• UK, US warn Indonesia over militias - South China Morning Post
• Militia leader hands in weapon - South China Morning Post
• UN `skeptical' of Indonesia's will to disarm militia - Agence France-Presse
• Indonesia fails to disarm militias by deadline - Straits Times
• UN frustration builds over bid to disarm gangs - South China Morning Post
• Peacekeepers brought death to militiamen's mission - Sydney Morning Herald
• 'Insulted' Guterres threatens to take over police post - Sydney Morning Herald
• Washington's patience running out - Interpress News Service
• Falintil patrol fires on militia - Sydney Morning Herald
• Floods cut off from everything but misery - Sydney Morning Herald
• Militia weapons handover, a farce ... as usual - Reuters
• Whitlam 'backed what we were doing in East Timor' - Sydney Morning Herald
• CNRT leaders form new social democratic party - Green Left Weekly
• Guarding profits in the Timor Gap - Green Left Weekly

• Gus Dur vows to reopen case - Straits Times
• Suharto's gain, Gus Dur's loss - Straits Times
• No respite for Wahid in wake of Soeharto ruling - Sydney Morning Herald
• Councillors likely to get land, cars - Jakarta Post
• Ruling creates dilemma for Wahid - South China Morning Post

• Ammunitions and M-16 rifles seized in North Maluku - Jakarta Post
• Maluku asylum seekers spend night at Swiss embassy - Agence France-Presse
• 127 families of transmigrants face uncertainty - Jakarta Post
• Muslims slaughter Christians in Ambon - Sydney Morning Herald
• Nine killed in Muslim attack in Maluku islands - Agence France-Presse
• Five injured in fresh clashes on Ambon island - Jakarta Post

• Aceh: A bloody truce - Far Eastern Economic Review
• Truce extension welcomed, civilians want role in talks - Agence France-Presse

• Order to drop probe into judges - Straits Times
• Rethink needed on what case represents - Straits Times
• Soeharto ruled unfit to stand trial - Sydney Morning Herald
• All charges against Soeharto dismissed - Jakarta Post
• Suharto son avoids jail, for now - South China Morning Post
• Police forced peasant activists - Jakarta Post
• 'Petrus' phantom assassins maybe employed again - Detik

• City set for violent protests over fuel hike - Jakarta Post
• Bondowoso Police shoot dead five attackers - Jakarta Post
• Youth group leader held for attack on US consulate - Straits Times
• New bomb rocks Kontras' office ahead of Suharto hearing - Associated Press
• Arrested army pair 'planted exchange bombs' - South China Morning Post

• Government raises fuel prices by an average of 12 percent - Jakarta Post
• Boom amid gloom - Straits Times
• Over 16 percent of Indonesian families classified as poor - Jakarta Post
• The budget dilemma - Jakarta PostSpacer

Students vow more protests

Devi Asmarani, Jakarta -- Student activists, angered by a Jakarta district court's rejection of former President Suharto's corruption charges, have vowed to step up pressure to bring him back to court with more street rallies next week.

But their movement may not carry the weight as it did two years ago, when their activism, joined by professionals and common people, helped pressure the former leader to step down.

Despite the violent showdown with the police following Thursday's verdict, most people in Jakarta were indifferent, reckoning the trial had been a farce to begin with.

Mr Suharto, who never attended the trial, was freed of all charges after a court-appointed medical team declared the 79-year-old physically and mentally unfit to stand trial. The prosecutors said they would appeal against the decision.

Mr Irfan, one of the leaders of the militant City Forum (Forkot), said his student group would gather 2,000 student protesters either on Monday or Tuesday. Armed with wooden sticks, rocks and Molotov cocktails, they will picket the Cendana Street area in central Jakarta, where the Suharto family lives.

They will not rule out hostile encounters with the police and other forms of violence, including setting up road blocks and burning vehicles belonging to the military or the police.

The planned rally next week coincided with Pancasila Day on October 1 when some 35 years ago as a young officer Mr Suharto led the crackdown on an attempted coup by the Indonesian Communist Party (PKI) members before taking over the presidency from Mr Sukarno.

