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ASIET Net News 11 – March 15-21, 1999

 Democratic struggle

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Democratic struggle

Pram: Revenge no, pity certainly

Detikcom - March 22, 1999

Sigit Widodo, Jakarta - A third of Pramoedya Ananta Toer's life was spent in jail. But in jail his imagination as a writer did not die. Pram says he does not feel vengeful against the New Order regime, even though the former head of the People's Cultural Institute (Lekra) was jailed without trial for years on Buru island.

In fact Pram admits to pitying the New Order. "I am not vengeful but have pity, [for those who] are so low", said Pram to reporters. The following are excerpts from an interview with Pram with journalists when he was inaugurated as a member of the People's Democratic Party (PRD) on Sunday March 21.

Question: Why did you decide to join the PRD?

Pram: Because the PRD is a youth movement who's hands, as far as I know, have not been stained with the blood of murder, there is no money from corruption in their pockets. They just have good intentions for the country and their nation. [Members of the PRD] are abducted [and are still missing], are still jailed without any reasonable basis. But they just keep going. Because of this I have an obligation to give moral assistance, first of all. It is because of this that I have great hope in the youth movement.

Question: If the PRD wins the elections what will be your attitude to the New Order regime?

Pram: I do not have any power and do not dream of having power. It's up to healthy laws. To educate [society] that each person is responsible [for what they do]. If the PRD wins a healthy, positive laws will be enacted.

Question: Don't you want revenge?

Pram: Actually I have pity, [for those who] are so lowly. Everything I owned was taken [lit: plundered], even my child's diaper! I do not want revenge but have pity.

Question: What was your political aim in joining the PRD? Pram: I don't have a political goal, [what I do politically as a member of the PRD] is entirely up to the youth.

Question: Why did you choose the PRD and not another party?

Pram: What other party? I don't trust any of the other parties. My rights have been taken away and all of them act as if this never happened. Golkar, the United Development Party, the Indonesian Democratic Party, what have they said about it? Not one case [of human rights abuses against me] was taken up [by them]. I became a political prisoner without being tried and they never raised it in the parliament. Instead the parliament agreed with it. So those parties have no relevance.

Question: How do you view the party leaders who were involved in bringing down Suharto?

Pram: What party!

Question: For example [Megawati's] PDI-Perjuangan, [Gus Dur's] National Awakening Party, [Amien Rais'] National Mandate Party?

Pram: As I said. There so many parties. What have they said. Have they ever defended me. They never said anything. I don't trust them, okay. [They are all full of] empty talk.

Question: Now that you have become involved in the world of politics will you abandon the world of literature?

Pram: That depends on how my dictation is, ha.. ha.. ha..

Question: What do you mean?

Pram: Yeah, I still want to work in literature.

Question: So you won't abandon literature?

Pram: I don't think so.

Question: How do you view the culture of violence which is occurring at the moment?

Pram: It is the culture of cannibalism. Because we have not long abandoned cannibalism. Only 150 years ago. It is not yet 50 years since we left the culture of the stone age. So certainly it is still easy to sink lower than the cultural standards in the hands of people who are uncultured. The more uncultured the political leaders, the power holders, the government leaders, the lower the level of culture will sink. And if the level of culture declines, any political systems will be the same in the end. [Translated by James Balowski]

Salam Demokrasi!

ASIET - March 22, 1999

[The following is a speech by Pramoedya Ananta Toer (1) on the occasion of his swearing in as a member of the Peoples Democratic Party (PRD) in Jakarta on March 21.]

At this moment, in the midst of this spirited and enthusiastic Young Generation (2), I truly feel happy. This is the most important event in my life, what I have dreamed of since I was young: to witness for myself the birth of a Young Generation not burdened by bombasticism, and which is rational, corrective, critical, and all of this bound by firmness of commitment. There are PRD members lost in who knows what jungle, those kidnapped, and those whose jungle we know, those in jail. They are all victims of the staged trials that are the fashion today. Now I am in the midst of the PRD, among whom are some who escaped from kidnapping. In fact I was one of the first victims of kidnapping, in 1959 (3), although then it was not news.

I assess the Young Generation, I mean the PRD, as being of higher quality than the generations that have gone before. Lets go straight to the core: since you were children you have been educated with the political lies of the New Order (4), painting the New Order as angels and depicting all those layers of society who refuse to defend it as devils. From primary school to university. And you all have seen through those lies.

You are of the Left, that is you side with people, the lower levels of society. Exactly, because for so long the people have just been the playthings of the elite, except during the Old Order (5), because in that period there were political forces that stood beside the people. The fall of the Old Order meant that the people and the country became loot for multinational capitalism working together with the national elite as their guard dogs.

Let us make a comparison with the Young Generation of the years before 1920.

They, university students who received scholarships from the colonial government in the Netherlands as well as the exiles of the Indische Party, discovered a homeland and nation and they called it Indonesia. This was a glorious and great discovery. Its a pity, but the flaws of this discovery were as great as its glory. There was no socio-political concept and it was imbued with antipathy to history. For example, the name Indonesia means Indian islands. The name itself was invented by an Englishman and then popularised by the German ethnologist, Adolf Bastian (1826- 1905). The name "India" for Indonesia originates from the Western nation's hunt for spices in the Moluccas starting in the early 15th century, a hunt that led to the whole of the non-Western world being dominated by the West. These spices came from what is known today as Indonesia, but always traded as "made in India". While under Portuguese domination, it was known as Portuguese India.

Under Dutch colonialism it was called Dutch India. And to disguise this association with India from the native people, this name was written Hindia.

The politics of manipulating words. Some people speculate that the young generation of that period adopted this ethnologists name to avoid the domination of Java. History had given birth to two names for what is Indonesia now, namely "Nusantara" during the period of the kingdom of Majapahit (6), which means "islands in between (two continents), and even older is "Dipantara" from the time of the Singasari kingdom, which means "fortress between (two continents)'. This older name is pregnant with political meaning because the King of Singasari, Kertanegara, built military alliances with other Southeast Asian coastal kingdoms against the expansion of Kublai Khan from the north.

And even till today, there are still no voices, not a single voice, calling for correction of all this.

If we make a comparison with the Young Generation with their Youth Pledge (7), also a genuinely glorious event, the PRD exhibits more ideas with greater depth. We can understand this when we remember than in the 20s only 3.5% of the population could read and write. The increase in the number of literate people began only with national independence. Taking into account this statistic we can understand the deficiencies of the Young Generation of this period.

The 45 Generation (8) was also glorious. With no self-interest, without reserve, they devoted all their body and soul, ready to die, in order to defend national independence on every inch of the homeland. Because the main problem they faced were the armed attacks of the colonialists, most of their activities were made up of shooting, the rifle ruled. They did not yet get to developing socio-political and economic concepts, like you are developing now, such as peoples democracy, popular democracy. And you must never forget that no matter how glorious was the 45 revolution that succeeded in seizing and defending national independence, it was begun by the gangsters of the Senen Markets in Jakarta.

The 66 Generation (9)? Wow! there is nothing more to say about them. And then came the Malari Generation (10) who wanted reform under the slogan "military back to the barracks", in line with the reform outlook of General Sumitro (11). Both of them, [the students and General Sumitro], were defeated by the New Order, with tactics which are becoming classic features of our history.

This is why I am proud to be among you all today, you who have prepared your ideas, have started to put them into practice in the field, and smiles maturely ready to accept the consequences, never mind how bitter.

There is no cry more appropriate for all this than: Long live the PRD! I am convinced that you are more prepared than those who have gone before you and will succeed more than those who have gone before you. I know that you will not denigrate the value of Indonesian's people through the use of massacres, and the theft of their fundamental rights. Because as was taught by Multatuli (12): the duty of all humans is to become human.

I believe that tomorrow or the next day, you will not speak in the name of the nation in defence of your own interests, or of your group's interests or for the sake of power. It is only ever valid to speak in the name of the nation if there is democracy. It is almost like people have been struck with senility so that they can't remember that the nation comprises three elements: its inhabitants or citizens, the homeland itself or the inhabited territory and the government. To speak on behalf of the nation requires the representation of all three elements. To denigrate any one element is corruption. And corruption in thinking inevitably spreads into actions.

I say all this not in order to praise you who have not yet had the chance to succeed, but only to locate you in these comparisons. You have what it takes to succeed better in lifting up our homeland and nation to the level of which we all dream.

In our modern history, the Young Generation has always been -- except for the 66 Generation -- the motor driving things forward. Even with all its flaws and limitations. And the limitation which sticks out most of all: the lack or absence of courage for correction.

Courage! Again, courage! For the youth in particular courage is the greatest of all capital. Without courage, as I have often said, you will be treated like cattle: deceived, herded from here to there and back again or even herded ready to be massacred. It is only courage that can make a firm character.

Before ending I would like to appeal to everybody here today at this meeting, here inside or outside this room, wherever you are, to donate money to the PRD for routine as well as non-routine expenses.

Once again: Long live the PRD!

Tranlators notes:

  1. Pramoedya Ananta Toer is Indonesia's greatest novelist and author of several works of revolutionary historical literature. He was a guerrilla fighter against the Dutch in 1945, eventually being captured. In the late 1950s, he became a prominent literary figure and polemicist in the broad Indonesian anti-imperialist movement. He was kidnapped and imprisoned by the military in 1959 for his defence of the Indonesian Chinese community. In 1965, he was again arrested during Suharto's purges and massacres of the Indonesian left. He was beaten, kept in prison in Jakarta until 1969 and then shifted to the infamous Buru Island prison camp until 1979. He was released in 1979 but placed under city arrest. Despite bannings and harassment, he has continued to publish novels that he wrote in prison. He has been a consistent critic and opponent of the Suharto regime.
  2. "Young Generation" is a term that emerged in the early 20th century to refer to youth activists against colonialism and which later became fixed in Indonesian political vocabulary to refer to each generation or wave of activists
  3. Pramoedya was kidnapped on orders of the Army high command as a result of his writings defending the Indonesian Chinese community. He spent a year in gaol without trial.
  4. The "New Order" refers to the period of the rule of General Suharto, which began in October, 1965.
  5. The "Old Order" refers to the period 1959-65, especially the years 1962-65, when the Indonesian Communist Party and the Sukarnoist Left wing increased in size and political influence. During this period, Sukarno was President.
  6. The kingdoms of Majapahit and Singosari were major maritime powers in the region durhing the Hindu-Budhist period.
  7. The "Youth Pledge" was a pledge or oath that came out of a congress of anti-colonial youth activists in 1920. It was the first time that a substantial body of anti-colonial activists committed themselves to an independent united nation with Malay as the national language.
  8. The 45 Generation was the generation of youth activists that fought the Dutch colonialists between 1945-1949.
  9. The 66 Generation refers to the student activists who sided with the military in 1965-7 during the purges and massacres of leftists during this period. More than 1 million people were killed and tens of thousands were imprisoned, including Pramoedya himself.
  10. The MALARI generation refers to the student leaders who campaigned against corruption and military abuse during 1973-74. The movement was crushed in January, 1974 with more than 200 students arrested.
  11. General Sumitro was the most powerful figure in the Indonesian regime after Suharto in 1973. He flirted with limited political liberalisation as well as with the student opposition and also liberalised conditions in the prison camps. He was forced to resign after the 19784 student protests were crushed.
  12. Multatuli was a lower Dutch official in the early colonial administration who exposed the corruption and abused of colonialism in a famous Dutch novel and was himself punished as a result.
[Translated by Max Lane, ASIET National Coordinator.]

Protest calls for Ginandjar to resign

Reuters - March 19, 1999

Jakarta -- Around 100 people protested in Jakarta on Friday calling for top economics minister Ginandjar Kartasasmita to resign over Indonesia's economic crisis.

A group calling themselves Economic Solidarity with the Indonesian People gathered in the afternoon outside the National Planning Board building, where Ginandjar has his office.

"We demand Ginandjar Kartasasmita as a gentleman resign as economics minister because he has failed to resolve the economic crisis of the Indonesian people," the protesters said in a statement.

They also called for an end to corruption and accused Ginandjar of siding with bankers to the detriment of the public.

The government announced last week that it would liquidate 38 banks with the loss of some 17,000 jobs. The protesters dispersed peacefully.

In Sumatra's main city Medan, around 50 customers of one of the closed firms, Bank Umum Servitia, threw stones at the windows of a branch after it failed to open on Friday, witnesses said.

Security forces soon brought the situation under control and the people dispersed peacefully. Indonesia's worst economic crisis in 30 years has thrown millions out of work.

Around 50 women from different ethnic groups across Indonesia also held a protest in Jakarta on Friday over violence against women, witnesses said.

Shots fired to quell crowd at pulp mill

Agence France Presse - March 20, 1999

Jakarta -- Indonesian police fired warning shots to disperse a mob of hundreds of villagers in North Sumatra demanding the closure of a pulp and rayon mill they charge is polluting their land and a nearby resort lake, reports said Saturday.

The clash Friday at the PT Inti Indorayon Utama factory near the town of Balige and the famed Lake Toba came as some 500 angry villagers threw rocks at trucks going to the plant, the Indonesian Observer reported.

There were no injuries in the shooting, but 20 people were arrested and an assortment of crude weapons confiscated, the newspaper said.

In Jakarta Friday, Indonesian President B.J. Habibie ordered the temporary closure of Indorayon and instructed a team of health and environment officials to conduct an inquiry.

"This company was a trouble-maker therefore its operation is temporarily suspended," North Sumatra Governor Rizal Nurdin was quoted as saying by the Jakarta Post after a meeting with Habibie.

A company spokesman called the closure order unnecessary as almost a year of violent protests, including the blocking of supplies to the plant, had forced it to remain idle since January, the report said.

On Thursday the bodies of two Indorayon employees missing since Tuesday in the area of the plant were found floating in a river, the state Antara news agency said Friday.

The dead men had been among four people abducted by a mob in the village of Dolok Nauli on Tuesday. A third man is still missing while a fourth escaped from the mob, Antara said.

Although the motive for the double-killing and abduction was unclear, police sources quoted by the agency linked the incident to the protests against Indorayon.

Company workers have been conducting their own rallies and protests to demand that the company stays open.

[On March 19, Dow Jones Newswires reported that President Habibie had ordered the temporary closure of the mill. Minister of Tourism, Art and Culture Marzuki Usman said the future of the factory would be decided by a team that will study the environmental impact of the plant - James Balowski.]

Joint demonstration in Solo

Info-Pembebasan - March 11, 1999

Demonstrations held on March 11 in a number of cities were not to commemorate the anniversary of the Supersemar, the document which enabled General Suharto to carry out a coup against Sukarno. Instead it became a momentum for simultaneous mass actions.

