• Wahid, Rais, partners - as in sparring - Asiaweek
• Wahid's calls to nationalism risk alienating Singapore - Strathfor
• Graft rumors swirl after reshuffle - Jakarta Post
• Abdurrahman must beware of growing political divisions - Jakarta Post
• Larger stakes for Gus Dur behind two sackings - Straits Times
• President proves to be wily political tactician - South China Morning Post
• Anger over firing of key ministers - Straits Times

• Violence in Maluku 'political' - Straits Times

• Officer ordered killing wounded in Aceh: Witness - Agence France-Presse
• No backing out of peace deal now for Aceh rebels - Straits Times
• Doubts cloud Aceh military trial - Jakarta Post
• Critics doubt if Aceh trial will be free and fair - Straits Times

• Teacher land hike in allowance, still short of demand - Jakarta Post
• More teachers threaten to strike, demand salary hike - Jakarta Post

• Police disperse student demonstrators in Riau - Straits Times
• Moslems delay spice islands jihad - Reuters
• Inching out of the abyss - Straits Times
• Jakarta's middle class tighten belt - Straits Times
• Wahid proposes three-way talks - South China Morning Post
• Yusril owns up to taking billion Rupiah from Habibie - Jakarta Post
• Still no light at end of tunnel for Jakarta's poor - Straits Times
• Businessman reports graft in Supreme Court - Jakarta Post
• Personal assets prove hard to track, despite global hunt - South China Morning Post
• Sulawesi students stage rally, demand independence - Jakarta Post
• Suharto's 'mafioso errand boy' questioned - South China Morning Post

• Indonesia's forests disappearing by the day - Agence France-Presse
• Half of mangrove forests are destroyed: Observers - Jakarta Post

• Air Force to receive six new Hawks from UK - Jakarta Post
• Military spokesman defends business ventures - Agence France-Presse

• ADB foresees stronger economic growth for 2000 - Agence France-Presse

Army members urged to leave West Timor or resign: UN

Geneva -- The United Nations welcomed on Friday a campaign by Indonesia to get East Timorese members of the Indonesian army in West Timor to resettle in other parts of the country or resign from the military.

Resettlement forms have been distributed by the government in camps in West Timor for an estimated 2,000 East Timorese military men, said Ron Redmond, spokesman for the UN High Commisssioner for Refugees.

They are being asked if they want to leave the West Timor camps and join the government's programme for resettlement, he said. If they choose to stay in West Timor, they must resign from the army.

"This is very welcome news for UNHCR. It comes at a time when the number of returnees from West Timor to East Timor has dropped sharply in recent weeks," Redmond said.

"UNHCR has been urging the Indonesian government to separate East Timorese military people and former militia members in the camps to eliminate the intimidation and to accelerate the return process to East Timor," he added.

"We believe that about 50,000 of the remaining 100,000 refugees remaining in West Timor would return to East Timor if they were free of intimidation," he said.

Redmond said although security and access to the camps had improved, pro-Indonesian elements still had a "pretty tight control" and opposed repatriation through misinformation and intimidation.

Small groups of East Timorese army members have already been demobilised and returned to East Timor, UNHCR said. The distribution of the forms has started at Tuapukan and Noelbaki camps, which are the largest of the West Timor camps hosting the remaining refugees. More than 160,000 East Timorese have returned home since October.

Some 250,000 refugees fled or were forcibly deported to West Timor during a wave of Indonesian army-backed militia violence which swept East Timor in September after the territory voted for independence from Indonesia.

'Former minister killed journalists'

Marianne Kearney, Jakarta -- Former Information Minister Yunus Yosfiah has been accused of murdering five Western journalists in East Timor in 1975 by a new witness who gave evidence on an Australian television show.

The accusations by Mr Tomas Goncalves -- a former East Timorese partisan soldier, and the only known witness to the event -- contradict Indonesian and Australian government reports which said Timorese soldiers accidentally killed the journalists in cross-fighting. The show was aired on Australia's Dateline programme on Wednesday.

Mr Goncalves, who headed the Timorese-trained forces accompanying Indonesian soldiers as they invaded East Timor from West Timor, said the five journalists had tried to surrender but were shot in cold blood.

"They came out, three at the back, one at the front, with their hands up. Their intention in coming out [of the house] was to survive. They thought they would get protection. Yunus had other ideas, his reaction was to fire straight away. He started first ... he started shooting and then everyone joined in. You know it's war and they all wanted promotion," Mr Goncalves said on the programme.

He claimed Mr Yunus had to shoot the five journalists -- two Australian, one New Zealander and two British, all working for Australian television stations -- "so they would not publicise what they saw to the outside world".

Mr Yunus has previously denied being at Balibo when the journalists were killed and this week refused to respond to the allegations made by Mr Goncalves.

The five journalists were in the border town of Balibo, then part of Portuguese Timor, to report on whether it was true that Indonesia was planning to invade East Timor and had launched sorties into the province.

With already strained relations between Australia and Indonesia, Australian Foreign Affairs Minister Alexander Downer said his government would not lodge a complaint or propose a further inquiry. "There will be no judicial inquiry, we've already had two. At the moment we've done all that we can," he said.

Commentators, such as a former Australian consul to East Timor, Mr James Dunne, say East Timor's fate may have been significantly different if the journalists had survived to report on the Indonesian invasion, and there had been Western opposition to Indonesia's plans.

Despite quite good intelligence material to the contrary, the Australian, American and British governments claimed no knowledge of Indonesia having sent troops into East Timor in preparation for their invasion.

Ms Shirley Shackleton, widow of one of the Australian journalists, called on the government to hold a full judicial inquiry into the journalists' deaths based on new evidence.

Militia leader jailed for firearms

Mark Dodd, Suai -- An Indonesian court has jailed the notorious militia leader Laurentino Soares, known as Moko, for up to three years for illegally possessing firearms, according to United Nations observers.

UN military officials said yesterday that Soares, who is wanted by the UN in connection with armed violence and murders committed in the East Timor enclave of Oecussi, was appealing against Wednesday's sentence.

The officials, speaking in the East Timor town of Suai, said they had been advised of the sentence by UN observers who attended the trial in Indonesian West Timor.

The jailing is the first evidence that Indonesian authorities are making serious efforts to crack down on militia leaders in West Timor.

Another prominent militia leader, Eurico Guterres, was questioned this week by Indonesian police and military over a shooting six weeks ago. Guterres allegedly fired shots at a government-owned car. He was allegedly found to possess a machine-gun.

Senior UN military commanders and diplomats welcomed the news of Soares's sentencing. Brigadier Duncan Lewis, UN commander of the western sector, which takes in East Timor's 170-kilometre border with Indonesia, appealed to Indonesian authorities to hand over other militia leaders sought over crimes committed during bloody post-ballot violence in September.

"For militia leaders in West Timor who have a case to answer, it would be a serious confidence-building measure if they could be brought to face due process," he said.

"I hear Eurico Guterres has been firing shots at Indonesian police, but I don't see yet any action taken against him. The fate of those militia leaders could be taken as a good measure of Indonesian Government intent. I continue to be concerned at the number of militia leaders who are still at large in West Timor."

A second Indonesian Army battalion deployed along the border indicated "a good spirit of co-operation" from the Indonesian military, Brigadier Lewis said. "I'm rather less worried about what's happening on the border compared to what is happening beyond the border."

A tower of babel for Timorese as they seek a language

Seth Mydans, Dili -- There is not much question about the language of commerce here as East Timor begins to define itself as a nation. The muddy central market is alive with the cries of moneychangers: "Dollar America! Dollar America! America, America, America, America!"

What is much less clear, however, and far more hotly emotional, is the question of the actual spoken language of East Timor, a question that goes to the heart of the self-definition of the world's newest nation.

Will it -- like the dollar -- be the language of the international marketplace, English? Will it be the dominant local language, Tetun, with its broad usage but limited vocabulary? Will it be the colonial language, Portuguese, the sentimental favorite of the older generation? Or will it be Indonesian, the common language of the young and the educated?

East Timor has not been on its own as a modern nation, its history overlaid by more than 400 years of Portuguese colonialism followed by 24 years of Indonesian occupation that ended last year. What will it keep from the past and what will it angrily discard? What is Timorese and what is an unwelcome import by foreign interlopers? What does it mean, as the nation emerges from its trauma, to be Timorese?

For many here, the answers lie in the choice of a national language. Although the nation is physically ruined and emotionally traumatized, its people hungry and mostly jobless, it is the question of language that sets off the angriest debates, hinting at social divisions that lie not far below the surface.

Rough statistics show the breakdown. About 60 percent of the population speaks Tetun (which is sometimes called Tetum). As many as 90 percent of people under 35 speak Indonesian, as do 40 percent of those over 35. But just 10 percent speak Portuguese, almost all of them in the older generation.

After Indonesia's invasion in 1975, the clandestine East Timorese leadership decided that the language of a future independent nation would be Portuguese. After a generation of struggle, these same leaders -- now middle-aged men -- have formally announced that this will be the national language, in honor of their country's past and of their own independence struggle.

But their announcement has only spurred further debate, for it would make linguistic outsiders of the great majority of East Timorese, pushing them to the sidelines of national reconstruction. Those most affected would be the people most vital to building a nation, young people with education and skills.

"For 24 years they forced us to learn Indonesian," said Helder Luis Pires, 25, a university student, speaking in Indonesian. "Now the political leaders want to force us to speak Portuguese. If they continue to do that there will be a big conflict between the young and old generations."

Oscar Lopes, 22, another student, agreed. "Europe is awfully far away," he said. "And take a look at Europe. Even there, almost nobody speaks Portuguese. Who are we going to talk to?"

To promote its language, Portugal has sent a contingent of language teachers to offer courses here, but this only makes some of the young people angrier. "Now is the time to work, not to study language," said Ivete de Oliveira, 25, a pro-independence activist who, like 20,000 other Timorese over the past 24 years, studied in Indonesia.

"We object," she said, speaking in English. "They don't respect us and they don't respect our education. In the future who will handle the country? The future is in the hands of the youth. But they are from the '75 generation and they don't think about us. Using Portuguese means they will control the government and there will be no place for us."

She added: "It was not the Indonesian language that traumatized us. Maybe the Indonesians did, but not their language. Their language has made us more rich, and in the future we will have close relations with Indonesia."

If Portuguese does become the national language, an entire nation will need to convert itself linguistically, starting with school children who will be taught in a language most of their parents do not know.

Whatever the rules, the court system will for the time being operate in Indonesian. All the nation's lawyers were trained in Indonesia and until a new legal code is written, a modified form of Indonesian law will apply.

If the new Timorese government is determined to rid all vestiges of the Indonesian occupation and teach everybody a new common language, some people argue, then why not go all the way and learn the world's international language, English? Jose Ramos Horta, a longtime independence propagandist, has an answer: "English is a commodity, not a culture."

Rebuilding Timor's education system

Mark Dodd, Dili -- When pro-Jakarta militias went on their rampage of arson, murder and looting last September they filled the classrooms of Dili's secondary schools with drums of fuel to ensure maximum damage before torching the buildings.

Their efforts were mostly successful and today, apart from a handful of church-run schools, East Timor is without a secondary education system. Most of the country's 140 secondary schools lie in ruins.

Higher education in East Timor has effectively stopped, according to UNICEF. About 80 per cent of secondary teachers were Indonesian, as were most staff of the Department of Education and the training institutes. They have left the territory and most are not expected to return.

One result has been that young East Timorese men and women, who should be in school, are instead part of a growing pool of disaffected youth.

East Timor's primary school system fared somewhat better although UNICEF spokesman Richard Koser said that most school buildings across the country were destroyed or damaged in the September violence.

"About 90 per cent of school buildings were badly damaged or destroyed, and movable items were either looted or burnt. Most primary school teachers were Timorese, but most were displaced in the violence," Mr Koser said.

The damage bill runs into the millions of dollars but UNICEF has now begun a program to get the primary school system back up and running with the help of the World Bank.

Before August 1999, there were about 160,000 children in primary schools across East Timor. By the start of this month an estimated 147,000 were students back in primary schools, and of the nearly 800 primary schools operating in East Timor before the referendum, 420 were up and running by December, a number that has now increased to 693.

"When UNICEF arrived in East Timor last September we decided one way to get some routine back in people's lives was to get the schools back up and running," Mr Koser said.

A novel incentive scheme in which primary teachers were paid a small salary and given a rice handout was a temporary measure in place until the new UN-trained East Timor Civil Service took over, he said.

Until then, UNICEF was the de facto education ministry in East Timor. The quality of teachers was questionable and no fixed curriculum had been endorsed, he added. "There is no standard curriculum. People [teachers] are just doing what they know -- reading, writing and arithmetic."

Under the Indonesian administration, the education system in East Timor was bloated and ineffective. Teachers were poorly trained and unmotivated, teaching a national curriculum to students unwilling to learn about the history and culture of Indonesia.

One legacy is left from the 24 years of Indonesian rule from 1975 until 1999 -- the language of instruction in primary schools remains Indonesian, Mr Koser said.

