• East Timor braces for turmoil - Associated Press
• Soldiers want compensation for Timor exit - Sydney Morning Herald
• Militias' words of fear strand Timor refugees in camps - Washington Post
• Home away from home as nervous wait goes on - Sydney Morning Herald
• People put off by scare stories - South China Morning Post
• Timorese angered over UN jobs deal - The Melbourne Age
• Final parade for Dili killers - The Australian
• Keating again berates PM over Timor - The Melbourne Age
• Untrained Timorese must build a nation from scratch - Washington Post

• Call to allow communism - Straits Times
• Megawati re- elected as PDI-P chief - Straits Times
• Charisma is not enough, say Megawati's critics - Straits Times
• Wahid lashes out at his cabinet in public - Jakarta Post
• Gus Dur for direct polls for president - Straits Times

• Two hurt in rebel attack on Aceh airport - Agence France-Presse
• Seven killed in Aceh violence - Agence France- Presse
• Medan authorities ban Aceh people's congress - Jakarta Post
• Market razed after stabbing - Agence France-Presse

• Poet Wiji Thukul confirmed missing - Kompas

• Jakarta delays fuel hike to avert unrest - Straits Times
• Indonesia coup controversy fueled - Associated Press
• 'Ailing' Soeharto digs in - Sydney Morning Herald
• Illegal immigrants riot at holding centre in Johor - Agence France-Presse
• Indonesia to hand out $112m in subsidies - Straits Times
• Bob Hasan held in graft probe - Straits Times
• ICW blasts Wahid's record in handling corruption cases - Indonesian Observer
• >Three generals involved in 1984 shooting identifie - Agence France-Presse
• Defence expert: claims of spy flights `a smear' - The Melbourne Age

• Indorayon shut down for environmental damage - Antara

• US on path to restoring military ties to Indonesia - International Herald Tribune
• Indonesia re-thinks US military ties - Stratfor
• Superficial and real reforms in TNI - Jakarta Post
• Jakarta to cut dependence on US for arms - Straits Times

• Indonesia says it consulted IMF on delay in price hikes - Agence France-Presse
• Indonesia races to meet IMF economic deadlines - Straits Times
• Tax collections exceeds target - Jakarta Post
• Sulawesi farmers to quit growing rice - Jakarta Post
• Rupiah tumbles on concern over IMF loan delay - Business Times
• IMF warns Jakarta on fuel price hike - Mandiri
• IBRA to issue bonds to bail out ailing companies - Jakarta Post
• In Indonesia, is success the enemy? - International Herald Tribune

Thousands descend on parliament

Esther Permatasari, Jakarta -- Around 2000 students from the National Student League for Democracy (LMND) and 5000 workers under the banner of the Indonesian National Front for Labour Struggle (FNPBI) are presently preparing to pack out the national parliament building.

The chairperson of LMND, Muhammad Sofyan, said that around 2000 students going to the parliament would be coming from three points, Salemba, Slipi and Lenteng Agung.

"Our demands are that the fuel price increases not just be delayed but canceled. Aside from that, education subsidies should also not be abolished but increased", said Sofyan at the parliament building on Jl. Gatot Soebroto, South Jakarta on Saturday.

Meanwhile, the president of FNPBI, Dita Sari, said that today they had mobilised around 5000 workers to fulfill their demands, asking that the government cancel the fuel price increases not delay them.

LMND and FNPBI both also said that on Sunday, tomorrow, they will hold a "long march" to the presidential palace. And this evening they planned to sleep over in the parliament building.

LMND has already raised a flag at the parliament building on which is written "IMF neo-imperialism is the source of the disaster, go to hell".

Translated by James Balowski.]

Price rise demonstrations go ahead

Jakarta -- Although on Friday the government delayed the price increase of fuel, thousands of high school, university students and workers went ahead with a demonstration on Saturday. They were protesting the government policy on fuel, electricity the regional minimum wage and [high-ranking civil service] wage increases.

The demonstrators arrived at the national parliament, gave speeches and unfurled protest banners. They came from the Indonesian National Front for Labour Struggle (FNPBI), the Workers Committee for Reform Action (KOBAR), the Indonesian Workers Prosperity Union (SBSI), Indonesian Tionghoa Youth Solidarity for Justice (Simpatik), the National Student League for Democracy (LMND) and Anti Fascist and Racist Action (AFRA).

They called on the government and parliament to cancel the price rises on fuel and electricity. "We want them canceled, not delayed", the group charged. They also demanded that the government increase the regional minimum wage of workers from 25 percent to 100 percent. This was because the prices of goods have now risen around 200 percent.

Aside from this, they also demanded that the government cancel the wage increases for high-ranking civil servants. They agreed with wage increase for low-ranking civil servants. For the soldiers and police, the demanded a wage rise only for the lower ranks and non-commissioned officers.

In her speech, Dita Indah Sari, the president of FNPBI, said that the government policy [to increase prices] which was agreed to by the parliament was not on the side of the people.

Translated by James Balowski.]

Violence taints protests near Soeharto residence

Jakarta -- Violence marred protests against the controversial fuel price hike and former president Soeharto on Saturday.

One protest, held a few meters from the residence of Soeharto, degenerated into a clash when some 500 protesters tried to break through a cordon of police officers on Jl. Suwiryo in order to reach Soeharto's residence on Jl. Cendana in Menteng, Central Jakarta.

Two protesters suffered serious injuries in the clash. Police identified the two as Edward, 24, a former student at Indonesian Christian University who resides on Jl. Melati in East Bekasi, and Aep Saifudin, 17, a high school graduate who is now a street singer. "Both suffered serious head injuries and slight facial injuries," a source at the city police medical center said.

After releasing Pos Kota daily photographer Timyadi, who was mistaken for a protester, police officers ordered reporters out of the area.

Separately, Central Jakarta Police chief of operational control Maj. Ricky F. Wakanno said six police officers, five of them members of the elite Mobile Brigade, were wounded during the clash on Jl. Suwiryo. He accused students from the City Forum (Forkot) of provoking the clash. "They, especially those in the left-wing (Forkot), started to provoke my officers by throwing stones and other objects at about 5.15pm. They also came prepared with sticks spiked with nails," he said.

"We brought two protesters to Jakarta Police Headquarters for questioning," he added. At about 3pm, some 150 students, mainly from the private YAI University, gathered at Teuku Umar fountain near Jl. Suwiryo, which leads to Jl. Cendana. At one point, Ricky told his officers to put away their rattan sticks and told students the police would escort two of the protesters to Soeharto's residence to meet with the former president as guests. This offer was rejected by the students.

At about 4.30pm, some 400 members of Forkot arrived at the scene in 15 buses. With some of the students carrying Molotov cocktails, the protesters marched toward the police officers and attempted to break through the cordon. Police fired tear gas and the protesters immediately dispersed, scattering in different directions.

In a separate protest, hundreds of students and workers gathered in the House of Representatives compound on Jl. Gatot Subroto in Central Jakarta at around 11am to demand the fuel subsidy be maintained. The government decided to delay the fuel price hike planned for April 1 for an unlimited period of time.

"The government must cancel its plan to revoke the subsidy," an activist, Dita Indah Sari, told the protesters. She also blamed the International Monetary Fund for forcing the Indonesian government to cancel the subsidy. The protesters also demanded a 100-percent hike in minimum regional wages for low-ranking employees, soldiers and police officers.

Outside of Jakarta, protests were held in cities across the country on Saturday, mostly demanding the planned fuel and electricity hikes be canceled, not merely postponed.

In Makassar, the capital of South Sulawesi, thousands of students from several universities, including the Indonesian Muslim University and Hasanuddin University, and members of the Democratic People's Party (PRD) hit the streets, burning tires and waving posters carrying slogans such as "Total removal of fuel and electricity hikes" and "Delay of hike not enough".

In Lampung, some 200 protesters gathered at the Lampung branch of Radio Republik Indonesia on Jl. Gatot Subroto in Pahoman, Bandar Lampung. The protesters demanded the station allow them to go on the air with their objections to the electricity rate and fuel price hikes.

Similar protests were staged in the North Sumatra capital of Medan, where hundreds of locals and students from Nomensen University, North Sumatra Muhammadiyah University and the Student-People Action Front expressed their objections to the planned hike.

In Surabaya, about 200 students from the National Student Institute for Democracy set up tents in Governor Soerjo Park, where they demanded plans for the fuel and electricity hikes be canceled.

Protests also were held in Bandung, West Java, by students from the Bandung Student Front and National Democrat League, along with the All Indonesian Workers Association and Anti-Fascist Front. According to rumors here, students will stage a mass protest on Monday and Tuesday to protest the planned hikes.

In Yogyakarta, students from the Indonesian Muslim Student Association gave speeches in front of Gadjah Mada University, urging President Abdurrahman Wahid not to bow to foreign interests in raising electricity rates and fuel prices.

Indonesian capital sighs with relief; few protests

Jakarta -- The Indonesian capital, put on top security alert in anticipation of planned massive demonstrations against fuel price hikes, was essentially quiet Saturday except for a brief clash involving students calling for former president Suharto to be tried for corruption.

In the only case of violence reported for the day, some 200 students of the militant City Forum clashed briefly with anti- riot police near the residence of Suharto in an upmarket residential area in Central Jakarta.

At least five tear gas cannisters were fired after the protestors became violent and had begun to beat the police's shields with sticks and pelt them with stones.

Carrying posters and banners demanding Suharto's trial, the students could only approach a roundabout some 300 metres from the residence as about 100 police in anti-riot gears, mostly with shields and sticks, blocked their advance. There were no serious injuries reported and the students withdrew from the scene shortly after the clash.

Meanwhile at least 500 students and workers from the People's Justice Committee, protested peacefully at the empty parliament building, with just a couple of policemen on standby, mostly to guard against vandalism.

The Committee, a gathering of student, workers and rights groups, protested rises in electricity, tranport and telephone rates, an uneven increase in civil servant allowances and rejected a cut in education subsidies. By dusk, the protestors were still chanting march songs, interspersed with yells, on the massive external staircase of the parliament building.

Indonesian Police had put the capital under top alert status after student groups and non-governmental organizations threatened to mobilize thousands of people to protest the increase in fuel prices. But at the eleventh hour, Indonesian president Abdurrahman Wahid announced the government was postponing price increases.

Police declare high alert status to face mass rally

Jakarta -- Jakarta Police chief Maj. Gen. Nurfaizi said on Friday the capital would be on high alert from Saturday through until the end of April.

"Waspada I [high alert] will be declared on Saturday, considering that mass protests are reportedly scheduled from Saturday onward. The alert will remain until the end of April," Nurfaizi said while addressing a meeting of about 4,000 police officers at city police headquarters on Friday morning.

The 4,000 officers will be posted throughout the city to secure the capital. "I call on all officers, particularly those of the patrol units and the elite Police Mobile Brigade (Brimob) force to deal with protesters in a sympathetic manner. Try to engage the protesters in a persuasive dialog." Nurfaizi also ordered all his personnel at the Jakarta Police to manage any protesters without using antiriot equipment.

"Do not use your helmets, your shields, your batons or your guns. That is the only way we can show these protesters that we are not there to fight them, but to secure the capital," he said.

National Police chief Lt. Gen. Rusdihardjo said the high alert was essential to make sure that no political or other elements interfered with the peoples' daily activities. "I want city residents to stay calm and safe. We'll make sure of that beginning tomorrow [Saturday]," Rusdihardjo said after addressing a ceremony marking the establishment of the National Narcotics and Drugs Coordination Agency at the National Police College in South Jakarta later in the afternoon.

Although the government has canceled its plan to raise fuel prices, student and labor organizations insisted on Friday they would continue with their plan to organize street protests on Saturday. "There is no change to our plan to stage a protest on Saturday. We demand the government revoke the policy, not just postpone it," said Dominggus Octavianus, head of the education division of the National Front for Indonesian Labor Struggle (FNPBI).

He said the protesters would add another issue to the planned protest on Saturday. "We'll also demand the government increase the regional minimum wage (UMR) from the planned 25 percent as of April 1 to 100 percent," Dominggus told The Jakarta Post by phone. He said workers could not afford proper daily expenses if the government only raised minimum wages by 25 percent. "With a 25 percent increase, the workers can only afford to meet 54 percent of their minimum needs," he said.

Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie said on Thursday the government would go ahead with its plan to raise fuel prices. However, the government's stance changed on Friday as President Abdurrahman Wahid announced the plan's delay. The President said the government was unprepared to launch the fuel subsidy mechanism for poor families.

FNPBI, along with six other student and labor organizations grouped under the People's Committee for Justice, held a media conference on Thursday, disclosing a plan to conduct a massive protest, involving some 10,000 protesters on Saturday.

A different group of student protesters, City Forum (Forkot), had yet to confirm its stance over Saturday's protest. "We're still discussing Saturday's planned protest," said Mixil of Forkot. The group earlier canceled its plan to stage a protest on Friday after hundreds of its members were involved in a clash with security personnel on Thursday, after staging a protest near former president Soeharto's residence in Menteng, Central Jakarta.

Achmad Nizar, another Forkot activist, said on Friday the group had planned to stage a protest against fuel price rises on Saturday, but the government's latest decision had made them reconsider the plan.

Meanwhile, the Democratic People's Party (PRD) might be absent from Saturday's protests. "We don't yet have a plan to join the protest," party chairman Budiman Sudjatmiko said.

Dominggus lashed out at the government for its hasty decision to cancel the fuel price hike, saying it was part of an effort to stifle the people's resistance to it. "The government should not make a decision only by observing the people's psychological state, but it should also take into account the people's economic abilities," he said.

The government's decision, however, won the support of Budiman. "The government is apparently aware that people are not ready to accept the hike now," he told the Post by phone. Budiman said the hike would be accepted if economic conditions improved.

Proposed security law sparks opposition

Pip Hinman -- Indonesian House of Representatives speaker and Golkar faction leader Akbar Tandjung wants the Abdurrahman Wahid government to ratify the draconian security law which was pushed through a depleted parliament during the last hours of the B.J. Habibie government on September 24.

The law was not ratified then due to the tens of thousands of people who massed outside the national and local parliaments across Indonesia.

The Law of Dealing with a Dangerous Situation (RUU PKB), presented by General Wiranto last year, would allow the president and regional and provincial governments to declare a state of emergency anywhere in the country. It also gives the military enormous powers of arrest and detention, as well as total control over the postal and telecommunications systems during states of emergency.

Human rights activists say that the push to get the security law ratified now relates to the government's subsidies cuts to basics such as fuel and electricity, which comes into effect on April 1. Also scheduled for April 1 are mass demonstrations organised by students, workers and the People's Democratic Party (PRD).

Hendardi, chairperson of the Legal Aid and Human Rights Association, and Munir, from the Committee for Missing Persons and Victims of Violence (Kontras), told the Jakarta Post on March 23 that the government should junk the bill. They described it and the 1959 State of Emergency Law as "poison to the people" and designed to repress public demonstrations.

Last year's mass protests prompted leaders of the main political parties then struggling to form the new government, including Megawati Sukarnoputri of the Democratic Party of Struggle, Amien Rais from the National Mandate Party and Wahid from the National Awakening Party, to commit themselves to opposing the law. Just six months later, one of Wahid's closest advisers, Dewi Fortuna Anwar, said that such a security bill was needed to regulate military deployment in a state of emergency. She told the Jakarta Post, "The bill was rejected not because of its content but because it was proposed by the military, whose image was badly tarnished".

Fuel price protest gets violent

Jakarta -- Indonesian police fired tear gas during clashes yesterday with protesters against a planned weekend increase in fuel and electricity prices.

The clashes occurred a short distance from the house of former President Suharto, who earlier in the day failed to turn up for questioning about alleged corruption.

Several hundred protesters gathered at parliament to protest against the fuel price rises, due to take effect tomorrow and one of the reforms demanded by the International Monetary Fund under an aid package for Indonesia.

Chanting "Cancel the hike!" more than 500 students flocked into the parliament building, demanding to see Speaker Amien Rais. The protesters then suddenly began heading for Mr Suharto's house in the posh Menteng district.

Some 200 students from the City Forum, who had protested at the parliament against the planned fuel price hike, rode on buses towards Mr Suharto's residence but they were blocked by anti-riot police at a roundabout some 300m short of the house. The students carried banners demanding that Mr Suharto be dragged to court and others labelling the 78-year-old former head of state as a "big corruptor".

Angered by the thick cordon of policemen blocking their way, some of the students began throwing stones at the security forces, who responded by firing tear gas cannisters. At least two policemen were slightly injured, one with a bleeding head and another with a cut leg, an AFP photographer at the site said. The students were quickly forced back by the police.

The military and the police have been gearing up in anticipation of major protests over the price rises. The government insisted yesterday it was set to raise fuel prices tomorrow despite concerns of some lawmakers.

Indonesia's chief economic minister Kwik Kian Gie said there would be no delay to the planned rise despite lawmakers' concerns. "Until today it is still going to happen and subsidies will be given to poor sectors of society," Mr Kwik was quoted as saying by the official Antara news agency.