One of them was in Solo (Central Java). On that day the Surakarta [Solo] Anti-Dwifungsi People's Movement (GERSAD) held a demonstration. GERSAD is a coalition of organisations formed from the Surakarta Student Reform Council (KPM), The Pro-reform Student Solidarity (SMPR), the People's Arts Council (Dekra), SMPTA, HSJSH, the Sukoharjo Megawati Support Committee (KPM), the Surakarta People's Democratic Party, YAPHI and SPEKHAM. The action demanded the abolition of the dual function of the armed forces (ABRI), the formation of a transitional government and the trial of Suharto.

The action began at the March Eleven State University (UNS) at 10am. Around 40 students and 30 local people joined in the action. Speakers emphasised the problem of the military, the failure of Habibie as president and invited the people to criticize political parties which only talk about the [June 7] election in order to create illusions among the people.

Half-an-hour later, the head marshal, Baharuddin, ordered the masses to march through Jagalan, Warung Pelam towards the city hall, then towards Tugu Adipura (Gladak), then cutting across Jalan Slamet Riyadi towards the home of Suharto in Solo , Dalem Kalitan. At each intersection, the masses stopped to hear speeches as political education for the local people.

On arriving at Suharto's residence, GERSAD held a graffiti action on the wall's of the house. The masses wrote: "Abolish the dual function of ABRI", "A Transitional Government", "SUPERSEMAR = A Demand to go Like Marcos" and "Provide Basic Goods which are Fair and Cheap".

[Translated by James Balowski]
 
East Timor

Friends and foes target Xanana

Sydney Morning Herald - March 18, 1999

Karen Polglaze, Jakarta -- An East Timorese political party called yesterday on Indonesia's peak human rights body to help release resistance leader Jose Xanana Gusmao just as people rallying outside the house where he is being detained demanded he be hanged.

Guards outside the house across from Salemba Prison outnumbered the 20 or so pro-Jakarta demonstrators who listened as a three- page statement was read out.

During the 15-minute demonstration the protesters waved posters saying "Hang Xanana" and "Xanana is not a hero". Xanana had been removed from the house early yesterday and taken back to Salemba prison as a security measure, his aides at the house said.

He issued a statement accusing the Government of trying to recruit poor East Timorese factory workers to take part in the demonstration.

He described a climate of violence in East Timor created by the distribution of arms to militia groups supporting the continued integration of East Timor with Indonesia.

"I urge the Indonesian Minister of Foreign Affairs, Ali Alatas, to refrain from wasting large amounts of money which serve the interests of a tiny section of the Timorese society at a time when his own people are facing tremendous economic hardship," Xanana said.

"I urge President Habibie to put a stop to these shameful political manoeuvres which only serve to discredit his reformist government and which call into question his pledge to the international community to work towards a just and peaceful solution for East Timor."

Meanwhile, members of the Socialist Party of Timor called on Indonesia's National Human Rights Commission to secure the release of all 128 East Timorese political prisoners, including Xanana, and a group of asylum-seekers holed up in the Austrian Embassy for 18 months.

A group of United Nations and Indonesian Government officials returned this week from assessing the situation in East Timor and is expected to announce next week whether the provincial and national governments can cope or whether overseas help will be required. The Australian Government agency AusAid also has a team in the province to assess the availability of food, medical supplies and services.

The Portuguese envoy Ms Ana Gomes, ending the first visit to East Timor by a Lisbon official since the 1975 Indonesian invasion, said Indonesian troops should be withdrawn from East Timor to facilitate a ceasefire under UN auspices. The port authority chief in Dili, Mr Noke Rahakbauw, said 16,911 non-Timorese had fled since January.

UN talks propose autonomy ballot

World Socialist Web Site - March 17, 1999

Peter Symonds -- UN Secretary-General Kofi Annan announced last Thursday that Portuguese and Indonesian representatives had agreed to a "direct" ballot for the people of East Timor to decide on an autonomy plan being drawn up by the Indonesian regime. If the autonomy proposals are rejected, Indonesian President Habibie has stated that Indonesia will withdraw from the former Portuguese colony, which it invaded in 1975 and annexed in 1976.

Indonesian officials have repeatedly ruled out any referendum to decide the future of East Timor. Details of the "direct" vote are still to be decided at a further meeting at the UN in April. Indonesian Foreign Minister Ali Alatas has suggested a "rolling ballot" conducted by UN teams travelling from village to village, but both Annan and Portuguese officials have opposed a drawn-out balloting process.

Annan commented: "We will be vigilant to ensure that there is no hanky-panky and that the kind of security that we are looking for is assured by the authorities. They have given us indications that they will work very closely with us on that."

However, Annan said the UN was not planning to ask Indonesia to withdraw its troops from East Timor. It was not realistic, he said, to expect that the Indonesian army, or any militia groups, could be disarmed before the vote. A poll conducted under such conditions would leave voters vulnerable to systematic intimidation and political pressure from armed pro-Indonesian militia and Indonesian troops.

Xanana Gusmao, head of the National Council of Timorese Resistance (CNRT), held talks last week with pro-Indonesia militia leader Joao Tavares over a ceasefire agreement. But another militia leader Basilio Araujo opposed the ballot and warned of continuing conflict, saying: "This will not solve the problem. It will create winners and losers, and when we have winners and losers the fight will go on."

Annan stated that there would be a UN "presence" in East Timor by the end of April, which would build up closer to the poll, but refused to indicate its exact nature. Australian Foreign Minister Alexander Downer has already indicated a willingness for Australia to play a major role in any UN force, by sending "administrative assistance, observers, some technical assistance, perhaps some people to assist with policing functions".

Downer has ruled out the immediate dispatch of Australian troops, but the Howard government has announced the establishment of a new Ready Deployment Force of 3,000 combat troops to be stationed in the northern city of Darwin, just 600 kilometres from Timor. The unit, complete with tanks, armoured vehicles, helicopters and artillery, is to be operational by the end of June.

The exact composition of any UN presence, military or otherwise, will be determined by Portugal, Australia and other powers with vested interests in East Timor. Each is jockeying for the dominant position in determining the future of the island and its resources of oil, gas and coffee. Should the autonomy package be rejected, Indonesia is expected to hand East Timor back to Portugal, the former colonial power, which will turn the island over to the UN. Far from achieving any form of independence, East Timor will become a UN-protectorate for a number of years.

Conditions on East Timor are becoming increasingly chaotic as a result of the continuing economic crisis throughout Indonesia, the growing exodus of Indonesian businessmen and civil servants, and continuing fighting between groups for and against integration with Indonesia.

According to some estimates, at least 7,000 people have left East Timor in recent weeks. Non-Timorese, who number an estimated 200,000, control most of East Timor's trade and hold many of the key government posts. Food stocks have been dwindling as businesses have run down supplies and the price of basic commodities such as rice has doubled in some areas.

Australian Council for Overseas Aid policy director Jim Redden cited reports that shops were closing down, and technicians, airline staff, doctors and teachers were leaving. "There is a serious breakdown of civil society. Planes and ships are fully booked; furniture trucks are coming across the border to take people back," he said. Thousands of people were crowding into Dili and other centres seeking food and medical aid.

Last week thousands of teachers from the East Timor Teachers Forum demanded talks with Indra Jati Sidi, a visiting Education Department official, urging the government to transfer them to other provinces. Some of the teachers complained that they had been physically abused, harassed and threatened by pro- independence students and residents.

East Timor's public health system is in a state of collapse, according to US-born Dr Dan Murphy who spoke to the Sydney Morning Herald last week. He said that 50 to 100 people were dying every day of curable diseases such as diarrhoea, malnutrition and tuberculosis, or during childbirth. Murphy, who works in a Catholic-run clinic and treats between 100 and 200 people a day, claimed that medical supplies from outside Indonesia were being prevented from reaching East Timor.

Another report indicated that 15 doctors had already left the Dili General Hospital, which is now short of staff and drug supplies. Only five general practitioners and 10 specialists remain. There is no surgeon and patients requiring surgery are being sent to the nearby Wirahusada Military Hospital. Nurses say there are shortages of antibiotics, syringes and intravenous equipment.

Disarm militias or 'there will be bloodshed'

Australian Financial Review - March 19, 1999

Rowan Callick, Hong Kong -- The East Timorese independence movement is prepared to see the United Nations-supervised referendum, scheduled for later this year, postponed if militias in the territory are not disarmed, and if the 20,000-strong Indonesian military deployment is not substantially reduced.

Otherwise, said Mr Jose Ramos-Horta, special representative of the pro-independence National Council of Maubere Resistance, in Hong Kong yesterday: "if we push ahead, bloodshed is almost certain".

He said that if the referendum does go ahead, and then favours independence, the council proposes a three to five-year transition period under UN administration to allow institution and infrastructure building before formal nationhood.

Mr Ramos-Horta said only Timorese should be permitted to vote in the independence referendum, "but Indonesians would be welcome to stay if they wished".

He said an independent East Timor would seek membership of the South Pacific Forum, and later ASEAN. Mr Ramos-Horta said that he and independence leader Mr Xanana Gusmao did not favour the establishment of a war crimes tribunal, or a South Africa-style truth and reconciliation commission "because those truly responsible will be gone, and we will only be trying the small fish".

While in Hong Kong, Mr Ramos-Horta visited wealthy philanthropist Mr Eric Hotung, who has offered to act as a financial adviser to East Timor.

Mr Ramos-Horta said an independent East Timor would look to the Northern Territory as a "strategic partner", and that size was not a determinant of economic viability.

"Look at Fiji, it is similar in land and population size, and is far from trading routes," he said. "And look also at some of the world's largest countries -- such as Russia and Nigeria. And is Indonesia really a model?" Mr Ramos-Horta said that Singapore, "for which I have great admiration", was a model. He compared Mr Gusmao with Mr Lee Kuan Yew. "Xanana might not appreciate the comparison -- but Singapore had no resources, no minerals, after its detachment from the Malayan federation. But it had creativity and resilience, and invested in its own people." He said he would continue to judge the Indonesian administration "by its actions on the ground, not by its speeches to the UN".

"There are dark forces at play in Indonesia which are not interested in democratic reforms or the rule of law," he said.

"The Soeharto clique has a political agenda, and money, and the capacity to undermine the process underway in East Timor." Mr Ramos-Horta blamed the military command in the province for providing weapons to the militias, insisting East Timor stay within Indonesia.

He said that the independence movement had "enough manpower to neutralise the paramilitary groups if ever we want to".

"But it is under instructions: no provocations. Indonesia now has the chance to disengage with honour. But this continuing destabilisation is soiling the name of their republic."

Border town booming

Sydney Morning Herald - March 20, 1999

John Martinkus, Atambua -- The ragged group of pro-Indonesian militia, armed with spears and knives, were clearly enjoying their task.

Five busloads of East Timorese and Indonesians waited at the border crossing as the militias slowly checked identification cards. Anyone identified as a student was hauled aside and questioned, their possessions thrown on the ground and kicked through.

The floor of the bamboo hut where the questioning took place was covered in black hair. "We cut their hair off -- if it is long they look like Falintil," said a laughing paramilitary brandishing scissors, referring to the pro-independence, armed resistance back in East Timor.

These militias, paid by Indonesian authorities, now man roadblocks on the land exits from the former Portuguese territory. They have been told students from Dili are "communists" who will destroy their way of life and cause a war in East Timor. "The East Timorese don't want to work, they just want to fight the Indonesians," said militia member Ben Unu, a student in Atambua, the main border town on the West Timor side. "They are different, you know. They cannot work in offices like us. The Indonesians try to teach them and they just want to fight. They go to Java or Bali to study, they get free houses, they get money to study, much more than us. But they don't mix with anyone else."

"If there is trouble in East Timor there will be trouble here in Atambua because this is where we have to send the army in," he said.

Since Jakarta made its first clandestine moves on East Timor in 1974, Atambua has been a staging point. Statues of Indonesian soldiers brandishing weapons and facing east towards the border line the streets. The town is ringed by military barracks and facilities.

According to a lecturer at Kupang University, in the capital of West Timor, Atambua has once again become a training ground for elements of the Indonesian military to prepare West Timorese to foment unrest across the border.

In a letter sent as a warning to Dili students in February, the lecturer said that, immediately after the January statement by President B.J. Habibie acknowledging the option of East Timorese independence, the Indonesian military had handed over 500 weapons in Atambua to Francisco Tavarres, son of the paramilitary leader Joao Tavarres.

The town is thriving. Its market sells goods not seen across the border for months because of the exodus of Indonesian traders. Hotels are full of families of Indonesian military men sent across for safety from bases in Dili and Baucau.

Local traders say thousands of Javanese and other Indonesian settlers have passed through the border in the past two months, in trucks piled high with possessions, to the small port of Atapupu down on the coast.

It's a town that thrives on war in East Timor. The locals clearly feel the good times are coming back.

Autonomy only way to avoid civil war: Militia

Lusa - March 19, 1999

Dili -- The commander of a pro-Indonesia paramilitary force in East Timor, Joao Tavares, said Thursday that autonomy within Indonesia was the only course that would avoid a new civil war in the territory.

Tavares, who said his force numbered 2,400 men, told Portuguese journalists in Dili that he would continue fighting for integration into Indonesia even if Jakarta withdrew its forces from East Timor. He added that he would not accept the result if the East Timorese people reject a proposal for special autonomy status within Indonesia.

Portugal and Indonesia are expected to agree on final details of the consultation on autonomy at the next UN-sponsored ministerial talks on East Timor, scheduled for April 22 and 23 in New York.

Rejection of the proposal opens the way to independence for the territory.

Pro-Indonesia paramilitary groups have unleashed a wave of violence in East Timor since Jakarta announced in January that it was willing to consider independence for the half-island it has occupied since 1975.

Gusmao rejects meet as "dirty manipulation"

Reuters - March 19, 1999 (abridged)

Lewa Pardomuan, Jakarta -- East Timor guerrilla leader Xanana Gusmao on Friday rejected an invitation to attend a reconciliation meeting organised by pro-Indonesia Timorese.

Gusmao called the event a "dirty manipulation" and political manoeuvring by Jakarta. He rejected an invitation to attend as the leader of the pro-independence National Council for the Timorese Resistance (CNRT). "CNRT cannot accept this dirty manipulation. CNRT rejects participation," Gusmao said in a statement released by his lawyers. Earlier this month Gusmao met Joao Da Silva Tavares, the leader of pro-Jakarta militias in East Timor. After the meeting the two men said they had agreed to discuss its future in peace.

But since then Gusmao has made a series of statements accusing the Indonesian government and military of using underhanded tactics to sabotage any moves towards the territory's independence. "Reconciliation needs honesty. Peace cannot be bought," Gusmao said.

The event was to have started on Friday at Jakarta's Radisson Hotel, but a hotel official told Reuterse it had been cancelled.

The meeting had the blessing of East Timor's Jakarta-appointed governor Abilio Soares, Gusmao said, adding he would not attend any meeting sponsored by the "Soares family."

Its organisers were a group calling itself "Klibur Oan Timor Ba Dame" -- a title in Timor's Tetum language meaning Peace Among East Timorese children. In a letter of invitation to Gusmao, it said the meeting was intended to promote "brotherly dialogue."