The abortive coup led to a nation-wide campaign against PKI members, and the killings of many suspected communist sympathisers. "October 1 is the milestone of Mr Suharto's immense power, when he started eliminating his political enemies," Mr Irfan said.

Although the student movement appeared to have fizzled out since the early days of the reform movement in 1998, the court's decision revived the students' cause.

Having lost financial and moral support from the public, which have grown weary of protesters clogging the traffic, the student leaders now hope they could again mobilise "non-student elements".

They aim to encourage brokers at the Jakarta Stock Exchange to threaten a strike if Mr Suharto was not brought to court, as they did last year to stop then President B.J. Habibie from running in the presidential election. But, judging from other activists' cool reactions, this expectation may be too farfetched.

Even the normally-feisty former political prisoner Budiman Sudjatmiko seemed more tolerant on the issue, saying his Democratic People's Party, which four years ago was labelled a communist by the Suharto regime, had no plans to stage street protests.

Students warned against staging violent protests

Jakarta -- Police warned students on Friday against conducting more violent protests following the ugly clashes which erupted on Thursday after the South Jakarta District Court dropped corruption charges against former president Soeharto.

"I warn them for the last time ... I don't want anymore casualties. So don't push us around," Jakarta Police chief Insp. Gen. Nurfaizi said at Jakarta Police headquarters during a meeting with city and military officials.

Nurfaizi said one person, a civilian, was killed in Thursday's incident but he did not give the victim's identity or the cause of the death. He added that seven police officers were seriously injured.

Hospital records on Thursday also showed that more than 30 people were injured following the clashes involving pro- and anti- Soeharto supporters as well as the police. As of Friday afternoon, 39 people were still in police custody in connection with the clashes, Nurfaizi said.

He stressed that the police would no longer be lenient with student protesters found to be carrying or using rocks, offensive weapons, or Molotov cocktails. "In the past, we used to let them off with a warning. Not anymore," he said, stressing that those arrested would be prosecuted in court.

Friday's meeting to discuss ways of preventing or handling further violent rallies, was attended by deputy governor for administrative affairs Abdul Kahfi, Jakarta military chief of staff Brig. Gen.

Lintang Waluyo, city councillors, ulemas, and mayors from five mayoralties. Dozens of students from various universities held a peace rally at the Proclamation Monument in Central Jakarta on Friday condemning the violence of the previous day. "We demand that our friends stop these mindless acts of violence at once," one student told the crowd.

Violent clashes between pro- and anti-Soeharto supporters first broke out near the Ministry of Agriculture complex in Ragunan, South Jakarta, where the Soeharto hearing was held on Thursday. Later, they moved to the elite Menteng district in Central Jakarta as anti-Soeharto students tried to march on Soeharto's Jl. Cendana residence.

They were encouraged by the statement of President Abdurrahman Wahid who, speaking in the Venezuelan capital of Caracas a day earlier, said the police and military should not stop protesters from reaching Jl. Cendana.

Unable to penetrate the area because of the presence of thousands of Soeharto supporters and a police cordon, the students focused their protests on the intersection of Jl. Salemba and Jl. Diponegoro. The students, joined by local youths, began to check every passing vehicle, including public buses.

They were targeting military or police officers. A man with crew cut hair in his 20's was beaten and kicked by the mob first inside a bus and then dragged into the street near St. Carolus hospital. Those who did not beat him shouted: "Burn him! Burn him!" The mob subsequently spared his life and he was sent to the emergency unit of the St. Carolus Hospital.

The mob also burned a military sedan. The fate of the driver and passenger was not immediately known. A police officer on a motorbike was also dragged and beaten by the mob. They set his motorbike on fire and almost forced him into the blaze. Instead, he was also eventually sent him to the nearby hospital.

Some of the youths stayed until the early hours of Friday and only dispersed when police arrived and retook control of the area. Menteng subprecinct police chief Asst. Supt. Paulus Waterpauw said on Friday that his men arrested eight protesters at the scene.

