• Officials meet over complex property issue - South China Morning Post
• Timor administrator de Mello criticizes UN rigidity - Lusa
• An intimidating ordeal for East Timor refugees - Christian Science Monitor
• UN rejects calls for shared executive power in Timor - Kyodo News
• Belo demands end to 'artificial' family planning programs - Lusa
• East Timor seeks mid-way sea boundary with Australia - Reuters
• Peacing East Timor back together - The Australian

• Presidential problems: will Wahid survive? - Wall Street Journal
• Political adultery - South China Morning Post
• indonesia in the balance - Sydney Morning Herald
• Time for leadership - Time Magazine
• Tense wait as key Wahid speech nears - South China Morning Post

• 'We'll kill anyone who tries to stop the jihad' - The Independent
• Tense calm as troops ordered to report to barracks in Ambon - Agence France-Presse
• Religious killing fields spread across the ugly new Indonesia - Sydney Morning Herald
• Partisan troops to be pulled out of Malukus - South China Morning Post
• Military neutrality key to ending Malukus violence - Agence France-Presse

• Women's groups should be included in Aceh solution - Jakarta Post

• Labour union offices attacked during protest - Detik
• 500 workers rally at the house - Detik
• Seasonal workers still lack protection - Jakarta Post

• 27 July incident: political and military compromise - Detik
• Striving to protect the witness amid calls for trials - Jakarta Post

• Marksmen to be used in high-crime areas - Agence France-Presse
• Forum calls for return to the ideas of reform - Jakarta Post
• Indonesian police restructure their ranks - Straits Times
• Wahid says Soeharto ordered bank transfer of US$8 billion - Indonesian Observer
• Timber king's business deals siphon off millions - Detik
• Government urges police to be stern - Jakarta Post

• Brushing up on reproductive health lessons - Interpress
• Indonesian plant pushes to reopen, stirring anger - Asia Wall Street Journal
• Batak Toba people demand Idorayon closure - Detik

• Too soon to reward Indonesia? - Washington Post

• Pharmaceutical industry hit hard by economic crisis - Asia Pulse
• Indonesia unveils privatization blueprint - Agence France-Presse
• Jakarta audit unveils more graft losses - Reuters
• WB sympathizes with government over slow pace of reform - Jakarta Post

One hundred villagers protest at Bintan resort

Yeoh En-Lai, Bintan -- About 100 villagers resumed their protest over the takeover of their land outside the main land entrance to the Bintan Beach International Resort yesterday morning, nearly six months after 91 were arrested for blockading it.

The villagers, who have pledged to protest peacefully at the entrance on a daily basis, want more compensation for their land, which they gave up progressively since 1991.

The gate, which is also known as Post One, is about 8 km from the closest hotel. Among the hotels are the Banyan Tree Bintan and Club Med Ria Bintan.

Many villagers claimed they got only 100 rupiah (2.4 Singapore cents) a square metre for the land they sold to build the resort. They want 10,000 rupiah a square metre. "We want them to know that unless we get peace, there will be no peace here," said Morie from nearby Malang Rapat village.

Newmont evacuation from mine after protest

Andrew Marshall, Jakarta -- Canada's Newmont Mining Corp. said on Thursday it had evacuated women, children and non-essential staff from its gold mine in north Sulawesi after intimidation by protesting locals who have blockaded the site.

Newmont said mining and milling operations had been halted at the site. The mine was forced to close temporarily earlier this month because of the blockade, which was reimposed on Monday.

"Some very irresponsible people have been guarding the roadblock and have been physically threatening our personnel," Paul Lahti, general manager of the Newmont Minahasa Raya mine, said in a statement.

"They have been drinking alcohol every night and generally have sought to strike fear into the people who live and work on this site." The protesters are former landowners who are demanding higher compensation for the land used by the mine.

But Newmont, North America's second largest gold producer, said the company had given healthy compensation packages to some 400 landowners from 1989 to 1994, paying five times the market rate.

"It's as if I went to the market and bought a fish, cooked it and ate it, then the fish seller came to me five years later and said 'you owe me more money for that fish I sold you'. It's illogical and not fair," Lahti said. He called on Indonesia's government to uphold the rule of law.

Officials have said Newmont Minahasa Raya's gold output in 1999 was 11 tonnes and targeted to reach 12 tonnes this year.

Mining firms face mounting problems

Foreign miners have increasingly found themselves at odds with local residents, especially over land compensation, since authoritarian rule under former president Suharto came to an end amid economic and social chaos in 1998. Protests, legal conflicts and environmental battles have hit several foreign mining firms in Indonesia.

In May, gold and silver miner PT Kelian Equatorial mining, owned by Rio Tinto, was forced to temporarily halt production and evacuate workers from its site in East Kalimantan after protesters seeking land compensation blockaded all access roads to the site. The incident followed the occupation late last year by Dayak tribespeople of another mine in Kalimantan -- the PT Indo Muro Kencana, a subsidiary of Australian Aurora Gold.

Newmont's mine in Sulawesi faced problems earlier this year when a tax row with regional authorities threatened to close the mine. A compromise was eventually found after Newmont agreed to pay $3 million for tax and community services.

There has also been trouble for the giant Freeport gold and copper mine in remote Irian Jaya, majority owned by Freeport- McMoran Copper & Gold Inc. The mine has been dogged by protests by locals and environmental groups, and was ordered by the government to temporarily cut production.

Situation explosive as economic and political crisis deepens

Max Lane -- The 10 years to 1998 was a decade of escalating mass protest in Indonesia, climaxing in the 1998 mobilisations of hundreds of thousands of people across the archipelago which toppled the aging dictator, Suharto. But that decade will be nothing as compared to what is down the line during the next one.

I have been visiting Indonesia now since 1969, 31 years ago, and I have never seen anything like what is happening now.

The economy has not recovered from the 1997 Asian economic crisis. Domestic demand has picked up substantially in the last 12 months, but it's been fuelled by regular injections of hundreds of millions of dollars of International Monetary Fund loans and by a spurt in exports made possible by the collapsing rupiah and the deregulation of commodity exports.

The rupiah has lost 30% of its value in the last two months; the stock market plummeted 25% over the same period.

While the official forecasts still hope for 4-5% growth, the head of the Indonesian Bureau of Statistics has indicated that it will more likely be 1.4% -- a disastrous figure for a country that has lost as much as 50% in output since 1997.

Crony capitalism

The economy is even more dependent on mineral, agricultural and light manufacturing exports than it was before the crisis. The revival, let alone expansion, of production is dependent on the conglomerates belonging to Suharto cronies, most of whom are still in massive debt to Indonesian and foreign banks. The IMF is helping to reschedule the debts of these corporate bandits; many are trying to sell equity to new foreign partners to get finances to pay off debt.

The official debt now is huge, about US$170 billion, more than Indonesia's GDP. More than 50% of foreign exchange earnings are now eaten up by debt repayments.

Meanwhile, according to a survey by a World Bank-funded monitoring agency, more than 40% of the textile and garments work force have lost their jobs, as have more than 75% of construction workers.

Poverty

Poverty has hit all the major cities in the archipelago. The same agency assessed that about 40% of those classified poor before the crisis have had to sell their "assets" to survive, their radios, old TVs, furniture.

Official wage rates have gone up but employer compliance is low and, in any case, the rises that have been made -- all less than 50% -- don't even take real wages back to 1997 levels.

Crime -- including violent theft -- is rapidly increasing in the big cities. Some areas are already considered no-go areas for middle-class people with something that could be stolen from them.

The rural areas on Java, where more than 100 million people live, has also been hit hard. Millions have been forced back into the villages. The pressure on land is increasing again and land occupations are on the increase.

The sugar industry, probably the second biggest agricultural sector, after rice, on Java, is basically bankrupt. The IMF has insisted on lowering the barriers to sugar imports, forcing the local industry to the wall in less than two years. The US is dumping rice -- as "food aid" -- undercutting local rice farmers and thereby increasing poverty.

Oil price rises of 12% originally scheduled for April have now been rescheduled for October. In the meantime electricity prices for medium and large firms and public transport prices rises are already fuelling inflation.

Ruling class discredited The government is weekly, if not daily, rocked by one scandal after another.

For example, President Abdurrahman Wahid's personal masseur was able to sell his "influence" with the president to someone who wanted to obtain a position in BULOG, the government agency in charge of marketing rice. The masseur promptly disappeared with his $7 million "fee".

There are many other cases, including the appointment of Wahid's brother to the agency which has taken over Indonesia's bankrupt banks. The brother, a professional politician, explained that he was employed to be a preman, or "thug", for the agency.

In May, the attorney-general, the "clean skin" Marzuki Darusman, issued a legal document ending all investigations of Texmaco, one of the country's largest manufacturers and declaring it innocent of any actions harming the country. The company has a debt of $1 billion to the now government-run banks and has been exposed for borrowing the money under false pretenses. Rumours abound as to how much Darusman received for the backdown.

Then there have been the dismissal of economic portfolio ministers and their replacement by Wahid cronies and attempts by Wahid to remove the governor of the Bank of Indonesia, a move prevented by the courts and the parliament.

The government has lost almost every court case it has taken out against a Suharto crony. Even the owner of the notorious Bank Bali, implicated in huge money laundering for the supporters of former president BJ Habibie, had a higher court hand the bank back to him.

Figures linked to the IMF and World Bank have started urging the appointment of ad hoc judges from Holland (most Indonesian laws are still based on Dutch law.)

The scandals envelop the entire political elite and all parties in parliament. Party congresses are reported as undignified battles between money-hungry cliques.

The May congress of vice-president Megawati Sukarnoputri's PDI- Struggle was sometimes even depicted as a battle between cliques run by either Megawati's husband or by alleged jealous ex-lovers.

Newspaper reports almost every day carry some new rumour about meetings between two or more of parliamentary speaker Amien Rais, Megawati and Golkar party head Akbar Tanjung, or people linked to them, as they allegedly plot to unseat Wahid at the next session of parliament scheduled for August.

Every rumour and rebuttal is followed by another drop in the rupiah.

The major political parties' use of private militias to intimidate their critics and rivals has further discredited them. For example, the Banser militia, affiliated to the Nahdlatul Ulama religious organisation, which Wahid headed until he became president, trashed a newspaper office after it criticised Wahid. There have been several other such well-publicised incidents.

Unrest and radicalisation

Misery, uncertainty and a discredited ruling class come immediately upon the heels of a decade of steady politicisation of the population. Hundreds of thousands were drawn into the mobilisations of the last year of the Suharto dictatorship, and millions more saw what mass action could do.

As the people slowly become convinced that the military have been forced into retreat and repression has lessened, more and more social struggles break out everywhere.

A spectacular breakthrough was the strike and protest outside parliament by 40,000 teachers demanding a 300% wage rise. In April, 40,000 striking cigarette factory workers brought the large city of Kediri in Java to a total halt. The strike lasted 11 days.

Police headquarters for Jakarta and the surrounding region reported attending 601 strikes for the January-April period, with 224 strikes or protests recorded in April alone.

The militant Indonesian National Front for Labour Struggles (FNPBI) can now attract workers to its offices just by distributing leaflets offering the union's help in organising. It has now expanded outside textiles, garments and other light manufacturing to automobile assembly as well as harbour workers.

Student movement activity is also reviving, especially to demand Suharto's trial. In recent clashes between students and the police, there have also been renewed signs of the willingness of the urban poor to come out onto the streets to defend the students. During the next academic year, the de facto privatisation of the big state universities will galvanise additional student activist opposition to the government.

In Aceh and West Papua the movements for self-determination continue to gain strength. Just a week after the 2700-strong Papuan Peoples Congress in West Papua, hundreds of Acehnese occupied the provincial parliament to demand the election of new representatives who would struggle more seriously to organise a referendum on independence.

There is widespread interest on campuses in Marxism. People's Democratic Party (PRD) leaders are speaking almost daily at campus forums around the country.

All the major bookshops now have special stands with Indonesian language books about Che Guevara and Karl Marx, as well as about Indonesia's own non-Communist Party leftists, like Tan Malaka. The book on the life of Budiman Sujatmiko, PRD chairperson, has sold out. Marxist web-sites are popular.

The audience for left ideas is also identified by some of the brains in the liberal bourgeoisie. Publishing tycoon Gunawan Mohammad, who owns Tempo magazine, is sponsoring the publication of a new left-flavoured weekly, Kritik.

New priorities for imperialism

The deepening crisis in Indonesia is re-ordering the political and economic priorities of Washington, London and Tokyo, as well as Canberra. During the Suharto period, when everything seemed stable, priorities were determined by commercial competition between US, European, Japanese and Australian corporations.

Now the priority will be saving capitalism in the archipelago. The massive scale of the IMF bailout package, to which even Australia has promised a $1 billion contribution, is one signal of this.

The US and its allies are pumping in money to tame any potential radicalisation. Moderate trade unions and non-government organisations are being pumped full of Western cash, especially through the US-funded Solidarity Centre in Jakarta.

There are also reports that the social-democratic Socialist International, to which the Australian Labor Party is affiliated, is funding a new "left" publication.

The major imperialist powers were also unanimous in their approval for Jakarta's rejection of self-determination for West Papua, following calls for a referendum on independence issued by the Papuan People's Congress.

Australia and the US have now both resumed military cooperation programmes with Indonesia. Wahid is rehabilitating the military by sacking the hated Suharto-era generals, like Wiranto, and promoting officers, like Lieutenant-General Agus Wirahadikusumah, who have been outspoken against "military involvement in politics".

Wirahadikusumah, head of the Strategic Command, has no in- principle opposition to repression. He explained in a June 18 interview with Tempo Interaktif that he supports the declaration of local states of emergency if the police cannot handle unrest. He cited the use of force against protesters in Seattle as a positive example.

Support in Australia

The solidarity movement in Australia must build support for those forces in Indonesia, primarily the PRD and the mass organisations associated with it, that are challenging the imperialist agenda by building a workers- and peasants-based opposition and struggling for their democratic rights, such as the right to self-determination.

Student, worker and democratic rights organisations in Australia must urgently build stronger links with the militant struggle organisations across the archipelago.

This needs to be accompanied by a renewed campaign to expose the role of the international capitalist institutions, such as the IMF, World Bank and World Trade Organization, in causing the social crisis in Indonesia. We must also renew the campaign against the Australian government's complicity in imposing the IMF austerity on the Indonesian people.

We must also oppose the Australian government's policy of helping to train and equip the Indonesian military. They are only being prepared to suppress resistance to this austerity, including to use force once again to stop the Acehnese and Papuan peoples' attempt to escape from the misery that 35 years of IMF- and World Bank-supported crony capitalism has produced.

Crunch time for West Kalimantan Governor

Maryadi/Swastika & LM, Jakarta -- Accused of corruption, incompetence and of being a remnant of the old regime, West Kalimantan Govenor, Aspar Aswin, only has to wait till 28 June when the provincial legislature will decide whether to accept his annual accountability speech.

Pontianak, the capital city of West Kalimantan was yesterday host to two groups of demonstrators. The anti-Aspin camp returned for the umptienth time to resume their protests demanding that the parliament reject the Govenor's speech and calling for the resignation of the West Kalimantan City Police Chief Atok Rismanto.

Students from the Joint Action of West Kalimantan Students gathered at the city's main roundabout and "long marched" waving banners and shouting slogans along Jl. Ahmaad Yani, heading towards the provincial parliament building.

As they entered the grounds, they met another group of students leaving the venue who had just held a demonstration in support for Aswin. Confrontation seemed inevitable but the two groups passed by each other without great incident.

The anti-Aswin group are rallying in support of a vote of no confidence which has been proposed and supported by all factions of the provincial legislature except for the Armed Forces and the Indonesian Democratic Party of Struggle (PDI-P).

The vote of no confidence proposal was signed by 37 members of the legislature and will be submitted to the President before the parliament vote whether to accept or reject the Govenor's speech 28 June 2000.

A member of the West Kalimantan provincial parliament, Reza Munawar, stated that most of the provincial parliament members are sticking to their decision to propose the vote of no confidence. "This proposal is currently being discussed by all members of the parliament but there have been several delays due to demonstrations at the provincial parliament building," said Munawar.

The anti-Aswin camp are also demanding a thorough investigation into the death of a student protestor, Syafarudin, last week who was shot dead while returning from a peaceful protest at the parliament on 14 June. Their calls for Aswin's head have since then been joined with calls for the resignation of West Kalimantan City Police Chief Atok Rismanto.

Students accused security forces of killing the victim while doctors attributed the death to the penetration of a blunt object in the victim's head, a category that could also include a bullet.

Aswin is accused of being incapable of addressing the problems faced by the province and of being the product of the old regime because he was elected by the parliament in 1997 while former president Suharto was still in power.

Aswin is also denounced for failing to bring progress and peace to the province and critics point to the the bloody ethnic conflict that swept some districts in West Kalimantan in 1998 and left thousands dead and tens of thousands of refugees.

Demonstrators threaten to occupy parliament

Yogi Arif/Swastika & LM, Jakarta -- While some 100 demonstrators gathered at the Jakarta provincial parliament building demanding the members reject the annual accountability speech of Jakarta Governor Sutiyoso, over 1,000 pedicab drivers gathered at the Jakarta City Court demanding they be allowed to operate in the city. The bottomline: Govenor Sutiyoso, named a suspect in one of the hottest cases under investigation, is coming under unprecedented pressure. Arriving at 10am today, the demonstrators occupied not only the building but also Kebon Sirih St. where the building is located.

While Sutiyoso has been accused of corruption collusion and nepotism, the majority of demonstrators today were protesting because of his alledged involvement in the brutal raid on the offices of the Indonesian Democratic Party on 27 July 1996.

Sutiyoso was the Jakarta Military Area Commander when thugs backed by the local security forces stormed the party headquarters where supporters of Megawati Sukarnoputri, then leader of the party and currently Vice President, were holed up. Megawati had been "ousted" from the PDI leadership in an internal party coup supported by the New Order government of former President Suharto. Sutiyoso was named a suspect in the case on 22 June.

The accountability speech is a hot issue this year because acceptance of the speech indicates the parliament's passivity and lack of political will in tackling the issues closet to the people's hearts. "If the parliament accept Sutiyoso's annual accountability speech, we will occupy the provincial parliament building on the upcoming anniversary of 27 July," said Gatot, one of the protesters. They also collected signatures demanding Sutiyoso be put on trial for his responsibility in the 27 July incident on a long white banner.

The speech was actually read on 5 June but the parliament has postponed passing judgement. In the speech, Sutiyoso claimed he had made much progress in developing the city of Jakarta. "But we found out that we didn't get sufficient support from the legislature," Sutiyoso said.

While the "27 July" protesters were making there presence felt on Kebon Sirih St., around 1,000 pedicab (becak) drivers and an armada of 200 pedicabs gathered at the Jakarta City Court. The protesters, organised by the Urban Poor Consortium, blocked traffic on Gajah Mada St. and surrounding streets.

The pedicab drivers launched a class action against the Jakarta government after the decision to allow pedicab drivers to operate in the city, taken in 1998, was withdrawn just one week later.

Representing the Jakarta government, Alexon Tambunan, asked that the hearing be postponed till next Monday to hear witnesses and review evidence. The presiding judge, M Sudjono SH, agreed, to the ire of the 600 drivers in the court.

They protested loudly, particularly because the session was the 13th in what has become, in their opinion, an excessively drawn out and frustrating legal process with no end in sight.

