• Australia may hand over classified data - Sydney Morning Herald
• Timor, Australia eye gap revenue - Dow Jones Newswires
• Militia continue challenges to Interfet - Australian Associated Press
• Battered society on the brink - Sydney Morning Herald
• UN too slow, bureaucratic - The Irish Times
• Troops warned on sexual harassment - International Herald Trimbune
• Jakarta asks UN to wait on probe - Reuters
• Irate jobseekers turn violent - Sydney Morning Herald
• East Timorese demonstrate - Green Left Weekly
• Discrimination in East Timor - Green Left Weekly

• Wahid rules out amnesty for Soeharto clan - Sydney Morning Herald
• Wahid's reforms aim for certainty - Sydney Morning Herald
• Wahid backs general Wiranto - Reuters
• Military pledges loyalty - Jakarta Post
• Government, military shake-up to continue - Agence France-Presse
• Amendments planned to election laws - Jakarta Post

• The mysterious roots of mayhem - Time
• A wasteland called peace - Time
• Troops stem attacks, tourists flee Lombok - South China Morning Post
• Protesters retreat on Bintan amid truce - Agence France-Presse
• Indonesian time-bomb - Sydney Morning Herald
• Wiranto linked to violence - Sydney Morning Herald
• General calls for neutral soldiers - South China Morning Post
• Demonstration on Makassar campus - Jakarta Post
• The reverberations from Ambon - Asiaweek
• Conflict in Maluku fuelling tension - Far Eastern Economic Review
• Migrants, power struggle fuel unrest - Agence France-Presse

• Seven die in renewed Aceh violence - South China Morning Post
• Soeharto forces `building militias' in Papua - Sydney Morning Herald
• Human rights groups urge end to violence - Jakarta Post

• US beefs up aid to Jakarta - South China Morning Post
• Struggle for democracy not over: Albright - Agence France-Presse
• Bar on Chinese religions, traditions lifted - Jakarta Post
• State agencies facing breakdown - International Herald Tribune

• Security spending raised - Agence France-Presse
• UK minister defends arms sales - The Guardian
• Divisions increasing in military - Green Left Weekly

• Ambitious push for change - Australian Financial Review
• Budget fails to meet provinces' demands - Sydney Morning Herald
• Agency fires salvo in Astra battle - Reuters

Popularising Marxism in Indonesia

Since the coming to power of Indonesia's brutal New Order regime in 1965, discussion and dissemination of Marxist ideas has been banned in Indonesia. However, on November 20, 200 students and activists gathered at the Bandung Institute of Technology campus for a seminar on the ideas of Karl Marx and their relevance in Indonesia. Green Left Weekly's Edi Ruslan spoke with Sudiarto, a student activist from the Bandung-based Indonesian Student Movement for Change (GMIP) and an organiser of the seminar.

"The academic study of Marxist ideas is now legal in Indonesia", explained Sudiarto. "However, in practice, a genuine study of Marxism has not been possible."

For the last 32 years, the people of Indonesia have faced a barrage of propaganda from the regime warning against "the danger of latent communism". Marxism is always identified with the communism of the Indonesian Communist Party (PKI), which was smashed under General Suharto's government (around 1 million PKI members and sympathisers were killed) and subsequently banned.

"Every opposition power towards the New Order regime", Sudiarto explained, "is oppressed by being labelled extreme right, reactionary Islamic, or extreme left, communist."

This tactic was used by the Suharto regime in its efforts to justify the banning of the People's Democratic Party (PRD) in 1996. Several PRD members were tried for subversion and jailed.

The PRD was accused of being the mastermind behind riots that occurred on July 27, 1996. "The accusation that the PRD adheres to communist ideology was propagated by the regime to kill the strength of the pro-democracy movement in Indonesia", stated Sudiarto.

Student movement

With the fall of Suharto, accompanied by a political liberalisation, the discussion of left-wing ideas has greatly increased, although the continuing grip of the Indonesian armed forces on political life still intimidates activists. Sudiarto explained that, at their actions, student organisations almost always proclaim a left-wing program and "can be heard to yell `revolusi' with their left fist raised".

The November 20 seminar on Marxism featured speakers Franz Magnis-Suseno, a senior lecturer at the Driyarkara Senior School of Philosophy, and Haris Rusli Moti, national chairperson of the PRD. Magnis is the author of The Ideas Of Karl Marx: from Utopian Socialism to the Dispute about Revisionism, the first book about Marxism published in the era of the New Order.

The event was organised by the Political Economy and History Study Club at the Bandung Institute of Technology, the Social Movement and Analysis Group at the Senior School of Technology, and the National Technology Institute Student Association in Bandung. These three study clubs were initiated by student movement committees in Bandung which are affiliated to the National Students League for Democracy. Sudiarto explained, "The study clubs see their role as `legal organisations', able to operate with greater freedom and access to facilities on the campuses, for propagating democratic socialist ideas".

The seminar was attended by 200 people, including students from campuses other than the three where there are study clubs. "Student enthusiasm was very high", Sudiarto told Green Left Weekly. "However, from the discussion it was evident that comprehension about Marxism amongst students in still confused. Marxism is still misinterpreted as the practice of Marxism in the former Soviet Union, which was distorted by Stalin." This form of socialism "was characterised by repression of political freedom and the dominance of state bureaucracy", Sudiarto pointed out.

Sudiarto explained, "In the student bodies themselves there are many that still have a false understanding of Marxism. Many students question the relevance of the theories of Karl Marx to the modern era, arguing that ideas about class struggle put forward by Marx have not come true." The ideas of European social democracy, as expressed in Anthony Giddens' book The Third Way, have gained influence with many students. Religion

Other students, coming from an Islamic perspective, sought to discredit Marxism by claiming that it "is just `rhetoric' because Marx never intended to analyse religion", said Sudiarto. However, Marx's statement that `religion is the opiate of the masses' must be understood in relation to Marx's commentary about the ideas of Feuerbach about the evolution of religion.

"Islam, if seen from an historical perspective, represented opposition towards the economic system of slavery in the Arabic peninsula. Yet, in the course of history, Islam developed into many variations and was finally coopted by feudal-monarchic power."

Sudiarto said that, while the Islamic religion has a strong hold on student consciousness (and the consciousness of people in general in Indonesia), "there are many examples of Muslim activists who have chosen a leftist course in struggling against class oppression". He cited the example of Haris, who was formerly a leading activist in the Islamic Students Association in Yogyakarta (a right-wing student organisation).

Sudiarto argued that it is essential for left-wing students to begin campaigning for support for Marxist ideas. "From the position of the student movement, Marxism is a real alternative ... because history indicates that it is left- wing/Marxist movements that are most consistent in fighting the oppression of the people, such as the workers' and farmers' movement organised by Red Sarekat Islam (SI-Merah) and the PKI.

"The student movement, without joining with the masses, will only produce change at the level of the political elite, without changing the political and economic structure on the scale that is needed.

"The new government of Gus Dur has promised democratisation. Unless we can awaken in the people a determination to reopen the gates to a democratic revolution, talk of democratisation will remain hollow rhetoric. Popularising Marxist ideas, which still remain taboo, is an important step in this direction."
 

East Timor

Australia may hand over classified data

Marian Wilkinson and Peter Cole-Adams -- Australia would consider a request to hand over classified intelligence material to the Indonesian human rights inquiry investigating war crimes in Timor, the Foreign Minister, Mr Downer, said.

Speaking on the eve of his first meeting with President Abdurrahman Wahid since the East Timor independence ballot and its murderous aftermath, Mr Downer told the Herald: "We support President Wahid's desire to see those responsible brought to justice. "Insofar as Indonesia felt we could help, we would do what we could to co-operate."

However, Mr Downer said Australia did not have any "smoking gun" evidence of direct involvement in the violence by Indonesia's former defence minister and military chief, General Wiranto.

Mr Downer will arrive in Jakarta tomorrow night. He will meet Mr Wahid on Monday morning, followed by a working lunch with the Foreign Minister, Dr Alwi Shihab, and talks with other Indonesian Cabinet ministers, politicians and business leaders before he flies back to Australia on Monday night.

It will be one of the most delicate diplomatic missions Mr Downer has undertaken. Apart from a meeting between him and Dr Shihab in Macau in December, this will be the first high-level contact between Indonesia and Australia since the Australian-led multinational Interfet force moved into East Timor in September and Indonesia broke off its security pact with Canberra.

The visit comes as Indonesia is being racked by religious violence in the Maluku islands, which spread this week to the island of Lombok, forcing hundreds of Australian tourists to flee, and amid rumours that elements of the military might try to overthrow the Wahid Government.

Mr Downer conceded on ABC radio yesterday that there was still ill feeling in Australia and Indonesia, and described the overall environment in Indonesia as "very worrying".

Significantly, Mr Wahid has visited most of the main Asian capitals and the United States since his election, and plans to go to Europe next month, but Australia is not on his visiting list. The inquiry under way in Jakarta into atrocities in East Timor recently revealed that it had found evidence of Indonesian military and police involvement and questioned General Wiranto about his knowledge of the events.

The inquiry is causing serious strains between some sections of the Indonesian military and the Wahid Government.

Mr Downer confirmed Australia had already provided classified intelligence material to the United Nations panel investigating human rights violations in East Timor.

"We used the precedent of what the British and Americans did in supplying intelligence material on Bosnia," he said. The investigators were supplied with a limited amount of material that they had specifically requested. Their report is with the UN Secretary-General.

The Indonesian fact-finding inquiry has been running parallel with the UN inquiry. Critics of the Indonesian inquiry believe it was established partly to forestall a recommendation to set up an international war crimes tribunal over East Timor. However, Mr Downer said he was "satisfied with the independence" of the Indonesian inquiry.

Timor, Australia eye gap revenue

Ray Brindal, Canberra -- Australia and East Timor stand to reap hundreds of millions of dollars in royalties if oil and natural gas projects in the zone of cooperation in the Timor Sea proceed, an East Timorese spokesman said Thursday.

He was commenting in a radio report after attending, with other East Timorese, Australian United Nations and company officials, a workshop Saturday through Tuesday in the East Timorese capital of Dili that focused on the Timor Gap Treaty.

Indeed, according to one of those attending, a figure of A$800 million in royalties over 20 years was mentioned at the workshop, but great uncertainty exists about royalty projections.

Mari Alkateri is East Timor's spokesman on the Timor Gap treaty. "My major concern now is how to disengage Indonesia from the treaty itself," he said in a radio interview.

Asked about how much money East Timor could gather in royalties, Alkateri replied "we are told already that there are some hundreds of millions of dollars, but of course it is better not to talk about the amount of money."

Such revenue, he said, could provide substantial economic and social benefits to East Timor, which was ransacked by militia and the Indonesian army after an August 30 vote for independence.

Under the 1989 Timor Gap treaty, Australia and Indonesia agreed to share royalties from oil and gas developments in the zone of cooperation in the Timor Sea.

Phillips Committed To Bayu-Undan

Following Indonesia's acceptance of East Timor's independence vote and the establishment of a United Nations Transitional Administration for East Timor, or Untaet, October 25, the treaty is being re-negotiated between East Timor and Australia. Until East Timor achieves full independence, Untaet is the nominal partner to the treaty.

One smallish oil field, Elang-Kakatua, has been producing in the zone of cooperation since August 1998 but is depleting quickly. But a number of major oil and gas resources have been discovered in the area and could be developed in the future. According to the government agency that manages the treaty on Australia's behalf, until mid-1999, only about A$2.5 million in royalties had been distributed to each nation as a result of oil production in the area. But that could change.

Phillips Petroleum Co. (P), the operator of the Bayu-Undan project in the Timor Sea, announced October 26, 1999, that it plans to proceed with a US$1.4 billion offshore development to extract liquefied petroleum gas and condensate from the field, with production from 2004.

It also wants to develop a liquefied natural gas export plant and gas distribution system in north Australia using resources from Bayu-Undan but hasn't formally committed to this yet.

The Northern Australian Gas Venture, a joint venture between the Royal Dutch/Shell Group (RD) and Australia's Woodside Petroleum Ltd. (A.WPL), also wants to develop an LNG export plant based on huge natural gas resources it has discovered in the Timor Sea, but hasn't committed to this project either. NAGV also is investigating a domestic northern Australian gas supply system.

Major benefits to East Timor seen

Jim Godlove, the area manager for Phillips who is based in the northern Australian city of Darwin, told of substantial resources in the Timor Sea and "substantial revenue to be shared between the contracting states."

Philips has discussed the revenue-sharing potential of the Bayu-Undan project with Australia, East Timor and Untaet, he said.

"So they are aware of the general magnitude of the revenue they might expect," he said in a radio interview.

"We think the gap will provide a significant revenue stream to the new nation of East Timor," he said.

"This will have a very material and a very beneficial effect to East Timor when it becomes independent," he said.

Asked if a figure of A$800 million in royalties over 20 years was cited at the Dili workshop, Godlove said he didn't recall that number mentioned. "I just don't comment on revenue potential. The people who need to know, know," he said.

Jonathan Prentice, a spokesman for Untaet who attended the Dili workshop, said royalties from the Timor Sea oil and gas projects have the potential to be East Timor's most significant resource in the near future and into the mid-term. "So we are taking it very seriously and are looking forward to a speedy and neat transfer of the treaty institutions over to Untaet and East Timor so that the dividends in the zone of cooperation can be reaped as from now," he said in a radio report.

"Various figures have been floated that are extremely significant, though we have been told by the experts these depend up on a whole kaleidoscope of factors, any one of which can change," he said. "Yes, the figure is extremely sizable, in the many, many millions," Prentice added.

Militia continue challenges to Interfet

John Martinkus, Dili -- Pro-Indonesian militia challenged the authority of Australian troops in the East Timorese enclave of Oecussi this morning, the fifth time in the past three days.

The clashes with the militia, including one this week in which militiamen were wounded and one reportedly killed, have baffled the Australian-led Interfet UN peacekeeping force.

Interfet commander Major General Peter Cosgrove contacted Indonesian commander Major General Kiki Syanakhri this morning for the second time this week to express deep concern that the militia activity was continuing.

Colonel Bruce Armstrong said the Indonesian commander responded by assuring Cosgrove he would send a high ranking officer to investigate the situation.

The area around the enclave is controlled by Indonesian regional commander Lieutenant Colonel Manuel Maneral, whom General Cosgrove has accused of having links with the local militia leader Moko Soares, believed to be responsible for the recent incursions into Oecussi.

Colonel Armstrong said he was confident the situation would be resolved in short order but admitted the incursions baffled him.

"Everything he [the local Indonesian commander] is doing defies logic," he said.

"These guys are coming over the border and what they're trying to do is a dangerous game, a very dangerous game for some of these militia [as] they're not even armed.

"Someone is revving them up across the border to come across the border to antagonise our troops by either firing at them or pointing weapons at them."

The latest incident took place near the village of Bobometo between 6am and 6.30am local time today and involved five militia armed with rifles crossing the border and harrassing local East Timorese.