When asked why the police had not moved into the area quicker, Waterpauw said it was not a good idea. "We couldn't come when the situation was still tense. My men could have lost their self- control and the result would have been disastrous," he told reporters.

Indonesian police attack protester

Jakarta -- In stunning TV footage, an Indonesian police officer aimed his grenade launcher into the face of a cowering protester and fired point-blank.

The protester, indignant at a court's dismissal of corruption charges against former President Suharto, was one of hundreds who had poured into rain-swept streets on Thursday.

About 100 yards from the courthouse, a line of police carrying Plexiglas shields and bamboo staves charged, with the protesters fleeing down the wide avenue.

But the attack victim inexplicably crouched on a sidewalk, covering his head with his hands. Police surrounded him, and one officer aimed a tear gas launcher into his face. The round burst in a yellowish-white flash -- the impact pitching the young man over his side.

At least 10 other officers then began beating and kicking the prostrate victim. One officer tried to beat him with another grenade launcher, which discharged and enveloped the group in a cloud of gas. Bleeding and semiconscious, the victim was taken to a hospital. It was not possible to immediately determine how badly hurt he was.

Indonesia's security forces, which formed the main pillar of Suharto's 32-year dictatorship, have a long tradition of brutality. But scenes like Thursday's had not been seen in the capital since President Abdurrahman Wahid -- the country's first freely elected leader in four decades -- assumed office a year ago.

Wahid, who is on a trip through South America, had urged on Wednesday that protesters be allowed to throw rocks at Suharto's home, adding the former leader deserved it.

Running street battles erupt after Soeharto walks

Jakarta -- Some 30 people were wounded in the capital on Thursday in clashes between anti-Soeharto and pro-Soeharto protesters and the police following the dismissal of corruption charges against the former president.

Police stated that at least one anti-Soeharto protester was killed in a clash with police personnel near the trial's venue at the Ministry of Agriculture in Ragunan, South Jakarta. But police could not identify the victim and there were no reports of any bodies being taken to the hospital. The clashes, which began near the ministry about 30 minutes before the trial got underway at 10am, continued late into the night near the private residence of Soeharto on Jl. Cendana in Central Jakarta, about 12 kilometers to the north.

A bus used by Soeharto's supporters, a military vehicle and two police motorcycles were set ablaze at separate locations in the capital by student protesters and spectators.

The demonstrators continued to rally at Megaria on Jl. Diponegoro and Salemba area late into the night. Together with locals who joined the demonstration, they beat a military soldier and a police officer, and burned the military vehicle and a police motorcycle.

As of late Thursday night, police had arrested at least 46 people in connection to the violence. All of those detained were among the group demanding the former president be jailed immediately for human rights abuses and economic crimes during his 32 years in office. During the clashes, 13 anti-Soeharto protesters, 10 pro-Soeharto protesters, three journalists were injured.

Unlike the demonstrations which surrounded the first two sessions of the Soeharto trial, police officers -- deployed at the trial's venue and in Cendana -- were quick to react to protesters. During the previous demonstrations, police showed greater patience toward the anti-Soeharto demonstrators, mostly university students from the City Forum (Forkot).

The first incident on Thursday took place around 800 meters from the trial venue when spectators on Jl. T.B. Simatupang chased and beat pro-Soeharto demonstrators who had arrived in a public minibus, which the mob torched. Jakarta Police spokesman Supt. M. Nur Usman said 10 of the Soeharto supporters were badly injured in the incident and were rushed to nearby hospitals.

The situation cooled down before approximately 1,000 anti- Soeharto protesters from Forkot and activists from the Democratic People's Party (PRD) arrived at about 1pm by foot from two separate directions. They were blocked by a cordon of some 200 police officers, who refused to allow the protesters to enter the ministry's compound.

After failed negotiations, the students began shouting and several minutes later, as the rain poured down, a number of the demonstrators pelted stones and Molotov cocktails at the police. The officers then proceeded to march on the protesters, firing tear gas and rifles to disperse the demonstrators.