The average 12 per cent increase is one of the economic reforms agreed with the IMF in Indonesia's last letter of intent. Indonesia's parliament called for the delay of the fuel price hikes. On Wednesday, the head of parliament's Energy Commission, which must be consulted on the rises, said it would delay them unless certain conditions relating to its effect on the public were met.

Electricity and fuel prices are highly sensitive issues in Indonesia. Jakarta's last bid to raise fuel prices in May 1998 helped spark a wave of unrest which was one of the factors that toppled the then president Suharto after 32 years in power.

Student, workers plan huge fuel price protest

Jakarta -- Seven student and labor organizations have vowed to bring some 10,000 people to the streets on Saturday to protest the government's plan to raise fuel prices the same day.

"We'll mobilize at least 10,000 students and workers on Saturday, with the target of occupying the House of Representatives building," Dita Indah Sari, coordinator of the National Front for Indonesian Labor Struggle (FNPBI), said on Thursday in a joint media conference at the office of the Foundation of the Indonesian Legal Aid Institute (YLBHI) in Central Jakarta.

The conference was organized by seven student and labor organizations grouped under the People's Committee for Justice (Kekar), including the FNPBI, the National Students League for Democracy (LMND), the Indonesian Prosperous Labor Union (SBSI) and the Chinese Indonesian Students Solidarity for Justice (Simpatik).

Dita said the groups would welcome other organizations' participation in the protest. "The more people participating, the more pressure on the government," she said.

The House of Representatives building will be empty on Saturday, as its recess starts on April 1, ending May 12. Dita, however, said it was not legislators who were their target, but rather the Abdurrahman Wahid-Megawati Soekarnoputri government. "By staging the protest at the [House] building, we can build public opinion in support of the idea that a hike in fuel prices betrays the people's will," she said.

Dita said Kekar would stage another protest in front of the State Palace in Central Jakarta on Sunday. "We will stay at the House building overnight to build support for the Sunday protest," she said. Asked why they had not held any protests before April 1, SBSI activist Yatini Sulistyowati said, "We have been preparing the protest for a long time. Also, laborers have a half-day on Saturday." Meanwhile, student protesters from City Forum (Forkot) are planning to stage a similar protest on Friday.

"We'll mobilize 3,000 to 5,000 students at the State Palace on Friday to protest fuel price hikes," Mixil, an executive at the loose alliance of student groups belonging to Jakarta's private universities, told The Jakarta Post by phone.

Both groups have yet to obtain permits from the police. "It is not necessary to get a permit. Law no. 9/1998 on the freedom of speech is a legacy of the former president Soeharto era," said Mixil.

In an attempt to anticipate the protest, Jakarta Police chief Maj. Gen. Nurfaizi said the city police would hold a meeting to consolidate police forces on Friday. "The police will not prohibit the protest as long as it's free of violence," city police spokesman Lt. Col. Zainuri Lubis said.

Dita lashed out at the government for its hasty decision, saying raising fuel prices would make the people suffer. "As the production cost of goods will be affected by the fuel price hike, the price of goods will also increase," said Dita. "Students will no longer be able to obtain a good education. And mothers will have to feed their babies food with a poor nutritional value, which will lead the nation to suffer a lost generation," said Dita.

Dita won the support of other speakers in the room, who said the government had acted against the people's will. "Instead of subsidizing people to improve their lives, the government is taking the people's money to pay its debts to foreign donors," said Alex Chandra Ferry from Simpatik.

Indonesia: has democracy been won?

Comment by Max Lane -- Socialists and progressive people face an important challenge in the coming few years to match the "solidarity" the Australian ruling class is extending to the new government of Indonesia and to any new conservative elite who may emerge as rulers in East Timor. Australia's foreign minister, Alexander Downer, was quick to visit Jakarta and invite President Abdurrahman Wahid to Australia and the tentacles of the Australian business and political elite are throughout East Timor.

We face a new challenge in building solidarity with the grassroots radical movement in Indonesia and its struggle for social justice, full economic independence and an end to the danger of military repression. The challenge is to deal with the widespread feeling here, including among students, that the replacement of Suharto by Wahid, the end of the Suharto dictatorship, meant that Indonesian solidarity is not so important anymore.

The problem of dictatorship versus democracy has ended, some think. Perhaps there is a problem of development, they say, but that is best dealt with by the Western NGOs.

For the mass of the Indonesian people, however, the question of democracy remains a desperate question. The change in Indonesia has been a change from the dictatorship of the Suharto clique to a collective dictatorship of the business and political elite.

Status quo government

The Wahid cabinet represents almost all sections of the ruling class, including the political creations of the Suharto-period: GOLKAR, the United Development Party and the Indonesian armed forces. It was these organisations that put Wahid into power. His cabinet also includes the ultra-right Star and Crescent Party, Megawati Sukarnoputri's Indonesian Democratic Party of Struggle (PDI-P) and the traditionalist Muslim Nahdatul Ulama.

The Wahid government came to power through a movement of mass defiance against the Suharto dictatorship which started around 1989 with student and worker protests (suppressed in 1996) and which was escalated by poor, urban, semi-proletarian and petty traders' protests in support of Megawati during 1996-97 (which diminished after the May 1997 elections). There was another leap forward in 1998 with the explosion of student unrest which led to Suharto's downfall.

The political framework for the transfer of power to a new government was the product of a struggle between the various political forces at the head of this mass movement and the political forces of the Indonesian bourgeoisie and petty bourgeoisie, especially those political parties and figures representing the factions of the bourgeoisie who had been excluded from power and the wealth accumulated by Suharto.

This bourgeois opposition, represented by figures such as Megawati, Amien Rais and Wahid, stood at the head of large legal national organisations which had considerable wealth and religious and cultural authority. They also had support from the United States, Japan and western Europe.

The mass movement had not had time to produce a leadership with political authority on a national level. The leadership was divided among local student activist collectives. There was only one well-organised national force, the People's Democratic Party (PRD), which had been struggling under extremely repressive conditions and with most of its well-known leaders in jail.

The struggle between these two forces climaxed in November 1998 when tens of thousands of students and hundreds of thousands of poor semi-proletarians and petty traders mobilised outside a special session of the People's Consultative Assembly to demand that President B.J. Habibie resign and a coalition of the bourgeois opposition and "clean elements" in GOLKAR take power.

In a meeting of Wahid, Rais, Sukarnoputri and the "clean" GOLKAR figure, Sultan Hamengkubuwono, the so-called Ciganjur Four refused the students' call for Habibie to resign and stated that they would contest power through elections.

They also rejected the students' demands for an immediate end to the military's role in politics, arguing that it should be reduced gradually. It was at this point that any significant coalescing of political interests between the student groups or the PRD on the one hand and the bourgeois opposition forces on the other ended.

Even so, nine to 10 years of mass anti-dictatorship struggle, which climaxed in the demand for reformasi total in 1998, had set an agenda for democratic reform that the bourgeois opposition, now in a coalition government with the Suharto-period forces, has been unable to ignore completely.

In fact, the Wahid government has continued the process of implementing changes that mass pressure had already forced upon the Habibie government.

Habibie had passed legislation for multi-party elections, reduced the Indonesian armed forces' representation in parliament, removed serving military officers from civilian posts, withdrawn the most repressive of the labour laws and instituted a UN- supervised referendum in East Timor.

Wahid has now disbanded some extra-constitutional bodies which had already ceased to function under Habibie and finished the process of releasing all the political prisoners. He has had to deal with international condemnation of the Indonesian military's activities in East Timor. General Wiranto has had to resign from the cabinet and the armed forces have new leaders.

Sham democracy

In all capitalist societies, parliamentary democracy contains a massive element of sham: real power resides in boardrooms and only those organisations with money and links to the ruling class get the chance to present their ideas through television, radio and the establishment press. In Indonesia, the sham is even greater.

The Indonesian bourgeoisie and its backers in Washington, Tokyo and London are willing to risk repealing repressive laws and allowing a multi-party system because of two key factors. First, the new Wahid all-party government is taking some of the credit for the reforms forced upon it and its predecessor by the masses. As US assistant secretary of state for East Asia Stanley Roth said recently, "There is a honeymoon period at the beginning. The government will never have greater legitimacy than it has today in the eyes of the Indonesian people to make tough choices."

The more fundamental reason, however, is that establishment of "liberal democracy" in Indonesia is taking place largely in a vacuum of popular organisation.

In 1965, Suharto launched a national campaign of terror and mass murder to disorganise the entire working class and peasantry. At least 1 million people were slaughtered, tens of thousands in public. Hundreds of thousands more were detained for one or two years and more than 20,000 were detained for 10 years without trial.

This mass terror campaign completely smashed all popular organisations that had any tradition of independent mass action.

As a consequence, 35 years later Indonesia still has no large independent worker and peasant organisations. Neither are there any political parties which have mass memberships recruited on the basis of real commitment to a political program or that are capable of sustained mobilisation.

People's leaderships

In the advanced capitalist countries, the problem for the left stems from the trade union and NGO elite's bureaucratic control of working-class organisations. But trade unions exist, are organised and wealthy, and have legal rights. In Indonesia, more legal rights exist now, but the organisations do not.

According to the Indonesian National Front for Labour Struggle (FNPBI), the most militant of the new trade union confederations, there are now 29 independent trade unions. The development of these unions is a major step towards the re-organisation of the working class. But it is just a first step.

Of Indonesia's tens of millions of urban and plantation workers, it is unlikely that even 200,000 are seriously organised into trade unions. The peasantry is without any form of national organisation.

Only two political parties recruit members on the basis of a program and work to integrate their memberships: the PRD and the conservative social-democratic Muslim Justice Party. Both are at an early stage of development. All other parties rely on the charisma of local and national figures, financial patronage, clique networks and religious or cultural ties.

In these circumstances, conceding more formal democratic rights does not represent an immediate political threat to the Indonesian ruling class. But the potential for such a threat to develop very quickly -- for mass, popular organisations to re- emerge -- does exist.
 

East Timor

East Timor braces for turmoil

Heather Paterson, Dili -- East Timor may be heading for renewed political turmoil as its former independence movement -- now relieved of the common enemy that once united it -- begins to crumble, party leaders warn.

Having succeeded in evicting the Indonesian occupiers after 25 years of struggle, the coalition known as the Timorese National Council of Resistance, or CNRT, is now fracturing as its member parties vie for power in the new political landscape.

While some fear such a split could lead to a repeat of the bloody civil war that preceded the Indonesian invasion in 1975, others see the trend as a logical progression to East Timorese democracy.

"The grassroots are very nervous with the notion of the CNRT ending too soon and we go back to the instability of the seventies," said Jose Ramos-Horta, Nobel laureate and vice president of the CNRT.

In an effort to rid the tiny territory of Indonesian occupation, 21 disparate political parties united into the CNRT. Its aim: to kick out the Indonesians and establish an independent state. It largely achieved that goal last September, after East Timorese voters opted overwhelmingly to separate from Indonesia in a UN-sponsored plebiscite.

Though the CNRT is made up of numerous factions, two are dominant: the right-wing Timorese Democratic Union, or UDT; and the leftist Revolutionary Front for an Independent East Timor, or Fretilin. After East Timor's colonial masters, the Portuguese, withdrew in 1975, the two groups engaged in a civil war that Indonesia exploited to justify its invasion.

Ramos-Horta warned that the CNRT could disband at its national congress in August. Fretilin leader Francisco Xavier do Amaral predicted the same thing. Ramos-Horta said there was fear that the fragmenting of the CNRT along party lines would mean a renewal of the bloodshed.

Others seemed willing to take the risk. "If we are going to have a democratic nation, then we must have different political parties," said do Amaral, one of the CNRT leaders.

UDT head Joao Carrascalao said the CNRT's factions will go their own way as soon as the United Nations adopts a new law on political organizations. "When that law on political parties is ... approved, then the political parties will start their activities," he said.

It will be another two years until East Timor gains full independence. The United Nations has a mandate to prepare the territory for self-rule and its officials regularly consult with CNRT leaders on administrative matters. Outside the CNRT there is only one group that has refused to be included under the its umbrella. The nationalist Council for Popular Democracy for the Democratic Republic of East Timor is critical of the CNRT's links to former colonial power Portugal.

"CNRT is a puppet, a manipulated body, set up in Lisbon, imported from Lisbon and imposed by Lisbon," said Cristiano da Costa, the party's chairman. "We don't want to be re-colonized by the Portuguese."

In February, East Timor's political leaders chose Portuguese as the territory's official language, saying they are indebted to their former colonial masters.

The United Nations has not set a date for general elections. But it is generally believed that independence leader Jose Alexandre "Xanana" Gusmao, CNRT's charismatic leader, will become the country's first democratically elected president.

He says it's not a job he wants, but will accept it should it be thrust upon him. "We read about many other failures, many other countries, in which heroes of the struggle became the leadership of the new country," he said. "A new country needs more capability to lead, to govern and to guide."

Soldiers want compensation for Timor exit

Lindsay Murdoch, Jakarta -- After taking part in or helping to loot almost everything of value in East Timor last year, Indonesian soldiers are claiming compensation for losing their belongings in a hasty withdrawal from the territory.

Senior army officers have asked the Government to pay millions of dollars to up to 20,000 members of the armed forces who were serving in East Timor when the Timorese rejected Indonesian rule in a United Nations ballot.

The demand will further enrage East Timorese leaders as the UN struggles to rebuild the territory, where most towns and villages were destroyed and almost every building and home was looted, including the entire commercial centre of the capital, Dili.

For days Indonesian military trucks, ships and aircraft were used to take goods -- many of them looted by pro-Jakarta East Timorese militia -- to Indonesian-controlled West Timor and other destinations, including Jakarta.

The UN and international human rights groups documented the operation, with one UN official in East Timor describing it as "state-sponsored grand larceny on a scale that has rarely been seen anywhere in the world".

Neither the UN nor the East Timorese leadership has asked Indonesia for compensation for the loss of property, including vital infrastructure the UN estimates will cost hundreds of millions of dollars to replace.

But Jakarta this week issued a presidential decree establishing a team with authority to deal with East Timor's transition to independence, declaring that one of its tasks was to discuss Indonesian national assets still in East Timor.

The Bali-based officer in-charge of West Timor, Major-General Kiki Syahnakri, said the army would fight to ensure that soldiers who had served in East Timor and their families were properly compensated.

General Syahnakri, who served for 11 years in East Timor, said he had raised demands for compensation with the Defence Minister, Admiral Juwono Sudarsono, who had "promised to find a solution".

The compensation demands coincide with the disbanding of Infantry Battalion 745, which human rights and other investigations have accused of widespread atrocities in East Timor, including many murders. Human rights activists say the dispersal of the soldiers through other commands will make it more difficult to track the killers.

Indonesia this week told the UN Human Rights Commission in Geneva that it would draft human rights legislation and set up a court to prosecute violations committed in East Timor. It told the UN that prosecutors would soon travel to East Timor to investigate the role of the former armed forces commander and suspended minister, General Wiranto, and 32 other soldiers and officials accused by Indonesia's national human rights commission of responsibility for the violence that erupted in the territory before and after the UN ballot.

Meanwhile, human rights activists in the United States have served a lawsuit on General Johny Lumintang, who they say played a leading role in shaping the Indonesian military's East Timor policy. General Lumintang, the former vice-chief of staff of the Indonesian Army, was served notice of the suit at a Washington airport, the East Timor Action Network said. The network said papers filed in the US District Court on behalf of East Timor victims and their families cited a telegram signed by General Lumintang ordering a military crackdown if the East Timorese favoured independence.

Militias' words of fear strand Timor refugees in camps

Rajiv Chandrasekaran, Noelbaki refugee camp -- Sitting on a rickety wooden bed frame in a cramped corner of her barracks, with only a sheet to provide privacy from her neighbors, Augustina Said spends her days hoping she and her family can return to the life they had in East Timor. To their freshly painted house. To their television, refrigerator and comfortable furniture.

But Said, 41, is afraid to leave this squalid encampment of more than 5,000 refugees, near Kupang on the western coast of western Timor, and return to newly independent East Timor. In the referendum to determine East Timor's future last August, she, her husband and their four children were on the losing side, advocating publicly that it remain an Indonesian territory. "If we return, they will kill us," she said of the independence supporters who dominate East Timor's population. "They don't like us anymore."

A few buildings over, Maria Anapinto, 37, is equally afraid. She voted for an independent East Timor and desperately wants to return, but she said menacing bands of pro-Indonesia militiamen continue to prowl the camp, warning people like her not to head back. "They tell us that it's not safe," she said. "The militias say they will return to take back East Timor."

Anapinto and Said arrived in western Timor seven months ago with an estimated 250,000 other East Timorese, fleeing the violence that enveloped the territory after its residents voted overwhelmingly for independence. Although 150,000 have trickled back, aid workers estimate 100,000 people like Anapinto and Said are still holed up in several dozen western Timor camps, trapped by a culture of fear that shows no sign of abating.