"It appears the locals stood up to them," Colonel Armstrong said. "The militia were armed with rifles and shots were fired. It is believed at least one local was injured." Australian Interfet troops have moved into the area and more reports were expected.

In an earlier incident in the village of Mahata in the same south west border area of Oecussi, five militiamen raised their rifles at Australian troops patrolling in the area. "The Interfet patrol fired six quick shots causing the militia to run to the border," Colonel Armstrong said.

General Cosgrove yesterday confirmed there had been three other separate incidents involving the militias, the most serious when Australian troops returned fire after being attacked by militiamen armed with automatic weapons.

"After firing at Interfet, fire was returned. As a result of this action it is my understanding that a militiaman was wounded and I have unconfirmed information that he subsequently died," General Cosgrove said yesterday.

Tensions between Interfet, the militias and the Indonesian military (TNI) are high in the coastal enclave which is surrounded on three sides by Indonesian-controlled West Timor.

UNHCR spokesman Paul Stromberg today announced the suspension of UNHCR convoys repatriating East Timorese refugees from Oecussi to mainland East Timor because of the current situation.

Colonel Armstrong also confimed the Jordanian peacekeeping force would be replacing the Australians in the enclave area in a little over a month, despite East Timorese concerns over Jordanian links to former Indonesian special forces commander General Prabowo.

Prabowo was in command of Indonesian special forces in East Timor in the early nineties and his period of command was characterised by brutal operations to wipe out the Falintil pro- independence guerrillas in the territory. After the fall of President Suharto in May 1997 Prabowo sought exile in Jordan.

Battered society on the brink

Tensions are rising as the rebuilding of East Timor begins, Conor O'Clery writes from Dili.

After quelling the recent disturbance in Dili by 7,000 disappointed and desperate East Timorese job-seekers hoping to find work with the United Nations, Mr Jose Ramos Horta told them: "Remember, Portugal was here for 500 years and what did Portugal leave behind? Indonesia was here for 24 years and destroyed every single thing.

"UNTAET [the UN transitional administration] and CNRT [the National Timorese Resistance Council] have received this legacy just three months ago. Don't expect miracles."

But miracles might be needed in the East Timorese capital, where 80 percent of the population is without visible means of support.

The rising tensions topped the agenda at a recent CNRT congress. Under the leadership of Mr Xanana Gusmao, the CNRT is trying to transform itself from a clandestine organisation into a government-in-waiting.

Mr Gusmao's days are filled with meetings and he is exhausted, friends say. On the streets people express disappointment that he is rarely seen, and that he lectures rather than talks to them.

"There is no communication between the leaders and the people and the UN and the people," Mr Francisco Dionisio, a student leader, said.

"Our real task," said a CNRT aide, "is to build institutions around the leaders so that they don't have to do everything and have time for reflection."

Mr Gusmao and Mr Joao Carrascalao did the talking for the CNRT at a recent meeting of the National Consultative Council, a joint UN-Timorese body chaired by Dr Sergio Vieira de Mello, the Brazilian head of UNTAET. The main issue was the low wages paid to East Timorese workers, a big source of discontent.

A four-day strike last week stopped all deliveries by the World Food Program. Workers employed by the International Organisation for Migration damaged vehicles in a protest and brandished machetes at two aid workers.

East Timor is a "bed of roses" compared to Kosovo, said Mr David Harland, a senior UNTAET official, but "social tensions will almost certainly get worse as major employment projects will not kick in for several months". UNTAET hopes to introduce "quick impact" programs next week, said Dr Vieira de Mello, who feared "an obvious increase in the expectation and frustration of the local population with a rise in criminality and possible social unrest".

After the National Consultative Council meeting, he announced a five-tier "stipend", pending full-time appointments to an East Timor civil service, ranging from the equivalent of $115 a month for unskilled workers to $475 for heads of departments.

Angry youths hang around Dili transit centre to identify returning militia members who had helped burn the capital. Three militia families have been hidden by the UN in safe houses after being attacked, Mr Paul Stromberg, of the United Nations High Commissioner for Refugees, said.

Crime has also increased, and a woman UN official was sexually assaulted in her house. "Law and order is a priority," said a Dublin lawyer, Mr John Ryan, a UN administrator who is setting up a judicial system.

Dili has two youth gangs, the Firaco on the east side and the Kaladi on the west. Before liberation, Indonesian repression and a night curfew kept rivalry in check. Now the youths chase around on motorcycles. "What city in the world doesn't have gang fights?" a UN worker said. "You could even call it normal. But if there's no work soon, it could get out of hand." -- The Irish Times.

UN too slow, bureaucratic

Conor O'Clery, East Timor -- The electricity power station in Los Palos, a remote town on the eastern plains of East Timor, survived the devastation wrought on the former Portuguese colony by pro-Indonesian forces in September. All it lacked was diesel fuel.

Officers from Interfet, the Australian-led international force, offered to airlift an oil container by MI 13 helicopter to get electricity going again. All Interfet needed was a signature on a docket to cover the cost of the fuel. But no one from the UN Transitional Authority (UNTAET) could be found to take responsibility.

The story, recounted by a senior Interfet officer, illustrates how bureaucracy has caused major delays in getting services restored and reconstruction under way in East Timor, where more than 80 percent of buildings were destroyed after the pro- independence vote on August 31st.

Twelve weeks after the UN Security Council established UNTAET, the only significant reconstruction has been to official buildings. In rain-soaked Dili, where up to 100,000 people are making do in blackened roofless houses, there is a surplus of military and UN equipment and vehicles, but not a cement mixer or a hardware store to be seen.

Significant amounts of building materials will not arrive before March, and unloading them will be seriously delayed by the changeover of 5,000 military personnel connected with Interfet's transformation into a blue-beret UN force at the end of February.

Some NGOs, such as GOAL, have shared responsibility for reconstruction in specific areas. Under team leader Ken Ryan, GOAL has been transporting timber bought in Indonesia by the UN High Commission for Refugees (UNHCR) to remote villages in the Aileu district south of Dili. But it is a drop in the ocean.

Part of the problem is that UNTAET was created late last autumn and a month was lost when senior officials took long end- of-year holidays or did not start until well into January. "The UN is looking like it cannot get off its backside," said the Interfet officer. "And they're coming with 9,500 troops to fight a war that's finished. What we need are roads for heavy machinery, but where are the bridging materials?"

The heart of the problem is money. There has been a serious delay in allocating budgets to the 13 UN district administrators -- which may explain the Los Palos debacle. One district officer in the mountains told me: "At every meeting local people say `Give us school desks and seats, or the means', and I've no good answer."

Money will not materialise from donor countries until they see a reconstruction plan, said the UNTAET leader, Dr Sergio Vieira de Mello from Brazil. A plan was finalised on Friday and will be put to the World Bank in Washington on January 21-22. It was passed unanimously by the National Consultative Council, a 15- member advisory body set up by UNTAET on December 2nd, on which seven seats are held by the Timorese national Resistance Council (CNRT) led by Xanana Gusmao.

"Before contributions are made into the Reconstruction Trust Fund, donors want a clear indication of the priorities in the first semester, February to July 2000," Mr de Mello said. Now they had it, and also an embryo Ministry of Finance, and approval this week is now "not a matter of urgency but a matter of emergency".

At a donor conference in Tokyo in December, 26 countries plus the EU, the World Bank and the Asian Development Bank made pledges to pay a total of $522.45 million (including $2.47 million from Ireland) over three years, with $373 million going to reconstruction.

Much of it will be well-meaning aid in kind rather than cash. One country offered a batch of 350,000 yellow fever vaccines, although there is no yellow fever in East Timor, according to a participant.

The IMF advised the donor conference that local salaries to East Timor civil servants should initially be paid at the old Indonesian rate. This failed to take into account raging inflation in Dili due to the overwhelming presence of UNTAET's "paternalistic machine", as a CNRT source described it, with its own budget of $700 million.

With social tensions already evident, Mr de Mello said a cost of living survey was now being launched "to agree on what a new and fair salary scale should be".

Meanwhile, UNTAET is setting up a civil administration. A civil service commission including local political groupings will start this month hiring government workers one by one, said Mr Jean-Christian Cady, the UNTAET official in charge of governance and public administration.

"We have already appointed 10 magistrates, eight judges and two prosecutors, all East Timorese, and we have a programme to train 25 more judges before the end of the year," Mr Cady told me in the former governor's mansion where embryo ministries are being created. ("That's the ministry of agriculture over there," said a UN official laughing, pointing to a man and a woman looking for somewhere to sit.)

Two of the East Timor judges are senior lawyers from Mozambique. Awaiting trial are 26 imprisoned militia leaders. The creation of the new government had a downside for CNRT as "the UN is sucking up a lot of good people", a CNRT official said. Most government workers above semi-skilled level in East Timor were Indonesians and will not be coming back, including all high school teachers.

With no legal system, UNTAET is using Indonesian law where it is compatible with internationally recognised human rights standards "and we shall make new laws of our own", Mr Cady said. "The need for training is very acute," said Mr John Ryan, the UN administrator of Dili.

A police academy under Canadian direction would take in recruits soon, he said. Some schools have reopened but Dili University will not admit students until the autumn. It has no books; they were all destroyed in what East Timorese now refer to as the "war" of last September.

Troops warned on sexual harassment

Canberra -- The commander of the multinational peacekeeping force in East Timor said Monday that he had issued a warning to his troops after a group of women complained of sexual harassment.

A series of incidents over several nights late last year seriously embarrassed troops who had won international praise for their peacekeeping efforts and sparked a major investigation to try to identify the men involved.

Major-General Peter Cosgrove, commander of the Interfet force, said military police had not yet apprehended the soldiers accused of verbally abusing as many as six sisters in an East Timorese family, some of whom made the complaint.

"We've been hunting for these fellows," General Cosgrove said on Australian Broadcasting Corp. radio, adding, "unfortunately, without success" so far.

He said, "We would want these people to turn themselves in -- that's unlikely -- but certainly if we find them we'll be asking for them to be called to account."

The newspaper The Australian said the incidents had involved as many as six young daughters of a Timorese family separated by the campaign of terror and murder waged in September by militias backed by parts of the Indonesian armed forces after East Timor voted August 30 for independence from Indonesia.

The most serious of the reported incidents happened December 16 just hours after the daughters had been reunited with their parents, who had fled as refugees to West Timor. According to the report, their mother hid behind a tree as a group of Australian men in civilian dress stormed a house in a suburb of Dili, the capital of East Timor, shouting that they "wanted a lady."

"We've apologized to the young women involved by saying that we were just aghast at this as 99.9 percent of the people here," General Cosgrove said. "I dare say the other 0.1 percent are feeling very guilty and stupid."

Foreign Minister Alexander Downer of Australia said the complaints were regrettable but had not undermined the work of the foreign force in East Timor.

The reports of sexual harassment "are obviously a matter of great concern to the Australian government," Mr. Downer said, "and we deplore the alleged behavior that's taken place."

Jakarta asks UN to wait on probe

Jakarta -- Indonesia on Monday urged the United Nations to give Jakarta the chance to complete its own inquiry into atrocities in East Timor before stepping up international action.

Foreign Minister Alwi Shihab told reporters the Indonesian inquiry being conducted by the government-appointed human rights commission would prove itself credible and UN intervention was unnecessary.

"I will meet UN Secretary-General Kofi Annan. I will explain that Indonesia can manage itself," Shihab said. "We will show that the commission is credible in order to uphold human rights ... there is no need for any interference from the UN"

Annan is reviewing a report from a special UN inquiry into human rights abuses in East Timor and plans to make recommendations for further action, the United Nations said last week. UN officials did not say when the report or Annan's recommendations would be released.

Washington's ambassador to the United Nations, Richard Holbrooke, on Friday said the military must cooperate with probes into human rights abuses in East Timor, or pressure would mount for an international tribunal.

Pro-Jakarta miliatamen, working with elements of the military, embarked on a wave of destruction after a UN-run vote on August 30 in which the territory overwhelmingly voted for independence from Indonesia.

Hundreds were killed in the violence and hundreds of thousands were driven from their home.

The military is fighting efforts to bring senior officers to account for the abuses in East Timor and elsewhere in the vast archipelago. Senior officers have grudgingly given secret testimony to the Jakarta inquiry, which has not yet reported.

Holbrooke said the US government "at every level," including President Bill Clinton, believed the military was "doing immense damage to Indonesia" by continuing to thwart efforts to investigate abuses in East Timor. Holbrooke said Washington would continue the suspension of all ties to the Indonesian military unless "there is full accountability" and all East Timorese could go home.

Shihab is due to leave later on Monday for the United States, where he will meet Holbrooke, Annan and members of the UN security council.

Irate jobseekers turn violent

Ian Timberlake, Dili -- East Timor's leadership plans to start paying volunteer public servants as part of measures to ease growing frustration over the lack of progress since Indonesian rule ended.

The National Consultative Council (NCC) has also agreed to create a central fiscal authority which will be the foundation for a finance ministry.

The decision came as violence erupted at the weekend among a crowd of 7,000 people waiting to be interviewed for 2,000 United Nations jobs in Dili, with UN staff and soldiers pelted with stones.

An Australian commander in the UN's civilian police force, Mr Fred Donovan, said: "I estimate there were about 7,000 who got somewhat out of control while they were waiting to be interviewed for jobs, and it became fairly nasty for a while."

The crowd had become impatient with the slow pace of interviewing applicants, he said. Locals said the crowd was also angry that proficiency in English was a requirement for the jobs. Few East Timorese speak much English.

The violence subsided after the pro-independence figure Mr Jose Ramos Horta addressed the crowd, asking for calm.

Mr Sergio Vieira de Mello, who heads the UN Transitional Administration and chairs the NCC, said the council's proposed fiscal authority needed to be in place before donor countries would provide financial support.

Donors were also waiting for a reconstruction and development plan that the NCC approved and which would be reviewed this month in Washington.

Mr De Mello said these measures, particularly the public service payments and the fiscal authority, were important in the light of an "obvious increase in the expectation and frustration of the local population, with a rise in criminality and possible social unrest".

The NCC agreed to begin payments to people who have been doing volunteer public service in the education, health, water and electrical sectors.

The payments will range from 538,000 rupiah ($114) a month for unskilled workers to 2.2 million rupiah a month for judges and department heads.

East Timorese, international and Australian officials met yesterday to discuss a Timor Gap oil treaty that may be signed by the end of next month. It divides the Timor Gap into three zones, with Indonesia and Australia managing one zone each of the oil- rich waters, and the third zone under joint administration.

East Timorese demonstrate

Jon Land -- The low wages that workers receive in East Timor today are little different from the pre-referendum rate, but given the dramatic increase in food and basic commodity prices since then, East Timorese can afford to purchase only a fraction of what they could previously. A price survey conducted between August and October in the Dili market found that there had been a rise in the consumer price index of approximately 200%.