The protesters fled in the face of the police charge, scattering in different directions, including some who took refuge in the homes of local residents. Sporadic fighting continued for more than three hours as the demonstrators continued to hurl stones at the police.

After the police pulled out, the demonstrators swept the area and burned a police motorcycle parked nearby, ignoring the protests of residents. Two soldiers in uniform riding a motorcycle were stopped by the demonstrators, some of whom attempted to grab the soldiers' rifles. The soldiers fired warning shots to disperse the crowd.

Shortly after the trial ended with all charges against Soeharto being dismissed, a similar scene began to play out in Cendana. Soeharto supporters arrived in the area at about 2pm aboard 16 minibuses, and groups of anti-Soeharto protesters began appearing at dusk.

Some 500 anti-Soeharto protesters were greeted with rocks and Molotov cocktails hurled by the Soeharto supporters near the fountain on Jl. Teuku Umar, about 200 meters from the former president's residence.

When the students fought back, the pro-Soeharto group retreated behind the police lines, which had been established to block the road to Jl. Cendana.

The anti-Soeharto demonstrators appeared ready to end their rally and depart when hundreds of police officers began pursuing them. The demonstrators attempted to escape by running up the small Jl. Padalarang, only to find their way blocked by the football field-sized Lembang pond.

The situation quickly spiraled out of control as dozens of police officers moved in, arbitrarily firing tear gas into the demonstrators. Several of the demonstrators attempted to jump over the gates surrounding two homes near the lake.

As the situation deteriorated, some officers were seen angrily shouting, ignoring their commanders' orders to stop firing. Several police officers became so enraged they hurled their batons at the houses.

At least 30 demonstrators were arrested and taken away in a police truck. Ten couples who were parked by the lake became caught up in the scene and jumped over a fence into the yard of one of the houses before being taken into custody. They were later released.

Farmers flood streets of Surabaya

Budi Sugiharto/FW, Surabaya -- Thousands farmers from all over East Javanese regional districts poured on to the streets in Surabaya, capital city of East Java province. They have been holding a rally on Wednesday demanding the East Java regional government to pay more attention to their declining standard of living.

Led by the Coordinator of the East Java Farmer Organization Union chapter, Syamsul Arifin and supported by farmers from Gresik, Bondowoso, Lumajang, Situbondo, Pasuruan, Madura. A number of farmers representatives from different province also lend their solidarity. Together they have been demanding a reform on Agrarian Legislation.

They argued that the current Agrarian Legislation only favors of land owner's interest. Apart from reform on Agrarian Legislation, they also pleaded to the government not to use violence and intimidation to settle land dispute cases, a practice which had been a trade mark on Suharto's New Order period.

One of the orators also asked for a better welfare security and justice. The person believes that many farmers across Indonesia have not had the privilege to most basic human necessities. The orator emphasized the struggles of farmers everywhere who often could not taste the fruit of their hard work. "Whenever there's a hike in the price of rice, it doesn't reflect on the live of farmers," he said.

The long march started from the central landmark in this city. Then, they walked to East Java Provincial Legislative Council building 5 km away. Upon their arrival in the council building, they occupied the building square as well as the lobby.

Seven university students who went with the action, presented a theatrical show of the suffering life of farmers. They brought effigy made from straws and dipped themselves into the fish pond which placed in the council square.

Thousands descend on West Java parliament

MMI Ahyani/GB, Bandung -- Thousands of peasants have descended on the provincial parliament in Bandung, the capital of West Java. They joined hundreds of textile workers occupying the building. The peasants protested their fate at the hands of corrupt government officials and institutions which have impoverished them and demanded the parliament be disbursed.

Despite pelting rain, the thousands of peasants and factory workers were determined to hold orations and generally draw the attention of Councilors to their cause. The factory workers demanded their minimum wages be lifted to the level prescribed for the Jakarta area.