UN officials had expected a solution to the refugee problem months ago, with independence supporters rushing home and those who favored integration with Indonesia either returning or settling elsewhere in the archipelago. But continued militia intimidation and worries about retribution have complicated the process. Officials now worry that the ramshackle camps, where almost 1,000 refugees have died from disease, are evolving into permanent housing, creating a group of people with no country to call home.

"A lot of them are settling in for the long haul," said Craig Sanders, who directs the UN refugee agency's operations in western Timor. "For a variety of reasons, they're still too afraid to return home."

The United Nations and the Indonesian government want the refugees to move on -- either back to East Timor or elsewhere in Indonesia -- but they differ on how to make that happen. The Indonesian government has promised to move militiamen out of the area. But it also has threatened to stop providing refugees food and other aid, a move that is drawing stiff condemnation from humanitarian officials and diplomats.

"It's like they're putting a gun to the head of the refugees to force them to move," said one Western diplomat in Jakarta, the Indonesian capital. The US ambassador to Indonesia, Robert Gelbard, warned that any aid cutoff would be "a serious mistake" that could lead to a "strong reaction from the international community."

Whether a halt in aid from Indonesia will have a significant impact on the refugees is unclear because, Sanders said, most food, medicine and other support comes from international organizations. But he and other UN officials acknowledge that the situation is becoming increasingly problematic. "We don't want these camps to last forever, but at the same time, we don't want people to be coerced into making a decision about where they are going to live," Sanders said. "They need to be allowed to decide without anyone pressuring them."

That is rare in the camps. Although militia members have been largely disarmed by the Indonesian military, those who lurk in the barracks have embarked on a campaign to persuade pro- independence refugees not to leave, telling them that there is not enough food in East Timor and that the multinational peacekeeping force there has been raping women by the hundreds.

A militia umbrella group called UNTAS has even begun printing a two-page newsletter that warns refugees not to go home because of "saddening and disgraceful conditions" in East Timor. The militia groups have tailored a different message to those who sided with Indonesia in the election, warning them that vengeful, pro- independence East Timorese will kill them as soon as they cross the border.

UN officials and military analysts believe that militia leaders, who were recruited by the Indonesian military before the election but were mostly abandoned after the defeat, view the refugees as a bargaining chip. "It's a group that has lost everything," Girmai Wondimu, a UN field officer in western Timor, said of the militia members. "They have to hold on to these hostages."

Some political analysts and diplomats argue that the Indonesian government needs to break up the militia groups and move the leaders away from western Timor. "The solution to this problem still largely rests with the Indonesians," said Gary Gray, chief of the US diplomatic mission in East Timor.

To counter the militia groups' propaganda, UN workers have embarked on a public relations blitz of their own. They are making their pitch on five radio stations, and are also videotaping interviews with returning refugees and playing them in the camps. They also are encouraging refugees to attend "family reunions" on the border, where they can talk to relatives who live in East Timor and hear firsthand about the living conditions there. But the UN workers toe a fine line in encouraging pro-Indonesia refugees to return. Although East Timorese independence leaders have said they favor reconciliation with Indonesia supporters who did not participate in the violence, several dozen who have returned have been beaten by their neighbors, and at least one has been killed, according to UN officials.

Despite the risks, some Indonesia supporters have been heading back in recent weeks, reasoning that the prospect of getting roughed up in East Timor is still better than living in the camps. "The militias in the camps kept telling us they would shoot us if we didn't do as they said," said Fernando Da Costa, 25, as he boarded a ship bound for East Timor from the western Timor city of Kupang.

That same message has persuaded others to stay. Vinancio Gomes, a former soldier, said he would love to leave his cramped bunk at the Tuapukan refugee camp but has heard of a letter circulating through the camp that details how some returning former soldiers were killed -- a story aid workers believe was concocted by militia groups. "This may not be a good place to live," Gomes said, "but at least nobody is going to kill me here."

Home away from home as nervous wait goes on

Joanna Jolly, Tuapukan -- The song is the most popular in the camp. "UNAMET go home, you only came for a few months, but many people died," the refugees sing to an upbeat tune. "You came to be in the middle, but in fact you were not. Because of UNAMET, we have left our children and gone away from our families."

The song is on an album recorded by the former East Timorese militia leader, Eurico Guterres. In Tuapukan, a camp of 20,000 refugees 30 kilometres from the West Timor capital, Kupang, everyone knows the words.

Despite fears the Indonesian Government would stop giving aid to this and some 200 other East Timorese refugee camps around the province, Tuapukan is beginning to look like a permanent settlement.

Refugees have made homes under bamboo and plastic shelters. Washing water comes from wells. Drinking water, provided by the West Timorese Government, is brought in by tanker. Children attend two nearby schools and medical facilities are available.

Although the camp relies on rice and sugar, brought in by the Government and international organisations, vegetables are readily available. Many refugees have set up shops around the camps, selling basic necessities such as soap, bottled water, toothpaste and coffee.

According to the camp information officer, Max Adoe, an agreement made a month ago committed the local government to providing aid until the end of May. The aid is necessary because, for the moment, most residents do not want to leave. Many of the refugees served in the Indonesian Army in East Timor. They wear their uniforms and look after camp security.

According to independence leaders in East Timor, refugees in camps around West Timor have become the victims of continuing militia violence. But Mr Adoe said the camp was peaceful, thanks to the help of the East Timorese soldiers.

Instead, the refugees worry what will happen to them if they return to East Timor. "We have heard there are some problems with CNRT [National Council for Timorese Resistance] and Falintil in East Timor," said Abelita Soares, 28, who lives in Tuapukan with her three children. "They are still fighting, kidnapping, raping and stealing. I got a letter from a Falintil commander in Los Palos who said this was happening."

This letter was distributed a few days ago. The East Timorese here receive many letters like this, handed out by UNTAS, a pro- Indonesian organisation staffed by former pro-autonomy politicians. "We have some letters from our relatives in East Timor saying the situation is now OK, but we aren't sure," said Mrs Soares. This uncertainty is felt by many in the camp.

Despite the threats from Jakarta to cut off aid, the refugees believe they will continue to be looked after by the Indonesian Government. They are waiting to find out whether the situation in East Timor has improved before returning. If the situation in East Timor doesn't improve, many are resigned to staying in West Timor and building new lives away from their homeland.

People put off by scare stories

Joanna Jolly -- An organised campaign of misinformation regarding the situation in East Timor is preventing many refugees from returning home, say international aid workers in the Indonesian province of West Timor.

Pro-autonomy supporters still operating in West Timor are responsible for publishing newsletters for the refugees which carry reports of forced repatriation by United Nations agencies and warn that Portugal is trying to re-colonise the newly independent country.

"Tens of thousands of refugees were dragged forcefully into East Timor, and so far, nothing is known of their fate. Methods such as this breach human rights. Be aware," reads a bulletin distributed to East Timorese in refugee camps this month.

These reports are backed up by stories in the West Timorese press which warn refugees of the danger of returning home. "We have seen a resurgence under the pro-autonomy Untas [the Association of Timorese with Dignity]," said Craig Sanders, head of the UN High Commissioner for Refugees (UNHCR) in Kupang. "They are feeding misinformation about the situation in East Timor. It is absolutely clear this is out of desperation."

Last week, Indonesian papers carried a report that about 10,000 East Timorese had returned to West Timor because of food shortages and economic problems in East Timor. The UNHCR says the reports came about because of a discrepancy in numbers between two censuses carried out by the Indonesian Government.

The latest census, which was completed recently, showed an increase in the number of refugees. However, the UNHCR disputes it. "This report had no basis in fact. We checked with the provincial authorities and followed it to the source," claimed Mr Sanders.

Timorese angered over UN jobs deal

Tom Fawthrop, Dili -- Riot police and UN peacekeepers held back a mob of more than 800 angry East Timorese protesters outside the world body's headquarters in Dili yesterday. Many in the crowd had shown up for promised job interviews but the UN had earlier cancelled them without informing the applicants.

Nobel laureate Jose Ramos-Horta was called in to quell the crowd. "I apologise for you coming here ... the information they gave to you was incorrect," Mr Ramos Horta said to the protesters, who had waited for several hours in the blistering heat.

The UN, which is administering East Timor during its transition to independence, said about 2000 applications had been received for available jobs. But it said its staff could only process 15 applicants a day.

The protest came as the chief administrator of the UN's transitional government in East Timor (UNTAET) pledged to throw the doors open to real Timorese participation in decision-making on Dili. "We will begin the process of transformation from our UNTAET international foreign superstructure, into a new East Timorese administration with a command and control structure over international staff," Mr Sergio de Mello said at UN headquarters in Dili.

During the first six months of the UN's attempts to run the territory, Timorese leaders have complained of being treated as second-class citizens and excluded from UN decision-making.

Ms Maria Bernadino, an aid worker and member of an East Timorese group monitoring the UN's performance in rebuilding the country said yesterday that "the foreigners are running every single UN department, expatriate businessmen are making fast bucks, and we are going from one colonisation to another".

Mr de Mello is seeking to overturn that image by going beyond the existing consultative mechanisms, and recruiting qualified East Timorese professionals as deputies to all departmental heads in Dili.

Although under Indonesian rule few Timorese were given any high level of training or management expertise, a number of qualified professionals have returned from exile, many of them serving as advisers to the Timorese resistance movement.

Final parade for Dili killers

Don Greenlees, Kupang -- Even in a military known for disregarding civil rights, Korem 164 is a notorious unit. Its men will be remembered either for standing by and watching the rape of East Timor or joining in the final rampage of arson, lootings and murder.

But with East Timor's freedom, the Dili-based military command that oversaw two decades of political oppression is passing into history. With modest military fanfare at a barracks in Kupang yesterday, the regional commanders witnessed the disbanding of the so-called Wiradharma command, most of its men scattered among other army units. The last assignment of Korem commander Colonel Mohammad Noer Muis -- under investigation by the Indonesian Attorney-General for his role in the carnage in East Timor -- has been to work out what to do with nearly 6000 unhappy East Timorese soldiers and civilian employees.

It hasn't been an easy job. At a press conference announcing the end of the Korem, Colonel Noer Muis, an infantry officer who attended staff college in Australia, admitted the loss of East Timor had a big psychological impact on his troops. "I have already met them and told them there will be no misunderstandings in their new posts," he said.

According to Colonel Noer Muis, about 3000 soldiers and civilians, most close to retirement, have decided to resettle in East Nusa Tenggara province, which includes West Timor. Others are being sent elsewhere in the country.

About 780 Korem members stayed in East Timor during the Indonesian military withdrawal last September, and 390 chose to return later. "There's no prohibition on those who want to go back," Colonel Noer Muis said. "They go back of their own accord. We cannot limit human rights."

One of those who did go back was Sergeant Hermenegildo dos Santos. He was a member of battalion 745, which was staffed with a considerable number of East Timorese.

He says his battalion commander, Yacob Sarosa, told the troops: "Destroy everything" on the way out. In an interview with the US Christian Science Monitor, he remembers Colonel Noer Muis saying they did not even have to tell their wives what they did.

A recent investigation by the Monitor reported witness testimony that battalion 745 killed more than 20 people as it drove from its base in Los Palos, in the eastern part of the territory, down to the western border. Dutch journalist Sander Theones was one of the victims.

Along with the dissolution of the Korem command, the armed forces yesterday formally scrapped battalion 745. According to Australian military analyst Bob Lowry, the Indonesian military were always wary of their East Timorese recruits. "The Indonesians never trusted the East Timorese so there were only about 25 per cent of them in the battalions and of course most of the officers were non-Timorese," he said.

But one battalion from the old Korem that will survive is 744, which also contained a large number of East Timorese soldiers. Colonel Noer Muis says 1393 East Timorese will remain on duty in East Nusa Tenggara. The 744 battalion's new mission raises questions about how serious the military is in maintaining the peace with East Timor. "They will have to secure the border," Colonel Noer Muis said.

Keating again berates PM over Timor

Paul Daley, Canberra -- Paul Keating has launched another attack on John Howard's handling of the East Timor crisis, repeating his allegation that the Prime Minister is directly responsible for the bloodshed in the newly independent state.

Mr Keating last night blamed Mr Howard for the East Timor carnage because he said Mr Howard urged an "interim" Indonesian President, Dr B. J. Habibie, to settle the province's future when there had been no agreement for troops to oversee a people's ballot. Mr Keating's comments are likely to cause acute embarrassment for some of his Labor Party colleagues, including the Opposition Leader, Mr Kim Beazley, who have specifically said Mr Howard was not responsible for the carnage in East Timor.

Mr Howard's spokesman last night rejected Mr Keating's comments, saying: "It is clear from his remarks in the past few days that if Mr Keating had been the prime minister, he would not have helped the East Timorese. He would have left them to their fate. The Leader of the Opposition, Mr Beazley, should repudiate Mr Keating's remarks."

Mr Keating, whose Labor Government was resoundingly defeated in 1996, told the SBS Dateline program last night that the outcome in East Timor might have been different if he had still been Prime Minister last year. Mr Keating said that unlike Mr Howard -- who urged President Habibie to finalise East Timor's future status -- he would have waited until President Abdurrahman Wahid was in power.

The former Prime Minister said only then would he have supported a policy of autonomy and economic development for East Timor. "Had Mr Howard waited until President Wahid was installed, he may have followed the policy of [East Timor's Roman Catholic leader] Archbishop [Carlos] Belo, which was that there should be 10 years of autonomy to give time for the integrationists and independence group to heal their differences," Mr Keating said.

"Now it's a society destroyed. Writing an incoherent letter to an interim President who had no authority to make this decision, and letting it happen without peace-makers was an act of irresponsibility by John Howard. Habibie made a decision on an issue put to him by John Howard -- the result was slaughter."

Senior Labor figures who supported the Australian-led InterFET deployment last year, were forced to distance themselves from Mr Keating when he first made his allegations about Mr Howard late last year.

Untrained Timorese must build a nation from scratch

Rajiv Chandrasekaran, Dili -- Louis Nkopipe spent last week in the sweltering Dili courthouse conducting a crash course on elementary legal principles. "Defendants are presumed innocent," intoned Nkopipe, a French lawyer, at the start of one lecture. "And they have the right not to incriminate themselves."

The audience of 23 middle-aged East Timorese men and women was engrossed, diligently scribbling into notebooks as each of Nkopipe's simple declarations was laboriously translated into Portuguese, then into Tetun, an indigenous language. For the students, many without previous legal education, the class is the only schooling they will receive before becoming the nascent country's first judges, prosecutors and public defenders.

"We do not have a lot of legal experience here," said Joao Calvalho, a former mid-level employee in the governor's office who was selected to be an investigating judge. "I've never been a judge or a lawyer before. In fact, I have never done anything like this."

Almost seven months after East Timor's overwhelming vote for independence from Indonesia and its subsequent devastation by militia groups backed by the Indonesian military, the East Timorese people and the UN administrators now in charge are finding the task of rebuilding from ground zero far more complicated than they ever imagined.

Consider the whitewashed courthouse building three blocks from Dili's beach. Although it was not burned to the ground like most of the structures here, the windows were smashed, the computers were stolen, the furniture upended, the files pilfered, the law books removed and the judges' robes were nowhere to be found.

All that is being slowly replaced by the United Nations and foreign donors, but the people who worked in the building are another matter. During the 24 years that Indonesia ruled this former Portuguese colony, no East Timorese were appointed as judges or licensed to practice law. Those jobs went to Indonesians, all of whom fled to Indonesian-controlled western Timor and other parts of the archipelago after last August's referendum.

"We are starting the court from scratch," said Louis Aucoin, a Boston University law professor who is the United Nations' acting director of judicial affairs here. "We have a courthouse, but there's not a lot inside. Most of our judges and lawyers have no practical experience with the law whatsoever."

East Timor faces a similar dearth of skilled labor in every other civil institution and every part of its infrastructure. The water and power services lack engineers. Schools lack teachers. Hospitals lack doctors.

For now, UN specialists and international aid groups are filling the vacuum. The British organization Oxfam International, for instance, is repairing the water system, and the French group Doctors Without Borders is helping provide medical care. But some aid experts worry about what will happen when humanitarian assistance dries up and the United Nations withdraws several years from now. Even if there are new schools, hospitals and water works, they wonder if anyone will have the expertise to operate them.

Some critics of the UN administration contend the organization is not recruiting enough East Timorese to work alongside -- and learn from -- international specialists. Although the UN transitional authority has set a goal of 12,000 East Timorese working for the government, fewer than 1,000 have been hired.

"We appreciate the help of the international community, but the East Timorese people need to be allowed to take a greater role in our own affairs," said Joao Carrascalo, acting president of the National Council for Timorese Resistance, the political wing of a pro-independence rebel group that has refashioned itself into a social assistance organization.