Social unrest could force UN troop cuts in East Timor

Mark Dodd, Dili -- The United Nations mission in East Timor is considering reducing its 8,000-strong peacekeeping force because of concerns over costs and possible social problems created by its military presence.

Mr Fabrizio Hochschild, the special assistant to the UN Special Representative in East Timor, said yesterday that a reduced peacekeeping force was likely if security continued to improve. "Our peacekeeping force is already significantly smaller in terms of numbers than the Interfet force," he said.

The peacekeeping force, with an authorised strength of 9,000, took over in February from the Australian-led International Force in East Timor (Interfet), which at its peak numbered almost 10,000.

"It is a significant burden on the international taxpayer and there are, as many have highlighted, social implications in having such a large number of foreigners in a relatively small country," Mr Hochschild said. "As the security situation allows, we do envisage a downsizing."

Another factor weighing in favour of reducing peacekeeping-force numbers is growing confidence in security following the signing of a border agreement with Indonesia last month.

The pro-independence political umbrella group, the CNRT, has expressed mixed feelings about the size of the peacekeeping force and its potential to create social problems.

A spate of border incursions last month from Indonesian West Timor caused several senior CNRT officials to query whether the peacekeeping force was large enough.

But one senior CNRT official, who asked not to be named, said yesterday that the real problem was not the size of the peacekeeping force but the size of the UN mission as a whole, and their lavish lifestyles.

"I think it is very obvious that East Timorese are becoming more and more marginalised," the official said. "It is almost as though an elite world has been created by the UN expatriate community."

The UN had failed in its promise to engage East Timorese in the transitional process and this was resulting in growing resentment by local people. Mass unemployment remained one of the biggest social problems to be addressed, the official said.

As well, East Timorese society was "very conservative" and there were fears about the spread of sexually transmitted diseases by a large foreign population, including peacekeepers.

Lieutenant-Colonel Fergus Bushell, a military spokesman for the UN transitional authority, said there had been "zero problems" between the peacekeeping force and East Timorese.

"There seems to be a misapprehension that all these foreign people are somehow going to corrupt their [East Timorese] culture," he said. Pressure to reduce the size of the force was more likely to be coming from donor countries anxious about the cost of the deployment.

Dili's Nobel laureate, Bishop Carlos Belo, has also raised concerns that a large UN presence in East Timor could lead to unwelcome social problems, including a sex industry.

UN steps in to help defuse anger over high unemployment

Mark Dodd, Dili -- The East Timorese leader, Mr Xanana Gusmao, and a senior United Nations official will hold a public meeting in Dili today to discuss the the country's number one social problem -- unemployment.

Unemployment estimated at around 80 per cent has been the main cause of mounting protests outside the UN headquarters in Dili for several months. Earlier this month, Mr Gusmao was called on to pacify a group of about 1,000 protesters upset that the UN could not provide work for them.

Yesterday, UN employees held a stopwork meeting over pay and conditions linked to new contracts in which salaries are paid in US dollars.

One employee claimed his pay packet had shrunk since signing the new contracts because of losses incurred when US dollars -- the local legal tender -- are exchanged for Indonesian rupiah, the preferred currency among locals. Up to 200 UN employees, mostly drivers, are believed to be involved in the industrial action. Locals are unfamiliar with the US dollar and complain there is no small change in circulation and few official exchange facilities.

A UN Transitional Administration in East Timor (UNTAET) spokeswoman, Ms Barbara Reis, said it was hoped today's meeting would clarify what job opportunities existed with the UN.

She said stolen UN job application forms were selling in the local market on the promise that once completed they were a guarantee of employment.

The UN chief of staff, Parameswaran Nagalingah, would explain what opportunities existed with the UN and how to apply, Ms Reis said.

UNTAET currently employs 1,100 East Timorese. Another 6,000 are employed by a US-funded employment project worth $US5 million ($8.4 million) which has put East Timorese to work on community clean-up projects. A similar scheme funded by Japan has hired work gangs to clear roadside verges of thick undergrowth.

But all these projects are short-term. Mr Gusmao is expected to stress that political stability and security in the capital are a prerequisite for attracting foreign investors able to offer long term employment prospects to East Timorese.
 

Government/politics

Wahid, Rais, partners - as in sparring

Jose Manuel Tesoro, Jakarta -- On April 20, in a house on Irian Street in Jakarta's residential district of Menteng, two top Indonesian leaders broke fast together. According to People's Consultative Assembly (MPR) chairman Amien Rais, he told President Abdurrahman Wahid: "I do not want to see you overthrown, because I am among those most responsible for bringing you the presidency." It seemed like an apology, but could also have been a warning. For at least a week, tension between the two had put the longevity of Wahid's six-month-old government in question. It touched off a swirl of speculation not seen since his high-profile battle against Gen. Wiranto, the country's former military head and chief political minister.

The tussle between Wahid and Rais had begun in mid-April, when the latter suggested a special MPR session to demand an accounting from the president.

The move targeted the government's lackluster performance as well as Wahid's controversial bid to rescind a 34-year-old ban on communism. Rais declared he would never flinch from "tweaking" Wahid's ear, should the Muslim cleric-turned-president be found wanting. Away on state visits, Wahid shot back that if the MPR accepts his explanations, Rais "could later be tweaking his own ears." On April 18, Wahid's National Awakening Party demanded Rais's removal. Retorted the MPR chief: "Only a president can be impeached by an Assembly speaker."

The episode underlines how dependent Indonesia's stability is on cordial relations among its main leaders: Wahid, Rais and Vice President Megawati Sukarnoputri. Where each leans, so do the major social groups that follow them -- Wahid's traditional, largely rural, Javanese Muslims, Rais's mostly urban, modernist Muslims and Megawati's hardline secular nationalists. Akbar Tanjung, who commands former Suharto vehicle Golkar and the second-largest bloc of votes in parliament, is another key figure. In the nation's turbulent, post-Suharto transition, all four have competed as often as they have cooperated. Wahid's continuing consolidation of his presidency may now have opened up a new period of friction.

Despite his decisive role in getting Wahid elected over Megawati, Rais has not shied away from public criticism of the president. In early January, he addressed in Jakarta Islamist protesters stoked up by religious strife in Maluku and demanded that the government take responsibility for it. "My heart is hot, my head is hot," cried the MPR chairman. Now, there is admittedly more about which to "tweak" Wahid's ear. Last week, the rupiah fell briefly past 8,000 to the dollar, the most immediate sign of the government's drift in economic policy. (After the International Monetary Fund affirmed its faith in the administration, the currency recovered slightly.)

Complaints about corruption -- especially among newly appointed officials -- continue. Court rulings against investors or reformers have cast a shadow on the economy. On April 24, Wahid fired two members of his economic team. One was respected investment and state-enterprises chief Laksamana Sukardi, a member of Megawati's party. The other: trade boss Jusuf Kalla of Golkar.

Wahid's long-rumored move still invited questions. "He thinks that changing the cabinet automatically will help the economy," says economist Umar Juoro. "I don't know." Whatever the economic benefit, there is a political cost. Some members of both sacked men's parties have demanded that their groups withdraw all their ministers from Wahid's cabinet in protest.

The turmoil is beginning even as the president's stratagems are starting to pay off. On April 21, armed forces chief A.S. Widodo delivered to the president the results of an annual two-day military leadership meeting. The forces had decided that they would give up their "socio-political" function. For 30 years, the dwifungsi (dual-function) doctrine had allowed the military to involve itself in civilian affairs. The move furthers the expulsion of the armed forces from Indonesian politics -- a process Wahid began in February by retiring Gen. Wiranto from both the cabinet and active service.

The other significant political achievement of the government is the tempering of communal tensions -- which Wahid had engineered along with Rais. In the run-up to the October presidential election, Wahid, then head of the Nahdlatul Ulama mass Muslim organization (which claims 30 million members), visited Rais at the latter's office at Muhammadiyah (another mass Muslim group). The symbolic message was important: that the traditional and the modernist strains of Indonesian Islam, represented by the NU and the Muhammadiyah respectively, could rise above their historical frictions and create an effective coalition. Says Hafiez Luqman of the Islamic Defenders' Front: "The two showed that they could work together."

Can they still? The recent spike in the political temperature has partly to do with Rais's current political needs. While the reserved Megawati has found her spare-wheel role as vice president to her liking, Rais is still struggling to find his place in the public eye. The MPR meets at most once a year to approve items such as constitutional changes; its next session is in August. That leaves Rais's post largely ceremonial the rest of the year. Such factors may account for his fondness for pushing hot-button issues for Muslim voters -- like Maluku and communism -- to boost his own standing. To give himself a real shot at becoming Indonesia's next president, Rais needs to increase the disappointing 7.4% of the popular vote that his National Mandate Party won in the parliamentary elections last June. Rais's broadsides also remind Wahid that the MPR boss is very much a player.

But Wahid often turns Rais's statements to his own advantage. The president has cannily used criticism to get coalition partners to reaffirm their loyalty. After Rais's January rally, Wahid's insinuation that some parties were out to undermine his government prompted declarations of support from Tanjung's Golkar and Megawati's Indonesian Democratic Party of Struggle (PDI-P).

On April 24, Foreign Minister Alwi Shihab warned that such sparring statements give the impression that Indonesia is unstable. He urged greater efforts by everyone concerned to project unity. "When will investors come in?" he lamented. Still, charitable responses to criticism have given Wahid a chance to burnish his democratic credentials. When an April 23 NU rally in Surabaya turned into a forum for blistering verbal attacks on Rais, Wahid gamely declared: "If we are to be democrats, we must be able to cope with our differences."

Even so, such conciliatory pronouncements have not erased the underlying tensions. With the latest reshuffle, the third since Wahid took power, the president has further reduced the number of ministers that his coalition partners have in his cabinet. The Islam-linked United Development Party, the military, Golkar and the PDI-P each now has one minister fewer than before. That none of the replacements came from the same parties has fueled complaints that Wahid is edging everyone else out of their rightful place at the trough of power.

Unsurprisingly, Rais has joined the fray. If Golkar and the PDI-P do withdraw their people, he warned on April 25, "that means the administration will enter a condition of endangered legitimacy." How the president's allies-cum-rivals deal with his continuing efforts to curb their clout may determine whose ears get tweaked at the MPR's August session.

Wahid's calls to nationalism risk alienating Singapore

Indonesian President Abdurrahman Wahid said April 25 that foreign submarines must not sail through Indonesia's territorial waters without permission. He specifically warned Singapore, which has two brand new Swedish subs, that any movement outside the established transit corridor into Indonesian waters would warrant "stern actions." He also suggested that Indonesian forces take future action against fish poachers.

Wahid appears to have turned to nationalism to ease rising political friction in Jakarta. But because there is no distinct Indonesian identity, he is building one by creating a sense of collective embattlement -- Indonesia versus the world. Wahid hopes to convert furor over internal politics into indignation directed abroad. Yet such a ploy could have unwanted side effects if Wahid's statements alienate regional allies. If the administration pounces on Singapore, for example, to solve internal problems, it could lessen the possibility of receiving foreign investment and support.

Many other confrontational statements precede the one Wahid made today. Just days ago, he warned the Australian government, which regularly flies planes into Indonesian airspace, to respect those boundaries or risk being shot down. In mid-April, he played up his refusal to obey a US State Department official who asked him not to travel to Cuba; "We are not a lackey of the US," he said. And in late March, he applauded military plans to build new bases, warning of an "international conspiracy" to undermine development in the East.

In Indonesia's geographically and ethnically disparate provinces, nationalism does not occur naturally. The country consists of 17,000 islands, of which 6,000 are inhabited by more than five different -- often clashing -- ethnic groups. Therefore, Wahid is creating national identity by defining Indonesia in opposition to others.

Interestingly, this could actually turn any dearth of foreign financial assistance into a political asset; he can argue that foreign powers not only disrespect territorial boundaries, but are hampering the country's economic growth as well. Historically, nationalism has allowed many troubled governments to maintain their grip on power. Under populist and nationalist Sukarno, the founder of Indonesia, the country experienced a period of political stability.

But at the same time, inflamed nationalist pride built solely on opposition to other countries could be dangerous for a nation almost completely dependent upon foreign support. Wahid's statements today, for example, could trouble relations with neighboring Singapore, especially if similar warnings ensue. To date, Singapore has been Indonesia's most loyal cheerleader, calling on ASEAN members, Hong Kong and others to invest in the country. Already, Indonesia has snuggled up to Malaysia, which clashes regularly with Singapore over bilateral issues. It might not take much Indonesian obstinacy to convince Singapore to shelve its pom-poms entirely.

Graft rumors swirl after reshuffle

Jakarta -- Legislators said after a closed-door consultative meeting that President Abdurrahman Wahid told them his decision to replace two economics ministers was due to their alleged involvement in corruption, collusion and nepotism.

Legislator Meliono Suwondo of the Indonesian Democratic Party of Struggle (PDI Perjuangan) said Abdurrahman revealed that the Cabinet reshuffle was due to corruption.

Meanwhile, a chairman of a Muslim party faction at the House of Representatives, speaking on condition of anonymity, also said that suspicions of impropriety was the reason given by the President for axing Laksamana Sukardi and Yusuf Kalla as state minister of investment and state enterprises development and minister of trade and industry. "It's not because they could not work together, but the President said that it was because of graft," the senior legislator said.