Gusmao said Soares had written a letter to several government ministers to ask for financial support. Soares also wrote in that letter that the talks were aimed at reaching a consensus on which rival East Timorese groups would agree to Jakarta's proposal for wide-ranging autonomy for the territory, Gusmao said. "I keep receiving reports that Klibur has started a campaign for autonomy in East Timor," Gusmao said.

Civilians shot dead in East Timor

CNRT Press Release - March 20, 1999

Jakarta -- The office of CNRT President Xanana Gusmao received information today that a group of about 20 armed and masked men raided the Maliubu hamlet -- "suco" of Ritabou, "posto" of Maliana -- on the evening of Friday 19 March.

The masked men arrived by "Kijang" at 6:30 pm and opened fire on civilians gathered in the hamlet. Pedro Assamali (30 years old), Domingos Manomau (25), Joao Ruben Barros (11) and Fonseca Gomes (11) were killed. Narciso dos Santos (19), Esminia Imaculada (13), Carlito da Cunha dos Santos (30), Mateus Afonso de Jesus (28) and Lucia da Cunha dos Santos, aged 17 were wounded.

Witnesses reported that the operation lasted about 30 minutes and that some of the masked men wore Indonesian military uniforms. The injured victims were initially taken to the Maliana hospital and later transferred to the parish polyclinic of Maliana. Two of them are in a critical condition. 17 houses were looted (money, personal belongings and a recorder were stolen) and 2 of them seriously damaged.

The Halilintar militia group based in Maliana under the leadership of Joao Tavares is believed to be responsible for these murders in a joint operation with the Indonesian military and SGI.

The local Indonesian authorities are not reacting and word has just reached Mr. Gusmao's office that the Indonesian military in East Timor are trying to put the blame on FALINTIL guerrillas. Mr. Gusmao calls for a full and speedy investigation of these cold-blooded murders. He deeply regrets that at a moment when both the East Timorese people and the international community are undertaking efforts to attain peace and reconciliation, SGI sponsored militia groups and the Indonesian military should continue to intimidate and terrorize the population.

Youths paid for pro-Indonesia demonstration

Lusa - March 16, 1999

Jakarta -- More than 200 East Timorese have reportedly been paid sums equivalent to between 50 and 100 euros to take part in a Wednesday pro-Indonesia demonstration in front of the Jakarta residence where East Timor resistance leader Xanana Gusmao is held under house arrest.

A source close to Gusmao told Lusa Tuesday that the protest was being planned by a group called the Movement of Youth Supporters of Autonomy for East Timor and that it was financially backed by the Indonesian secret services.

Demonstrators have been recruited from among East Timorese left hanging since government work contracts offered during the period 1991 to 1995 did not work out as promised, the source said.

Jakarta has said it will withdraw from the territory it has occupied since 1975 if the East Timorese reject a proposal for enhanced autonomy within Indonesia.

Australia ready to join UN team in Timor

Sydney Morning Herald - March 15, 1999

Michelle Grattan -- Australians could be in East Timor by late next month as part of a United Nations contingent helping to plan for a July-August election on independence.

The UN Secretary General, Mr Kofi Annan, said at the weekend that a team would go as soon as autonomy proposals were finalised, hopefully in late April. "We would want [an] Australian contribution," he said.

Australia, together with many other countries, had already been approached, he told SBS television. Mr Annan said it was not yet known whether the contingent would be military, police or just a political presence. It would build up closer to the ballot.

The Foreign Minister, Mr Downer, said yesterday: "We hope it won't be necessary to send in a peacekeeping force."

While Australia was planning for a range of contingencies, "what we hope will be necessary is to send administrative assistance, observers, some technical assistance, perhaps some people to assist with policing functions".

"We obviously hope that the sort of contribution that the UN will make will only need to be a relatively low-level confidence- building contribution.

"It will be important to have some UN people there to help provide confidence for the East Timorese that the ballots, if that is the way it is going to work, or the consultation process, however it works, works well." No indication of numbers from Australia was available.

Mr Downer said negotiations on the autonomy package should be finished about April 21-24. Mr Annan expected the ballot would be in July-August.

The Foreign Minister met Mr Annan in January and the head of the Foreign Affairs Department, Mr Ashton Calvert, met him about a fortnight ago. There have also been detailed talks between officials.

"We haven't really talked with him about a peacekeeping force," Mr Downer said. "What we've talked through is ... the broader question of the need for UN involvement. The type of UN involvement will depend on the types of needs that there are on the ground." He said Darwin would be an important logistical support base for a UN presence.

Separately from the UN operation, two Australian AusAID officers arrived in East Timor on Saturday to assess food and medical needs.

Mr Annan said the Indonesians had reaffirmed that the detained resistance leader Xanana Gusmao would be released as part of the settlement. "So I am hoping he will be free before the actual vote takes place."

Pledge to release Gusmao reaffirmed

Agence France Presse - March 14, 1999

Sydney -- The Indonesian government remained committed to releasing jailed resistance leader Jose Xanana Gusmao from house detention, possibly before a vote on the future of East Timor, UN Secretary-General Kofi Annan said in an interview screened here.

Eighteen other political prisoners would also be released by Indonesia, he told SBS television late Saturday, adding Australia had a vital role to play in organising a ballot to determine East Timor's future.

"On Friday the government reaffirmed its commitment to us that Xanana Gusmao will be released as part of the overall settlement that we are discussing, so I am hoping that he will be free before the actual vote takes place," he said.

Gusmao was captured in 1992 and sentenced to life imprisonment, later reduced to 20 years, for leading the bloody resistance war against Indonesian forces which invaded the former Portugese colony in 1975. He was moved to a house from Jakarta's Cipinang prison earlier this year.

The UN was central in the push to allow Gusmao house detention so he would have greater freedom to talk to supporters and foreign visitors over Indonesian President B.J. Habibie's proposals to offer the province autonomy.

Annan said there were still problems to overcome in determining East Timor's future, such as the logistics of organising a ballot within the region and for East Timorese living around the world, but he was hopeful of a positive outcome.

"We would want Australian contribution," he said. "We have approached Australia and many other countries with capacity and interest in the problem to work with us in bringing it to a successful conclusion, so we will be relying on Australian support and contribution as we would with other countries."

Australian Foreign Minister Alexander Downer later confirmed Canberra would provide help as early as next month, but said it was still unclear exactly what the involvement would be.

Annan had not asked for Australian troops to be involved, he added. "The type of UN involvement will depend on the types of needs that there are on the ground," he said.

"We've always said that we are not passionately of a desire to send Australian troops into danger ... we don't want them to risk their lives or for them to lose their lives. We have a responsibility to them so we hope it won't be necessary to send them.

"What we hope will be necessary is to send administrative assistance, observers, some technical assistance, perhaps some people to assist with policing functions and we hope that it won't be more than that, but it will at a minimum be that."

Annan said the UN had to be seen to be organising a transparent ballot for a free East Timor.

"What is important is how credible the entire process is and if the flaws that one perceives are such as to negate the results of the entire elections ... we will try to ensure that it is credible, it is democratic, it is free, it is well organised and only those who are entitled to vote are admitted at the ballot box," he said.

Portuguese envoy visits Catholic bishops

Agence France Presse - March 14, 1999 (abridged)

Dili -- The first Portuguese diplomat to visit East Timor since Indonesia's 1975 invasion met with the troubled territory's two Roman Catholic bishops Sunday, amid reports of renewed factional violence.

Ana Gomes, the head of the Portuguese interest section opened in Jakarta last month, attended an early morning mass led by Nobel Peace Prize laureate Dili Bishop Carlos Ximenes Felipe Belo.

Gomes joined about 500 people for the early morning mass but did not take part in the communion. She shook hands with Belo and briefly spoke to him afterwards. Scores of people also tried to shake her hand after the mass and she spoke to a few in Portuguese, a language still widely in use in the former Portuguese colony despite 23 years of Indonesian efforts to introduce the Indonesian language as the main language here.

Accompanied by her retinue, Gomes then left for Baucau, a town some 200 kilometres (125 miles) east of here which is the seat of the territory's other diocese led by Bishop Basilio do Nascimento.

"She arrived in a convoy of three or four cars and went directly into discussion with the bishop," said a Roman Catholic priest at the Baucau diocese who identified himself only as Father Rui.

Rui could not give further details of the meeting or the schedule.

A source in Baucau said also present at the meeting at the diocese was the head of the Baucau chapter of the National Council of Timorese Resistance, Marito Reis.

A source travelling with her said Gomes was expected return to Dili after the talks to visit the house of pro-independence activist Manuel Carrascalao, where hundreds of refugees have sought shelter from violence in their regions since January.

Tensions have risen in East Timor, annexed unilaterally by Indonesia in 1976, since Jakarta announced late January that it would give the territory independence if the people rejected autonomy.

The surprise January announcement by Jakarta has led to rising tensions between Indonesian residents, pro-Indonesia factions and pro-independence groups.

Unconfirmed reports in Jakarta said two civilians were killed in clashes between pro-independence and pro-Indonesian groups in Baucau on Saturday, but the incident could not be confirmed by the military or police.

Several people were also reportedly wounded in Liquica, some 30 kilometres west of here, when violence broke out after rumors that a local parish priest had been stabbed by pro-Indonesian civilian militia members Saturday.

The priest, Father Rafael da Santos, had been stopped at a road block manned by pro-Indonesian militia, the Kompas daily said.

A passing public transport driver rebuked the pro-Indonesian activists for questioning a priest but was attacked by arrows.

The priest intervened and took the wounded driver to hospital in his car but the sight of blood on his robe sparked rumors the priest had been stabbed.

Thousands of people angered by the report, many armed with knives, machetes and arrows gathered in Liquica.

They set up road-blocks, checking passing cars and passengers, beating up those who were not pro-independence, the daily said, adding "several people were wounded."

The priest had to come forward and assure the crowd he was not wounded before the mob dispersed, the daily said.

Sources said Gomes, who will be in East Timor until Tuesday, will also meet with military and police chiefs, as well as leaders of several major political groupings, both pro-independence and pro-autonomy. Gomes is also due to meet with representatives of human rights watchdogs operating here.

Free Timor must build economy from rubble

Reuters - March 14, 1999

Andrew Marshall, Dili -- East Timor, according to Indonesian President B.J. Habibie, is "nothing but rocks." And if this impoverished region chooses independence, it faces the daunting task of building an economy from rubble.

Most of its 800,000 people are subsistence farmers. The landscape is mountainous and infertile. And 23 years of often brutal Indonesian rule has done little to foster an educated workforce. Most important jobs are taken by Indonesians.

The economy is deteriorating, shaken by the uncertainty hanging over the region. Indonesia has said it will have the chance to vote on an autonomy package being drawn up by Jakarta. If it rejects this, Habibie says it will be given independence.

The prospect of independence has widened divisions. Several pro- Indonesia militias have sprung up, sparking clashes that have caused thousands to flee their villages, traumatising the rural economy. In the towns, the Indonesians who controlled the bureaucracy, health and education systems as well as trade are leaving, citing intimidation and uncertainty. Shop inventories are running down, and many shops have closed altogether. Food and spare parts are scarce.

In recent years Indonesia, which invaded the former Portuguese colony in 1975 and annexed it the following year, has pumped more than $100 million a year into East Timor -- although some say much is siphoned off through corruption.

Analysts put the annual budget of an independent East Timor at around $120 million a year. Even optimists accept that in the early years, much of this would have to be provided by foreign aid infusions to keep the economy from collapsing.

Pro-independence activists insist the tiny country could eventually build a viable economy. "We will not be rich, but to live, to provide food for our people, we have enough," says David Dias Ximinez, leading member of the presidential secretariat of East Timor's government-in-waiting, the National Political Commission (CPN).

Most discussions of Timor's future centre on oil. An independent East Timor would take Indonesia's place in the Timor Gap treaty with Australia, which shares out the oil and gas wealth in the Timor sea. But for the forseeable future, the prospect of significant oil earnings will remain a dream. In 1998, Indonesia and Australia received just $1.1 million in royalties from the Timor Gap.

In the meantime, East Timor's best hope is coffee. The country produces an average of 6,000 to 7,000 tonnes of coffee a year, much of which is marketed as high-quality organic coffee, says Anthony Marsh, coffee expert at the National Co-operatives Business Association (NCBA) in Dili.

The NCBA handles around a quarter of East Timor's annual coffee crop. The main player is PT Denok, run by the Indonesian army, which handles about two-thirds of the crop.

Marsh said total coffee exports were currently worth about $15 million a year. Over five to 10 years, with improved techniques and more planting, this amount could be doubled. "Even $50 million one day is not impossible," he said.

But while coffee is likely to be the main plank of the Timorese economy, it cannot be the sole foundation. Other exports that have been mooted include marble -- the territory has an impressive supply -- and sandalwood, although much of this resource has already been plundered over the centuries.

Tourism is an alternative, and some have even suggested turning East Timor into a gambling haven for visitors from Indonesia, where gambling is banned. But East Timor lacks even basic tourist infrastructure at present. Sceptics say independence would mean deepening poverty.

"People might argue that we have potential here, like the Timor Gap and also sandalwood, coffee," said Filomeno De Jesus Hornay, head of Dili's College of Economics and founder member of the pro-integration Forum for Unity, Democracy and Justice.

"But the problem with those things is that although East Timor has potential, we need capital, money. We need skilled manpower. We would have to ask other countries to help us.

"If we have to rely on people to help us, if we have to ask for everything, isn't it another form of colonisation?"
 
June 7 election

Stock market activity plummets

Dow Jones Newswires - March 18, 1999

Kate Linebaugh, Jakarta -- As Indonesia's June parliamentary election nears, trading volumes on the Jakarta Stock Exchange are drying up, threatening the country's already shrinking brokerage industry.

With few expecting any substantial spurts of investment in the coming months, analysts say the Indonesian securities industry may see a gradual contraction.

Already the country's more than 190 securities companies have slashed their sales teams, eliminated research departments, and cut back on administrative personnel. But the number of active brokers has fallen by about 15% to 166. Brokers fear this number may shrink further if volumes in Jakarta don't pick up.

According to statistics from the stock exchange, the total volume of shares traded in February was down 74% from a year ago, while the rupiah value was down 78%. Compared to January, volumes fell 14% and value 39%. Average daily turnover has shrunk to 150 billion rupiah (IDR) ($1=IDR9,025) from IDR500 billion - or around $10 million to $15 million a day.

"Most brokers are in hibernation," said Alex Wreksoremboko, head of research at Merrill Lynch. "We shouldn't see any sustainable pick up in activity until the new president is elected." Indonesia is set to hold landmark, multi-party elections in June.

Presidential elections are scheduled for November, after the parliament has been formed based on the results of the June poll. But with 48 political parties allowed to join in June elections -- far more than the three government-endorsed political parties in previous elections -- most expect increased political and social violence in the run-up to the date.