Riau land dispute protests target regent

Chaidir Anwar Tanjung/ RHP & LM, Pekanbaru -- In Lagoi, North Bintan, Kepri regency, on the island of Riau which is pushing for extensive autonomy from Indonesia, hundreds of local people have staged protests demanding proper compensation for their land taken during the New Order era of President Suharto. The local government claims that the actions have begun to threaten development projects.

For the last three days, local people have continuously held protests in front of the office of the head of regency, Abdul Manan, demanding fair compensation for their land which has been turned into a tourist resort. Unfortunately, the regent, Abdul Manan has rejected the people's demands and his arrogant behaviour has only made the situation worse.

"The head of the regency supposedly acts wisely in dealing with cases. But it is natural that the people are currently demanding better compensation [for their land which was pruchased] in the old days because their lands were taken forcefully and they were paid a very low price [at the time]," said Fachruddin S, a protester, to Detik Saturday.

"I still remember that the land price in that area was only set at Rp 500 per square meter. This was clearly unfair considering that the land was used for the development of an International resort," he added.

The Regional House of Representatives in Riau have asked Saleh Djasid, the Governor of Riau Province, to immediately resolve the dispute and the House has admitted that the compensation paid for the land had not been fair.

The local parliament is concerned about the flow of foreign investments flocking into the area and that the province will get a bad reputation as a difficult place to do business. The dispute over the land is already having an impact on foreign investment. A Singaporean investor is reconsidering it's investment in a water project in Riau.

According to Akman Ade Poetra, former deputy chairman of the Regional Investment Board, the Singaporean investor is considering cancelling the investment project in that area. "The realization of the project to develop water supply facilities in an area covering some 37,000 hectares is being postponed because the land is under dispute. It is likely that the project will be completely cancelled," said Akman to Detik.

According to documents signed by the Indonesian government and the Singaporean investors on 28 August 1990, some 64,000 hectares in the Lagoi area has been zoned as for joint economic cooperation. 23,000 hectares were allocated for tourism, 4,000 hectares for an industrial park and 37,000 hectares for the water supply project.

Currently, there are 14 electronics manufacturing factories and 13 garment factories with a total investment of S$1.05 billion already operating. "From these two industries alone, 6,000 workers have ben employed," said Akman. He elaborated that a total of around 3% of the land is in dispute.

Akman hoped that both the Riau regional government and the Kepri regency could resolve the land dispute. "If the protests over land compensation continue and eventually leads to anarchy, do not expect that much of the confidence of foreign investors would ever return," said Akman.
 

East Timor

Officials meet over complex property issue

Vaudine England, Jakarta -- Bargaining over property and compensation claims between Indonesia and East Timor has begun in what is already proving to be a complex and sensitive process.

A team of 10 Indonesian businessmen and bureaucrats has just returned from an inspection of properties in East Timor, ranging from half-wrecked power and telecommunications buildings to largely destroyed private homes. The United Nations Transitional Administration for East Timor, Untaet, provided assistance to the team and said a new round of talks would take place next week in the Indonesian city of Surabaya. But sorting through the detritus of a bloody occupation and Indonesian departure "quickly gets so murky", a diplomat said yesterday.

"It starts just with ownership issues, who really owns what, and how. And then you try to find the records. Maybe they were destroyed in Dili, but there should be copies here in Jakarta. It could go on for years," she said.

Beyond practicalities are the political sensitivities, including Indonesia's wounded pride, surrounding East Timor's violent route to independence. "From the beginning, both [Indonesian President Abdurrahman] Wahid and [Indonesian Foreign Minister Alwi] Shihab recognised that it was a bit cheeky, shall we say, for Indonesia to insist on compensation for properties," said another diplomat in a reference to the destruction of East Timor by Indonesian troops. "But also from the beginning, the bureaucracy was demanding a proper accounting for buildings, items, whatever, that they have to sign off in their books."

At first, the Indonesian side wanted compensation even for stretches of tarmac, bridges and roads which Jakarta had built in East Timor from 1976 onwards. And regardless of international condemnation of Indonesia's scorched earth departure from East Timor, a strong body of Indonesian opinion maintains Jakarta has nothing to be ashamed of in its actions toward East Timor and thus deserves a generous accounting.

"Many things in East Timor were built with foreign aid, aid which we are still paying the debt service on. So how can we calculate such things?" said Sulaiman Abdulmanan, Indonesia's Foreign Ministry spokesman."We know it is impossible to bring back bridges and all those things, so we are finding ways to discuss compensation for them. But at the same time, we know we cannot really do that so easily because East Timor also needs assistance," Mr Sulaiman said.

International diplomats agree that Indonesia, under the Wahid Government, now has a realistic approach to the problem, but many constituencies need to be assuaged.

United Nations sources also insist that the issue of compensation must be inextricably intertwined with the issue of East Timorese demands for redress. "There is a pre-established precedent from when a state devolves, whereby the public property built by the old state becomes owned by the new state," a diplomat said. "What we're talking about is so-called private properties, such as those of semi-commercial state enterprises like the telecoms. For these, yes, Indonesia should be compensated, but we are saying this compensation has to be tied to the valid claims of the East Timorese."

Asked if this principle was accepted by the Indonesian side, Mr Sulaiman replied: "This is a remnant of a past problem, and we are all trying to find a win-win solution." In the end, which may be as far off as the elections in East Timor now set for late next year, these asset talks will probably result in no movement of money in either direction.

Timor administrator de Mello criticizes UN rigidity

Dili -- Rigid UN practices coupled by delays in distribution of World Bank funds are hampering progress on the reconstruction of East Timor, Sergio Vieira de Mello has told the UN Security Council.

The head of the territory's UN transition administration (UNTAET) spoke before a Tuesday Council session in New York. Reconstruction is the most "exasperating" aspect of the UNTAET mission, he said, urging greater flexibility of UN regulations.

"Something's not right when UNTAET can cost 692 million dollars and the budget of East Timor is little more than 59 million," Vieira de Mello stressed. "It should come as no surprise that the United Nations is targeted for so much criticism, while the East Timorese continue to suffer," he added.

The UNTAET chief emphasized that the criticism would continue until the rules were changed. As an example, he cited the need for engineers to be given authorization to work not just in UN buildings but also on the construction of border posts and the airport, prisons and courts.

An intimidating ordeal for East Timor refugees

Carolyn Robinson, Belu -- They fled only to become refugees. Now they almost live here as inmates. In the camps that dot the countryside of this impoverished Indonesian province, about 100,000 refugees now live alongside the same militias who went on a killing and burning rampage in East Timor last September following a referendum on independence.

United Nations officials say many of the displaced yearn to leave, but are intimidated into staying by armed gangs who are using them as bargaining chips in a desperate bid to hold on to their waning influence and power.

Last week, a senior UN official called the militias "bad elements" and said the UN was suspending work in three refugee camps. "We will not resume our activities in the camps without additional security guarantees," said Kris Janowski, spokesman for the UN High Commissioner for Refugees in Geneva.

Meanwhile, the Indonesian government has set a June 30 deadline to end aid to the refugees, who must decide whether to stay or return to East Timor. Three months ago, the same ultimatum was pushed back under heavy international pressure.

The largest refugee camp, just outside West Timor's capital, Kupang, is called Tuapuakan -- a temporary city of 12,000 with a disturbing air of permanence. Aid workers say disease is rampant, and hundreds of men, idle for months, stare emptily at outsiders passing through with an armed police escort. In the past few months, at least eight people have been killed here in sporadic fighting between rival groups.

There is also an open defiance of Indonesian authority. "I have to be honest with you, maybe there are some people here who still have weapons," Cancio Lopes de Carvalho, leader of the Mahidi militia, recently told a gathering that included a US congressional group and journalists. "I've already instructed my people to turn over their weapons -- but they say to me, if we continue to live in these very poor conditions, when our future is uncertain, we will have to keep fighting."

Some of the refugees have been militia members, or East Timorese members of the Indonesian Army, who fear reprisals if they return to their homes in East Timor. Others are still receiving government pensions and are afraid they may not continue to get them in East Timor. And many face an uncertain future in East Timor, with family members killed and homes destroyed.

But the main reason the camps still stand, say almost all local and international aid workers, comes down to one factor: militias. Aid workers say the militias intimidate the refugees into staying through various means, although they are technically free to leave.

"No, there are no militias in the camps," insisted West Timor Governor Piet Tallo, after a formal interview with an American delegation, under the watchful eyes of half a dozen Indonesian Army commanders.

"No militias in the camps," said Army commander Alex Logi, as he talked with reporters in Noelbaki camp, which shelters over 6,000 refugees. Meanwhile, a group of men wearing camouflage clothing, whom local aid workers identified as militias, stood listening. "If people want to leave, they are very welcome to go. They only have to register to go -- they can leave whenever they want."

But Alberto Carceres, a farmer from Manatutu, who lived for six months in the Tuapukan camp and recently decided to return to East Timor with his family, says there is a lot of misinformation. According to aid workers, militias often tell refugees that the UN peacekeepers who patrol East Timor will brutalize them if they return.

"When we first came to West Timor, we did not receive clear information about East Timor," he says. "Now we are going back because we've gotten news from our relatives."

"The majority of people want to go home, but they are afraid," says Pamela Sexton, an aid worker with Peace Brigades International. "They receive incredible disinformation about what's happening in East Timor, but also the high concentration of militias in the camps is a tremendous threat to people."

Meanwhile, under President Abdurrahman Wahid, the Army has come under heavy pressure to disassociate itself from the militias they once encouraged and supported. In response, locals say militias have been making public threats to the Army to continue supporting them -- or face the possibility of the militias disclosing what they know about the Army's role in the rampage.

"My duty is to forbid certain people from making West Timor a base for trouble," says Col. Jurefar, the chief Army commander in the province, referring to the militias, "because we respect the results of the referendum in East Timor."

But Indonesia has yet to arrest any militia leader for crimes. Across the border in East Timor, however, many people are awaiting trial for last September's crimes.

The first trials are set to begin soon and analysts say could bring a measure of justice, peace, and reconciliation to this wounded half-island territory -- and possibly encouraging tens of thousands of its citizens waiting uncertainly across the border to return home.

UN rejects calls for shared executive power in Timor

Dili -- The United Nations has ruled out sharing executive power with East Timorese leader Xanana Gusmao in the lead-up to full independence for the UN-administered territory, according to a document obtained Tuesday.

The document, prepared by Jean-Christian Cady, deputy head of the UN Transitional Administration in East Timor (UNTAET), said the UN Security Council has vested all administrative and executive authority in UNTAET chief administrator Sergio Vieira de Mello, "which he cannot further transfer."

Cady prepared the document last week in response to a series of questions posed to UNTAET by the Socialist Party of Timor (PST), which has held a series of demonstrations outside UNTAET headquarters on a range of issues. The PST had proposed that de Mello share executive power with Gusmao during the transitional period, which is expected to last one or two more years.

Gusmao is president of the National Council of the Timorese Resistance (CNRT), the main umbrella group of East Timorese political parties, including the PST. "While the role of the president of the CNRT is essential in the consultative process, the PST proposal for shared executive power is not within UNTAET's capacity to grant," wrote Cady, the UNTAET official in charge charge of governance and public administration.

Cady acknowledged that a coalition government and planned expansion of the existing National Consultative Council (NCC) would increase East Timorese participation in policy-making and governance during the transitional period.

"The inclusion of East Timorese leaders in policy making 'cabinet' positions of a transitional government will allow them to share more fully in the experience of governing a nation, and to accept responsibility for the success or failure of policies," he said.

UNTAET and the CNRT have agreed to form a coalition government by mid-July, which will have a cabinet with four East Timorese members and four international members, each overseeing a variety of departments. Gusmao will not play a formal role in the new government, but UNTAET officials said he will be consulted informally before de Mello makes a major decision, as has been the case thus far.

They stressed that while UNTAET would welcome Gusmao's taking a formal role, he himself thinks it best if he stayed outside of the process as the unifying force among the East Timorese people. The agreement is part of what de Mello has termed the "accelerated Timorization of the East Timorese administration" as the territory moves toward full independence.

The UN will retain the internal security, justice, finance and political, constitutional and electoral affairs portfolios, while Timorese will take the economic affairs, infrastructure, social affairs and internal administration portfolios. The East Timorese currently have a say in the decision-making process through the NCC, a quasi-legislative, quasi-cabinet that includes 11 East Timorese and four UNTAET members.

The expanded NCC will be reconstituted to comprise 33 East Timorese members, with 13 representatives from the territory's 13 districts, seven from CNRT parties, three from non-CNRT parties, 10 from various social groups, and none from UNTAET.

Belo demands end to 'artificial' family planning programs

Dili -- Catholic Bishop Carlos Ximenes Belo, East Timor's spiritual leader, has written to the UN administration and foreign health aid groups demanding a stop to the use of "artificial" family planning methods in the territory.

In a letter dated June 22, a copy of which was obtained by Lusa in Dili, the bishop, a Nobel Peace Price winner, said the propagation and provision of family planning methods, such as condoms and day-after pills, were "totally unacceptable" in the predominantly Roman Catholic territory. Timorese women's organizations and health aid groups, contacted by Lusa, criticized Belo's initiative.

East Timor seeks mid-way sea boundary with Australia

Darwin -- East Timor wanted a maritime boundary with Australia at the midpoint between the two countries, putting key petroleum projects in East Timorese waters, spokesman on Timor Gap issues for the National Council of Timorese Resistance (CNRT) Mari Alkatiri said on Monday.

Alkatiri said the proposal was based on international law for maritime boundaries between nations. "It is the application of international law", he told Reuters. "The law first of all considers 200 miles for each country. There is no 400 miles so we have to go to the midpoint."

The boundary between the two countries is currently undefined, falling within an area known as the Timor Gap, covered since 1991 by a petroleum production revenue sharing treaty between Australia and Indonesia. After East Timor voted for independence last year, Indonesia's position was taken over by the UN Transitional Administration in East Timor and provisional arrangements put in place.

Negotiations to start

Alkatiri said preliminary talks had been held with the Australian Government on a new regime to cover the treaty area and formal negotiation would begin in August/September. "From our point of view the starting point is the maritime boundary," he told reporters after addressing the South East Asia Australia Offshore Conference.

On CNRT's calculation a mid-point boundary between the two nations would run across the southern end of area A within the Timor Gap Zone of Co-operation (ZOCA). Production from the jointly managed area A has totalled around 16 million barrels since output began from the Elang, Kakatua and Kakatua North fields in 1998.

It is estimated less than A$10 million has been distributed to each of the contracting states to date from oil output. But there is the potential for the revenues to the contracting states to reach hundreds of millions of dollars in the next five to 10 years as new projects come on stream. The US$1.4 billion Bayu- Undan liquids project operated by Phillips Petroleum Co is due to produce 100,000 barrels a day of condensate and liquid petroleum gas from 2004.

Gas pipelines to Australia

It also plans to pipeline gas to the Australian domestic market and ultimately begin liquefied natural gas production. Woodside Petroleum Ltd and Shell Australia Ltd, a unit of Royal Dutch/Shell Group also plan to transport gas to Australia from their Greater Sunrise fields.

Twenty percent of the estimated recoverable Greater Sunrise reserves of about 9.5 trillion cubic feet of gas lie within area A of the ZOCA. Alkatiri said downstream projects requiring Timor Sea gas to be piped ashore could only be developed in Australia as a deep underwater trench prevented pipelines to East Timor.

He said the mid-point boundary would bring a substantial increase in revenues to East Timor from royalties, but would not be a major issue for Australia which would have the benefit of the downstream development. "It doesn't affect too much the Australian economy and besides this, the pipelines would go to Australia," he said.

Timor Gap Joint Authority Australian executive chairman Robert Mollah said continued close co-operation would be needed for development of the projects. "Despite where you may put the boundary, for everyone to benefit you really need to have everyone involved," he said. Oil companies have stressed that they are not concerned about the royalties split as long as the tax rate is not changed.

Phillips Petroleum chairman and chief executive officer James Mulva said he was encouraged by assurances by Australia and East Timor that a new treaty would not impair the investments of companies operating in the ZOCA. But he said companies wanted the treatment of gas under a new treaty be settled quickly or there could be project delays. Gas was never fully addressed under the Australia-Indonesia treaty. Alkatiri said it was likely a new treaty could be ratified after mid 2001 when a new East Timorese government was in place.

Peacing East Timor back together

Peter Alford -- "The criticism of us has been varied and I would say only partly justified ... at no time in history has a country been totally rebuilt in six months or a year," so Jean Cady, deputy chief of the UN Transitional Authority in East Timor (UNTAET), dryly notes.

It has been a punishing three months for the UN administration, with Cady and other senior officials, accused of arrogance, ignoring Timorese priorities and general laxity in responding to the urgent reconstruction needs of the territory's south-west and eastern districts.

At closed meetings, they've been flailed by frustrated CNRT (National Council for Timorese Resistance) president Xanana Gusmao and criticised carefully, but pungently elsewhere by other senior CNRT people.

UNTAET has suffered wildcat strikes among its 1400 locally engaged staff over pay and conditions, repeated demonstrations outside its Dili headquarters, and in late April a riot by unemployed Timorese after a social soccer game in Dili.

"The mood of the people is disappointment and frustration," says former Fretilin resistance movement president Fransisco Xavier do Amaral. "This is far away from what we expected. People are saying that after the long suffering, we are now being colonised by the UN. Personally, I think we are better to have the UN here than not, but they must do concrete things for the Timorese."

One fundamental problem shared by the Timorese and the UNTAET staff working under Brazilian transitional administrator Sergio Vieira de Mello is that neither has experienced a mission like this before. The UN Security Council has given UNTAET an unprecedented mandate for a peacekeeping operation: governing East Timor until independence, while rebuilding its shattered physical infrastructure and establishing administrative, judicial, legal, health, education and policing systems.

"The Timorese have no familiarity with any of these roles. All that experience left with the Indonesians," says an UNTAET official. "We, the donors and the international agencies, are having to train them virtually from zero for these new systems at the same time we're building them" it is a very novel mission." And it has been stressful for internal morale.

UN district administrators have complained about a reluctance by the UN headquarters in Dili to promote local administrators to take over their positions and excessive delays in rebuilding towns, villages and roads. One UN official, based within half a day's drive of the capital, recently told The Australian he had started local programs without authorisation after waiting weeks for approvals to arrive from Dili.

Junior staff can be scathing about the attitude of UN veterans, especially headquarters staff from New York. "I came in with one New York guy, with first-class stickers all over his luggage, and he looked around the airport and bellowed 'You call this a capital city'," said a young New Zealander.

Chatting at the top deck bar of the Hotel Olympia, he forecasts a big turnover when six-month contracts for UNTAET staff come up for renewal next month. The Dili rumour mill now treats almost as established fact that de Mello, a polished and ambitious UN high-flyer, won't be in East Timor by the end of the year, even though he has signed up for a second term.

The Hotel Olympia is often cited as a symbol of UN aloofness from the Timorese. Refurbished in Poland's Solidarity stronghold of Gdansk, the floating hotel is moored in Dili Harbour, a short walk from UNTAET's headquarters in the old Government House, to house about half the 800 UN staff.

In fairness, the UN reasonably decided it shouldn't compete for the sparse useable housing remaining in Dili after the militia and departing Indonesian troops had reduced most of it to ashes. In fairness also, many staffers loathe the Olympia and are queuing patiently for repaired houses as they become available for rent.