Carrascalo points to the more than 80 percent unemployment rate and daily gatherings of hundreds of young job seekers outside UN headquarters, warning that "if the UN doesn't get its act together soon, very soon there will be big problems with social unrest. The euphoria of independence is beginning to wear off," he warned. People are becoming frustrated."

UN officials maintain they are trying to hire people as quickly as possible, but they say their efforts are hindered by the lack of a qualified labor pool. Part of the solution, they believe, is to encourage some of the former Indonesian government workers to return, even if they voted against independence. And, the officials say, training programs need to be bolstered.

This week, as a step in that direction, the United Nations plans to open East Timor's first police academy. But interest is far outpacing availability; officials received more than 12,000 applications to join the first class, which is limited to 50 recruits.

The UN special representative, Sergio Vieira de Mello, effectively East Timor's leader until general elections next year, has pledged to set firm deadlines for integration of East Timorese into government jobs. "We are here to give birth to a genuine East Timorese administration that is a product of the gradual acquisition of maturity," he said in an interview. "But I cannot guarantee that in some areas we will not behave in a paternalistic kind of way." But UN officials insist they do not intend to solve the unemployment problem by giving thousands more people government jobs, as the Indonesians did when they ruled the territory. Instead, they want to foster small businesses and encourage rural residents to plant cash crops, such as coffee, the country's primary export.

"We are doing everything to get things started, but the world needs to understand that we are starting from almost nothing," said Fernanda Borges, the UN director of economic affairs here. "This will take a long time."

At the courthouse, though, time is not something the new judges, prosecutors and public defenders have. There are 83 cases, most involving murder or rape charges stemming from the post-election violence, that must come to trial soon.

UN officials considered bringing in outside judges to handle the first trials but decided against it, concluding that it would be an important symbol of reconstruction to have East Timorese presiding. Still not ironed out is whether foreign judges might sit on three-judge panels with their East Timorese counterparts, who were jointly selected by UN officials and East Timorese leaders.

Having foreign judges sitting on the same bench is an idea that the new judges here do not like much, arguing that the international jurists should serve instead on an appeals court. The new judges have begun to make procedural decisions about how the court will operate. Although there is no television station in East Timor as yet, they have banned TV cameras in courtrooms. Defense attorneys will be allowed to question witnesses directly, something that is not allowed in Indonesian courts. "They don't want to create a system that is as repressive as it was in Indonesian times," Aucoin said.

Because it would take too long and be too complicated to draft new laws, the country plans to use Indonesian laws. But in a break with Indonesian rules, the new court will provide public defense attorneys. Their first task will be to defend militia members accused of participating in the burning, looting and killing here last year.

"As human beings, it is difficult for us to defend them," said public defender Vital Dos Santos, former manager of a trading company. "But we have to follow the law. We also have to defend their rights as human beings."

UN officials are hoping the first trial will begin next month, although they acknowledge that timetable might be optimistic. The judges and lawyers, for their part, say they're eager to get down to work but would welcome more training.

"The first time I sit as a judge, it will be like taking an examination," said Judge Maria Natercia Gusmao, who used to work for Indonesia's land development authority. "It will be a little scary."
 

Government/politics

Call to allow communism

Robert Go, Jakarta -- Taking his case directly to the people after Friday prayers in Jakarta, President Abdurrahman Wahid made his strongest appeal yet for a review of 1966 parliamentary decrees banning the communist ideology in Indonesia. "The spirit of this regulation infringes on someone's basic rights without clear justifications," he said.

This is why he has been advocating that the country's lawmakers re-examine not only the edict in question, but also events preceding its enactment.

Displaying his background as a revered Muslim cleric, the President used personal anecdotes and the Quran to drive home his arguments. One of his statements -- "that God judges a man by deeds and faith" and not by membership in the Indonesian Communist Party -- seemed to be a direct challenge to prominent clerics who had voiced objections to a repeal of the ban on the basis that communism was anti-Islam and promoted atheism.

In recent weeks, Mr Abdurrahman has stepped up his campaign to revisit Indonesia's history with communism. Two weeks ago, he made a televised request directed at the military, urging a reopening of its case files on the September 1965 attempted coup which was blamed on the Communist Party and anti-communist hunt which some said claimed more than 500,000 lives.

Since then, he has opened a national dialogue by incorporating the issue into his public addresses. "The original 1945 Constitution guaranteed the rights of each citizen to hold every ideology in this country," he said at the opening of the Indonesian Democratic Party-Perjuangan (PDI-P) congress last week.

Opposition to his intentions comes not only from religious figures, but also from within his Cabinet. "In my opinion, the decree should be maintained," Law Minister Yusril Ihza Mahendra told reporters before a Cabinet meeting yesterday. Mr Yusril, who heads the Islamic Crescent Star Party, joins a growing pool of political leaders who warn that lifting the ban will shake the country's fragile stability.

But some academics take a different view of Mr Abdurrahman's efforts -- including his public apology to the victims of the 1965 massacre. They argue that Indonesia's progress towards democracy depends on protection of all ideologies, including communism.

Political analyst Soedjati Djiwandono wrote in The Jakarta Post: "The public apology was the right step towards a long and probably painful process of national reconciliation."

Mr Rufinus Lahur, an analyst at the Centre for Strategic and International Studies, indicated that Mr Abdurrahman's conciliatory remarks on communism not only served to firm-up the fledgling roots of democracy here, but was also a message to the rest of the world.

Megawati re-elected as PDI-P chief

Marianne Kearney, Jakarta -- In a manner some here see as reminiscent of Golkar's elections during the rule of former President Suharto, Vice-President Megawati Sukarnoputri was unanimously re-elected to lead the country's largest party until the next elections in 2004.

Ironically Ms Megawati -- a symbol of democracy to many during Mr Suharto's rule when her party was the only opposition force -- has been accused of engineering to have all other candidates for leadership of the Indonesian Democratic Party-Perjuangan (Struggle), or PDI-P, disqualified.

On the last night of the party congress, she proposed to bypass an open election for the position of party chairman and suggested instead that the congress accept herself as the only candidate for the position -- thus disqualifying two others challenging her.

She also proposed that the congress give her the right to select new executive council members rather than allow delegates to vote for them. "This congress is like an obituary for democracy. Since PDI-P is the winning party in the last elections, the Indonesian people expect them to be the pioneers of democracy," said Mr Eros Djarot, one of the disqualified candidates. "Instead Semarang has become the place where they kill democracy," he said, referring to the Central Java town where the congress was held.

Reformists in the party were puzzled as to why she went to such extents to muzzle any dissenting opinions, as her position as party leader was not expected to be challenged seriously.

Her decision to maintain tight control over the party's executive council was a worrying trend, as analysts said that the PDI-P needed desperately to become a more modern and democratic party if it was to be an effective ruling party.

"If Megawati can't change the type of party leadership, I see PDI-P trapped in the format of a traditional political party," warned political analyst Tomi Legowo. He said the party needed more reformists in its upper management, but the conservatives who supported the existing party structure far outnumbered the reformers.

Mr Eros was concerned that Ms Megawati's decision to choose personally her executive council showed that she was not willing to allow the council enough autonomy to lead the party, and the executive council the power to make policy decisions independently.

The two rejected candidates, Mr Eros and Mr Dimyati Hartonto, said PDI-P delegates felt pressured into accepting the process because of Ms Megawati's powerful influence over the congress proceedings.

Delegate Nadham Yusuf said many of them left the congress in frustration rather than complain about the non-election for the remaining positions such as secretary-general. "No one's brave to object because he knows it is a legal congress," he said, but he warned that unless the party became more open and democratic, its supporters would look elsewhere.

Internal critics said that the party has not formulated any new policies, and has so far failed to take the initiative on issues such as the conflict in Maluku or Irian, where the party has a strong following. The only statement on the numerous regional problems to emerge was a confirmation that PDI-P would oppose separatist movements such as in Irian and Aceh.

Charisma is not enough, say Megawati's critics

Marianne Kearney, Semarang -- Charismatic Vice-President Megawati Sukarnoputri is still hugely popular with ordinary Indonesians. But her popularity may not last until the next elections if her party does not reform itself, say party critics.

Thousands of supporters have flocked to this Central Java town for the Indonesian Democratic Party Perjuangan's congress. The town is awash with the red flags of the party, stalls selling Megawati souvenirs line the main streets and kiosks have been painted red for her arrival.

But her popularity may not last if the party does not reform its structure and starts showing how it will help the little people, say the critics. "The question is if in five years' time Megawati is still a symbol of the oppressed," says political analyst, Mr Tomi Legowo from the Centre for Strategic Studies. Part of the party's problem is the almost cult status of the daughter of Indonesia's first president, which is still as strong as ever.

Ms Megawati's temporary departure from the congress is more reminiscent of a royal parade than the movements of a vice- president.

Like a private army, hundreds of PDI-P's black-clad civilian security guards took control of the streets leading out from the hotel, providing a guard of honour even though the Vice-President has official military guards.

"Mega herself is a problem because she has become more and more secularised," says Imam Prasodjo from the University of Indonesia's political science faculty.

The problem with her followers' blind devotion is that in the glow of success the party has failed to develop any real policies, says Mr Tomi Legowo. "Megawati should be clear what kind of ideas she has for the future of Indonesia. The congress should produce a party policy platform that is easily understood by PDI-P and society," he says.

But with the congress caught up with electing Ms Megawati as chairman and with debates over how to elect a new executive council, new policy directions are unlikely to emerge.

"The PDI-P followers adore their leader fanatically. We have to change their way of thinking so that they use rationalism and are able to criticise the party," says PDI-P member Dimyati Hartono, who is also a candidate in the elections to the party posts.

Critics say the party's lack of clear direction means it has failed to lead the debate on key issues such as increasing the price of basic commodities, which affect the lives of the ordinary Indonesian workers.

Mr Mochtar Buchori, PDI-P deputy chairman, says the party still has a policy vacuum in major areas such as foreign affairs, defence and education. Part of the problem, say the reformists within the party, is that the undemocratic and hierarchical structure of the party prevents reform and new ideas. They point out that the way the party elite handled challenges to Ms Megawati's position illustrates the limits of the party's democratic ideals.

"People around Mega want Mega as the only candidate which is ridiculous as this is supposed to be a democratic party," says Mr Eros Djarot, one of the challengers who was banned from attending the conference by the Jakarta chapter of the PDI-P.

Mr Mochtar Buchori agrees the party is split along lines of personal allegiances rather than policy. "Eros has been rejected because he is not part of the inner circle and anyone who feels threatened by an outsider will reject him," he says.

The conservatives argue that Ms Megawati is the crucial figurehead for the party and without her as chairman the party cannot survive.

But Mr Eros Djarot and Mr Dimyati Hartono say she is too consumed by her role as Vice-President to run the party effectively. Analysts say that Ms Megawati is really the only sensible choice for party leader, and changes to the leadership will only erode its support further.

However they agree that the party is being undermined by poor management. "They are good at organising parades on the street but not good at formal organisation. Look at all the double delegates you have fighting each other," says political commentator Andi Mallarangeng referring to arguments over who qualifies as a regional delegate.

Both Mr Dimyati and Mr Mochtar say part of the party's problem is that it has a shortage of well-educated and well-qualified members and representatives to invigorate the party.

PDI-P's previously squeaky clean image has also been tarnished over the past few months by corruption charges. In some cities, representatives were accused and later found to have stolen money. And in one city, candidates accepted payments in exchange for voting for rival parties. "We have a moral crisis, and if we don't improve morally we'll be like the New Order," said Mr Dimyati Hartono.

Wahid lashes out at his cabinet in public

Jakarta -- President Abdurrahman Wahid openly criticized his Cabinet -- particularly the economic team -- on Thursday, banning ministers from overseas travel until they are able to resolve a pressing problem with the International Monetary Fund (IMF).

The President said he would chair a special Cabinet meeting on Saturday to discuss ways of speeding up the implementation of reform programs Indonesia had committed to under a loan agreement with the IMF.

The President could not hide his disappointment with the IMF decision to delay the disbursement of the next tranche of its loan to Indonesia. He said he would ask his ministers to identify the problems in carrying out the programs mandated by the IMF.

Speaking in a joint media briefing with visiting Pakistani leader Pervez Musharraf at Merdeka Palace, the President said the problems with the IMF must be resolved because there could be serious consequences.

"I have asked them [the ministers] to prepare a report on Saturday. There are many items that need to be discussed further," Abdurrahman said.

The meeting will also tackle preparations for next month's meeting with the Paris Club of creditor nations to negotiate Indonesia's plans to reschedule US$2.1 billion of foreign debts.

The President said he was not satisfied with the progress his Cabinet members had been making, especially the economic team, and said they should perform better.

The IMF chief representative in Jakarta, John Dodsworth, warned that a delay in the IMF aid might cause difficulties for Indonesia to secure a deal from the Paris Club.

Earlier, Minister of Foreign Affairs Alwi Shihab said the President had banned his ministers from making foreign trips, at least until the problem with the IMF has been resolved.

The ban does not apply to the foreign minister. "Ministers have been told not to go abroad. In the past they went overseas to lure investors to Indonesia. But if the domestic situation remains uncertain, such trips are pointless," Alwi said after meeting with the President at Bina Graha presidential office.

Minister of Industry and Trade Yusuf Kalla became the first victim of the policy initiated by the President on Wednesday. Yusuf cut short an overseas trip and returned on Thursday, instead of next Tuesday as originally planned.

Echoing the President's complaint to the Cabinet, Alwi said ministers should show a greater sense of urgency. Alwi said the President was not satisfied with the performances of some of the economic ministers.

He singled out Minister of Forestry and Plantation Nur Mahmudi Ismail and Attorney General Marzuki Darusman as being among those who were doing a poor job. The President was nevertheless optimistic that the government would be able to satisfactorily resolve the problem with the IMF, he said.

Alwi conceded that the government failed to anticipate difficulties in realizing its commitments under the IMF program, such as resolving the corporate debt restructuring problem. "When we signed the agreement with the IMF there were several factors we did not anticipate," Alwi said.

Gus Dur for direct polls for president

Semarang -- Indonesian President Abdurrahman Wahid said yesterday that his government will propose that the country's next president and vice-president be elected directly by the people in 2004.

Speaking at the opening of the first congress of the Indonesian Democracy Party-Perjuangan (PDI-P), he said the proposal would go to the People's Consultative Assembly (MPR), the country's highest legislative body, at its general assembly in August.

"The government will propose that the elections of the president and vice-president be held directly," he said to applause. In that way, we show our respect to ... the people who are of the opinion that the political system has deviated from the people's will."

Under the current system, the president and vice-president are elected for a five-year term by the MPR -- composed of 462 elected MPs, 38 military appointees and 200 appointees representing the regions and non-political organisations.

The PDI-P of Ms Megawati Sukarnoputri won last year's parliamentary elections, but she did not become president automatically. In the end, she was elected Vice-President by the MPR, while Mr Abdurrahman, who was fielded by a coalition of small Islamic parties, was elected President in October.

Mr Abdurrahman also said that resource-rich Irian Jaya province would never be allowed to break away from Indonesia although its leaders were allowed to express their views on independence. Indonesia is facing calls for independence in the provinces of Irian Jaya and Aceh and these have grown louder after East Timor voted to break away from Jakarta's rule last August.

Ms Megawati, addressing the same congress in this Central Java town yesterday, said the country's political life was still "far away" from being a true democracy. "We are not yet ready to accept the usage in democracy that gives the main rights to the political force that wins in elections," she said. "We are also not yet ready to accept a political defeat or victory as something normal in the process of democracy."

She also said the country needed to deal with the tendency to move towards national disintegration, and the increasing use of violence and conflict in handling society's problems.

The party congress, the first since the PDI-P was established in 1998, is due to elect a new party leader and map out a strategy for the next five years. The meeting is being seen as a test of the leadership abilities of Ms Megawati, who has been criticised by some in the party for not cracking down on dozens of corrupt officials. Other have questioned her ability to lead.

And when addressing members at the congress opening, she stressed that the populist party must find a new direction and develop itself as "a modern party that places the people in the centre of our activities".
 

Aceh/West Papua

Two hurt in rebel attack on Aceh airport

Jakarta -- Two aircraft passengers were wounded when separatist rebels in Aceh province yesterday attacked the police posted at an airport run by an Indonesian subsidiary of Mobil Oil Inc, a rebel spokesman said.

The passengers were injured when stray bullets hit a company plane which had just landed at the airport in the industrial city of Lhokseumawe in North Aceh, said Mr Ismail Sahputra, a spokesman for the separatist Free Aceh Movement (GAM).

The nationality of the victims, who were rushed to a company clinic, was not immediately available. "The Free Aceh Movement is not responsible for the destruction of the Mobil Oil facilities nor is it responsible for the human casualties. We have repeatedly warned the company's management not to place any Indonesian troops on their site," Mr Sahputra told AFP. "We have no intention of attacking the company and are not dealing with it but with the Indonesian military," he said.