Violence playing on investors' nerves

Investors are worried that violence similar to the religious conflict which has raged in the riot-torn island of Ambon may break out in other parts of the archipelago, analysts said. More than 200 people have died in Ambon since mid-January.

"The important thing, in my opinion, is the security, and socio- political stability," said Mas Achmad Daniri, a director at the Jakarta Stock Exchange. "I believe after that period [of uncertainty] the market will rebound ... this is the survival period." The economic environment isn't attracting investors either. Gross domestic product is expected to shrink another 3% in 1999 after a 16% contraction last year. Many of Indonesia's 279 listed companies are deeply in debt and likely to post losses for the second consecutive year.

"The fundamental reason for investment is strong earnings growth," said Merrill Lynch's Wreksoremboko. "[In Jakarta] there is no earnings growth and there won't be for many years to come." But lingering political uncertainty and a bleak economic outlook are having a clear effect on the Jakarta exchange. In February, net purchases by foreigners on the market fell 84% from January to a meager IDR174.5 billion -- the lowest level since September last year when foreigners were net sellers. Market capitalization meanwhile has shrunk by 14.7% on year to IDR169.221 trillion.

"Nobody in this town has got any business," said Darwin Sutanto, president director at ING Baring Securities. This should result in the consolidation of the nation's brokerage industry: as the pot dries up fewer will be able to make ends meet. "Now it is a holding game -- finding out who has got the deepest breath," said ING's Darwin.

The bulk of the country's securities firms are small-scale operations that cater to local punters. With volumes so thin, even the casino-like activity that characterized the exchange last year is declining. These firms, banking on the expected economic turnaround in the second half of the year, will fuel a surge of activity on the exchange, although many market watchers say they don't expect investors to return to the Jakarta market until at least next year.

Despite the dismal situation, the number of active brokers has shrunk by only 15% since the crisis began in 1997, to about 166 active firms.

And Matt Pecot, president director of GK Goh Ometraco in Jakarta, says he doesn't expect to see a wave of consolidation among the local brokerages in the months ahead, though some of the smaller players may go out of business. "I wouldn't expect to see mergers and acquisitions, but the small players will start dropping out," he said. That said, Merrill Lynch's Wreksoremboko said the industry may not shrink as much as it should because the current regulations are lax -- a minimal amount of activity every six months is all a brokerage needs to keep its license.

The Capital Market Supervisory Agency has reportedly threatened to revoke the licenses of 18 securities companies, but it's offering the companies an opportunity to meet the criteria to retain their permits.

ING's Darwin reckons the industry will hold out until mid-2000 before another shake-up. "Everyone knows they'll lose money this year," so they will see if investors come back next year, he said.

Gus Dur won't support Mega presidency

Dow Jones Newswires - March 16, 1999

Jay Solomon, Jakarta -- Abdurrahman Wahid, the chairman of Indonesia's largest Islamic organization, Nahdlatul Ulama, ruled out supporting opposition leader Megawati Sukarnoputri for president. Instead, he said NU and its main political arm, the National Awakening Party, or PKB, would back either himself or the Sultan of Yogyakarta, Sri Sultan Hamungkubuwono X.

Wahid and Megawati have talked of forming a coalition between their two parties following Indonesia's June 7 parliamentary elections. Wahid said he still expected this to occur and that together they would garner between 60% to 70% of the parliamentary seats up for election.

PKB's support of Megawati for president, however, is "out of the question," Wahid said in an interview Tuesday with Dow Jones Newswires, "as I can't guarantee our `Ulamas' (Islamic leaders) will support her."

Some Islamic leaders within NU believe that a woman can't lead the nation, Wahid said. "They believe it's against current Islamic law."

Wahid said he would be PKB's presidential candidate provided continuing attempts to restore his vision succeed. The NU leader has been left nearly blind following a stroke last year. The prospects for his recovery will be known in around a month, he said.

The PKB would support the Sultan of Yogyakarta because he's seen as honest and independent of former President Suharto, Wahid said. "Maybe he's better than Megawati," he added.

Wahid also said he believed Megawati, the chairman of Indonesian Democratic Party of Struggle, or PDI Perjuangan, would agree to support a presidential bid by the Sultan.

KPU to draw up poll code of conduct

Jakarta Post - March 16, 1999

Jakarta -- The General Elections Commission (KPU) has set up a seven-member team, called the Team of Seven, to make a draft electoral code of conduct and stipulate internal rulings.

Commission chairman Rudini said it selected seven names from the 53-member commission to form the small team on the issues.

"This is led by Djuhad Mahja of the United Development Party (PPP)," he said after presiding over the commission's plenary session on Monday.

Members are Agus Miftach of the Indonesian People's Party (Pari), Rasidi of the Solidarity for Indonesian Workers Union (SPSI), Yakob Tobing, deputy chairman of the Indonesian Democratic Party of Struggle (PDI Perjuangan), Hasballah of the National Mandate Party (PAN), Mustafa Kamal of the Justice Party and Bambang Sulistomo of Indonesian Democratic Alliance Party (PADI).

He said the team would take into consideration drafts proposed separately by the United Development Party and political expert Andi A. Mallarangeng, who is also a member of the commission, in drawing up the code of conduct.

"The team will present the two drafts before the commission meeting tomorrow," Rudini added. Rudini said the commission also decided to ask governors, regents and majors to postpone establishing provincial and regional election committees until the National Elections Committee (PPI) is set up.

KPU is assigned to prepare the elections and establish the PPI, which answers to the commission.

"All provincial and regional election committees that have been set up must be disbanded because it is against the general election law," he said.

The law states the PPI must be established before the lower level committees. Rudini added several provinces established their election committees without any consultation with the election commission. Given the limited time before the June polls, Minister of Home Affairs Syarwan Hamid, who also chaired the disbanded general election institute, asked governors last month to help the KPU establish local election committees.

The 1999 law on general elections states the chairman, deputies, secretary and members of the National Election Committee are chosen from representatives of the government and political parties on the commission.

During Monday's plenary session, Rudini also took the oath of Bambang Sulistomo of the Indonesian Democratic Alliance Party (PADI) and Hendrik Kwok of People's Democratic Party (PRD) as commission members.

Hendrik, Bambang and Sri Bintang Pamungkas, chairman of the Indonesian United democracy Party (PUDI), refused to be sworn in by President B.J. Habibie at Merdeka Palace last Friday.

Arso, a representative of Bintang at the plenary session, was asked to leave the meeting because the commission members could not be delegated.

In Purwokerto, Central Java, Andi A. Mallarangeng said the first part of 87 regulations on the polls would be issued on voter registration, money politics and the political campaign scheduled from May 13 through June 4.

He said the regulations could not be issued simultaneously because of lack of personnel on commission.

Meanwhile, Ichlasul Amal, rector of Yogyakarta-based Gadjah Mada University, charged the commission's plan to bar mass mobilizations during campaigning was unfavorable to new parties.

Citizens 'have poor grasp of democracy'

South China Morning Post - March 16, 1999

Vaudine England, Jakarta -- Only three per cent of Indonesians see any connection between democracy and elections -- but nearly everyone intends to vote in the country's June poll.

Indonesians also feel cautiously optimistic about their country's direction and future despite their concerns about the economy, according to the first nationwide survey of Indonesians' views.

"The survey shows most Indonesians are hopeful for the future and want fair elections that deliver change," the survey says.

"But it also indicates that many do not know they need to register to vote, are uncertain if this year's election will be fairer than the past and are unfamiliar with many of the basic tenets of democracy.

"While many people want to vote, and believe this election will be fairer than the 1997 election, many voters still need reassurance that the 1999 election will really be free and fair and will make a difference."

The random survey, conducted by AC Nielsen and Charney Research, is based on in-depth interviews conducted in November.

It represents the first comprehensive test of opinion since the events of last year which saw longstanding president Suharto deposed amid violence, riots and economic crisis.

Election experts are now studying and acting on the survey's findings, which they describe as "extremely useful" building blocks for the forthcoming polls.

The survey was released in co-operation with the United Nations Development Programme and the Voter Education Clearing House of Yogyakarta, with support from the Asia Foundation.

The overwhelming concern of Indonesians remains economic pain. The rising price of basic necessities was considered the country's top problem by 70 per cent of the electorate. Almost every Indonesian family has suffered from the crisis.

People are worried about rising violence and political conflict, but say they feel dramatically freer to express their views. A striking conclusion of the survey is that 63 per cent of respondents feel that the Government listens to their concerns.

The same percentage also has no idea how democracy might have anything to do with improving their daily lives. Among the minority who do think democracy might be relevant, the idea is that democracy will lead to an improvement in the economy.

"They see democracy more as a means of solving their most pressing problem -- the economic crisis -- than as a means of ensuring their rights," the survey reports.

"Although Indonesians do have an understanding of what elections ought to be, they have little concrete awareness of the political nature of democracy, the central role elections play within it, or its potential impact on their lives.".

That is not surprising, considering the decades of de- politicisation practised by Mr Suharto, and the survey's finding that only six per cent of Indonesians are "very interested" in politics.

Megawati promises clean government

Straits Times - March 16, 1999

Indonesian opposition leader Megawati Sukarnoputri, quietly confident of securing the presidency this year, has vowed to put up a "clean and respectable" government with the will to restore confidence to a country rocked by a financial crisis and ethnic bloodshed.

In separate speaking engagements in Singapore yesterday, she said that the June 7 polls would be a turning point, enabling Indonesia to re-establish tenets ignored by the government of former president Suharto -- and which remain ignored by the Habibie government.

Speaking in Bahasa Indonesia, and occasionally in English, she told members of the Singapore Press Club that key features to restoring confidence were an honest government, transparency in policy implementation and an independent judiciary to provide certainty of recourse to justice.

Earlier, at a lecture organised by the Institute of Defence and Strategic Studies -- the host of her private visit to Singapore -- she said there was a "complete collapse of public confidence" in the post-Suharto government because the authorities failed to implement reforms demanded by the people.

The government was also not making any serious attempt "to eliminate the New Order culture and the economic political strength of Suharto and his cronies" which, she maintained, was the "main source of all the chaos" in the country.

Ms Megawati, who often left two key advisers -- economist Kwik Kian Gie and former banker Laksamana Sukardi -- to elaborate on the points she was making, said corruption, cronyism and nepotism remained in place, and charged that the government continued to resort to "brutality ... purportedly to promote democracy and uphold human rights".

The daughter of Indonesia's first president Sukarno also said that her travels across Indonesia gave her the confidence to predict that her PDI-Struggle party would garner the largest share of votes at the polls.

She described the party as one that would "not tolerate a dictatorship of the majority or the tyranny of a minority" and pledged to eliminate discrimination -- including that in the business arena -- and create a society "in which everyone is the same in the eyes of the law".

Both Mr Kwik and Mr Laksamana also refuted criticism that Ms Megawati spoke too often in general terms and was short on economic policy details.

They said a Megawati-led administration would have the political will to implement reforms required by the International Monetary Fund, would remain open to foreign investment, and ensure a transparent and competitive business climate.

The key difference, Mr Laksamana argued, was that the government of Dr B J Habibie has been unable to restore political and economic confidence "because he is a holdover of the Suharto period ... That perception of him is important because it dictates how the people continue to behave".

Ms Megawati herself charged that Indonesia's economic problems stemmed from the fact that growth in the past was "powered by corruption"; that crony capitalism, monopolies and cartels helped distort market-economy principles and that the rights of citizens were trampled on "in the interest of ... cronies". The Indonesian experience must serve as a lesson for all, she said.

Mass rallies may be banned in campaigning

Jakarta Post - March 15, 1999 (abridged)

Jakarta -- The 53 members of the newly established National Elections Committee (KPU) are to convene on Monday morning to discuss a draft code of conduct for election campaigning, which includes a ban on mass mobilization of supporters.

Other stipulations cover adherence to the law, freedom from fear and pressure, prohibition of bribery, transparency of information and equal rights and treatment.

Government representative on the committee Andi A. Mallarangeng promised to abide by the now disbanded Team of Eleven's recommendation that no mass rallies should be held during the 20 designated campaign days.

"No mass mobilization or rallies. Parties can campaign through public debates on television, in newspapers ... and through dialog campaigning," he said Friday after the drawing of parties' numbers. Committee chairman Gen. (ret) Rudini concurred.

Scheduled for May 18 until June 4, election campaigning is considered the most inflammable period for clashes and riots.

"There's no need for massive rallies during campaigning ... but the KPU has to agree on this as a whole," Rudini said. Both Rudini and Andi said they were lobbying the poll contestants to decide against street rallies.

"So far some of them agreed also on sanctions that should be imposed on violators. For instance, a political party could be disqualified if proven to be involved in clashes," Rudini added.

Another government representative, former justice Adi Andojo Soetjipto, cited the unfeasibility of all 48 contenders taking turns holding street rallies during the short time period.

"[Rallies] will only be ineffective. Rioting could even foil the poll," he said on Saturday. He called on party leaders to be role models for their supporters in their campaign behavior. "Do not exploit rhetoric on ethnicity, religion or race which will only incite tension or anger."

Representatives of the political parties on the committee differed on how far the code of conduct should extend.

"We do not want any bloodshed. We basically agree not to have mass rallies despite them being the most effective means to attract people, but the committee must find a better campaigning method," said Hasballah M. Saad of the National Mandate Party (PAN).

Sri Bintang Pamungkas of the Indonesian Uni-Democracy Party said he agreed there should be more public debates and dialogs. "Let's contest [our skills] in debating ideas and concepts," he said.

Abdul Rahman Saleh of the Crescent Star Party was also in favor, but warned of the possibility the major parties, with great resources at their disposal, would break the agreement.
 
Political/economic crisis

Bank staff protest, owners mull suit

Jakarta Post - March 16, 1999

Jakarta -- Scattered protests by bank employees greeted the weekend closure of 38 private banks here on Monday as owners of the closed banks mulled whether to sue the government over the move.

The Jakarta Stock Exchange (JSX) suspended trading on the closed banks, while the Federation of Domestic Private Banks demanded the government take concrete measures to reactivate the real sector to expedite economic recovery.

Hundreds of employees of at least five of the closed banks -- Bank Papan Sejahtera, Bank Central Dagang (BCD), Bank Mashill Utama, Bank Putra Surya Perkasa and Bank Bahari -- picketed their respective offices demanding fair severance pay.

About 150 employees of BCD packed the bank's lobby on Jl. Sudirman, South 3akalta, while right behind the BCD building some 100 Bank Mashill employees protested their office.

"We are demanding the bank's owners pay us severance pay at least two times government regulations," said a spokesman for the BCD employees.

According to government regulations, a worker who has been with a company for less than five years is entitled to severance pay equal to one-month's salary. The maximum severance pay is for employees who have been with a company for over 35 years. These employees are entitled to severance pay equal to 11months salary.

Ibnu Sina, 27, an employee at Bank Mashill who organized the protest, said the employees waited to meet with the bank's owners but they did not show up.

"We will continue to protest until the owners meet our demands," he said, adding that the employees were demanding severance pay four times government regulations.

