particularly on the development of East Timor's political solution in the UN forum," Antara quoted Father Yohannes Suban Gapun as saying.

Indonesia agrees to 'direct' ballot for Timor

Reuters - March 11, 1999

Evelyn Leopold, United Nations -- UN Secretary-General Kofi Annan announced Thursday that Indonesia and Portugal had agreed on a "direct" ballot for the people of East Timor to decide whether they wanted autonomy or independence.

Indonesia's Foreign Minister Ali Alatas had previously refused to accept a direct vote for the troubled former Portuguese colony that Jakarta invaded in 1995.

Portugal's Foreign Minister called the agreement a "turning point" in discussions the two countries have been holding for years over East Timor.

"The meeting has reached an agreement that a method of direct ballot will be used to ask the people of East Timor whether they accept or reject the autonomy proposal," Annan said after two days of talks with the ministers.

But he said the "specific modalities of how the popular consultation will be carried out" were not yet resolved. To this end Indonesian and Portuguese officials would meet on April 13 and 14 and the two ministers would come to New York again on April 22, Annan told a news conference.

At issue is a wide-ranging autonomy plan that Indonesia is offering, which the Timorese are expected to turn down in favor of independence. The United Nations had hoped the plan would be completed this week but Indonesia's cabinet Monday demanded some major revisions.

If the East Timorese reject autonomy, Alatas said the Indonesian legislature, to be elected in June and meeting in August, would move to rescind the 1976 annexation, putting the territory on the road to independence.

East Timor, a former Portuguese colony of 800,000 people, has for more than 20 years been the center of a dispute that earned Jakarta international notoriety for its army's harsh rule. Indonesia's annexation of the territory is not recognized by the United Nations or any other country.

One major stumbling block was how the Timorese would make their voices heard, with Portugal insisting on a direct vote and Indonesia ruling out a referendum, saying this would be cumbersome and require UN peacekeepers.

Alatas Wednesday, according to diplomats, proposed that United Nations conduct a "rolling ballot," with UN teams going from town to town rather than voting taking place on a single day.

At the press conference, however, he said "there has never been at any time a proposal by Indonesia that such a consultation would stretch out over weeks or months." But he gave no clue about how the ballot would be held.

In response, Gama said exiled Timorese would obviously not vote at the same time as those living in the territory. "But I would like to stress that if it is possible to have elections in such a big country like Indonesia in one day, why not East Timor [balloting] in one day?

"That is our intention," Annan said, adding that he wanted any balloting to take place in a "concentrated" timeframe. Alatas said he agreed.

Gama also said that for Portugal, the only way to ascertain the opinion of the people in East Timor was a universal vote. He called the talks a "turning point" in achieving this but stressed that details still needed to be resolved.

The Indonesian government of President B.J. Habibie in January startled the world by suggesting independence as a "second option" if autonomy were rejected, triggering fighting between pro- and anti-independence factions and accusations the Indonesian army was handing out weapons to its allies.

Alatas said Jakarta was calling "the bluff" of some Timorese resistance leaders who said 90 percent of the territory would vote in favor of independence.

"There has been a sea change in the Indonesian position. We have no more fears," he said. "Please, choose what you want. I hope this is now finally understood by everyone."

East Timor is developing security policy

Janes Defence Weekly - March 3, 1999

Robert Karniol -- The East Timorese resistance is quietly developing a coherent policy on security during pre- and post- independence periods that could devolve from a tentative agreement reached last month by Indonesia and Portugal.

Together with internal debate, talks are being selectively initiated with some East Timorese currently serving in the Indonesian armed forces and police, and with potential foreign partners.

Speaking by phone from Lisbon, resistance leader Jose Ramos- Horta identified Australia, Fiji, New Zealand and Portugal as countries that could potentially provide paramilitary training and equipment. Portugal, the former colonial power is already "fully committed" to suppl;ying any assistance required and security subjects will be raised during talks he expects to hold in Fiji and Australia within a month.

The former foreign minister of the short-lived Democratic Republic of East Timor further noted the importance of establishing a "highly sophisticated intelligence-gathering system, both for internal and external security". Accurate and timely information offers "the best protection" for a small country, he said, and Portugal and Isreal could help create an effective intelligence agency. Ramos-Horta said that a peaceful transition to independence should be supervised by a UN force of 1,000 to 2,000 personnel. Together with ensuring stability, this force would train a local armed police force formed around a core drawn from the resistance army and supplemented by East Timorese currently serving in the Indonesian armed forces and police.

He said that the pro-independence resistance now has an armed strength of about 1,000 although Indonesian sources give a figure of "under 200". This would be expanded to around 3,000 during the transition period to become the "rapid deployable" armed police force of an independent East Timor.

The Nobel Prize laureate added that he is opposed to establishing a standing army following independence. "I personally dont believe that a small country like East Timor should have a professional army," he said. "Rather, something along the Costa Rican (paramilitary) model and treaties of neutrality with neighbouring countries."

Such a paramilitary police force would be required for a "few years" to ensure stability following independence, he said, and then East Timor would decide on a more permanent security structure.

Despite this scenario, independence for East Timor has yet to be assured, with autonomous status within Indonesia still as an alternative. However, Indonesia's President Habibie said on 11 February that he wants the issue resolved by the end of this year. "As a friend, we will let them decide by themselves," he told a meeting of the Indonesia Chamber of Commerce and Industry.

Militia closing in terrified on refugees

Sydney Morning Herald - March 8, 1999

John Martinkus, Hatolia -- Cut off by impassable roads and swollen rivers in East Timor's rugged interior, about 1,160 refugees fear for their lives as Indonesian army units and allied local militia groups move closer to their camp.

The refugees fled into the mountains two weeks ago after shooting in the town of Guico, near Maubara, a centre for pro- integration supporters, about 50 kilometres west of the capital, Dili.

According to four men who arrived in Dili last week with bullet wounds from the February 23 incident, the local district head Mr Josi Arfat opened fire on about 200 villagers after calling them to a meeting.

Mr Arfat was said to be backed by members of the armed paramilitary groups Besih Merah Puti (red and white iron) and Hali Linta, and soldiers of the Indonesian Army's 143rd Battalion, who then burnt down the houses of 39 pro-independence villagers.

The Catholic relief agency Caritas is trying to get food to the refugees, who are trapped in the village of Sare, with a flooded river on one side and the advancing paramilitary units on the other.

A resident of nearby Hatolia said two men who tried to return to Guico last Wednesday to find food were shot by Indonesian soldiers. One man died instantly and another was taken to Dili for treatment.

"The military and the paramilitary are only 1 1/2 kilometres away [from Sare]," said Mr Duarte Goncalves, who took the wounded man to Dili. We are trying to find a safe way to enter Sare to deliver food and medicine."

Mr Goncalves said many of the refugees were suffering from fevers, diarrhoea, and flu because they were not used to the cold mountain climate. Last week, a woman gave birth in the open.

In Hatolia, groups of youths armed with knives check the identity of every traveller because of fears about infiltration by pro-integration militia members. One of the youths said they were worried the trouble would spread to their area.

Shootings have been reported in the eastern towns of Los Palos and Baucau and along the waterfront in Dili.

Near the south-western town of Suai, renewed paramilitary attacks in the village of Tilomar injured eight and forced 950 villagers to seek refuge in a church and school, the Caritas office in Suai said.

Pro-Indonesian Timorese talk with Gusmao

Agence France Presse - March 6, 1999 (abridged)

Jakarta -- Jailed East Timorese rebel leader Xanana Gusmao met with seven opposing pro-integrationists here Saturday, and hailed the first ever talks between leaders of the warring sides as a positive beginning.

The unprecedented closed-door meeting was held in the ministry of Justice building in downtown Jakarta and lasted two hours.

It was designed to break the ice between the two bitterly- hostile sides -- one backed by Indonesia and the other fighting it -- as East Timorese are set to choose between independence and autonomy.