Protests have already occurred in response to this situation. East Timorese health workers at a clinic in Los Palos demanded in December that they receive money wages rather than payment in food and aid. On January 5, the Alliance of Socialist Workers (ASW), which is affiliated to the Socialist Party of Timor (PST), helped to organise a protest outside the offices of the United Nations Transitional Administration in East Timor (UNTAET) to make five demands: a increased wages, lower prices, greater consultation with the East Timorese, an end to imported labour, and more jobs for East Timorese.

This is the first such coordinated protest to take place in East Timor since UNTAET was established. According to PST secretary-general Avelino da Silva, some 800 to 1000 East Timorese were involved in the action, which lasted for four hours.

Before the rally, the ASW formed an organising committee which involved workers who are not ASW members but agreed with the demands put forward by the ASW.

Workers met at the PST office in Balide early on the morning of January 5, from where they marched to the UNTAET office carrying banner and flags.

The protesters gathered outside the UNTAET headquarters, where they read out their demands and placed placards and banners on the fence. East Timorese working in the UNTAET office were told by their employers to ignore the rally and continue working. A delegation from the protesters met with UNTAET staff who said that the administration would investigate the unfair wages grievance.

Discrimination in East Timor

Sam King, Dili -- The stated aim of the United Nations Transitional Administration in East Timor (UNTAET) is to effectively administer the country during the period of transition to a popularly elected government. However, effective, let alone democratic, administration is impossible while so little decision-making power is being given to East Timorese community and political organisations. Even the highest East Timorese body, the seven-member Transitional Council, has only a consultative role with UNTAET.

While UNTAET's accountability only to the UN secretary-general and the Security Council does not automatically preclude it from implementing policies desired by the East Timorese people, evidence is accumulating which indicates that the UN has not been doing that.

A leaked November 22 internal bulletin titled District Profile Ermera UNTAET, Civil Affairs, expressed concerns about the level of grassroots organising by East Timorese in the region. It states, "CNRT [National Council of Timorese Resistance] has also been organizing security brigades with the task of preventing possible actions from part of the militias" and directs that "with the arrival of INTERFET and CivPol [civilian police], the CNRT involvement in security aspects should be progressively reduced, so that all security and police functions should be completely handed over".

The report also notes that "CNRT involvement in distribution of humanitarian assistance is being extremely important due to the fact that the NGOs have been incapable of organizing food distribution" but recommends that CNRT involvement be reduced because "their direct involvement creates pressure from the population". It concludes, "It would be desirable that UN agencies and NGOs start to follow more directly (or through the creation of local NGOs) the distribution of humanitarian assistance <193>" A similar report from the Liquica region notes that "CNRT have the strong support and trust of the majority of the population, and are highly coordinated and efficient in their management of programs", but recommends that UNTAET take over that role: "It is essential that civil affairs quickly develops a stronger presence in the district so that UNTAET is seen to be the administrative authority".

Reports from East Timorese in other districts suggest that the approach taken in Ermera and Liquica is a national pattern.

Accommodation

The devastating vandalism organised by the Indonesian military before it left East Timor means that there is much competition for the few remaining buildings. All of the biggest, best quality and best located buildings have been taken over by UNTAET, foreign NGOs and rich international aid organisations which have arrived in East Timor in large numbers over the last few months.

The Interfet military apparatus has taken over many large blocks of buildings and prime land and the Interfet residential complex is located in Faroel, the wealthiest district in East Timor. This area of former mansions belonging to the Portuguese and Indonesian generals and government and business elite could house thousands of the homeless East Timorese.

Across the road (and razor wire fence) from Interfet's Faroel complex are some large unburned empty houses guarded by UN staff who are instructed to tell local people who inquire about moving in that the houses and their contents are for UNTAET personnel when they arrive in East Timor.

The UN High Commission for Refugees occupies, but does not fill, a large unburned ex-government building and its grounds. The mainly foreign staff there work on the latest computers in airconditioned rooms.

Across the road, around 100 East Timorese live on a similar sized block on which there are just four houses still standing. Many of these people reside in structures made of old wood and mangled iron collected from the wreckage of other houses. Jobs

A major problem in East Timor at present is the chronic unemployment and underemployment. Almost all production ground to halt after the referendum, such that East Timor is now totally dependent on aid agencies for most food, medicine and other necessities.

A little agricultural activity has resumed and a small section of the population work as stall holders or street sellers to sell the agricultural produce, as well as goods carried from Indonesia by the tens of thousands of returning refugees.

East Timor was basically destroyed by the departing Indonesian forces. However, the UN's dismantling of the leadership role of existing East Timorese community structures and organisations, and its establishment of new structures under UN control has significantly slowed the process of reconstruction. For example, the CNRT, with its elaborate popular structure is in a good position to quickly identify and organise people's skills for the reconstruction effort, yet UNTAET is setting up completely new structures led by foreigners who have to start from scratch.

At a local level, UNTAET does try to involve East Timorese in working groups, such as the Food Working Group, the reconstruction committee and others, to obtain East Timorese expertise on local conditions. But these committees have been established to assist UNTAET's efforts to organise communities outside of the framework of the CNRT and other grassroots East Timorese-controlled political organisations.

UNTAET uses UN organisations or overseas-based "implementing partners" to organise emergency relief, the return of refugees, reconstruction and so on. These implementing partners control large amounts of money, as well as which materials enter the country, who receives assistance and the methods used in rescue and reconstruction operations.

Made up mostly of large, wealthy international aid agencies and NGOs sponsored by organisations such as World Vision, Oxfam, Care International and the International Committee for Red Cross, the implementing partners are answerable only to UNTAET, not the people they are supposed to be assisting.

The top positions are monopolised by non-East Timorese personnel and while many young East Timorese have begun to work for aid agencies, NGOs, the UN and Interfet, they are few compared to the tens of thousands of unemployed locals. This work is the best paid and most sought after in East Timor. The usual minimum wage for East Timorese staff within the overseas organisations is 25,000 rupiahs (A$5) per day, enough to buy about five kilograms of rice in Dili. Some local workers receive as little as $3 a day. These rates do not even equal the hourly wage rate of many non-East Timorese workers in these organisations.

A report by UNTAET and eight humanitarian agencies recommended a wage range for East Timorese staff of between 25,000 of 70,000+ per day, even if the East Timorese employee is the CEO of the organisation. "There is an explicit understanding between employing agencies that they will adhere to these salary ranges in order to minimize the poaching of employees", adding that "Salaries can be paid in a mixture of cash and commodities". UNTAET has also implemented numerous work for food schemes in which East Timorese do menial tasks like cleaning up wrecked buildings for bags of rice. The rate varies from place to place, but the storm-water gutter sweepers in West Lahane (between Dili and Dare), for example, received 36 kilos of rice per fortnight.

Resources

There is also a striking gap between the technical resources available to the East Timorese people and their political and community organisations and those used by the UN and large overseas aid organisations.

East Timorese walk around while foreigners drive around in brand new, white four-wheel drive vehicles. While most East Timorese don't have access to even a telephone, the UNTAET compound storeroom is stacked to the ceiling with new computers and other equipment, sent to replace the last lot that was looted by Indonesian soldiers and their militia when the UN abandoned East Timor on September 12. A number of private businesses have set up in Dili to service the rich overseas organisations and workers.

Workers at Manuel Carascalao's car and motor bike sales business report that of the hundreds of sales they've made since the UN arrived, "around a dozen" have been to East Timorese. Thrifty Rent a Car meets the transport needs of non-East Timorese at a hire rate of A$200 a day!

Since there is not yet a taxation system in place, business is getting a free ride. However the UN's wages report recommends that employers set aside 10% of the wages they pay in anticipation of a future income tax.

The blatant exploitation of East Timor's crisis by business, combined with the open discrimination against locals by the UN and aid agencies, has led many East Timorese to question the direction that UNTAET is leading East Timor.

However, while the administration is not popular, it is generally tolerated because the UN's intervention to end the terror and the subsequent withdrawal of Indonesia's armed forces was a qualitative gain for the East Timorese people.
 

Government/politics

Wahid rules out amnesty for Soeharto clan

Jakarta -- Former Indonesian president Soeharto, facing accusations of corruption and self-enrichment on a vast scale, can expect to be amnestied -- but not his family or cronies, Indonesian President Abdurrahman Wahid was quoted as saying today.

In an interview in the latest edition of the German news magazine Der Spiegel due to be published Monday, Wahid said: "Of course he [Soeharto] should go on trial. I have already instructed the state prosecutors. But after he is found guilty, I shall pardon him.

"However, I shall give an amnesty only to Soeharto and [his successor as president] Habibie -- and certainly not to their clans.

As a young nation, we must respect our former heads of state. In Soeharto's case that's only a biological question anyway -- he will not live much longer."

Soeharto faces a raft of accusations stemming from his 32-year rule, including self-enrichment, corruption, and using the armed forces to crack down on political opponents, holding the vast Indonesian archipelago together by force and intimidation.

Asked if he had the confidence to prosecute leading figures in military in all this, Wahid told Der Spiegel: "Don't worry. That will happen."

Asked if this also applied to General Wiranto, now coordinating minister of security and political affairs in Wahid's own cabinet, and former Soeharto right-hand man, Wahid said: "No."

He explained that if the country's new human rights commission found Wiranto guilty of the brutal repression in East Timor during its 24 years of annexation and its recent violent end, then "I shall ask for his resignation, but will spare him. But not others".

He continued: "My principle is: We have to respect the institutions and punish the individuals. Wiranto symbolises the institution of the army."

Wahid said he had every understanding for international concern over current and recent ethnic violence in several regions, but insisted that authorities were close to dealing with it effectively.

Wahid's reforms aim for certainty

Jakarta -- President Abdurrahman Wahid has nominated reform of the legal and regulatory system as central to Indonesia's economic recovery and development.

In an address to the plenary session of the House of People's Representatives, delivered in conjunction with this week's budget, Mr Wahid said legal certainty would ensure justice was enforced.

It would also reduce risks in getting up a business, he said. "Therefore, improvement in the legal and regulatory sector must be undertaken simultaneously," he said.

Mr Wahid outlined three central measures. First was to improve and delineate laws such as those involving bankruptcy and the commercial court, which would make decisions on cases of bankrupt companies. Next was to develop a system of asset listing and a law guaranteeing collaterals.

Both changes would reduce the risk on the part of a creditor. In the past, a debtor could use the same collateral to obtain a loan from another creditor, a factor that caused bad debts to swell.

A final measure would be to establish an independent and professional judiciary and reform the Government's administrative law.

This reform would be to ensure there would no longer be any overlap between a regulation issued by one government institution and another issued by a different agency.

Mr Wahid said that despite Indonesia's difficulties, reforms already under way had resulted in a "synergy" that would help efforts to overcome the crisis.

"This momentum must be maintained in future by proceeding with the reform which we have begun," Mr Wahid told the representatives.

He said transparency and responsibility would always be part of the reform process, to ensure changes were supervised and accounted for.

Wahid backs general Wiranto

Jonathan Thatcher, Jakarta -- Indonesian President Abdurrahman Wahid on Wednesday backed his controversial former top general Wiranto, but said he would have to step down if found guilty of human rights abuses in East Timor.

If Wiranto, now coordinating minister for political and security affairs, did have to quit Wahid said he would in return try to shield him from any international tribunal.

Asked if he had confidence in Wiranto, he told a small group of foreign reporters: "Of course, yes. As long as he is not proven guilty, I believe in him."

There has been repeated speculation Wahid's relations have soured with Wiranto, who shot up through the ranks during the rule of disgraced former President Suharto and who is seen as allied to anti-reform elements in the still powerful military.

Wiranto was military commander during last year's ransacking of East Timor by pro-Jakarta gangs, with military support, after most of the population voted to break from Indonesian rule.

He and other senior Indonesian officers have always denied any role in the wave of violence in East Timor in which most of the population was displaced, hundreds killed, and much of the infrastructure -- built up during 23 years of Indonesian rule -- destroyed.

Wiranto was questioned last month by a government-sanctioned commission looking into human rights abuses in East Timor. The interview's contents have not been made public.

"If [the commission chairman] names Wiranto as a culprit then ... I'll ask him to resign from the government," Wahid said. In exchange, he said he would do his utmost to make sure that there is no international tribunal on the matter.

Last week, United States UN Ambassador Richard Holbrooke accused the military of being uncooperative with probes into atrocities in East Timor.

"The Indonesian generals should know that their own efforts to thwart internal accountability and openness and inquiry are only going to result in greater [international] pressure," he said.

He warned that high-ranking officers were "going to bring the whole house down if they persist in obstructing this."

There have been repeated warnings to Jakarta of an international commission into the events in East Timor last year if the Jakarta government fails to take proper measures to make those involved accountable.

Military pledges loyalty

Jakarta -- Indonesian Military (TNI) top brass lashed out at rumors of a coup attempt by the armed forces, saying such a move was contradictory to TNI culture.

TNI Chief of Territorial Affairs, Lt. Gen. Agus Widjojo, said after addressing a seminar on nationalism here that the country's five decade history has never seen a military plan to topple the government.

"TNI has always been and will always be loyal to the president of the Republic of Indonesia," Agus said. "History proves that even planning such a move is impossible for the military."

He denied speculations that TNI was upset by President Abdurrahman Wahid's intention to replace some military top brass. "The rotation, including the planned replacement of the TNI spokesman, has been part of the TNI proposal of tour of duty," Agus argued.

He also denied rumors that the President was trying to undermine the Army by appointing TNI officers from other forces to positions traditionally held by Army members.

On Monday, Abdurrahman played down foreign countries' warnings of a military coup attempt, saying it was just an expression of concern from friends.

Separately, Army spokesman Brig. Gen. I Dewa Putu Rai also contested the rumors of a military coup, saying they were created and fomented to cause trouble in the country. He said there was no culture within TNI to justify a coup attempt against the legitimate government.

Putu said the Army, as the oldest force in TNI, was supported by the people during the struggle for independence. He felt it was therefore unlikely that the force would go against a government which was chosen by the people.

"TNI doesn't have the culture of coup, so it is impossible that the Army, as part of TNI, will undertake it," he told reporters.

Government, military shake-up to continue

Jakarta -- Indonesian President Abdurrahman Wahid has said he plans to continue replacing senior government and military officials in an effort to wipe out corruption and strengthen professionalism.

"Oh yes, yes, you can expect that [a continued shake-up of government positions]," Wahid said in an interview Saturday with AFX-ASIA, an AFP financial affiliate, and USA Today, which was released Monday.

Although ruling out a cabinet reshuffle, he said nobody could count themselves immune from the sweep, including senior figures such as former armed forces chief and senior cabinet member General Wiranto, if they are found guilty of wrongdoing.

"This comes from the decision to put [government institutions] under people of clean backgrounds." He said the priorities "are so many" but the armed forces and state enterprises topped the list.

Asked whether he plans to dismiss Wiranto -- now Coordinating Minister for Political and Security Affairs -- as has been widely rumoured, Wahid said it was difficult to take action on the cases he is allegedly involved in.

The general is among a number of senior army officers being investigated for past human rights abuses including those in East Timor and Aceh.