More importantly, the UNTAET mission has undergone huge changes in direction over the past two months. The first major switch followed the April disturbances. Having initially planned to rely on the main reconstruction phase of the mission, the $US165 million World Bank-administered Trust Fund for East Timor, for job creation, UNTAET and the US Government relief agency, USAID, hastily implemented a slew of short-term, make-work schemes that now employ 31,000 people across all 13 districts.

This has eased the immediate social pressure and Cady says the mission is now fast-tracking the reconstruction phase. "The 'transition initiative' (make-work) programs will last until the end of August and by then we hope our own capital investment projects" $US15 million from the UNTAET Trust Fund and $US65 million from the World Bank fund will have taken hold," he says. They better have, comments an Australian non-governmental organisation co-ordinator: "The World Bank projects have been unbelievably slow in coming through so far and the big worry is that if there's even a brief gap between the short-term schemes finishing and the capital works projects starting, we'll be seeing far worse outbreaks of unrest than before."

However, two far more fundamental changes to the mission will take place next month: "accelerated Timorisation" at all levels of the administration and the introduction of a "co-equal government".

Until now, in the words of one staffer, "de Mello has administered East Timor as a benign dictatorship", consulting formally on major matters with a National Consultative Council, dominated by CNRT and UNTAET officials, and informally with Gusmao.

From July 15, de Mello will operate a cabinet system that divides UNTAET's responsibilities into eight portfolio groups, four controlled by UNTAET officials and the others by CNRT political officials, although chosen by de Mello.

This "political option", which has been accepted by Gusmao and approved by the UN Security Council, is the more radical of two models de Mello put to a CNRT conference earlier this month. "This means that under the first model, UNTAET and myself will continue to be the punching bag," de Mello told the conference with a sharp smile. "And that under the 'political model', we will share the punches with you."

Whether or not they do join de Mello in the punching bag he still has overriding authority in all areas of the administration the CNRT leadership has embarked on a steep learning curve. None, apart from deputy chairman Mario Carrascalao, who was an Indonesian-appointed governor of the territory for a decade, has any real administrative or policy experience. Most have spent the past 25 years abroad, in jail or fighting in the hills. They had a first taste of the painful responsibilities of government earlier this month when presented with UNTAET's operational budget for the next 12 months, which imposed harsh limits on expenditure on what will form the core of the new Timorese civil service.

The budget allows for just 9035 employees, where once the Indonesians employed more than 25,000 people, although without ceding them any real authority. CNRT also had to accept two bitterly resented tax imposts, on petrol and coffee exports.

What further aggravated the process was having the International Monetary Fund riding shotgun on the process, on behalf of the donor nations. "Xanana Gusmao was quite forthright in telling the IMF they were imposing the model for economies in crises which were at least partly their own fault on a country that has been ruined by outsiders and is trying to build rebuild itself," said one insider.
 

Government/politics

Presidential problems: will Wahid survive?

[This is an opinion piece from Thursday's Asian Wall Street Journal. Mr. Van Zorge is principal and co-founder of Van Zorge, Heffernan & Associates, a political risk and government relations firm based in Jakarta.]

James van Zorge, Jakarta -- There is growing speculation that Indonesian President Abdurrahman Wahid will face serious challenges to his authority -- perhaps even impeachment -- during the upcoming August 2000 session of the People's Consultative Assembly, or MPR. On the surface, such a scenario seems perfectly plausible.

When Mr. Wahid presents his progress report before the MPR session, he will have to address several nagging issues and concerns about his administration's performance. Foremost, there is the strong scent of scandals surrounding the president's office. Bulog-gate, Brunei-gate, and other stories of financial improprieties looming on the horizon will provide sufficient fodder for Mr. Wahid's opponents inside the MPR to undermine the president's credibility. More than likely Mr. Wahid will be able to escape allegations of personal misconduct, but how will he answer to allegations of corruption and cronyism within his inner circle of advisors and friends?

Indonesia's democratically elected leader can argue that it is impossible to eradicate corruption overnight and make a plea for patience, but ultimately President Wahid must remember that he is being held to a different standard than were his predecessors. The Suharto and Habibie governments were undeniably corrupt and never held accountable during their tenures. Mr. Wahid, on the other hand, was elected in the beginnings of a more open political climate with higher ethical expectations. And if Mr. Wahid is unable to prove leadership by sacrificing wayward allies -- not just foes -- he will be painted, rightly or wrongly, with the same brush as those he succeeded.

Tales of corruption will not be Mr. Wahid's only problem in August's MPR session. His antagonists can bemoan the fact that separatist sentiments in the provinces of Aceh and Papua are still running high. Furthermore, the sectarian violence in the Maluku islands has reached new heights.

When Mr. Wahid entered office with promises of maintaining national unity, he took responsibility for tackling Aceh and assigned Vice President Megawati Sukarnoputri to Papua, Riau and the Malukus. Mr. Wahid has made some progress in Aceh by stitching together a truce agreement, but clashes continue and there is a strong possibility of the deal falling apart. Vice President Megawati has, on the other hand, proven to be totally ineffectual.

An adamant nationalist on the campaign trail, Ms. Megawati has disappointed her loyalists by showing a passing interest in Papua, at best, and practically no appetite for addressing the Malukus' woes. Scores of journalists will attest to the fact that, just one day after major unrest shook the troubled province, the vice-president was spotted in Hong Kong on a shopping spree. Gucci and friends might be amused, but why hasn't Mr. Wahid reassigned this critical portfolio to a more proactive and capable politician?

Then there is the economy. Progress on restructuring of the corporate sector, privatizations and reducing the foreign debt has been painfully slow. Granted, the government's macroeconomic policy has been sound, and a consumer-led economic recovery has started, but without discernable progress on restructuring the economy there is little doubt that Indonesia's recovery will prove to be short lived.

The International Monetary Fund is pessimistic about the commitment and capability of key economics ministries to deliver on their promises of reform, with the latest IMF mission departing Jakarta unable to complete its review. Unless Jakarta can meet its past obligations on reforms by early July, there is little hope for a new letter of intent being issued before August's MPR session. That would mean a delay in a disbursement of the IMF's next loan tranche of around $500 million, which is bad news for both the economy and the president.

When Mr. Wahid enters the MPR session, he can certainly deflect criticism on economic policy by pointing out the deficiencies of his coalition cabinet. All the president's men are not really his men, and they have been prone to backtracking and delays on the reform front for the sake of narrow political interests.

So, one must ask, what will be the outcome of the much- anticipated MPR session? Mr. Wahid will come under intense criticism for sure, but the big question being posed on today's cocktail circuits is, will the MPR impeach him? Luckily for Mr. Wahid, there is an anticlimax to the impending drama: There are no constitutional provisions or legal rulings that provide the MPR with the power to impeach the president. Here, one should be reminded that Indonesia is a presidential, not a parliamentary, system of governance. There is no equivalent, such as in European parliaments, of a vote of "no confidence." Simply put, the president remains in power unless he becomes incapacitated or passes away during his term in office.

In the final analysis, President Wahid will survive this coming MPR session, but his credibility will be damaged severely during its proceedings. A weakened incumbent will, in turn, set the stage for finalizing the debate raging inside the halls of the MPR on amending 1945 Constitution. Included in the amendments that will be proposed to the plenary session are direct presidential elections and rulings on impeachment of the president. So far, it looks like the proposed amendments will pass muster.

The passage of constitutional amendments on direct elections and impeachment rulings would signal some significant changes to Indonesia's political architecture, indeed. With constitutional provisions for direct elections and impeachment in place, for the first time ever the Indonesian president could be held accountable for his actions. The prospect of real accountability -- not only toward oneself but also before an entire nation and its representatives -- will serve as a wake-up call to Mr. Wahid and his future successors.

This year's theme of accountability does not end with constitutional measures. Before embarking on his recent visit to the US, Mr. Wahid met with Vice President Megawati, who also heads the Indonesian Democratic Party of Struggle, and Akbar Tandjung, chairman of Golkar. Collectively representing the majority of party seats in the MPR, Ms. Megawati and Mr. Tandjung agreed that the president should be given a blank check to create a cabinet of his own making, not by the dictates of what is essentially a dysfunctional coalition. With blank check in hand, Mr. Wahid now has a golden opportunity to improve his administration's performance. But the green light from Indonesia's two most influential party heads for Mr. Wahid to redo the cabinet does not come without costs, for once he chooses his own men he can be held directly accountable for their actions -- good or bad.

Herein lies the bottom line: Can Mr. Wahid resist his instinct of relying on old friends and associates to occupy high-ranking posts in his government? Now unshackled by the constraints of a coalition, Mr. Wahid must turn the corner and select a capable, experienced group of ministers to run the government. Especially important posts that drive the economic reform program include the ministers of finance, trade and industry, the economics coordinator, and the head of state-owned enterprises. Equally important is the posting of the attorney general, which needs to be filled with someone who possesses the political savvy and daring to push ahead with legal reform and the prosecution of ghosts of the past, such as former president Suharto and his circle of friends.

If Mr. Wahid does act with wisdom in his appointment of a new cabinet, Indonesia will surely face a more promising economic future. Investors will have reason to positively reassess business prospects, discontent provinces will have a less rosy perspective on secession, and the president's enemies will begin to resemble more a loyal opposition than a band of disloyal snipers. The ball is now in Mr. Wahid's court.

Political adultery

Vaudine England -- Her father helped found the country and remains a symbol of freedom to many. After a childhood of privilege she chose to enter politics, daring to stand up to the dictatorial whims of her father's successor.

She alone galvanised millions of her country's disadvantaged and democrats to sweep the streets in a version of people power. But now her husband is securing control of her political party, leading to charges of corruption and abuse of power, while her comrades of recent years wring their hands in distress.

The plot is not new, as any observer of Pakistan's politics can prove. But this story is set in Indonesia and the woman at the centre of the storm is not Benazir Bhutto, but Vice-President Megawati Sukarnoputri.

Her Indonesian Democratic Party of Struggle (PDI-P) draws its strength from the grassroots, from the millions of Javanese, Balinese and others who suffered repression and economic injustice during the 32-year rule of former president Suharto, after he ousted her father, Sukarno, from power in 1965.

These people formed the vast swathes of red that have swept the streets of Indonesia's cities, giving Ms Megawati an iconic status as "mother of the nation" just when it needed her most. But, in recent times, she has stood accused of following in the footsteps of Pakistan's Ms Bhutto -- of betraying her grassroots supporters by allowing her husband, Taufik Kiemas, effectively to take control and ruin what she built.

That even led to the formation this month of an alternative group of disaffected members of her party and others, calling itself a "moral movement" seeking to halt the party's slide towards self- destruction as members seek personal gain.

Last June's parliamentary victory dissipated as the small core of intellectuals and politicians behind the party pleaded in vain with Ms Megawati to draw up the deals to win her the presidency. When Abdurrahman Wahid was elected last October -- Ms Megawati instead winning the vice-presidency as the consolation prize -- there were sighs of relief that she remained near the top, hence avoiding mass riots by her supporters, and that someone so disengaged from politics had not been raised to the highest job.

But what of her party? Originally, as head of the Indonesian Democratic Party (PDI), Ms Megawati had fought off Suharto's efforts to depose her as party leader through a mix of poise, cultivated martyrdom and a commitment to peaceful, constitutional means of change. In 1996, after hundreds of her youthful supporters faced a military and thuggish operation to remove them from the party headquarters that Suharto sought to control, the party was wrested from her but the bulk of her members remained loyal and abstained in the 1997 elections, which returned Suharto to power.

Then, as she waited in the wilderness, a core group of brains in her party, in the form of the Research and Development Unit called Litvang, plotted her route to power. That culminated in the registration of her new party, the Indonesian Democratic Party of Struggle, in February last year. Yet key members of that brains trust have now been ousted from the party's executive council and, since the party congress in Semarang in March, have been gnashing their teeth at the way the party, still chaired by "Mega" as she is known, is going.

"If she goes on like this, she will repeat the fate of Benazir Bhutto," said one former member of the party executive. The comparison crops up regularly in political circles. "The congress showed that Mega is not the old Mega -- she's accommodating her husband too much. According to close friends, there has been an agreement between them, that public affairs will be Mega's domain and party affairs will be the domain of her husband. It's very dangerous. The new council -- they are all Taufik's people, or Mega people who are too scared to challenge the new orthodoxy."

That new orthodoxy centres around allegations of corruption and personal power plays. Asked what skills Mr Taufik had, a PDI-P member said simply - "bribery". A government minister concurred: "His petrol stations used to be more than enough. But once you're in [the vice-president's house] you suddenly feel poor."

A member of Mr Wahid's Government said Ms Megawati was risking turning herself into a tool of her husband. "She won't defend anyone who is against her husband. It is this Javanese respect for the spouse, but it's very bad."

The recent sacking of Minister for Investment and State Enterprises, Laksamana Sukardi, followed his expulsion from the party executive. Fellow former executives say he was "tossed on the scrap heap" partly because of Ms Megawati's difficult marriage -- several party insiders believe Mr Laksamana lost his job because the PDI-P, now under the sway of Mr Taufik, requested that he be got out of the way.

"It's a kind of conspiracy," said a PDI-P member. "Yes, Taufik's PDI-P asked Wahid to get rid of Laksamana and it suited Wahid's general goal to do so." A palace source said that Mr Taufik and Rozy Munir, the man who replaced Mr Laksamana, "had already reached agreement on dividing the spoils and Laksamana had refused to go along".

Added to this is the sexual innuendo alleged by Mr Taufik's camp, accusing Eros Djarot -- Ms Megawati's political adviser and speech writer and a glamorous film director and artist -- of being too close to her. Ms Megawati's friends say her husband has barred Eros from seeing her.

Mr Eros was a serious contender for the post of secretary-general of the party until his candidacy was marginalised, as were those of others in Ms Megawati's camp. In their place are people described by deposed executives as "Taufik's men". Mr Taufik is reported to claim that out of 153 PDI-P legislators, "one hundred are my people".

"I was responsible for playing the role of political adviser while Laksamana advised for the economic side," said Mr Eros last week. "But after [Ms Megawati] became vice-president, that became very difficult for me because of certain restrictions of the inner circle. And the commander of that circle is, of course, Taufik Kiemas."

Arbi Sanit, of the University of Indonesia, described the new line-up as based on loyalty rather than merit. "If I were a member of the party I would resign."

Mr Taufik's brother, Santayana, strongly denied the allegations of machinations by Mr Taufik's block. "Taufik is not involved in any political engineering ... I know Megawati. As party chairwoman, vice-president and stateswoman, she would never let anyone, not even Taufik, tarnish the party's image or her leadership."

He said his and Mr Taufik's membership in the party and in legislative bodies had nothing to do with Ms Megawati's position in the party, noting his father and grandfather were loyal followers of Sukarno's independence movement.

According to friends, Ms Megawati "really regrets" she has allowed the party to get away from her. "She was advised, as many feared what Taufik might do. But it was her own indecisiveness," said a PDI-P leader. Maritime Exploration Minister Sarwono Kusumaatmadja is matter of fact: "I can say that the party is experiencing an involution, it is going into itself. It served its purpose in the sense that it was a receptacle for protest groups at one time, then after that they just have to shape up. If they fail, they'll shrink."

The deposed party faithful plan to rescue the party and hope to surge to victory in the 2004 elections. "We want to work at district and sub-district level across the country in an exercise of mass consciousness raising," said one party member. "People would be educated against money politics and abuse of power."

Confusion was apparent at the party congress in March. Of 351 district branches represented, 48 sent double delegations from opposing wings of the party. Many local parliaments are in chaos through the buying and selling of candidacies, most notably in Surabaya, Medan and Jakarta.

"The problem is that at the PDI-P we have no clear ideological platform," a senior party source said. "So some of us want to create a mass moral movement, a social mass organisation, not necessarily a political party. And if by 2003, the PDI-P shows no sign of improvement, then this movement could declare itself a new party."

That sentiment led to the launch this month of a group called The Indonesian Axis, under the chairmanship of Mr Eros, and including other PDI-P notables. "We would like to have people with national interests in mind and leave their personal or political party interests behind," Mr Eros said.

Mochtar Buchori, a former member of the PDI-P executive council, agreed that the party needed modernisation and a willingness to re-examine its orientation and plans. "Otherwise it cannot prevent or stop the ruinous process that is now going on. Our emphasis is on re-capturing a feeling of pride in being Indonesian."

PDI-P's new leadership has, for now, decided to work with the Axis. Apart from sentiment, the party remained vital, said sociologist Arief Budiman of the University of Melbourne, "because in this coalition Government, [the PDI-P] represents non-Muslim and secular constituents.

"If the Government were dominated by Abdurrahman Wahid and the National Awakening Party, I am afraid there would be a sharp polarisation between Muslims and non-Muslims."

Mr Eros would also like the ideas part of politics to start making inroads through the greed and power plays. "Unfortunately, the party is still focused on romanticism and has emotional space only for its own affairs," he said. "This must end."

indonesia in the balance

President Wahid may pay dearly for failing to get a quick turnaround in his country's troubled economy, writes Hamish McDonald.

Analysts of Indonesia have occasionally looked to the Soviet Union for analogies to explain and predict trends in this far- flung archipelago.

The rise of former KGB agent Vladimir Putin as Russian president has given rise to fresh conjecture about Indonesia tracing a similar circular path through chaotic democracy back towards a familiar authoritarianism.

If former president B.J. Habibie was Indonesia's Mikhail Gorbachev, the old regime insider turned belated reformer, and the current President Abdurrahman Wahid is a version of Boris Yeltsin, the unpredictable and ill maverick who is able to stay in office but can't achieve national progress, where and when will a tough, probably less democratic, leader emerge? What bits of Indonesia might fall off like the non-Russian Soviet republics in the meantime?

Most Indonesia specialists see no immediate threat to Wahid's position, despite intensifying jostling ahead of the August session of the supreme legislature, the MPR, which has the power to censure or fire the President. There is yet no Putin apparent, says Sydney University's Michael van Langenberg, because Indonesia has nothing like the KGB (or FSB, as it is now named).

The military, the TNI, has been neutralised for the time being by Wahid's deft removal in February-May of General Wiranto and many other adherents of Soeharto-era military involvement in politics. "There is no possibility of a successful military coup in present circumstances," says a recent survey by the Crisis Management Group, a political risk outfit represented in Jakarta by long- time TNI-watcher Harold Crouch.

Nor do any of the potential civilian contenders -- the nationalist Vice-President Megawati Sukarnoputri, the Islamist chairman of the MPR, Amien Rais, or Akbar Tanjung, leading the rump of Soeharto's Golkar party -- look to have enough support inside or outside the MPR to challenge.

Yet the optimism last October that greeted Wahid's emergence as Indonesia's first president resulting from popular elections (even if the vote was transmuted through backroom deals in the MPR) has faded drastically in recent weeks.

The gloomier mood has overclouded the sound political beginnings of Wahid's first six months -- purging Wiranto and elevating TNI reformers, engaging the Acehnese in negotiations on terms for staying in the republic, adjusting the presidency to more democratic ways and, through his apology in Dili, setting relations with East Timor on a decent basis.

Wahid's travels, his provocative statements and retractions, his simultaneous pursuit of dialogue and attack (in different ways, with the Acehnese rebels and the Soeharto family) have been credited with a certain Machiavellian method in their apparent randomness. Wahid has unbalanced his domestic political targets, cut off international support for regional separatists, and girded himself with important foreign support.

But only confusion is seen in Wahid's approach to Indonesia's huge economic problems, notably the refloating of the banking system now largely in receivership under the restructuring agency IBRA. The President is surrounded by several economic ministers and advisory teams with overlapping authority. Even his main economics minister, Kwik Gian Gie, has said that "if I were a foreign investor, I wouldn't come to Indonesia".