According to the government's new minimum wage legislation, West Java workers receive less than their counterparts in Jakarta but more than other areas where the cost of living is lower.

Ari Wahab, head of the Central Leader's Council of the West Java Peasants' Union, the current provincial government is not aspirative or responsive towards the lower strata of society. He said it was ironic that West Java, famous for its agriculture was seeing its land increasingly seized, sometimes with little or no consultation with the owners, and turned over to industry.

The protesters, therefore, gathered to demand the prioritisation of peasants' land rights. They also protested noisily the current state of the State Logistics Agency (Bulog) which handles the purchase and distribution of rice for national consumption.

They said the Agency was not fulfilling its proper function, namely, protecting peasants' welfare through monitoring rice prices. Rather, the Agency was continuing to be treated like a money machine protecting the political interests of the government, as it had done under the fascist regime of former President Suharto.

They further accused Bulog of collaborating with the National Development Planning Agency (Bappenas) and the World Bank to import low quality rice the quality of livestock feed to sell at low prices within Indonesia. This caused the price of their produce to fall. The protesters demanded the government raise tariffs on imported rice to 150%.

Students commemorate slaying at Semanggi

Lukmanul Hakim/Hendra, Jakarta -- On 24 September 1999, five students were shot dead in the Semanggi district of the Indonesian capital Jakarta by the military while protesting the proposed implementation of special military powers. One of those who fell, Yun Hap, was commemorated today, 25 September, by tens of students from the University of Indonesia who demanded the killers be brought to justice.

The incident is known within Indonesia as Semanggi II. One year ago students clashed violently with military personnel attempting to block their road as they gathered in Semanggi.

After placing flowers on Yun Hap's grave, students also placed flowers at the site of the tragedy and then staged a rally at the Attorney General's office taking photos of Yun Hap with them.

Students participating in the rally were mainly from the Indonesian University Students Action Front and Students for Human Rights Forum. They dressed in their characteristic yellow almamater jackets.

"We don't believe in the military trial. We have to use another method by staging a civil trial or a Human Rights trial," said Waway, a coordinator of the rally disillusioned with the investigations and trial staged by the military after the incident. Protesters were inhibited from entering the grounds of the Attorney General's office. The main gate was heavily bolted.

The students gathered to also demand thorough investigations into Human Rights violation cases perpetrated by the military and demanded they be held accountable before Indonesian law, not just subject to military trials.

At 3.50pm, several students jumped the front fence of the Attorney General's office while others were staging an open forum of speeches outside main gate.

The protesters also rejected the amendment of article 28 (1) 45 of the Constitution which inhibits the trials of Human Rights violation cases -- the so-called retrospective clause. Protestors demanded to meet with the Attorney General, Marzuki Darusman, but were turned away because he was apparently not in his office.

Students protest fuel price hike

Makassar -- Around 200 students took to the streets here on Monday protesting the fuel price hike, effective next month. The students, from the Student Movement for People, said the policy was not popular and would "kill the people with low incomes." The rally started at 10am local time, congesting the traffic on Jl. Urip Sumohardjo thoroughfare. The students burned used car tires and held orations before marching to the provincial legislative council.

Spokesman for the students Ismail M Said said that it was hard to accept the official reasons to increase the fuel price. "In general the people have yet to recover from the economic crisis. The government takes people's real condition for granted." "The people have to pay high prices for natural resources from their own homeland, while they should enjoy them for free," Ismail said.

The students' anger over the fuel price hike issue almost exploded at the legislative council building where the councillors were holding a plenary session. A quarrel between deputy speaker of the council Kallo Bandoso and the students almost led to violence.

Kallo said the students were welcome to enter the convention room, but asked them not to disturb the session. "You are welcome to become listeners. If you cannot restrain yourselves from making noise we will ask the security guards to expel you." One of the students was apparently uneasy with Kallo's statements and said they were not afraid of such threats.