Golkar Party legislator Ekky Syachrudin further confirmed that the President had said corruption was the reason for the replacement, and not his earlier public statement that a lack of teamwork was the reason. "The two ministers should be asked for confirmation since it could defame them," he said.

The legislators said Laksamana was suspect due to his decision of replacing several directors in state enterprises overseen by his ministry, while concern over Yusuf was related to the minister's brothers who joined tenders in the ministry.

House Speaker Akbar Tandjung was more reserved about the accounts of the meeting between the President and leaders of the House. Akbar acknowledged that the four-hour meeting, usually open to the media, was closed because the President wanted to reveal the reasons behind the replacement of the two ministers.

However, he would not reveal the allegations against the two ministers, saying only that he and the Golkar Party were "not satisfied" with the explanation. "We still cannot fully accept the reasons before we get clarification from the concerned [former] ministers," Akbar, who is also the Golkar Party chairman, said, adding that the party would consider withdrawing its representatives in the Cabinet if the accusations were proved untrue. Meliono also said PDI Perjuangan was "not satisfied with the explanation". "Actually, we wanted to ask more questions on these accusations, but the meeting was already ending," he said.

Apart from discussing the Cabinet reshuffle, which took up the majority of time in the consultative meeting, the President also reiterated his desire to revoke the People's Consultative Assembly Decree No. 25/1966, which bans communism. "Abdurrahman agreed that the Indonesian Communist Party (PKI) could be banned, but he disagreed with a ban on communism and Marxism," Meliono said.

The President confirmed weeks of speculation when he revamped half his economics team by appointing on Wednesday Lt. Gen. (ret) Luhut Panjaitan as the minister of industry and trade, and Rozy Munir as state minister for investment and state enterprise development.

Initially, Abdurrahman said the reason was the axed ministers' inability to work together with Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie and Minister of Finance Bambang Sudibyo.

Abdurrahman said there was disunity and that the two axed ministers failed to implement economic reforms mandated by the International Monetary Fund (IMF) resulting in a freeze of the US$400 million installment of its $5 billion rescue package for Indonesia.

While Laksamana could not be contacted for a response to the allegations, Yusuf Kalla went on the offensive later on Thursday by meeting with Golkar Party colleagues to refute the various allegations of graft, among which was the charge concerning the state-owned electrical company PT PLN tender for the Paiton project in East Java.

Yusuf maintained that despite the fact the tender was done fairly, certain parties had maliciously slandered him. "There was a certain party who whispered to Abdurrahman," he said without elaborating.

"This case was examined by [Attorney General] Marzuki Darusman and the Inspectorate General of the Ministry of Industry and Trade. Everyone said it was clean without any intervention ... And it should be given to [the winners of the tender] the Bukaka-Megaeltra and Wijaya Karya consortium," Yusuf said.

The reverberations concerning accusations of graft were also felt outside the House building. A Cabinet minister, who asked not to be named when contacted by The Jakarta Post, said among the reasons for the dismissals was the President's exasperation at the ministers' half-hearted policies due to their self-interest.

When asked to be more specific, the minister said Laksamana had gathered an investors forum with direct access to him but without the knowledge of the President. "Another example was during the PT Indosat shareholders meeting which invited the director of Indosat but elected a commissioner as president.

"That was not consulted with Abdurrahman or other ministers." Turning his attention to Yusuf Kalla, the minister without elaboration merely said: "He used to be against regulating the sugar trade, but all of a sudden he is strongly campaigning for it."

Abdurrahman must beware of growing political divisions

Disappointment with Abdurrahman Wahid's (Gus Dur) government is leading to strange bedfellows, with the former ruling party, Golkar, the faction being most courted, says observer Azyumardi Azra, rector of the state-run Syarif Hidayatullah Institute of Islamic Studies in South Jakarta. The following is an excerpt of Wednesday's interview:

Question: How do you view the current restlessness of politicians, including those among the Islamic factions that most supported Gus Dur for president?

Answer: We are seeing a significant increase in the political advocacy of Islamic movements [factions] which had declined in the beginning of Gus Dur's government. Now the scale of increased political activism is leaning toward radicalism. This is partly influenced by the perception that Gus Dur as a Muslim leader has not fulfilled earlier hopes.

Regarding their attitudes to Gus Dur, there are three different groups: the first are the loyalists, mostly within Nahdlatul Ulama (the country's largest Islamic organization formerly led by Gus Dur) and the National Awakening Party (PKB, founded by Gus Dur).

The second group are those who used to support Gus Dur, mostly within the so-called axis force of Islamic factions. They see that Gus Dur still serves their interest but that he must be watched very closely. They have no alternative to Gus Dur; if he were to be replaced then [Vice President] Megawati Soekarnoputri would take his place. They're not ready to accept her, more because of her secular nationalist label and incapability, rather than because she's a woman.

Among those with such guarded optimism are modernists such as the Crescent Star Party (PBB) and the Indonesian Committee for World Moslems Solidarity (KISDI). But we are also seeing beginnings of a dialog between elements of this group towards Megawati's camp.

What are the indications? For instance the beginnings of a dialog between the United Development Party (PPP) and the Indonesian Democratic Party of Struggle (which Megawati chairs), which also involves Golkar.

To continue, the third group are the hardliners who are beginning to be explicitly anti-Gus Dur, including movements such as the Laskar Jihad (Jihad Force) and others. Such groups are the extension of the civilian security volunteers (pamswakarsa) who earlier voiced support for (his predecessor) B.J. Habibie. They were disappointed with Gus Dur becoming president right from the beginning. Earlier they couldn't be explicit about their disappointment because everyone seemed to be supporting Gus Dur.

In the midst of efforts to build a civil society, why are such groups so willing to ally with military members?

They acknowledge at least individual support of some military and police officers. To liberal Muslims such alliances are indeed incompatible and unfeasible with "democracy" or "civil rights." But in the "Islamic agenda" [adopted by hardliners], strong governance is needed to uphold Islamic values and achieve Islamic sovereignty. The military comes into use here.

In the classic political paradigm of such groups the civil- military dichotomy is not an issue ... Indeed this has been widely criticized.

Naturally, power tends to corrupt ... Does Gus Dur benefit from such divisions?

So far he has been able to maintain control. But increasing "social illegitimacy" such as lack of law enforcement, and unsettled issues seen to be hurting Muslims such as the Maluku violence, could endanger him.

Adding to these, Gus Dur throws up issues considered to be unfair to Muslims such as suggesting the lift of the ban on communism. To Muslim liberals this may be no problem from the view of diverse opinions, but to others it's totally unacceptable.

Surely he knows that?

Well he's playing with fire. Together with the failed economic recovery, such issues could lead to other groups, such as hardline students, feeling deprived and as a consequence teaming up against Gus Dur and certain ethnic groups [as reflected by protests this week supporting the replaced minister of industry and trade Yusuf Kalla who is from Makassar -- Ed].

It's similar to the days leading to Soeharto's fall, where we saw marriages of convenience between groups that hardly ever agreed with each other.

Where do you think the dialog between PPP and PDI Perjuangan is going?

Alliances in politics will continued to be formed ... Golkar is being fought for, for common interests. Nahdlatul Ulama and PKB are talking now about not only keeping Gus Dur in his seat but retaining him for another term.

Matori Abdul Djalil (PKB chairman) has said Gus Dur is ready for two terms so PKB is targeting for more seats. Mere alliances are not enough.

So predictions are coming true about people turning to Golkar after the polls.

Golkar here remains the real force ... The elite of the Islamic groupings are too fragmented ... PDI Perjuangan is also eying Golkar as seen by their mutual approaches ... while in the past PDI Perjuangan saw Golkar as the symbol of the status quo. Golkar is also calculating what it might get.

From the formal political point of view Gus Dur is still safe, suggestions for a special session [demanding his accountability] was called off but that's only temporary.

So dismissing calls for the special session was just a cooling down of things?

Yes, the agreement gives Gus Dur another chance and he should use it. But the option for a special session later this year remains open if the country's condition gets worse. However, Gus Dur is very self-confident and such people can become authoritarian.

Changing one minister or the whole cabinet would have the same political repercussion. It would be better to change the whole cabinet but with transparency and credibility as the basis ... Now ministers are having a hard time trying to work while thinking whether they're next.

The replacement of Kalla with Lt.Gen. Luhut Panjaitan has been widely questioned, also by foreigners.

The reportedly cold attitude towards (Minister of Defense) Juwono Sudarsono by the State Department in his recent visit to Washington shows ... that the United States is also uncomfortable with the large number of positions given to the military ...

We also hear Surjadi Soedirdja [Minister of Home Affairs] will become Coordinating Minister for Political Affairs and Security. If Gus Dur takes merit into account his replacement should be [State Minister for Regional Autonomy] Ryaas Rasyid but if it's one of his people again it could be [State Minister of the Empowerment of Women] Khofifah Indar Parawansa [a PKB executive].

Is there a prospect for modernist Muslims coming together with the PBB congress being held from April 26 to April 30?

In the context of democratization we need a rationalization of parties. Forty-eight parties joining elections was too much, leading to nonconducive fragmentation, and there were a number of other parties who missed the deadline to join elections, who also claimed to be a revival of Masyumi (once large Islamic party).

If PBB could lead the way to reconciliation among such parties it would be a great contribution to the growth of our democracy. Masyumi is now divided as represented by parties such as those under Ridwan Saidi and Deliar Noer.

Such a fragmented elite only leads to group egoism, sacrificing not only the interest of Muslims but also of the nation, as reflected through the rackets at the General Elections Commission.

Would members of that elite want to come together?

They must find a way to overcome their psychological barriers and differences. They often come together but only for gestures of decency ... If they agree that those of the Masyumi movement want to really have a say in the political process they must unite.

I agree that their positive side is being critical towards Gus Dur but they waste all their energy with commenting on his every statement so their programs and dire need for consolidation are neglected.

Another strength of the modernists is that historically they have proven to be more compatible with ideals of building a modern Indonesia; they've been more capable of working with others as seen by their past cooperation with the Catholic Party.

And modernist Muslims have personnel with adequate technocratic skills urgently needed to address our problems.

Is Gus Dur trying to keep opponents divided by his controversial measures?

In any case he has neglected the consequences particularly with the accumulation of all problems which are perhaps coincidental. If massive teacher and labor strikes continue this could lead to increasing disruption and radical movements.

Gus Dur still has a large opportunity to accommodate [rivals]. They have named candidates to replace Gus Dur such as Nurcholish Madjid [a noted scholar] and Adi Sasono [former minister under Habibie government] but are still constrained by constitutional and acceptability factors.

What about Yusril Ihza Mahendra, the PBB chairman and one time presidential candidate?

He is building his image through a very strategic issue that is everyone's concern -- judicial reform. In the cabinet, I'd say he's about the only one with a concept [as Minister of Minister of Law and Legislation].

He's attempting to straighten out the knot in the courts, move out suspected judges, and adding new [clean] ones. If Yusril continues like this he'll gain much credit.

Larger stakes for Gus Dur behind two sackings

Susan Sim, Jakarta -- Mr Stanley Fischer, the world's chief economics tutor, may find out today if he has a student so compliant he wants to give him all credit for his decisions.

Will President Abdurrahman Wahid tell his angry legislative chiefs during their monthly "consultation" that he sacked two economics ministers from their parties on Monday, and might fire yet more, because the International Monetary Fund (IMF) said the Cabinet team's disunity was causing the country to backslide on the reform track?

It will be a tribute Mr Fischer does not deserve, nor want. For, say IMF sources, he specifically asked the President not to indulge in his favourite game of ministerial musical chairs and roil the markets any further.

The IMF's acting managing director left a meeting with the President on Monday morning with what he thought was a presidential assurance that there would be no Cabinet reshuffle for now. So did Gus Dur's personal economics advisers, who pleaded that he not add to the air of uncertainty. Eight hours later, the axe fell on State Enterprises Minister Laksamana Sukardi and Trade Minister Jusuf Kalla.

Was Gus Dur cocking a snook at teacher, showing him who's boss? After all, his most important political challenger, People's Consultative Assembly Speaker Amien Rais, has got people thinking that such stringent foreign tutelage is unnecessary when Jakarta does not really need the fund's US$400 million so urgently now.

Machismo aside, by unceremoniously shoving aside one representative each from the two largest political parties in the land, has he changed the tenuous balance of power such that his unhappy allies have no choice but make good on their threatening noises to walk out of his Unity government?

The short answer is no, for the fractious dynamics of the Indonesian Democratic Party-Struggle (PDI-P) and Golkar do not favour the two sacked ministers.

Mr Laksamana might have been among Vice-President Megawati Sukarnoputri's most loyal advisers and probably the best-liked lobbyist with foreign governments while she was still in opposition.

But, his secularist wing of the party is being shut out, reduced to criticising her lack of leadership, while Ms Megawati's husband shores up her Islamic credentials with his own Masyumi background and advances to Dr Amien's Islamic Axis bloc. A month or so ago, the Vice-President might have wrangled with Gus Dur on his behalf, running interference in the quiet but firm manner she did for economic czar Kwik Kian Gie and, even ex-military chief Wiranto, buying them time for a more graceful exit.