Weakening economic confidence is compounded by perceived nepotism and influence-peddling around Wahid. A brother was given an unmerited job in IBRA, Wahid's masseur walked off with $7 million from a government agency, extorted on the basis of his alleged closeness to the President, and a lobbyist who paid for Wahid's eye surgery in the United States seems to have upset the awarding of a power contract. To be fair, Wahid has an unwieldy coalition to keep happy. And implementing economic policy is hampered by the chronic weakness of institutions like the judiciary resulting from neglect and corruption during Soeharto's 32-year rule, when the army provided the stiffening for the state and Soeharto's family ran a parallel tax system to pay off regime insiders.

But the lack of a firm stamp on policy is producing some hard judgments on Wahid. "Gus Dur [Wahid's nickname] has some qualities, but not the full range of qualities needed to fix all the problems," says a senior Australian banker who visits Jakarta frequently. "He's still behaving like a traditional Nahdlatul Ulama chieftain," said another long-time visitor, referring to the Islamic movement Wahid has led. "It's like he's sitting around in a sarong on the mat, chatting with his mates and plotting against his enemies."

The weakness has extended forecasts for Indonesia's recovery from the couple of years envisaged in 1998, just after the Asian crisis. "Indonesia will take several years to restore order and stability," Singapore's Deputy Prime Minister, Lee Hsien Loong, said earlier this month in Canberra, in a remarkably hard comment for a South-East Asian neighbour.

With this has come more pessimism about the longer-term prospects for Wahid, and democracy in Indonesia. "My guess is Wahid's pretty safe for another 12 to 18 months," said van Langenberg. "I would not put any money on him lasting a full five-year term."

Nor is the military permanently knocked out of contention. "Although the danger of a military takeover seems low at the moment, it remains a real possibility in Indonesia," wrote Laksamana Sukardi, a lieutenant of Megawati who was recently dropped from Wahid's Cabinet, in the Jakarta Post on June 23. "[It is] one that could grow more likely if the Government's performance over the coming seven months is as poor as we have seen during the first seven months."

A senior Canberra expert also fears Indonesia could be on a cycle back to dictatorship, delivering a blow along the way to the current philosophy pervading the World Bank and other development circles that "democracy equals development".

"The best guide might just be to re-read Herb Feith," this expert said, referring to the 1962 book The Decline of Constitutional Democracy in Indonesia, which charted the country's course from the high hopes of independence to Sukarno's "guided democracy" -- which was replaced by Soeharto's military rule. "I would say we are at about 1951 or 1952 right now."

[Hamish McDonald is the Herald's Foreign Editor.]

Time for leadership

Terry McCarthy, Jakarta -- When President Abdurrahman Wahid moved into the presidential palace last October, his spirits and those of the country were riding high. After 32 years of Suharto's dictatorship and 18 months of interim rule by Suharto's former deputy B.J. Habibie, Indonesia was finally getting a reformist President who preached tolerance and openness and promised to let democracy flourish.

There was hope that two years of economic crisis and political chaos were over, and that Indonesia was finally on track to move ahead. But as the Wahid clan mounted the steps of the Istana Merdeka, a dukun -- Javanese soothsayer -- close to the family called the party to halt, warning that the spirit of "the big man" was standing in the doorway. The dukun insisted on carrying out a prayer ritual before the First Family could enter the building.

Gus Dur, as the President is known to his 200 million fellow citizens, waited for the soothsayer to finish before crossing the threshold. "It was the black power of Suharto," says the President's daughter Yenny, who witnessed the event. "He is trying to hurt us. We have white power -- we just defend, we won't hurt anyone."

Thus began the bizarre reign of Indonesia's fourth President, a man so contradictory that even his closest aides say they cannot understand him half the time. With one foot in the traditional world of Javanese mysticism and the other in the modern era of globalization, Wahid's internal compass spins wildly in all directions. A Muslim cleric from a distinguished family line, he trades dirty jokes with his friends and barbed compliments with his enemies.

He says he will fire military chief Wiranto, relents, and then fires him for real, all in the space of 24 hours. He praises America's support for his democratic reforms, but then pays court to Fidel Castro, Muammar Gaddafi and other leaders of the unfree world. He tells his economic advisers he wants capital controls on the rupiah, then changes his mind later that day. An incessant traveler, voracious reader (until his eyesight failed following a stroke two years ago) and obsessive gossip, Wahid relishes controversy, fears nobody and has a joke for every occasion.

When he took office, Wahid's unpredictability was interpreted as an asset, enabling him to keep foes off balance as he began his mission to cleanse Indonesia of the legacies of Suharto and his military-backed rule. But eight months on, even his supporters are starting to worry that Wahid's increasingly erratic behavior is a liability, particularly in the economic sphere where the country desperately needs to restore stability and a sense of confidence among domestic and foreign investors. In April Wahid fired two key economic ministers, and last week the governor of the central bank was arrested on suspicion of corruption, pushing the rupiah to one of its lowest levels against the dollar since the President took over. "It is becoming an issue, at least among his economic team, whether Wahid is an asset or not," says Sri Mulyani Indrawati, Secretary of Wahid's National Economic Council. "We are concerned about what's best for the country -- but we need a more predictable decision-making process."

Indonesia is in a precarious state. The economy is barely holding together, and mounting ethnic and religious strife makes many Indonesians fear that the country could disintegrate. Last week alone more than 150 Christians and Muslims were killed in the Maluku islands, and separatist tensions are again boiling up in Papua and Aceh. "Gus Dur is saying, 'Let [the provinces] voice their aspirations,' but he is not giving them any outlet," says Endy Bayuni, editor of the Jakarta Post. The pressure for change in relations between Jakarta and the provinces is mounting, Bayuni says. Things "could turn violent -- in which case Indonesia could just break up."

Much now depends on the enigmatic character of Wahid. Few would dispute that he is genuinely committed to confronting the "black force" of Suharto's poisoned legacy and improving Indonesians' lives. But conviction may not be enough. Says Muhaimin Iskandar, parliamentary head of Wahid's National Awakening Party: "From the beginning, management has been his problem."

The heat is turning up under Wahid and his capricious management style. Returning last Wednesday from another extended trip abroad (Wahid has visited 34 countries since October; his critics cite this as proof that he is not devoting enough time to domestic problems), the President faced renewed calls from student activists to bring Suharto to trial for corruption. Protesters are outraged at revelations of the government's secret talks with the Suharto family, at Wahid's behest, apparently aimed at pardoning the 79-year-old former dictator if he returns some money to the state. At the same time, accusations of corruption are creeping nearer to the President's closest advisers. His personal masseur allegedly embezzled $4.7 million from the national rice distribution agency Bulog. The intervention of a friend of Wahid's reportedly led to the revoking of a $100 million power-transmission-line contract that had been put to tender under the previous government. Some parliamentarians are even threatening to start impeachment proceedings against the President, perhaps when he makes a scheduled "accountability speech" in August. "His inner circle poses the greatest threat," says Zastrouw Ngatawi, a former assistant to Gus Dur and author of a book about him.

"People are using his name, and this will distract from the ideas he is trying to put into practice." Certainly, there's little to fault in Wahid's ideas. On a recent trip to Lombok, a tourist island whose hotels emptied after an outbreak of Christian-Muslim violence in January, Wahid preaches a gentle message of tolerance to both sides of the community. He does not give speeches in public, but chatters on in a bantering tone interspersed with frequent jokes, as if he were talking to a neighbor across the garden fence. Sitting in an armchair in front of a crowd at the Asaluddin pesantren (traditional Muslim school), Wahid slips into a monologue. "Christians have their day of rest on Sunday, but for Muslims it is Friday, and that is all right, everyone is different. Children throw pillows at each other, but when you grow up and get married you throw plates, and it is natural to have emotions -- just like the troubles that broke out here in January. It is not religion that needs to be improved, but the teaching of it that matters. What is important is clean government, the rule of law and open minds of the people, so we can all be brothers."

Later, he attends Friday prayers at a mosque and, as is his custom, engages in a question-and-answer session with the men present. One man angrily asks why Wahid and the Nahdlatul Ulama (NU), the 30-million member Muslim organization he once led, have not done more to base the new government on Islamic principles. Other worshipers indicate support for the questioner, but Wahid calmly tells them that he is not going to make Indonesia an Islamic country. There are other religions that need to be respected, he says, and the NU never intended to push for an Islamic state. By the way, he continues, the NU was founded by 6,000 wise Muslim clerics, and did the questioner want to criticize all 6,000 of them? The crowd dissolves into laughter, and the questioner is speechless. Wahid's wit has again rescued him from a tricky situation.

On the plane from Lombok to Solo in central Java, where he is to address a meeting of mystics, Wahid laughs about the incident. "That man likes to think of himself as a defender of Islam," he says. "But there is no point in defending Islam in an uncompromising way, forcing confrontation with Christians. I have to do away with that. These people want to enforce their own identity, but I say we must talk about it."

And talk he does, untiringly. The next day he has breakfast in the palace with former general Edi Sudrajat to discuss the problems of nationalism and the military. Later, he calls Australian Prime Minister John Howard in connection with a state visit to clear the bad blood over East Timor, he debriefs Minister of Foreign Affairs Alwi Shihab who has just returned from the US, he talks with the central bank about the rate of the rupiah and then explains on TV his controversial proposal to lift the ban on communism, imposed after the bloody 1965 coup that brought Suharto to power. "We have left that decision too long," he says after the show is over. "How can you ban a teaching? That would be against the freedom of expression."

It is late afternoon, and Wahid is in a jokey mood. After talking about Suharto's current state of affairs -- "He is disappointed and angry, because he thinks nobody understands him" -- Wahid recalls the last joke he told the former dictator. "I visited him shortly after he stepped down, in the economic crisis. He asked me to stay the night, but I said I had another appointment. I said I could leave him with a kyai (Muslim cleric) who was with me, to say evening prayers. Suharto said, 'O.K., that is what I want.' So I asked him if he wanted the old way or the new way? Suharto was puzzled. I said the old way is when they say 23 prayers, but the new way, with the economy the way it is, you get a 60% discount."

He segues into a joke about Lee Kuan Yew's barber, then tells the story of how he made the Saudi King laugh on television with a whispered vulgar joke, marking the first time the Saudi people ever saw their King's teeth. Before the laughter subsides, he begins explaining why Indonesia should open relations with Israel -- taboo up to now among the country's majority Muslim population -- and then talks about a book he plans to write on modernizing Islamic philosophy. He is upbeat: tonight he is going to a wayang performance of shadow puppets, and it has been arranged that the puppeteer will engage Wahid in a humorous debate.

The hall is full when the President arrives -- he is led to a chair in the first row and starts munching on the sweets and fruits laid out in front of him. The performance starts with the distinctive music of gamelan, metal xylophones, and the puppetmaster comes onstage and begins manipulating the puppets in front of a white screen. Halfway through the story of the knight Arjuna trying to cut the hair of the court jester Semar, thus depriving him of his power, the puppeteer turns to the audience and starts throwing questions at Wahid and two prominent guests sitting with him. They trade jibes about various politicians, keeping the audience laughing until the puppeteer asks Wahid whether he has changed since he became President. "I am afraid I am also a player in a larger story that I don't control," replies Wahid, suddenly serious. "I am a puppet that will be put back in the box when I am no longer needed."

Wahid's self-effacing manner is as effective as his wit in keeping his opponents guessing. Both traits have their roots in his family origins: Wahid's father and grandfather were highly respected Muslim scholar-teachers. The journey into the complexity of Gus Dur ends where it all started, in the town of Jombang in East Java, where Abdurrahman Wahid was born in 1940. His grandfather Hasyim Asy'ari founded the NU, and his father Wahid Hasyim became Indonesia's first Minister of Religion under the Sukarno regime in the 1940s. As the first son in such an illustrious Muslim family, the young Wahid acquired the honorific "Gus," a title given only to high-level kyai. (Dur is a contraction of his given name, Abdurrahman.) From an early age he was treated with deference by older Muslim scholars, and he grew up with a sense of entitlement that never left him.

It was in the traditional pesantren in Jombang that Wahid learned the Koran, and also the habits of the kyai, the clerics who tend to sit around joking and debating late into the night, scoring points off one another. With the intimacy of boarding schools and the regimen of monasteries, the pesantren produce sharpened wits and grand ideas far removed from the everyday world outside the compound walls. "What amazed me most about Gus Dur as a student was the number of books in his room," says Sholeh Abdul Hamid, a cousin of Wahid's who headed the Tambakberas pesantren when the future President studied there as a teenager. "And his jokes ... He was always like that -- that's the way kyai communicate, to diminish their own self-importance."

Despite stints studying in Cairo and Baghdad -- mostly spent reading Western literature and watching movies -- Wahid has never really left the world of the Javanese pesantren. It centers him. He relies on the NU organization for his political support and still meets regularly with a wide network of kyai friends. Hamid, for instance, visited just last month: "He told me his cabinet is full of thieves. He hasn't changed at all since becoming President."

Which gets to the heart of Wahid's predicament. He has brought the habits of the pesantren into the presidential palace. The mystic's tendency to laugh in the face of human vanity, the high-brow idealism with little practical experience of implementation, the autocratic manner of the senior kyai -- these traits bewilder many of the people who work with him. "Gus Dur is committed to democracy in principle," says Nurcholish Madjid, professor of Islamic studies at Paramadina Mulya University and one of Indonesia's most prominent intellectuals. "But he is not a democrat himself. He is a 'Gus,' a highly honorific title that implies a kind of immunity."

Wahid's immunity, however, may be wearing thin in the rough and tumble of Jakarta politics. As corruption scandals involving people around him come to light, the President's judgment is being called into question. Some critics say he is deliberately putting members of NU into powerful positions ahead of more- qualified candidates for petty political reasons. "All the pathologies of the past regime remain in the system," says Laksamana Sukardi, the former minister in charge of state-owned enterprises, whom Wahid fired in April, replacing him with Rozy Munir, a prominent NU leader.

Amien Rais, a rival to Wahid who serves as Speaker of the People's Consultative Assembly and leader of the more dogmatic Muslim organization Muhammadiyah, has launched a campaign to have the President's health examined by independent doctors. The intention is to embarrass Wahid by suggesting that his erratic decisions are evidence of mental instability. Wahid has had two strokes, the second in January 1998, and he suffers from diabetes.

The two conditions have left him blind, although he still keeps to an incredibly busy schedule. Desperate to regain some vision, he has made several visits to eye specialists in the US, but so far they have made little progress in restoring his sight.

As the criticism mounts, Wahid seems undaunted, at least in public. "Let them say what they want about me," he says. "I don't care." But in private he rails against his enemies, many of whom he calls dishonest in their attacks on him.

"Their way is to make me emotional, and they think I will have another stroke." His supporters fear that Wahid's blindness and sense of being threatened have made him withdraw even more into a private space where he will listen only to a small group of trusted family members and advisers, whose counsel is totally unaccountable and potentially motivated by self interest. Otherwise, his safest refuge is humor. It comes easily to him -- almost as a default mode -- and it drives others mad. "We will all become hostages to his craziness," says former minister Laksamana.

And yet, despite the mounting attacks on Wahid, there are few viable alternatives to his leadership for the time being. "How can we expect him to fix 32 years of corrupt behavior in just six months?" asks Jajang C. Noer, an Indonesian actress. "This country has been so devastated by mismanagement that I cannot imagine who would be a better alternative." Wahid has positioned himself as a benign ayatollah, aiming to lead Indonesia away from the forces of darkness that still emanate from Suharto and his poisonous legacy. But as Wahid told the Solo puppeteer, he is now a player in a larger story that he doesn't control. The danger is that his "white power" will not be strong enough to pull the country along with him, and that he and his retinue will get sucked backward into the dark old ways of corruption and nepotism that have become so deeply entrenched in Indonesia. If that happens, not even the strongest dukun will be able to protect him.

[With reporting by Zamira Loebis, Jombang and Jason Tedjasukmana, Jakarta.]

Tense wait as key Wahid speech nears

Vaudine England, Jakarta -- Less than two months from now, President Abdurrahman Wahid will face a fractious parliament, large parts of which will seek to bring him down.

He will deliver a speech outlining his achievements in just 10 months in office but many of those who voted him into power hope to use the occasion to fatally weaken his presidency. There is no precise mechanism for doing so -- at least the President maintains no vote on his speech will be necessary.

But everything done and discussed by Jakarta's political and economic elite today is being said and done with the August session of the Peoples' Consultative Assembly (MPR) in mind. Even calls for and against trying to impeach Mr Wahid at least show that this discourse is open, and that competitive politics is alive and well.

Every event signals a new round of mutual criticism, letting observers track possible alliances to come through the line-up of voices on either side.

Last week's detention by Attorney-General Marzuki Darusman of the head of the central bank, Sjahril Sabirin, is just the latest example. The heads of both houses of parliament attacked the move, accusing Mr Wahid of pressuring the legal system to pursue a personal vendetta against the bank governor.

It suits Golkar leader and House of Representatives Speaker Akbar Tandjung and MPR chairman Amien Rais to have a new stick to beat Mr Wahid with. And there is some truth in the allegations against Mr Wahid, who is not above a certain petulance.

But it also suits Mr Wahid to have Sjahril in the news for his alleged role in last year's Bank Bali scandal, to distract attention from more recent scandals closer to the President's office. It allows the Government to appear pro-active against alleged corruption and sends the message that when someone upsets him, as Sjahril did, then Mr Wahid is not a man to mess with.

All this adds to an already juicy mix of allegation, rumour and speculation across political circles. Typically, the President has given his opponents more than enough material to be used against him, not least his erratic, wilful and wayward style.

There was the presence of one of his brothers on the payroll of the Indonesian Bank Restructuring Agency to refresh charges of nepotism, and the case of the missing masseur from Mr Wahid's home who appears to have spirited away state funds.

Mr Wahid has not endeared himself to a certain crowd in the armed forces, some of whom could back his opponents. He has also yet to convince the nation's financial elite it is time to bring their money back to the country.

But despite his several serious mistakes and his penchant for provoking others, Mr Wahid is not short of material to use either. His statements last week about how he plans to retrieve a claimed US$45 billion from former president Suharto can also be seen as part of the waiting game ahead of the MPR session. It is a reminder of Mr Wahid's popular backing which, such as it is, relies on his reformist credentials. There is, perhaps above all, the realisation that few alternatives exist to his presidency which could match his constitutional legitimacy.

Says a veteran foreign banker: "The vast majority of the political elite wants to get back to business as it was before -- just without Suharto, his family, and [timber tycoon] Bob Hasan. That's their dream, only they can't work out how to do it, and Wahid just keeps messing it up for them."
 

Regional conflicts

'We'll kill anyone who tries to stop the jihad'

Joanna Jolly, Ternate -- "Before we go to the holy war field, we are trained magically. If our magic is strong and we have a true contact with God, we will not be killed or wounded," says Abubakar Wahid, the leader of Laskar Jihad, touching the row of sword cuts on his arms that, he says, prove that he is invincible.

Abubakar Wahid and his army of white-robed fighters hone their fighting skills by cutting and shooting at each other after drinking holy water. Backed by dissident groups in Jakarta, they are fighting a war to defend the name of Islam but which is tearing apart Indonesia's remote and beautiful Moluccan islands.