Placards covered the Mashill building's ground floor where the protest took place. One of placards read: "We are ready to become People's Security [Kamra] to chase out the [bank's] owners. " Bank Putra Surya Perkasa was also hit by a protest, with some 250 employees gathering in the bank's lobby at the Sumitmas II building on Jl. Sudirman. They also demanded fair severance pay.

Benny M. Suwarya, the bank's legal officer who coordinated the protest, said the employees would continue to protest until they received the money The National Labor Party said in a statement that it would file a class action suit against the government for the banking crisis, which resulted in the massive lay offs.

The party's chairman, Tohap Simanungkalit, said the banking crisis resulted from the central bank's failure to monitor domestic banks.

"The National Labor Party will file a class action suit at a [district] court against the government, in this case the President and the monetary authorities because they have to be held responsible for the bank liquidations which inflict losses to employees of the liquidated banks and the people in general." Meanwhile some 25 owners of the closed banks are likely to sue the government over the move said Sukamdani Sahid Gitosardjono, the owner of the closed Bank Sahid Gajah Perkasa.

Sukamdani told the afternoon daily Suara Pembaruan the central bank and the government were using double standards to decide which banks to close, compelling the owners to take legal action against the government.

The closures would devastate the economy and were detrimental to the bank employees. Around 17,000 workers in the banking sector will lose their jobs as a result of the decision, he said.

The government on Saturday closed 38 private banks, nationalized seven other banks and will recapitalize nine private banks.

Of the 38 closed banks, seven are listed on the JSX. They are Bank Papan, Bank Umum Servitia, Bank Mashil, Bank Alva Panduarta, Bank Bahari, Bank Bira and Bank Ficorinvest.

The JSX suspended trading on the closed banks. The next move is to delist the banks as it did with four banks closed by the government last year The exchange also said that it temporarily suspended trading on the nationalized listed banks -- Bank Duta, Bank Tamara and Bank Rama.

Meanwhile, Antara reported that depositors rushed Bank Bali and Bank Lippo's branches in Semarang, Central Java, fearing that the banks eventually would be closed down if they could not raise the money for recapitalization Minister of Finance Bambang Subianto again reassured the public the government guaranteed all deposits in domestic banks. At a session with the House of Representatives Commission VIII for finance and the state budget, Bambang said that the bank restructuring program was a necessary step toward the country's economic recovery.

"If the program is well implemented, God willing, it will help accelerate the process of economic recovery.

Attack by migrants in leaves one dead

Agence France Presse - March 18, 1999

Jakarta -- An attack on a village in Sumatra left one man dead and 25 houses burned down, police and reports said Thursday, amid conflicting reports of who was responsible.

Truckloads of migrants arrived at the village of Dalu-Dalu, in Riau province, early Thursday following a row over unused land on a private plantation where they had settled, the Antara news agency said.

A 40-year-old man was killed, 25 houses set on fire and hundreds of villagers fled to safety in a neighbouring village, the news agency said.

But Hasan Basri of the Kampar sub-district police office told AFP he had received a report saying the attack was by people from the plantation estate company.

"A man died from the clash in Dalu-Dalu, but we don't have his identity yet as our officers are still on the scene," Basri said. "The riot control police force, as well as our intelligence officers and the head of the Kampar police have all gone to the village." Basri said the clash started around 2am.

Antara said the migrants, who had settled on the land illegally, objected to the youths from Dalu-Dalu being given permission to use the area for a farming project. The governor of Riau and the heads of the Kampar district and police had gone to the area to try to stem the violence, Antara said.

Rights Watch critical of soldiers on Ambon

Agence France Presse - March 17, 1999

Canberra -- Indonesian soldiers sent to quell religious rioting on Ambon worsened the violence because they were not trained in non-lethal crowd control, the US-based Human Rights Watch said Wednesday.

A report by the group released in Canberra said there was no question an extremely grave security threat existed on the island following weeks of fighting between Christians and Muslims. But the report found the troops sent to halt the killing had only added to the problem.

"When they finally did intervene, they shot lead bullets rather than attempting to use any methods of non-lethal crowd control," the report said.

"From February 14 onwards, most of the deaths took place when security forces, whose numbers by March had risen to 5,000 on an island of about 350,000, began implementing shoot-on-sight orders."

Indonesian aid organisations estimate 200 people have died in the communal violence with more than 30,000 forced to leave their homes after churches, mosques and houses were set alight.

The report called on Indonesian authorities to investigate allegations of bias made by both the Christian and Muslim communities.

"Muslims have accused Christian Ambonese police personnel of taking part in attacks against them," the report said. "Likewise, the Christians have accused troop reinforcements of siding with Muslim villagers in several clashes."

The report said Indonesian press reports, senior political figures and diplomats believed the violence was provoked by rogue military officers linked to former President Suharto, with the aim of disrupting Indonesia's June national elections.

But Ambonese community leaders believed the violence was locally instigated. "In either case, the government of Suharto's successor, Habibie, seems to have been half-hearted about investigating allegations of provocation either at the national or the local level," it noted.

But the report said imposing a state of civil emergency on Ambon should be avoided at all costs. "With the very clear exacerbation of the situation caused by the presence of security forces with shoot-on-sight orders, additional measures that allow the military to bypass normal civil rights safeguards are likely to make things even worse."

51 dead as ethnic unrest spreads in Borneo

Agence France Presse - March 19, 1999

Jakarta -- Four days of ethnic violence in the Indonesian province of West Kalimantan has left 51 dead and thousands evacuated, a report said Friday.

The heaviest toll in the daily carnage came Thursday when 33 died, the Kompas daily said, adding 1,900 troops and police had been sent to the Sambas district to prevent the violence from spreading further.

The fighting, sparked by a dispute between members of the Malay and Madurese migrant communities last Sunday, had spilled over to six sub-districts by Thursday, the daily said.

The military and police in Singkawang, the main town of the Sambas district, and in Pontianak, the main city in West Kalimantan province, declined comment Friday. But the head of the Sambas police had gone to the area to coordinate peace efforts, a member of his staff said.

The 51 deaths this week brought the toll since violence first broke out between the two communities in February, to 68 killed, with more than 1,000 houses torched and 3,351 Madurese evacuated to Singakawang and Pontianak, the daily said.

The violence erupted on February 22 after a Madurese man refused to pay his public minibus fare and stabbed the Malay driver in an ensuing argument.

Friends of the driver retaliated by attacking the village in Tebas subdistrict where the Madurese lived, sparking an initial wave of violence that spread to nearby Pemangkat leaving 17 dead.

The renewed fighting broke out on Monday with members of the Madurese community attacking a predominantly Malay settlement in Pemangkat after a Malay had scolded a Madurese the previous day for carrying a machete in public.

Yield arms or be shot, army warns rioters

Reuters - March 15, 1999

Ambon -- Indonesian forces on the ravaged island of Ambon have been ordered to shoot residents who refuse to surrender weapons, a senior commander said.

"The security apparatus will take the policy of asking the people to surrender their weapons voluntarily at least three times," Colonel Karel Ralahalu told a news conference late on Sunday.

"If they do not want to, we will act firmly in the form of shooting on the spot whether to paralyse or to kill," said Ralahalu, military commander on Ambon. Witnesses said security forces on Monday were searching in six trouble spots around Ambon, 2,300 km east of Jakarta, and confiscating weapons. Over the weekend various crude weapons were seized.

Ambon city was calm on Monday with some schools reopening after recent violence. Witnesses said about 14 abandoned houses were torched on Sunday night, but there were no immediate reports of casualties.

Clashes between Moslems and Christians erupted on January 19 and have killed more than 200 people.

On Wednesday, tens of thousands of people fought pitched battles in the city centre using machetes, knives and Molotov cocktails, killing up to 10 people. One died in new violence on Saturday.

Is Indonesia breaking down?

Far Eastern Economic Review - March 18, 1999

Gerry van Klinken -- Is Indonesia's social fabric disintegrating? Or are the peasants simply in revolt? It's time to take a serious look at the accepted wisdom on what lies behind the epidemic of social unrest in this vast archipelago. Those outside Indonesia have seen their TV screens filled with images of smoke-blackened shops and Indonesian parents weeping over dead children. The voice-over is almost invariably peppered with such phrases as "a society tearing itself apart" or "as Indonesia's social fabric unravels." Indonesian commentary has been similar, with Feisal Tanjung, the minister for security, for example, saying that the unrest was caused by religious decline.

True, when neighbours kill each other the feeling of decay is hard to put aside. Ambon is today experiencing the worst inter- religious and ethnic strife the island has known this century. And there have been many such cases recently: in Jakarta, Kalimantan and Sumba. Yet the seeming universality of the interpretation, that we are seeing the "breakdown" of a society that once functioned reasonably well, should lead us to be suspicious. Common sense is often uncommonly wrong.

In 1997, I visited the riot-torn town of Tasikmalaya in West Java. Then, the question, "Why did it happen?" had triggered enormous public debate, with the "breakdown" view coming through strongly. Before heading to the town, I met the popular Islamic opposition leader, Abdurrahman Wahid. He explained that the riots had been instigated by a number of intellectuals from Jakarta. But in Tasikmalaya, no one was interested in the Jakarta intellectuals. The talk there instead was about insensitive police, overconfident young activists and well-connected local Chinese businessmen. In other words, it was all about local issues. It struck me then that for all his popularity, Abdurrahman Wahid was out of touch with the grassroots.

Today, my impression is stronger than ever of a Jakarta elite out of touch with their 200 million brethren. Whether they belong to the old guard or the opposition, there is a widespread view that Indonesian society is traditional, religious and (therefore) harmonious and obedient. Put another way, the view is that the bulk of the people are inert and prefer to do nothing unless prodded to action by either good Jakarta government policies or evil "provocateurs," usually also from Jakarta. But this is surely a paternalistic view of one's own society. Indeed, it reminds me of the smug Dutch minister for colonies 70 years ago, who said that the Javanese peasant wanted nothing more than to be left alone to grow rice.

Meanwhile, unbeknown to the elite, there is life, hope and clear thinking in rural and small-town Indonesia. You won't read about this in the Jakarta press, which fears to report it as it might imperil "national unity," but there is an alternative discourse going on. Hidden as it is, it is nevertheless a lively and highly political discourse. And being local, this discourse is different everywhere, although there are some parallels.

First, it is about local heroes, whose status grows as they are denounced as subversives and provocateurs by Jakarta. Some of them are like Achmad Kandang, the separatist rebel leader in Aceh. Others are resolutely peaceful, like Agustiana, the environmental activist in West Java who was eventually blamed and jailed for the Tasikmalaya riot. Others again are religious, such as the Central Java cleric, Afifuddin, named by Jakarta as the provocateur behind a major riot in 1997.

The discourse also often has xenophobic aspects, in which "foreign" is equated with the bad, no matter whether the foreigner in question has lived in the community for many years and is just as poor as the "core" group. Ethnic tolerance is certainly not a hallmark of the intense Acehnese, Dayak or West Papuan feeling that has exploded recently. But mind you, the locals think they are purifying and strengthening the community -- the exact opposite of social breakdown. Indeed, Achmad Kandang is a hero in Aceh because young people are turning away from gambling and going back to prayer, as his father proudly told one interviewer.

Most of all, the discourse is about reclaiming local government, long hijacked by big capital and a brutal military. This is why protests have at last stopped the giant pulp mill, Indorayon, in North Sumatra. This, too, is why "anti-corruption" protests have forced literally hundreds of local-government officers throughout the archipelago to resign over the last year -- so many that some wonder how the June parliamentary elections will be properly implemented.

And there are many more examples of the discourse -- naturally enough because of its overlay of local concerns. Exactly what they all add up to isn't yet clear, except this: It would be a mistake to think of the unrest only as evidence that the social fabric is unravelling. Rather, what may be unravelling is an elitist concept of statehood, and the authority of an elite whose world this has always been. But for the people, this could be just the start of something new.

Military enforces crackdown in Ambon

Associated Press - March 14, 1999

Geoff Spencer, Ambon -- Indonesian soldiers raided homes and searched boat passengers Sunday in a security crackdown on the island of Ambon to quell fighting between Christians and Muslims that has killed more than 200 people in less that two months.

Despite their efforts, 15 houses were burned near a military hospital after nightfall.

Witnesses said a Muslim gang set fire to a home owned by Christians and the flames quickly spread to others owned by people of both religions. There were no reports of injuries.

Fierce fighting erupted on Ambon in late January and spread to five other eastern islands in Maluku Province, which were known as the Spice Islands in Dutch colonial times.

Military authorities have filed charges against a security officer accused of fomenting sectarian rioting in recent weeks. The unidentified officer would face trial this week, Ambon's military police chief, Maj. Djuhendi, said Sunday.

More than a dozen other members of the security forces have also been questioned since Muslim leaders accused some of siding with Christians during the violence.

Meanwhile, squads of soldiers with automatic rifles conducted body and luggage searches on passengers coming and going on inter-island ferries and ships at Ambon's main port. Thousands of people have already sailed away from Ambon fearing more bloodshed.

About a dozen men carrying knives and other weapons were arrested in one search Sunday. Soldiers also raided houses in the eastern end of the island's capital, which is also known as Ambon.

On Saturday, police arrested 37 Muslim men accused of planning a new wave of attacks against Christians. Four homemade bombs and other weapons such as spears, arrows and swords were confiscated.

Also Saturday, the mutilated body of a Christian man was dumped near a Muslim opposition party's office in Ambon city. He was the 14th person to die since fighting flared again Wednesday, when troops opened fire on rival mobs battling each other with gasoline bombs and spears.

Christians prayed and held Sunday services, some in the burned out wrecks of village churches set on fire during the religious clashes. Many mosques have also been burned along with thousands of homes, stores and other buildings.

"Let's pray that this violence is over and that Christians and Muslims can live in peace again," said Father John Ruhulessin, a Roman Catholic priest in Ambon.

Military officials said government offices and schools would open Monday as usual. Thousands of state employees and students have been staying at home because of last week's violence.

About 90 percent of Indonesia's 210 million people are Muslim, making it the world's most populous Islamic nation. However, just over half over Ambon's 311,00 people are Christian.

Indonesia textile industry suffering

Reuters - March 14, 1999

Soraya Permatasari, Jakarta -- Indonesia's textile industry, once a significant national breadwinner, has withered into a shadow of its former self under the strains of the country's deep economic crisis.

Huge exposures to foreign borrowings and expensive raw materials have undermined what was a major export earner.

Indonesia earned $6.2 billion from the export of textile products in 1997, the year its economic crisis started. No figures are yet available for 1998, but industry officials expect a drop of 50 percent.

Analysts forecast the performance of Indonesian textile companies will remain weak, hampered by limited growth in demand, expensive production costs and further price declines.

Indonesian Spinners Association chairman Aminuddin said the textile industry was languishing at 62 percent capacity.