But the fact Wiranto is being investigated at all shows that no one is above the law, Wahid said. "To be frank with you, it is difficult to take action about the cases that he [Wiranto] was involved in. But ... everybody is dispensable," Wahid said.

He said in the case of the armed forces, the purpose of the shake-up was not to weaken the military as an institution but to strengthen its professionalism.

"We have to differentiate between the military as an institution and the people there," Wahid said. "We will fire the people, if necessary, but not [target] the armed forces as an institution."

Wahid's comments came after he last week ordered the military to replace armed forces spokesman Major General Sudrajat, a Wiranto ally, who had publicly suggested the president was not the supreme commander of the armed forces.

Sudrajat's dismissal came amid speculation in Jakarta of a growing rift between Wahid and Wiranto over the human rights probes. Last week, US ambassador to the United Nations Richard Holbrooke said Washington was deeply concerned over reports the military might be planning to move against Wahid.

The government's placement of non-corrupt professionals at the head of key institutions and state enterprises is part of a strategy to revitalise the economy by rooting out corruption, Wahid said.

"We want to rewrite the rules of the game ... so that we can take advantage of the economic recovery when it comes," Wahid said.

He said the shake-up, which has already seen changes in the managements of the Indonesian Bank Restructuring Agency, the Capital Market Supervisory Board, and the state electricity company could extend to PT Telekomunikasi Indonesia and PT Indonesian Satellite Corp.

"For example, we [will] put clean people in [the state oil company] Pertamina, in Telkom, Indosat, everywhere," Wahid said.

"There will be no cabinet reshuffle," he said, but left open the possibility that ministers could resign "if they are discovered by the court to be involved" in corruption or other wrongdoing.

On the ongoing bloodshed in the Maluku islands, he said retired army officers and fanatical Muslim groups may be among the elite exploiting situation.

But he said he expects the trouble in Maluku, and a separatist conflict in Aceh, northern Sumatra, to be solved within a few months.

"For me the most important thing is that some of them [the troublemakers] come from the retired army officers. Some from the fanatic Islamic groups," Wahid said.

"I see that within several months we will overcome those problems," he said, adding he has been meeting frequently with Aceh community representatives, who tell him they are close to solving the problem.

"In Ambon, the real question is to change several government people. I have already taken steps to ensure that it happens."

Wahid said the wide belief that problems such as in Maluku are at least partly rooted in the elite politics of Jakarta is correct.

"Yes ... they are right. I know it because the reports from Ambon are that local people had no quarrel at all at the beginning. So it was started by people from Jakarta."

Amendments planned to election laws

Jakarta -- On Monday, the government announced a planned revision to the 1999 election law which would include dissolving the present General Elections Commission (KPU).

Speaking after a closed door meeting with the House of Representatives leaders, Minister of Home Affairs Surjadi Soedirja simply said amendments to the law had been stipulated by the State Policy Guidelines and were "in line with people's aspirations".

"Yes," he replied when asked whether the government proposed to change the KPU and the number of House seats due to the creation of three new provinces and 31 new regencies, and the need to run the elections in a freer and fairer manner.

The amendment would also include requirements for a political party to contest the polls beginning in 2009.

"I cannot elaborate on all consequences of the amendment in detail because discussions of the matter are still underway. We will meet again in the near future to discuss them. All changes will be made in accordance with aspirations from the grassroots, which obviously grow strong," he said.

He said the planned amendment would be discussed also in a consultation meeting between President Abdurrahman Wahid and the House leadership on January 27.

Pressures have mounted on the government to replace the KPU's 53 members, who represent 48 political parties contesting the 1999 elections and the government, with independent and professional persons. Such measures are proposed to avoid any conflict of interest among the commission members.

KPU members were much criticized for violating their own rules and election laws prior to the June 7 polls last year. Complaints about KPU's performance took their toll when the commission rejected the results of the polls, citing alleged violations.

A legislator attending Monday's meeting said the House leaders believed the KPU should stop its daily activities until the amendment to the election law was complete.

"A possible dissolution of the election commission was discussed but no agreement was reached. This matter will be deliberated in the next consultation meeting," said the legislator, who requested anonymity.

To organize the local elections in June, KPU has established a committee whose members represent political parties that failed to win House seats in the last elections.

Surjadi also said the government would consider canceling local elections in the Aceh regency of Pidie, North Maluku province, until the situation there returns to normal. "The local elections will be flexible depending on the province's readiness," he said.

He said the House's current composition would certainly change following the local elections, because under present law each regency has at least one representative in the House.

Meanwhile, Lt. Gen. Agus Widjojo, chief of the Indonesian Military's Territorial Affairs, said the military would help the local elections to run in an orderly manner.

He said, if needed, TNI would deploy more troops to safeguard elections in the troubled provinces of Maluku and Irian.

He warned that KPU should also be prepared for possible intimidation by separatist rebel groups, such as in Irian Jaya, against people who wish to participate in the elections.

Agus urged KPU to introduce the elections to local residents before conducting the elections. "KPU also needs to discuss the elections with local leaders."
 

Regional conflicts

The mysterious roots of mayhem

Jason Tedjasukmana, Ambon -- A twisted pile of scrap metal from buildings gutted during a year of armed conflict lies near one of the many "borders" separating Ambon's warring Muslims and Christians. The mass of corrugated steel, door frames and pipes represents opportunity for scavengers who can sell the metal to traders in East Java. On a recent morning, all hell nearly breaks loose when a Christian resident tries to claim the prize. "This is our territory, and the metal is on our side," says the man, as dozens of Muslims approach. There is a tense standoff until other Christians pull the man back. "We have given him several warnings not to do business in an area that will provoke them," says one of the Christians, his short and stocky frame heaving with anger. "We do not want another war."

Neither side in Ambon says it wants a fight, and yet the violence seems unstoppable. How far back does one need to go to affix blame, to untangle the emotions? Who's ultimately to blame? Listen to Hasanusi, a local Muslim leader: "We are prepared to defend ourselves, but we have never been the first to attack." Then listen to Christian hard-liner Agus Wattimena, rumored to train young boys on the art of making bombs: "The Christians have never attacked first." The widespread destruction and torching of mosques and churches occurs without explanation. Rooftop snipers who kill citizens on the streets below tend to be identified simply as "mysterious."

Indonesia's media are doing little to clarify things. A report last week in Media Indonesia, a national newspaper, says 52 people were killed and 500 houses torched during three days of violence in the town of Masohi on Seram Island off Ambon's coast. Ambon Governor Saleh Latuconsina scoffs.

"The report says the local mayor has fled," he notes in an exasperated voice; he phones the mayor in Masohi, who confirms he never left and doesn't know what the report is based on. "With this kind of reporting it's no wonder people are so emotional." Muslims denounce Christian-owned newspapers as the "voice of provocateurs," while Christians describe the Muslim dailies as full of lies. Indonesia's army is proposing a media blackout to keep all sides -- Muslims, Christians, the army -- from overreacting. "It hurts me to read what they're saying about us in Suara Maluku," says a soldier, referring to a local paper run by Christians. A recent article accuses the army of being slow to act and reports that some military men have become snipers. "It's not true," the soldier says. It's difficult for a visitor to know for certain what's happening.

At the north end of the province, scene of some of the worst reported atrocities, hundreds of Muslims are said to have been massacred in a mosque in the village of Popio.

A doctor appeared on national TV describing the carnage and the piles of burned bodies stacked in and around the mosque. Local Christians deny that any such attack took place. "There has not been a massacre here, and there are no mass graves," says Christine Simange, a member of the Tobelo Council of Churches. In Halmahera, reports of mass killings baffle neutral parties struggling to get at the truth. "We doubt some of the reports coming out of Halmahera," says Karin Hergarden, a nurse for Midecins sans Frontihres. "Stories from both sides are often exaggerated." It's hard to say anything more with certainty.

I have seen a Muslim graveyard marked with hundreds of thin wooden tombstones. I've surveyed home-made firearms confiscated by police and seen dozens of churches, mosques, homes and buildings reduced to their foundations. I shake my head and wonder how a process of reconciliation can ever begin if no one is found responsible.

A wasteland called peace

Nisid Hajari -- No one would mistake the calm of Ambon for peace. The capital of Maluku province -- epicenter of a yearlong orgy of religious violence -- has been carved up into exclusive "sectors" by its Muslim and Christian residents. During the day Indonesian soldiers search neighborhoods for homemade rifles, spear guns and petrol bombs; at night tanks patrol the rubble- strewn streets.

The main Muslim sector is a narrow, 4-km corridor lined with refugee camps, fish markets and charred buildings. Taxi drivers loiter on the sidewalks, since driving within the few kilometers would yield only a few cents. "I feel like I'm living in a cage," says Yusnita Tiakoly, a university student who, along with most of her peers, has not been to class in a year.

The ring of steel that the Indonesian military has thrown around the Moluccas -- the fabled Spice Islands -- has restored only the semblance of normalcy to the region. According to the military, the pace has slowed, leaving a death toll of about 600 since December 26, when a bus driven by a Christian allegedly hit a Muslim boy in Ambon.

But the quiet owes more to the presence of close to 10,000 troops than to any reconciliation. Across the islands of Maluku and North Maluku, thousands of villagers have withdrawn into their communities, loath to cross religious lines and quick to respond to rumors with mobs and machetes. Many fear that this week's anniversary of the first religious riots to strike Ambon could spark renewed violence. "Since last January 19, there have been so many victims that the feeling of revenge is very deep," says Agus Wattimena, a tattooed Christian militant who carries a Colt .45 pistol and claims to have 60,000 men under his command. "Both sides are at a breaking point."

In fact, no one really knows whether the violence has actually ebbed. In Jakarta an embattled General Wiranto, Coordinating Minister for Political and Security Affairs, used his own military's casualty figures to declare that the situation has stabilized. Yet both Muslim and Christian sources hotly dispute the numbers: by some estimates, more than 3,000 members of both faiths have been killed in North Maluku alone in recent weeks. On the island of Halmahera last week, Muslim aid groups claimed to have found the charred corpses of more than 500 of their co- religionists and buried them in mass graves. Some Christian groups deny any such massacre occurred.

The facts that all sides agree upon are more foreboding. Some 276,000 refugees have been scattered throughout and beyond the Moluccas, bringing with them little more than their fears and resentments. Areas like North Sulawesi, now home to 13,000 refugees from North Maluku, already suffer from religious tensions that could easily be exacerbated by the newcomers. "I'm very worried that Manado will be the next Maluku," says political commentator Fachry Ali, who recently returned from the North Sulawesi capital. There, local Muslims chafing at what they see as Christian dominance have already asked for their own province. If clashes break out, says Ali, they would likely be supported by their brethren in the predominantly Muslim province of South Sulawesi, which has also accepted thousands of refugees.

Indonesian President Abdurrahman Wahid has ordered the Navy to intercept any Muslim militants who may try to stoke those fires. But forces far from Maluku continue to wield the bloodshed to their political advantage. "The whole tragedy has become part of a national chess game," complains Maluku Governor Saleh Latuconsina. Parliamentary heavyweights Amien Rais and Akbar Tandjung have rallied Muslim anger in the capital in a show of strength aimed at Wahid and his Vice President, Megawati Sukarnoputri.

Locals in Ambon argue that the military, threatened by a civilian administration and the possibility of prosecution for human-rights abuses, has again manipulated the violence to justify an iron hand. Even those who have difficulty pointing to a culprit are unable to shake the feeling that local rivalries alone cannot explain such bloodshed. "Violence of this magnitude would never have spread so quickly without some type of provocation or organization," says Abdurrahman Khouw, vice chairman of the local Council of Indonesian Ulemas, an influential, nation-wide Muslim organization. "Until we can find what or who is at the root of the problem, we can only call for restraint."

Unfortunately, that kind of indecision may only prolong the search for a lasting solution to Maluku's divisions. So far Wahid has treated the problem at a remove: last week he ousted the army spokesman, who had questioned his right to intervene in military affairs. Such moves may protect the President from his enemies in Jakarta, but they hardly address the cloud of mistrust and anger that has poisoned the air throughout Maluku. "What is happening is like a vicious virus tearing through both communities," says Dr. Sudirman Abbas, the only general practitioner left at the only hospital in the Muslim sector of Ambon. "If the right dose and treatment is not applied, the epidemic will spread." What Jakarta found last week was a Band-Aid, not a cure.

[Reported by Zamira Loebis/Jakarta and Jason Tedjasukmana/Ambon]

Troops stem attacks, tourists flee Lombok

Vaudine England in Jakarta and Agencies in Mataram -- Sporadic looting and attacks on ethnic Chinese and Christians continued for a fourth day on the tourist island of Lombok yesterday.

But by afternoon a measure of calm had been restored by the hundreds of troops and police rushed to the island east of Bali. Tourists on Lombok continued to flee, however.

A public relations officer at the Novotel hotel in southern Lombok said 48 foreign tourists staying there were evacuated to Bali yesterday. "Nothing has happened here. Our hotel is 60km away [from Mataram]. But we evacuated all the guests as a precaution," she said.

Australia's consul in Bali, Ross Tysoe, said about 200 people were ferried from the Gili Islands off the northwest coast of Lombok overnight. More followed during the day. While the popular backpacking and diving area had not seen any violence, Mr Tysoe said there were fears it could spread.

The assistant manager of a Lombok hotel, Putu Indiawan, said the resort area of Senggigi, 20km from the capital, Mataram, was quiet, but he had heard rumours of a new attack planned for today. Most hotels are now empty of guests and have sent their Christian staff away.

Mobs went on the rampage on Monday in Mataram, attacking and burning Christian churches and homes, in apparent revenge for reports of the slaughter of Muslims by Christians in the distant North Maluku islands.

A carload of Christian professionals leaving Lombok on Wednesday night reported that their vehicle was stopped by Muslim youths on their way to a Bali-bound ferry, and the passengers were asked if they were Christians.

"Luckily, the man in front spoke Sasak [the indigenous Muslim language on Lombok], and told them, 'No', and the Muslims did not check identity cards," said one of those in the car, speaking from Bali.

"It seems more like terror tactics and intimidation," she said. "It seems there has been an order not to burn houses and not to loot, so the youths are taking things on to the streets and burning them instead. What I heard today was that it is still quite tense. It is not calm yet".

Alex Jones, the British Council representative in Lombok, also reported continued tension, telling the BBC: "Basically the situation isn't under control. There is this very strong feeling they're looking for Christians.

"It's young guys on the street and I don't think even the guys who originally conceived all this, burning churches, are necessarily in control."

The death toll from the violence rose to five, all rioters shot by security forces, police said.

Dozens of Christian homes were torched or looted overnight, residents said. "Last night, the house of my [Christian] neighbour was ransacked and the belongings were then burned," said one woman in Mataram.

Cars that had been overturned and burned had been hauled away, while shops were reopening. However, hundreds of Christians and ethnic Chinese were sheltering in police stations and government buildings. Residents said police orders to shoot rioters on sight seemed to have been ignored.

Police in Mataram said they had no reports of fresh violence during yesterday. "It's quiet and safe. I heard police will start using live ammunition. But I don't know more about it," said one policeman.