The spokesman warned that similar attacks would be launched if the company maintained Indonesian security forces at its site. Mobil Oil Indonesia operates the Arun field, one of Indonesia's two largest gas fields, and the airport normally serves two flights daily to Medan, the capital of neighbouring North Sumatra province. Aceh, on the western tip of Sumatra island, has been wracked by clashes between Indonesian troops and GAM rebels who have been fighting for an independent Islamic state since 1976.

Seven killed in Aceh violence

Banda Aceh -- Unidentified gunmen killed at least seven people, including three policemen, and injured two in a series of shootings in restive Aceh province, police and residents said Thursday.

A policeman, seriously wounded during an attack by armed men on a police post in Ingin Jaya subdistrict some 20 kilometres (12 miles) from here late Wednesday, died at the hospital Thursday, Aceh Besar district police chief Lieutenant Colonel Sayid Husainy said. Another policeman was killed instantly in the attack in which men believed to be separatist rebels carried grenade launchers and automatic rifles, Husainy said.

An anti-riot policeman, Sarmidi Erik, 28, was also shot dead and another wounded on Wednesday in an ambush while on motorcycle patrol by suspected rebels in Blang Nisam village in North Aceh, North Aceh police chief Lieutenant Colonel Syafei Aksal said.

In another development on Wednesday, a motorcyle taxi driver was shot by his passenger in Idi Rayeuk subdistrict after they scuffled, residents said. The motive for the killing was unknown. Dikri, a farmer from Alue Tampak village, was shot dead as he was riding a motorcycle home from the main West Aceh town of Meulaboh late Tuesday, a local journalist said.

About one hour later, the village secretary of Kabu Baroh, in the Seunangan sub-district, was shot dead by unknown assailants some 400 metres from his house, the journalist said. Another victim, the head of the Krueng Mangkom village in the same sub-district, was shot around 2.30am Wednesday. The village secretary was seriously injured in the same shooting.

A special police team has been set up to investigate the shootings, West Aceh police chief, Lieutenant Colonel Her Aris Sumarman, told journalists in Meulaboh.

Violence involving Indonesian soldiers and separatist rebels of the Free Aceh Movement, fighting for an Islamic state in the province since 1976, has already cost more than 300 lives this year.

Medan authorities ban Aceh people's congress

Medan -- The provincial authorities have banned the Aceh Community Congress (Konggres Masyarakat Aceh), scheduled to begin on Monday and last through Friday, citing security reasons.

Spokesman for the North Sumatra administration Eddy Syofian said on Monday that the organizing committee submitted a request for a permit only on March 23. "We were pressed for time to arrange everything, including the security of the congress participants," he said.

He said that the provincial authorities would need at least three months to prepare for the congress, which was scheduled to be opened by President Abdurrahman Wahid at the Emerald Garden Hotel.

"If the committee insists on holding the congress, please find another place outside North Sumatra," Eddy said, quoting the result of a meeting between Governor Tengku Rizal Nurdin and, among others, provincial police chief Brig. Gen. Sutanto and Bukit Barisan Military Chief of Staff Brig. Gen. Asril Hamzah Tanjung, on the matter.

Spokesman for the organizing committee Nur Nikmat, who is also an Acehnese figure, said he had no idea why the authorities abruptly banned the planned congress. "We have lost Rp 500 million in accommodation expenses," he said. He added, however, that the organizers would not sue the provincial administration for the losses resulting from the cancellation.

Minister of Law and Legislation Yusril Ihza Mahendra, who was here on Monday, said that the congress organizers did not need to ask for a permit for the congress. "There is no special permit for a congress. A written notice to the authorities is enough," Yusril said.

Meanwhile, in the Aceh capital of Banda Aceh, Free Aceh Movement (GAM) military commander Tengku Abdullah Syafi'ie claimed to have warned Acehnese not to join the event prior to the cancellation of the congress.

Speaking to the local daily Serambi Indonesia, Abdullah prohibited Aceh people from joining the Medan congress because "it was set up by certain parties who want to take advantage of the tragedy and misery of the Acehnese." "I forbid Aceh people from joining the event. If they continue to do so, then we will no longer consider them as Aceh citizens," Abdullah told the daily by over the weekend. Abdullah, however, refused to comment on the congress and said that any talks or diplomatic efforts must be discussed directly with GAM leader in exile Hasan Tiro.

Another congress, the Aceh People's Congress, will be held in Banda Aceh from April 22 through April 28. State Minister of Human Rights Hasballah M. Saad has pledged security assurance for separatist rebels who wish to attend both congresses in Medan and Aceh.

In another related development, violence continued to rock Aceh as an unidentified armed gang shot dead two security personnel, Pvt. Fitriyanto Susanto and civilian guard Herman Arief, in Ujong Blang village in Beutong district, West Aceh, on Sunday. The two were paroling the area on a motorbike when suddenly an armed gang ambushed and fired on them, local police chief Lt. Col. Her Aris Sumarman said.

At least seven people have died in separate incidents over the weekend, bringing the death toll in the strife-torn province to almost 300 this year.

Market razed after stabbing

Jakarta -- An armed mob yesterday torched a market in Jayapura, the capital of Indonesia's eastern province of Irian Jaya, after a youth was stabbed by migrant traders, police said.

"The Entrop market was burned to the ground this morning but the fire has now been put out," said Sergeant Major Bahar from the Irian Jaya police headquarters.

Mr Bahar said the market, dominated by migrants from South and Southeast Sulawesi, was burned "in an attack by local people" but he declined to give further details. The mob was armed with bows and arrows, axes and machetes.
 

Human rights/law

Poet Wiji Thukul confirmed missing

Jakarta -- After more than two years of waiting as a result of unclear stories, Diah Sujirah, the wife of a young poet and member of the People's Democratic Party (PRD), have finally reported the disappearance of Wiji Thukul to the Committee of the Disappeared and Victims of Violence (Kontras)

Sujirah and Wiji's younger brother Wahyu's last contact with Wiji was by phone on February 19, 1998. It is suspected that Thukul was a victim of the abductions along with other activists which disappeared in Solo [Central Java].

In Jakarta on Friday (31/3), Kontras coordinator Munarman explained that according to the information which had been gathered, during the months of March and April 1998, Thukul was still meeting with a number of his friends but after that no more news was heard.

"We suspect that the disappearance of Wiji Thukul around March 1998 is linked with his [political] activities. That time coincided with a increase in the repressive operations of the New Order regime in an effort to cleanse political activism which challenged the New Order. With the disappearance of Wiji Thukul, the cleansing operation [has resulted in] 23 people who have disappeared and up until this time 14 people, including Wiji, have yet to return", said Munarman.

The chairperson of the PRD, Budiman Sudjatmiko, explained that at the time of the mass cleansing of democracy activists in the wake of the bloody tragedy of July 27, 1996 (1), Wiji Thukul, who had become one of the primary targets of the cleansing, was able to escape.

He was hunted by the security forces while in Solo, then Salatiga, Jakarta, even when he was being hidden in Serpon, Tangerang [an industrial zone on the outskirts of Jakarta].

According to Budiman, the is a strong possibility that Thukul became of the victims of the sweep operation of activists in Solo along with Suyat (2) who up until this time has not returned, and a victim of the abductions who was then freed, Wawan.

Thukul, who was born on August 23, 1963, in Solo, attended school up until level II at the Karawitan State High School, he then became active in art and cultural [activism] and joined the [PRD affiliated] People's Art Network (Jaker).

Thukul was known as a writer of poems of struggle. One of the sentences which is best known is the last line of a poem titled Warning, that is "There is only one word: Resist!".

Notes

1. Following Megawati Sukarnoputri's popular election as chairperson of the Indonesian Democratic Party (PDI) in 1996, the Suharto regime, who feared a PDI led Megawati (who could draw upon the tremendous popularity of her father Sukarno, the founding president of Indonesia) might threaten the state party Golkar's dominance in the upcoming 1997 elections, sponsored a rebel PDI congress in Medan, North Sumatra, and succeeded in replacing her with their own pro-regime candidate, Suryadi. Following weeks of protests and the occupation of party's headquarters in central Jakarta by pro-Megawati PDI supporters, on July 27 paid thugs backed by the military attacked and destroyed the PDI offices resulting in the death of as many as 50 people. Popular outrage at the attack sparked several days of mass rioting and violent clashes with police which was blamed on the PRD, who's members were hunted down and arrested as the masterminds behind the riots.
2. Suyat, a university student from Solo who was active in the PRD affiliated student organisation Student Solidarity for Indonesian Democracy (SMID), has been missing since February 12, 1998.

Jakarta delays fuel hike to avert unrest

Derwin Pereira, Jakarta -- The Indonesian government yesterday delayed a fuel hike to avert threats of mass demonstrations in the country.

Not prepared to bite the bullet on economic reform, President Abdurrahman Wahid continued to walk a tightrope between taking measures stipulated by the International Monetary Fund (IMF) to heal a battered economy and winning public support for it. With Parliament warning that oil-price increases could spark civil unrest and as students and non-governmental organisations planned to mobilise thousands to hold street protests today, the President held back the controversial rise.

"The government has decided to postpone the increase of fuel prices until we decide that the time is right," he told reporters. But not wanting to put an end to a thorny issue which ironically toppled former President Suharto in May 1998 after he announced a 71-per-cent fuel-price increase, he said that the government would review conditions every week. He said that the rise would be implemented when "we decide that the time is right for that".

Analysts said that the decision would calm public anger for now with some suggesting that the government was pushed into a corner on the matter not just by students and NGOs but even by legislators.

Parliamentary Speaker Akbar Tandjung yesterday said that he had delivered a letter from the House of Representatives to persuade Mr Abdurrahman to hold back the decision to raise fuel prices given its impact on the poor. Said a Jakarta-based diplomat: "Two years ago, we did not have a government that had broad political legitimacy. There has also not been large-scale and protracted demonstrations these last few months for it to explode to a level it did in 1998."

Jakarta's biggest headache is the impact of its latest decision on the Budget. Said economist Umar Juoro: "How will it get sufficient funds without the removal of fuel subsidies? With high fuel subsidies, it also means that it cannot allocate money for other expenses like creating jobs." While the IMF had indicated that the government could delay the price increase, analysts said there was no guarantee it would maintain its stance for long given its recent decision to postpone payment of a US$400 million loan tranche over concern about the slow pace of economic reform.

Indonesia coup controversy fueled

Slobodan Lekic, Jakarta -- Leaning forward in his armchair, Indonesia's founding father, President Sukarno, hands a sheaf of papers to a general seated on his right. Other generals, presidential aides and the first lady watch impassively.

The life-size diorama in Jakarta's military museum depicts the moment on March 11, 1966, when -- according to the official, army-inspired version of history -- Sukarno transferred power to Gen. Suharto, ushering in 32 years of brutal dictatorship.

But two years after Suharto's ouster, serious doubts have emerged about the handover. Sukarno's aides claim the document was in fact simply an order to the army to improve security following an abortive coup in 1965. It's difficult to determine the truth -- the original document apparently vanished 34 years ago.

At stake is more than just a footnote to history: if Suharto illegally seized power by a thinly disguised coup, he and his cronies could face prosecution on charges punishable by death.

Suharto was driven from office in 1998 and lives quietly in the capital. He suffered two strokes last year, and his lawyers have so far stymied a government corruption probe by claiming he is too frail to be questioned.

"The official line is that nobody has the paper," said Dede Oetomo, a political analyst at Airlangga University. "But in reality, the military probably destroyed it because it didn't support their claims about a legal transfer of power."

According to the army, the "Letter of Orders of March 11" granted Suharto the authority "to take all steps considered necessary" to protect Indonesia's integrity and ensure the government's continuity. The military interpreted this to mean Suharto had been installed as acting president.

As many as 500,000 leftists were slaughtered in 1966 in an army- sponsored massacre the CIA characterized as "one of the worst mass murders of the 20th century." An estimated 600,000 were imprisoned without trial.

The killings followed the mutiny by a group of middle-ranking officers on September 30, 1965. Six generals were slain before Suharto -- whom the plotters had inexplicably left off their hit list -- ordered his troops to restore order.

According to the army's version of events, the coup attempt had been instigated by the Indonesian Communist Party, then the world's third-largest. Although no direct link between the coup leaders and the Communists was ever established, the party was decimated in the ensuing purge and its top officials executed along with the mutineers.

Earlier this month, reformist President Abdurrahman Wahid said he would support an unprecedented judicial probe into the massacres. "The government's task is to follow up the findings of the investigations, to punish those ... who are found guilty," he said. This week, Wahid said he also wanted to ease a ban on the Communist Party.

Hario Kecik, a former general, said the massacre was the work of a clique of officers who served during World War II in the Japanese army, where they were imbued with a disdain for civilian rule and a penchant for extreme brutality. "Every family has at least one victim of Suharto's regime," said Kecik, who himself spent four years in jail and another 11 in exile.

Within days of receiving the March 11 order, Suharto arrested several of Sukarno's ministers, including those depicted in the museum diorama. Sukarno himself was forced out of office; shattered by events, he died soon afterward.

"The nebulous March 11 order has ... become a political hot potato," said a recent editorial in the Indonesian Observer. "It is time to study the actual content ... and to punish those who have ignored or abused its message." Most of the people depicted in the diorama are long dead and others refuse to talk.

Media reports have claimed Gen. Muhammad Jusuf, one of the surviving officers, was in possession of the document and would give it to parliament. This was quickly denied, but the speaker of the assembly appealed to anyone with knowledge of its whereabouts to come forward. Researchers need not bother looking for answers at the military museum. The file in Sukarno's hand contains an old newspaper.

'Ailing' Soeharto digs in

Lindsay Murdoch, Jakarta -- Only a day after attending a lavish reception in Jakarta for his grand-daughter's wedding, former president Soeharto has claimed he is not healthy enough to answer questions about corruption during his 32-year rule.

Challenging the recommendations of an independent medical investigation commissioned by lawyers for the Attorney-General, Mr Marzuki Darusman, Mr Soeharto's lawyers said yesterday he had difficulty talking, and needed "assistance for complex matters".

Mr Darusman had earlier authorised a summons for Mr Soeharto to appear for questioning today over alleged corruption at charities he used to control. But one of Mr Soeharto's lawyers, Mr Juan Felix Tampubolon, said: "We want to inform the Attorney-General that Soeharto does not have the ability medically to come."

Another of Mr Soeharto's lawyers, Mr O.C. Kaligis, said his client was incapable of submitting to questioning. "He can only understand and utter simple questioning," Mr Kaligis said.

Mr Darusman said he would consider the case of Mr Soeharto, 79, who was admitted to hospital last year after suffering a stroke. However, he said Mr Soeharto first had to agree to meet him so an assessment of his condition could be made. A deadline for the meeting had yet to be set, Mr Darusman said.

Indonesian newspapers yesterday published photographs of a healthy-looking Mr Soeharto talking at his grand-daughter's reception with President Abdurrahman Wahid, who authorised the reopening of Soeharto corruption allegations after he took office in October.

Mr Soeharto has rarely appeared in public since he was forced from office amid bloodshed in 1998. Mr Wahid has promised to pardon Mr Soeharto if he is convicted. But he has made it clear there will be no pardons for Mr Soeharto's family and cronies, who amassed one of the world's biggest fortunes during his strict rule of the country.

A team of Mr Soeharto's lawyers went to Mr Darusman's office only hours after one of Mr Soeharto's closest former associates, the timber tycoon Mr Mohamad "Bob" Hasan, had been detained over allegations that he defrauded the state of millions of dollars in a forest mapping scam.

At the time of the alleged offence in 1997, the former trade and industry minister controlled a state-sanctioned plywood monopoly that was awarded a $US87 million contract to conduct aerial mapping of the country's vast forests.

But the forestry and plantation ministry has since reported irregularities in the mapping results, claiming the techniques used were obsolete, uneconomical and did not live up to the value of the contract. Mr Hasan, a long-time golfing friend of Mr Soeharto, played a key role in a network of hundreds of companies controlled by the Soeharto family.

Environmental groups claim companies that Mr Hasan controlled helped destroy large areas of Indonesia's rainforests through illegal logging. Attorney-General's officials said Mr Hasan could be held for questioning for 20 days. He had already been barred from leaving the country. Mr Hasan declined to comment to reporters, describing himself as a detainee.

Illegal immigrants riot at holding centre in Johor

Hundreds of Indonesian illegal immigrants rioted at a holding centre in Johor. Local newspaper reports quoted an Indonesian consulate official as saying that the riot began after a detainee was allegedly assaulted by a guard and sent to hospital.

The detainees threatened to burn down the holding centre if their demand to be sent home was not met. This went on for about 12 hours, but fortunately no one was injured.

Police later sent some 900 detainees back to Indonesia to reduce tension at the camp. The camp houses illegal immigrants from Bangladesh, the Philippines and Nigeria.

The clash is the latest in a series of violent incidents involving Indonesian workers in the country, prompting a top police officer to issue a stern warning for foreign workers to obey the law.