The students finally agreed to leave and meet with a separate team. They said they would resist the government policy.
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East Timor

UK, US warn Indonesia over militias

Associated Press at the United Nations -- Britain joined the United States in warning overnight that Indonesia risked losing foreign aid if it doesn't immediately disarm militias and arrest those responsible for killing UN aid workers and wreaking havoc in Timorese refugee camps.

British Ambassador Jeremy Greenstock said Britain would be hard- pressed to continue extending support to Indonesia at an upcoming donor meeting in Tokyo if Indonesia fails to make progress on reining in the militias.

"At the most between now and 12 October, there may be time to show that that real progress has begun," Mr Greenstock told the Security Council. "But we do not believe ... that it has yet begun."

US Defence Secretary William Cohen warned during an official visit to Jakarta earlier this month that Indonesia risked losing financial assistance if it didn't move to break up the militias.

Deputy US Ambassador Nancy Soderberg echoed that warning overnight, saying the attitude of the United States and other donors at the Tokyo donor meeting "will certainly be influenced by the government of Indonesia's actions in the next couple of weeks".

The open Security Council meeting came after a two-day security crackdown by Indonesian authorities to disarm the militias netted just 21 weapons -- all of which were voluntarily surrendered.

The UN administrator for East Timor, Sergio Vieira de Mello, told ambassadors that the militias need not only be disarmed, but broken up entirely and their leaders arrested. "Regrettably, I remain skeptical that current activities will achieve this goal," Mr de Mello said. "Where resolution and a certain degree of ruthlessness would seem to be required, we are witnessing hesitation and prevarication."

In particular, he noted a disarmament ceremony last Sunday in West Timor that was disrupted when militia leader Eurico Guterres appeared with his supporters and reclaimed some of the weapons that had been handed over.

Mr De Mello said it was also galling that while there had been arrests in the September 5 slaying of a Timorese militia leader, there had been no arrests made in the deaths a day later in the West Timor town of Atambua of three international staffers of the UN High Commissioner for Refugees.

"There could hardly be a more eloquent demonstration of Indonesia's current inability to deal effectively with the problem," Mr de Mello said. "This is impunity running rampant."

Indonesian Ambassador Marakim Wibisono bristled at such criticism, saying such comments were "most unfortunate and ill- advised". He said the three slain UNHCR workers had ignored Indonesian warnings to leave Atambua "and hence could not be saved".

And he said the Indonesians had collected far more weapons than had been reported -- even predating the announced start on Sunday of a voluntary collection period that has been followed by forcible disarmament.

"Every single one of these weapons could have maimed, injured or killed innocent civilians," Mr Wibisono said. "Any shortcoming of the handover ceremony should not deflect and cannot deflect from the basic indisputable facts that a large quantity of weapons were surrendered to the police on that day."

Militia leader hands in weapon

Associated Press in Kupang -- A notorious militia leader surrendered a handgun to police on Saturday after Indonesia's president threatened to have him arrested if he refused.

Eurico Guterres, who commands the Aitarak or "Thorn" gang, also vowed to abandon violence in his fight against independence for East Timor. "I will continue my struggle in politics. But I promise, I will no longer use firearms," Guterres said.

The largely symbolic handover came as Indonesia's military admitted that many gang members in Indonesian West Timor were hiding weapons in defiance of a weeklong campaign to disarm them. Later on Saturday, a squad of more than 20 armed police officers raided and searched Gutteres's house but found only a hunting knife.

Indonesia is under strong international pressure to disarm the militias after gang members murdered three UN aid workers in West Timor on September 6. Even so, Indonesian security forces said they had netted only 85 automatic rifles and pistols along with about 1,000 crude homemade guns plus ammunition and grenades.

Regional military commander Major General Kiki Syahnakri, admitted many militiamen had stashed their weapons. "They will face stern action. We will find them," local newspapers quoted him as saying.

Guterres voluntarily handed in a pistol and 74 bullets at a police station in West Timor's capital, Kupang. Despite his pledge of peace, he admitted that he possessed more guns.

UN `skeptical' of Indonesia's will to disarm militia

United Nations -- The UN official running East Timor, Sergio Vieira de Mello, reiterated on Friday that he was "skeptical" about the ability of the Indonesian army to disband militias in West Timor.