"The result [of the meeting] was very positive because we could meet as East Timorese and have our opinions heard as East Timorese to look into the future," Gusmao told reporters.

"We are starting a new era for East Timor," Domingus dos Dores Soares, general chairman of the East Timor Justice, Democracy and Unity Forum (FPDK), said on behalf of the pro-integrationist side.

Domingus Policarpo, another of the integrationists, told AFP later that his group had recommended that Gusmao, who is serving a 20-year jail term for armed rebellion, be released so that the talks could continue.

"If this dialogue is [to continue] it should be on the condition every participant should be on the same ground, then by that time it would be better if Xanana is released from prison," Policarpo said. He said the FPDK would work on recommending his release.

The meeting came a day after both Gusmao and the integrationists, some of whom are militia leaders, had met with US Secretary of State Madeleine Albright.

Clemento Dos Reyes Amaral, secretary general of Indonesia's National Commission on Human Rights who took part in the meeting as an intermediary, denied that Albright had prompted the talks, saying they had been planned "several days ago."

But Policarpo said the invitation had been handed to them Friday by a Rights Commission official while they were in a Jakarta hotel to visit Albright.

Gusmao, who had reportedly been rebuffed by the integrationists earlier, defended Soares when asked why the long anticipated meeting had only taken place now.

"It's not that [it has been delayed], we have to think of the tension that we have had for the past 23 years. Now we have let go of that tension," he added. "This is the first step in which we have assumed our willingness to carry on efforts into the future," Gusmao added.

"This was our first meeting ever with Xanana," Policarpo told AFP, addding that the "Forum has a concept for East Timor resolution should be carried out through dialogue and Xanana accepted this proposal."

He added that the process for future meetings was ongoing and would take some time to arrange. "We don't know yet when [the next meetings] are going to be held. It's an ongoing proceess."

A Justice ministry official said the meeting took place in the Ministry because it was "an appropriate" neutral meeting ground for the two groups.

He added that the Forum had brought along a letter from Pro- Integration militia Commander Joao Tavarez, which contained his wishes to meet with Gusmao.

"The letter has been delivered to Xanana and he has already agreed to meet," he said, but could not specify when a meeting would take place.
 
June 7 elections

Rais makes rounds in Washington

Wall Street Journal - March 11, 1999

Eduardo Lachica -- An Indonesian opposition leader called on the US to help his country conduct free and fair elections, and Washington may be only too happy to oblige.

In response to such urgings from Amien Rais, the chairman of Indonesia's National Mandate Party, US officials said that a package of grants already is being prepared to assist Indonesia in training poll watchers, educating voters and other preparations for its June 7 elections. The US may also support international monitoring of these elections since US

Secretary of State Madeleine Albright had been assured by other political contenders that this assistance would be welcome, the officials said.

Mr. Rais also held an hour-long meeting with the managing director of the International Monetary Fund, which is heading a $43 billion bailout and reform program for the Indonesian economy. After the meeting, Mr. Rais said that if elected president, he would continue cooperation with the fund, the World Bank and other international financial institutions. He also said he would do his best to push ahead with market-oriented reforms.

The US is clearly hesitant to appear too interested in the fortunes of specific candidates in Indonesian elections. Mr. Rais failed to secure an appointment with US Vice President Al Gore on Monday; instead, he met with Mr. Gore's foreign-policy adviser, Leon Furth. "If the vice president had to receive Rais, he'd have to receive all of the other candidates," reasoned one of Mr. Rais's admirers in the US

Otherwise, Washington appeared to like what it heard from the elfin, US-educated political scientist who quit the leadership of a 30-million-member Islamic organization to head the reformist party known as PAN, its Indonesian initials. US lawmakers were pleased by the Islamic leader's assurances that he wants a multi-ethnic democracy. Democrat Nancy Pelosi, a US House of Representatives member from California, said meeting with Mr. Rais helped to increase "our understanding about the prospects for Indonesia." Mr. Rais told an audience at Johns Hopkins University's School of Advanced International Studies that since no party is likely to win a majority, PAN would be willing to form a ruling coalition with other parties, including Megawati Sukarnoputri's Indonesian Democratic Party of Struggle.

And he told congressional staff members that US assistance could help ensure "honest and fair elections." He warned that certain "status quo forces" could thwart the will of the electorate unless the process is conducted properly.

US State Department officials said the Clinton administration is looking for additional funding for Indonesian electoral assistance over and above the $20 million that the administration already has earmarked for this purpose.

During her Jakarta stopover last week, Ms. Albright did her best to look up all the major political contenders. She met Mr. Rais and Ms. Megawati, the daughter of Indonesia's founding president, but couldn't see another Muslim leader, Abdurrahman Wahid, who was reported to be ailing at the time, according to Ms. Albright's aides.

The June 7 vote is intended to elect 462 of the 500 members of the country's new parliament, called the People's Representative Assembly. The remaining 38 seats will be filled by the Indonesian armed forces, which traditionally have enjoyed a preferential place in Indonesian politics. The Parliament will later join 135 provincial delegates and 65 representatives of professional and other groups to form a 700-member People's Consultative Assembly, which will elect the next president in November.

Election uncertain for troublespots

Agence France Presse - March 11, 1999

Jakarta -- The Indonesian government is uncertain whether this year's landmark national election will be able to go ahead in East Timor or the troubled city of Ambon, a senior official said Thursday.

But Ryaas Rasyid, director general for public affairs and regional autonomy at the home affairs department, said authorities would do everything possible to make sure voting goes ahead on June 7.

The first election since the fall of Suharto as president last year will bring in a new assembly to choose a new president for a five-year term from January 1.

Ambon and East Timor have emerged as major problems though. Hundreds of people have been killed in the eastern city of Ambon since Moslem-Christian unrest erupted in mid-January and thousands have fled the region.

East Timor's future has been thrown into doubt by the Indonesian government's declaration it is ready to give independence to the former Portuguese colony.

Rasyid said "we have to stabilize the situation [in Ambon]" before the election can go ahead there.

He said the people of East Timor should hold an election for the national assembly but not for a local assembly as the government is preparing an offer of autonomy for the territory.

The government has said it is ready to consider independence for East Timor if the autonomy offer is rejected, as analysts consider likely.

Rudini elected chairman of election body

Agence France Presse - March 11, 1999

Jakarta -- A former general and minister in the Suharto administration was elected chairman of Indonesia's newly- established election commission Thursday and sworn in hours later by President B.J. Habibie.

"The formation of the commission will lead us to a new chapter in our election [history], that serves as a gate to the new democratic Indonesia we all hope for," Habibie said at the ceremony at the Merdeka palace.

The 53-strong commission is made up of five government appointees and representatives of the 48 parties contesting the June 7 elections, the first since the fall of Suharto in May last year.

Rudini former army chief of staff and minister of home affairs, was elected early Thursday with 39 votes out of 45, Media Indonesia said.

He is also a member of a military think-tank, the Center for Strategic Studies, and a representative of the People's Mutual Cooperation Party, made up of breakaway members of the ruling Golkar party.

The body elected noted lawyer Adnan Buyung Nasution, a government appointee to the commission, and Harun Alrasyid, a constitutional law expert of the Moslem Community Party, as vice-chairmen.

One member, from the People's Democratic Party whose leader is jailed, was absent during the vote, two abstained and the five government members are not entitled to vote.

At the swearing-in Habibie said the commission was charged with playing a "strategic role" to ensure the success of the elections and called on the people to endorse it.

Commission member and staunch government critic Sri Bintang Pamungkas, leader of the Indonesian Union Democratic Party which was outlawed during the Suharto era, failed to show up at the ceremony.

Jakarta theatrics mask voter ignorance

The Australian - March 9, 1999

Don Greenlees, Jakarta -- Every weekend across Indonesia, convoys of buses, crammed with supposedly enthusiastic supporters of the 48 political parties approved to contest the June 7 elections, pull up at sports stadiums and parks.