Official figures show there are about 700,000 foreigners working legally in Malaysia in 1999, but it is believed that there are another hundreds of thousands, mostly from Indonesia and Bangladesh, working illegally.

Indonesia to hand out $112m in subsidies

Jakarta -- The Indonesian government will pay out 495.8 billion rupiah (S$112 million) in subsidies for the poor and public transport operators to offset planned fuel price hikes.

A total of 164.8 billion rupiah had been earmarked for subsidies to the poor to buy kerosene, the deputy chairman of the National Development Planning Board, Muhammad Abduh, said.

Public transport operators, which in Indonesia are mostly private companies, will also receive a total of 331 billion rupiah in subsidies to buy diesel oil, the main fuel for their vehicles.

The subsidies have been agreed upon between the government and the legislature to prevent a rise in public transport costs. This would prompt a rise in other costs and the prices of goods.

The government and the legislature have mutually agreed to raise fuel prices by an average of 12 per cent from April 1. The price of kerosene will rise by 70 rupiah per litre to 350 rupiah per litre.

Poor families will receive a lump sum of 10,000 rupiah to buy 135 litres of kerosene for the rest of the year. This is based on the assumption that each family consumes 15 litres of kerosene, mostly for cooking purposes, per month. The subsidy was based on data from the social safety net programme which showed there were 17.4 million poor families.

The fuel subsidy to public transport operators was agreed upon after the government decided to increase the price of automotive diesel oil from 550 rupiah per litre to 600 rupiah per litre.

However, only three months of subsidies will be provided for each public transport operator. "After three months, we shall re- evaluate the data on the numbers of public tranpsortation vehicles in operation," Mr Abduh said.

According to him, the subsidies would be disbursed through the country's network of post offices. "Through the post offices, we expect to channel the subsidy funds to the remotest areas within two weeks," he added.

Mr Abduh said the government preferred using post offices rather than banks to distribute the fuel subsidies because the former had a wider network of operations.

Bob Hasan held in graft probe

Jakarta -- A close friend of former president Suharto was detained yesterday by the Attorney-General's office in connection with an investigation into the alleged misuse of funds involving an Indonesian government contract.

Mohamad "Bob" Hasan, the former trade minister and Suharto's golfing buddy, was held for questioning over a forest mapping concession. No charges have been laid. "We will detain him for 20 days ...," said Mr Suhandojo, the spokesman for the A-G's office.

The A-G's office is questioning Hasan over allegations that one of his companies, PT Mapindo, misused state funds. Mr Chairul Imam, the office's director of corruption crimes, said: "Bob Hasan's company was ordered by the Ministry of Forestry to make aerial maps of Indonesian forests. It did not give the result it promised ... and we are talking about billions of rupiah here.

"He caused losses to the state but he could not specify the amount of money involved. We will need the state auditors for that."

Hasan told reporters after being grilled for six hours at the A- G's office in central Jakarta: "I'm now a detainee, so please ask my lawyers." The A-G's office said the detention could be extended if the investigating team considered it necessary.

Hasan's conglomerate depends mostly on the timber business, and enjoyed vast and lucrative business privileges under Mr Suharto.

The arrest is part of Attorney General Marzuki Darusman's ongoing campaign against high-level corruption during Mr Suharto's 32- year reign and the 17-month term of Dr B.J. Habibie, his successor as head of state.

Hasan has been questioned several times since Mr Suharto's ouster two years ago. He enjoyed a virtual monopoly over one of the most profitable sectors of the Indonesian economy. He is one of the largest single debtors of the Indonesian Bank Restructuring Agency -- a state agency set up to revive Indonesia's graft- ridden banking system. The agency says he amassed debts of more than US$710 million (S$1.2 billion).

Mr Suharto, himself, is to be questioned tomorrow on unrelated charges of misusing funds belonging to several charitable foundations.

ICW blasts Wahid's record in handling corruption cases

Jakarta -- The Indonesian Corruption Watch (ICW) -- a watchdog body that monitors abuses involving corruption, collusion, and nepotism (KKN) -- commented that President Wahid has not yet significantly combatted corruption in Indonesia.

Its top official said in Bandung Saturday that the president, to date, has not punished any corrupter. "Due to the lack of measures taken against corrupters, Gus Dur has achieved a poor record which can be categorized as a red [failing] score," Teten Masduki, Coordinator of ICW, said. (A red score is a numerical grade used in school children's report book that indicates the pupil's lack of capability in a specific area of study.)

Teten, who was recently appointed as a member of the Ombudsman body, said that he was used to feeling embarrassed every time he went abroad as his counterparts often labeled the Indonesian bureaucracy as the most corrupt in the world. "It [their labeling] was true," he said. "We will be frustrated if we leave it to the current law enforcement, because corruption in Indonesia has become a political problem. Most of the law enforcement officials themselves are implicated in legal irregularities.

In further comments, Teten expressed a pessimistic attitude in regards to the latest bureaucratic efforts to eradicate KKN, and believes that such practices will likely continue, particularly in major areas such as Medan, North Sumatra, and Bali. "It has become a new trend among legislator [in these areas] to accept bribes, as was shown in the mayoral elections in Medan and Bali," he said.

Teten also blasted the government's decision to increase the salary of high ranking state officials in group I through V of state of up to 30% . "High salaries for high ranking state officials won't prevent them from committing corruption. It's the mental attitude that the government has to deal with. I'd say it won't be effective in changing their corrupt behavior," he remarked "The government has to increase the salaries of the low ranked civil servants, because they are the ones who are facing difficulties everyday," he added.

Three generals involved in 1984 shooting identified

Jakarta -- Three generals, allegedly involved in quashing a 1984 riot in Jakarta when scores of Muslim militants died, have been identified by the National Commission on Human Rights (Komnas Ham) and will be summoned for questioning.

Although not named by the commission, newspapers here identified two of them as former vice-president Try Sutrisno and ex-military chief Benny Murdani.

The secretary general of the commission Asmara Nababan has said that the three would be questioned over the incident, when troops opened fire on a crowd of Muslim protesters in North Jakarta, the Republika daily reported.

In the past only two generals had been identified by their initials as being involved in the September 1984 Tanjung Priok riot, allegedly sparked by an inflammatory sermon.

Intelligence personnel attempted to halt the sermon, but trouble quickly flared as rioters began to torch several businesses in the port area, and security forces moved in.

"On March 1999, the Komnas Ham already had a preliminary conclusion on the Tanjung Priok case, that there were human rights violations ... that involved security personnel, three generals," Mr Nababan said. He identified the three generals by their initials: TS, BM and FT last week.

Past press reports had only cited two sets of initials corresponding to former vice-president Try Sutrisno, the then commander of the Jakarta garrison, and Benny Murdani, former head of the armed forces. The identity of the third general was not immediately known.

Gen Murdani, in his official statement on the incident said nine people were killed and 53 were injured. But independent death tolls spoke of more than 100, with reports that there were truckloads of bodies.

Mr Nababan said that if the generals refuse to be questioned, it was empowered by law to seek an injunction from the attorney general's office.

Gen Try said that there is no need for him to be questioned as the incident resulted from military policy at the time and was not the responsibility of a single officer.

Papers have identified two of the three generals involved in the so-called September 1984 Tanjung Priok incident, when troops opened fire on a crowd of Muslim protesters.

They are former Vice-President Try Sutrisno, the then commander of the Jakarta garrison, and former head of the armed forces Benny Murdani. The identity of the third general is not immediately known.

Defence expert: claims of spy flights `a smear'

Paul Daley, Canberra -- Indonesian military figures associated with the discredited Suharto regime are deliberately smearing Australia with unsubstantiated allegations of unauthorised RAAF spy flights over the archipelago, senior Australian defence and intelligence figures claim.

The sources allege sections of the Indonesian military, humiliated by the InterFET mission, have embarked on a "payback" after the Australian-led deployment to East Timor.

The allegations of a conspiracy to discredit Australia come after new claims by Indonesian air force chiefs in recent days that Australia has repeatedly made illegal flights over eastern Indonesia, including at least 10 in the past two months.

Over the weekend Indonesia's Air Vice Marshal Alimmunsiri Rappe said: "Our radar monitoring showed the high frequency of the Australian aircraft's violations of our territorial sovereignty." He warned that intruders could be forced away or shot down.

But the Australian Defence Force yesterday said Indonesia's latest claims were demonstrably untrue. "We deny absolutely that there have been any unauthorised flights into Indonesian airspace," a spokesman said. "We can prove there have been no unauthorised flights as claimed. Australian aircraft do not move [into Indonesian airspace] until we have the authority from the Indonesians to do so."

An intelligence source described the latest Indonesian allegations as part of "a campaign of lies" about allegedly unauthorised Australian military flights. "The Indonesians continue to make these allegations but, with few exceptions, they have given no examples," the source said.

"When they have given examples, the RAAF has been able to prove that the planes in question were given clearance or were not in Indonesian airspace. This is clearly part of a payback campaign by elements of the military associated with past regimes."

Earlier this week, the Australian ambassador to Jakarta, Mr John McCarthy, strongly denied the latest Indonesian claims. He said Australia had investigated the allegations every time they had been raised and found them to be baseless. "Australia has enormous respect for Indonesian sovereignty," he said.
 

Environment/health

Indorayon shut down for environmental damage

Jakarta -- The Indonesian government has shut down polluting pulp maker PT Inti Indorayon Utama (JSX: INRU) in Porsea, North Sumatra, pending a permanent settlement of its case by an arbitrator, an Indonesian environmental activist said.

Indonesian Forum for the Environment (Walhi) chairwoman Emmy Hafild quoted President Wahid's as saying "The plant was closed down to accommodate objections from the local population. But the closure is not final because an arbitrator will take up the case and issue a ruling on the issue."

Emmy met the president with a delegation from the Porsea community. The president had said he had decided to submit the INRU question to an arbitrator after some of his cabinet gave opposing views on it.

Environment Minister Sony Keraf wanted the government to close down the company permanently, while Industry and Trade Minister Yusuf Kalla and State Minister for Empowerment of State Entreprises Laksamana Sukardi insisted on bringing the issue to a legal institution.

During the meeting with Wahid, the Porsea community delegation expressed support to Minister Keraf's stand. It also reported that since the plant was closed, the local people had been able to resume their normal agricultural and farming activities. The pulp-maker has caused grave environmental damage in the region where it operated.
 

Arms/armed forces

US on path to restoring military ties to Indonesia

Michael Richardson, Singapore -- The United States is moving toward restoring full military ties with Indonesia that were cut in September when hard-liners in the Indonesian Army were accused of supporting a campaign of killing, destruction and forced movement of people by militia gangs after East Timor voted for independence.

The commander in chief of US forces in the Pacific, Admiral Dennis Blair, said Friday that progress toward resuming military links with Indonesia had been made, adding that he would go Jakarta on Sunday to discuss what more needed to be done before a full military relationship could be resumed. "My visit signifies that we are at least within talking range of it," he told a small group of reporters in Singapore. "Some progress has been definitely made."

In the violence after East Timor rejected continued Indonesian rule, 250,000 East Timorese -- nearly half the estimated population -- fled or were forced across the border into West Timor, which remains part of Indonesia. The United Nations, which is now preparing East Timor for statehood, estimates that 149,000 of these people have returned since October.

But on a visit Friday to Jakarta, the head of the UN transitional administration in East Timor, Sergio Vieira de Mello, called on the Indonesian government not to disrupt the return process by halting the delivery of food and other aid to the remaining 100,000 East Timorese still in camps in West Timor.

Some Indonesian officials have reportedly said that the aid would be halted March 31 because Indonesia could no longer afford to feed the refugees and the assistance acted as a magnet that prevented those who wanted to return to East Timor from doing so.

However, Mr. de Mello said that the main obstacle to the free repatriation of displaced East Timorese was the activity of militia extremists who continued to harass them and spread lies about the situation in East Timor to deter potential returnees. He said that President Abdurrahman Wahid of Indonesia pledged in a meeting Thursday that Indonesia would act to prevent such abuses.

After the talks with officials in Jakarta on Sunday, Admiral Blair will fly on Tuesday to Dili, capital of East Timor. He was last in Indonesia in September to inform the government that President Bill Clinton was about to cut military ties because of the abuses in East Timor.

Admiral Blair said Friday that there were two primary areas in which the United States needed to see progress by Indonesia before military ties, including sale of American equipment and the provision of spare parts, could be restored.

He said the first was accountability for the "very bad behavior" by elements of the Indonesian military who were in East Timor when the independence vote took place.

Mr. Wahid last month removed General Wiranto, armed forces commander at the time of the vote, from his post as coordinating minister for security after an Indonesian inquiry named him and dozens of other officers and militia leaders as suspects in the East Timor human rights abuses.

Admiral Blair said that progress was also needed in "taking care of the refugee population in West Timor, ensuring that those who want to go back to East Timor do go back and that those who are left are moved into a more permanent situation so that you don't have a breeding ground for this militia activity which works its way across the border into East Timor."

Indonesia re-thinks US military ties

Indonesian President Abdurrahman Wahid has proposed breaking his country's reliance on the United States for military equipment. He proposed that instead the domestic defense industry expand along with a network of international suppliers. Wahid appears to be seeking leverage for an upcoming visit to Washington. But his stance opens up new opportunities for other suppliers, notably Russia and China. Wahid accurately assumes that Indonesia is vital to US security concerns; he may be mistaken, however, in his belief that Washington will simply watch Jakarta's military enter into new strategic partnerships.

Addressing members of Indonesia's Air Force Special Troops (Paskhas) on March 25, President Abdurrahman Wahid called for Indonesia to break its military dependence on the United States. The president's comments are less about market dominance than strategic dominance. Since his election, Wahid has paid the United States little diplomatic heed, instead focusing on Asian neighbors and calling for greater cooperation with China and India.

In reality, US arms sales and military cooperation with Indonesia have declined sharply over the last few years. Now, Wahid is suggesting that the military buy from countries like France or Russia. Wahid said he did not fear a backlash from the US for his decision to diversify weapons sources. "They also need us," he said.

"Without us, security in this region is not guaranteed." The Indonesian president is likely correct that Washington considers his country important to regional stability, but he may be miscalculating the potential American response. With Wahid contemplating greater cooperation with Russia and China, the United States is unlikely to take a passive stance.

Wahid's presidency is re-shaping Indonesia's relationship with China, both by easing the government's strict anti-communist stance and by growing more friendly with the country's ethnic Chinese elite. Wahid has steadily promoted a shift in Indonesia's anti-Communist policies, which were established following a 1965 coup attempt attributed to pro-Communist forces potentially supported by China. Over the past week, the president has advocated the reversal of a law that forbade the teaching of communist ideology in Indonesia and that blocked the activities of the Indonesian Communist Party. His calls triggered a domestic backlash, similar to that when he earlier attempted to open relations with Israel.

Though he has justified these moves as helping Indonesian democracy, they appear to be part of a series of overtures toward Beijing. In early March, Wahid eliminated a law allowing special investigations into all political candidates, which had previously been used to look for communist connections. He has also expanded on efforts by former President B.J. Habibie to reverse anti-ethnic Chinese laws, established in conjunction with the country's anti-communist regulations.

Both presidents have been motivated by economics. Indonesia's ethnic Chinese minority controls a substantial portion of the nation's capital. This, however, has often made them the target of domestic unrest, inducing many to flee the nation -- with their money. In addition to reversing capital flight, Wahid has deeper reasons for promoting greater acceptance of China. During his speech to the Paskhas, Wahid said the United States does "not simply want to help us, they want to sell to us." Wahid said Indonesia had been "made dependent on the United States," both economically and militarily, adding, "I have thought for a long time about reducing our acquiescence to the US and depending more on our own capability."

Wahid's statements appear to stem more from strategic and political considerations than from a real concern over the United States cornering the Indonesian arms market. The United States has traditionally been Jakarta's primary weapons supplier, with over $1 billion in arms sales since 1975. But the flow of weapon systems has waned considerably in the last few years. Human rights lobbies have played a key role in reducing arms sales. In 1993 the State Department banned small arms sales; in 1995 and 1996 the ban was expanded to include helicopter-mounted armaments and armored personnel carriers. In September 1999, following accusations of military human rights abuses in East Timor, the United States suspended all new and pending commercial and foreign military sales to Indonesia.

While Indonesia still relies on the United States for spare parts and system upgrades, Jakarta has already been weaned from Washington's military assistance. The 1997 Asian economic crisis further reduced Indonesia's arms expenditures, and the European Union -- whose sales have often collectively surpassed that of the US - dropped its own arms embargo in January 2000.

Both Europe and Russia have entered the picture. But the government appears to be looking to China for both military support and strategic positioning. Wahid has promoted greater cooperation with China since before he was elected President, vowing to make Beijing one of his first official visits. Wahid's visit in December 1999 was followed by bilateral economic and political consultations. Jakarta's newfound openness to China after years of estrangement, coupled with calls for decreased dependence on the United States, presents a troubling situation for Washington.