For more than 18 months the Moluccas have been wracked by violence that has left more than 3,000 people dead and displaced tens of thousands. Yesterday, up to 600 Christians fleeing the escalating violence perished when their ship sank off the island of Halmahera. Earlier this week, brutal street battles in the southern city of Ambon prompted the Indonesian government to declare a state of civil emergency, amid reports that police and army officers were shooting at each other, rather than attempting to keep the peace.

The vicious conflict, which began over a disputed bus fare in Ambon in January 1999, has pitted the islands' Muslims and Christian communities squarely against each other. Within months, the violence has spread throughout the islands, and has now reached the island of Ternate, the capital of the province of North Maluku, 600km to the north of Ambon. In the southern islands the war is being fought along religious lines, between Muslims and Christians who have lived side-by-side for centuries. But in North Maluku, the conflict appears to be as much about wealth and power as religion.

A collection of volcanic islands, the largest of which is Halmahera, North Maluku became a province in its own right last year. Previously the islands that make up the Moluccas were governed as one region but last July the new boundaries of the province were implemented, causing communities to fragment.

Violence first flared on Halmahera last August, after a redrawing of district boundaries meant the indigenous mixed Muslim and Christian population stood to lose their share of profits from the licensing of an Australian-run gold mine to another group of Muslims who had been forcibly relocated from another part of North Maluku.

It is not clear which community began the fighting, but last September a Christian attack on the Muslim migrants forced them to flee to Ternate. They took their frustration out on the people of Ternate burning churches and homes as they went. But finding themselves under attack, the Christians were forced back to Halmahera, where they, in turn, attacked the Muslims in the Halmahera town of Tobelo.

Muslims in Ternate are keen to show photographs of this attack, which they say claimed up to 800 lives. In these pictures, women and children sheltering in a mosque are shown with their heads and limbs blown off. Now the island's Muslim fighters say they are fighting to avenge every one. Last week they attacked the Christian village of Duma in Halmahera, killing over 100 people.

"I will go back and I will fight again," says Saffri, a Muslim fighter in hospital in Ternate, despite having lost his right hand in a bomb blast. "My command is that the Christians must be driven away from Halmahera," adds Abubakar Wahid, who claims to command 30,000 troops.

And in this war the Muslims have one huge advantage. From their stronghold in Ternate it is obvious to see they have the support of both the provincial government and the military, who also stand to benefit from the new provincial boundaries.

Wounded jihad fighters are treated by military surgeons when they return from fighting, while wounded Christians have to rely on a hospital which until this week did not have a doctor. Despite the authorities' assurances that jihad fighters will be prevented from travelling to Halmahera, boats of fighters regularly cross to the island.

The declaration of a state of emergency in the Moluccas will do little to change the explosive situation in Ternate. Christian leaders have called for international intervention because they do not believe the army is neutral, but jihad fighters say that if the army tries to stop them, they will be forced to fight back. "If the military try to stop us, the jihad troops will fight them. It will become even worse. Let the Christians and the Muslims solve their own problems," says Abubakar Wahid.

Tense calm as troops ordered to report to barracks in Ambon

Jakarta -- Occasional sniper fire and explosions punctuated a tense calm in the riot-torn eastern Indonesian city of Ambon Friday ahead of a midnight deadline for all Indonesian troops there to report to base, residents said.

Ambon, in the fourth day of a state of emergency aimed at stemming sectarian violence, was "a lot calmer," Hukom, a volunteer for the Indonesian Red Cross, told AFP.

"All police and military troops are required to report back to their respective battalions before Friday midnight, and perhaps that contributes to the calm situation here," she said. No reason has been given for the order for troops to report to barracks, but it is seen as a move to check the identities of deserters who have joined one side or other of the conflict.

The New-York based Human Rights Watch on Friday urged Jakarta to suspend from service and ship out all troops who have taken sides in the 18 month-long conflict in the region. "Soldiers have broken ranks and joined the fighting as partisans, and, as a result, Indonesian troops right now have virtually no credibility in areas where a neutral force is most desperately needed," the group said in a statement received here.

"There's an urgent need for a neutral force to intervene to stop the bloodshed," it said, adding that witnesses had reported direct participation by rogue troops in the fighting.

Hukom said many residents were still shunning areas with high- rise buildings because "snipers are still roaming through" them. "I don't know any civilian who could fire weapons as accurately as that," said Hukom, when asked who the sharpshooters were.

She also said the sound of gunfire and home-made bomb explosions could still be heard in some parts of the city, though state banks reopened their doors Friday. "For most of the day, the situation has been calm and state banks have reopened. The markets are busier compared to yesterday despite having barbedwire barricades on many streets," Hukom said.

The state Antara news agency quoted Maluku governor Saleh Latuconsina as instructing all government agencies and state enterprises in the riot-torn islands to continue their operations. "Those who fail to observe the instruction will be disciplined according to valid laws," Antara quoted the governor as saying.

The order came after Latuconsina criticized the head of Ambon's regional central bank, Garjito Heru, for shutting down the agency's operation and evacuating his staff from Ambon on Monday.

Violence between Muslims and Christians has left more than 4,000 people dead in Maluku and North Maluku in the past 18 months, with more than 100 people killed and hundreds wounded since June 21 in Ambon. The upsurge in attacks led the authorities to impose a state of civil emergency followed by a curfew in both provinces on Tuesday.

Lieutenant General Agus Wirahadikusumah, who heads the army's crack Kostrad strategic reserve division, was quoted by Antara as saying that "hopefully [martial law] will not" have to be imposed in Ambon and its surroundings. "I am urging people in Ambon and in Maluku ... not to be easily pitted against each other. The real issue is how to let go all the vengeance, disappointment and anger," Antara quoted him as saying in Singosari, East Java. Wirahadikusumah also proposed a six-month rotation of troops deployed in Ambon to keep them from being "influenced by any groups."

Religious killing fields spread across the ugly new Indonesia

Lindsay Murdoch, Poso -- Bodies are rotting by the road or floating down rivers. Nearly all have had their heads cut off, their hands tied behind their backs. Mosques and churches are destroyed. Houses and shops are burnt to the ground. Entire villages are packing up or have already left for makeshift refugee camps, the future unknown.

This is the ugly new Indonesia, where Muslims and Christians who have lived in peace for decades are locked in a vicious war that shows no sign of ending.

In Jakarta, the enfeebled Government fears similar conflicts could erupt across the vast archipelago as the demoralised armed forces either refuse or cannot maintain the same level of order it did during the 32-year Soeharto dictatorship.

"Welcome to Poso," reads a Government billboard on the outskirts of this isolated town in Central Sulawesi, the contorted island that sprawls between Borneo and the violence-wracked Ambon island chain. But that was before. Poso is now a ghost town where police and soldiers who arrived too late to stop the killings spend long, hot days sitting under trees or patrolling streets where nobody lives any more.

Only a few weeks ago this was a busy riverside town of 20,000 people -- half of them Christians, half Muslims. Famous for its wild orchids and surrounded by clove-covered hills, the 32,300- hectare Poso lake is one of the most spectacular places in Indonesia. There has been trouble here before, but nothing like this. In April, a local newspaper published a report forecasting that riots were about to break out, quoting a local politician.

A midnight fight between drunken teenagers then set off a vicious cycle of revenge attacks and rampaging by rival vigilante gangs - red (Christians) versus white (Muslims).

Yesterday, the official dead toll had reached 165. But Muslim leaders have recorded 512 of their people either dead or missing while the Christian side says 28 of its supporters have been killed. Hundreds of people have been wounded and at least 4,000 houses have been destroyed.

The leaders of both sides agree that the cause of the violence can be traced to a campaign two years ago by rival politicians -- one Muslim, the other Christian -- for the job of mayor, or bupati. The politicians bankrolled groups of supporters who ended up attacking each other. The terrible things that have happened in the past few weeks have been acts of revenge.

"The problem was political, at first," said a conservative Muslim leader, Mr Yahya Al-Amri. "But it developed into a religious conflict. People with power and money are responsible."

Unlike the Ambon islands, less than a 1,000 kilometres east, where Jihad Muslim fighters have been slaughtering Christians and the Government imposed a state of emergency this week, the Christians of Poso appear far more organised and ruthless than the Muslims.

The signature of the red gang is that they behead their Muslim enemies. But there are limits, say Christian leaders. They must not attack women, children or unarmed men. They must not rape, loot or destroy mosques. A Christian man who raped a Muslim women this month was killed by men from his own side. But it is difficult for outsiders to understand the intense hatred that this conflict has created.

Nine kilometres along a road that winds south from Poso, blood splattered on the walls and floor of a mosque shows that this was one of the Christians' killing grounds. The charred bones of a man lies outside. Surrounding villages are burnt, empty and eerily silent.

Most of the people who lived here were Muslims who had come to Sulawesi from Java and other more densely populated areas in the past couple of decades. Local leaders say they worked harder and were more prosperous than the traditional villagers, which created animosity. The migrants have been the main targets of the Christian vigilantes.

A few kilometres along the road south, Sergeant Saefuddin Dehong of the Indonesian police spends his days searching for bodies that have been dumped in deep ravines along the roadside. His grisly job is to take the heads of the rotting bodies he finds back to a military base in Poso for identification.

Mrs Warsimurni, 40, a Muslim, spent nine days hiding in the jungle with her husband, Muhdawan, 45, their 18-year-old daughter, Dasiyen, and 15-year-old son, Rahmat, after she heard in the Poso market that armed Christians were about to attack Muslims.

But Christian men wearing Ninja-style hoods captured them among dozens of others. The men and boys were separated from the women and children. Mrs Warsimurni thinks Muhdawan and Rahmat are dead because she saw headless bodies floating down a river a couple of days later.

She said the women and children were released after they were forced to take off all their clothes and had their genitals inspected by a Christian leader, who claimed he was looking for witches. "I felt humiliated and afraid," Mrs Warsimurni said, "but the man said if you don't follow our orders you will be my enemy."

Now staying with her daughter in a refugee camp in the town of Palu, 200 kilometres north of Poso, she said she has no money and nowhere to go. "I haven't seen the bodies of my husband and son but I know they are dead." Christians in villages and towns south of Poso fear revenge attacks from Muslims.

In the town of Tentena, on the shore of the Poso lake, nearly every house that still stands has a cross painted on it, signifying the home of a Christian. Muslims have fled and their homes and businesses have been burnt down.

Asked whether Christians and Muslims of the area will ever again be able to live in peace again, Father Rinaldy Damanik, who heads a Christian crisis centre in the town, said: "That is difficult to answer. For instance, in Tentena it has never been difficult to build a mosque while it has been impossible to build a church in other places." He said the Christians were not seeking revenge. "We want the law upheld ... the authorities are against the Christians who are protecting themselves."

In the nearby Christian village of Kelei, people take turns watching for Muslim attackers. "We are monitoring closely," said a church worker, Ms Yustina Baretha. "We are fearful because the military swept through here and took all our traditional weapons, such as machetes. We don't trust the authorities to protect us."

Partisan troops to be pulled out of Malukus

Vaudine England, Jakarta -- Troops in the Maluku Islands are to be replaced because they are taking sides in the sectarian strife there, military spokesmen said yesterday as a night curfew was imposed. The action came a day after the declaration of a state of civil emergency in Maluku -- one step short of martial law.

Some 1,200 of the 10,200 troops there will be replaced. Air Vice-Marshal Graito Usodo said they "have been there too long [and] may have become involved emotionally". Brigadier-General Tono Suratman said: "There are some rogue elements ... that are not acting professionally. They are taking sides."

The state of emergency allows the imposition of curfews, the setting up of blockades and indefinite detention. But gunfire and bomb blasts echoed across the Maluku provincial capital, Ambon, yesterday despite Monday's declaration. At least one more person was killed.

More than 100 died in a Muslim attack on a Christian village in Halmahera nine days ago. At least 3,000 people of both faiths have been killed since the fighting started in January last year.

Maluku's new military chief, Colonel Made Yassa, a Hindu, whose religious neutrality might help, has given all combatants until Saturday to surrender their weapons "or else they will be forced to hand them in". Missing soldiers must also report to barracks by then.

On Monday the United States urged the Indonesian Government to stop the violence in the Malukus, saying the security forces were either unable or unwilling to act. But Foreign Minister Alwi Shihab said: "We are still able to handle the ongoing communal bloodshed in Maluku. We will not ask for military help from foreign countries."

In Ambon, in the south of the Malukus, aid agency Medecins Sans Frontieres (MSF) said there was "complete chaos and breakdown of law and order", which was causing a serious shortage of medical supplies to treat the hundreds of wounded, most of them young men hit by gunfire. It wants humanitarian corridors to be opened so that food and medicine can reach encircled victims.

On Halmahera, in the north, where far fewer observers have been able to witness events, church sources say the situation is much worse than in Ambon. The hospital in Halmahera's capital, Tobelo, cannot cope with the number of wounded and the Indonesian navy is now evacuating patients to Manado, the capital of the neighbouring North Sulawesi province.

The recent arrival in strength of groups of Muslim Laskar Jihad (holy war) fighters has altered the balance of forces, perhaps irrevocably, church workers say. Reports from Ternate, just south of Halmahera, said that jihad fighters there were able to move freely around town.

A succession of Christian areas have been overrun across Halmahera. "The pressure on Tobelo is now intense," a Manado- based church source said. "Thousands of Chrstians with nowhere to go."

In Ambon, 34,000 people in 81 camps have now been cut off by the fighting and have been without relief supplies for several days. An MSF office in Ambon, which had served both the warring communities there, has been torched. The agency said medical supplies would be exhausted "within days" unless the main drug warehouse in the city could be reached.

A Christian crisis centre in Ambon has listed several villages under immediate threat of attack from jihad fighters and where a lack of troops means resistance depends on "voluntary Christian fighters". "It is crucial for them to hold out," the centre said. It said a ship on which Christians hope to be evacuated was waiting in Tual in the Kei Islands to the south but "doesn't dare to set sail for Ambon" at this stage.

Military neutrality key to ending Malukus violence

Jakarta -- Government efforts to end sectarian violence in Indonesia's Maluku islands by imposing a state of emergency hang on the neutrality of soldiers there, analysts said Tuesday.

The government of President Abdurrahman Wahid declared a "state of civil emergency" in the provinces of Maluku and North Maluku on Monday, granting wide powers to the local government and military. But many doubted the effectiveness of the order.

"The key to whether this status will be able to bring peace here is the military," said the secretary of Ambon's Roman Catholic Cathedral, Benny Liando. "If the security personnel can remain neutral, then hopefully, peace will come."

He said there was a commitment to neutrality at the leadership level, but it was another story among soldiers on the ground. "If this neutrality is absent, I am afraid this state of emergency will only lead to more bloodshed," Liando said.

Malik Selang, the secretary of the Maluku chapter of the Indonesian Council of Muslim Scholars, also expressed pessimism over the neutrality of the security forces deployed in Maluku. "The military commander has called on all security personnel to return to their bases, but several have ignored the order and joined the other side," Selang said.

Political researcher Bambang Triono of Gajah Mada university said "the problem now is that security personnel are trapped and carried away by the conflict. "There are personnel who appear to be protecting Christians while others appear to be protecting Muslims," he said.

Triono told the Detikcom online news service the emergency status could not guarantee the neutrality of security personnel and what the region needed was a complete rotation of troops.

"Troops sent to the Malukus should be trained in peacekeeping missions, such as those who were sent to Cambodia or Africa," he added referring to Indonesian participation in UN peacekeeping missions.

The newly-appointed military commander of the Malukus, Colonel I Made Yassa, on Monday admitted that some soldiers may have been involved in the violence but pledged to bring them to justice.

Salim Said, an expert on the Indonesian military, said members of the security forces in the Malukus "are incapable of overcoming the situation" and a special task force should be deployed to separate the parties. To prevent contamination by either side, the task force should be allowed to work in the Malukus for only up to three months, he added.

Armed forces chief Admiral Widodo Adisucipto said 19 battalions of troops had been deployed in the Malukus and that two companies from the police mass-control unit left for Ambon on Sunday. An Indonesian battalion consists of around 600 men.

House Speaker Akbar Tanjung said Monday that imposing a state of emergency was the only choice left to restore law and order, but the neutrality of the security personnel there was the key to peace. "It is true that the security personnel there should not get involved in the conflict between the warring sides," Tanjung said.

Both the Muslim and Christian camps have accused soldiers and police of joining the other side in their attacks, or of providing weapons to the rival camps. Maluku Governor Saleh Latuconsina has said soldiers' pay was often months late and left soldiers dependent on food support from the local population.
 

Aceh/West Papua

Women's groups should be included in Aceh solution

Santi Soekanto -- A truly democratic negotiation for solutions in Aceh should include different elements including women groups, says Jacqueline Aquino Siapno from the Philippines. The lecturer in political science and staff member of the Melbourne Institute of Asian Languages and Societies, at University of Melbourne, recently finished her book, Women, Nationalism, and Political Violence in Aceh. The following is an excerpt of an e-mail interview with The Jakarta Post.

Question: You have been observing the turbulence in Aceh for years. What do you think of recent developments there?

Answer: The situation in Aceh has been so horrifying in the past decade that, like many people, I was at first optimistic about the truce (Joint Understanding on Humanitarian Pause recently signed in Switzerland) since it is a step towards ending the violence. However, it is glaring omission that the women's groups that have been at the forefront of political organizing in Aceh have not been included.

A genuinely democratic negotiation with any hope of lasting should include the women's groups, student organizations and religious leaders. There is too much emphasis on the role of the Free Aceh Movement (GAM). This is a rather present-oriented and narrow-minded view. The struggle for independence in Aceh must be understood from a broader historical perspective, and not be too limited to the present conflict.

This has been an ongoing struggle for several decades and historically, the rebellions against the state had specific differences in terms of leadership (during the Darul Islam rebellion in the 1950s it was the ulama who led), demands, and aspirations. The independence movement in Aceh today is much larger than GAM. Any genuine solution to the conflict ought to include all the other groups outside GAM that also want independence, but talk about the desirability of independence in different terms.

How do you see the spread of the self-determination movement in Aceh?

Calls for referendum have already spread to South Aceh, Aceh Proper (Banda Aceh), West Aceh, and Central Aceh, initially not as militant in the early-mid 1990s. This is partly due to the success of the students in their campaigns on the referendum despite the state terror and intimidation waged against them.

But it's mostly due to the sadism of the Indonesian government and military which has been digging its own grave in Aceh in the past decade with its extremely brutal measures against ordinary Acehnese.

The push for self-determination in Aceh is about many things, among them the reorganization of the nation-state and capital, about ending state violence and sadism, about seeking justice for victims of massive human rights violations.

It is also about unfair development policies, and corporate greed and irresponsibility on the part of companies like Mobil Oil. However, it is not about "religious conflict" which is the propaganda that the government has been using to delegitimize the independence movement.

Many have expressed fear of Indonesia disintegrating, especially following East Timor's self-determination.

I think the disintegration theory should be given a decent burial. The two places that seem most likely to become independent are Aceh and West Papua. However, the problems in the other provinces seem quite different, and in some cases, they are asking the government and military to intervene to solve problems rather than leave them alone.

I don't really believe in any "domino theories". This was supposedly the same reason why Indonesia invaded East Timor in 1975 -- they were concerned about the "domino effect" of a Third World populist socialist government coming to power.

I think the example of East Timor becoming independent has been an immensely inspiring experience, not just for Aceh and West Papua, but for the Muslims in Mindanao, Southern Philippines, as well. Or for that matter, for small groups considered "an insignificant dot on the map" or "gravel in the shoes" of big hegemonic giants.