The events are as much theatrical as political. Singers, parades of school children, even skydivers perform before a heaving mass of colourful banners. In Jakarta, estimates of crowd numbers at the big rallies have been as high as 300,000.

But how much Indonesians know or care about the first genuine democratic election in more than four decades is another matter. A nationwide random survey of views on elections -- the first ever -- has produced a picture of a population eager to vote and hopeful about the outcome but deeply ignorant about what elections mean.

The survey, released by the Asia Foundation, was carried out in all provinces except East Timor between late December and late January. The survey team interviewed 2593 eligible voters in person, with a sample that matched Indonesia's demographic mix, making it one of the most reliable studies of the country's voters to date.

It found only 3 per cent of Indonesians drew a connection between elections and democracy. Sixty-one per cent could not say what democracy meant and just 8 per cent of voters, who are required to register in the coming weeks, have any idea they need to do so.

"They don't have any civic education whatsoever," says Mochtar Buchori, a retired professor of education and co-chairman of Megawati Sukarnoputri's Indonesian Democratic Party of Struggle (PDIP). "It's especially true of the older generation."

The concerns are reinforced by the presence of money politics. A rally of the ruling Golkar, widely reviled as former president Suharto's political machine, at Jakarta's Senayan Stadium attracted thousands of people. But many admitted being paid the equivalent of a day's wage.

The Asia Foundation survey, carried out by A.C. Nielsen, shows 55 per cent of Indonesians believe at least one of the old practices of election tinkering will recur. Yet they are surprisingly resilient. Despite economic collapse and political uncertainty, the national mood is upbeat: 71 per cent said they were confident of a happy future and 50 per cent believed the country was headed in the right direction.

On balance, they also think that, overall, the election will be free and fair -- 58 per cent, compared with 4 per cent who do not.

Rais won't rule out coalition with Golkar

Dow Jones Newswires - March 8, 1999

Jay Solomon, Jakarta -- Indonesian presidential candidate Amien Rais said he couldn't rule out a possible coalition between his National Mandate Party, or PAN, and the ruling Golkar party following June 7 parliamentary elections. He stressed, however, his preference to unite with reformist parties, such as Megawati Sukarnoputri's Indonesian Democratic Party of Struggle, or PDI Perjuangan.

"Golkar is a symbol of CCN (corruption, collusion and nepotism)," Rais said in an interview with Dow Jones Newswires. But "I can't close off all possibilities ... if for some reason we have to form a coalition with Golkar. Absoluteness is not a good policy."

Rais was among the staunchest critics of former President Suharto's 32-year rule and a played a pivotal role in forcing his resignation in May 1998. Since then he's formed the PAN party and announced his presidential candidacy, running on a platform of economic reform and the promotion of human rights and civil liberties.

PAN has faced difficulties, however, finding common political ground with key reform parties such as PDI Perjuangan and the National Awakening Party, or PKB. Both parties have stressed maintaining a secular state in Indonesia and voiced fears that Rais could introduce religion into politics.

Rais denied in the interview that he has any plans to introduce Islamic laws to Indonesia should he become president.

Many political analysts say PAN could be a key swing vote in deciding which coalition controls Indonesia's parliament and, subsequently, chooses the next president after June 7. If PAN is unable to ally with Megawati and the PKB, they note, Rais could choose to bolster a more Islamic block of parties lead by Golkar. This coalition, in turn, could choose Rais as their presidential candidate or reelect President B.J. Habibie.

More than 200,000 turn out for Golkar

Agence France Presse - March 7, 1999

Jakarta -- An estimated 200,000 people packed a Jakarta sports stadium Sunday in a mass show of support for Golkar, the party which kept president Suharto in power for 32 years, witnesses said.

The gathering turned the downtown Senayan stadium into a sea of yellow, Golkar's trademark color. It came less than 100 days before the June 7 elections in which it will be fighting to maintain its parliamentary majority.

The party rally was held to announce Golkar's official change of status from a "functional group" to a party to conform with new political rules introduced by Suharto's hand-picked successor, B.J. Habibie.

In the June 7 polls Golkar, which has said it may propose Habibie as its presidential candidate, will for the first time face up to 48 rival parties instead of the two allowed in the Suharto era.

The party also faces the prospect of losing thousands of previously assured votes from the military, which has pledged its neutrality in the polls. Civil servants and their families had also been obliged to vote for it in the past.

Golkar chairman Akbar Tanjung was quoted by the state Antara news agency Sunday as saying the new Golkar might consider a coalition with other parties to remain in power.

"Coalition between a party with other parties is okay, as long as it is aimed at our nation's interest," Tanjung, who is also Indonesia's State Secretary, was quoted as saying.

But he said any such coalition would only be formed after the polls, not before.

[Following the rally, Golkar chairperson Akbar Tanjung told the Associated Press that he expected Golkar to gain 40% of the vote -- enough he claimed to remain the largest party in parliament - James Balowski.]
 
Political/Economic crisis

Indonesia closes 38 banks among key reforms

Reuters - March 13, 1999

Gde Anugrah Arka, Jakarta -- Indonesia said on Saturday it had closed 38 banks as part of a cleanup of the debt-laden industry considered crucial to efforts to rescue its ravaged economy.

Among them were three owned by children of former president Suharto who was forced to step down 10 months ago amid the country's worst political and economic crisis since he came to power some 30 years earlier.

The long-awaited reforms included the government take over of seven banks, and plans to recapitalise nine, Finance Minister Bambang Subianto said. "Today 38 banks have been closed," he declared.

The $30 billion banking reform programme is regarded as the lynchpin of any recovery for Indonesia's devastated economy.

The package won swift endorsement from the International Monetary Fund, which said it had worked together with Jakarta, the World Bank and the Asian Development Bank to ensure the scheme was objective, efficient and transparent.

"The IMF fully supports the package and its implementation," IMF Asia-Pacific director Hubert Neiss said in a statement.

"The package of measures announced by the government today marks a decisive breakthrough in the ongoing effort to restore a viable private banking sector in Indonesia," he said. The IMF is leading a $40 billion international bail-out package for Indonesia.

Subianto said the closed banks included 21 which had previously been considered candidates for recapitalisation. The 38 banks, he said, "are deeply insolvent and have no prospect of regaining financial viability. They have therefore been shut."

The seven banks taken over by the government were the largest among the group which had been seen as candidates for recapitalisation. They had "extensive branch networks and are being taken over in the public interest to minimise disruption to the payment system."

Officials have said that banks to be recapitalised would receive 80 percent of their recapitalisation costs from the government through a bond issue. Banks with a capital adequacy ratio over four percent are considered healthy. Subianto said there were 73 such banks.

Details of the scheme were originally due on February 27, but were delayed with just one day to go. This prompted claims that the government had caved in under political pressure from well- connected bank owners whose banks faced closure.

Among the banks to be closed were at least five listed banks. They were Bank Bira, Bank Umum Servitia, Bank Mashill Utama, Bank Bahari and Bank Ficorinvest.

The IMF's Neiss said the package should help Indonesia's stricken rupiah currency recover. Its serious depreciation in 1997 triggered a deep recession.

Last week the currency was trading at under 9,000 to the dollar. It was at around 2,400 when the crisis started in July 1997 and has lost around 70 percent of its value. The banks included to be recapitalised include several of Indonesia's best-known banking names.

Violence worsens in Ambon, 12 dead

Associated Press - March 11, 1999

Ambon -- Religious violence worsened on riot-torn Ambon Island after outnumbered troops opened fire on Muslim and Christian mobs fighting each other with spears, knives and gasoline bombs. Religious officials said 12 people were killed.

Christian officials said nine of their faith were killed. Islamic officials said three Muslims died. Both sides said most victims were shot by soldiers.

More than 30 people were hospitalized with gunshot wounds. Others were cut by swords or hit by rocks, homemade spears or arrows.

The violence flared late Wednesday on the island already devastated by months of communal fighting, and residents said security forces continued to fire shots today. "We heard shots before dawn. Two neighbors were wounded by gunfire. Another was stabbed," said resident Una Noya in a telephone interview.