The Indonesian president expressed little concern for a US backlash, noting that Indonesia remains strategically vital to the region. However, it is this same vital position that will induce Washington to react rather than sit back and observe. Indonesia would not be alone in finding important, new strategic partners.

Malaysia, a growing ally for Indonesia, is a long-time vocal opponent of US regional hegemony. Malaysia is a major purchaser of Russian arms and is increasing its contacts with China. At a recent defense meeting, the idea of joint Malaysian-Chinese military exercises was even broached. Adding to this, Malaysia, Indonesia and Brunei have proposed greater trilateral cooperation.

Wahid intends to use his apparent lack of concern as a bargaining tool in his upcoming April visit to Washington. However, he may be overly optimistic about his leverage.

Former Indonesian President Sukarno's flirtation with communism and Beijing -- in addition to Phnom Penh, Pyongyang and Hanoi -- spawned the 1965 coup attempt. In the wake of the failed takeover of the government, a wave of anti-Communist and anti-Chinese sentiments fueled the executions and arrests of millions and led to decades of institutionalized discrimination against ethnic Chinese.

While Washington is unlikely to advocate a similar course of events at this time, it will not sit back and watch as the regional balance of power slips into the hands of Chinese and Russian governments. US military ties can be resumed. Other measures could include inducing allies in Europe and Asia to increase diplomatic and military ties with Indonesia as proxies. Washington may also take a more extreme measure and implement sanctions against Jakarta, though US imports represent less than 15 percent of Indonesia's exports.

Another possibility may be calling Wahid at his own game; the country's Muslim majority could easily find the new policies distasteful.

Superficial and real reforms in TNI

Editorial and opinion -- Competing agendas remain one hindrance to reform within the Indonesian Military, says Damien Kingsbury, the Executive Officer of Monash Asia Institute, who recently wrote Guns and Ballot Boxes: East Timor's vote for independence. In this recent interview at Monash University in Melbourne, he shared with The Jakarta Post his guarded optimism and concern for hurdles facing Indonesia's democracy in relation to the changing role of the military. An excerpt of the interview follows:

Question: In your research and observation of the Indonesian Military (TNI), what struck you as the most optimistic and most pessimistic aspects?

The most optimistic aspects are the strength and vitality of the reform movement. I think there is some political opportunism there, but on the whole we are seeing open discussions about a set of ideas that only a few years ago would not have been allowed at all.

On the down side, while superficial reform has been and will continue to be achievable, fundamental reform will be much slower, I think, and not as successful.

The main impediments to a more fundamental reform of the TNI revolve around the evolution of a distinct and particularistic military culture, more broad notions of authority and hierarchy and the practical difficulties of separating senior officers from what have been lucrative or powerful positions.

Very few people anywhere are happy to give up something that enhances their status or power, and TNI is no different. Indeed, many officers went into TNI attracted by status and power, and it is a challenge to now say this must change.

It is not as easy as having a benchmark of military disengagement and reaching that in, say, five years. There will be some hangover into the indefinite future. But I hope I'm mistaken.

President Abdurrahman Wahid, or Gus Dur, seems to have certain designs for TNI. He regards Agus Wirahadikusumah, the new chief of the Army's Strategic Reserves Command, as a thinker. Do you see attempts by Abdurrahman to "intellectualize" TNI?

No, TNI was already "intellectualized" under [retired generals] Wiranto and through [Susilo Bambang] Yudhoyono. Agus Wirahadikusumah is following that lead, although he's pushing it further. His appointment was made, I think, because he will shake up TNI.

He may not be successful in overhauling it, but he will certainly force it to reconsider some basic issues, such as the territorial structure. Of course, he may also be sacrificed in the process, although he could also be groomed as a potential commander.

Who else can you categorize as intellectuals or thinkers in TNI? Bambang Yudhoyono is the obvious example, as is Agus Widjoyo. Although now out of TNI, Hendropriyono might also fit that mold. Hendropriyono was seen as one of a group of senior officers, also including Agum Gumelar, [Muhammad] Yunus Yosfiah, mostly after his appointment as information minister, and others, who were in favor of limited reform.

This mostly revolved around breaking Soeharto's control of ABRI/TNI and establishing it as an independent organization. However, this did not necessarily imply an end to its dwi fungsi (dual function), so reform from some of these officers was quite limited.

Bambang Yudhoyono, on the other hand, suggested a more far- reaching program of reform, and articulated several key policy points. But even here, while Bambang was clearly a reformist he was also cautious, in particular over the period of transition from TNI's political role to a nonpolitical role.

Possibly his biggest success was in ensuring that TNI did not interfere in last June's general election, and that it formally broke its links with Golkar. However, since going into the Cabinet, Bambang has been much quieter on such issues, perhaps reflecting his acknowledgement that he is in the process of no longer being a serving officer.

In one sense, most of the leading officers now are "intellectuals" of one sort or another. None can afford to simply rely on being a good soldier -- they also need to be political thinkers and strategists, and to do this they need some sense of vision for both TNI and for Indonesia.

How effective are they?

So far, they have been very effective, especially compared with, say, when Try Sutrisno was the commander. He was definitely not an intellectual. The reform process which TNI is grappling with is indicative of their intellectual strength, although this covers a range of positions.

But it should be remembered that "reform" is not synonymous with "intellectualism" and that some TNI "intellectuals" have a limited commitment to reform.

How good is this pooling of thinking cadres in TNI? Will it help TNI's professionalism?

"Professionalism" in TNI really means taking the military completely out of politics, which means making it a defensive force only, completely loyal and beholden to the civilian government.

This is the goal of the reformists, although as I've noted many of even the reformists have trouble in thinking about achieving such goals outside the political arena.

Perhaps this indicates just how entrenched TNI is in the political process. The "pooling" of "thinking cadres" in TNI was demonstrated by the launch of Agus Wirahadikusumah's last book, Indonesia Baru dan Tantangan TNI (The New Indonesia and TNI's challenge), and the officers who contributed to it.

But factionalism within TNI has somewhat divided the capacity for TNI's thinkers to be "pooled" as such.

How does the situation differ from under Soeharto?

The current environment concerning TNI reflects the competing political agendas in society at large. Under Soeharto such competing agendas were not allowed to exist in the open. Perhaps the most obvious difference is that the generals are slowly being parted from the economic process and having their direct political influence curtailed. In part this happened under Soeharto too, and in part Abdurrahman is cultivating his own personal clique within TNI, as Soeharto did with the Armed Forces (ABRI).

But Abdurrahman's political style is very different -- much more liberal -- and this is reflected in the gradual reorientation of TNI. TNI is no longer the ideologically driven security apparatus that it was, especially in the first part of the New Order, although elements of that still exist.

If "reform" is not synonymous with "intellectualism" in TNI, isn't the idea of politically astute military officers rather incongruous with the ultimate objectives of depoliticizing the military?

There is, of course, a contradiction within elements of TNI over its depoliticization, in particular through the political processes being used to achieve this outcome. This in part reflects the deeply entrenched political position of TNI.

But it also reflects a fundamental inability of most senior officers to think of themselves or TNI in other than political terms.

There appears to be a process of contraction in TNI, because many civilian positions have been removed from TNI career avenues. Would this lead to gradual elimination of the military's dual function?

It is a step in that direction and it is a part of the "New Paradigm" developed by Bambang in the mid-1990s. But in one sense it only removes the New Order excesses of ABRI under Soeharto, and does not deal with the core elements of dwi fungsi as developed under [former commander Gen. A.H.] Nasution in the late 1950s.

Do you think Nasution had any idea his concept of dwifungsi would develop into what it was under Soeharto?

According to Agus Wirahadikusumah, the evolution of dwi fungsi was a product of its circumstances -- "a bastard child whose birth could not be prevented," he said.

Regardless of whether Nasution intended its outcome -- and I think it can be demonstrated by his later comments that he did not -- it was a logical consequence of establishing the military as a parallel structure to civil government.

Soeharto simply used that mechanism and elevated it to a more elaborate position. But the seeds of its evolution were planted by Nasution.

Perhaps he had not read enough of Latin American or Central European history to know the likely outcome of his plan, or perhaps he did. It must be remembered that a major philosophical contribution to the founding of the state of Indonesia in 1945 was Japanese organicism -- also known as fascism -- and that this Japanese model also had parallel structures for the military and the government. In this sense, Imperial Japan was perhaps a less than ideal midwife to the birth of the new state of Indonesia.

Another side effect of this contraction is the concentration of middle-ranking officers in the middle, because they cannot be "dispersed" into civilian positions. Will this cause a great deal of dissatisfaction and create a boiling pot effect?

Perhaps, I've seen some of that. But perhaps such middle-ranking officers will also need to be educated, over time, about the role of the officer core being to obey orders and to serve the state, without regard for personal enrichment or political advancement.

Many say there is a lot of feudalism and primordialism in TNI. When Lt.Gen. Suaidi Marasabessy was replaced with Lt.Gen. Djamari Chaniago as TNI's chief of general affairs there were protests from Maluku, because they felt no longer represented by TNI leadership. How do you think feudalism and primordialism will fare in the immediate or distant future? Will they hinder the overhaul of TNI as presumably planned by Abdurrahman?

The question of feudalism is an interesting one, mostly because theoretical analysis of Indonesian politics and the Armed Forces have focused on patrimonial tribalism, which is a single, central authority dispersing patronage.

However, elements of TNI have increasingly been divided from the government and have split between themselves, creating a sort of feudal structure in which there are many power bases under an overarching power, in this case the presidency.

The main advantage of such feudalism is that it creates political "gaps" and allows and even encourages differences of views to be expressed. This is a fundamental requirement for the development of a real democracy, toward which I think Indonesia is still heading.

Of course, such feudalism is a long way off from democracy itself, but recognition of a plural political constituency is absolutely necessary for such political maturation.

However, such feudalism does pose threats to the longer term stability and security of the state. It also has the potential to establish a type of "warlordism", especially under the proposed decentralization plans. This could place the regions under the control of powerful elites and actually hinder the development of political participation in the regions.

In terms of primordialism, all societies retain degrees of "tribalism" and Indonesia is no different. Indeed, such primordialism could be seen as a way for regions that feel vulnerable to excessive central control to assert some degree of autonomy.

This is okay if it is expressed through a participatory, representative political framework which includes the interests of the minority as well as the majority. But it can be very destructive if it reverts to a "winner-take-all" scenario.

If this was to develop now -- and there are elements of it in places like Ambon and some other trouble spots -- there would be a greater potential for the fragmentation of the state.

Any examples of a winner-take-all scenario?

The scenario is basically that which reflects more primordial forms of political dominance, in which power is centralized and in which any questioning of authority is implicitly a challenge to that authority.

This was noticeable under Soeharto. For example, if Islamic separatists in Aceh were to be successful, it is unlikely that they would opt for a compromise state. Rather, it would seem that the type of state that would be established there would allow little room for meaningful dissent or disagreement.

In terms of Indonesia overall, if one group was to achieve power, or power was to again become centralized in the hands of an individual or a small, cohesive group, we could see that group assisting its friends and fellow travelers at the expense of other groups.

Fortunately, the tendency at the moment is not in that direction. But if, say, in Ambon, the situation is settled in a way that results in long-term exclusion of Christians from power and economic advantage, it would almost certainly further destabilize the region.

It really does depend on how decisions about difficult situations are made. If they are not inclusive there will continue to be trouble, and the continuing potential for fragmentation.

So, if this was to genuinely threaten, we could see a return to TNI asserting its authority as "guardian" of the state, as it did in 1958, which led to the dwifungsi in the first place. Let's just say that Abdurrahman has a big job ahead of him on a number of fronts. (Dewi Anggraeni)

Jakarta to cut dependence on US for arms

Jakarta -- President Abdurrahman Wahid said Indonesia must develop its own military industries, diversify its weapons- sourcing and move away from dependence on the United States.

"We have been very dependent on one side -- not only economically dependent but also in arms. We have been made dependent on the United States. Therefore, I have always thought from the start -- reduce that dependence on one single side," he said.

Speaking during a visit to the headquarters of the Indonesian Air Force Special Command in Bandung, West Java, on Saturday, he said Indonesia had many industries which could be upgraded, with a little effort, to produce modern weapons.

He cited the Nusantara state aircraft industry, the state-owned Dahana firm that produces explosives, national shipyard PT PAL and ammunition-and-weapons-maker PT Pindad.

"We have been able to buy so far only with loans and this should no longer be allowed," he said. "We are a great nation and we must have our own military industry."

The country could learn from the successes of China and India in developing their own military industries, he said, adding that Jakarta should not worry about any backlash should it reduce its dependence on Washington for arms. "They also need us. Without us, security in this region is not guaranteed," he argued.

Indonesia's dependence on US arms was most evident in its air force, which relies on US-made F-16s as its backbone, but Jakarta has already begun to diversify, buying two squadrons of British- made Hawks.

In May 1997, Indonesia also cancelled the planned purchase of nine F-16s after the sale was blocked by the US Congress over Indonesia's human rights record. Jakarta then began to look to Russia as an alternative source, but any purchase had to be postponed because of the economic crisis that hit Indonesia and other Asian countries.

President Abdurrahman pledged to work to modernise the equipment and arms for the air force after being told that the 3,000-strong Air Force Special Command was equipped mostly with weaponry dating back to the 1950s. He also said that in view of the importance of safeguarding Indonesia's wide expanse of air territory, the command should be expanded.

"We have so many airports but the forces are so small, and because of this, we should increase the number of personnel to 6,000," he said, without giving details on the number of airports or airbases the country has.

"The Air Force Special Command has the heavy duty of safeguarding Indonesian sovereignty over its airspace and, therefore, we should accord some attention to it," he said, adding: "Hopefully, we have enough money for that."
 

Economy & investment

Indonesia says it consulted IMF on delay in price hikes

Indonesia has consulted the International Monetary Fund on its delay in raising fuel prices, said Economics Minister Kwik Kian Gie. He added that the IMF gave no reaction and Mr Kwik said this means no objection.

Under the letter of intent signed in January, Jakarta has to lift state fuel subsidies. This means that Indonesia has to increase fuel prices of about 12 percent. But on Friday -- a day before the scheduled price rise -- President Abdurrahman Wahid said the government would delay the move as people are not ready to accept it and mass protests had been planned for Saturday over the increase. The president said the government would review the situation weekly.

Up to 400 students protested outside the parliament house on Friday against the planned price hikes in fuel, electricity, transportation and salaries of top civil servants.

Security in the capital was especially tight with Jakarta's police chief saying that 16,000 officers were mobilised in anticipation of massive demonstrations and possible trouble. The last time the government tried to tinker with fuel prices in 1998, riots broke out.

Indonesia races to meet IMF economic deadlines

Jakarta -- Indonesia faces a race against time to fulfil pledges made to the International Monetary Fund if it is to persuade creditors to reschedule its debt and the IMF to release its next loan instalment, officials said yesterday.

Speaking ahead of a special Cabinet meeting to discuss speeding up economic reform, chief economics minister Kwik Kian Gie said the next disbursement of IMF bail-out funds was not likely to be made as scheduled, as several promised measures were yet to be completed.

The routine review by the IMF will lead to the disbursement of US$400 million in aid, but the review should have been completed by the end of last month, or early this month.

Mr Kwik said his office would continue to monitor their implementation and added that Indonesia had promised to implement key measures by April 12 and other reforms by April 30.

But a letter from IMF senior resident representative John Dodsworth obtained by Reuters said Indonesia should aim to further accelerate reforms to smooth its planned meeting with the Paris Club of creditors on April 12, when it will ask for the rescheduling of US$2.1 billion in debt.

"In order for the authorities to be able to present a stronger case to the Paris Club on April 12, it would be better if the measures dated April 12 could be advanced to April 8," said the March 31 letter which Mr Dodsworth sent to Mr Kwik.

The measures the IMF wants by April 8 include giving the Jakarta Initiative Task Force -- set up to promote corporate debt restructuring -- new powers to help it break the country's private debt deadlock and clamp down on recalcitrant debtors.

It also wants the recapitalisation of Bank Negara Indonesia (BNI) to begin, and the recapitalisation of Bank Mandiri to be completed. Performance contracts must also be signed with the two banks.

Indonesia's budget for fiscal 2000 assumes that the Paris Club will agree to reschedule US$2.1 billion, and failure to secure this could gravely hit the country's fiscal position.

Indonesia is due to receive a US$400 million IMF loan tranche early this month, but the body said last week that payment was not expected until next month amid concerns about the slow economic reform. The IMF is particularly concerned at Indonesia's failure to implement promised measures to tackle its US$65 billion private debt burden and take recalcitrant debtors to court.

In its letter, the IMF said that to minimise the delay in its next disbursement, a review team should aim to arrive in Jakarta during the last week of this month. "To ensure this, measures dated end-April would be better advanced to April 21," it said, adding that Indonesia must also clarify as soon as possible when it would fulfil other pledges for which no target date has been agreed.