It is inspiring in the same way that the struggle for independence in Vietnam against French and then American colonization was inspiring to so many other colonized groups in the world. What is so criminal about dreaming of becoming free and independent?

Your comment about President Abdurrahman Wahid's (Gus Dur) handling of the calls for self-determination?

Like many people, I am very much hopeful that Abdurrahman will respond to the growing quest for self-determination in creative and non-cynical ways. His background as a religious scholar makes many different groups in Aceh hopeful that if there were a president who could understand the complexities and subtleties of the problems in Aceh, it would be him.

However, so far his record on Aceh is not good, and in fact Acehnese activists have begun to call him a war criminal and the joint military-civilian tribunal as a mob court (pengadilan gerombolan).

The President kept Aceh's problems for himself, and gave Vice President Megawati Soekarnoputri the problems of Irian Jaya, Maluku and Riau. What do you think? Your suggestions for Megawati?

It is possible that Gus Dur "kept Aceh for himself" possibly because he better understands the sensitivity of the Acehnese situation.

Someone with his immense understanding of religion, would hopefully, unlike Soeharto, not "play the Islamic card" as a political tool. This seems to be a hope that many Acehnese continue to cling to, but who knows what can happen in the future.

My suggestions for Megawati: try to be a shining role model for women in politics, take up earnestly this role of building and creating an intellectual and political space for women, and make astute, wise decisions about the serious problems of the growing push for independence in places like West Papua.

One would think that the desirability of "independence" would be something that strong women would intuitively understand since it is something many seriously struggle for in their own lives.
 

Labour struggle

Labour union offices attacked during protest

A Andri/SWA & LM, Jakarta -- The offices of the Indonesian Prosperous Labor Union (SBSI) on Jl. Yos Sudarso St Km 6.8, Medan, North Sumatra, were attacked today by a mob of assailants wearing vests marked with the emblem of the Indonesian Workers Union Federation (FSPSI).

The SBSI was established by respected labour activist Mochtar Pakpahan who was also the founder of the National Labour Party (PBN) which contested the July 1999 national elections although it did not win any seats in the parliament. The FSPSI is the post-Suharto incarnation of the SPSI, the only labour `union' permitted during the New Order of former President Suharto.

The incident began when SBSI members joined in a peaceful protest of some 500 labourers from PT Golgon who were demanding a pay rise in front of their factory. The factory is located across from the metal, machine and electronic (lomenik) division offices of the SBSI. Witnessing the demonstration, SBSI members felt compelled to escort the labourers.

Shortly after the two groups joined, the PT Golgon management deployed tens of men wearing FSPSI vests to disperse the demonstrators. The SBSI offices were stoned and their property badly damaged at around noon local time today. The demonstrators were taking a rest when the group attacked and they were taken by surprise with many unprepared to flee.

The situation was relatively calm later in the afternoon after the labourers had left the location while the group of FSPSI members stood guard at the factory.

SBSI North Sumatra-Aceh Regional Coordinator, Arsula Gultom, confirmed that the assault was perpetrated by man wearing FSPSI vests. "We were badly besieged. But because the labourers didn't want to make things worse, we decided not to fight back," Arsula said. Despite the severe damage, neither SBSI nor the labourers are planning any retaliatory action.

Whether or not the attackers in this instance are members of the FSPSI remains unknown. Nevertheless, this clash is just the latest incident in which mobs at the behest of factory management have violently attacked protesters.

500 workers rally at the house

Yayus Yuswoprihanto/LM & FW, Jakarta -- 500 workers from Gaspermindo (Indonesian Independent Workers Combined Union) rallied in front of the House of Reperesentatives building today, demanding sweeping improvements in the wages and conditions of workers.

Led by M. Jumhur Hidayat, the protesters first gathered at the East Parking Lot of the Parliament complex at 8am. At around 10.15am, the workers started to march to the House. Thus far, Detik can not confirm which parliamentary commission or what faction of the House they intend to meet.

The workers listed their demands on a five by ten meter banner. There were seven points including decreasing the price of goods, providing employement for Indonesia's estimated 40 million people, abolishing all forms of retrencment and a rise in labourers' wages.

The demonstrators marched wearing black headbands with "Gaspermindo" printed written on it. Meanwhile, the protest leader, Jumhur, wore a ceremonial outfit and headband at the front of the procession. Jumhur is well known as a close associate of former Minister of Cooperatives and Small-medium Enterprises, Adi Sasono and represented him in Cides (Centre for Information and Development Studies, an NGO).

He boldly encouraged his "followers" to voice their demands. The protesters seemed to be workers from various companies and street musicians, many wore blues shirts and t-shirts, the colour of the Union.

Seasonal workers still lack protection

Jakarta -- The lack of a clear-cut regulation on industrial labor relationships and poor control from the government have led to the vast exploitation of workers, especially those hired on a seasonal basis, according to legal expert Apong Herlina.

Apong Herlina of the Jakarta Legal Aid Institute (LBH Jakarta) said on Saturday that unlike permanent and temporary employees, the seasonal workers were not protected by any of the country's existing laws on industrial labor relationships.

"Still, many people have no other choice but to sign a completely unsecured, unfair contract because it is not easy to find a job these days," she told a discussion on legal protection for seasonal workers.

According to the existing regulation, companies are only allowed to hire employees on a temporary basis, up five years in maximum. After five years, such workers should be appointed permanent workers if the companies still needed them.

In reality, Apong said, many people had been hired as temporary or seasonal workers for over 20 years. "Worse still, they don't get the facilities or bonuses given to their permanent working colleagues despite the fact that they have worked as hard and produced the same quality services as the permanent workers do," she added.

She said that under the existing laws, companies can only hire non-permanent workers to work in areas that are not the companies' core activities, Apong said. Many big companies, however, had taken advantage of the country's unsound legal system by hiring cheaper workers through recruitment agencies on a temporary or seasonal basis and placing them in areas that are "significant" to their core business, she said.

Many banks, for example, hired temporary workers for their main businesses, such as customer services and credit card products, she said, adding that some banks had even placed temporary staff in their relatively "sensitive" divisions, such as the popular 24-hour telebanking customer services. "Banks which hired non- permanent workers in their telebanking divisions have clearly violated the regulation on banking secrecy because they let non- employees have access to their customers' accounts," she said.

Director of the working prerequisites office at the Ministry of Manpower I Wayan Nedeng, who also spoke at the seminar and admitted that the government had failed to solve the labor problems, said the most cases found by his office concerned companies underpaying their non-permanent workers. "The law orders companies to pay non-permanent workers no less than what they pay the permanent ones. But, in practice many companies underpay these non-permanent workers," he said.

Several seminar participants, working as executives at human resources offices at foreign banks that also hire seasonal workers through worker agencies, denied the allegation, saying that the banks had settled payments properly with the agencies.

Separately, Ditta Amarhoseya, head of corporate affairs at Citibank Indonesia, which recently faced protests from some of its non-permanent employees hired through local labor agencies, said workers who were hired through such agencies were not the bank's responsibility.

"They are employees of the agencies ... The contracts they signed are with the agencies, not us. Thus, their salaries and other compensation are the responsibilities of the agencies," she said in a company statement following the protest.

Some 30 temporary workers at Citibank, some of whom have worked there for over five years, recently demanded that the bank -- which recently secured a labor agreement with the company's labor union -- hire them on a permanent basis.

Ditta said it was common for big companies like Citibank to hire workers from laborer agencies to be placed in some fields, such as cleaning services, working as messengers and in operational divisions, whose volume of work was not constant but fluctuated according to market conditions.

Wayan said the government was currently working to complete three new regulations to cover more aspects in industrial labor relationships. In the meantime, he urged employees to form labor unions at their places of work in order to strengthen their positions in negotiations with their employers. "The existing laws encourage workers to form labor unions to help them with their rights ... Companies must not try to stop workers from establishing unions," he said.
 

Human rights/law

27 July incident: political and military compromise

Djoko Tjiptono/FW & Lyndal Meehan, Jakarta -- After the Police handed in the findings of their investigations into the 27 July 1996 attack on the offices of the Indonesian Democratic Party (PDI), the House decided to set up a special "connectivity trial". Many doubt that the Connectivity Team, comprised exclusively of military and police personnel, will bring the high ranking offices accused of executing the attack to justice.

As reported widely, on 27 July 1996 supporters of Megawati Sukarnoputri, now Vice President, were violently attacked and ejected from the Party headquarters where they had been holed up after Megawati was ousted from the PDI leadership in an internal party coup. At least five died in the riots that ensued in Jakarta and an unknown number of others "disappeared" in the following weeks and months.

The police report into the incident was compiled over several months of questioning high level military figures, PDI leaders and thugs alledgedly involved in the incident as "witnesses" and several of the civilians officially became suspects. Police submitted their findings to the Attorney General last week although several of the submissions failed to meet the prerequisites set and were returned to undergo improvements.

However, according to Indonesian law, military personnel may only be tried in a military court and few in the police, parliament or civil society believed a military panel would placate the calls for justice in this controversial case. The House, therefore, decided to set up a "connectivity trial" which would breach the legal immunity of the Indonesian Armed Forces (TNI).

The "Connectivity Team" established to look into the involvement of the military is comprised exclusively of members of the militarys' legal advisory team, the National Police Investigation Team and the Military Police.

Military Police Commander, May. Gen. Djasri Masrin, a member of the Connectivity Team, stated today that as soon as the case was handed over to them, work would begin the next morning. Djasri stressed that they were using this interim time to prepare their activities, schedules and coordination with the Police.

The Team plan to call again many of the high ranking officers suspected of planning and executing the bloody incident. "Today, the Connectivity Team will schedule the summonsing of the people who were allegedly involved in this case and [the schedule] will probably be implemented next week," said Djasri.

Djasri elaborated that in accordance with Regulation No. 31/1997 (on military courts) members of the Indonesian Armed Forces or the Police, will be summonsed through prior notification of their superior. In the case of retired members, the summons will be direct. Djasri added that the summons can come from either the National Police headquarters or the Military Police.

This "connectivity trial" is not the first to be held this year in Indonesia. On May 17, a "connectivity trial" chaired by five military and civilian judges passed judgement on 25 defendents, all but one members of the Indonesian security forces, in the murder of Tgk Bantaqiah and 56 of his pupils on July 23 1999 in the province of Aceh, Northern Sumatra.

In that case, the most frequent criticism from the public was that the trial only netted low ranking officers. In the case of the 27 July incident, civilian judges have no role and similar concerns that only the "little fish" will be pursued are being voiced. Whatsmore, activists are talking of a mutually beneficial deal struck between the parliament and military to keep the trial under their control alone.

"With this `connectivity trial', New Order people [as former President Suharto's regime is known] who at this very minute are in the government want to prove that they can bring [offenders] to justice, but this will only be done at the lower levels. This is the proof that the `connectivity trial' is a compromise between the House and the military and that the power of the old status quo is still strong," said Jonson Penjaitan, a lawyer with the Indonesian Legal Aid and Human Rights Association.

Budiman Sujatmiko, Leader of the Peoples' Democratic Party (PRD) who was jailed for subversion in the aftermath of the incident is also talking conspiracy. "In the 27 July case in the House you get the impression certain things are being covered up, meaning that there's a conspiracy between the House and the military to let the officers directly involved off the hook," he said. Experience has already shown, he added, that cases involving the military have foundered and are never followed up with sound legal processes.

Many observers, including the PRD and various media, have also questioned the deafening silence on the issue from Vice President Megawati Sukarnoputri and the Indonesian Democratic Party of Struggle (PDI-P) she established after Suharto's downfall. They have only pursued with any vigour the civilians involved at the time, avoiding directly challenging the military's involvement.

Concerned parties are planning demonstrations and actions on the 4th anniversary of the incident to focuss attention on the involvement of the military and the failure of the legal system to deal with the case and perhaps renewing calls for the International Human Rights Court to investigate and try the guilty. It is highly unlikely that Megawati will join in, she has yet to make a public appearance at any of the commemorations.

Striving to protect the witness amid calls for trials

Ati Nurbaiti, Jakarta -- There is a lot of clamor nowadays to bring those guilty of abusing power and violating human rights to trial -- those involved in abduction, arbitrary detention, corruption, torture, rape and killings.

And the list keeps growing. From the 1993 murder of labor activist Marsinah, the Banyuwangi "ninja" killings, the 1996 attack on the Indonesian Democratic Party headquarters in Jakarta, the Bank Bali scandal, "provocateurs" of clashes in various regions, and so on.

But who would come forth as a witness in such cases, when one's child is followed home from school, when a caller threatens your life, or if one must recall the details of a rape over and over again? Reports of the harassment of potential witnesses has led to demands for witness protection.

Legal expert Harkristuti Harkrisnowo, who chairs the team working on a witness protection bill, claims the draft has been completed. The bill especially applies to the protection of witnesses and victims in cases regarding corruption, rights violations, drug abuse and violations by ruling parties.

Witnesses, Harkristuti said during a public debate on witness protection last month, would be ensured of relocation rights, rights to a new identity, and safety for themselves and their families.

The talks were held by the National Commission on Violence against Women, which invited among others experts experienced in international tribunals. Special attention was given to women victims who had told their stories in an earlier workshop closed to the press.

The Commission's Secretary General, Kamala Chandrakirana, said the legal approach only has a chance to work if sensitivity is ensured in the victim's immediate community and in all the different phases she has to pass through on the way to justice, such as dealings with medical and police personnel.

While the grief and anger over a rape may be shared in the family and in the community, one of the experts, Francoise Ngendehayo, said "it is still a long way from that individual actually coming forth as witness." She is a gender consultant for the International Criminal Tribunal for Rwanda, which has heard the accounts of a few hundred women survivors of the 1994 genocide.

Even a victim's husband might not encourage the woman to speak up about sexual violence, said Ngendehayo, referring to the stigma involved in such a crime.

Ngendehayo told The Jakarta Post, "what struck me is the similarity between the experiences and accounts from Indonesia and Rwanda." She had listened to stories from survivors and victims of clashes in Aceh, East Timor and Irian Jaya. "Although conflicts in Indonesia have not reached the extent of those in Rwanda, they are just the same," she said, referring to the reluctance of women in speaking up about their cases.

A 1996 report on Rwanda by the Human Rights Watch made the statement, based on survivors' testimonies, that thousands of women were victims of such crimes as individual rape, gang rape and rape with sharpened sticks or gun barrels. The exact number of women raped, it said "will never be known." Numerous cases of sexual assault have been reported from conflict areas here but the rare investigations into such cases reflect the obstacles specific to these "gender-biased crimes." Only one case of rape was on the investigation list of a government sponsored team on Aceh.

An insight into the obstacles is provided in a Human Rights Watch report entitled Shattered Lives: "Rwandan women who have been raped or who have suffered sexual abuse generally do not dare reveal their experiences publicly, fearing that they will be rejected by their family and by the wider community and that they will never be able to reintegrate or marry." A lot of victims also fear revenge from attackers.

In Indonesia, the official team investigating the May 1998 riots verified 52 victims of rape, another 14 victims of rape accompanied by violence, 10 victims of sexual attack and four cases of sexual harassment.

From the aftermath of the riots up to the announcement of the team's result in November 1998, the silence of the victims has been reinforced by the outrage following activists' claims that the number of victims was much higher, leading to accusations of "lies that Muslims raped Chinese." Debates over the number of rapes led to reports that one woman among the claimed number of victims was not raped -- "but only stripped in public." A physician who had examined some of the victims dropped plans to testify, saying his family was being threatened. Activists called for the need to protect witnesses while their own families were also targeted for harassment. The police said they could not be everywhere to protect witnesses all the time, and many of these witnesses reportedly fled the country to seek safety.

Outcries against the harassment of potential witnesses was subdued compared to the allegations of a conspiracy to discredit Muslims. Until today we are still in the dark over the real identity of the criminals. Six years have passed since the civil strife in Rwanda which killed some 800,000 people, but the chilling similarity to much of the violence in Indonesia is yet to be fully understood.

Similarities are found not only in civilians hunting and killing one another just because they belong to "the other" side, but also in the pattern of victimization of women and the long term effects this has had.

The Human Rights Watch said "rape ... is also used as a weapon to terrorize and degrade a particular community and to achieve a specific political end." Time is short given the continuing violence. So parties seeking justice for victims are pressed to understand the above issues, while learning from whatever experience is available in the obtaining and protection of witnesses.

Ngendehayo, who is from Burundi, described the complexities involved in coaxing a witness to testify. One question that needs to be asked, she said, is "does the witness have a house?" If witnesses are to be protected, "how can they be safe on the streets?" she said, referring to refugees fleeing attackers.

Ngendehayo said that involving family and community and local nongovernment groups is vital in the process to bring forth a witness. The potential witness must be accompanied by a family member and another party from the community who understands the local culture and language, she said.

Also, "I told the women that if they did not come forth, their daughters could also experience the same crimes," she said. However the witness, she added, must be prepared and made to understand the impact of her coming forth, including the way the family would be affected.

"The law must also be demystified," she said, to be made comprehensible to the community and to potential witnesses. A woman from Ambon told the workshop of the "constant fear of meeting people" and of the depression in daily life, as the two- year clashes continue.

Riyah (not her real name), from an unidentified region in Aceh, said she has no idea where her husband is, or whether he is still alive. One night, she said, 20 men entered the back door of their house, beat up her husband and disappeared with him. She has sought information about him from the local and district military headquarters, as well as the police chief, with no result. Left with six children, she said she could not return to Aceh and was always in fear, particularly at the sight of soldiers. "We have no more money," she added.

These were among stories on "crimes by the state." But executives of the national commission on women stress that what is equally urgent is witness protection for victims of domestic violence.

Ani (not her real name), said for years her husband not only locked her up and beat her, but also did the same to the children. The violence started, she said, when she discovered that her husband was having an affair and would not agree to a request for a divorce. Throughout 1999, the Mitra Perempuan women's crisis center has revealed, 60 percent of the 113 cases of abuse against women in Jakarta took place inside the home.

Feminists point to the law as one source of continuing neglect in the ongoing issue of domestic violence. The marriage law, for instance, states that the man is the head of the family. This, says sociologist Julia Suryakusuma, perpetuates the waiving of domestic violence charges on the grounds that such cases are "private" affairs. "This law implies that the woman is the man's property," she said.

Even as barriers against speaking out are being broken down, abused women will surely remain silent as long as there is no protection provided against spouses who have become as powerful and as terrifying as other perpetrators of cruelty.

[The writer is a journalist based in Jakarta.]
 

News & issues

Marksmen to be used in high-crime areas

Jakarta -- Police in Jakarta will deploy trained marksmen in a bid to combat rising crime in the Indonesian capital, a spokesman said yesterday.

"The move is show that the police are serious in fighting crime and to make people feel psychologically safe," said police spokesman Colonel Zainuri Lubis.

"Police have difficulty aiming at moving targets. There's a possibility that the bullet fired hits the criminal's head instead of his leg. So trained shooters are needed," he said.

Jakarta has seen rising crime since Indonesia was hit by the regional economic crisis in the mid-1997, which drove millions below the proverty line and out of jobs. One result of the crime wave has been a sharp escalation in civilians taking the law into their own hands.

Forum calls for return to the ideas of reform

Fabiola Desy Unidjaja, Denpasar -- A gathering of prominent national figures made a strong call here on Saturday for the nation to recommit to the ideals of reform by recommending an absolute break from antidemocratic institutions and practices of the past, including putting former president Soeharto and his cronies on trial.