"Where resolution and a certain degree of ruthlessness would seem to be required, we are witnessing hesitation and prevarication," he told the UN Security Council in a public meeting.

Indonesia said on Thursday that it had begun to forcibly disarm the militias, after a phase of voluntary disarmament earlier this week. "It has been started. Everybody is on the ground," Lieutenant Joseph Pereira, the head of military intelligence in the West Timorese border town of Atambua, told AFP by phone. "If they refuse to give up their weapons we will force them, and if they fight us we will take them on," he said.

But Vieira de Mello said "I remain skeptical that current activities will achieve this goal." He recalled that after a disarmament ceremony on Sunday in the West Timor border town of Atambua, militias reclaimed the weapons they had earlier surrendered.

The militas were led by Eurico Guterres, whom Vieira de Mello described as "a well-known suspect of crimes against humanity." The ceremony was staged by the Indonesian army in the presence of Vice President Megawati Sukarnoputri.

Vieira de Mello recalled that, after Sukarnoputri and other Indonesian officials had left, a small delegation which he had sent to the ceremony was threatened by a pro-militia crowd.

He said that before the ceremony, an Indonesian army officer told the delegation that there were still no suspects in the case of three UN relief workers who were murdered in Atambua earlier this month. The murder "happened in broad daylight in the presence of 10 Indonesian police officers," Vieira de Mello said. "There could hardly be a more eloquent demonstration of Indonesia's current inability -- or refusal -- to deal effectively with the problem," he added.

"This is impunity running rampant. What is required is a coordinated, integrated and comprehensive strategy on the part of the Indonesian security forces, together with the necessary will, to hunt down and break up the militias and bring their leaders to justice.

He said the Indonesian authorities should draw "a clear distinction between well-meaning pro-autonomy representatives and thugs such as Eurico Guterres who should be behind bars instead of being invited to attend meetings with high-level Indonesian officials."

Indonesia fails to disarm militias by deadline

Derwin Pereira, Jakarta -- Indonesia yesterday failed to meet its deadline to disarm Timorese militias, despite increasing international pressure on Jakarta to rein in the army gangs.

Police sources in the border town of Atambua said that security forces were still carrying out shack-to-shack searches for weapons using metal detectors.

"We have not recovered all the weapons," a police officer there, who declined to be named, told The Straits Times. "So far it is voluntary. We will continue searching for the arms but we won't apply force unless the government asks us to do so."

The military indicated earlier that it would arrest the militiamen and confiscate their weapons from yesterday if they ignored Wednesday's deadline for a voluntary handover.

Reports suggested that military and police personnel were already beginning to crack down on the militiamen. But sources in Atambua said this would not happen until today after the local military command received its orders from Jakarta. Several ministers yesterday met chief Security Minister Bambang Yudhoyono to discuss the problem.

The first phase of the disarmament drive, during which the militiamen were ordered to surrender their arms voluntarily, ended on Wednesday. The head of the United Nations mission in East Timor, Mr Sergio Vieira de Mello, described the first phase as "pathetic".

Meanwhile, the Atambua police source said that security personnel had not experienced any problems seizing the weapons from the militiamen. "We would prefer if they handed in the guns themselves," he added.

Militia leader Joao Tavares, who oversaw the handover of six guns in Atambua, told reporters: "We do not have any more weapons. "If people do not believe this, just search the refugee camps. By all means, frisk us. They can start with me."

The authorities say the militias have handed in more than 1,000 guns, but they are mostly crude, handmade weapons. Sources said the military search had yet to recover more modern makes, such as AK-47s, which are reportedly used by the notorious Aitarak militia that is responsible for much of the violence in the area.

General Bambang warned that the militias faced "strong action" if they did not relinquish their weapons. "If there are any who refuse to abide by the government's request to give up their arms, the police will carry out their legal duties," he said. He did not define what type of action would be taken, but observers said he was referring to a threat to use force.