In the Maluku capital, Ambon, hundreds of Muslims protested after the tortured body of a Muslim man was found dumped in a Christian district. Blaming Christians for his death, some protesters called for revenge.

Protesters retreat on Bintan amid truce

Singapore -- About 100 armed protestors have withdrawn from a power plant they illegally occupied at a Singapore-managed industrial park on Indonesia's Bintan island as part of a truce over land compensation claims, officials said Thursday.

Nearly all the 27 tenants had resumed operations after work was suspended due to the tense situation since the weekend, when hundreds of villagers waving knives and spears stormed the plant and cut off power and the water supply. Singapore conglomerate SembCorp Industries Ltd., whose unit SembCorp Parks Management runs the Bintan Industrial Park, said in a statement Thursday that all the protesters had left the plant and the park.

Indonesian police and military personnel had moved into the power plant to guard the facility, it said.

The protestors on Wednesday threatened to tear down the park in their campaign to demand more money for land that was sold in 1991 to Indonesia's Salim Group, the largest shareholder in the industrial estate.

Bintan, about 50 kilometres east of here, is a popular weekend resort for Singaporeans who also hold the lion's share of the 1.35 billion-Singapore-dollar (808-million-US) investments on the tiny island.

Listed SembCorp Industries, whose shares on Wednesday slumped to a four-month low in a knee-jerk reaction to the Bintan dispute, said it had "strongly requested the regional government to protect the people and assets in the industrial estate and they have agreed to do so."

A spokesman for SembCorp Parks Management told AFP that a circular had been sent to the tenants to resume production.

But the spokesman repeated an earlier warning that the park would be closed if it was not operationally safe.

"Although the situation has returned to normal, our earlier statement stands -- that the park will be closed if the situation went out of hand in an extreme case," the spokesman said. Talks between the disgruntled villagers and local Indonesian government officials reportedly collapsed on Wednesday but the protestors were taking their case to Indonesian President Abdurrahman Wahid, Singapore newspapers reported.

Ignatius Toka Solly, a student leader and spokesman for the protesters, was quoted as saying that the villagers would wait for three days for an outcome.

"If we do not get what we want, the people will take over and we will occupy the land using whatever means we can," the Straits Times daily reported him saying.

The villagers were reportedly paid 100 rupiah per square metre and now want 10,000 rupiah (1.37 US dollar). The 27 tenants in the 4,000-hectare (9,880-acre) had committed a total of 213 million US dollars in investments by end-1999, and employ about 9,600 workers.

"We have been told that the situation is slowly returning to normal with the mobsters having left the power station," Raymond Choy, managing director of Singapore-based German Plastic Technology, a tenant at the park, told AFP.

Other tenants said Indonesian authorities had stepped up security around the industrial park and Bintan Beach International Resort.

The villagers are unhappy with the money given to them for sale of land for both the beach resort and industrial park.

The Bintan problem cropped up just as Singapore Prime Minister Goh Chok Tong returned at the weekend from Jakarta after an investment mission aimed at helping Jakarta woo back foreign capital crucial for economic recovery.

The Singapore leader, who led a 60-strong delegation of Singapore-based local and foreign businessmen, had announced a 1.2 billion-dollar plan to help Indonesia attract foreign investments and accelerate economic growth.

Indonesian time- bomb

Lindsay Murdoch, Jakarta -- Indonesia's Government fears that provocateurs linked to elements of the military and the regime of the corrupt former president Soeharto have begun a campaign to provoke religious and separatist violence across the archipelago.

It believes that small groups with millions of dollars to spend are behind the continuing bloodshed in the Ambon island chain and spreading violence on the resort island of Lombok, in industrial estates on the island of Bintan, near Singapore, and in the provinces of Sumatra and Sulawesi.

The President, Mr Abdurrahman Wahid, has warned of a crackdown on a small number of provocateurs who he says "want to settle the score" against his Government after losing power last year.

He said outbreaks of religious violence in the Maluku region, on Lombok and elsewhere were the product of a conspiracy to distract him and his Government from implementing economic reforms unpopular with vested interests he labelled "dark forces".

"There is a kind of frustration because we are chipping away at their power," Mr Wahid told journalists in Jakarta. "We tried to make the rule of law supreme in this country ... they do not like it because in the past they were used to doing whatever they liked."

Government insiders believe that business people who are facing huge debts after the collapse of the economy are prepared to spend large amounts of money to destabilise an administration which is trying to bring them to account for the plunder of hundreds of millions of dollars of government funds during Mr Soeharto's 32-year rule.

They believe the campaign to force the collapse of the Government involves stirring up sectarian violence on outer islands and then provoking its spread towards the capital, Jakarta.

It is feared the campaign also involves scaring off foreign investors whose support is needed to kick-start the collapsed economy.

Mr Kholiq Achmad, secretary of Mr Wahid's parliamentary faction, told a Jakarta newspaper that the Government had been leaked information that after January 28 violent incidents would be provoked from Lombok to Bali and then across the densely populated island of Java to Jakarta.

Mr Wahid is scheduled to leave on January 28 for a two-week tour of 10 European countries and South Korea.

A leading politician, Mr Amien Rais, warned of "national anarchy" unless the provocateurs were arrested and tried.

The latest Far Eastern Economic Review magazine says a police intelligence report names two former senior members of the Kopassus special forces as being present during riots in Lombok.

Investigations into the cause of violence in Ambon, where more than 1,700 people have died in the past year, have identified four men with links to Mr Soeharto and the former military chief General Wiranto.

The Jakarta Post quoted one investigator, Mr Tamrin Amal Tamagola of the University of Indonesia, as saying that General Wiranto, who is now the co-ordinating minister for political and security affairs, was a key figure "to whom we can trace all connections in the conflict".

But Mr Wahid, asked if he still had confidence in General Wiranto, said: "Of course, yes. As long as he is not proven guilty. I believe in him."

However, Indonesia's media has been speculating for days that Mr Wahid intends to sack General Wiranto in a Cabinet reshuffle. That reshuffle is now not expected until Mr Wahid returns from his overseas trip.

Mr Rais, the Speaker of the upper house of parliament, said it was possible that Indonesia could lose democratic reforms introduced since Mr Soeharto was forced to resign amid widespread bloodshed in 1998. He said that unless the provocateurs were arrested "we will be living in an endless nightmare."

Mr Wahid, a 59-year-old Muslim cleric, said that the Government's patience was running out as violence escalated across the country and elements of the military, especially the army, openly challenged the authority of the Government.

Police have issued shoot-on-sight orders against rioters in Lombok and Ambon in an effort to try to stop the violence that has left hundreds dead in recent weeks.

The military has stepped up attacks in the strife-torn province of Aceh only days before a visit there next Tuesday by Mr Wahid, who earlier ordered the military to remain in the barracks to allow peace talks with separatist rebels to begin.

Mr Rais warned that the violence in Lombok, where dozens of Christian homes were set alight on Wednesday night and looting continued, could spread to the nearby island of Bali, threatening its multi-million-dollar tourist industry.

Wiranto linked to violence

Jakarta -- A team promoting reconciliation in the strife-torn Maluku islands has named four men suspected of stirring up sectarian violence, and linked former president Soeharto and ex- defence chief General Wiranto to the clashes.

The Jakarta Post yesterday quoted team member Tamrin Amal Tamagola as saying that the names of four people suspected of provoking Muslim-Christian violence in the Maluku islands, which has left more than 1,700 people dead and hundreds and thousands of refugees, have been handed to the Indonesian armed forces (TNI).

"I have told TNI chief of general affairs, Lieutenant-General Suaidy Marasabessy, that the provocateurs of the sectarian clashes are Buce Sarpara, Yorris Raweyai, the Sultan of Ternate and former Ambon mayor, Colonel Dicky Wattimena," said Mr Tomagola, a sociologist at the State University of Indonesia.

He said the four men had unlimited funds, which they had used to stir up trouble in the province. Mr Tomagola also aired suspicions that Mr Soeharto and several of his business cronies had provided funds to the provocateurs.

Mr Sarpara is a former chief of the land agency in Irian Jaya and Mr Raweyai was the deputy chief of a Soeharto-era youth organisation. He has also been a key figure in the independence drive in Irian Jaya.

Tomagola said General Wiranto, now co-ordinating minister for political and security affairs, was a key figure "to whom we can trace all connections in the conflict."

The Maluku reconciliation team was initiated by the Government late last year, and has military and human rights advocates among its members.

General calls for neutral soldiers

Vaudine England in Makassar, South Sulawesi and Agencies -- Indonesia's leading reformist soldier and the regional commander for Sulawesi, Major-General Agus Wirahadikusumah, wants a neutral peacekeeping force to be deployed in the neighbouring Maluku Islands.

But rights groups claim the army and provocateurs linked to former president Suharto's government are fomenting religious violence on the islands.

A taskforce trying to quell the violence gave the Indonesian Defence Forces (TNI) the names of four suspects, including the former mayor of Ambon, the capital of Maluku province, reports said.

Another alleged suspect is the sultan of the small northern Maluku island of Ternate, whom one Western observer said was trying to protect political and business interests by fomenting unrest.

General Agus, meanwhile, said the military should "use compassion and fairness to save this nation. This nation is losing its character because of all the tragedies that are happening," he said.

The idea is that Indonesian troops should be selected to form a special force committed to securing peace. They should have different uniforms and special training to help people understand they are different to the troops and police, long accused of bias by Muslim and Christian combatants. "The TNI should work for the people's aspirations and not just for group interests," said General Agus.

Human rights and Christian groups have called for international peacekeepers to help solve the problem, but this is out of the question for many Indonesians.

General Agus called for a de-politicisation of the armed forces, and for civilian supremacy over the military.

He also stood against the standard military line about the need for martial law and separation of communities along religious lines in the name of peace.

"All the violence happening in our country is part of a political game being played by our political elite in the central Government," he said, adding that the military was in danger of becoming a player in the conflicts. The co-ordinator of the Commission for Missing Persons and Victims of Violence, Munir, accused the TNI of involvement in the religious clashes in the Malukus. There have been claims the military is involved in protection rackets and gun-selling.

Demonstration on Makassar campus

Makassar -- A fierce clash between demonstrators, armed with swords and wooden bats, and military troops erupted at about 9pm local time in Makassar on Tuesday evening.

Gunshots and screams were heard in front of the Hasanuddin University campus on Jl. Perintis Kemerdekaan as 300 unidentified demonstrators resisted a military order to clear the street. A heavy downpour added drama and tension to the scene.

The protesters, who unexpectedly appeared and broke the military troops' barricade yelled "Allahu Akbar" (Allah the Great) and called for a jihad.

A military troop member told The Jakarta Post that his commander ordered them to resort to tough measures to curb the brutal demonstrators.

The 300 protesters demanded that their 12 colleagues arrested by police hours before be freed. The 12 people were said to be the instigators of the earlier riot, which broke out on Tuesday. At late night, 32 people had been detained as a result of the clash while six people were seriously injured.

A wave of protests by a group of Muslim students started on Monday. They tortured a non-Muslim and claimed their action as retaliation for what had happened to their brothers in Maluku.

The demonstration continued and grew wilder on Tuesday when military troops fired warning shots to disperse about 1,000 demonstrators.

A tentative count, made before the clash, indicated that as of Monday a total of 27 demonstrators were injured and nine motorbikes set on fire. "A car belonging to the Indonesian Air Force was damaged by the mob," an eyewitness said on Tuesday.

Chief of Wirabuana Military Command overseeing South Sulawesi Maj. Gen. Agus Wirahadikusumah said he regretted the brutal actions by the student group, branding such measures a crime. "We cannot condone what they have done," he said at his residence on Tuesday.

He said the students heard rumors that one of their colleagues had been killed by a non-Muslim group.

The riot began when the students stopped motorists passing in front of their campus. The motorists were ordered to show their ID cards, and 17 of them, who were found to be non-Muslim, were assaulted. Seven motorbikes and a car were damaged during the chaos.

One of the victims said he was questioned, beaten and stripped. "Three of us are now being treated at the police hospital for severe stab wounds," he said. Agus ordered his men to be tough and arrest the violent students.

In a separate interview, South Sulawesi Police chief Brig. Gen. Mudji Santoso said the students' actions were inhumane. "We cannot let such a thing happen again," he said.

The reverberations from Ambon

By Dewi Loveard, Jakarta -- A local conflict rooted in long- simmering religious enmity. That is how Jakarta views the Muslim-Christian fighting in Ambon and other parts of the Maluku island chain. Scene of bitter sectarian strife over the past year, the Malukus have seen a fresh outbreak of violence in recent weeks. The problem "is that the [Maluku] population is almost equally divided between Christians and Muslims," says Brig.-Gen. Nono Sampurno, a special adviser to Vice President Megawati Sukarnoputri (who is tasked with resolving the crisis). In the past tensions were held in check by repression, he says, but under the current open climate people view reform and democracy as an invitation to seek revenge for the "sins" committed against their ancestors by their religious opponents.

Sampurno's analysis is sound as far as it goes. There is, however, more to the crisis than he lets on. For one thing, religious tensions are spreading nationwide in this predominantly Muslim country. Outraged by reports of their brethren being massacred, Muslim activists have been staging demonstrations in Jakarta to demand firm government action and call for a jihad (holy war) against Christians. The National Human Rights Commission, which is currently investigating last year's alleged atrocities in East Timor, has been accused of double standards -- namely, that it is coddling East Timor's Catholics while ignoring the plight of Muslims elsewhere. "Look at the massacres in Ambon, Aceh and Halmahera; these people are less responsive," charges People's Consultative Assembly chairman Amien Rais, a former Muslim leader.

The Islam Defenders Forum, a hardline Muslim organization, recently shipped 400 volunteers to Ambon to put pressure on the Christian community there. The group has already demonstrated its clout by pushing the government to close nightspots across the country during the Muslim holy month of Ramadan. Wahid, however, has vowed to take action against those who try to wage a jihad in Ambon.

Muslim militants aren't Wahid's only concern. Relations between his government and the military have been strained lately because of the former's investigation of the latter's involvement in the East Timor rampage. Now a widespread suspicion is that some in the army are using the Maluku troubles to weaken Wahid -- a view bolstered by the uncovering of military-issue weapons during police sweeps in Ambon.

A retired intelligence officer who once worked under former military boss L.B. Murdani agrees that army elements are involved in the Maluku crisis. While stopping short of saying the military is actively fomenting trouble, he asserts that some ranking officers are using the conflict to maneuver against Wahid. He also admits that the pro-Muslim protests in Jakarta have been engineered by elements in the army. He predicts that the demonstrations will reach their peak in two months and force the government to face a vote of no confidence in parliament. "I think that will be the end of Wahid's administration," he says.

Marzuki Darusman, attorney-general and chairman of the National Human Rights Commission, dismisses any chances of a military-engineered ouster of Wahid, saying that it will not be supported by the international community. "The idea is not backed by China, the US or Russia," he says. Others cite a likely popular backlash against the military's return to power as a factor in favor of Wahid. Still, these are unsettling times. Darusman and his family have been regularly getting threatening phone calls from angry Islamists; this kind of intimidation is now so common that "it's just a joke for us," says Darusman. Unfortunately, in other respects the Ambon crisis is proving to be no laughing matter.