Fierce fighting among rival religious groups first erupted in Ambon Jan. 19. Since then violence has spread to five neighboring islands and has left more than 200 people dead in Maluku province. Thousands of homes, shops and other buildings have already been damaged or burned.

Thousands of troop reinforcements have been deployed, but they have failed to quell the violence despite orders to shoot troublemakers.

The latest killings in the main city, also named Ambon, triggered a new series of protests by Muslims in other parts of Islam-dominated Indonesia. There are fears that religious strife might spread.

Both Muslims and Christians accused the military of shooting unarmed civilians during the latest mayhem. "At least two of the dead were shot in their homes by soldiers," said Semiwaile Runi, a Protestant church official.

Jusuf Ely, an official at an Ambon mosque, said two Muslims were shot and killed and one was burned to death in his house. Military officials were not immediately available for comment today.

Dozens of houses were set on fire in the city, 1,400 miles east of Jakarta, when clashes among rival gangs erupted in six places around the city, police said.

About 90 percent of Indonesia's 210 million people are Muslim, making it the most populous Islamic nation. However, parts of Maluku, known in Dutch colonial times as the Spice Islands, have large Christian populations.

The religious clashes continue as Indonesia grapples with rising political and social tensions fueled by its worst economic crisis in 30 years.

The religious strife has increased obstacles to greater democracy in Indonesia, which is preparing to hold its most open parliamentary election since 1955 on June 7.

Today, President B.J. Habibie downplayed the threat of rising instability and said the large number of political parties that are contesting the election was a sign of greater democracy.

In Jakarta, Muslim students called on the government and military to take stronger action to stop the violence.

And on Sulawesi Island near Ambon, thousands of Islamic students marched through the streets of Ujung Pandang city today and warned of the possibility of retaliation against the Christian minority there.

Two shot dead in Aceh province: reports

Agence France Presse - March 11, 1999

Jakarta -- A soldier and a local official, were shot dead by unidentified men in separate incidents in Indonesia's troubled Aceh province, it was reported here Thursday.

The soldier, identified as Sergeant Rahmad Rohibat, was killed Thursday morning, and Zainal Abidin, a secretary for the Alue Durin village administration, was shot on Wednesday evening, the state Antara news agency said.

The agency quoted North Aceh military chief Leutenant Colonel Giyono as saying that the soldier was a member of the Kuta Makmur military base.

Rohibat was ambushed by an unidentified man on his way home from his child's school and shot dead. The killer escaped on a motorcyle.

Abidin was killed by a bullet which smashed through a window of his house while he was watching television, the agency said. His body was taken to the state Lhokseumawe hospital for a post- mortem, Antara said.

Police hand over control to army in Ambon

Agence France Presse - March 11, 1999

Ambon -- Indonesian police Thursday handed over control of this riot-torn city to the army, after a day of pitched battles between Moslems and Christians that left up to 10 dead and scores wounded.

"The command and control for riot situations will be transferred from the police to the military," said Major General Amir Sembiring, commander of the army's Trikora division, which overseas the Maluku islands.

Sembiring said the decision was made by the Maluku governor, adding "the Maluku police and its utilities are not appropriate for the task."

But he said that, with almost a full brigade -- about 2,100 troops -- in the province, there was no need to put Maluku under a civil emergency.

In Jakarta, Justice Minister Muladi said the transfer of power did not mean a state of emergency in the Malukus, where more than 200 have died since the violence erupted in mid-January.

"In line with the constitution, only the president can declare a state of 'civil emergency', if other conventional methods could no longer work and the situation is worsening," Muladi said.

He said that should an emergency be declared, there would be a night curfew, identity checks, press restrictions and other measures.

Meanwhile, residents reported scattered clashes in the wake of Wednesday's violence, which saw thousands of Christians and Moslems in the streets battling with crude weapons and fire bombs.

A spokesman at the Moslem coordination post, who asked not to be named, said three people were reported shot by troops in the city's Kalilau district Thursday, two outside a mosque and one in his home.

The report could not be officially confirmed. The spokesman said no Moslems had died in Wednesday's street fighting.

But Peilouw, a priest from the Bethania Protestant church here, said nine Christians had died of stab and gunshot wounds since Wednesday and 23 others injured, "but I don't know how many people from the other [Moslem] side were killed."

"Since Monday until this morning there have been a total of 12 people dead," Ambon General Hospital doctor Ristianto, who coordinates information from all city hospitals, told AFP.

In the rest of the city, a tense calm prevailed Thursday, local reporters said, with scattered warning shots and instances of houses torched.

"There is still some burning of homes in the eastern part of the city at the Tantui village, but it is unclear how many homes have been damaged," a reporter said in the early hours of the morning.

Meanwhile, the World Food Program (WFP) warned in a report, a copy of which was obtained by AFP, that food shortages in Ambon were worsening.

"The entire chain of supply has been disrupted," the report said, adding that food imports had dropped by 75 percent as ships were afraid to dock and traders had stopped storing food "in stores that could be burned at any moment."

"Big shortages" could be expected "if the situation does not change in the [coming] weeks," the report, submitted to the government this week, said, adding that the need for milk for children was urgent.

Compounding the problem was the fact that "Moslem and Christian zones are mixed and to join one place both Christian and Moslem areas must be passed," it said.

"People feel unsafe to pass through 'the enemy area' and this creates a feeling of 'locked lands' from where they cannot go out."

The WFP said its survey of Ambon and the surrounding areas had been carried out between March 1 and March 5, and that it had counted some 33,000 displaced people, 18,554 in Ambon alone.

Some 3,400 houses had been destroyed and the biggest market and 700 shops burned or completely destroyed.

Students stone churches in Sulawesi

Agence France Presse - March 12, 1999

Jakarta -- Rock-throwing students damaged at least four churches and four Catholic schools in Ujunagpandang, the capital of Indonesia's South Sulawesi province, witnesses said Friday.

Thousands of students from at least four universities in the city held a street rally Thursday to demand a halt to the Moslem-Christian violence in Ambon, capital of the Maluku province, which has killed more than 200 people since mid-January this year.

"The students were passing by our church when they pelted it with rocks. Some windows are broken." a secretary at the Heart of Jesus Cathedral in Ujungpandang, who identified herself as Lien, told AFP by phone.

Lien said the students also hurled rocks at other nearby churches and Catholic schools, shattering windows.

She said troops and police were rushed to the scene and managed to contain the violence, which lasted about an hour. There were no casualties, she said.

Students throughout the country, mostly Moslems, have been demonstrating against the military for its inability to curb the persistent violence in Ambon, with some groups calling for Jihad (holy war).

Indonesian Christians are a small minority in this predominantly Moslem country of 202 million people, and tensions between the two religions have risen as a result of the Ambon violence.

Fires smoulder, Ambon tense

Agence France Presse - March 11, 1999

Ambon -- Fires from burned homes smouldered and occasional warning shots rang out Thursday in the empty and tightly-guarded streets of Ambon, a day after renewed Moslem-Christian street battles.

"There is still some burning of homes in the eastern part of the city at the Tantui village, but it is unclear how many homes have been damaged," a reporter said.

He said the occassional helicopter hovered above the city. Some of the fires were were from the Wednesday fighting, and others were new.

The death toll from Wednesday's street battles was unclear, with some Jakarta-based newspapers reporting 10, others seven and others two.

Peilouw, a priest from the Bethania protestant church here, said nine Christians had died of stab and gunshot wounds since Wednesday and 23 others injured, "but I don't know how many people from the other [Moslem] side were killed."

"Since Monday till this morning there have been a total of 12 people dead," Doctor Ristianto from Ambons General Hospital, who coordinates information from all hospitals in the city, told AFP.

Meanwhile the national police swore in a new police chief for the Maluku islands, of which Ambon is the capital, and was reportedly preparing to hand over riot-control to Maluku to the army.