But not this time. He did not consult me, she said sadly when she heard the news of his sacking on Monday night while enroute to the strife-torn Central Maluku islands.

The truth, of course, was that she could have been more pro- active, especially after the President confronted Mr Laksamana with a demand that he resign before he left on another whirlwind tour in early April.

Instead, she told the depressed Laksamana that, while she did not agree with Gus Dur's decision, he should not fight him. Perhaps, apart from the complex emotional battle between her husband and her strategists, her own survival instincts also told her that this was a battle she would not win.

For Mr Laksamana's Cabinet viability is part of a larger tussle over the President's long-term political survival, which includes firming up his own patronage network or risk mass defection in the regions.

Although he is well-loved as Islamic kyiai and national leader, the concept of electoral loyalty will remain an alien one among local elites unless he shows them how their vote is linked to their personal fortunes.

Over the last fortnight, after Gus Dur accused him privately of backsliding on the IMF targets for his department, and told him to resign, the former minister has been telling friends about the pressure being exerted on him to fill top posts in state enterprises with presidential loyalists.

He had already lost one skirmish earlier in the year when the government suddenly grew lukewarm about investigating private sector giant, Texmaco, after revelations of malfeasance by Mr Laksamana.

Aghast presidential advisers later told The Straits Times that Texmaco had allegedly put 150,000 NU members in East Java on its payroll and given NU kyiais incentive to lobby the President on its behalf.

The last straw was apparently over Mr Laksamana's failure to secure the term extension of a senior Telkom official, sources said.

When he was away in mid-February on a haj pilgrimage with Ms Megawati, Coordinating Economic Minister Kwik Kian Gie was advised by the former minister's deputy, Mr Rozy Munir, to ensure the Telkom official kept his job because the President wished it so. When he demurred, he was summoned by the President and given the same message.

Yet, at the Telkom shareholder's meeting on April 7, that official did not win a term extension. For Mr Laksamana's foes, it would be proof of his continual defiance of Gus Dur.

Commented a friend: "Laksamana just didn't play the game. He wouldn't entertain the NU requests and, when he should have stroked Rozy Munir since he was forced on his ministry by the President, he alienated him instead." Why Gus Dur even installed Mr Jusuf Kalla in the first place is puzzling.

Accusing the trade minister of being involved in the Golden Keys scandal of the mid-1980s, he began promising his post to Lt-Gen Luhut Panjaitan, the Habibie-appointed envoy to Singapore, almost immediately.

Mr Kalla's real utility, it appeared, was to embarrass his nominal sponsor, Golkar chief and Parliament Speaker Akbar Tandjung, who had given his personal undertaking that the Bugis businessman was a man of integrity despite the whiffs of corruption swirling around him, and fanned by Gus Dur himself.

Still, Mr Akbar stood by him, forbidding him to quit unless proven guilty in a court of law. But it is doubtful he will go to bat for Mr Kalla now he is finally out; he is from South Sulawesi, a province controlled by a party boss who wants to oust Mr Akbar as chief.

He has no need to strengthen his own opponents, especially since Mr Kalla has admitted privately he was involved in the Golden Keys scandal, and his only defence is that former president Suharto ordered him to.

Mr Abdurrahman, too, has shown time and time again that he has little regard for the Parliament Speaker, often ignoring him altogether. When Gus Dur decided to fire Mr Kalla late last month, it was not Mr Akbar's blessings he sought but, the ageing General Muhammad Jusuf's, a much revered former Defence Minister from South Sulawesi.

What Gus Dur did not do on Monday is perhaps more instructive; he left well alone the ministers endorsed by Islamic Axis leader Amien Rais.

The two hitherto Islamic leaders, well-known for their decade- long animosity towards each other, have been inching closer to putting real bite into their verbal sling-fest.

But the timing has never seemed right, although the scheming goes on. A ministerial source told The Straits Times that, in the last two months, Dr Amien and the five or six ministers from the Islamic Axis parties have met at least twice to discuss ways to oust the President constitutionally.

One option they considered was for the Islamic Axis parties to withdraw their support for Gus Dur on the grounds that he was not only not solving the economic problems, but also contributing to the malaise with his confusing statements. Influential in Cabinet appointments, if not in electoral clout, their sudden rejection of the President would "create a legitimacy crisis", they reckoned.

Dr Amien might have credibility problems with most of Jakarta's political elite, but no one can deny that he worked hard to develop solidarity among the Muslim parties and hand their votes over to Gus Dur, thereby denying Ms Megawati victory in October.

The main stumbling block in this scenario would be Ms Megawati herself. Would she throw the weight of her party masses behind the President? Would she side with a failing President against all the Islamic parties, thereby allowing them to tar her party as anti-Islamic, in cahoots with a President who is more interested in furthering the interests of non-Muslims at their expense?

That element of uncertainty stymied the group, the source said. Plus they realised it could mean a chance for the Indonesian Defence Force to step into the political arena, on Gus Dur's side.

The leading military generals made as much clear when they stomped on suggestions floated by Dr Amien's group to hold a special impeachment session of the People's Consultative Assembly.

Stalemate? Perhaps. Gus Dur and Amien's political futures seem quite inextricably linked for now. But, mercurial as he is, it would be foolish for any minister to sleep easy, especially after his promise yesterday to "slim his Cabinet".

Meanwhile, Indonesia's economic prospects are actually looking cheerful for a change, recent ministerial inertia notwithstanding. At least there are now two new ministers fully pumped and eager to prove their President's trust in their abilities.

As the ABN-AMRO's latest market report issued on Monday noted optimistically: "Recent developments, including the Paris Club rescheduling and the IMF's optimism over reform progress, will provide underlying support for Indonesia's balance of payments. S&P's downgrade of Indonesia's issuer rating from CCC+ to D was a technical one, and should be reversed in two to three months.

"Although political and social risk factors remain a wild card, for investors with higher risk appetite, we recommend entering long rupiah short dollar positions on a three-month basis."

Political pundits might want to continue betting long on Gus Dur's political wiles and survival instincts too. Just consider why he risked alienating the market to remove Mr Laksamana so his own man is now in control of the state enterprises.

If, as President, you are committed to not treating the conglomerates like your personal piggy bank, where then is an impoverished grassroots movement, like NU, that has always depended on your ability to collect handouts, to get funding from?

How too can a small party like the Nation Awakening Party (PKB) quickly collect a sizeable war chest for your re-election in 2004, especially if it is going to be the first direct presidential election?

The reality is, money still talks loudest for a people still years from appreciating the benefits and risks of ballot-box democracy.

President proves to be wily political tactician

Vaudine England -- The latest phase in the Government's continuing reshuffle signals a further consolidation of power by President Abdurrahman Wahid.

His technique is also impressive. He announced Monday's sackings while International Monetary Fund (IMF) managing director Stanley Fischer was in town, leading many to assume the fund had demanded the changes.

In fact, the IMF did not demand these or any other sackings, but sources expressed wry admiration at Mr Wahid's finesse in letting the IMF take the heat. "There are underlying politics behind every move Wahid makes," said Kusnanto Anggoro, a political analyst at the Centre for Strategic and International Studies.

Mr Wahid's choice of replacements in his cabinet is a clear sign of his priorities. Retired lieutenant-general Luhut Panjaitan is loyal -- and bumps up military representation in the cabinet -- while Rozy Munir is a close personal and political ally from the President's Nahdlatul Ulama organisation.

"He wants loyalists around him as his primary consideration is the consolidation of power. There is no economic reason [for the cabinet changes], everything is political," said Mr Anggoro.

When Mr Wahid cobbled together a coalition of Islamic, nationalist and other political parties to secure the presidency last October, he faced an array of problems. Mr Wahid's approach was to carefully dole out power to a neatly balanced mix of political parties, religions and even ethnic groups, in what was lauded as the "compromise cabinet".

This year, however, Mr Wahid has openly commented on his dislike for many in his cabinet and his plans to sack and appoint whoever he wants, while he first of all dealt with the military by sidelining General Wiranto.

Now, he is seen to be implementing those plans for reform of a cabinet which has long been unable to co-ordinate policy goals or implement them. Observers have been quick to note how many times Mr Wahid has placed close friends or Nahdlatul Ulama allies around him. "Yes, he wants people from Ulama," said Mr Anggoro. "He has often said he trusts no one but close friends and relatives."

It is believed Mr Wahid plans more cabinet changes to further insulate him from his opponents and that these changes would be ahead of August, when an annual session of the Peoples Consultative Assembly will hear his accountability speech.

Opinions vary about whether Mr Wahid's growing confidence is a good sign of growing cohesion at the top, or a bad sign of his autocratic tendencies. "He has been an autocrat already," said Mr Anggoro. "If you interpret democracy as freedom of expression then, yes, Wahid is a democrat. But if you think it means a Government which is transparent, accountable and so forth, then he is not."

Anger over firing of key ministers

Jakarta -- President Abdurrahman Wahid faced anger among coalition parties within his already fractious six-month-old government yesterday after he fired two key financial ministers.

Several senior politicians raised the prospect of withdrawing their factions from the Cabinet in protest.

The Cabinet reshuffle was also greeted by suspicion with few believing it would make a jot of difference to its stated aim of revitalising faltering economic reforms.

Mr Abdurrahman, who is under increasing international pressure to accelerate reforms to Indonesia's crisis-ridden economy, sacked Trade and Industry Minister Yusuf Kalla and Investment Minister Laksamana Sukardi on Monday.

A Cabinet spokesman said the decision was designed to ease tensions and fix poor coordination among ministers in charge of restructuring the moribund and corrupt financial system.

The ministers were fired just hours after the President met Mr Stanley Fischer, the acting head of the International Monetary Fund, who urged Indonesia not to waver on a commitment to make painful economic changes.

Officials within Mr Kalla's Golkar Party and Mr Laksamana's Indonesian Democratic Party of Struggle, or PDIP, said they regarded the dismissals as an attack by Mr Abdurrahman on their power within the Cabinet.

President Abdurrahman, who is backed by his Muslim-dominated Nation Awakening Party, has replaced the two ministers with Indonesia's ambassador in Singapore Luhut Panjaitan, a serving army general, and Mr Rozy Munir, a senior bureaucrat and Aburrahman supporter.

Some party officials raised the possibility of pulling out of the Cabinet. Golkar's chairman and Speaker of Parliament Akbar Tanjung told reporters his party might withdraw support for the government if the President fails to provide a good explanation for the sackings. "Pulling out of Cabinet is one possibility," he said.

Mr Abdurrahman, who is regarded as a reformer, appointed his Cabinet after he was elected head of state in October. At that time he admitted the line-up represented a compromise to accommodate the ambitions of several parties and the politically powerful military.

Analysts said a main worry in the reshuffle was the replacement of investment minister Laksamana Sukardi with a subordinate whose main qualification seems to be his closeness to Mr Abdurrahman.

That has triggered charges that Mr Abdurrahman is swelling the ranks of his inner circles based on old associations rather than skills.
 

Regional conflicts

Violence in Maluku 'political'

Marianne Kearney, Jakarta -- A Christian religious leader yesterday said the latest outbreak of violence in the Malukus may not have been accidental, but timed to coincide with the three- day visit to the region by Vice-President Megawati Sukarnoputri.

Ms Megawati arrived in Maluku's capital of Ambon with 10 Cabinet ministers in tow on Tuesday in a further bid to halt violence between Muslims and Christians.

"Everytime Megawati comes, it always happens. It seems to show the conflict has a more political colour than religious," said Mr Dicky Mailoa, a religious leader from the Indonesian Council of Churches.

On Sunday, two days before Ms Megawati's visit, the discovery of a Muslim man's body caused a riot, killing three Muslims and one Christian man in central Maluku. Ms Megawati's last visit to Maluku, in February, was also marred by violence, when a riot broke out on Haruku Island, leaving 25 dead.

Mr Mailoa said he thought groups were still trying to use the violence for political purposes. "They try to position themselves as the group with certain power to decide when the conflict stops," he said.

Another longtime observer of the Maluku conflict also thought Sunday's violence may have been manufactured in order to discredit the Vice-President, who has made some headway in limiting the violence.

"At least three parties could be trying to step in the way of Ms Megawati and so try to keep the conflict going," said Mr Tamrin Tomagola, a sociologist who heads the Reconciliation and Peace Institute.

Both Mr Tamrin and Mr Mailoa expressed surprise that there should have been a fresh outbreak of riots as everywhere except North Maluku had become quiet over the past two months, with Muslim aid workers able to enter areas controlled exclusively by the Christians or vice versa.

Mr Tamrin suspected that Sunday's violence may have been created by local fighters who have become powerful community leaders and made financial gains from the ongoing conflict.

He said if this group alone was not to blame for the violence, perhaps either members of the Central Axis or old guard elements in the Indonesian army could have encouraged locals to provoke the violence.

Wounds on one of the people killed on Sunday also suggested that the attack was intended to incite further violence. "One of the victims was sliced. I think this was done by the side that wants to destroy the peace process," said Mr Abdullah Ely from the Islamic Existence Organisation in Ambon.