Conflict in Maluku fuelling tension

Margot Cohen, Jakarta -- It was a gut-wrenching evening for the Defenders of Islam. Packed into Jakarta's Al Ashlah mosque on January 9, hundreds of young men dressed in white tunics and skullcaps listened rapt as their leaders denounced the "Christian savagery" in the Moluccan Islands, where, they were told, "tens of thousands of Muslims have been murdered, thousands of Muslim women raped and thousands of children orphaned." Soon, they were warned, the bloodletting could begin on their own doorstep.

"The Muslims of Indonesia are going to be destroyed," warned one young cleric, Reza Pahlevi. "It started in Maluku, and now it could spread to other provinces. It's not impossible that it will reach Jakarta. We must be ready."

Will religious enmity become the latest export from the renowned Spice Islands? That's the frightening prospect for jittery Indonesians and foreign investors as they monitor the national repercussions from the year-long conflict that exploded yet again in December, claiming possibly thousands of Muslim and Christian lives and displacing more than 180,000 people.

Spiralling beyond Ambon to the islands of Buru, Ternate, Halmahera and elsewhere, the latest violence has prompted a public outpouring of disgust at the government's seeming inability to halt the madness.

Unlike the firebrands, most Muslims aren't rising to the anti-Christian bait and are simply praying that President Abdurrahman Wahid will live up to his reputation as a champion of interfaith harmony and find some way of dousing the flames. Will he? With an administration beset by divisions, it's proving even harder to control the army, which appears to be pursuing its own agenda in the Moluccan Islands at the expense of peace.

Meanwhile, the rhetoric reverberating in mosques, leaflets and street protests is beginning to spook minority Christian communities. With some Muslim clerics in Jakarta and West Java preaching "holy war" at services to mark the end of Ramadan, some Christians have even begun mulling a move overseas.

"We are worried that this is the first stage. What is the second stage?" asks Ignatius Ismartono, a Jakarta-based official from the Indonesian Bishops' Conference.

The Maluku crisis has exposed signs of severe strain within the fragile political alliance between the president and Amien Rais, the chairman of the National Mandate Party and a key backer of Wahid's presidential bid last October. Amien lashed out at Wahid's government as ineffectual and issued a two-week deadline to halt the killings. Other statements indicated Amien is intent on repositioning himself as a Muslim leader, after making concerted efforts to reach out to minorities during the election campaign.

The crisis has also laid bare the vulnerability of Vice- President Megawati Sukarnoputri to accusations that she is ill- prepared to handle weighty matters of state, and particularly the task that Wahid gave her of calming the Spice Islands. Some Jakarta officials as well as supporters of Megawati believe public demands for a quick resolution of the Maluku crisis are unrealistic.

Her staunchest defenders go further, rejecting the attacks on her as a conspiracy aimed at ensuring she never becomes the country's leader. "Some people don't want Mega to become president. So starting now, there are manoeuvres to undermine her," fumes Zulvan Lindan, a Muslim MP from Megawati's party, the Indonesian Democratic Party of Struggle. Still, Megawati did leave herself open to criticism by trotting off on a family vacation just as Ambon was again descending into bloodshed. Nor did she advance her own cause by virtually ignoring the three- person team of knowledgeable Moluccans informally assigned in late November to advise her on fresh policies. The team says it wrote three letters to Megawati and Wahid requesting formal status and a budget, but never received a reply.

Indonesians' anger over the escalating violence doesn't just apply to sluggish bureaucrats and government leaders; they're also upset at what they see as inflammatory and unbalanced media coverage. During the Suharto era, reporting on religious conflicts at the provincial or national level was strictly taboo. Now that reformasi has lifted such restrictions, many newspaper readers and television viewers resent that information from unreliable sources is often trumpeted as fact. For example, the Maluku body counts have varied widely depending on whether the information was provided by Christian or Muslim sources.

"Provocative statements are routinely published, and this can be very dangerous," complains Arnold Purba, executive director of Solidaritas Nusa Bangsa, a nationwide network of activists trying to promote racial and religious harmony.

Ironically, however, Wahid's embattled administration is benefiting from the unreliable news reports. Recognizing that the islands' paralyzed local government is incapable of providing solid data, many Indonesians are waiting for more accurate information before taking a firm stand on who's to blame. That's giving the president's supporters in the nationwide Nahdlatul Ulama organization and the National Awakening Party time to do some damage control. "I guarantee the conflict will not spread to other areas," says Said Aquiel, chairman of religious affairs in Nahdlatul Ulama. Their main tactic: Spreading the word that the Maluku problem shouldn't be viewed as a purely religious conflict. "We tell them that the Moluccans are victims of the political elite," says Choirul Anam, head of the East Java branch of the NAP.

That's a widely voiced theory, inside and outside Maluku. Intellectuals and religious leaders of all faiths cling to the belief that cronies of former President Suharto, power-hungry religious extremists, and military officials aiming to recover lost political ground are perpetuating the conflict. For their part, the Defenders of Islam and other right-wing Muslim groups argue that it is aimed at shaming the military and triggering international intervention to allow the Spice Islands to break away, just like East Timor. Such arguments have raised suspicions that the Muslim right is appealing for military support.

So far, the anecdotal evidence falls short of fleshing out any conspiracy theories. What is clear, though, is that any long-term solution to the islands' woes will have to take into account a knotty set of factors. As Human Rights Watch noted in a January 7 report: "Tensions had been building for decades as a result of the decline of traditional authority structures, the influx of migrants, [and] perceived Islamization of the central government and civil service."

More immediately, however, many human rights and religious groups have pointed at the role of the military, which has been accused of taking sides in the conflict, with soldiers even selling ammunition and renting guns to their favoured factions. While the armed forces finally took more decisive steps in early January, such as confiscating weapons, checking identity cards and mounting a naval blockade to guard against any influx of thugs or ammunition, many analysts argue that the military is too deeply embedded in the conflict to offer much long-term relief. Amir Hamzah, a private investigator and former columnist for the armed forces newspaper Angkatan Bersenjata, is one of many analysts who believe the unrest is linked to the military's economic interests in Maluku. He says certain officers, both active and retired, feel threatened by the prospect of decentralization. If Jakarta implements plans for regional autonomy and local revenue-sharing next year, local parliaments would have the power to cancel or refuse to renew lucrative contracts with military-backed companies engaged in fisheries, forestry and mining.

Riots, he argues, would delay such losses. "If the local government is paralyzed, parliament doesn't function, and there's no social control, automatically, Jakarta can't carry out decentralization," Amir predicts.

As the generals fend off flack over the Maluku mess, they're still haunted by the bloody aftermath of the independence vote in East Timor. With both domestic and international human-rights commissions due to complete reports in late January, it's already open season to discredit their findings. At the Al Ishlah mosque, leaders of the Defenders of Islam slammed Indonesia's National Commission on Human Rights as a tool of Christian-coddling foreign governments, and accused it of ignoring Muslim victims.

"Why is it that only Muslim generals are going to be prosecuted?" thundered charismatic cleric Muhammad Rizieq Syihab, drawing a roar of approval from his flock. Chances are, that won't be the last sign of friendship between the Muslim right and military might.

Migrants, power struggle fuel unrest

Jakarta -- The marginalization of Christians and a power struggle among local politicians are behind bloody year-long clashes in Indonesia's Maluku islands, analysts say.

Most agree that demographic changes in Ambon caused by the influx of Muslim migrants, including some from other islands in Maluku, has enabled politicians to fuel the conflict. But the other factors are complex.

Commentators have struggled to explain the bitter fighting between Muslims and Christians, who once lived together peacefully in the former "Spice Islands" and disagree on the causes of the conflict.

One analyst said the army, threatened with a shrinking role in the nation's politics as it is called to account for past human rights abuses, is cashing in on the unrest to strengthen its territorial grip.

"The feelings among Christians of being treated unjustly has ignited the unrest," Thamrin Amal Tamagola, a Maluku-born sociologist of the state University of Indonesia told AFP. "If you pour fuel on dry hay, it will suddenly burn to ashes," he said.

But noted historian Ong Hok Ham dismissed accusations that the military had a hand in the bloodshed. "I don't think the military is involved. The fact that the military is unable to end the violence has already tarnished its image," Ong said.

Tamagola maintained that the army's "hidden agenda" has driven the conflict, which has left at least 1,700 dead and hundreds of thousands displaced since January last year.

"Unrest is used as a tool by the military to justify their stronger presence in provinces so that the wind of reform does not blow too hard on them," he said.

Reforms were introduced after the 1998 fall of president Suharto, under whom the military was all-powerful in Indonesia.

Traders from other Indonesian provinces began to flood into the Maluku capital of Ambon in the early 1970s and the migrants, mostly from neighboring Sulawesi island, quickly prospered.

Before the influx Christians made up 52 percent of Ambon's population but the Muslim community expanded to become the majority, Tamagola added.

He said the appointment of a Muslim governor, Akib Latuconsina, in the 1980s further fuelled the unhappiness of local Christian politicians.

Latuconsina is accused of sidelining Christian officials and preventing a former Ambon mayor from running for a second term despite his acclaimed success in running the city.

Ong agreed that tension between the Ambonese and Muslim migrants had contributed to the violence, but rejected political or religious motives. "It seems to me like brawls among high school students," he said.

Muslim-Christian violence on the Malukus, a former Dutch colony, has left more than 700 people dead in the past few weeks alone, many shot by security forces caught between the warring sides.

Despite the presence of some 10,000 troops, the clashes have raged unabated into the new year with both communities accusing the military of backing the other side.

The Indonesian Communion of Churches (PGI) has said it believes the violence is aimed at exterminating "the indigenous Maluku people along with their social institutions" and has been wrongly labelled as a religious conflict.

The church group has called for the deployment of international peacekeepers and said the military and police must be held accountable for their role in fanning the conflict.

"We, as a religious institution, can only facilitate efforts for reconciliation through churches. But that cannot be done well in the current circumstances," PGI chairman Sularso Sopater told AFP.

Tamagola said the government must replace governor Saleh Latuconsina (no relation to his predecessor), a Muslim, with someone more neutral, reform the whole administration and replace the army with the navy.

Calls for a jihad, or holy war, have been aired by Muslim groups following the deaths of Muslims on Halmahera island at the hands of Christians angered by the burning of a Protestant church in Ambon.

President Abdurrahman Wahid, who attended a gathering of both Christian and Muslim Maluku residents of Jakarta on Saturday, has warned he will take action against Muslims travelling to the islands to wage a jihad.
 

Aceh/West Papua

Seven die in renewed Aceh violence

Associated Press -- At least seven people have died in the latest round of violence in the strife-torn Aceh province, human rights activists said on Friday.

The head of the People's Crisis Centre in the Bireum region said five bodies were found on Thursday with gunshot wounds. He said two of the dead were student human rights activists.

Rizannur, who like many Indonesians has only one name, said the military had cracked down in recent days on separatist rebels and suspected sympathisers. "They have acted brutally," he said.

Two other bodies were found in west Aceh, said Zakaria, another human rights activist. He said the military raided several villagers in the area on Thursday, setting fire to about 80 homes. The latest killings brings to 24 the death toll in the region this week.

Meanwhile, a spokesman for the separatist rebel group the Free Aceh Movement, Ismail Syahputra, claimed 15 soldiers were killed in a clash Thursday in east Aceh.

A military spokesman confirmed the clash took place but said no soldiers had died. "It's not true," said Captain Sugeng Santoso. "Only four soldiers were wounded."

Soeharto forces `building militias' in Papua

Andrew Kilvert -- Military authorities and political enforcers associated with the former Soeharto regime appear to be building up East Timor-style militias in the contested province of West Papua, human rights activists warned yesterday.

The claim follows clashes in the north coast town of Serui on Wednesday when pro-Jakarta elements clashed with pro-independence supporters.

An Australian-based West Papuan academic, Mr John Ondowame, has accused former Soeharto-regime activist Mr Yurris Raweyai of engineering the formation of pro-Jakarta militias in West Papua -- as Irian Jaya has been renamed since a visit by President Abdurrahman Wahid over the New Year. Mr Yurris, an indigenous Papuan, is infamous in Indonesian politics for his prominent role in the ousting of Ms Megawati Sukarnoputri, now Indonesia's vice-president, as the head of the Indonesian Democracy party in 1996.

"Yurris is forming militias," Mr Ondawame said. "It is very dangerous, the Yurris rallies are protected by TNI [the Indonesian armed forces] but at the independence rallies the people are shot."

In the provincial capital Jayapura, Mr Yurris has organised the formation of the "West Papuan Army" in coalition with the moderate pro-independence leader Theys Eluay.

He is believed to have brought in many members of the Pemuda Pancasila movement -- a youth group ostensibly formed to promote the state ideology Pancasila under the Soeharto government -- which was often employed as to break up and intimidate opposition activity.

Pemuda Pancasila members were also prominent in the militias in East Timor, which slaughtered hundreds of people and deported nearly half the population after the territory's pro-independence vote on August 30 last year.

Mr Eluay's motives in associating himself with Mr Yurris are not clear, but some local activists suspect it is a tactical move to gain access to Mr Yurris' funds, which come from the Indonesian military and TNI- associated business interests. Mr John Rumbiak from the West Papua human rights organisation ELSHAM said: "He just wants the money from the military and their businesses. It is very complex but Theys is still supporting independence."

Since Mr Soeharto's resignation in May 1998, West Papua has seen a growing popular movement for independence, expressed in ceremonial raising of the nationalist flag and other protests in many of its widely-scattered towns.

Mr Eluay himself is one of a number of independence activists charged with sedition for raising the rebel flag, and his trial is due to start on February 2. The trial of two others, Don Flassy and Samuel Yaru, began on Tuesday, with the charges carrying a maximum 15 years' jail. On Tuesday, about 100 people closed the airport at Sentani, just outside Jayapura, by sitting on the runway, in a protest demanding proper compensation for land seized for the airport 30 years ago, the Indonesian Observer newspaper reported.

Meanwhile the international community is starting to review the much criticised "act of free choice" in 1969, whereby 1,025 representatives selected by Indonesia voted for the former Dutch colony to become part of Indonesia.

The Netherlands Parliament is conducting an inquiry into the 1969 consultation. Some of the surviving representatives argued that they voted under duress and that the results did not reflect popular sentiment. The vote has never been ratified by the United Nations.

Human rights groups urge end to violence

Banda Aceh -- Representatives of 15 international non- government organizations concluded their two-day meeting here on Sunday putting more pressure on the Indonesian government to soon end the violence in the restive province.

Held at Syah Kuala State University, the meeting was organized by the Support Committee for Human Rights in Aceh (SCHRA) and focused on the actions needed to help the victims of violence, particularly women, children and refugees, who have been living in poor conditions.