In a political statement issued at the conclusion of its two-day dialog, the National Dialog Forum laid blame on the multidimensional conflict hitting the nation as a result of the vestiges of the past regime which were antidemocratic.

"For that reason we call on all components of the nation to reassert their joint commitment to the reform agenda by breaking ties with practices, actions, institutions and legal products of the past which were antidemocratic," the political statement read.

Among the steps which should be taken are fundamental changes in the Indonesian political system through constitutional amendments, electoral and party reform, agrarian reform and the phasing out of the Indonesian Military's sociopolitical role.

The forum brought together over 200 renowned figures, many of whom are regarded as the being at the forefront of the reform movement which helped bring an end to former president Soeharto's 32-year rule.

The dialog was held with the aim of formulating systemic methods which could help the country's many problems. It is particularly significant since it was held two months before the critical General Session of the People's Consultative Assembly. President Abdurrahman Wahid addressed the forum later on Saturday night.

Five separate statements were issued: on politics, law, the economic sector, decentralization and social instability. In its political statement, the forum stressed the need for constitutional amendments and highlighted specific areas which needed to be addressed in the 1945 Constitution: a direct presidential system, a bicameral system consisting of the House of Representatives and Regional Representatives, independence of the judiciary and state prosecutors office and additional constitutional articles on human rights, including gender equality.

The forum not only reasserted the need to phase out the Indonesian Military (TNI) from politics, but in fact stressed that the process be "accelerated". It identified the need to abolish TNI's controversial territorial structure and, as if drawing from past personal experience, called for a new law which regulates and oversees intelligence activities. Not only was the political role of TNI under scrutiny, but the forum also declared that TNI and the police should be barred from commercial activities.

On legal affairs, the forum urged that all antidemocratic legal rulings be annulled. More specifically, they also called for the "immediate trial of Soeharto and his cronies" and to resolve all corruption, collusion cases and human rights violations.

There was also reference to growing concern over military-style civilian guards and whether to disband these paramilitary units, including the militarization of political parties.

The key, touched on in at least three of the five statements, was the supremacy of the law. "The weakness of the legal authorities and government apparatus have opened the possibility for social anarchy. The people no longer trust government officials to resolving social conflicts," the social instability statement said.

The forum further warned that never in the republic's history had the country seen such social violence, noting the worrying trend of communal violence and social displacement. It added that "the social cultural mosaic of Indonesia, particularly in the eastern half of the country, has been manipulated by various parties".

Given such a crisscross of ethnicities and environments, the forum proposed that, as a long term measure, a social mapping of the country be conducted with particular emphasis on ascertaining the settlement patterns, strategic resources and subjective realities of each area.

It further noted that much of the current regional and national problems stemmed from the strong centralistic nature of the past government and, thus, there must be effective control of power in the future.

Indonesian police restructure their ranks

Marianne Kearney, Jakarta -- The Indonesian police have taken another significant step towards their long awaited split from the military -- restructuring their ranks and replacing their military ranks with British style ranks.

The rank restructuring process is part of the reform process, aimed at transforming the police from a weaker arm of the military, whose focus during the Suharto era was more on internal security, to an independent police force.

Next year the police force will become answerable directly to the president rather than part of the Defence Ministry -- moving from an organisation that models itself on the military to one that enforces law and order. They will also take over security of the president and vice-president.

Under the new outfit, a colonel in the police force will change his rank to senior superintendent while a major becomes an assistant superintendent and a captain becomes an inspector.

Under the new police chief General Rusdihardjo, the police have been making various efforts to demonstrate their commitment to law and order and their independence from the military. Last year General Rusdihardjo announced a tough new anti-drug policy among the force. Several police officers found to have used amphetamines were expelled from the police force.

While the publicity surrounding such ground breaking approaches to disciplining their own members has obviously raised public perception of the police, their reputation is still far from professional.

A poll in Indonesian daily Kompas showed that almost 50 per cent of the population thought the police did not solve problems, 78 per cent thought it was natural to pay police extra for their assistance and only 46 per cent thought police attitude had changed to become more sympathetic towards people.

While these figures are hardly promising, they have actually improved a little in the last year when even more people thought police did not solve problems or try to change. When asked about police treatment towards ordinary civilians in places such as Maluku or Aceh, assistant spokesman Colonel Salehsaaf said "all the criticism we take as constructive and we try to make our personnel more professional". While city police chief Major- General Nurfaizi said the recent police training had focussed on "how to handle the masses while observing human rights".

Both the police and the military have long been suspected of being involved in various corrupt practices such as dealing in drugs, and accepting bribes for ignoring crimes but police leaders say they want to clean up the force's image.

Australian Federal Police liaison officer in Jakarta, Leigh Dixson, said he thought the moves to stamp out drug abuse and corruption within the force had been quite positive. "They've have shown that they are serious about stamping out narcotic trading, that it won't be tolerated using public humiliation," he said of the public dismissal of errant officers.

Mr Dixson says he is also confident that the new police leadership is committed to controlling crowds in a non- confrontational way, thereby avoiding some of the Suharto and Habibie era abuses such as shooting student demonstrators.

Wahid says Soeharto ordered bank transfer of US$8 billion

Jakarta -- President Abdurrahman Wahid disclosed yesterday that a few days before former president Soeharto resigned on May 21, 1998, he had instructed the withdrawal of Rp70 trillion (US$8 billion) from foreign banks.

Wahid, speaking at a gathering of more than 1,000 religious leaders in Malang, East Java, said he had received the information from one of Soeharto's main enemies. "Thank God, yesterday afternoon, one of the men most hated by Soeharto reported to me that days before quitting office, Pak Harto instructed the withdrawal of money from abroad, amounting to Rp70 trillion," he said.

Wahid said if authorities could get the money back from Soeharto, they would use it to replace counterfeit rupiah banknotes, which have flooded the country since the fall of Soeharto. "We [would] use the money to replace faked banknotes so as not to shake the market."

Wahid, better known as Gus Dur, said his informer had told him the names of the ringleaders behind the massive counterfeit operation. But the president did not make these names available to the public.

Timber king's business deals siphon off millions

Nuruddin Lazuardi/FW & LM, Jakarta -- The disgraced "Timber King" Bob Hasan has reportedly amassed US$263 million from an aerial mapping project conducted by his company, PT Mapindo Parama. This is in additition to the US$145 which he has yet to return to the Indonesian Plywood Association (Apkindo) which he headed and the US$85 million taken from that organisation currently locked away in his own now liquidated bank.

The Bandung Institute of Technology (ITB) conducted research into the mapping project and submitted it's findings to the Attorney General who will be using it as evidence in their ongoing investigations.

ITB found many technical irregularities in the aerial mapping project undertaken by Hasan's PT Mapindo Parama. Financial losses incurred in relation to protected forests ammounted to around US$87 million and US$176 million for Forest Concessions (HPH).

The report was made public today, concurrent with the questioning of former Ministrer of Forestry, Hasjrul Harahap, who gave the contract to PT Mapindo Parama. According to a Detik source from the Attorney General's office, Hasjrul has alledgedly violated a Decree which outlines Inventory and Forest Usage Guidelines. The Decree, No.102/KPTS/VII-2/1989, covers technical aspects such as the parameters for carrying out aerial mapping as well as the mapping of forest concessions. PT Mapindo is also accused of deliberately violating the Decree.

Originally, the contract was going to be awarded to a company suggested by the then Director General of Transmigration, Narsa. This proposal was rejected by Hasan, one of President Suharto's closest cronies, and Hasan's PT PT Adi Kerto, as PT Mapindi Parama was then known, was given the contract.

After being questioned by State Prosecutor Suwandi at 11am Wednesday, Hasjrul Harahap tried to avoid the press. Hasjrul only told the press that he was questioned about the aerial mapping project. He also mentioned that he was asked about 8 helicopters which were "leased" by the Ministry of Forestry to PT Gatari Hutomo Air Service (GHAS), a company owned by Hutomo Mandala Putra, better known as Tommy Suharto, Suharto's youngest son.

As reported earlier in the day by Detik, Tommy is also facing the Attorney General's team today in relation to this case in which the small airline was brought in by the Ministry to conduct the aerial mapping.

PT Gatari has so far failed to pay for the use of the equipment costing the state an estimated Rp23.3 billion (US$2.8 million) -- besides the fact that an unknown number of the helicopters are now no longer in working condition.

Hasan will also likely be questioned over the massive misuse of the funds from the Indonesian Plywood Association (Apkindo) which he headed during the Suharto era. On 21 June, the head of the Indonesian Forestry Community Association (MPI), Sudrajat DP, announced to the press that Hasan had taken millions of dollars from their affiliated associations for his own private business ventures.

MPI knew of US$145 million dollars that had been siphoned off, which Hasan has yet to return, and added that a further US$85 million had been deposited by Hasan in Bank Umum Nasional, in which Hasan held 40.08% of the stocks. The bank has since been liquidated and the money is now tied up in the Indonesian Bank Restructuring Agency (IBRA). Sudrajat threatened last week that if the money was not returned, MPI would take IBRA to court.

Government urges police to be stern

Jakarta -- The government urged on Monday the police to take tougher actions against protesters to protect the operations of coal mining company PT Kaltim Prima Coal in East Kalimantan and gold mining company PT Newmont Minahasa Raya in North Sulawesi.

Director general at the Ministry of Mines and Energy Surna Tjahja Djajadiningrat said the situation at the mining sites of both companies, already rocked by many protests has been worsening and the police need to take action. "There is no other way but to ask the police to act sternly against the protesters," he told The Jakarta Post.

He said he would send a letter to the National Police chief Lt. Gen. Rusdihardjo asking for special attention at KPC's mining site. He noted, however, that the letter had yet to be approved by Minister of Mines and Energy Susilo Bambang Yudhoyono.

KPC stopped operation on June 15 after some 150 striking workers took control of important mining facilities to demand a 15 percent salary increase. He said he had also received reports that Newmont had been forced to close its gold mining operation due to protests from the local people.

Surna said that KPC was willing to resume negotiations with the workers, provided that they leave the mining site. He said that although he respected the workers' right to voice their demands, he could not tolerate their action.

"The strike is causing losses to the company and the state," he added. He said the local police should not hesitate to step in and dismiss the workers at the mine, since the Regional Committee for the Settlement of Labor Disputes (P4D) has already ruled the strike illegal.

KPC has said that it was loosing Rp 3 billion (US$348,837) sales per day due to the strike and was also facing penalties from buyers for failing to supply coal on time. The company said that most of its 2,600 workers did not support the strike and local residents have expressed intentions to drive out the protesting workers themselves.

Surna said he sees a growing trend of people forcing their will on mining companies. "I fear that should we fail to solve the problem with the workers at KPC, others might imitate their action," he explained.

Aside from KPC, gold mining company PT Kelian Equatorial Mining (KEM) has also stopped operating since April due to a land dispute with residents of the Kutai Barat regency, East Kalimantan. Locals have demanded more land compensation and have blocked the only access road leading to KEM's gold mine.

Both, KEM and KPC are subsidiaries of Australian mining giant, Rio Tinto. Surna said that Newmont has been forced to halt its operation in the Ratatotok regency, North Sulawesi because of land compensation demands like KEM has received.

According to Newmont's press release, former land owners of its mining area rejected on Monday negotiations with the company and have instead blocked the access road to the gold mine.

The claims by the locals date back to the early 1990's when nearly 400 individuals sold their land to Newmont, the statement said, adding that it was now facing 24 new claims.
 

Environment/health

Brushing up on reproductive health lessons

Richel Dursin, Bandung -- In a classroom full of senior high school students, Budhi Setiawan was giving a lecture on reproductive health when a 16-year-old girl raised her hand and asked: Does kissing cause pregnancy?

On another occasion, Setiawan was discussing the risks of sexual activities on a live radio talk show when a 21-year-old female university student interrupted him and posed the question: Does sexual intercourse result in pregnancy?

Such questions are often heard from Indonesian youths, who experts say are mostly denied information about reproductive health by their families and school authorities.

"That is how naive Indonesian youths are," says Setiawan, who at 22 is a general medical practitioner and volunteer at Mitra Citra Remaja (MCR), a youth centre here which offers counselling, peer education training and reproductive health services to high school students.

Every Sunday evening, Setiawan hosts 'Pojok Ngeres', a radio programme on healthy lifestyles for teenagers. "Of the 10 callers that ask me over the radio, eight are sexually active," explains Setiawan, whose talk show is popular among youths from middle to upper class families and counts at least 300,000 listeners in Bandung, a city south-east of Jakarta. Most of the youngsters who consult with MCR are avid listeners of 'Pojok Ngeres'.

"Indonesian youths engage in sexual activities, but they do not know about the risks," says MCR coordinator Irawati Imran. Early marriage and sexual intercourse, involving persons under 16 years old, is prevalent in all provinces in Indonesia.

The results of the latest survey by MCR show at least 90 percent of youths in Bandung believe that premarital sex is prohibited, but more than 50 percent also say they would engage in it if there is a chance.

The findings also show that many Indonesian youths think that engaging in sexual intercourse for the first time does not cause pregnancy, that kissing can result in pregnancy, and that jumping after having sexual intercourse would flush out the sperm cells.

With the limited knowledge young Indonesians have about reproductive health, the United Nations Population Fund (UNFPA) has coordinated with the National Family Planning Coordinating Board and the non-governmental Indonesian Planned Parenthood Association in setting up six youth centres near high schools and universities in Indonesia, including one here in Bandung.

"In these youth centres, there is an education block, life skills education as we call it," says Patricia Koster, UNFPA programme officer in Jakarta. Under Indonesia's Population Law No. 10 issued in 1992, providing contraceptive services to unmarried persons is forbidden.

"Indonesian youths do not have a supportive environment where they can get information about reproductive health," Imran said. "Talking about sex is still taboo in our culture," said Ahmad Faried, one of the five medical staff of the MCR reproductive health services division. "Most of the parents think that if they teach their children about sex education, it will encourage them to engage in sexual activities."

Aside from providing counselling, peer education training and reproductive health services, youth volunteers at the centres also offer career preparation courses such as Internet usage and job interview techniques to high school and university students.

"The Internet is a gateway to our services just like the radio programme. It attracts the students to come here and they continue to do other activities such as consulting with the counsellors," Setiawan explains.

At MCR, counselling is done not only over the radio, but also through letters, e-mails, face to face and over the telephone. Through its only one hotline, MCR receives at least five callers a day. "Monday is a very busy day for us because too many youths consult with us," says Wahyudhi, coordinator of the MCR adolescent reproductive health counselling services division.

Most of the problems consulted by MCR clients, particularly high school students, concern issues like sex, unwanted pregnancy, dating, conflict with boyfriends or girlfriends, drugs, personality, and arguments with family, teachers, and friends.

Ira Dewi Jani, coordinator of the MCR reproductive health services division, recalled that she was once able to persuade an 18-year-old female senior high school student and her boyfriend not to abort their 10-week-old baby. "The student and her boyfriend promised to keep their baby, but their parents did not want and the girl was forced to have her baby aborted," Jani laments. "That is our dilemma."

MCR volunteers reach out to sex workers, who are mostly in their teens. Twice a week in the evening, volunteers assigned at the AIDS community and development division of MCR educate sex workers, who are scattered near big hotels in Bandung and surrounded by pimps, about reproductive health and sexually transmitted diseases.

MCR provides free medical check-ups to the sex workers, whose ages range from 15 to 23, every Wednesday. "In reaching out to the sex workers, we hope that we can change their behaviour," said Fahmi Arizal, coordinator of the AIDS community and development division of MCR. "It is difficult to stop them from working as prostitutes, but at least we can minimise the risks of their sexual activities," says Arizal, whose group advocates the use of condoms.

MCR volunteers reach out to the sex workers twice a week, and have earned their trust. "We do not despise them, but we make them realise that their occupation is wrong," says Ruby Mangunsong, one of the MCR volunteers who counsels the sex workers.

There are 30 youth volunteers at MCR. Of these, eight have been trained as peer educators to organise weekly discussions at MCR with their friends about reproductive health, sexual behaviour, risks of sexual activities.

"Never give in to your boyfriend's demand or else you would suffer. Your schooling would be in danger and your family and peers would shun you," Anie Purwantie, a 17-year-old peer educator says, recounting her experience in advising a friend, a high-school student. Like Purwantie, 17-year-old Mira Sifra Mantaha, another peer educator, has succeeded in convincing a friend not to engage in premarital sex.

Apart from the weekly discussions, the peer educators write articles and make wall magazines about adolescent reproductive health that they distribute to Bandung high schools.

This year, MCR plans to recruit another eight peer educators and to reach out to senior high school students and out-of-school youths, aged from 15 to 20. "We want to become an excellent adolescent reproductive health services centre," says Imran.

However, some government officials and school authorities do not view their efforts the same way. "Our main problem is the bureaucrats. Just to do a simple activity, it takes months. Sometimes if they allow us to hold a lecture, they find it hard to schedule," Imran recounts.

"It takes time to get in touch with the education authorities. They see the value of reproductive health education, but they have too many considerations," adds Setiawan. "They believe that such things should not be taught in schools. For them, schools should just teach the students to have good grades, how they can graduate and get to higher educational institutions."

Indonesian plant pushes to reopen, stirring anger

Richard Borsuk, Porsea -- When Suharto was president of Indonesia, corporate big shots visiting their factories in the provinces were routinely welcomed by festive banners strung above the highway.

In post-Suharto Indonesia, such banners are still hoisted. But today the greetings can be rather rude, as Palgunadi Setyawan, the new chairman of PT Inti Indorayon Utama, has discovered.

To visit his huge but idle $600 million pulp mill here on the island of Sumatra, Mr. Palgunadi must run a gantlet of hostile messages. "The Voice of the People, the Voice of God: Close Indorayon!" reads one. Another calls Indorayon supporters traitors. A third says local residents are prepared to burn down the plant.

Mr. Palgunadi has a delicate, potentially explosive task: carrying out a government-sanctioned reopening of the Indorayon mill, closed in 1998 by opponents who claimed the company was poisoning the environment and was in league with Mr. Suharto. The job is tougher than just patching up public relations. It means doing what the Indonesian government can no longer do: persuading local communities to bend to the will of central authority.

The Indorayon imbroglio illustrates the dilemma businesses and the government face as Indonesia copes with the anger of communities whose complaints were ignored or smothered during Mr. Suharto's 32-year rule.

`Many time bombs'

Indorayon -- which denies it had any links to the Suharto family -- is a particularly thorny case, because the mill was controversial even before it was opened in 1989. Its location near Lake Toba -- Southeast Asia's largest lake and Sumatra's biggest tourist attraction -- was criticized by the ethnic Batak people who live nearby, and by Indonesian environmentalists.

Opposition to the plant sparked occasional violence that was suppressed by force when Mr. Suharto was in power. For example, after a pipe exploded in 1993, releasing gas the company said was harmless, word spread that poison would engulf the area. Villagers rioted and burned more than 100 workers' houses before soldiers restored order.

Now, Jakarta's pledge to give more political power to local governments, combined with the military's diminished status and a woeful legal system, is emboldening disgruntled communities like Porsea. It amounts to another way Indonesia's chaotic post- Suharto democratization is testing longtime investors and scaring away new ones.

"This case is one of so many time bombs left by the [Suharto] government," says Industry and Trade Minister Luhut Pandjaitan, who was born near Lake Toba. "Whatever decision there is, it's going to be messy," he says, adding wistfully that the situation "maybe can't be defused."