"Textiles are a capital intensive industry, therefore it is common that they finance their operations through loans," said Arief Koeswanto of HSBC Securities.

There was also a problem in getting raw materials, Koeswanto said. "Overseas banks don't trust Indonesian banks any more because of the crisis. How can they make payments for imports?"

Like companies in other industrial sectors, textile companies have been hit by the depreciation of the rupiah. In principle, this should help exporters, making their products cheaper abroad.

But many textile companies are beset by foreign debts that have swollen in rupiah terms. Raw materials are largely imported, making production costs jump in rupiah terms.

The rupiah has plummeted from 2,700 to the dollar in mid-97 to below 9,000 to the dollar. At one stage it fell to 17,000. Most analysts have dropped textile companies from their coverage due to the firms' small capitalisation and generally weak performance.

Some textile analysts only follow those at the upstream end of the industry -- who produce polyester and polyester yarns and other types of raw materials for clothes -- because of their stronger capital base and their big export portion. The downstream end of the industry -- firms actually making cloth and clothes -- has been worst affected.

"Many companies in the downstream industry are domestic players. It is harder for them to survive, because the raw materials are mostly imported," one said.

Polyester producer Indorama (INDR.JK), whose market capitalisation is much higher than most other firms, was expected to book higher revenues in 1998 and slightly lower in 1999.

Declining selling prices and limited growth in sales volume are making it tough for the company this year, analysts said.

"You may see much higher revenues in rupiah terms in 1998 when compared with 1997 numbers, but the sharp increase is mainly due to the sharp depreciation of the rupiah. In terms of volume there was no real increase," said an analyst with a foreign brokerage.

One textile analyst expected Indorama to book a loss in 1998 because of higher swap costs. Analysts expected polyester product prices to continue falling by five to 10 percent in 1999.

Koeswanto of HSBC Securities added that profit margins for textile companies were not impressive in dollar terms.

One leading foreign brokerage house in Jakarta said in its latest report on textile in the fourth quarter last year it expected Indorama to book a loss of 31.4 billion rupiah in 1998 but a profit of 89 billion in 1999.

Net loss expectations in 1998 resulted from a forex loss of 130.5 billion rupiah. The brokerage house used a year-end exchange rate of 9,000 rupiah to the dollar.

On the other hand, Barra's The Estimate Directory had a consensus of 56.3 billion rupiah net profit in 1998 and 121.2 billion net profit in 1999 for Indorama. Indorama's 1998 nine-month result showed a net profit of 7.86 billion rupiah.

One textile analyst at Panin Sekuritas said, however, that some textile companies are still prospective.

"Actually I don't think that all textile companies are bad," the analyst said. "Some of them still make profits in rupiah term despite the large forex loss, because of their big export sales."

The analyst mentioned Indorama, Roda Vivatex (RDTX.JK) and Ever Shine Textile (ESTI.JK) as relatively good textile stocks.

As of end of September 1998, Roda Vivatex had a bottom line of 58.3 billion rupiah, while Ever Shine Textile booked a 48.8 billion rupiah net profit.

Based on 1998 nine-month results, more than 50 percent of Indonesia's listed textile companies posted losses.
 
Aceh/West Papua

Demand for Irian independence rejected

Kompas - March 15, 1999 (BBC summary)

Jayapura -- Irian Jaya Governor Freddy Numberi has confirmed that the government has rejected the Irian Jaya people's demand for the independence of West Papua (Irian Jaya) which representatives of the Irian Jaya people conveyed to President B.J. Habibie during a recent dialogue.

The governor confirmed this in reply to questions from journalists at Sentani Airport, Jayapura upon his return from Jakarta on 13th March.

Numberi said the head of state did not say that the government rejected the demand for the independence of West Papua during the dialogue with the Irian Jaya people's representatives.

"President Habibie simply said: the Irian Jaya people need to reflect on what they demanded. The conclusion is that the head of state disagrees with the Irian Jaya people's demand for independence and secession from the unitary Republic of Indonesia, " he said.

The governor said the dialogue between the president and the Irian Jaya people's representatives sponsored by the Irian Jaya People's Reconciliation Front failed or did not achieve any target.

Numberi added that the dialogue failed because the dialogue did not yield any concrete measures to develop the largest province. "During the dialogue, the people's representatives should have come up with important things related to the development of the land of the cenderawasih [birds which are native to Irian Jaya] such as the development of human resources and other sectors," he said.

He said the demand for the independence of West Papua which the Irian Jaya people's representatives conveyed to President Habibie, was in fact an attempt to remind the government to pay serious attention to the development of the easternmost province.

He said huge funds are needed and the local sons and daughters must be trained to develop Irian Jaya. "The training of the sons and daughters of Irian Jaya has been so unclear that they have been less competitive than their brothers and sisters in other provinces," he said.

Army atrocities stoke separatist fires

Toronto Star - March 15, 1999

Martin Regg Cohn, Pusong -- As Muslim worshippers ambled toward the onion-shaped domes of the village mosque, truckloads of combat troops moved into position. For the soldiers lying in wait, the noon call to prayer was their cue to attack.

They charged across a dusty field, sweeping past the mosque's white colonnaded arches in pursuit of fleeing worshippers. Their target: suspected members of Aceh Merdeka (Free Aceh), a guerrilla movement seeking independence from Indonesia.

Yet the raid, like the past decade of counter-insurgency operations, only increased grassroots support for Aceh's separatists.

"I feel pure anger inside me," said Anwar Jalil, who endured three weeks of beatings in a detention centre, emerging with a fractured skull, broken hand, bruised ribs, gashes across his body. And a burning desire to separate from Indonesia.

"I thought I was going to die," the 31-year-old recalled. "God gave me a longer life. Now, I think Aceh must be independent, so we won't be colonized and tortured."

Indonesia has been on the brink of social chaos and political collapse ever since the currency crisis invaded Southeast Asia's biggest country a year ago. A moribund economy is dragging millions into poverty and despair, turning Indonesia into a breeding ground for incitement and anarchy. Regional tensions are straining Jakarta's attempts to keep united a country of 200 million, 90 per cent of whom are Muslim.

Aceh is perched on the northwestern tip of Indonesia's sprawling archipelago, which spans three time zones and more than 17,000 islands. The dream of many Acehnese to sever their ties with Jakarta, 1,750 kilometres away, is being closely watched by other secessionist movements in Indonesia's eastern hinterlands: East Timor and Irian Jaya.

The brutal nature of the conflict in Aceh has been hidden from the eyes of the world for a decade. Only recently were foreign diplomats and journalists allowed back in, lifting the veil on rampant Indonesian army atrocities.

Indonesia has the world's largest Muslim nation -- a fact it has used to cynical advantage. Jakarta has raised the spectre of Islamic fundamentalism, with its attendant terrorist stereotypes, to ward off Western criticism of its tactics in Aceh. But horror stories are emerging of brutality by Indonesian troops.

At a secret meeting in the village of Kandang, Aceh Merdeka member Ismail Sahputra showed pictures of Hamzah Daoud, 38, who was tortured to death by the army last January.

An autopsy showed the flesh had been pulled off his mangled arms, his lungs collapsed, his back crushed, and a traditional Acehnese dagger thrust into his rectum, says his half-brother, Burhanuddin Ilyas.

Another torture victim, Ibrahim Hanafiah, 43, described how soldiers dragged him from his house on the same day and brought him to a youth centre, next door to military headquarters, for physical and psychological torture.

Hanafiah says they slashed his back, broke his nose, smashed his index finger, and made him watch as they sliced off the ears and gouged out an eye of a dying man beside him.

"Everyone was screaming to death, asking for help, but the more they screamed, the more they were brutalized," he says. "All I could think of was asking Allah for help, to release me." Now he asks Allah's help in releasing Aceh from Indonesia.

One senior diplomat says the excuse of Islamic extremism is no longer silencing Western diplomats. "For 10 years, the army did what would be grounds for an international war crimes tribunal: they brutalized their own people," he said. "They turned it into a war zone, and got away with murder."

Aceh's relentless cycle of violence and retribution has turned coffee plantations and rice paddies into killing fields.

The government itself estimates that more than 1,000 people have been killed over the past decade. Researchers have documented many hundreds of rapes, sexual assaults and house burnings. The home base of many guerrillas hunted down by the army, Pidie Acehnese, is known as a "village of widows."

Beyond the repression, there is economic exploitation. The central government siphons off profits from Aceh's lucrative natural gas exports, further alienating a fiercely proud people. Now, even the most moderate students are openly campaigning for a referendum on independence. Alongside them, hardline Aceh Merdeka activists are waging a war of attrition with the army.

There is little evidence in Aceh of stereotypical Islamic fundamentalism. An atmosphere of languid tolerance, not militancy, pervades the area. Instead, the fanaticism in Aceh emanates largely from the army's declared strategy of "shock therapy."

Army commander Gen. Wiranto apologized last August for the army's human rights violations, and declared an end to the Military Operations Area that had terrorized Aceh since 1989.

But the army's abuses resurfaced in recent months: Bloated bodies in rivers, dismembered corpses dumped from military torture centres, mass graves dug up. The raid at Pusong's mosque and the torture of dozens of worshippers was only a recent example of the continuing shock therapy.

Softyan Issa was the mosque's muezzin that day, summoning people to prayers, his voice wafting from the minaret's loudspeakers. He still seethes over the army's attack.

"All these years, we have been tortured and brutalized," he says softly, surrounded by Koranic plaques on the turquoise walls of his home. "I don't want to see my people treated like this."

The military raid came a day after an explosive confrontation on the streets of Pusong. Hundreds of villagers converged on government buildings in response to leaflets dropped from military helicopters calling for reconciliation.

They walked into an ambush. Army snipers perched on rooftops or riding in cars fired on women and children in the crowd, mowing down as many as a dozen people.

Sairah Ismail, 70, said a bullet went through her right arm. She says she walked from the mosque in search of peace, only to be cut down by a hail of bullets. Now, she too has given up on reconciliation, and is waiting for a chance to cast a ballot for independence.

Against this backdrop of raw hatred, referendum banners and graffiti have sprung up across Aceh.

Five students were arrested last month after painting a referendum sign on the bus terminal in Lhokseumawe, where multinational corporations pump liquified natural gas into supertankers that ply the trading routes to Japan.

The rising tide of political resistance is a resounding defeat for an army that thought it could eradicate support for the insurgency movement.

Regional military commander Col. Johnny Wahab acknowledges he is losing the war for the hearts and minds of Acehnese, even if he has Aceh Merdeka on the run.

"Their [rebels'] military power is now small, but their influence is considerable," Wahab concedes. "The problem now is that people are asking for a referendum and independence."

The wild shooting spree by Wahab's troops earlier this year shocked local Acehnese, who believed the fall of Indonesia's dictatorial President Suharto last year would usher in reforms.

The commander denies human rights violations by his men, insisting the army cleaned up its act after he took over late last year.

He acknowledges the soldiers were also "motivated by revenge" after seven of their comrades were slain by hostile crowds late last year.
 
Human rights/law

Rights abuses largely unchanged: Amnesty

Reuters - March 18, 1999

Sydney -- Amnesty International said on Thursday that torture, disappearances and unlawful killings continued in Indonesia despite President B.J. Habibie's human rights reforms since coming to power in May 1998.

"While the measures which have been taken are welcome, there are still questions about the Habibie government's commitment to human rights reform," Amnesty said in a report titled "Indonesia, An Audit of Human Rights Reform."

The report said the Indonesian government had not begun to address many of the legal and institutional changes needed to protect human rights.

"As a result the pattern of human rights violations -- the arrest of individuals engaging in legitimate peaceful activities, torture, ill- treatment, 'disappearances' and unlawful killings -- remains largely unchanged," the report said.

Amnesty said more than 30 Indonesian prisoners of conscience remained in jail for peaceful political activities and laws allowing imprisonment for peaceful protests remained unchanged.

"The government has not reviewed the convictions against political prisoners imprisoned following unfair trials," it said.

"A much publicised government commitment to repeal the anti- subversion law has not yet been fulfilled, and there are fears that the government intends to incorporate some of its key provisions into the criminal code or a new national security law effectively rendering its appeal, when it eventually happens, meaningless," Amnesty said.

Indonesia's anti-subversion law carries penalties ranging from 18 months imprisonment to the death penalty.

Amnesty also said that while human rights violations by the Indonesia military had been investigated and officers brought to trial, there was "no concerted effort towards ending impunity."

However, Amnesty welcomed the relaxation of restrictions on political parties, independent trade unions and the media. It also welcomed the release of a number of political prisoners and Indonesia's cooperation with the United Nations on human rights.
 
News & issues

Certainly the PRD is a left party

Detikcom - March 17, 1999

Jakarta - The links between Pramoedya Ananta Toer and the People's Democratic Party (PRD) go back some time, starting in 1996. This matter was raised by the PRD's representative in the General Election Committee (KPU), Hendri Kuok, in a special interview with Detikcom at the KPU offices on Wednesday, March 17.

Hendri is one of the members of the KPU who are considered controversial, he is the only KPU member who did not attend the first plenary KPU meeting. Hendri also refused to take an oath by President Habibie. In the end Hendri made an agreement before the head of the KPU along with the representative of the Indonesian Democratic Alliance Party (Partai Aliansi Demokrasi Indonesia, PADI), Bambang Sulistomo.

Hendri's appearance is far from being ferocious, instead he exudes an impression of calm and authority. He is different from his colleges, the other KPU members who always wear formal clothing. Hendri is always seen wearing jeans.

Although members of the Team of 12 who's members are made of parties which have passed the verification process always insult the PRD, Hendri continues to defend them. "We must defend their political rights", says Hendri. But Hendri is extremely critical of the acts of intimidation by the Team of 12 against the representative of the Bhinneka Tunggal Ika party.

Hendri does not object to the PRD being referred to as a "left" party. "In its essence [the state ideology] Pancasila is `left' and the Republic [of Indonesia] was built by left people", responds Hendri calmly.

The following are excerpts from a conversation with Hendri with Sigit Widodo from Detikcom.

Detikcom: How did Pramoedya link up with the PRD in the beginning?

Hendri: That began in 1996. Early on he said that if he was still young he would like to become a PRD member, that was in 1996. Then at the end of 1998 he made a statement saying that if he was accepted, he wanted to become a member. At that time we were very busy with all kinds of things, so we were not able to process the request, only now are we processing our new members.

Detikcom: So Pram will be inaugurated [as a PRD member] next Sunday, March 21?

Hendri: That's the plan.

Detikcom: And on that day there will also be a relaunch of the PRD?

Hendri: Actually it is not a relaunch. It is more like a launch of the PRD's program for the elections. And there will be other things on the agenda such as the launch of a team for the 1999 elections, an introduction to the Central Leadership Committee of the PRD (KPP-PRD) and the inauguration of a number of new members, such as Pramoedya Ananta Toer and Dr. Dede Utomo from the Airlangga University in Surabaya.

Detikcom: With Pram entering the party, isn't the PRD afraid of being labeled as being "left" again?