The event's coordinator, Radhi Darmansyah, said among the participants were the Washington-based Non-Violence International, the New York-based International Commission of Jurists, the US Committee for Refugees (USCR), Forum Asia, Thailand's Thamasat University, the Japanese rights group NINDJA, the Solidarity Forum for Peace in East Timor (Solidamor) and the International Forum for Aceh (IFA).

He said the session also sought efforts to promote human rights advocacy to "peacefully campaign in the international community for human rights in Aceh".

"The campaign is expected to place international pressure on Indonesia to cope with the Aceh problem", Radhi told Antara.

The meeting follows an international conference held in Bangkok in July in which representatives of 21 international human rights groups agreed to set up the SCHRA.

President Abdurrahman Wahid disclosed on Saturday that he would go to Aceh this month to attend a ceremony to settle the dispute between police and a group of proindepedence students, the Taleban.

"I will attend the pasejuk, ceremony sometime this month," the President said while addressing a gathering of the Maluku community in Jakarta.

Abdurrahman said his decision was made after meeting with several Aceh leaders on Saturday, although he did not elaborate further.

It is not clear whether the President means to attend a dialogue between the separatist Free Aceh Movement (GAM) and the government in Langsa, East Aceh, on January 25.

Violence continued on Sunday as separatist rebels and a group of military officers were involved in an exchange fire in Pidie district, killing at least 12 military soldiers, Reuters reported.

No immediate casualties were reported as parties involved in the fray gave different versions of the incident.

GAM's Ismail Syahputra claimed the military tried to raid the camp of GAM's commander Tengku Abdullah Syafi'ie in Pidie, and that 20 military officers were killed. Witnesses put the death toll at 12 while the military denied fatalities on its side.

Earlier on Saturday, in North Aceh, an Army soldier identified as Pvt. Suardiman was killed when an armed group threw a grenade at a security post of PT Kertas Kraft Aceh in Jamuan village of Nisam district, North Aceh military chief Lt. Col. Suyatno said.

Four more bodies were found on Saturday in Peuribu village in West Aceh, in the Idi river in East Aceh and in Muara Dua village in North Aceh, near the PT Arun gas plantation.
 

News & issues

US beefs up aid to Jakarta

Associated Pressm, Washington -- The United States gave Indonesia's fledgling democracy a vote of confidence on Thursday by substantially increasing aid to the world's fourth most populous nation.

State Department spokesman James Rubin said Secretary of State Madeleine Albright told visiting Indonesian Foreign Minister Alwi Shihab at a meeting that aid in 2000 would increase by 66 percent from US$75 million to US$125 million and could go higher next year.

Ms Albright said Tuesday that besides Indonesia, Colombia, Nigeria and Ukraine will benefit this year from special attention and US aid. "The United States has and will continue to have strong support for the enormous and so far, successful democratic transition in Indonesia," Mr Rubin said.

President Abdurraham Wahid took office last October after successful parliamentary and presidential elections.

He has been trying to revive the moribund economy and reform its corruption-ridden institutions while dealing with multiple separatist and religious conflicts.

While Ms Albright had praise for the democratic transition, Mr Rubin said, she also told Mr Shihab that the United States was "watching very carefully" as an Indonesian commission investigates human rights abuses in East Timor. "We will be awaiting their work before deciding what additional steps may or may not be necessary," he said.

This was a reference to calls to set up an international tribunal to investigate the frenzy of violence that swept the territory in September after residents voted for independence from Indonesia.

An Indonesian government human rights investigation has accused General Wiranto, the former military commander and now Mr Wahid's senior security minister, and other officers of permitting the violence.

A separate UN human rights commission also has submitted a report on atrocities in East Timor, and three UN human rights investigators have recommended the Security Council establish a tribunal if Indonesia fails to carry out effective trials.

In a speech to Johns Hopkins University's School for Advanced International Studies before meeting Ms Albright, Mr Shihab said he would tell her, as he told members of the UN Security Council in New York Wednesday, that Indonesia opposes setting up an international tribunal.

"It would be counter-productive because it would trigger a xenophobic response and allow violators to wrap themselves in the flag in an excessive spirit of nationalism," Mr Shihab said.

He said Indonesia should have the chance to show that it meets international standards by conducting its own hearings. "If the commission concludes that Wiranto or others were involved in abuses of power, they will have to resign."

The United States warned Indonesia's military last week not to overthrow Mr Wahid and to cooperate with investigations into human rights abuses in East Timor.

Struggle for democracy not over: Albright

Washington -- Indonesia's struggle for democracy is facing tough challenges and must be supported from the outside, US Secretary of State Madeleine Albright said Tuesday. "Today Indonesia is nearer the goal of true democracy than it has ever been, but the struggle is far from over," Albright said in a speech at the Johns Hopkins University School for Advanced International Studies.

"And our job, which reflects our interests, is to ensure that the Indonesians don't struggle alone," she said, urging support for the Southeast Asian country's new President Abdurrahman Wahid.

Albright's comments came just four days after the US Ambassador to the United Nations, Richard Holbrooke, delivered a blunt warning to the Indonesian military against staging a coup.

"We would view this with the most, the greatest possible concern," Holbrooke told reporters on Friday, adding that any military officers "thinking of military adventurism have forgotten that we are now in the 21st century."

Holbrooke spoke as rumors of a possible coup have swept Jakarta with military officers grumbling about Wahid's desire to dilute their power. On Saturday, US ambassador to Indonesia Robert Gelbard delivered a message of support to Wahid from President Bill Clinton.

Albright made no mention of Holbrooke's warning but listed Indonesia and safeguarding its transition to democracy as one of four priorities for US foreign policy in the coming year.

She said that Wahid deserved support for his efforts to stabilize the Indonesian economy, put the military under civilian control, establish the rule of law and protect human rights, but noted that those challenges were "simple to identify but devilishly difficult to achieve."

"The new president is widely respected for his humanity and wisdom but to succeed he must make tough decisions and explain them in terms his people will understand and accept," Albright said.

She paid tribute to the Indonesian people for choosing a new president in a democratic election last year while dealing with a variety of crises including the economy, East Timor and other separatist violence and added that the United States would continue to support Wahid.

"We will continue to deepen our investment in light of Indonesia's importance and in response to Indonesia's request and needs," Albright said.

Bar on Chinese religions, traditions lifted

Jakarta -- The government has officially revoked Presidential Instruction No. 41/1967, which restricted the observance of Chinese religious practices and traditions.

Ministry of Home Affairs spokesman Herman Ibrahim said on Tuesday that Presidential Decree No. 6/2000 was issued on Monday to revoke the 33-year- old instruction.

"For Indonesians of Chinese descent across the country, please go ahead and celebrate your New Year. No permits need to be obtained for that anymore," Herman said, referring to next month's Chinese New Year.

He said the repeal of the regulation was made after serious concern that it stifled the practice of different religions.

The Confucianist High Council announced the Chinese New Year would fall on February 5. Herman advised people to hold modest celebrations in an effort to maintain the country's unity and respect other faiths.

Until recently, all public activities related to Confucianism and Chinese religious practices and traditions were banned. The prohibition of Chinese traditions dates back to the 1965 failed communist coup, which Jakarta accused the Chinese government of supporting. Issued during the early years of Soeharto's rule, the regulation restricts the practice of Chinese religion and traditions to closed private ceremonies.

Organization of the ceremonies still needed the consent of the minister of religious affairs with the approval of the attorney general.

State agencies facing breakdown

Michael Richardson, Singapore -- Like many other institutions from the rule of former President Suharto of Indonesia, the headquarters of the central bank in Jakarta has an impressive facade.

But behind that facade, a recent government audit found mismanagement, inflated asset values and a mountain of bad debt that had left the central bank insolvent. It also found a web of irregular accounting practices that disguised the bank's weak financial condition.

Bank Indonesia's troubles are symptomatic of an inner crisis in the world's fourth most populous nation, officials and analysts say. They cite a widespread lack of trust by investors and the public in key national institutions, including the government, the bureaucracy, the judiciary, the armed forces, the police and the legislature.

During his 32-year rule, Mr Suharto, who was forced to resign in 1998, became the only functioning government institution, according to Laksamana Sukardi, a long-time critic of the former president's who is now the minister for investment and state- owned enterprises in the reformist government of President Abdurrahman Wahid.

"The Parliament was useless, the economic institutions like the central bank and our Securities and Exchange Commission were Suharto's instruments," Mr Laksamana said.

Indonesia, he said, is living with the consequences on many levels, including "a deep crisis of legitimacy of the Indonesian government," a gross misallocation of resources, a fragile and hollow developmental boom, and a major setback to national pride and identity.

The problems at Bank Indonesia were uncovered by the government's Supreme Audit Agency and the international consulting firm KPMG, which found a gap between the central bank's assets and liabilities; the International Monetary Fund says the discrepancy could be as much as $4.2 billion.

The key challenge for Mr Wahid's government, Mr Laksamana said, is building a new set of rules and practices based on laws, precedent and nondiscrimination instead of on power, connections, and intimidation.

Indeed, many analysts say that building sound institutions is Indonesia's major long-term challenge, assuming the government can successfully manage the sectarian and separatist challenges that threaten to tear the country apart just as the economy appears to be emerging from a two-year recession that devastated banks and companies, and threw millions into poverty and hardship.

Like many Southeast Asian officials, Lee Kwan Yew, Singapore's senior minister, credits Mr Suharto with positive achievements. "But he did not build up institutions," Mr Lee said. "They were all personalized relationships with leaders of various sectors that he appointed. I think the lesson is, you have to have institutions because no man is going to live forever."

Yet in Indonesia's case, effective institutional reform will take years when investors are looking for much quicker results. Charles Himawan, an Indonesian law professor and member of the National Commission on Human Rights, said it could take 10 years to develop a clean judiciary to apply corporate as well as criminal law.

"Many fail to realize that restructuring the financial sector without restructuring the judiciary will end in failure," he said.

"Indonesia is suffering from an institutional vacuum," the Political and Economic Risk Consultancy Ltd of Hong Kong told corporate clients in a report six months ago. Based on the example of the Philippines, where the collapse of the Marcos regime in 1986 has some parallels, "it will take at least another five years for Indonesia to rebuild its national institutions to basic functioning levels," the report said.

Since Mr Wahid became Indonesia's first democratically elected president in October and appointed his government, there have been a number of significant moves to develop a system of institutional checks and balances. The Parliament, with a new crop of lawmakers elected in June, has ceased to be a rubber stamp for the executive.

Civilian control over the military has been increased. Many of the appointees to key institutional positions made by Mr Wahid are widely acknowledged to be people of integrity. The judiciary is slowly being reformed. The power of the presidency itself has been clipped and is set to be further reduced by the Parliament.

But critics said that Mr Wahid's inconsistency and divisions within the cabinet -- comprising 35 ministers from at least seven political parties, the military, the regions, and civic groups -- were raising concerns about the effectiveness of the government and its reform programme. The formal replacement on Thursday of Glenn Yusuf as chairman of the powerful Indonesian Bank Restructuring Agency by Cacuk Sudarijanto has caused doubts in the market.

Analysts noted that Mr Wahid had moved decisively to consolidate his control over the country's economic affairs by appointing two close associates to head the restructuring agency and the state-owned power company this week.

The reconstruction agency controls 600 trillion rupiah ($84.3 billion) in equity and debt. It is central to rebuilding the banking sector and resolving Indonesia's $80 billion private debt burden.
 

Arms/Armed forces

Security spending raised

Jakarta -- The Indonesian government on Thursday asked parliament to approve a 10.5 percent rise in overall defence and security expenditure, but a 71.9 percent cut in development spending for the armed forces.

The armed forces sub-sector will see its development budget drop from 1.5 trillion rupiah in the current budget to a mere 415.4 billion rupiah, documents on the new draft budget showed.

The new budget covers the nine-month "transitional" fiscal year from April through December 31, 2000. The armed forces payroll does not fall under the the development budget.

The armed forces is one of four subsectors of the defence and security budget, which as a whole would see defence and security spending rise 10.5 percent during the nine month period, the documents showed.

The rise -- in the "support sub-sector" which had its development budget raised by almost 500 percent to 1.3 trillion rupiah -- will bring spending in the whole defence and security sector between April 1 and December 31 to 1.9 trillion rupiah.

There was no accompanying description of what the support sector covered, though it was believed to cover logistics and training.

The police, which received no development budget in the current fiscal year which ends March 31, was given 127 billion rupiah in the 2000 budget year.

The sector covering civilian militias and civil protection saw its development budget this year cut by 24 percent to six billion rupiah.

The government of President Abdurrahman Wahid had been striving to return the military to the defence sector and gradually wean them from their influential non-defence role in the country's politics.

The defence and security sector was one of the three sectors which saw a raise in the new budget.

The tourism, post and telecommunication sector had its budget allocation raised by 4.5 percent to 719.8 billion rupiah, while the sector of regional development and transmigration saw its budget go up by 52.3 percent to 16.6 trillion rupiah.

UK minister defends arms sales

John Aglionby, Jakarta -- The foreign office minister John Battle yesterday defended the resumption of British arms sales to Indonesia in spite of the rapidly escalating social unrest, a divided military and warnings from other countries.

He urged the world to dispel its long-held view of Indonesia as an unstable, military-controlled state and to welcome the emerging democracy into the international fold.

Mr Battle said after two days of talks with Indonesia's President Abdurrahman Wahid and government officials in Jakarta that it was time to get rid of outdated and antiquated views on Indonesia.

"It is not commonly understood internationally that there is a new president elected, that there are new ministers, that there's a programme of reform, and my view is that the government needs to be underpinned in that programme of reform," he said.

In such circumstances, and in the light of Indonesia's withdrawal from East Timor, he said, there was no reason to reimpose the European Union arms embargo against Jakarta.

"The situation in East Timor has changed massively," he said, referring to circumstances four months ago, when the embargo was imposed. "The TNI [Indonesian military] are not in East Timor, thankfully, and the situation is different. What we're talking about now is a new government that has to cope with the legacy of what went on there."

However, he stressed that there would be "no free flow through of arms and no questions asked tomorrow", because both the EU and Britain had strict codes of conduct regarding arms exports to Indonesia.

"The international community is not going to go away," he said. "It's going to watch the situation and see how the government handles it. It's going to be a case by case basis."

Britain is one of the biggest arms suppliers to Indonesia. In 1998 Britain exported arms worth 73 million Pounds to Indonesia. In order not to lose future busi ness, British diplomats and arms dealers have regularly courted Indonesian dealers and generals during the embargo period when all links were supposed to have been broken.

The Dutch foreign minister, Jozias van Aartsen, who is also in Jakarta, said that when he reports on Indonesia to the EU council of foreign ministers next Monday, "without any doubt there will be a very positive outlook".

Neither referred to the current state of the military which, after decades as the country's most powerful political force, is now deeply divided over its future role. There is speculation that some generals, particularly those threatened with prosecution over their involvement in East Timor, are plotting a coup.

It is widely accepted that barely half of the armed forces support President Abdurrahman and his reform programme.