"The heads of the military are now in a meeting to discuss the command of riot control, which is going to be transferred from the police to the army," a duty officer at the Maluku military headquarters here said.

The head of the Maluku military command Colonel Karel Ralahalu gave no reasons for the command change when briefing reporters after the inauguration ceremony for the new police chief.

Deputy National Police chief Lieutenant General Nana Permana swore in Colonel Bugis Saman as the new Maluku police chief to replace Colonel Karyono Sumodinoto.

"[The handover] should not be interpreted as something which could worsen the riots that have dragged on all this time," the Antara state news agency quoted Permana as saying.

Armed Forces chief General Wiranto early this month announced the abrupt replacement of Karyono following nearly two months of unrest in the province that has left at least 200 people dead and devastated Ambon city.

However he did not elaborate on the casualties in Wednesday's violence, which erupted in six separate areas of the city, most fiercely in the downtown area where Christians and Moslems abttled with crude weapons and fire bombs.

Five more deaths reported in Ambon

Agence France Presse - March 8, 1999 (abridged)

Jakarta -- Renewed Moslem-Christian clashes in the riot-torn Indonesian city of Ambon reportedly claimed five more lives Monday as an attack was reported on Christian places of worship and a school on Java island.

The first two deaths in Ambon were reported early Monday when two Christians on their way to work were stopped at a Moslem roadblock in the Air Salobar area of the city, a police spokesman said.

One victim was an ambulance driver, a Red Cross official in Ambon said.

Three more people, all of them Moslems, were killed in Paso village 12 kilometers (seven miles) from the city center on Monday afternoon, local journalists said.

"They were hacked to death by our Christian brothers," a photographer told AFP by phone, adding that a bus and a truck were also torched.

Paso residents, mostly Christians, were stopping cars and buses for random checks. It was unclear how the situation turned violent.

An officer at the State Police Academy in Paso was unable to confirm the deaths but said many warning shots were fired.

Residents said the Monday killings in the Air Selobar area followed a clash between residents the previous evening when small explosions had been heard.

"The situation was under control last night after security forces fired rounds of warning shots but then this morning's attack made the situation tense again here," a local photographer said.

In separate incidents overnight and early Monday, residents in Ambon's Batu Gajah village torched an empty utility vehicle and later dumped it into a river. Residents of Batu Gantung village torched homes Monday morning, the reporter said.

Children who had returned to school this week following the arrival of 3,000 more troops ran home following the torching in Batu Gantung, the photographer said. All offices and shops immediately shut their doors.

Fears raised by mob attack in Bandung

Straits Times - March 9, 1999

Susan Sim, Jakarta -- Two churches and a Christian school were destroyed partially in the West Java city of Bandung on Sunday by mobs angry over the illegal use of several shophouses for Christian services.

The attacks raised fears that religious fanatics would ride on the rising chorus of extremist-led calls for a jihad (holy war) to avenge the deaths of Muslims in Ambon to spread sectarian violence.

Church sources said that the attacks, which occurred in predominantly Chinese-owned residential areas in south Bandung, took place just as Sunday mass began.

Pastor Simone Timorason, chairman of the West Java Christian Communication Forum, told The Straits Times yesterday that the mobs, numbering about 1,500 people in all, appeared to have come from surrounding areas.

One church, operating from three shophouses in the Taman Rahayu housing complex, was visited first by a policeman and a government official who disrupted the service to ask if the congregation had a permit to use the houses for fellowship.

"The pastor said no. So the policeman and the official stopped the preaching and sent the people out of the church," Fr Simone recounted.

"Then, about 1,000 people came, took the chairs, the pastor's lectern, everything, out of the church and burnt them. "This happened at 10 am. But the police and the military did not come until 1.30 pm."

Even then, the officials were more interested in learning if the church had the necessary permits.

Another nearby church was also torched, as was the first floor of a four- storey building housing a Christian primary school. The mainly Chinese congregations were not hurt, he said.

Local news reports said the mobs also pelted other shophouses in the area with rocks. Homes in the posh estates were also stoned.

But a resident told The Straits Times that damage appeared to be minor. Most of her neighbours, however, stayed home yesterday.

Despite the presence of 20 policemen outside the complex, she was still "a little afraid", she said.

Although church sources said the intimidation of illegal prayer houses was common, they were afraid that the Bandung attacks were "possibly linked to the statements of die-hard Muslims calling for jihad in Ambon".

Sunday saw the largest rally so far, with 50,000 Muslims marching through Jakarta chanting "Allahu Akbar" and "Jihad! Jihad!" as they protested the military's failure to quell the Christian-Muslim warfare in the province once renowned for its religious harmony.

Military sends special team to Ambon

Agence France Presse - March 7, 1999

Jakarta -- The Indonesian armed forces on Sunday sent a team of 19 high-ranking military officers to riot-torn Ambon in a bid to halt ongoing Moslem-Christian violence which has left more than 160 people dead.

"We are sending 19 high-ranking officers who were born and raised in Maluku because they fully understand the culture and customs of the local people," armed forces chief General Wiranto told journalists at Jakarta's Halim military air base.

The team is made up of both Moslems and Christians and is led by Major General Suaidi Marasabessy, chief of the Wirabuana Command which oversees provinces in Sulawesi island.

Wiranto said he hoped that the team would be able to calm the warring communities due to the members' full access to the people.

He also said the military would help the tens of thousands of settlers from other provinces, who had fled Ambon since the violence erupted mid-January, to return when the situation had been brought under control.

"We hope they will return and ABRI (the armed forces) will provide its ships to help them return to Maluku, which has been their home for generations," he said.

Wiranto said the declaration of an emergency in Maluku province, of which Ambon is the capital, was not yet warranted.

Wiranto last week sent some 3,000 marines and tough Kostrad Strategic Command troops to Ambon in a bid to bring the violence under control. But the brief calm which heralded their arrival was shattered Friday with the fire-bombing of a Christian church.

Hours later plainclothes police officers opened fire on a crowd of Christians guarding their homes near the church, killing one person and wounding at least 16.

Repeated appeals by religious leaders to halt the vicious cycle of revenge attacks by Moslems and Christians in Ambon and surrounding islands have been in vain.
 
Aceh/West Papua

Students in Aceh press for referendum

Agence France Presse - March 8, 1999 (abridged)

Jakarta -- Students in Indonesia's troubled Aceh province have launched a campaign for a referendum on self-determination for the troubled territory, residents and a report said Monday.

The State Antara news agency said hundreds of banners and placards had been put up at markets and on roadsides along the east coast of the province, home to about four million people.

Some 300 people, part of a student group which has since mid- February campaigned in sub-district areas, have been giving speeches and putting up the "referendum" signs, a student leader said.

"We ask Indonesia to understand the problem of Aceh because the problem ... is linked to its unresolved past," Kautsar, from the Student Solidarity for the People, told AFP from the province's capital of Banda Aceh.

To resolve the problem, he added, "referendum is one of the options, to get the people to choose whether they want to be free or join with Indonesia."

"We want peaceful referendum and not a bloody referendum," read one of the group's banners in a North Aceh village, Antara said.

North Aceh military commander Colonel Jhoni Wahab said: "The students' campaign to support reform has become a new conflict in dealing with security issues in Aceh." Kautsar said troops were pulling down the signs.

The Indonesian parliament, in a special session last year, revoked a law allowing any province to hold a referendum.

The campaign launch followed a student congress in Banda Aceh attended by some 300 people concerned over the province's status.
 
Human Rights/Law

Rights group demands release of Budiman

Agence France Presse - March 12, 1999

Jakarta -- A human rights group has called on the government to unconditionally release jailed Indonesian political party leader Budiman Sujatmiko, dismissing an offer of clemency as unacceptable, press reports said Friday.

"The release of Budiman and his friends should proceed from a political confession that the old [Suharto] government committted the crimes, and not him," The Indonesian Observer quoted the PHBI as saying.