Costly shutdown

Company executives say the plant, which critics say polluted rice fields and fish ponds near Lake Toba, can't be moved. But neither can it remain closed without pushing Indorayon into insolvency. The shutdown already has been costly. Jakarta-listed Indorayon's market capitalization has skidded to about $25 million; in the mid-1990s analysts valued the company at as much as $1.5 billion.

Indorayon's founder, Indonesian-Chinese businessman Sukanto Tanoto, stands to lose his majority shareholding under a plan to restructure Indorayon's $400 million in borrowings, mainly from US, European and Japanese creditors, including Credit Lyonnais and Credit Suisse First Boston.

Indorayon says it wants to reopen the mill "soon." It is lobbying for community support to carry out a decision by President Abdurrahman Wahid's government in May permitting the pulp mill to reopen for one year, so an environmental audit can be done.

But the standoff remains tense and fraught with political risk. On June 21, an incident near Porsea involving a truck used by Indorayon resulted in one death. Police later killed a teenage demonstrator when they fired on angry villagers protesting the detention of 13 men in connection with the stoning of the truck.

If Indorayon tries to restart production, some villagers and organizations promise more trouble. "We couldn't avoid a clash," says Abadi Hanawa of the Medan branch of Walhi, an Indonesian environmental group. "There will probably be a lot dead, not just a few." But if the plant can't reopen, an Indorayon executive says, a different kind of chaos could be the result: 7,000 people still on the payroll will be dismissed.

An unenforceable directive

Trouble began at Indorayon soon after Mr. Suharto resigned in May 1998. Demonstrators blocked the road used by the company's trucks, forcing the first in a series of plant shutdowns. Protestors demanded permanent closure, charging that the mill's emissions were harming crops and residents. (A US concern, in a 1994 company-funded study, found shortcomings in environmental practices, but no danger to neighbors.) After police used force to lift a blockade in March 1999, four Indorayon employees were kidnapped. Three were killed; the kidnappers haven't been found. The president at the time, B.J. Habibie, ordered the plant closed for two weeks while an environmental audit was done.

More than 15 months later, there has been no audit and the mill remains closed. The Wahid cabinet's decision to reopen the pulp portion of the plant in order to conduct the audit has been unenforceable. North Sumatra province officials in Medan, 170 kilometers north of the mill, and the central government appear to lack the will and ability to carry out the decision. To use military force -- as happened at Indorayon and elsewhere while Mr. Suharto was in power -- is a "terrible option or no option," a member of Indonesia's Parliament from Sumatra says.

"We don't have the institutional infrastructure to solve this kind of inherited problem," says former investment minister Laksamana Sukardi. On one hand, the central government's decisions should be respected, "or there's no credibility," he says. On the other hand, "People hate the central government so much, they feel they've been exploited." Indorayon's chairman, Mr. Palgunadi, a 61-year-old former manager at Indonesia's state ammunition factory, was brought in by the company's founder, Mr. Sukanto, to change the plant's bad image. A retired army lieutenant colonel trained in precision mechanics, Mr. Palgunadi is tapping management skills learned during a second, 20-year career at auto maker PT Astra International to persuade Indorayon's neighbors, anxious government officials and unpaid creditors that the mill can be safely reopened. The company is "committed to changing the way we do business, but not to going out of business," Mr. Palgunadi says.

`The world changes'

Indorayon's opponents show little sign of backing down. Musa Gurning, a 74-year-old father of 14 whose house and rice mill in tiny Porsea are at an intersection used by Indorayon trucks, speaks at length of Indorayon's "evils." He blames the company for destroying rice fields, killing fish and causing genetic damage to residents with toxic pollutants. He contends that Porsea people "don't accept any dialogue with Indorayon," as a dozen villagers gathered at his home nod agreement.

Mr. Gurning shows ponds where, he says, fish flourish again after the mill's closure. Indorayon executives, blaming earlier poisoning of ponds on "provocateurs," say a proper audit would prove or disprove Mr. Gurning's charges.

The animosity of people like Mr. Gurning doesn't discourage Mr. Palgunadi, who became Indorayon chairman in January. Several acquaintances say that if anybody can repair Indorayon's image, it is the soft-spoken, articulate Mr. Palgunadi, who is trying to cajole foes instead of confronting them. Indorayon "is lucky to have Palgunadi," says Jakarta lawyer Mulya Lubis, who represents most of the company's foreign creditors. "He's very open, very compassionate and he doesn't see things in black and white." On his first Porsea trip after becoming chairman, Mr. Palgunadi made it a point to introduce himself to Mr. Gurning. On a subsequent visit, accompanied by a reporter, the chairman drops in again. In a dimly lit, windowless room adorned with portraits of Vice President Megawati Sukarnoputri, the two exchange smiles, sugar- saturated tea and pleasantries. But they avoid substantive discussion of the topic at hand.

"At least he doesn't see me as a menace," Mr. Palgunadi says afterward. Mr. Gurning later describes the chairman as "a very nice man" who is welcome in Porsea -- provided he isn't there to open the mill.

But that is precisely why Mr. Palgunadi keeps visiting. He wants to win the "consent of the community" for an audit. If an audit proves environmental damage, he says, "then I'll quit Indorayon to fight against it." Three hundred meters from Mr. Gurning's place, 10 middle-age men drinking coffee in a roadside shop say there will be no audit, and no community acceptance. "Everything that company says is bull-- ," says farmer Oloan Manurung. "If government tries to force it open, it will be total war." Still, Mr. Palgunadi contends that a "silent majority" in favor of restarting the mill is being intimidated by the people -- he won't name names -- who oppose Indorayon. He thinks the opposition can be watered down. "The world changes; the Berlin Wall fell. So why can't things change here?" he says.

Impatient creditors

Change must come quickly, say foreign creditors, who contend the impasse at Indorayon is hurting Indonesia's overall investment climate. "Everyone at the (Paris) head office is looking very closely at settlement of this case," says Pierre-Alexandre Muyl, Indonesia country manager for Credit Lyonnais, a major creditor.

But a Medan newspaper editor says enmity toward Indorayon is deep. "The company never tried to persuade people to support the mill, they only depended on powerful backing" from Jakarta rather than nurturing local support, he says. Many of the thousands of workers were hired from Medan and elsewhere, and almost all supplies, including food, came from cities far away.

Today, Mr. Palgunadi and his colleagues are trying to win hearts and minds by sponsoring community development programs. Indorayon has begun hiring teachers for the Porsea area's understaffed, underfunded primary schools. Indorayon and creditors also are promoting a plan through which a small percentage of future revenues will be channeled to the community.

Mr. Abadi of Walhi, the environmental group, asserts that only 10% of the local population will buy the program. "It's simply too late," he says, warning that the plan could cause conflict between different clans of ethnic Bataks, who might fight over who gets the funds. Indorayon "didn't understand Batak culture, and now it's too late to try," Mr. Abadi contends.

A member of Indonesia's Parliament who hails from Lake Toba disagrees. "It will be very hard, because some people really hate this company, but if Indorayon helps fund enough of the big figures, the mill can reopen," he says. "I think this [dispute] is more about money than the environment."

Batak Toba people demand Idorayon closure

A Andri/Swastika & LM, Jakarta -- Representatives of Batak Toba tribe in North Sumatra have urged the government to immediately close down PT Inti Indorayon Utama to avoid further conflict with local people.

On Wednesday clashes between the security forces and locals from the Porsea area where the plant is located who had organised amongst themselves to stop all materials reaching the plant claimed the life of a high school student.

The villagers mainly originate from the Sosor Ladang village, Porsea subdistrict, Toba Samosir municipality, North Sumatra. They have joined forces with Walhi, the Indonesian Forum for the Environment, in condemning the pollution of their traditional land and demanding the withdrawal of the plant's operating license.

The government recently reissued Indorayon's license after it was withdrawn during the Habibie adminstration because of environmental concerns and prolonged protests by local peoples.

Walhi also announced yesterday that they had written a letter to President Abdurrahman Wahid calling for a thorough investigation into the shooting death which occurred after a truck carrying chemicals from the plant was pelted with rocks. 13 people were arrested and the student shot when a large group went to the police station to demand their release.

General Secretary, Bona Pasogit, and Secretary, Martin Sirait, of the organisation representing the Batak Tobe tribe as well as Chairman of the United Porsea People's Voice, Musa Gurning, Bungaran Antonius Simanjutak from the Parbatu area and Tunggul Sirait, a member of Commission VIII from the House of Representatives, held a press conference at the Wisma HKBB Nommensen building on Kuru Patimpus St., Medan, North Sumatra today. "Porsea people can not stand the existence of PT Indorayon. If this firm is not closed down immediately the people threaten to hold a peoples' court," Musa Gorning said.
 

Arms/armed forces

Too soon to reward Indonesia?

Dana R. Dillon -- It is a debate that pits the Clinton administration against human-rights watchers who say the White House is rewarding a corrupt regime bent on violence. The White House counters it is trying to export American values. Building trade with China? No, resuming military ties with Indonesia, where independence movements have been springing up for months, only to be met with violent reprisals from local militias.

It was because of last year's massacres in the Indonesian province of East Timor that military-to-military contact between the United States and Indonesia was cut in the first place. A recent UN report says segments of the Indonesian army did "support the militias in intimidation and terror attacks" in East Timor. Now the White House is quietly re-establishing ties with the army and will soon ask Congress to approve a program allowing the United States and Indonesia to engage in more joint military exercises.

Generally, military-to-military programs with developing countries are entirely defensible. Training their military officers makes their armies more professional and imparts sound American practices. But the problems with the Indonesian military are systemic and have nothing to do with poor training. Indeed, if President Clinton's goal is to reform the Indonesian army, then renewing engagement is the worst course of action.

The problem is this: The Indonesian military has spent the last 30 years gradually grabbing control of almost every facet of Indonesian society, including the bureaucracy, the legislature and the economy. In short, the Indonesian military has evolved from an arm of national security into a uniformed mafia.

I traveled to Indonesia in March and visited both Aceh and Papua, two of the more restless provinces. It was clear from the people I spoke with that the army and police are the most hated and distrusted institutions in the country. Many Indonesians feel the military cares more about its business and political interests than about national security. One activist who has worked in eastern Indonesia for 12 years told me he frequently asks people what could be done to improve their quality of life. Their consistent reply: "Get the army out of my village."

The Clinton administration says it is rewarding Indonesia for removing some senior officers responsible for the massacres in East Timor and for establishing civilian control of the military. True, President Abdurrahman Wahid's record of pursuing and convicting soldiers who commit war crimes isn't bad, but don't give him too much credit. After all, the general who served as the army's chief of staff during the East Timor debacle has only been questioned, not tried, for whatever role he played in slaughtering unarmed civilians.

Supporters of resuming military ties often tout Juwono Sudarsono's record as civilian defense minister, but he is allied with the uniformed officers. Mr. Sudarsono has decried the intense vilification of the military and calls anti-army media commentary the result of "too much democracy" in Indonesia.

When violence and political dissent increased in Aceh last year, Mr. Sudarsono asked permission to re-impose martial law. President Wahid denied that request, but the military went ahead and launched a brutal crackdown anyway. Since February, more than 400 people have been killed and more than 300 schools torched. The killing continued even after the government signed a peace accord with the main insurgent group on May 12. Since then, more than two dozen have been killed.

At one point, the army agreed to give up its seats in the legislature by 2004, but it now appears to have reneged on that commitment. Lt. Gen. Agus Widjoyo, chief of territorial affairs, recently called for the formation of a military "faction" in the legislature. These are not the words or actions of a military under the control of a civilian government.

A few days or weeks of American military training for officers who have spent their entire careers in a corrupt system -- and who will return to that system when their training is complete -- will not reform Jakarta's military. Nor will it encourage democracy in Indonesia. It will more likely help Indonesia's army officers become more proficient criminals.

If our goal is to reward Indonesia's government, we should maintain the military embargo until we see evidence of substantive reform. Removing a few officers isn't sufficient. The army must abandon its political role, divest its business interests and dismantle its territorial security apparatus. The US seal of approval doesn't belong on half-measures.

[Dana R. Dillon is a Southeast Asia policy analyst at the Heritage Foundation.]
 

Economy & investment

Pharmaceutical industry hit hard by economic crisis

Jakarta -- At least 87 pharmaceutical factories in Indonesia have stopped operation since the crisis began to jolt the country in the second half of 1997.

Anthony Sunaryo, chairman of the Association of pharmaceutical companies (GP Farmasi) said the country had 280 pharmaceutical factories before the crisis. "Now we have only 193 left," Anthony told the newspaper Bisnis Indonesia. He said, however, he could not confirm whether the companies had been merged with other companies or went bankrupt.

The pharmaceutical industry, like many other industries, had reeled badly under the crisis although some had managed to improve performance, he added. He said the 87 factories were mostly small and medium size companies that could not pay for the soaring prices of imported feedstock. The country's pharmaceutical industry still is heavily dependent on imports for basic materials.

Indonesia unveils privatization blueprint

Jakarta -- The Indonesian government Thursday unveiled a blueprint and timetable for a sell-off of state assets this year, including the communication giants, Telkom and Indosat.

The State Enterprise and Investment Ministry said the plan, Reform of State Enterprises 2000, was designed to generate 6.5 trillion rupiah (748 million dollars) as targetted in the April- December budget. Analysts said it was the first time the ministry had given specific percentages and deadlines for the government's privatisation process.

They said the plan was also seen as an effort to satisfy the International Monetary Fund (IMF) which is in charge of a 46 billion dollar bailout program for Indonesia. The IMF has included privatization of 150 state enterprises, staggered over 10 years, in its list of reforms. Jakarta has been accused of foot-dragging on reform and this has resulted in a two-month suspension of a 372 million dollar IMF funding tranche in April.

In a statement, the ministry said the government planned to divest a further 14 percent stake in diversified miner PT Aneka Tambang in October, and 10-35 percent of the coal firm Tambang Batu Bara Bukit Asam by at least November.

The ministry also said it was planning to divest an additional 14 percent of its stakes in Telkom and satellite operator Indosat and its entire 65 percent holding in tin miner Tambang Timah in December.

Among the other stakes to be put on the block was a 10-35 percent holding in plantation company PT Perkebunan Nusantara IV, to be sold by July.

The sale of 10-49 percent stake in pharmaceuticals firm Indofarma was planned for August, 10-49 percent of fertilizer producer Pupuk Kaltim by September, and a 10-35 percent stake in plantation firm PT Perkebunan Nusantara III by October.

The statement also said the government would divest up to 49 percent of airport manager Angkasa Pura II in July or August, 10-35 percent of pharmeceuticals firm Kimia Farma in December, and a 15-20 percent of surveyor Sucofindo in September.

"With the exception of [trading firm] Kerta Niaga, in general the privatisation will be done through IPOs or strategic sales," it said. It added the government planned to sell 100 percent of PT Kerta Niaga, but gave no further details of the company's divestment.

The ministry also said the government was prepared to divest its stakes in a number of other companies by the end of this year. This included up to 75 percent of department store Sarinah, up to 42 percent of office building Wisma Nusantara, 100 percent of PT Perhotelan Indonesia, 100 percent of fertiliser firm Pupuk Sriwijaya and 3.3 percent of Jakarta International Hotel Development.

Jakarta audit unveils more graft losses

Jakarta -- Indonesia's state audit agency said yesterday that despite government efforts to tackle graft, millions of dollars had been wasted through corruption at major state companies and agencies in the fiscal year to end-March.

In a report to parliament, the audit agency said 1.05 trillion rupiah (S$206 million) had been lost through corruption at state oil firm Pertamina over the year, while 631 billion rupiah had gone astray at the Ministry of Investment and state enterprises and 213 billion at commodity regulator Bulog. The National Family Planning Board had lost 70 billion through corruption and the central bank 56 billion, it said.

"Among the results of the audit are findings that indicate significant corruption at a majority of ministries and non- departmental bodies," the audit agency said. It said among malpractices found were fictional contracts and irregularities in procuring goods.

Last year, a PricewaterhouseCoopers audit said Pertamina lost around US$4.7 billion between 1996 and 1998 through inefficiencies, mismanagement and corruption. Similar audits of other state institutions also found there had been heavy losses due to graft during the rule of former President Suharto.

President Abdurrahman Wahid, elected in October, has promised to make fighting corruption a priority. But analysts say graft remains rife at many state institutions.

WB sympathizes with government over slow pace of reform

Jakarta -- The World Bank country director for Indonesia, Mark Baird, has apparently taken sides with President Abdurrahman Wahid over growing criticism against the government's economic policy.

Speaking at a business lunch with the Indonesian Chamber of Commerce and Industry (Kadin), Baird said most criticisms were focused on the government's weaknesses while ignoring its economic achievement.

"This political pressure has compounded the difficulties of economic policy-making, leading to slippages in implementing the reform program," Baird said during the luncheon, which International Monetary Fund (IMF) representative John R. Dodsworth had also joined.

Baird said criticism coming from demands for more economic empowerment, opportunity and accountability had outstripped the government's capacity to deliver the expected reforms. He said the newly obtained democracy had generated high expectation and increased debate on the country's economic direction.

He said in this political environment it would be unreasonable to expect the implementation of economic policies would run as smoothly as they would under the strict governance of former president Soeharto. "I often hear investors lamenting the good old days -- when policy was predictable and you knew who to talk with to fix a problem," he said.

Baird urged investors to be patient as the present uncertainty was the inevitable result of Indonesia's new democracy. He said criticisms against the government often neglected improvements in other economic fields. "Economic policy has stayed largely on track. Structural policies have been guided by the comprehensive reform program outlined in the letter of intent with the IMF," he explained. The government was maintaining a conservative budget position, while Bank Indonesia had kept monetary policy under control, he said.

Baird praised the governments of former President B.J. Habibie and his successor President Abdurrahman Wahid for having managed to stabilize Indonesia's macroeconomy. He said since the economic crisis in 1997, the government had managed to control inflation and raise the Gross Domestic Product (GDP) growth rate to over three percent last year.

However, he said, the government still needed to restore the country's investment climate, which, among other things, was tainted by deteriorating law and order, corruption cases and questionable bureaucratic quality. "Investors are looking for some indication of the government's game plan -- a strategy which provides a sense of direction to the reform effort and a way to measure its progress," he added.

Baird said the slow progress of implementing the reforms was most evident in the asset sales by the Indonesian Bank Restructuring Agency (IBRA), the privatization of state-owned enterprises and the restructuring of state banks.

The government expects to raise Rp 6.5 trillion (US$755 million) for the April-December state budget from the privatization of 10 state companies. Meanwhile, IBRA is expected to raise Rp 18.9 trillion from the sales of its assets, which total some Rp 600 trillion.

At the same forum, Dodsworth said the government should push ahead with its privatization program and the sale of IBRA's assets. "It's a little bit slow so we need to accelerate that," Dodsworth said in reference to the privatization program.

Asked whether this year's privatization could meet its target of Rp 6.5 trillion, he said the potential was there. "The minister has said he'll meet the target, so I think we have to take it on face value," he said of the optimism expressed by State Minister of Investment and State Enterprises Development Rozy Munir on the privatization program.

Dodsworth said despite the present sluggish market, the government did not need to revise the target. Commenting on the sales of IBRA assets, he said selling the assets now could help lift market sentiment and improve the value of future sales.

Kadin chairman Aburizal Bakrie also suggested the government sell IBRA assets now despite the present market condition. "Don't wait until the market improves. What if it doesn't? How are we going to pay our debts?" he said. Once the government decides to sell its assets it must act firmly on its decision, regardless of the criticism, he said.