Religious groups and non-government groups report that both Christian and Muslim leaders have been striving to bring peace to the troubled islands.
 

Aceh/West Papua

Officer ordered killing wounded in Aceh: Witness

Banda Aceh -- Three military witnesses on Saturday told a court trying 24 soldiers charged with massacring 58 civilians in Aceh province last year that an officer, now declared missing, had ordered the killing of 23 people wounded in a shooting spree there.

Second Sergeant Subur told the joint civilian and military court here that 23 people wounded during the shooting of Teungku Bantaqiah, a Muslim leader, and 57 of his followers in West Aceh last year were taken away by a military truck.

He said the 23 were to initially be taken to Takengon, the capital of central Aceh, for medical treatment. But after several kilometers, Lieutenant Colonel Sujono ordered one of the defendants, First Lieutenant Trijoko, to take six of the wounded out of the truck and kill them.

Subur said none of the wounded ever got to Takengon as all of them were killed along the way. Two other witnesses gave the same account to the court.

Sujono, who heads the intelligence department of a military command overseeing several Aceh districts but not West Aceh, has been missing since November and has since been declared a military deserter.

Attorney General Marzuki Darusman was quoted by the Suara Pembaruan daily as saying he had a report Suyono was seen, accompanied by soldiers, leaving Jakarta's Sukarno Hatta airport in a car on April 23. Darusman believed there might be some conspiracy to prevent Sujono from facing the court but he could not say who was behind the scheme.

Lieutenant Surya testified he was informed by a follower of Bantaqiah caught by the military that the group had 100 firearms and 100 followers.

Another witness, First Lieutenant Indarjo said he was tasked to block the area during the operation and from a distance of 10 kilometers he heard gunfire.

But Surya said he was not involved in the raid on the Bantaqiah Muslim boarding school. The trial resumes on Monday.

No backing out of peace deal now for Aceh rebels

Susan Sim, Jakarta -- As leaders of Aceh's armed rebel movement hovered on the brink of a peace agreement with Jakarta, officials here warned that if it backed out now, it would find itself isolated.

The central government is forging ahead with plans to grant local legislative and community chiefs extensive powers to run the province in return for abandoning the independence cause.

A law devolving full powers to Acehnese officials in all areas except foreign affairs, national defence and fiscal and monetary matters could be in place by the end of June, State Minister for Regional Autonomy, Prof Ryaas Rasyid, said yesterday. He told The Sunday Times that, proceeding on negotiations with rebel leaders in Stockholm and elected officials in Banda Aceh, Jakarta had obtained from the Acehnese parliament a draft Bill on how they would like to share power with Jakarta.

Extensive discussions to ensure the draft has the support of most sections of Acehnese society is likely to take place by late next month, after the government submits its Regional Autonomy Bill to Parliament on May 7, he added.

Separately, Human Rights Minister Hasballah Saad on Friday also gave May 7 as the deadline for a peace deal with the Free Aceh Movement (GAM) leaders, who had met three times up with Indonesian officials in Geneva recently.

"Everything has to be done gradually but, God willing, the agreement will be signed next week before May 7 in Geneva," he said. He did not give details other than saying that setting up a human-rights tribunal was a key issue.

President Abdurrahman Wahid, originally scheduled to visit Aceh today, is now expected to go to the western-most province on May 8, fuelling speculation that he will personally announce a ceasefire.

But even if the GAM deal falls through, Jakarta is still committed to granting Aceh wide-ranging autonomy beyond that being contemplated for the other provinces. Only Irian Jaya will get the same special status, Prof Ryaas said, adding:

"GAM is just one element among others in Aceh. If the other groups agree to special autonomy, then it will be left behind. The situation in Aceh has changed because people are more realistic now and know that the government will never agree to independence."

Giving meat to the idea of special status, Acehnese legislators, he revealed, are demanding not just the right to control the usual public services, but also a provincial police force, the courts, all revenues from provincial resources, and foreign trade relations, ceding control to Jakarta only functions like foreign diplomacy, national security, and currency and monetary policy.

Prof Ryaas' own regional autonomy bill, to be presented to Cabinet on Wednesday, reserves to the Centre exclusive control over five areas -- foreign relations, national defence, the judiciary, religious practices, and financial policy, including setting revenue-sharing norms with the provinces.

To demonstrate its sincerity to the Acehnese in atoning for the decades of abuse and neglect and end the separatist drive, Jakarta is prepared to accede to most of their demands.

But Prof Ryaas warned that Jakarta was unlikely to give up full control of all revenues from natural resources, and while it understood their desire to cement their historical ties to Malaysia and the Middle East by establishing direct economic relations, it would want to retain some control here.

"Once we agree on a special autonomy draft, then it is up to the Aceh Parliament to persuade Acehnese that it is the best arrangement."

Doubts cloud Aceh military trial

Yogyakarta -- Skepticism persists about the trial of 24 soldiers and a civilian charged in a mass killing in Aceh last year as violence continued in the strife-torn province on Thursday.

Member of the Commission for Missing Persons and Victims of Violence (Kontras) Munir said the joint military-civilian tribunal now under way was aimed at placating the public while shielding the real offenders from prosecution.

He said the disappearance of key suspect Lt. Col. Sudjono was a proof. "The trial will not touch government officials and military top brass who should be held responsible for human rights abuses in Aceh." He said Sudjono's disappearance was irregular and the commission obtained information it was politically orchestrated.

Munir said several eyewitnesses reported to the commission that they saw Sudjono at Soekarno-Hatta International Airport in Jakarta on March 22, probably heading to Denpasar, Bali. "Our witnesses even wrote down the license plate number of the car that took Sudjono to the airport," Munir said. In Aceh, protests marred the preparations for President Abdurrahman Wahid's visit to Langsa, East Aceh, on Sunday. Dozens of student activists rallied at the East Aceh legislature, demanding Abdurrahman hold a referendum with the option for independence.

"We want to remind Abdurrahman that the Acehnese only want a referendum to decide the future of this province," Iskandar S.Y of Samudera University said. "He can pray anywhere he wants because the matter of Aceh actually can be solved from Jakarta," another activist said.

Abdurrahman has ruled out submitting to the demand for independence and repeatedly expressed guarded optimism of a quick resolution of the discord. East Aceh Police chief Lt. Col. Abdullah Hayati said on Thursday that more than 820 police and military personnel were deployed for the President's visit.

Meanwhile in the provincial capital Banda Aceh, a group of 25 protesters marched to the gubernatorial office on Thursday morning, demanding a thorough investigation into the killing of at least 60 civilians in Simpang KKA in North Aceh on May 3 last year.

Separately, head of the National Family Planning Board in Aceh Risman Musa revealed that arson and bombing of its three buildings caused total losses of Rp 6.5 billion. A wave of arson and bombings have hit Aceh in the past few weeks, targeting government offices, schools and security posts.

In the latest attacks, a gang of gunmen set on fire the assistant regent's office in Mabaro, eight kilometers east of Banda Aceh, early on Thursday, spokesman for the Sadar Rencong antirebel operation Col. Safri D.M. said. Late on Wednesday, an explosion rocked the Darussalam Police post in Lambaro Angan, 12 kilometers east of Banda Aceh. In West Aceh, two junior high schools were set ablaze by an armed gang. No fatalities were reported in the incidents.

Critics doubt if Aceh trial will be free and fair

Marianne Kearney, Jakarta -- The long-awaited trial of 24 soldiers charged with the massacre of 58 civilians in West Aceh last July has been called a show that will be hampered by its connections to military legal procedures.

Mr Irianto Subiakto, a human-rights lawyer from Indonesian Legal Aid, said: "You have to ask if the government is serious or not. It is just a show for the people to put soldiers on trial and punish the boys." Lawyers are concerned the hybrid trial, which uses both civilian and military judges, will not satisfy the Acehnese people's demand for justice for the thousands of human- rights abuses allegedly committed by the military in its campaigns against separatists over the last decade. The hearing is the first of its kind.

The plea-bargain for the defence, made on Saturday, the second day of the hearing, indicates just how difficult it will be to ensure a fair trial involving both criminal and military legal procedures. The defence for the soldiers argued that the shooting of Islamic teacher Teungku Bantaqiah and his followers, including women and children, was not criminal because the soldiers were just following orders.

"If we follow a military paradigm, it is true that these soldiers were just following orders," said Mr Irianto. "So the question is: To what extent is the command structure responsible for its subordinates?" Mr Irianto said that, under Indonesian military law, soldiers had diminished responsibility if they were following orders.

The only problem is that Lt-Colonel Sudjono, the most senior defendant in the case, disappeared last November. He is the officer who could best have been expected to say who gave the orders to pursue the Islamic leader.

In the absence of the key witness, if only criminal law was used to prosecute the accused, the 24 soldiers would be held responsible for the massacre, while the high-ranking military commanders behind the scenes would not be tried, Mr Irianto said. Before the trial, the military argued that the Islamic teacher and his students were Free Aceh rebels, who opened fire on the troops while they were searching for weapons.

Non-governmental groups are also angry at what they see as an attempt to make scapegoats of low-ranking officers. "Where is the justice if only the subordinates are charged?" asked Mr Muhammad Nazar from the Aceh Referendum Information Centre.

Mr Nazar, like many other leaders of non-governmental groups in Aceh, said the trial should have been held by an international tribunal. "What was done by the Indonesian military in Aceh was political, not just criminal. If Indonesian law appreciates human rights, they would not have a connectivas trial," he said referring to the hybrid nature of the court.
 

Labour struggle

Teacher land hike in allowance, still short of demand

Jakarta -- The government has agreed to raise teachers' functional allowances by 100 percent, far below various demands made by protesting teachers.

Speaking after a Cabinet meeting at Bina Graha presidential office on Wednesday, Minister of National Education Yahya Muhaimin said the figure was the best the government could do due to financial constraints for the 2000 fiscal year.

Yahya said the 100 percent increase in functional allowances for teachers along with a 30 percent across-the-board salary increase for civil servants had been endorsed by the House of Representatives (DPR).

Any changes to the decision should be further discussed with the House, he noted. "However, the government will continue to seek all possible ways to improve teachers' welfare," the minister pledged.

President Abdurrahman Wahid is scheduled to have a consultative meeting with House leaders on Thursday. House Speaker Akbar Tandjung is expected to raise the issue during the meeting.

Cabinet Secretary Marsilam Simajuntak said teachers' demands were thoroughly discussed during the Cabinet meeting, but the government could not extend itself further due to serious financial constraints. "We understand fully the hardship faced by teachers, and we will do everything to help them in improving their welfare," Marsilam remarked.

Teachers throughout the country have staged demonstrations demanding higher salaries. Indonesian Teachers Union (PGRI) secretary-general Sulaiman SB Ismaya told The Jakarta Post that the government decision violated a previous agreement on April 17 between PGRI and the minister of education.

"In the previous agreement the government agreed to give a 300 percent increase in functional allowances. Of course we expect an explanation," Sulaiman said, noting that the latest development was disappointing.

A 100 percent increase means teachers will receive between Rp 90,000 (US$11.25) and Rp 210,000 on top of their basic salary. Indonesia has about 1.7 million teachers.

Sulaiman conceded PGRI might review its decision to suspend mass rallies. However be pledged that even if there were further rallies, they would not disrupt end-of-term examinations. "We will keep on fighting but will not harm students' education," he remarked.

The teachers' demonstrations have continued this week. In Medan, North Sumatra, a protest was held on Tuesday by the Teachers Communication Forum for Teachers Struggle (FKPNG).

The charged that the government was unsympathetic to the teachers' plight. "If the government cannot treat teachers properly, let teachers become the president and director general of budgeting," one protester said.

More teachers threaten to strike, demand salary hike

Jakarta -- Some 1,000 teachers of kindergarten to high school across Jambi staged a noisy rally in front of the provincial legislative building on Saturday. They demanded a 300 percent raise in their salaries and 500 percent in extra allowances.

The teachers, grouped in the Indonesian Teachers Union (PGRI) and the Forum of Jambi's Teachers (FGKJ), forced their way into the main plenary hall, where their representatives were holding a dialogue with local councilors, Antara reported.

Speaker of the legislature Nasrun HR Arbain received the representatives led by PGRI executive Sudirman. During the dialogue, the protesters also demanded that the government drop the monthly rice distribution and replace it with a rice stipend. "We asked for a rice stipend with a new price basis of Rp 2,640 (some 33 US cents) per kilogram instead of the old rice price of Rp 2,380," Sudirman said.

The teachers also urged the government to provide them with housing credits and demanded the removal of the head of PGRI's provincial branch, Yusuf Madjid, whom they accused of failing to realize their needs. Nasrun pledged to relay the demands to Jakarta and the local administration.

Secretary of FGKJ Suardiwan said that the central government should reconsider its decision to earmark a mere 5.8 percent of the state budget for teachers salaries and allowances. "Other countries allot much more from their budgets for their teachers. Malaysia, for instance, used 17 percent of its budget, and Sweden 35 percent," he said.

Separately, thousands of teachers in Banyumas regency in Central Java threatened to strike on National Education Day which falls on May 2, along with their 9,000 colleagues in neighboring regency of Banjarnegara.