The PHBI, or Indonesian Legal Aid and and Human Rights Association, dubbed the clemency offer "unfair" because it "assumes that Budiman and his friends were guilty of holding a political belief."

On Sunday Indonesian justice minister announced that President B.J. Habibie had agreed to pardon Sujatmiko, now serving a 13- year jail term for subversion in Jakarta's Cipinang prison.

But Sujatmiko, who was charged with subversion in connection with the riots that rocked Jakarta in 1996, rejected the offer out of hand because he would continue to be classified as a criminal.

The leader of the People's Democracy Party (PRD), Sujatmiko was convicted in 1997 of discrediting the Suharto government and masterminding labor and political demonstrations.

The PRD was banned under the Suharto government but last week qualified to contest the June 7 elections. Its two representatives on the newly-formed Election Commission Thursday boycotted an audience with Habibie in protest against the pardon offer.

Muladi: Budiman, don't say too much

Detikcom - March 10, 1999 (slightly abridged)

Nurul Hidayati, Jakarta -- The Minister of Justice, Muladi SH regrets [jailed People's Democratic Party, PRD, chairperson] Budiman Sujatmiko's action in rejecting clemency from the Indonesian President. Muladi was surprised by the attitude and has asked Budiman not to say too much.

"If he rejects clemency that means he is just creating problems for himself. [If we try] to help a person, why do they reject it", said Muladi on Wednesday.

Muladi said this when journalists were asking about Budiman's statement which explicitly rejected clemency by the President. Budiman has asked to be released without any conditions. Muladi hoped that Budiman would not make it difficult for himself because [the offer] to free [the PRD and PKI, reported in Kompas March 6 - JB] political prisoners was made in good faith.

"People like him should be silent. Don't speak too much. [He] should be like Bintang or Pakpahan who were freed before and were silent and wanted [clemency]", said Muladi to journalists.

It was explained that while the granting of clemency must be agreed to by those involved he would leave it up to Budiman [accept it or not]. According to Muladi there are other legal means which could be used such as an amnesty. Amnesty, Muladi said, is a more complex process while clemency from the President in this case, is a technical process by the Department of Justice.

"Budiman's rejection will obviously make things difficult for me because as you know, I do not stand alone in this matter. If he takes steps which make it difficult for himself, that's not my business", he said.

On the issue of whether the PRD can still participate in the elections, according to Muladi, Budiman is not the only chairperson of the PRD. "The Election Committee (KPU) will determine that", he said.

Budiman's rejection to being given clemency by President B.J. Habibie drew comments from he a group of 12 political parties which failed to be able to participate in the Elections. They released a statement that said the rejection by Budiman was a huge insult against the President Habibie and the Republic of Indonesia.

"Because of this, we from the 12 Political Parties Group D state that we condemn Budiman's attitude as the chairperson of the PRD and hope that the government and the KPU will prevent the PRD from participating in the elections", they wrote.

The statement was signed by the chairperson and general secretary of the Indonesian Mutiara Party, Dr Sumarjan Matgono and Djoko Wijono, along with the chairperson and general secretary of the Republican Party, Masgar Kertanegara and Krisnu Hanura.

[Translated by James Balowski]

PRD has never committed political crimes

Kompas - March 9, 1999 (abridged)

Jakarta -- The chairperson of the People's Democratic Party (PRD), Budiman Sudjatmiko has said that they [the PRD] have never recommended to anyone to present [a request] for clemency by the President. "We have never felt we have done wrong or carried out political crimes during the period of the New Order regime", wrote Budiman and Petrus H. Hariyanto (the secretary general of the PRD) in a written press statement received by Kompas on Tuesday, March 8.

"What we actually did was integral to the movement for total reformasi, of which one thing was demanding that Suharto resign. That is something that in reality has already become a fact and historical truth", wrote Budiman.

Budiman added that his being in jail is a result of political manipulation by the regime in order for it to maintain authoritarian political power. "Therefore we feel there is no need to obtain clemency to free us. Our freedom and the freedom of other political prisoners is a historical demand", he said.

In the statement Budiman rejected the clemency offered by the Minister of Justice, Muladi, along with demanding the release of all political prisoners though an amnesty with out any limits or conditions.

The reaction of Budiman's father, Wartono Utomo was slightly different.

"I am happy because the government will free Budiman. But Budiman will definitely reject being released if other PRD activists are not released as well", he explained when contacted by Kompas. Wartono admitted to meeting with Budiman in Cipinang prison last week. At that time Budiman had spoken about the offer of clemency which meant he could leave the jail. But he had explicitly said that he would not accept being released if other PRD activists were not freed also.

[Translated by James Balowski]
 
News & Issues

Suharto's son put under "city arrest"

Agence France Presse - March 12, 1999

Jakarta -- Former president Suharto's youngest son, Hutomo "Tommy" Mandala Putra, was slapped under city arrest for 20 days Friday pending trial for his alleged involvement in a multi- million dollar land scam.

Announcing the order Attorney General Andi Ghalib said Hutomo would have to report to his office twice a week, on Mondays and Thursdays, the private ANteve television station reported.

ANteve said the order was given as the case would soon be referred to the courts, while Ghalib said the move to confine him to the city was evidence that everybody is equal before the law.

"Anyone is subject to legal consequences. This a country based on law," he told journalists after Hutomo appeared at his office. "If other suspects have been put under city arrest, why not him," Ghalib was quoted by the state Antara news agency as saying.

The head of the Jakarta High Prosecutor Syahmardan Lubis was quoted by Antara as saying the restriction would allow the court to convene at any time. "If they want to leave Jakarta, they will have to ask permission from [the] Jakarta High Prosecutor," Lubis said.

Other suspects in the case, the former chairman of the National Logistics Agency (Bulog) Beddu Amang and businessman Ricardo Gelael, had previously been put under city arrest.

Hutomo was officially declared a suspect and questioned in November over the scam, revolving around a 1997 real estate swap deal involving Bulog and a private company, Goro.

The deal allowed Goro, 40 percent owned by Hutomo and Ricardo Gelael, to build a retail centre on a large Bulog tract of land in an affluent residential area in North Jakarta.

But Goro failed to keep its side of the bargain and give some 63 hectares of land to the logistics agency, which resulted in an estimated loss of 52.5 billion rupiah (seven million dollars) to Bulog. A travel ban has already been imposed on Hutomo and Gelael.

Jail terms urged for soldiers

Agence France Presse - March 9, 1999

Jakarta -- A military prosecutor on Tuesday asked for jail sentences of between 15 to 26 months for eleven soldiers on trial for abducting pro-democracy activists in the last months of the Suharto regime.

Military prosecutor Colonel Harom Wijaya, in his call for the sentences said the defendants, from the elite Kopassus special forces, had been guilty of "collective deprivation of the right to freedom."

The prosecutor sought a 26-month jail term and dismissal from the military for three of the defendants, Major Bambang Kristiono, Captains Multhazar (eds: one name) Yulius Selfanus and Untung Budiharto.

He said Captains Nugroho Sulistio, Dadang Indrayuda, Jaka Budi, and Fauka Noor Farid should be sentenced to 22 months in jail and dismissed from the military.

For the remaining three, Master Sergeant Sunaryo, and Sergeants Sigit and Sukadi, he called for 15-month sentences. But he failed to mention whether he was also asking for their dismissal from the armed forces.

The jail terms of all 11, who were arrested in September, should be reduced by the time they had already spent under detention, Wijaya said.

The military court, which has yet to rule on whether the nine are guilty or not, will reconvene Tuesday to hear the defendants' defence plea.

One of the defendants, Major Kristiono, told the court at a previous session that he had set up a team of soldiers on his own initiative to abduct nine pro-democracy activists.

He said the mission of the "Rose Team" was to investigate "radical groups" allegedly seeking to disrupt a meeting of the country's highest legislative assembly in March 1998 which was to re-elect Suharto.

The assembly returned Suharto to the presidency for a seventh consecutive five-year term, but the ageing strongman resigned amid mounting public pressure and unrest two months later.