Tax collections exceeds target

Jakarta -- The government collected Rp 95.57 trillion (US$12.74 billion) in income, sales, value-added and property taxes in the fiscal year which ended on Friday, about 3 percent above the Rp 92.14 trillion target.

Director General of Taxation Mahfudh Sidik announced the results as the deadline for people to send in their tax returns neared. "We still have until 6pm to collect additional revenue," he said during a visit by members of House of Representatives Commission IX for financial affairs to the Kalibata tax office in South Jakarta.

The tax directorate collects income taxes, value-added taxes, sales taxes on luxury goods, land and property taxes, and tax on the transfer of property ownership. Other taxes such as excise, import duties and export taxes are collected by the directorate general of customs and excise.

Total tax receipts from the non-oil and gas sector were expected to bring in Rp 145.39 trillion of the Rp 201.69 trillion total state revenue in the just concluded fiscal year.

Total income taxes in 1999/2000 reached Rp 58 trillion against a target of Rp 54.94 trillion, while income from land and property taxes and taxes on the transfer of property ownership totaled Rp 4 trillion compared to a target of Rp 3.65 trillion. Value-added taxes and sales taxes on luxury goods reached Rp 32.90 trillion against a target of Rp 32.98 trillion. Revenue collected under the category of "other taxes" reached Rp 565.9 billion compared to a target of Rp 568.53 billion.

In spite of exceeding the targets, Mahfudh said 1999/2000 had been a difficult year in terms of collecting taxes because of the lingering impact of the economic crisis. "Tax collection during a crisis cannot be too aggressive because it could be counterproductive," he said.

On the plan to amend tax laws, Mahfudh said the government was preparing several bills currently being reviewed by the Ministry of Finance and the Ministry of Industry and Trade. "Hopefully they will be ready in April and submitted to the House," he said.

The bills are on income tax, general tax provisions and procedures, on value-added tax on goods and services and sales tax on luxury goods. These amendments are aimed at netting more taxpayers and collecting more revenue for the government.

Sulawesi farmers to quit growing rice

Sidrap -- Thousands of farmers in Sidrap regency, some 230 kilometers north of the South Sulawesi capital of Makassar, have threatened to stop growing rice if the price of unhusked rice does not improve before the next harvest in October.

Frustrated by the fact that they had not benefited from planting rice this harvest, the farmers claimed they would prefer to plant cacao.

H. Langke, head of a farmers group in Mariatangae district in Sidrap, said if the price of unhusked rice did not increase from Rp 700 per kilogram before October, thousands of farmers in 364 groups in the regency would convert their rice fields to cacao groves. "The government should take responsibility in this," Langke said.

Farmers across the country are upset at the drop in rice prices. Some of them have blamed the government for allowing imported rice to be marketed. Other farmers consider the drop in prices normal due to harvest time falling almost simultaneously throughout the archipelago.

That logistics agencies lack adequate funds to buy rice from the farmers is one of the key factors aggravating the problem. Aware of the situation, the government allocated Rp 2.8 trillion for the purchase of farmers' rice nationwide this month. The government also promised to set aside Rp 300 billion for village cooperatives, which buys farmers' products for logistics agencies.

In Sidrap, the price of unhusked rice was set at between Rp 1,100 and Rp 1,200 by the government. However, because the local logistics agency did not buy the rice, the farmers sold it to traders for Rp between Rp 650 and Rp 700 per kilogram.

Sidrap, which has a total of 46,000 hectares of rice fields, is one of the province's rice bowls, with annual production reaching 511,000 tons. Records at the local logistics agency show that over supply of rice in the regency is some 125,000 tons per annum.

Sidrap Regent HS Parawangsa said farmers were apparently upset that rice was being imported into the country, saying: "We would be very happy if the government stopped the imports, or if the import duty was raised." Asked what the local administration had done to relieve the people's burden, Parawangsa said the province had exported good quality Celebes rice. "We started exporting rice to Saudi Arabia last month. We've also urged the logistics agency to buy the farmers' rice." Parawangsa acknowledged that the local logistics agency had bought the farmers' rice, but due to bumper harvests in February, March and April the rice surplus reached 200,000 tons in the area. "The logistics agency is overwhelmed." The regent said he had heard about the farmers' threat. "But I doubt the threat will come true. It's just a threat. Please don't exaggerate the issue," he told The Jakarta Post, describing the farmers' frustration as a calamity. "We have been giving guidance to the farmers and enhancing communication with them to alleviate their frustration."

Rupiah tumbles on concern over IMF loan delay

Shoeb Kagda -- Concern over the International Monetary Fund (IMF) delaying its next loan payment of US$400 million to Indonesia sent the rupiah skidding yesterday to its lowest level in over two months.

The Indonesian currency fell to as low as 7,630 against the US dollar in morning trade before recovering later to close at the 7,600-level.

The multilateral lending agency, which in January signed a fresh US$5 billion loan package with the newly-elected government of President Abdurrahman Wahid, is unhappy with the pace of reforms, particularly in the area of corporate and bank restructuring. It remains unclear as to when the programme will get back on track as a rescue team from the IMF is scheduled to visit Jakarta early next month to assess the situation.

Djunaedi Hadisumarto, head of the economic planning body Bappenas, told reporters that a date would be agreed for the IMF team to come to Indonesia to review its progress. After the review, the IMF board can meet to discuss the loan.

The fund's executive board was originally due to meet on April 4 to approve paying the next tranche of the three-year loan package for Indonesia, but said this week talks were still underway on setting a meeting date.

Asked whether the original schedule could still be met, Chief Economics Minister Kwik Kian Gie said yesterday: "I think not. But we are making efforts so that it could be implemented as quickly as possible."

He added that Indonesia would not be able to meet all the targets on time as set out in its latest letter of intent to the IMF. "Most of the programme's deadline is March 31. There are only a few days, so we can predict it cannot be implemented."

Sources told BT that the government viewed the problem as a serious matter and was working hard to resolve it. Trade Minister Yusuf Kalla, who is on an official trip to South Africa, has been recalled to discuss the letter of intent and hammer out a new timetable.

Market analysts said they were not surprised by the IMF's decision. "I don't get any sense that the government is able to knuckle down and carry out the reforms," said the research head of a foreign broking firm. He added, however, that the government could in fact use the IMF as a stick to push through the reforms and move against powerful vested interest groups which have been resistant to change.

This is the second time the IMF has suspended its loan programme due to the government's inability to carry out economic and political reform. The fund halted aid last September over the politically-charged Bank Bali scandal and resumed lending only in January this year.

Last week, IMF senior Jakarta representative John Dodsworth warned that Indonesia would have to speed up the pace of economic reforms, particularly on corporate debt restructuring, to qualify for the next loan tranche.

In Washington, Anoop Singh, deputy director of the IMF's Asia and Pacific department, said Indonesia had sought more time to agree on how to implement the necessary reforms. "The government's economic team requested more time to reach full consensus on the corporate restructuring strategy, and to advance implementation in other areas of the programme."

Indonesia pledged in January to speed up efforts to tackle its US$65 billion private debt burden. A large chunk of the country's corporate sector has stopped servicing its debt and many companies are not cooperating with creditors. The country's bankruptcy law has also proven to be ineffective in resolving the deadlock due to problems with implementation. Hardly any bankruptcy suits have been successful.

In its January deal with the IMF, Indonesia pledged to tackle the debt burden through aggressive action by the Indonesian Bank Restructuring Agency (Ibra), the Attorney-General's Office and the Jakarta Initiative, a body set up to promote debt restructuring.

Ibra is the country's largest creditor, controlling billions of dollars in loans taken over from ailing banks, and analysts hope that with the cooperation of the AG's office, it will have the clout to push through some bankruptcy cases and get the ball rolling on debt restructuring.

IMF warns Jakarta on fuel price hike

Jakarta -- The International Monetary Fund (IMF) has warned that instability could occur if the government presses ahead with its plan to increase prices in the energy sector, at a time when economic recovery is still in a fragile state.

IMF Senior Representative in Jakarta Dr. John R. Dodsworth, in an interview with the English language news-weekly magazine KAPITAL, which will be published on Friday, said that IMF did not want to see socio-political instability that could jeopardize economic recovery programs being implemented by the Indonesian government.

Asked if IMF had pressured the government to raise energy prices, Dodsworth said it was actually the government, rather than IMF, which had insisted that subsidies be removed from the budget.

His statement seems to contradict the widely-believed perception that the government was under IMF pressure to raise prices and tariffs. "The way the discussions went was that the IMF was rather on the other side of removing subsidies in the budget too quickly. This needs some years. And we would make the argument that the first thing you need for an economic program to work is social stability.

The feeling of the government was these subsidies were bad, and that it was time to get them out of the budget," he recalled. "I have no doubt in my mind that when discussions started in December, the government was at a higher level than we were about price increases. We said, of course, the government's decision was good economics, but on price increases we don't want to see instability. That would affect the progress that we can make on the program."

On the government's plan to raise echelon I [high ranking civil servants - JB] allowances up to Rp9 million, Dodsworth said: "This was another aspect where we had long discussions with the government. We thought it was good to pay more for the public sector over time, to get rid of corruption and so on. But you can't do it in one year and in particular you can't do it when the recovery is still very fragile."

"What we finally agreed with the government was that, let's look at it again. There is going to be very little impact of it on the macro level, but again we were sensitive to the fact that there may be some social problems from very high increases for a small number of people. You need political stability. If you don't have it, then however good your economic program it's not going to be implemented."

The official also expressed dissatisfaction over the slow pace of the implementation of the Letter of Intent (LoI), due to what he described as "vested interests that do not support structural reforms." He added there was a need to increase the speed of institutional restructuring and that IBRA must be quick to move banking credits back to the market.

"There is always difficulty to know why something did not happen. I think it's because we have ministers who were not ministers before; they are learning, trying to keep control of their bureaucracy. You've got to be very much a leader, otherwise the bureaucracy runs the minister rather than the minister runs the bureaucracy."

"All of these structural reforms go against vested interests. They use any weapon they can to slow the reform. That's not to blame the government for this because the government is working in a difficult environment," he said.

"Cacuk [Sudarijanto, the IBRA chief], for example, is a really energetic guy, a doer, he wants to move forward. But let's face it, he is working in a very difficult environment. He may want to do everything tomorrow, but cannot. He has to use all his time building consensus. There is a tendency to blame the team, but actually we have to understand the overall situation in Indonesia is not so conducive to getting these things done." The IMF official concluded that the government has to work harder to accomplish the provisions of the Letter of Intent (LoI).

IBRA to issue bonds to bail out ailing companies

Singapore -- The chief of the Indonesian Bank Restructuring Agency (IBRA) said Tuesday top Indonesian ministers have given "verbal" approval to issue bonds to bail out 48 companies indebted to IBRA.

"About the 48 enterprises under IBRA, we got verbal or basic approval from Finance Minister Bambang Sudibyo and Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie [for] state enterprise recapitalization," IBRA chairman Cacuk Sudarijanto said at a news briefing here.

He was here to attend a forum of the Singapore Chinese Chamber of Commerce and Industry. The 48 companies owed IBRA some Rp 15 trillion (US$2 billion), he said.

To speed up debt restructuring, the government will issue bonds through state enterprises, with the companies using the proceeds to repay their debts to the banks, he said.

The restructuring of 48 state companies together with around 160,000 small and medium companies must be completed in the next two quarters. Once the restructuring is completed, he said IBRA will end up handling about 1,000 large debtors.

The IBRA chief also defended a decision to replace a key official, saying the move was aimed at speeding up Indonesia's asset disposal program.

This week, IBRA had to complete its bank recapitalization plans, and ensure the successful initial public offering next month of one of the Indonesian banks, PT Bank Central Asia, he said.

IBRA has announced plans to sell within the year equity in at least 20 companies, and a good portion of 1,105 properties or bank offices, in a bid to raise $5.1 billion by December for the Indonesian budget. However, he said it will only sell 10 to 15 percent of Bank Central Asia instead of its initial target of more than 30 percent if the price is not high enough, Cacuk said. He added IBRA will hold an international roadshow visiting Singapore, London, New York and four other cities in April.

Cacuk earlier said in a bid to ease its hefty workload, IBRA plans to farm out the job of restructuring loans valued at between Rp 5 billion (about $667,000) and Rp 50 billion to private banks, freeing up IBRA officials to concentrate on restructuring larger loans. Agency officials say the IBRA will seek to outsource some restructuring work to several banks and pay them a fee for managing the loans as well as a percentage of loans restructured.

Cacuk said IBRA would seek to sell stakes in companies in the agribusiness, consumer goods, trading and property sectors. IBRA plans to sell the stakes through a mixture of initial public offerings and private placements. IBRA has previously said that around nine of the 20 companies will be from the Salim Group.

IBRA's efforts to sell assets got a boost last week when it sold 39.5 percent of its stake in auto maker PT Astra International to a consortium led by Singapore's Cycle & Carriage Ltd. The sale is expected to spark other sales to foreign investors.

In addition, Cacuk said IBRA's short-term priorities include selling off stakes in state-owned companies and initiating government-wide restructuring of state companies.

In Indonesia, is success the enemy?

Michael Richardson, Jakarta -- After sidelining the military and consolidating democracy in Indonesia, a country long used to authoritarian rule, the government of President Abdurrahman Wahid is under increasing pressure to speed economic reform efforts or risk losing the fragile gains in stability it has achieved.

Just over five months after taking office, the government can point to some promising signs of recovery from the country's worst recession in more than 30 years. But foreign officials fear that renewed growth may reduce the incentive to push ahead with painful changes in Indonesia's financial, legal and tax systems, where local vested interests, corruption and inefficiency continue to deter urgently needed investment.

"The government may feel fortunate that growth is returning to Indonesia," John Dodsworth, senior representative of the International Monetary Fund in Jakarta, said at a meeting of the US Chamber of Commerce last week.

"But without real structural change, the consumption-led recovery will dissipate and Indonesia will face a long period of stagnation, as have other countries that refused to tackle financial-system and corporate problems."

On a recent visit to Indonesia, Stanley Roth, the US assistant secretary of state for East Asia and the Pacific, said the greatest challenge facing the world's fourth most populous nation was to revive its economy. He said political stability would not take hold until there was a renewal of growth based on a sound structure.

There is unease, too, among business leaders and foreign investors at reports of continuing divisions over policy in Mr. Wahid's multiparty coalition government and among his economic advisers. The president, who is evidently impatient about the pace of reform, recently said he would set up a third team of economic experts to "support" his economic ministers.

"The plan is a ridiculous idea," said Hadi Soesastro, an economist who serves as executive director of Indonesia's Center for Strategic and International Studies. "The president may have performed well and have the support of the people, but policy implementation is another thing."

Indonesia's next loan of $400 million from the IMF could be at risk if it fails to implement key changes soon. The disbursement is due April 4. The government signed an agreement with the IMF in January for a new $5 billion loan over the next three years to help bridge a big budget deficit, support the Indonesian currency, the rupiah, and convince investors that it is serious about reform. The agreement set targets for restructuring the banking and corporate sectors, reducing corruption and cleaning up the court system.

"The next two or three weeks are critical in terms of program implementation and constitute a major test for the government," Mr. Dodsworth said. "Good implementation of the program will have its rewards in terms of market support, but conversely, slippages will be damaging for market sentiment."

A delay or suspension of IMF support could affect a proposal by Indonesia that it be allowed to delay repayment of about $2.2 billion of foreign debt that matures this year. The request will be considered April 12 by the so-called Paris Club of countries that lend money to Indonesia. The club normally takes action on debt rescheduling only after the government concerned has signed up for an IMF or World Bank reform program and is in compliance with it.

Still, Jakarta's success Friday in selling a nearly 40 percent stake, valued at $506 million, in the automaker PT Astra International to a Singapore-led group of investors is seen as a promising sign of its ability to accelerate asset sales and push deals through in the face of local opposition.

Economic growth is officially forecast to reach nearly 4 percent this year after marking time in 1999. The economy shrank about 14 percent in 1998 as the Asian financial crisis, violence and political instability decimated heavily indebted banks and companies, throwing millions of people out of work.

Some nongovernment economists, including those at the IMF, say growth in 2000 may reach its average pre-crisis level of between 5 percent and 7 percent in inflation-adjusted terms.

Markets, shops and department stores in Jakarta and other large cities are crowded with buyers once more. Car sales in January, the latest reporting period, were four times those of the same month last year, and there is a three-month wait for Indonesia's most popular locally-made family vehicle, the Kijang. Property sales are rising, and ACNielsen Media International reported recently that advertising sales in Indonesia were up 40 percent in 1999.

Interest rates have fallen sharply, with the benchmark one-month rate now below 11 percent, down from about 70 percent at the height of the crisis.

But Mr. Dodsworth of the IMF said the government should not be misled by short-term prospects. "At this stage, this is a consumption-led boom from a low base," he said. "The Indonesian economy was sick before 1997 even though it had respectable growth, and it is sick in 2000 even though growth may return."