Banyumas regent Aris Setiono urged the teachers to reconsider their plans, saying that students will be undergoing their final examination in the middle of May. "I want the teachers to think about their students' preparations for the final exams," he told journalists on Saturday while visiting Purwokerto.

However, a teacher of Banyumas confirmed with The Jakarta Post on Sunday that "partial strikes" have been stealthily underway. "Most teachers in Banyumas have been holding strikes by arriving in classes without following the schedule," Munirwan, a member of the Banyumas Teachers Communication Forum, said.
 

News & issues

Police disperse student demonstrators in Riau

Jakarta -- Indonesian police fired warning shots and tear gas yesterday to break up a student demonstration in Pekanbaru during a visit by President Abdurrahman Wahid to the city in the Sumatran province of Riau.

The shots and tear gas were fired as the students attempted to break through the police security cordon around the governor's office, the Antara news agency said.

Mr Abdurrahman was in a meeting with local leaders at the governor's office in Pekanbaru, about 800 km north-west of Jakarta, when hundreds of students rallied nearby and demanded that police allow them to meet him. The students' demands to meet the President were rejected. Antara did not say what the students were protesting about or wanted to discuss.

But when the students surged forward, security forces responded with teargas canisters and warning shots. The protesters then dispersed in panic, but there were no reports of any serious injuries or arrests.

Mr Abdurrahman was in Pekanbaru for a meeting in the city's main mosque and another with local officials.

Demands for greater autonomy for Riau, rich in forestry and natural resources, are mounting along with calls for the region to manage its own riches. Other regions have also called for the formation of a separate state.

Indonesia has faced calls for independence from the resource- rich provinces of Riau, Aceh and Irian Jaya since last year when East Timor voted in a United Nations-sponsored referendum to break away from Jakarta's rule.

Moslems delay spice islands jihad

Yogyakarta -- Radical Indonesian Moslem fighters who have vowed to launch a jihad, or holy struggle, in the bloodied Moluccas said on Saturday they had been forced to postpone their departure for the islands.

The Ahlus-Sunnah Wal Jama'ah Forum, a loose grouping of hardline Moslems, said they now planned to send fighters to the fabled spice islands in early May. The group had originally planned to ship 3,000 fighters there this weekend.

"There are many obstacles in the port of Surabaya with police carrying out sweeping operations and checks against people going to the Moluccas," Ayip Syafruddin, leader of the forum, told reporters in the city of Yogyakarta in central Java. A rally planned by the Forum in the city on Saturday had also been cancelled, Syafruddin said.

Police in Surabaya, Indonesia's second port and gateway to the scattered eastern half of the country's archipelago, have said they would not allow the Moslem fighters to leave for the Moluccas.

On Wednesday, East Java police arrested three members of the forum at the port but were forced release them the next day when hundreds of hardline Moslems stormed the police offices.

Syafruddin insisted the fighters were going to the Moluccas to help defend Moslems rather than to wage war against Christians. "We promise not to wage war," Syafruddin said, adding that his fighters would not carry any arms.

The forum trained thousands of fighters, armed with swords and sticks, at a heavily-guarded camp near the capital of Jakarta for several weeks. The group says a jihad is a mission to help other Moslems, and does not necessarily involve war.

The Moluccas, a group of small islands around 2,300 km east of Jakarta, have been ravaged by violence between Christians and Moslems since early 1999. Human rights groups say thousands of people have died.

Many fear the arrival of thousands of angry Moslems would reignite Christian-Moslem tensions to fuel violence on the islands which may spread to other parts of the Indonesia's diverse archipelago.

Seven people died in two days of fighting that broke out on Wednesday after a peace visit by Vice-President Megawati Sukarnoputri, who has been charged with ending the conflict, local officials in the provincial capital of Ambon told Reuters on Friday.

Inching out of the abyss

Two years after the regional financial upheaval, the Indonesian economy is slowly regaining its footing. But the recovery is tentative and many painful tasks lie ahead. In the first of a two-part special report, The Straits Times looks at the controversial issue of fuel and food subsidies and the millions more who are still mired in poverty.

Marianne Kearney, Jakarta -- Mr Kaslim, a part-time becak driver and farmer, has just started to feel the effects of Indonesia's economic upturn. Two years ago his half-day of becak driving around Cijulang, a small rural town in West Java, earned him only 8,000 rupiah to 10,000 rupiah (S$1.70 to S$2) a day.

At the time, the cost of staple foods had more than doubled and his earnings were not enough to feed his family of six. He was lucky because at least he did not have to pay exorbitant prices for rice, and any extra rice he harvested could be traded for other food items such as eggs or chicken.

Now, however, he does not have to barter trade his rice. The becak business is picking up -- in the last six months he has earned almost twice as much as two years ago and the cost of some daily necessities, such as cooking oil and noodles, has come down.

Although he is still struggling to pay his sons' school fees, his monthly earnings from driving a becak are still more than that of a local school teacher.

Government employees are also seeing a small rise in their salaries, although the increases go mainly towards paying for daily necessities.

Ms Titik, who works in a government human-resources department in central Sumatra, says her wage increase from 300,000 rupiah to 400,000 rupiah a month early last year was still mostly spent on food.

Although her monthly salary is higher than that of a teacher in Java (165,000 rupiah), Ms Titik says the cost of food in Sumatra is higher than in Java, and so her family has cut down on luxuries such as meat and cigarettes. This month, however, employees such as Ms Titik will receive a wage rise of 100,000 rupiah.

Other workers have not been so lucky. While workers in textile factories, furniture-making or mining have also seen their wages increase in the last year, feeding a family on these wages would still be difficult. A typical factory worker in Jakarta now earns about 280,000 rupiah a month whereas in 1998 the monthly pay was about 230,000 rupiah.

Mr Kaslim and Ms Titik, like millions of other Indonesians, have seen their living standards improve at least a little over the last six months as the cost of basic foods stabilised, their wages rose and the Indonesian currency settled in at around 8,000 rupiah to US$1.

The figures, though modest, are a huge turnaround from mid-1998, when the rupiah hit a low of 15,000 to US$1 and the prices of staples shot up 120 per cent, raising the threat of food riots and mass starvation.

United Nations economist Iyanatul Islam estimates that in the last year about 15 million of the 92 million who were living below the poverty line in 1998, have successfully climbed above the mark. The government Department of Statistics, however, claims a far bigger figure of almost 40 million people.

The government has achieved this more positive picture of declining poverty levels mainly by setting minimal living standards for the poor at a lower level than that of Mr Iyanatul. The government says that there are now 38 million people living in poverty against Mr Iyanatul's 70-odd million.

Now, as many Indonesians see a modest improvement in the standard of living, the government is pushing through a number of controversial price increases, aimed at creating more efficient local industries as part of its agreement with the International Monetary Fund.

The most controversial of these is the fuel-price hike. Back in May 1998 when the then Suharto government raised fuel prices by 70 per cent, riots erupted all over the country, contributing to his eventual downfall.

Earlier this month, students again threatened to mobilise themselves for massive demonstrations if the government went ahead with the proposed hikes.

The government backed down but critics say that it should not have because the main beneficiaries of the current fuel subsidies are mainly the well-off.

"It's a problem of political communication. Why don't the ministers explain to the people that if we delay the hikes too long we will pay more," says Mr Johannes Kristiadi from the Centre for Strategic Studies.

The fuel subsidies, say economists such as Mr Iyanatul, consume billions of dollars of government money and end up helping the middle class and upper class run their cars and factories cheaply while basic services such as health and education starve for funds.

The daily expenditures for rural people such Mr Kaslim, who does not own a motorbike, and uses public transport occasionally, will only be affected marginally by the price hikes.

People living in the cities will be more affected, says Mr Iyanatul, with the cost of goods rising slightly. The main effect on urban dwellers will be the rising cost of public transport. Economists say these hikes are fair as public-transport costs have not risen over the last two years and will need to rise in order to keep those companies in business.

The cost of electricity has also been kept low artificially, costing the government millions of dollars in subsidies, while major companies and the middle and upper class reap the benefits, they say. The recently introduced electricity hike of 30 per cent will not be passed on to the poor who consume only small amounts of electricity.

But one of the most contentious subsidies, that many economists argue could definitely swell the ranks of the poor, is that for local rice farmers. Although the government has so far resisted pressure to remove tariffs on cheaper overseas rice, it is under pressure to do so.

International organisations, such as the World Bank, say removing tariffs on imported rice, by reducing the cost of Indonesia's main staple food, will reduce poverty levels significantly.

"If Indonesia wants to support farmers it should do so not through tariffs, or through subsidies but infrastructure," says Mr Bert Hofman, a senior World Bank economist.

One study done by Development Alternatives Incorporated, which is funded partly by the US Agency for International Development (Usaid), found that the lower the tariffs, the less poor people there would be; a zero tariff would bring 14 million people above the poverty line, whereas a 25 per cent tariff would bring 4 million people above the poverty line.

Mr H. S. Dillon, an economist from the government's Economic Council rejects these figures as nonsense. While agreeing that lower rice prices help, he argues that zero or very low rice tariffs will wipe out farmers who make up most of the population.

"You have 80 per cent of the population who has not gone beyond primary school. Where else will they find employment? They can't enter the high-tech work force," he says, pointing out that 20 million of Indonesia's 210 million people are rice farmers.

Thus, Dr Dillon argues, agricultural subsidies would be the government's most effective social safety net for keeping Indonesians above the poverty line. Abolishing the rice tariff, it is argued, would drastically increase the number of poor people.

One of the reasons the numbers of those poor jumped so dramatically during the height of the economic crisis was that so many people were hovering just above it that even small increases in the cost of basic foods send millions into poverty.

And it is these millions, still hovering just above the poverty line, that the government should be targeting to ensure that they rise above it further, says Dr Pande Raja Silalahi from the Centre for Strategic Studies.

He agrees that government policies to curb rampant inflation and stabilise the rupiah have helped improve average living standards but accuses the Wahid government of doing nothing to reduce the long-term causes of poverty or create more jobs. "The government keeping inflation low is a different story from people living below the poverty line," he said.

The World Bank too is cautious in its assessments of whether Indonesian standards of living will continue to see improvement. One of its studies estimates that as many as half of all Indonesians could still be living very close to the poverty line, and they have a 50 per cent chance of slipping below it in the next three years.

How the poverty line was calculated

Both the government and the United Nations economist, Mr Iyanatul Islam, arrived at the poverty line by calculating the cost of 52 standard commodities which allows a minimum of 2,100 calories per day.

Mr Iyanatul argues that the government's calculation underestimates the cost of basic goods in rural areas which, therefore, underestimates the number of poor in rural areas.

He says the government's poverty line also underestimates the consumption of basic non-edible goods such as cooking implements, and believes that more allowance should be made for the purchase of household items.

(The difference between the two poverty lines is not much -- government's estimates the basic income at 77,386 rupiah (S$16) per month while Mr Iyantul sets it at 97,074 rupiah per month. However because of the low incomes, this small change adds a large number to the number of poor.)

Other economists have also challenged the Indonesian government's estimates of the costs of goods, concluding that poverty levels before and after the crisis were a lot higher.

Jakarta's middle class tighten belt

In the first part of our special report on the Indonesian economy yesterday, we looked at the controversial issue of fuel and food subsidies and the millions of Indonesians who are still mired in poverty

While Indonesia's middle class do not have to worry about their next meal, many of them are still going easy on imported goods and luxuries.

In the second of a two-part special report, The Straits Times looks at the wary mood that is still pervasive two years after the economic crisis.

Robert Go, Jakarta -- Locally-made margarine instead of foreign, fewer holidays abroad and, sometimes, cutting out visits to the doctor altogether. Two years after the economic crunch, Indonesia's middle class are still having to keep a wary eye on the family budget.

Crismon -- the popular shorthand term here for "crisis monetary" -- reined in their growing consumption of imported goods as the drastic devaluation of the rupiah put a severe crimp on their purchasing power.

Latest statistical indices show some price stabilisation or even deflation in the last two years, but the consumption level of commodities usually associated with the middle-class lifestyle is still lower than in 1996.

"There is a noticeable change in spending pattern with people concentrating on essentials and forgoing items that can be substituted," said Mr Bambang Sabarudin, head of Consumer Price division at Indonesia's Central Board of Statistics.

While none claimed starvation, households interviewed by The Straits Times reported having to spend more but getting less in terms of quality and quantity.

"Things that we cannot substitute we still buy, but for extra items, we try to hold back or spend money on cheaper alternatives," said Mrs Lusi, a housewife from Surabaya. Explaining her budgeting practices, she said that before the crisis she bought imported Australian margarine, but the domestic Blue Band has become her family's current brand of choice.

American-made Mazola cooking oil, which cost approximately 17,000 rupiah (S$3.60) in 1996 but rose to over 35,000 rupiah, is substituted with Sunrise, priced at 22,000 rupiah at her local supermarket.

Mrs Lusi considers herself middle class. Her husband works for a foreign manufacturing company. Their monthly family budget before 1997 was approximately two million rupiah, but has since ballooned to reach 3.5 million rupiah.