Kristiono said, however, the team's activities were reported to his superior, then Group Commander Colonel Khairawan of the Kopassus, then headed by Suharto's son-in-law Prabowo Subianto.

A total of 23 activists were kidnapped, of which nine have resurfaced, 13 are still missing and one was found dead.

Some of the nine who resurfaced have spoken of being kept for weeks in solitary confinement and being tortured.

Human rights groups have already called for a halt to the court martial, charging that its only purpose was to cover up for the involvement of the military top brass in the abductions.

Press reports in August said that Suharto's son-in-law, Prabowo, had admitted during a two-week investigation by the military's Officers Honorary Council that he had ordered the kidnappings.

The officers' council discharged Prabowo and two other senior officers for their role in the abduction and torture of activists.

Ghalib now says phone tape's genuine

Business Times - March 10, 1999

Indonesian Attorney-General Andi Ghalib admitted yesterday that the leaked tape of a phone conversation between himself and President BJ Habibie is genuine, retracting his earlier assertion that the conversation never took place.

"Yes, the voice on the tape is mine," he said in Parliament. Mr Ghalib said he only heard a copy of the tape, and thus couldn't confirm if the original was genuine.

Dr Habibie was caught on tape urging Mr Ghalib to softpedal the ongoing investigation of former president Suharto for corruption, and demanding judicial pressure on businessmen Sofyan Wanandi and Arifin Panigoro.

The two businessmen funding the pro-democracy reform movement were accused by the government of corruption.

Mr Suharto ruled Indonesia with an iron first for 32 years. His family is said to have amassed a fortune running into billions during those years. Mr Suharto was toppled amid mass protests last May. The leaked tape has confirmed the perception that Dr Habibie, one of Mr Suharto's oldest friends, isn't serious about pursuing corruption charges against his mentor.

It also intensified calls for Mr Ghalib to resign, and damaged Dr Habibie's chances of becoming the ruling Golkar party's next presidential candidate.

Lawyers file letter to stop Suharto probe

Agence France Presse - March 11, 1999

Jakarta -- Lawyers for ex-Indonesian president Suharto on Thursday filed legal papers with the attorney general's office to demand that an inquiry into the former leader be stopped as hundreds of pro-Suharto protestors demonstrated outside.

Lawyers Muhammad Assegaf and Denny Kailimang delivered a "Letter of Legal Opinion," demanding that the attorney general halt the investigation into alleged massive corruption and abuse of power by their client.

"It turns out after three months of investigation the attorney general's office has found no evidence and taken no legal measures on the Suharto investigation," Assegaf said as he handed the letter over.

Assegaf said the purpose of the letter was to determine the legal status of the 77-year-old fallen leader, reputed by the US-published Forbes magazines in July 1998 to be worth four billion dollars.

"We are certain there is no strong reason for the attorney general to pursue this case as one of criminal corruption, because none of the facts allude to the crime of corruption," he said.

Some 400 youths who described themselves as Suharto loyalists protested in the streets outside, demanding that the attorney general produce results or clear Suharto.

"We ask the attorney general to stop and immediately announce the results of the investigation on Suharto and restore his good name if there is no evidence of criminal violation of the law," a joint press release from three protesting groups said.

One youth told an AFP photographer he had been paid 15,000 rupiah (about 1.60 dollars) to stage the protest.

On Tuesday a parliamentary commission pressured Attorney General Andi Ghalib for three hours to speed up the probe by making Suharto a suspect in the alleged corruption case instead of only as a witness.

Suharto, who has scoffed at reports that he amassed a fortune during his 32 years in power, stepped down on May 21, 1998 amid mounting public pressure.

March 11 marks the anniversary of the day in 1967 when as a virtually unknown major general, he took power from Indonesia's first president Sukarno on the heels of a botched coup blamed on communists.

The role of "Pancasila thugs"

Straits Times - March 7 1999

Derwin Pereira, Jakarta -- In the movie Forrest Gump, a simpleton character wanders blithely into scenes that are later regarded as historic. A variation of that happened here recently.

Indonesian newspapers carried a picture of former President Suharto recently together with respected Muslim leader Abdurrahman Wahid. The story was about the serious subject of national reconciliation and the grisly violence tearing Indonesia apart.

In the background of that picture, a Forrest Gump-like character appears, in the form of the bearded and plumpish Yorrys Raweyai. However, he is anything but an innocent intruder onto the scene.

Rather, as one of the leaders of the Pemuda Pancasila organisation, usually referred to here as Preman Pancasila or "Pancasila thugs", he was reputedly the country's No. 1 hatchet man for the Suharto regime.

The 51-year-old former sailor from Irian Jaya is not shy of being associated with the world of gangsters. Displayed prominently at the entrance of his house is a poster of Al Pacino in his signature role in the film Godfather III.

Asked about the poster, he said he had seen the Godfather sequel several times and admired the Mafia's code of conduct and strong loyalties. He sees his seven-million-strong para-military outfit as akin to the "Capo regime".

His "best friend and soul mate" is Mr Suharto's eldest son Bambang Trihadmodjo. And for him, his Godfather is none other than Mr Suharto.

He tells Sunday Review in an interview: "Suharto is Indonesia's Godfather. He is our true leader. He built the country into what it is today and protected his people and followers. Without him, we have become a weak and divided society."

The organisation's connections with Mr Suharto and his family reveal the darker underside of Indonesian politics and explain why the New Order regime survived for 32 years.

Guardian angels or hoodlums?

The Pemuda Pancasila was set up in October 1959 by the then military commander General A. H. Nasution. By forging an alliance with other mass organisations like HMI and Ansor, it aimed to act as a counterweight to the communists.

It went into political oblivion, albeit temporarily, after the emergence of other influential youth groups in the early '70s.

But with the backing of the government and ruling Golkar party, the Pemuda Pancasila was revived in 1978. Branches were established throughout the 27 provinces and its membership mushroomed.

Mr Yorrys and his shadowy counterpart, Mr Yapto Suryosumarno, a relative of the late Ibu Tien Suharto, formed a potent partnership in leading the organisation.

Many members of the group are ex-convicts and hoodlums from slum areas. Mr Yapto is unabashed about the type of people Pemuda Pancasila recruits.

"They are Indonesian citizens and they have rights as any other Indonesians," he says. "Why can't we give them a second chance in life? Yes, they don't understand the law. But we can help them to do so. We are also giving them a source of income. What is wrong with that?" Equally, he defends the military-style training they receive from the armed forces (ABRI).

All recruits go through a three-week basic military training in different parts of Java to improve discipline and group solidarity. Members wear a tiger-like orange and black-striped uniform and army boots, and carry accessories like walkie- talkies.

He notes: "There is always proper command in the military. There are levels, hierarchy and procedures to follow." That military affiliation is expressed in helping ABRI in its political and economic programmes down to village level. Members also help out in intelligence-gathering activities and establishing armed civilian militias. Golkar has also, to a large extent, depended on the Pemuda Pancasila, as one of its main youth groups, to mobilise support for the party during general elections.

To improve its image as nothing more than "a rag-tag group tied to the power centre", the Pemuda Pancasila has tried, particularly in rural areas, to build Islamic boarding schools and hold Quran recital competitions.

However, such efforts have been undermined by the activities of some members for using intimidation, violence and bribery to get their way in protection rackets, debt collection and land disputes.

In April 1997, for example, 60 of its members were arrested for attacking five amusement centres in a Jakarta shopping complex. Their story: to wipe out gambling in the city.

Their victims tell a different tale. They said the louts wanted protection money that would be used to finance the construction of a new office for the Pemuda Pancasila.

Mr Yorrys is quick to counter such allegations. "We are not hoodlums. We are the guardian angels of Indonesian society." Protecting the Godfather

Provocateurs -- this is the popular catchphrase in Indonesia today to describe the "invisible hand" in much of the rioting, sectarian violence, looting and mysterious killings in the last year, leaving behind a trail of untold deaths and mass destruction.