Hendri: We have never been afraid of this. From the beginning we have been labeled as being "left". I don't think this is a problem because all of those forces fighting against oppression and arbitrary abuse of power are actually left groups. In its essence Pancasila is "left" and this republic was build by left people. So I don't think there is a problem.

Detikcom: So the PRD says it is a "left" party?

Hendri: Now that depends on how the term "left" is used. Historically it arose from parties of the opposition forces in France who sat on the left side of the parliament. They consistently fought the conservative parties who were in power, that's why they were referred to as left groups. So using the term like that is okay. But it does not mean that "left" should always be identified with communist forces. Because reactionary communist forces are clearly to the right, not the left. So [in that context], certainly we are "left".

Detikcom: So what is the definition of "left" in the PRD's view?

Hendri: It's as I said earlier. It is all of those forces who are defending the oppressed classes and fighting arbitrary abuse of power and defending minority groups. Those are "left" groups.

Detikcom: What is your opinion of the Team of 12?

Hendri: We need to defend the political rights of the 12 parties. This issue has already been put on the agenda. Possibly it will be decided to invite a representative of the Department of Home Affairs to discuss the matter. We will ask them what their decision is, I say that the department will wash its hands of the matter, because they are involved in the verification process and the like.

Detikcom: What about the racial intimidation by the Team of 12 against the representative against the representative of the Bhinneka Tunggal Ika Party?

Hendri: If it is an issue of intimidation it is not right to do such a thing. I don't know exactly, I did not see it happen yesterday (March 16). But intimidation like that is an incorrect thing to do. But we need to defend the political rights of those 12 parties, which is a separate issue from intimidation or other emotional acts. With regard to racism, that is something that we must oppose. It is something which is incorrect for them to do in a democratic forum such as this. That is another problem again, but we need to defend their political rights. But certainly we will be critical of actions which smack of racism, which is extremely undemocratic.

[Translated by James Balowski]

Ghalib ignores sale of Suhartos' homes

Jakarta Post - March 19, 1999

Jakarta -- Attorney General Andi M. Ghalib played down on Wednesday media reports on the planned sales of three luxurious mansions in London owned by relatives of Soeharto, saying it was irrelevant to the government's investigation into the wealth of the former president.

"We are only searching for assets owned by Soeharto, " Ghalib said before attending a Cabinet meeting on people's welfare and poverty eradication at the Bina Graha presidential office.

The Independent, a London daily, reported on Tuesday that Soeharto's family members were putting the properties up for sale for a combined total of more than #11 million (US$17.6 million).

The newspaper linked the sales with the Indonesian government's probe into Soeharto's alleged rampant corruption and the British government's refusal to grant visas to some members of the former first family, including his son-in- law Lt. Gen. (ret) Prabowo Subianto.

One of the houses, in Winnington Road, Hampstead Garden in northern London, is offered for #8 million, #1.5 million lower than market price. Another house, provided for the family servants and friends, is on the market at #1.95 million. The third property, in Putney, reportedly owned by Soeharto's half brother, Probosutedjo, is on sale for #1.4 million.

Ghalib, under fire for his office's sluggish investigation into Soeharto, said he was doubtful about the validity of the report.

"It is a one-sided story. It is not confirmed yet. The Ministry of Foreign Affairs has reported that he [Soeharto] did not have any wealth there, " Ghalib said.

Ghalib announced last month that his office in cooperation with the Ministry of Foreign Affairs, "has discovered that Soeharto has no wealth abroad either in the form of bank accounts, deposits, land or houses".

A spokesman for the Attorney General's Office, Soehandoyo, insisted that the Indonesian Embassy in Britain had failed to find any information on the money reportedly kept in Indonesian banks in London under the names of Soeharto and his family members. Similar investigations were also conducted in 16 countries including Italy, the Netherlands, Australia, France, the US and Belgium.

A scholar and staunch critic of Soeharto George Junus Aditjondro, said in September that three of Soeharto's children -- Sigit Hardjojudanto, Siti Hardijanti Rukmana and Siti Hediyati Prabowo -- and Probosutedjo had five houses in London.

"I stick to the statement of the Ministry of Foreign Affairs. It is an official report," Ghalib insisted. He said he had asked the ministry to examine the accuracy of the British newspaper's report. "It is just a newspaper report. It must be checked first," he said.

Separately, Golkar deputy chairman Marzuki Darusman suggested that the present government should not to force itself to continue its probe into Soeharto's alleged illegal wealth, saying that it was beyond its capacity due to the complicated nature of the case.

"There are more important things to do than investigate Soeharto. Let's give the job to the next government," he said.

Sale of Suhartos' homes to be checked

Agence France Presse - March 17, 1999

Jakarta -- Indonesian authorities are to investigate whether relatives of former president Suharto are selling lavish London properties, and have called back his son-in-law from abroad for questioning, officials said Wednesday.

The authorities are probing the wealth of Suharto who ruled Indonesia for 32 years before resigning last May and have been accused by the opposition of being too easy on the former strongman.

But Attorney General Andy Ghalib said the government would check on the report about the sale of London properties. "We will check through the foreign ministry whether the report is true or not," Ghalib said.

The British newspaper, The Independent newspaper, reported Tuesday that properties owned by Suharto family members in upmarket areas of London were on sale for a combined total more than 11 million pounds (17.6 million dollars).

Ghalib said his office had previously relied on a foreign ministry statement that there were no wealth in Suharto's name in Britain. "What we are looking for is those [assets] on his name," Ghalib added.

An inquiry is underway to determine how Suharto amassed his fortune, estimated by US magazine Forbes in July 1998 to be worth some four billion dollars, a figure Suharto called ridiculous.

The Independent said the Suharto family is also believed to own another three properties in and around London, but it was not clear if they were also on the market.

Last week a parliamentary commission pressed Ghalib to speed up the wealth probe by making Suharto a suspect instead of only a witness.

The secretary general of the anti-graft Movement Concerned with the State Wealth, Faisal Tajudin told the Suara Pembaruan daily that Ghalib should include the Independent report as new evidence in the graft investigation of Suharto.

Suharto's lawyers have filed legal papers with the attorney general's office demanding the inquiry into alleged corruption and abuse of power be stopped. But pressure remains on Suharto.

Indonesian military chief General Wiranto has summoned Suharto's son-in-law, retired lieutenant general Prabowo Subianto home from abroad for questioning over a meeting at his office in May last year, a report said.

Prabowo, who is in Malaysia according to his younger brother Hasyim Joyohadikusumo, will be questioned over a meeting at the headquarters of the army's Kostrad strategic command, military spokesman Major General Syamsul Maarif said. The meeting was held during the riots last May, when Prabowo headed the Kostrad. Maarif said the summons, sent on March 14, followed a report from an official team investigating the riots that recommended the authorities investigate a meeting at the Kostrad headquarters on May 12.

Prabowo was honorably discharged from the forces in August 1998 following the recommendation of a military council for his suspected involvement in the abductions of activists during the last months of Suharto's rule. He has since remained mostly abroad conducting business for Hasyim.

Three-days of riots in Jakarta left more than 1,000 people dead and massive devastation. The riot was also marked by allegations of the rape of ethnic Chinese women and girls.

Maarif said Prabowo may also be court martialled over the abductions if there were enough evidence to support charges against him.

An Indonesian military tribunal is currently trying 11 soldiers from a military unit headed by Prabowo before he headed Kostrad, over the abductions.

At least 24 activisits were abducted in early 1998. Nine have since spoken of being abducted and tortured. One was found dead and the rest remain missing.

Pram to make first visit overseas in 40 years

Agence France Presse - March 15, 1999

Jakarta -- Leftist author Pramudya Ananta Toer hailed by international critics as Indonesia's leading modern novelist but gagged here until the fall of Suharto, is travel abroad for the first time in 40 years, Fordham University said Monday.

Pramudya, 74, who has been nominated for the Nobel prize will leave here April 4 for his first tour of the United States which will also take him to Canada, the university said in a press statement. It will be the first time he has left the country since 1959.

At the invitation of Fordham and the Association of American Publishers, Pramudya will take part in a seminar on his work marking the launch of the English language edition of his work, 'The Mute's Soliloquy,' the statement said.

Most of the ageing novelist's work was banned for decades in Indonesia, where he spent a great part of his life in jail.

Born to a modest family in Blora, a small town in the northeastern coast of Central Java, Pramudya was a thorn in the side of successive adminstrations.

During Indonesia's independence struggle against the Dutch, the colonial administration threw him in jail from 1947 to 1949.

The country's first president Sukarno imprisoned him between 1960 and 1961 for writing about the Chinese in Indonesia.

In the 1960s, Pramudya was one of the main figures of Lekra, a communist-affiliated art organisation which harshly suppressed liberal writers, through the media outlets under its control at the time.

Under the Suharto government his links to the communists landed him in jail without trial for 14 years following a bloody 1965 coup attempt, officially blamed on the Indonesian Communist Party (PKI).

He spent years at the notorious Buru Island prison labour camp, and the decade following his release from Buru in 1979 under house surveillance.

In 1996 Pramudya was questioned over his possible links with a pro-democracy group, the People's Democractic Party (PRD), which was deemed to be pro-communist at the time.

Pramudya never showed any remorse for his past or his communist links, and in May 1987, the government barred him from accepting an invitation to attend the Pen Club congress in Lugano, Switzerland.

He was nominated to the Nobel Prize for literature for the first time in 1986. It went to Nigerian writer Wole Soyinka and although nominated several times since, the coveted prize has eluded him.

In May 1995 Pramudya was awarded the Ramon Magsasay Award for Journalism, Literature and Creative Communication Arts, an annual Manila-based award encompassing Asia.

Several authors and intellectuals harshly protested Pramudya's nomination for the award citing his suppression of liberal wiritings while under Lekra, and Jakarta again barred him from leaving the country to accept the prize.

He wrote eight of his novels during his stay at the infamous Buru island prison where thousands of alleged communist members and supporters were jailed without trial.

His "The Earth of Mankind" and "Greenhouse", part of a tetralogy retracing the rise of Indonesian nationalism at the turn of the century, was translated in eight languages, including English, Dutch, German, Swedish, Russian and Chinese.

Murdani resurfaces, clues to power play

Far Eastern Economic Review - March 18, 1999

John McBeth, Jakarta -- Ever since then-President Suharto dumped him from the cabinet six years ago, former Defence Minister Benny Murdani has clung to the shadows of Indonesian politics. Some of his critics have refused to believe he had ceased to be a player, seeing his hand in all manner of backroom machinations. But until recently there was little evidence that Murdani retained any real influence.

In the past few months, however, Indonesia's former military hard man has come in from the cold. He has met quietly with both Suharto -- to whom, despite everything, he remains intensely loyal -- and armed-forces commander Gen. Wiranto. And to show how times have changed, he has been providing advice to the new head of military intelligence, the apparatus he made his own power base in the 1980s.

Even now, Murdani remains on the sidelines of Indonesia's power drama. Yet the fact he's involved at all casts light on two key themes: the rise of Islamic influence in the army and the delicate dance among leading players over calls for an accounting of Suharto-era corruption.

Wiranto's meetings with Murdani -- a Christian and staunch proponent of a secular military -- show that the armed-forces chief feels more secure in curbing the rise of Islamic influence within the ranks, an aim evident in an army reshuffle on January 4. The army's direction is important because it is still the most powerful national institution. With religious and ethnic friction on the rise before June's parliamentary elections, the neutrality of ABRI, as the military is known, is seen as vital to keeping violence at bay. "If ABRI gets divided on the religious question, then we're lost," says Jan Van de Made, a Catholic priest in Jakarta.

Few other officers have left such a stamp on the military as the bluff Murdani, a tough, Java-born Roman Catholic. He became armed-forces commander in 1982, having been recalled to Jakarta in the mid-1970s after serving in Bangkok as an undercover intelligence officer and in Seoul as military attache. He was appointed defence minister in 1988 but fell from grace five years later.

Tapping general bitterness over Murdani's perceived favouring of Christians for key posts, new armed-forces chief Gen. Feisal Tanjung and army commander Gen. Hartono spent the next five years ensuring Muslims regained the ascendancy -- a process Wiranto now appears to have halted.

What initially opened the way for Murdani's rehabilitation was the removal last year of Lt.-Gen. Prabowo Subianto, the former special-forces chief who was his most vocal critic. Suharto's ambitious son-in-law displayed an almost pathological hatred of his former mentor.

However, it was the future of Suharto, rather than Prabowo or Islamic influence, which underlay Murdani's re-emergence on the political stage. Sources say the first step occurred in October, when three of Murdani's former aides paid a call on President B.J. Habibie -- another person with whom Murdani has had strained relations. The three emissaries, the sources say, were Maj.-Gen. Sukarno, Murdani's one-time adjutant and former deputy attorney- general for intelligence; Maj.-Gen. Nugroho, a retired home- affairs secretary-general; and Maj.-Gen. Arie Sudewo, an ex- military intelligence chief. The sources say they carried an olive branch to Habibie and a message: Go easy on Suharto. Despite his sacking, says one insider, "Benny has this absolute soft spot for Suharto."

As with Prabowo, Murdani was once close to Habibie. When Habibie was research and technology minister, Murdani even assigned him a special-forces major as a personal bodyguard. But their relationship soured in the late 1980s as they became rivals for Suharto's ear.

In his only public comment so far, Murdani has rejected speculation that he's an active participant in attempts at national reconciliation between Suharto, other key players of his era, and the forces now calling for reforms and investigations. (Murdani didn't respond to requests for an interview.) But he clearly shares with Habibie, a long-time Suharto protege, and Wiranto, a former Suharto adjutant, a concern over the consequences of a witch-hunt against the deposed leader.

Several sources say Murdani met Suharto for 90 minutes in mid- December after receiving an invitation via the ex-president's elder daughter, Siti Hardijanti Rukmana. It was only the second time the two had met since Suharto sacked Murdani for questioning the business activities of his children and broaching the subject of his retirement; the other was the 1996 funeral of Suharto's wife.

Murdani has also met Wiranto on several occasions, including a one-on-one session in early December when the armed-forces chief sounded him out on how he would react to a series of hypothetical political situations. The meeting was apparently at Wiranto's invitation.

"Benny should be back because he's both a soldier and a statesman," says a Western military analyst. "He is now where he would have been -- a tribal elder -- if Suharto and Prabowo hadn't exploited the whole process."

Clearly, Wiranto's January reshuffle would have earned Murdani's approval. Wiranto named either non-Muslims or officers with strong secular credentials to several crucial positions. In the process, he shunted aside a potential rival, left two former Suharto aides in key posts and removed the last vestiges of Prabowo's influence.

Among the secularist Muslims to be promoted was Maj.-Gen. Tyasno Sudarto, an intelligence officer under Murdani in the late 1980s, who was named head of Badan Intelijen ABRI, the military intelligence agency. Significantly, Murdani met Sudarto on January 9 and 10 near Bogor, south of Jakarta, to offer solicited advice on the agency's planned restructuring. Such a rendezvous would have been unthinkable even months before, given the way Suharto had purged Murdani's people from the agency.