Mr Battle met only one general in Jakarta, the mines and energy minister, Bambang Yudoyhono, who no longer has hands-on control of any troops. Mr Van Aartsen sidestepped questions about whether he trusted the military to respect the civilian government's reform programme. However, with more than a quarter of the country affected by social unrest that the military appears unable to control, Washington is still worried about the situation and refuses to lift its arms embargo until the generals are brought completely to heel. Many other western diplomatic missions in Jakarta share their concern.

One diplomat said it was "pretty irresponsible" of Mr Battle and Mr Van Aartsen to make judgments without consulting the military high command or considering many other factors.

"The place is in a mess and what is more frightening is that we don't know how bad a mess it is," he said. "The military is even more splintered than it was a year ago, access to this cabinet is worse than to the last cabinet and ministers are running scared and keeping their heads down because they don't know what the president is going to say next."

Divisions increasing in military

Max Lane -- For the first time since 1974, a public split has emerged within the Indonesian army's top generals over how best to preserve the political authority of the Indonesian armed forces (TNI). The split has been provoked by the inquiry, launched by the Indonesian National Commission for Human Rights, into the events in East Timor that followed the August 30 referendum.

The commission's inquiry is headed by the outspoken human rights lawyer Munir, who led the campaign which exposed the military's role in the kidnapping and disappearance of student activists in 1998 and 1999.

The inquiry has revealed the extent to which the TNI organised the militia that terrorised East Timor before and after August 30. To date, it has confirmed that militia gangs, such as Aitarak (headed by the murderous Eurico Guterres), Besi Merah Putih and others, were installed as the official civil militia in East Timor and, as such, were organised, funded and directed by the Indonesian government.

The inquiry also stated its opinion that the "Ganardi document", which set out a scorched earth plan should Jakarta lose the August 30 referendum, was a genuine document. The commission questioned Ganardi, a Department of Home Affairs official, who claimed that the document and his signature were forgeries; the Commission was not convinced.

Throughout the inquiry, the generals who have been hauled before the commission have claimed that it was impossible for them to bring "spontaneous" activities under control and that no violence was planned by the TNI.

An interim statement by the commission explained its view that the TNI, including coordinating minister for political and security affairs General Wiranto, was guilty of, at the very least, crimes of omission in East Timor. The commission believed that charges against the officers should be seriously considered. However, the commission cannot itself prosecute Wiranto or any other generals; only the Wahid government can make such a decision.

The uncompromising nature of the questioning from Munir and other commission lawyers has provoked a publicly hostile response from military spokespeople. In November, General Sudrajat, spokesperson for Armed Forces Headquarters, stated that the TNI's soldiers "would be angry if their generals were treated roughly".

General Agus Wirahadikusumah, a regional commander in eastern Indonesia and a well-known critic of current TNI policy, publicly rejected Sudrajat's claim, stating that TNI soldiers' loyalty was not to individual generals but to the TNI and the state as a whole.

The dispute between the Wiranto-Sudrajat camp and Wirahadikusumah has stretched into other areas as well. Wirahadikusumah also made a statement to a parliamentary inquiry that the territorial command structure of the TNI should be dismantled. The territorial command structure mandates the deployment of military command posts and detachments at all levels of the civil administration: provincial, district, sub- district and village. This structure provides the organisational framework for the TNI to act as a political security force throughout society and has, therefore, so far been considered sacrosanct.

Sudrajat and others in the Wiranto camp immediately responded, stating that Wirahadikusumah was presenting his personal views, not TNI policy.

Wirahadikusumah has maintained his public stance on this issue and has found some support from other generals and retired generals.

There has even been public discussion of the possibility of a military coup. In November, Sudrajat made a statement that, under the Indonesian constitution, the president was not the supreme commander of the armed forces but only their political head. This statement was also rejected by figures associated with Wirahadikusumah. While Sudrajat's statement started a discussion about a possible TNI coup against Wahid, it was more likely a move to try to restrict Wahid from making military appointments.

By January 14, in the midst of intense speculation that President Wahid may sack Wiranto, Wirahadikusumah felt confident enough to state that Wahid need not fear worsening relations with Wiranto, because Wiranto's influence in the TNI was no longer significant. In the same conversation with journalists, Wirahadikusumah also stated that there was no possibility of a coup. "The TNI cannot even solve Ambon", he said.

Wirahadikusumah's riposte came two days after Sudrajat himself said that the TNI would have no objections if Wiranto was "reshuffled" out of the Cabinet. Sudrajat's statement has not saved him, however, as he was sacked from his position as head of the Armed Forces Information Centre on January 14.

As Wiranto's fortunes in the government have slowly waned, there appears to have developed an alliance between the Wiranto forces and the most right-wing elements among the Islamic political organisations. The Indonesian Mullahs Assembly issued a statement on January 11 calling for the abolition of the National Human Rights Commission and for the disbanding of non-government organisations for "upholding double standards regarding the interests of the Islamic community".

Right-wing Islamic leaders called for 2 million people to mobilise on January 9 to demand the resignation of President Wahid for not protecting Islamic interests in Ambon. The rally, which was rumoured to be backed by Wiranto, mobilised only 10,000 people. A call for all Islamic parties to unite also met with only lukewarm support from key Muslim politicians. Wahid was able to laugh off the protest as a failure.
 

Economy & investment

Ambitious push for change

Tim Dodd, Jakarta -- President Abdurrahman Wahid expects his first Budget, which tries to meet a multitude of conflicting economic challenges, to return Indonesia to pre-crisis growth levels of 6-7 percent within five years.

Its key change is an ambitious reform of the notoriously inefficient and corrupt taxation system which aims to cut exemptions, streamline administration and combat fraud.

These measures, with a rise in excise on cigarettes, are planned to boost tax revenue by 30 percent compared to the Budget last year and give enough fiscal leeway to cope simultaneously with the debt hangover from the economic crisis and the cost of introducing economic and political reform.

The Budget also takes advantage of a revenue windfall from the high world oil price which has boosted the Government's oil and gas revenue by 135 percent compared to the previous Budget. The 2000 Budget will increase revenue to 15.1 percent of GDP, compared to 10.6 percent last year.

Although the extra revenue provides a welcome cushion, it is, according to the senior economics minister, Mr Kwik Kian Gie, a "survival Budget", although it does assume healthy economic growth of 3.8 percent this year.

The big drag is interest on government debt which now includes funds to recapitalise the banking system. Interest costs are estimated to increase by 44 percent over last year that is 6.5 percent of GDP this year, compared to 4.5 percent last year.

The Government has to meet the costs of other programs essential to keeping Indonesia stable. Allocations to the regions are up by 26 percent, based on a new formula which rewards provinces rich in natural resources. It is aimed at quelling separatist feeling in Aceh, Irian Jaya (now called Papua), Riau and East Kalimantan all big winners under the new formula.

But the Government is already sliding away from one key goal, to increase the woefully low salaries of officials to help remove the temptation for corruption.

It has budgeted for a 16 percent increase in salary costs this year, which would pay for a 20 percent pay rise delivered in two stages. Higher increases were to be given to senior officials and the judiciary but an outcry about rises that would have flowed to ministers, and to the President, yesterday prompted the Government to allow Parliament to determine the distribution.

However, the Government is reducing spending by cutting subsidies for goods including electricity and some staple foods.

Successful implementation of the Budget strategy depends on inflow of foreign investment and a return of much of the Indonesian capital which left during the Asian crisis.

If the strategy works the Budget deficit, estimated to be 5 percent of GDP this year, will be balanced by 2004. And government debt, which is now 100 percent of GDP, will reduce to about 65 percent by 2004. The Budget covers nine months, from April to December, because the Budget cycle has been realigned. The Budget and news of a new economic reform agreement between the Government and the IMF helped push the Jakarta stockmarket up 2.2 percent yesterday.

Budget fails to meet provinces' demands

Jakarta -- Indonesia's new Government unveiled its first Budget yesterday with pledges to reform the bankrupt banking sector. But it shied from granting the country's independence- minded regions more control over their finances.

The budget forecasts the first significant economic growth since 1998, when the Asian financial crisis devastated Indonesia's corruption-ridden economy.

President Abdurrahman Wahid, who took office in September, expressed confidence in the economic recovery. "We expect this will become the stepping stone for higher growth in the coming years," he told MPs. "I am confident that Indonesia will be able to play a key role in the world's economy."

The budget did not provide expected increases in revenues for the provinces, although future moves to give the regions greater control over how they spend their own funds as well as money received from the central government have been flagged.

Several provinces, especially the oil-rich western region of Aceh, have demanded a greater share of the revenues generated on their territory.

In a bid to appease separatist tensions, the Government earlier said it would eventually allow provincial authorities to keep up to 75 percent of their earnings. This would first be done with the resource-rich provinces of Aceh, West Papua, Riau and East Kalimantan.

Vice-President Mrs Megawati Sukarnoputri, who presented the budget to parliament, said gross domestic product would grow by 3.8 percent in 2000. No increase was recorded last year, and the economy contracted by 14 percent in 1998.

The $US25.4 billion budget forecasts a deficit of 5 percent of GDP, down from an expected shortfall of 6.8 percent for the current budget year.

Higher government revenues will be driven mainly by greater oil and domestic tax incomes. The higher oil prices are a mixed blessing for Indonesia, because they raise the cost of energy subsidies.

The International Monetary Fund has asked Indonesia to phase out its generous system of subsidies. But the IMF has not made this a priority because a sudden cut could spark unrest.

Ms Sukarnoputri said revenues from oil and domestic taxes and asset sales would be used to finance the burden of restructuring the banking system, which collapsed during the economic crisis. Bankrupt banks have been taken over by the state restructuring agency, which is gradually recapitalising and selling them.

Indonesia's National Family Planning Board (BKKBN) has reportedly staked a claim to part of the millions of dollars held in the coffers of a charitable foundation set up by former president Soeharto.

The Jakarta Post quoted BKKBN chief Mr Khofifah Indar Parawansa as saying that at least one billion rupiah ($21.5 million) was owed to the board's field workers under the charter of the Dana Sejahtera Mandiri Foundation.

Mr Soeharto willed the Mandiri Foundation -- and several others he set up during his 30-year rule -- to the Government after he stepped down in May 1998.

In the Soeharto years companies and individuals and companies with after-tax annual earnings of more than 100,000 rupiah were required to donate 2 percent to the foundation. The rupiah was then 2,400 to the US dollar, compared to about 7,000 today. In 1999 the foundation was reported to have collected revenues of some 1.5 trillion rupiah ($324 million).

"It is clearly stipulated in the memorandum of agreement which was signed in 1996 that the foundation should donate half of the 6 percent interest that was imposed on its customers to the field workers," Mr Parawansa said.

"But so far the foundation has not fulfilled this obligation." BKKBN research and development chief Mr Pujo Raharjo said: "Maybe we will have to seek legal action if the foundation keeps ignoring our demand." But he added that the 1996 agreement did not include a time frame for the payments to the board's field workers.

The BKKBN has been working to reduce the high birth rate in Indonesia, the world's fifth most populous country, through programs promoting safe sex, family planning education and vasectomies.

Agency fires salvo in Astra battle

Andrew Marshall, Jakarta -- Indonesia's powerful bank restructuring agency went on the offensive on Tuesday in the battle over control of the country's largest automaker, Astra International, launching a bid to change the firm's management.

The Indonesian Bank Restructuring Agency (IBRA), which holds around 40 percent of Astra, said it wanted an extraordinary meeting on February 8 to consider management changes and review plans for a share issue which would dilute existing holdings.

The announcement was the latest salvo in IBRA's struggle to sell its stake to a group of foreign investors in the face of opposition from Astra management.

"IBRA has worked with the board of directors to achieve a mutually beneficial strategy ... to dispose of its Astra stake in a timely, transparent and value-maximising manner. IBRA may seek to replace directors at the EGM ... to install directors that will help promote corporate transparency and cooperation," it said.

IBRA is Indonesia's most powerful economic entity. It controls some 600 trillion rupiah ($83 billion) in equity and debt and is central to the most fundamental objectives facing Indonesia -- rebuilding the banking sector, restructuring the country's massive debt burden and attracting investors.

The agency styles itself as a "one stop shop" for foreign investors -- it controls assets in almost every sector of the economy and aims to sell them off over coming years.

So the sale of its Astra stake -- one of the jewels in its portfolio -- is a test case, closely watched by investors. But so far, things have not been going well.

A test case for Indonesia

IBRA announced last month that a group of investors led by Gilbert Global Equity Partners (GGEP) and Newbridge Capital had been selected as the preferred bidder for its 40 percent stake, and would conduct due diligence on the Indonesian firm.

But negotiations with Astra's management have turned increasingly acrimonious. Astra refused to answer hundreds of detailed questions from GGEP/Newbridge, saying the information requested was sensitive and could be used by competitors.

The investor group accused Astra of withholding information and blocking due diligence, and said Astra's actions could scare off other foreign investors.

The issue of foreign buying of Indonesian assets is a thorny one. Nationalist politicians say foreign firms should not be allowed to scavenge crisis-hit Indonesian assets at low prices, and asset sales should be on hold until recovery begins.

Their critics say there cannot be recovery without foreign investment and the sale of distressed assets, however cheaply.

Nationalist sentiment has already scuppered much of the country's privatisation programme, and was stirred up again by a damaging battle over the sale of Bank Bali.

IBRA's efforts to sell a stake in Bank Bali to British-based Standard Chartered are in tatters -- StanChart withdrew from agreements to manage and invest in Bank Bali after finding itself embroiled in an Indonesian political scandal and facing protests by disgruntled Bank Bali staff.

IBRA aggression may backfire

The government this month installed former Telkom president director Cacuk Sudarijanto as new head of IBRA with instructions to speed up asset sales and debt restructuring.

Analysts say IBRA's aggressive stance on Astra is a signal that Cacuk will push ahead with asset sales and deal sternly with recalcitrant companies. But they warn the move may backfire.

In picking a fight with Astra, IBRA has chosen a tough opponent. The company is regarded as one of the best managed in Indonesia, and chief executive Rini Soewandi is liked by the market and politically well-connected.

The market reacted unfavourably to IBRA's move -- Astra shares were down 3.8 percent at 3,750 rupiah at 0300 GMT.

Analysts said IBRA was unlikely to succeed in pushing through a major management change, but may get a representative on to the management board.

"While this should facilitate greater access to detailed information...IBRA must also take careful steps so as not to undermine investors' confidence, given that a major change in (management) could cause changes in the company's existing business strategy," said Ferry Yosia Hartoyo, head of research at Vickers Ballas in Jakarta.

Analysts say there is a widespread belief in Indonesia's corporate community that IBRA is being unfair on Astra. Many have criticised the process for selecting the preferred bidders, and the level of information the bidders are demanding from Astra.

If the stake sale collapses, the consequences for Indonesia's economic recovery will be dire. But, analysts say, if IBRA treats Astra unfairly in its determination to speed up asset sales, the company may gain enough ammunition to fight back successfully, hammering another dent into IBRA's tarnished credibility.