Ambon, Ketapang, Medan and Banyuwangi, just to name a few, are periodic reminders of what a politically motivated group can do to tug apart the loosely-knit ethnic and religious yarn of the sprawling archipelago.

The Commission For Missing Persons And Victims (Kontras) alluded to the involvement of Indonesia's new bogeymen when it said recently that the violence in the strife-torn eastern Indonesian island of Ambon was engineered to discredit certain political leaders.

Kontras chief Munir said that two weeks of investigation by his human-rights group revealed that there was mobilisation of strangers before the riots, pamphlets and documents inciting religious passions, people with guns and the use of walkie- talkies and cellular phones during the unrest.

"The instigator seemed like he knew this situation very well and made this vulnerable issue the trigger to a bigger and broader riot," he says.

He rejected a government explanation that the unrest was sparked off by a fight between a public vehicle driver and a thug. But Mr Munir does not offer any clues as to who is behind the violence.

Respected Islamic scholar Abdurrahman Wahid believes that Suharto loyalist and pro-status quo elements within Golkar are responsible. With the Godfather gunned down, his supporters are fighting back.

Their aim? To cause sufficient problems in the country to signal the former leader's continuing power and influence. There are already indications that people in rural and outlying areas are yearning for the Suharto past. Noted a Cabinet Minister: "This is the work of people around Suharto, not necessarily Suharto himself. Some of the Pemuda Pancasila have been let loose to harass Islamic forces supporting Habibie because they see these forces as a threat to their survival.

"There is also a sense that Habibie and Wiranto have done little to protect Suharto and his family. It is a wake-up call to them."

In the case of Ambon, Mr Wahid says the riots were incited by "someone living in Ciganjur", interpreted by many here to mean Mr Yorrys, who lives in that area in south Jakarta and, by sheer coincidence, next to Mr Wahid's house.

ABRI chief General Wiranto has also alluded to the Pemuda Pancasila's involvement by asking Mr Suharto to stop his "terrifying loyalists" from spreading more terror and bloodshed.

Lending credence to such views is the arrest of several Pemuda Pancasila members in Ambon and the Ketapang riots.

Mr Yorrys denies such charges. When asked to respond to Mr Wahid's allegation, he shoots back: "Why not Yapto? Why me? I know provocateurs were caught in Ambon. But does it mean that I am involved?"

The chairman of the National Human Rights Commission, Mr Marzuki Darusman, who is also Golkar's faction chief in Parliament, however, argues that too much credit is being given to the group for the violence.

"People are making them look bigger than what they are. Their influence is exaggerated and on the wane now." But is it?

As the largest youth group in Indonesia, the Pemuda Pancasila still commands significant weight at grassroots level to affect political outcomes. Indeed, Golkar and ABRI made use of large networks across the country to mobilise support for the ruling party in previous elections.

It is highly probable that it will do so again in the June election to preserve the old constellation of forces in the form of Golkar or newly-formed pro-Suharto groups like the Indonesian National Party and the Republic Party.

More 'Al Capones' to come?

Indonesian independence in 1945 was won by the parallel efforts of Western-trained intellectuals and uneducated, armed volunteers in their fight against the Dutch colonialists.

Fast-forward half a century later. As Indonesia experiences the destabilising double blows of an economic and political crisis and election looms in the background, the forces of muscle politics appear to be on the rise.

The Pemuda Pancasila is not the only group accused of seeking to shape the contours of national politics from the underworld. There are also radical Islamic groups like the Dewan Dakwah and Kisdi, which have also been accused of agitating the grassroots.

But nothing can be proven. And this is not surprising. Indonesian politics operates much like a giant mill fuelled by endless streams of rumours and innuendoes.

If asked, none of these groups will admit to be anything but perfectly legitimate social, political or religious organisations.

But then Al Capone also thought of himself as a legitimate businessman. For years, he masqueraded as one despite deep suspicion of his activities. He was undone finally when courageous and incorruptible law enforcers convicted him.

The sad thing for Indonesia in 1999 is that the law enforcers' modern-day equivalents are few and far between. Consequently, Indonesian-style Al Capones and their supporters go about their business with relative freedom.
 
Economy and investment

World Bank sees difficult recovery

Kyodo - March 10, 1999

Christine T. Tjandraningsih, Jakarta -- Indonesia will see modest economic growth next fiscal year, starting April 1, but its recovery prospects will be overshadowed by the grim global outlook and continuing political uncertainty at home, the World Bank said Wednesday.

"Indonesia's prospects are subject to a wider-than-usual band of uncertainty," the bank said in a 20-page document titled "Country Assistance Strategy -- Progress Report" made available to journalists the same day.

"The point at which the economy will bottom out and start growing again is hard to predict," it said.

According to the World Bank projection, Indonesia's gross domestic product (GDP), estimated to fall 13% in fiscal 1998, will grow by 1% in fiscal 1999, followed by a 3% growth in fiscal 2000.

The bank projects inflation in Indonesia to fall to 10% in fiscal 2000 from 20% in fiscal 1999 and 80% in fiscal 1998. Meanwhile, the budget deficit is expected to remain stable at about 4.8% of GDP in fiscal 1998 and 1999.

This assumes reforms are implemented speedily and consistently, the fiscal stance remains expansionary and monetary policy eases gradually as prices and the exchange rate continue to stabilize, the report said.

"The global outlook continues to look grim for Indonesia," the World Bank said. "Quite apart from depressed international commodity markets, especially for oil, which affects both export and budgetary revenues, the prognosis for Indonesia's East Asian markets looks none too promising."

The report said Indonesia's recession would be prolonged and its recovery postponed if global conditions and political developments take a turn for the worse.

Indonesia's GDP may decline 3% in fiscal 1999 and remain stagnant in fiscal 2000 if global conditions worsen, the World Bank said.

According to the bank, the government under President B.J. Habibie has continued to show commitment to reforms, including improving public sector governance and transparency, but these are just starting and may be increasingly focused on short-term measures in the run-up to the country's general election on June 7.

"Indications are that several initiatives could be started during the period leading up to the election, including anticorruption actions, civil service reforms, fiscal decentralization and judicial reforms," it said.

"There is a danger, of course, that these initiatives may be motivated by short-term political considerations to the detriment of longer-term development objectives, and they will require close monitoring and intensive, constructive involvement by the bank and others," it added.

The bank said it still sees a period of growing political uncertainty -- especially in the run-up to the parliamentary election, the presidential election in November and the subsequent appointment of a new cabinet in December -- haunting the progress made by Habibie's government and the country's economic condition in the future.

"The period will be dominated by enormous uncertainties associated with the complex political transition to a new government, which will influence greatly the bank's future role in Indonesia," it said.

"Calls for a 'people's economy' and a redistribution of assets from the rich to 'pribumis' (native Indonesians) have acquired considerable popular support and need to be channeled in constructive ways, or else they could do considerable damage," it added.

The bank stressed it will maintain a high degree of flexibility to allow rapid adjustment despite the uncertainty, but said "Indonesia's future is where it should be, in the hands of Indonesians."

"We must not forget that in Indonesia, the bank is playing only a small role in a much larger drama," it said.

[On March 11 AFP reported that the Investment Minister, Hamzah Haz, said that Indonesia approved foreign investments worth 300 million dollars in the one-and-a-half months to mid- February -- less than 10 percent the approvals recorded a year ago - James Balowski.]

World Bank exposure to approaching limit

AFX-ASIA - March 10, 1999

Jakarta -- The World Bank's exposure to Indonesia is approaching its limit of 13.5 bln usd for a single large borrower, reducing the scope for additional lending in the next few years, the bank said in an interim assistance strategy document.

The document said that, taking into account a base case lending scenario of about 4.9 billion usd in the years to March 1998 to 2000, "Indonesia is expected to approach close to the bank's concentration limit of US$13.5 billion for a single large borrower..."

"This scenario therefore limits the scope for additional lending in future years to about US$1.2-1.3 billion a year," the bank said.


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