The January 4 military reshuffle didn't sit well with many of the Islamic officials who form Habibie's inner circle and who in many ways represent his only real base of support. One senior presidential aide says he was so surprised at the free hand Wiranto was given that he asked Habibie whether he had approved all the changes.

Most analysts see the changes as a measure of Wiranto and Habibie's mutual dependence. The two share a belief that dragging Suharto to court risks bringing down vast segments of Indonesia's elite and possibly creating widespread instability in the months prior to the elections.

Wiranto's backing of Habibie explains why the president resisted what Indonesian and diplomatic sources say were efforts by Muslim cabinet officials to remove Wiranto after the shooting deaths of eight students in mid-November. Several weeks later, the president again demonstrated his independence from his Muslim circle when he formed the 27-man Council for Uplifting Society and the System of Law, which now oversees national-security policy. Although Feisal was made a council member, Habibie appointed himself chairman and pointedly chose Wiranto to head the council's day-to-day operations.

Habibie's dilemma, however, is that in trying to please both sides he has pleased no one. More recent developments point to strains between him and Wiranto that may increase with time. One of these was the leaking of phone conversations between Habibie and Attorney-General Andi Ghalib that many suspect were made by military intelligence agents. Another was Habibie's claim that he had been the target of a Prabowo coup attempt in May, which implies Wiranto wasn't in full control of some troops.
 
Arms/Armed forces

Labour sells twice as many guns as Tories

Sunday Times (London) - March 14, 1999

Labour is exporting more guns and other military equipment to Indonesia than the Tories -- in spite of Robin Cook's much-vaunted "ethical" foreign policy. Sales of small arms, including machineguns, have even doubled under Labour. Licences for the sale of howitzers, mortars and flame-throwers have been approved even though Indonesia continues its illegal occupation of East Timor, where thousands of civilians have been killed during a battle for independence. When Cook became foreign secretary he announced that the government would introduce an "ethical" policy.

"Our foreign policy must have an ethical dimension and support the demands of other peoples for democratic rights," he said. "The government will put human rights at the heart of foreign policy." As an opposition MP, Cook lambasted the arms trade in general and described weapons exports to Indonesia as "particularly disturbing".

Yet, together with the Ministry of Defence and the Department of Trade and Industry, Cook has allowed twice as many licences for the export of small arms and machineguns to Indonesia as were granted during the Tories' last year in office.

The same volume of ammunition sales to Indonesia was allowed last year as during John Major's final year in power, and exports of weapons including howitzers, mortars and flame-throwers are also being allowed at pre-election levels.

Cook has assured people privately that he will allow Indonesia access to arms only if they are not to be used for internal repression. Yet Colonel Halim Nawi, the Indonesian defence attache to London, admitted on television last month that British-made equipment had been used to crush dissent in East Timor. The level of arms sales is an embarrassment to Cook and his ministerial colleagues. An annual report listing arms exports has been delayed as a result. It was promised last July but ministers say only that it is expected "soon".

"We have had fine words from Robin Cook but he has failed to get to grips with the arms trade," one of his backbench critics said last night. "His ideals in this area are noble but he does not seem to have delivered." The government announced last week that Britain's arms exports reached Pounds 6.25 billion last year, a record level, exceeded only by American arms sales. The announcement came on budget day, ensuring scant media coverage. The trade department and defence ministry have defended the interests of the arms industry, arguing that it employs 410,000 people and that foreign companies will steal British contracts if excessive prohibitions are brought in. Labour critics complain that, as a result, the criteria Cook introduced in July 1997 to judge arms exports are riddled with loopholes. Any export can be allowed if "the end use is judged to be legitimate such as protection of members of security forces from violence".

"How do you judge whether guns, armoured cars and tear gas are to be used to defend the police or turned on innocent civilians?" said a Labour MP. The controversy over the government's record is expected to deepen because ministers oppose German calls for a European Union code to restrict arms brokers -- middlemen who fix arms deals -- from circumventing national restrictions by arranging manufacture abroad.

Government ministers did not dispute that it was "possible" there had been an increase in arms exports to Indonesia. The Foreign Office claimed the situation in East Timor had improved, pointing out that the government have offered the people there greater autonomy under a deal finalised just last week.

UK arms sales to Jakarta increase

Australian Associated Presse - March 13, 1999

London -- The Blair Labour Government is exporting more than its predecessors, a British newspaper has revealed, despite Indonesia's ongoing illegal occupation of East Timor.

A report in The Sunday Times states that the Blair Government has permitted the export of twice as many small arms and machine guns to Indonesia as were approved in the last year of John Major's conservative government. The government has also allowed the sale of howitzers, mortars and flame-throwers to Indonesia, the report said.

The claims are consistent with recent allegations made by London-based Australian journalist John Pilger.

The increase in arms sales to Indonesia runs contrary to British Foreign Secretary Robin Cook's pledge to introduce an "ethical" foreign policy. "We have had fine words from Robin Cook but he has failed to get to grips with the arms trade," said one Labour backbencher.

"His ideals in this area are noble but he does not seem to have delivered." Government ministers accepted that it was possible that arms sales to Indonesia had risen.

The Foreign Office stated that the situation in East Timor had improved, following the Indonesian Government's commitment to East Timorese autonomy.
 
International

Canberra's troops hike alert

Inter Press Service - March 17, 1999

Melbourne -- Australia's defence forces have been placed on their highest level of military preparedness since the Vietnam War, in what analysts see as a clear sign of Canberra's growing unease with regional instability across Asia.

With an eye on instability unleashed by events in Indonesia and the Asian economic crisis, Defence Minister John Moore told Parliament on Mar. 11 that the government plans to double the number of combat-ready troops by June.

The announcement follows a decision by the government's National Security Committee earlier in March, to depart from past military strategy and embrace a new doctrine espousing the use of Australian troops in potential conflicts well beyond Australia's shores.

Analysts say the primary impetus behind these moves is the breakdown of law and order in Indonesia, which has raised the specter of mass evacuations of Australian expatriates throughout the troubled archipelago, and Australian participation in a future peacekeeping force in East Timor.

"These policy changes are totally driven by the situation in Indonesia and East Timor, there is no doubt about it," said Alan Dupont of the Strategic Defence Studies Center, at the Australian National University in Canberra.

"But it's also bigger than that. What we have now is the government saying 'we are an island of stability in a turbulent region and what steps can we take to protect this'," he added.

Australia previously had only one ready deployment brigade based at Townsville in northern Queensland, ready to move at 28-days notice. Moore's statement will see a second brigade, about 3,000 troops, based in Darwin in the Northern Territory. It will have armor and engineers, supported by air and navy units.

"This is the first occasion in over two decades that Australia's had the equivalent of two brigades at this level of readiness," Moore told Parliament.

"The government believes it is important to have maximum flexibility and options necessary to respond to contingencies at short notice. Such measures are both prudent and appropriate," he explained.

Moore said that Indonesia, Malaysia, Singapore and New Zealand and the United States had all been given advance notice of the announced increase in military preparedness, none of who had expressed any concerns about the move.

The decision was applauded by East Timorese resistance leaders, who have called for a UN peacekeeping force to be sent to East Timor immediately.

"I am taking it as a sign of two things -- one, that the Australian Government now believes Indonesia's time as overlord of East Timor has ended, and two, that Australia is ready to put people on the ground in ET," Joao Carrascalao, president of the pro-independence Union of Democratic Timorese, said in a statement from New York.

But speaking on national radio, Prime Minister John Howard, stressed the troops were not being prepared for deployment in East Timor for peacekeeping duties. Instead, he said they were being put in place to face security contingencies.

Howard's conservative Liberal/National Party coalition government has said that while it wants to help with East Timor's transition to autonomy, it will deploy troops only after the conclusion of an independence deal being worked out in the United Nations between Indonesia and Portugal.

Another meeting between Jakarta and Lisbon is scheduled in mid- April, coming after a recent agreement on a direct ballot among East Timorese on autonomy or independence.

But while the rapidly changing situation in East Timor is a key factor behind the increase in Australia's military preparedness, there are other factors behind the policy change.

In early March, the Australian government announced the country's army would embrace a new doctrine that could see the use of "expeditionary forces" in intense conflicts well beyond Australia's shores.

The doctrine, contained in the study "The Fundamentals of Land Warfare", commits Australian troops not only to previous goal of defending Australia and its immediate territorial interests, but says the military has to create to capability of projecting "expeditionary forces" to "operations further afield".

The study, the first of three being conducted by the army, navy and air force, also says the military's need to make use of new technology and military techniques.

The term "expeditionary forces" has been out of vogue since Australia's last involvement in a high-level conflict ended when troops were pulled out of Vietnam in 1972.

The new doctrine follows calls last year by defence planners for a wide-ranging review of potential military threats facing Australia in the aftermath of Asia's economic crisis, which has created instability and exacerbated anti-Western sentiments.

According to Dupont, the new strategy is also part of efforts by Australia's conservative government to answer regional criticism that it was not engaged enough in the region during its first term in office. The scenarios in which Australian troops would be deployed under the new scenario remain uncertain.

Defense officials have been quoted in the media as saying the most likely need for such a contribution would be in support of US forces on the Korean peninsula or Taiwan Strait, or in the event of an outbreak of hostilities in the disputed South China Sea.

There are also fears that growing economic and political uncertainty may mean Australians may need to be evacuated from Indonesia, East Timor or Papua New Guinea.

While some analysts have rendered the doctrine change far sighted, others have questioned as to whether resource restrictions may render the army unable to implement the policy change in practice.

The Australian Defence Force numbers around 50,000 personnel, of which ground forces make up approximately half, the lowest level it has been in 50 years. "They don't have the resources to both defend Australia and engage in regional conflicts," said Dupont.
 
Economy & investment

Privatisation falls below half its target

Agence France Presse - March 19, 1999

Jakarta -- Indonesian's privatisation of state firms in the year to March 31 is likely to raise less that half the targetted one billion dollars, reports said here Friday.

The privatisation scheme is expected to raise just 380 million dollars, the Jakarta Post daily quoted an unnamed official as saying.

But a letter of intent sent to the International Monetary Fundearlier this week said the government had only been able to raise "close to 200 million dollars" through two transactions in the current financial year.

The letter identified government stakes in food-processing company PT Indofood Sukses Makmur and cement maker PT Semen Gresik.

State Enterprises Minister Tanri Abeng had planned to raise 1.5 billion dollars from the privatisation of 12 state-owned firms, but the figure was later slashed to one billion dollars due to weak market sentiment.

The official said that, so far, Abeng had only succeeded in privatising two state companies, raising 200 million dollars. The official only named one of the companies -- PT Pelindo II. Officials have said the Pelindo II tender would be finalized next week.

The unnamed official said that Jakarta also obtained 59 million dollars from divestment of government shares totalling 10.18 percent in publicly listed Indofood Sukses Makmur and 121 million dollars from the sales of its 14 percent stake in publicly listed Semen Gresik.

The letter of intent, sent as part of requirements to get the disbursement of IMF aid, said the privatisation program had fallen behind schedule, blaming unfavorable market conditions.

Watch how Indonesia restructures its banks

Asiaweek - March 19, 1888

Tom McCawley, Jakarta -- In the end, Indonesia's banking reform was more like amputation than elective surgery. But nearly everyone agreed a radical step was necessary to save the patient. Jakarta announced March 13 that it was closing 38 banks, taking over seven others and recapitalizing nine. Although the closures grabbed the immediate headlines, it was the last group that represented the most significant development. Together with state banks, these nine account for more than two-thirds of lending within Indonesia. The fate of Indonesia's economy depends on the success of the program. Indonesia's banks were paralyzed in 1998. Commercial lending was virtually impossible with interest rates often above 40%. Savings, production, exports -- activities critical to job generation -- froze to a standstill.

And Indonesia's economy contracted by about 16%. "There can be no recovery without a working financial system," said the Jakarta- based World Bank director Dennis de Tray.

The nine banks to be recapitalized will be eligible to receive from the government 80% of the funds they need, provided they can come up with the remainder by April 21. Many observers think it is unlikely that the government will get really tough because the banks involved are simply too big to fail. But Subardjo Djojosumarto, the director of Bank Indonesia, the nation's central bank, insists the government will not bend: "If they fail [to get financing], the banks will be closed." For the past week, rumors have swirled that some of the nine might merge to form a new institution called "Power Bank." Bank Lippo, Bank Bali and Bank Universal -- all among Indonesia's 20 largest banks and named as eligible for recapitalization funds -- are said to be possible partners.

One immediate benefit of the bank reform plan was the expected release by the International Monetary Fund of the remaining $2.3 billion of the $11.3 billion portion of Indonesia's bailout package. An additional $1 billion from the IMF is under consideration. The fund's lending to Indonesia had been suspended until bank restructuring and liquidation were resolved.

The bank plan was originally to have been announced on Feb. 27. But at the time, senior economics minister Ginandjar Kartasmita said the closures would be postponed for "technical reasons." However, one official with the Indonesian Bank Restructuring Agency (IBRA) acknowledged that the delay "was political." Many observers feared the ultimate plan would not be tough enough.

In fact, many powerful Indonesians were connected to the 38 banks slated for closure. Bank Arya Panduarta, which is owned by timber tycoon and Suharto crony Mohamad "Bob" Hasan, was on the list. The Suharto kids also took a beating. Youngest son Tommy's Bank Pesona Kriyadana was shut down.

Second son Bambang saw his Bank Andromeda ordered liquidated -- the second failure for the bank, which was ordered shut under the name Alpha but was given a reprieve. Daughter Tutut's Bank Yama is also going down. Not to say the announcement looked interference-free. One bank to be nationalized is Bank Nusa Nasional, which is owned by Ginandjar ally Aburizal Bakrie. IBRA sources say audits of Bank Nusa revealed that non-performing loans represented more than 90% of its portfolio.

Although there were some initial signs of depositor trouble in Surabaya, the announced bankruptcies produced nothing like the panic that followed the closures of 16 banks in November 1997. The US debt-rating agency Standard and Poor's said the program was a positive step but wasn't enough.

The agency was critical that Indonesia had classified 73 banks as healthy even though they had achieved capital-adequacy ratios of only 4%. The world standard is 8%. The lower benchmark is "inadequate given the operating risks facing banks in Indonesia," according to S&P.

A next major step is restructuring state-owned banks. The March announcement marked the near-nationalization of the banking sector. The government now has control over about three-quarters of the entire industry. It is not an enviable position. Indonesian banks are bedeviled by a vicious cycle in which their cost of funds is invariably higher than the interest they receive on loans -- a negative interest spread. Economist Syahrir warns that if the negative spreads continue and bank losses balloon, the government may be tempted to print money as a palliative, which would spur inflation. And a coming election may only increase the pressure. Jakarta may find out soon the dangers of owning so many banks.


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