Other means of cutting cost for the middle class include reducing spending on clothing, jewellery, property and luxury cars. Some families say they have cancelled foreign travel plans and vacationed at destinations within Indonesia.

Some even cut back on health care, choosing to see local dukuns or traditional healers instead of consulting a doctor. "People report to us that they had to choose alternative treatment such as going to unlicensed traditional health practitioners or taking traditional potions to treat their illnesses," said Mrs Indah Suksmaningsih from the consumer group YLKI.

Patronage of restaurants, another important gauge for middle- class consumption, also dropped significantly, even at popular, medium-priced establishments located in middle-class neighbourhoods. "We had 30 per cent fewer customers up until a few months ago, when things started to get better," said a worker at Twilight Cafe, one of Jakarta's popular eateries.

Ms Irene, a recent college graduate living in Jakarta, described her favourite hangout spot, the food court at Taman Anggrek shopping centre, as a convenient place that offers variety at a low price.

She admitted frequenting the noodle stall with her friends before they went shopping. "We still go to places like Pizza Hut ... but we spend half the money by going to regular stalls at the food court," she said.

If the middle class exercised firmer hands on the purse strings when purchasing daily necessities, they also practised delayed gratification in making larger spending decisions such as on travel and cars.

Some families said they had cancelled foreign vacations because of a higher tax charged by the Indonesian immigration authorities on citizens travelling abroad as well as pricier airfare and accommodation costs.

Ms Regina, a medical student at one of Jakarta's leading universities, said: "We planned to spend Christmas 1998 in Sydney, Australia, but then decided it was too expensive."

Her family ended up spending a week at the Hard Rock Beach Club in Kuta, one of the poshest resorts in Bali. They were not too disappointed, she said, because they still got to spend the holidays together.

Saleswoman Yuli, who works at one of Toyota's dealerships in Jakarta, confirmed that the car market slumped as prices increased. Priced at 45 million rupiah in 1997, the Kijang, Indonesia's most popular car model, is now being sold at over 130 million rupiah. "People still came in to look at the new models, but they were just looking," she said.

Business is picking up, however, at least for the first part of this year. Toyota's head marketing office recorded a national total of 29,086 units sold during the first three months of 2000, compared to 22,877 for the same period last year.

That middle-class membership definitions change from one person to the next presents a big problem for those trying to address the issue.

Mr Frans Bararualo, an economist at Atma Jaya Catholic University in Jakarta, said: "We can't describe an average living standard in Indonesia since each province differs in characteristics and costs from the others."

But Mr Hajadi, Ciputra Group's Managing Director, defines Indonesia's middle class as white-collar professionals earning above 3 million rupiah a month.

He believes confidence is returning to the domestic market, especially since the election of President Abdurrahman Wahid last October.

Wahid proposes three-way talks

Vaudine England, Jakarta -- In a surprise move, Indonesian President Abdurrahman Wahid yesterday proposed a meeting with Australian Prime Minister John Howard and East Timorese leader Xanana Gusmao to help repair strained relationships.

Steps toward the three-party meeting also illustrate the potential significance of a location -- such as East Timor -- on the East Asian geopolitical map.

Mr Wahid's proposal comes after he indefinitely postponed a planned visit to Australia, which Australian commentators saw as a calculated snub prompted by widespread anger at Canberra's role in leading international troops into East Timor last year.

"I would like the three countries to co-operate for our mutual benefit and interests," Mr Wahid said yesterday after holding talks with Mr Gusmao in Jakarta.

Mr Wahid wants to meet his two counterparts in West Timor, East Timor or Australia on his way home from Canberra, but did not say when that visit would be.

Alleged spying by Australian soldiers and Indonesian claims -- denied by Australia -- about so-called "spy" flights into Indonesian airspace by Australian planes, have helped further delay the trip.

But Mr Gusmao has maintained good relations both with Australia and Indonesia, and may well be an agent of gradual rapprochement between his two largest neighbours.

Mr Gusmao supports Mr Wahid's plan for a summit meeting of the three leaders and would urge Mr Howard to take part. Mr Gusmao, who has often praised Australian intervention in East Timor, is due to hold talks with Mr Howard in Canberra next week.

Mr Howard, meanwhile, predicted this week that relations with Indonesia might never be fully repaired. In turn, Mr Wahid has criticised Australian policy on Jakarta as "childish".

In the longer term, the desire of East Timor's leadership to play an active diplomatic role in safeguarding its future independence brings into focus the likely competing demands for influence on the territory. One school of thought among diplomats and analysts on the issue of security holds that East Timor is strategically insignificant, and the only priority is for Indonesia -- a major regional power -- to feel comfortable with an independent East Timor in its waters.

"We have neither the resources nor the ambition to expand our strategic reach," Australian Ambassador to Indonesia John McCarthy said at the height of Indonesian anger over Australia's leadership of international intervention in East Timor.

Others say East Timor is the hinge on an Asian axis, between the interests and territorial ambitions of China to the north and those of Australia, an ally of the United States, in the south.

East Timor's independence leaders, Mr Gusmao and Jose Ramos Horta, have often said they aim to be independent and unambitious in the diplomatic arena. They have been in touch with the South Pacific Forum and the Association of South East Asian Nations (Asean) about future membership.

At the same time, they have told the Chinese leadership they want to establish diplomatic ties with China. "East Timor places great importance on China's important role in international and regional affairs, and hopes to establish and develop normal relations with China as soon as possible," Mr Gusmao said in January.

Yusril owns up to taking billion Rupiah from Habibie

Jakarta -- Crescent Star Party (PBB) chairman Yusril Ihza Mahendra acknowledged on Friday accepting Rp 1 billion from then president B.J. Habibie to help finance the newly established party prior to the 1999 general election.

Yusril said his party received a total of Rp 2.9 billion in financial assistance -- including Rp 1.57 billion in donations from supporters and the Rp 1 billion from Habibie -- since its founding in July 1998.

"All the funds were used to finance the party's programs, especially during the 1999 general election," he said in his accountability speech at the party's congress here on Friday.

An unabashed Yusril, who is the minister of law and legislation, defended the action. He said Habibie's contribution was not illegal because it was donated prior to the implementation of the 1999 law on political parties which regulates campaign contributions.

"Please, give me evidence that the financial assistance was against the law. I'm ready to undergo a police investigation into it," he said. "Besides, many other parties received funds from the former president too." He did not identify the parties. Yusril denied last year allegations he received some Rp 1.5 billion in campaign funding from Habibie.

The issue of the contribution is among the fissures which have divided the party congress. Yusril is expected to be reelected chairman when the congress closes on Sunday as 13 of the 28 provincial chapters declared acceptance of his accountability speech and supported his leadership.

The internal discord came to a head on Friday when 16 of the party's outgoing officials walked out of the congress. Kholil Ridwan, the party's outgoing deputy chairman, accused some party figures of political engineering for the sake of personal interests.

"We see a number of uninvited participants disturbing the congress. Each time we enter the congress we are harassed and terrorized for not supporting the reelection of the outgoing chairman." Kholil said he and the 15 other officials would boycott the congress if the "uninvited participants" were not expelled.

Fadli Zon, another outgoing deputy chairman, said the officials' rejected Yusril's accountability of his leadership. "Over the last year, Yusril and the outgoing secretary-general [M.S. Ka'ban] led the party with an iron fist and both failed to solve internal conflicts among the outgoing executive board." Fadli urged the police to investigate Yusril's alleged involvement in money politics.

"The party received donations, including the one from Habibie, but they were never disclosed in party meetings," he said. "He [Yusril] was involved in money politics because the donation was received in the middle of February 1999 while the law on political parties took effect on February 1, 1999." Achmad Sumargono, chairman of the PBB faction at the House of Representatives, acknowledged the outgoing executive board was not consulted by Yusril before presenting the accountability speech. Achmad said he disagreed with many parts of Yusril's speech.

Still no light at end of tunnel for Jakarta's poor

Marianne Kearney, Jakarta -- Meeting 60-year-old Daruna as she chews betel nut in front of the piles of rubbish that are her main source of income, it is hard to see any evidence of Indonesia's economic upturn.

In slums such as Kelapa Gading, where the lower rung of the poor eke out an existence literally on top of the rubbish dump, most people cannot afford three meals a day, and have little chance of being able to soon.

"If I could not buy this rice then I would not be able to buy it from the market," she says, referring to rice she buys through an aid scheme. Before the aid programme began last December, Daruna, whose husband "flew off and left her", depended on the sale of home-grown vegetables to raise a small amount of extra cash.

She and her neighbours pick through the piles of rubbish, salvaging and selling what they could for a living.

Through the World Food Programme, she can buy rice at 1,000 rupiah (23 Singapore cents) a kg, half the cost of that sold in the markets.

As rice is one of the major foods for rich and poor alike a 100 per cent discount in the cost of rice means people like Daruna can now afford to buy some other foods such as the occasional egg.

While the figures show that poverty levels are improving, aid groups such as World Food Programme, which distributes rice to 5.2 million people in Jakarta, Surabaya and Semarang, say there is little sign of improvement for those at the very bottom of the poverty line.

They say their meagre incomes have not kept pace with rises in the cost of foods such as eggs, which has doubled since the start of the crisis.

Thus one study from the United Nations estimates that 56 million people would be struggling to afford three cheap meals a day. "When you are dealing with the bottom group they are not reached by any improvement in the economy. They are even worse off than a year ago because they have sold everything they have," says Mr Philip Clarke, from the World Food Programme.

He explains that in the first stages of the crisis many families survived by selling lounges and other pieces of furniture, or borrowing from their family, but now they have exhausted all these sources of extra revenue.

Rahayisit, a 30-year-old living in Kelapa Gading says although her husband works as a road sweeper, their family of five cannot eat properly on his monthly wage of 150,000 a month. Clutching her nine-month old baby, she says she often has to buy food on credit from her local warung, or food stall, and depends on buying discounted rice through an aid programme.

Studies by the United Nations Development Programme also say that the very poor became even poorer as a result of the crisis two years ago. They say that the number of people living 80 per cent below the poverty line increased from 8 million to 22 million.

And the number of people spending almost all their income on food, an indicator that there is little money for other necessities, has jumped dramatically.

The poor health of young children is another disturbing barometer. Unicef estimates that 40 per cent of children under two years old age are malnourished, and in rural Java, some children have begun developing diseases usually seen in famine- ridden Africa.

Aid workers and the United Nations reports say that while emergency programmes such as the sale of subsidised rice and scholarship schemes helped soften the impact of rising costs, the government still has not considered how to help the long-term poor, particularly the very poor.

"The government still has no food security programme, food production policy and no pricing system to convince the market to sell to the government," says Mr Clarke, who predicts that the very poor will need assistance for at least another year.

The crisis has accentuated not only the rich/poor divide but also the rural/urban divide, creating almost three times as many extremely poor people in rural areas.

Part of the reason why there are so many poor people in rural areas is that even before the crisis there were far more poor people in the country, with many people teetering just above the edge of poverty. Droughts in 1997 and 1998 pushed many poor farmers over the precipice.

Ironically too, the current bumper harvest of rice as well as imported grains on the market have hurt rice farmers, who are receiving very low rates for their crop.

Businessman reports graft in Supreme Court

Jakarta -- The government-sanctioned National Ombudsman Council received on Thursday a complaint of corruption in the Supreme Court.

Businessman Djohan Taniwidjaya lodged a complaint with the council alleging a substitute registrar at the Supreme Court in August 1999 had asked him for a Rp 200 million payoff if he wanted to win his land dispute case. Djohan claimed the registrar told him the money would be given to several justices.

According to Djohan, the female registrar gave him a time limit of about one month to deliver the money, after she returned from visiting her children who were studying overseas.

However, he said the offer was later taken back after the other party in the case made a larger payoff. The registrar then suggested Djohan negotiate a new price with the justices.

Djohan claimed he had raised this matter with Supreme Court secretary-general Pranowo late last year, but had not received a satisfactory response.

Djohan was received on Thursday by council chairman Antonius Sujata and council member Teten Masduki, who is also chairman of the Indonesian Corruption Watch.

"We will soon establish a special team to examine this report, clarify it with the Supreme Court and after that submit this matter to the National Police to take further action," Antonius told journalists at the council's headquarters in Graha Mustika Ratu, South Jakarta.

The council, which began its work last month, has received some 300 complaints, most dealing with land disputes.

Personal assets prove hard to track, despite global hunt

Vaudine England -- Finding seizable assets in Mr Suharto's own name may prove difficult for investigators.

During an official probe in 1998, Mr Suharto said he had 22 billion rupiah (HK$24.2 million) deposited in three private banks and that his personal property included two houses in Jakarta and five hectares of land.

That investigation, carried out by the government of Bacharuddin Habibie, a Suharto protege, was later closed because of a claimed lack of evidence.

Earlier official and independent investigations have determined that Mr Suharto owns relatively little, with most of the family's wealth in his children's names.

"If the Government were serious about recovering some of that money, then it should sequester their wealth and property here and abroad," the Jakarta Post noted in an April 17 editorial.

The family's presumed wealth ranges up to the US$15 billion quoted in a Time magazine article, now subject to a legal suit by Mr Suharto. But calculating the liquid benefits of a lifetime of unrivalled access to government instruments in the pursuit of riches remains difficult.

Sulawesi students stage rally, demand independence

Makassar -- Street rallies by disgruntled students protesting the dismissal of Minister of Industry and Trade Yusuf Kalla here started Wednesday off with a renewed threat to break away from the republic.

The students who claimed to represent 45 Makassar University and Indonesian Muslim University, blocked Jl. Urip Sumohardjo and demanded clarification on the removal of Kalla, who comes from Makassar.

"We want the government to be transparent or else we demand a free Sulawesi," Rustam, one of the students, said. "The ousting of Kalla could imply the rejection of the South Sulawesi people from the government and this hurts us." He acknowledged that the President had the prerogative to sack Kalla and State Minister of Investment and State Enterprises Laksamana Sukardi.

"But the way the President dismissed them should not have evoked hatred among people. We, the Sulawesi people, are ready to break away from the Republic of Indonesia if our representatives are not treated properly," he said.

Soon after B.J. Habibie dropped his presidential bid last year, Makassar students held rowdy demonstrations demanding independence for Sulawesi. Many speculated that the rallies were orchestrated by South Sulawesi figures living in Jakarta.

The clamoring for independence was mitigated when South Sulawesi businessman Kalla was appointed minister.

South Sulawesi governor HZB Palaguna and speaker of provincial legislative council Amin Syam said on Wednesday that they could understand the students' disappointment over Kalla's dismissal. "We saw no acceptable reasons to axe Kalla, who is a noted figure in the province," said Palaguna. Amin said that the President had acted arbitrarily. "Gus Dur should have remained transparent and behind the scenes," Amin said.

Suharto's 'mafioso errand boy' questioned

Vaudine England, Jakarta -- A man described by his friends as a "likable mafioso" has been scooped up in recent legal moves against people suspected of attacking Megawati Sukarnoputri's party headquarters in 1996.

Yorrys Raweyai, deputy chairman of the Pemuda Pancasila youth organisation, was taken in for questioning about his alleged role in providing a mob of attackers to support what were said to be government-backed efforts to unseat Ms Megawati as head of the Indonesian Democratic Party.

Activists defending Ms Megawati's office on July 27, 1996, were first besieged then attacked by mobs. The attacks were thought to have been arranged by senior military officers as part of attempts by the then president, Suharto, to destroy Ms Megawati and the reform movement which eventually unseated him.

Mr Raweyai has now reportedly admitted the Jakarta Military Command ordered him to mobilise his forces ahead of the July 27 riots of 1996 but denied that he or his organisation took part in the attack.

That Mr Raweyai is now falling victim to the crusading zeal of official investigations into a series of recent traumas in Indonesian politics is an interesting sign of how those politics are changing.

"When I was a Golkar member of parliament," recalled one source, in a reference to Mr Suharto's election-winning machine, "we all knew Yorrys. If you were going out of town and wanted a mass gathering to greet you wherever you were going, you just called Yorrys.

"He was the errand boy. He's a nice guy if you know him but yes, he does earn his living from mafia-style business." Meanwhile, the sons of the Pemuda Pancasila chairman, Yapto Soerjosoemarno, have been questioned several times in connection with at least three murders in recent months.

Accusations against the youth group paint it as one of several which played important, albeit shadowy, roles at most key moments in Indonesian history. Such turning points date back to the independence struggle itself, through the trauma of 1965-67 and some of Mr Suharto's domestic battles to the East Timor debacle.

The legal process against Mr Raweyai and others can be expected to be slow, but his apprehension is a significant fresh move in the continuing tug-of-war between old politics and new.
 

Environment/health

Indonesia's forests disappearing by the day

Bogor -- Indonesia's forests are disappearing at a rate of 4,000 hectares a day and the government appears to be unable to do anything about it, experts said.

"The situation is getting worse and we should do something," said Jeffrey Sayer, director general of the Center for International Forestry Research (CIFOR).

The center recently organised a seminar of conservationists, World Bank economists, logging industry representatives and government agencies in Bogor, southeast of the capital Jakarta, where the government's apparent inability to curb illegal logging was a focus of concern.

The country's massive jungles and rain forests are second only to the Amazon in terms of area and are home to some of the rarest animals in the world.

Their exploitation has been an "important contributor to growth" for Indonesia's struggling economy, according to a World Bank report published at the conference. But the bank warned: "Its overall outcome, rapid deforestation and highly inequitable distribution of benefits, is highly unsatisfactory."

It said the logging was benefiting "the same few conglomerates" and "has subordinated the traditional rights of indigenous forest dwellers and communities." This "has resulted in conflict and created one of the most serious social problems facing Indonesia at present," the report said.

The annual legal production of logs is 21.4 million cubic metres, in line with the forests' ability to regenerate, but actual production is more than three times that at some 77.9 million cubic metres, according to the report. That's about 1.5 million hectares of forest which disappear every year, mostly to make way for quick yield palm plantations.

The felled trees feed demand for wood products, especially paper and plywood. The mills, built by major companies with the help of international loans which they either cannot or will not repay, are monitored by the Indonesian Bank Reconstruction Agency (IBRA).

The IBRA is in charge of billions of dollars of assets but has come under fire for being driven by narrow political or commercial interests. Government and IBRA officials taking part in the conference ruled out closing the mills for economic and social reasons.

They face "a very bleak future but there is no consensus on the closing of the mills," said an economist, adding that the debts of the sector in the IBRA portfolio amounted to some eight billion dollars. "It is a highly political debate," he added.

Participants in the seminar noted the efforts of the new Indonesian administration to allow for greater indigenous participation in the exploitation of the forest's riches.

But they were in agreement that this in itself did not consitute a guarantee that they would be better protected. "A form of central control is probably needed," noted the CIFOR's Sayer. "Some form of resource transfer or compensation may well be needed to induce local communities and regional governments to retain their forests intact," said the World Bank.

Uma Lele, one of the authors of the World Bank report, said "there is a major gap between international expectations of how the tropical forests must be managed and the expectations of the local communities for their immediate benefits."

Half of mangrove forests are destroyed: Observers

Jakarta -- Almost half of the country's mangrove forests have disappeared since 1982, causing land abrasion by the sea and threatening biota living in that environment, activists said on Tuesday.

In a discussion on mangrove forests, the program coordinator of the Indonesian Non-Governmental Organizations Network for Forest Conservation (Skephi) Ruddy Gustave said there are only 2.4 million hectare of mangrove forests left today from 4.25 million in 1982.

Mangrove forests function as natural sea barriers preventing land abrasion by the sea. Observers reported in October that some isles in Mentawai Islands, 90 kilometers east of West Sumatra's capital Padang, had vanished due to erosion.

It happened after thousands of hectares of mangrove forests were damaged following rampant tourism construction projects and arbitrary slashes by locals for firewood.

Director General of Natural Protection and Conservation Harsono said that the destruction of the mangrove ecosystem was strongly related to, among others, "the uncontrolled clearing for shrimp and fish ponds." Early this month, 85 percent of approximately 12,000 hectares of mangrove forests in Lampung were reported to have been severely damaged by locals who used the wood to build traditional hatcheries. They claimed the forests was nobody's land therefore they were free to exploit it.

Ruddy said that the government had allocated 800,000 hectares, mostly in mangrove forests, for the shrimp hatchery industry. He said about 390,000 hectares had been used for the purpose. "We can be sure that next year we will see a further decrease in mangrove forests," Ruddy warned, learning that the number of big shrimp hatchery companies are increasing. Harsono said that the country has already enacted Environment Law No. 23/1997 to protect the mangrove ecosystem. However, Skephi in its statement said that law enforcement remains unsatisfactory.
 

Arms/armed forces

Air Force to receive six new Hawks from UK

Jakarta -- The Indonesian Air Force will receive six new Hawk jet fighters from the United Kingdom in June. They will be stationed at Supadio Air Base in Pontianak, West Kalimantan. "We expect the six British-made tactical attack aircraft will be sent soon. This was the second batch of 40 aircraft we ordered a couple years ago," the Indonesian Military (TNI) Spokesman Rear Marshall Graito Usodo told The Jakarta Post on Wednesday.

The six Hawks were originally scheduled to arrive in September but were delayed following the crisis in East Timor.

The European Union placed an arms embargo on Indonesia restricting purchases to black box instruments such as radar. The embargo was lifted in January.

Indonesia ordered 40 Hawk-100 aircraft and Hawk-200 aircraft worth around US$120 million in May 1996. Fourteen of the aircraft have been delivered since April 1999. Earlier in 1993, the country bought 24 Hawk aircraft, the delivery of which was completed in May 1997.

All 14 Hawk-200's, purchased in the second sale, along with the pending six aircraft, are stationed with the Elang Khatulistiwa airfleet in West Kalimantan. The 24 Hawks already delivered from the first purchase are stationed in Pekanbaru, Riau.

Western Air Force Operations Commander, Air Rear Marshall Suprihadi, said on Wednesday that the six new aircraft are expected to arrive in June. Unlike previous deliveries which were directly flown to Indonesia, Antara reported that the Hawks would be shipped in containers and assembled upon arrival.

This type of aircraft is well-known for its swiftness and can be used both as training and fighting aircraft. The Hawk 200 is a single-seat multi-role combat plane made by British Aerospace.

It is usually fitted with a Rolls-Royce Adour Mk 871 engine which can produce a maximum speed of 1,065 kilometers per hour. It can carry up to 3,000 kilograms in rockets and bombs on seven under- wing external points.

Military spokesman defends business ventures

Jakarta -- The spokesman for the Indonesian Armed Forces (TNI) yesterday defended the military's business ventures, saying it would be impossible to survive on state funds alone.

If the current government tried to curb -- or even try to restrict the military from conducting business -- it would be impossible for the armed forces to survive on its state-allocated budget, Vice-Air Marshal Graito Usodo said.

"Suppose there is a new rule or a tightening of the rules, that we are absolutely forbidden to do business ... we will never be able to live on that kind of salary," he said.

Various military bodies thrived during the Suharto regime after forging links with Chinese businessmen. The military's past and present business deals with ethnic Chinese businessmen were dictated by the "situation, needs and opportunity", he said.

"Doing business with them is simpler, so don't just see whether they are indigenous or not since they are indeed the ones with the economic power and money."
 

Economy & investment

ADB foresees stronger economic growth for 2000

Jakarta -- The Indonesian economy, battered by two years of financial and economic crisis, will post growth of four percent in 2000, up from 0.2 percent this year, the Asian Development Bank (ADB) predicted Wednesday.

In its annual forecast of economic trends in the region, the Manila-based ADB said Indonesia's gross domestic product (GDP) will grow four percent in 2000 and five percent in 2001.

An economic crisis that hit several Asian countries beginning in mid-1997 slashed Indonesia's economic growth from an annual average of seven percent to 4.7 percent in 1997. The economy contracted by 13.2 percent in 1998 before growing again by 0.2 percent in 1999.

The ADB attributed the better growth for the year 2000 and 2001 to "a moderate rise in investment, increased exports from the non-primary sectors and strong agricultural production."

However, the ADB cautioned that the positive estimate hinged on the assumptions that "political conditions in Indonesia will not deteriorate further and that the rest of Asia's strong rebound will continue."

The pace of recovery, it said, will also be constrained by continued liquidity problems and a massive overhang of corporate debt.

The ADB also projected a modest inflation rate of 6.0 percent for the year 2000 and of 5.0 percent the following year, after the whopping 58.5 percent posted in 1998 and 20.5 percent in 1999.

The bank attributed the economic recovery to the growth of private consumption as exports remained weak. Exports which had declined by 10.5 percent in 1998, declined by another 7.4 percent in 1999. The bank expected exports to grow by 8.1 percent in 2000 and by 9.0 percent the following year.

Imports, which contracted by 30.9 percent in 1998, and by 10.8 percent in 1999 were expected to grow by 7.5 percent this year and 14 percent next year.

"Despite the large real depreciation of the rupiah and stronger oil export prices, exports remained depressed because of problems associated with high corporate indebtedness and access to credit," the bank said.

The bank said that although the Indonesian currency will remain vulnerable to swings in market sentiment, it was expected to remain stable at around 7,000-7,500 to the dollar in 2000.

On Wednesday, the rupiah broke the 8,000 to the dollar exchange level, last seen in October, amid political concerns that arose from the abrupt replacement of two economic ministers.

The ADB said one major consequence of the crisis has been a sharp rise in public debt, which by the end of March was expected to have increased to 95 percent of GDP from only 23 percent at the end of March 1998.

Domestic public debt now stood at 89 billion dollars compared to 63 billion dollars in external public debt. The domestic and external debt-service expenditures made up 41 percent of total current expenditures and 61 percent of total tax revenues and will drain public resources for the foreseeable future.

The government, it said, needed vigorous efforts to speed up domestic resource mobilization, including by accelerating asset sales through privatization.

Timely price adjustment were also needed to reduce subsidies and full transparency in the use of public resources as well as a careful programing of external assitance were also required.

The devastating impact of the crisis on the banking system points to the need to developing the capital market as a source of funds.