Yet it is hard to envisage the military using force against pro- Jakarta militias which they backed for years. Several analysts believe that the threat of force, which is being echoed by the police and military commanders down the line, is more for show than anything else.

And even if Jakarta were to seize several weapons now, it is likely that militiamen would still receive arms supplies through another military channel that is willing to back them secretly.

UN frustration builds over bid to disarm gangs

Vaudine England and Associated Press in Kupang -- Two days after the start of what was supposed to be a campaign to forcibly disarm East Timorese militiamen in West Timor, Indonesian police said yesterday they had netted only 21 weapons, all of which were surrendered voluntarily.

In three militia-controlled refugee camps around Kupang, the West Timor capital, hundreds of armed police officers and soldiers searched for weapons through makeshift huts and dilapidated tents. "We found nothing," said one officer. United Nations officials dismissed the effort as "a real disappointment".

Indonesia is under intense international pressure to disband the gangs after they murdered three foreign United Nations aid workers in the West Timor border town of Atambua on September 6. The Government promised the world body that security forces would forcibly disarm the militias after a deadline for them to surrender their weapons expired.

Indonesia's UN Ambassador, Makarim Wibisono, said in a letter to the Security Council that 34 standard weapons, 888 home-made weapons, four grenades and 1,000 rounds of ammunition had been handed over during the first, voluntary phase of the disarmament process.

UN officials have accused elements of the security forces of covertly training and arming the militias and directing their activities. "The level of these voluntary surrenders of weapons has really been quite pathetic," said Peter Kessler, a spokesman for the UN High Commissioner for Refugees, in Dili, East Timor. "That's a real disappointment."

The UN chief in East Timor, Sergio Vieira de Mello, spoke to the UN Security Council in New York yesterday in what a colleague described as "a state of rage". Two of his senior advisers were terrorised by militiamen on Sunday when they attempted to observe a voluntary disarmament ceremony in Atambua.

Making the situation yet more frustrating for the international community -- which is threatening to cut Indonesia's budget support due to the West Timor transgressions -- is the United Nations' inability to verify whether Indonesia is moving against the militias seriously.

"The UN is now in a ridiculous position," a Jakarta-based diplomat said. "They've given Indonesia all these objectives but they have no way in which to verify if or when those demands are met. We are reduced to guessing, yet again, if the Indonesians are lying or not."

Part of the problem is a lack of forethought, some diplomats argue. UN outrage at the September 6 murders was so intense that pressure was applied immediately with little planning. But also part of the problem is the situation on the ground in West Timor, which Jakarta seems unable or unwilling to control.

There are no international personnel in West Timor, and their continued absence is part of the pressure being applied on Jakarta. UN aid officials say they will not return to aid the 120,000 East Timorese refugees in West Timor until it is safe, adding that any troubles or deaths caused by such lack of care will be laid at Jakarta's door.

When refugees at the Tuapukan camp demanded that the weapons search there be covered by journalists, police decided to delay the search.

Based on past experience, observers say the militia will be hiding the modern arsenal they are known to own in secure caches until the current flurry of international outrage blows over.

The verification problem leaves it wide open for the Indonesian Government to avoid the direct confrontation with militia gangs which the UN had hoped to see. Some ministers are trying, but police and army willingness to implement orders remains in serious doubt.

Peacekeepers brought death to militiamen's mission

Mark Dodd, Suai -- Dead men tell no tales, according to the adage, but the body of a dead militiaman can reveal a bounty of information. For the present he is an unknown warrior who was among a group ambushed by New Zealand peacekeepers.

Dressed in black Indonesian military fatigues, he was armed with a 1960s vintage semi-automatic rifle and carrying enough ammunition to start a small war -- seven 20-round magazines, 204 loose rounds and five grenades. New Zealand intelligence officers found a spare pair of boots in his pack, a change of footwear to throw off trackers.

But his mission was a lost cause. His last days were spent on the run, tired and hungry. He knew he and his 14 colleagues had been followed since August 10 when his group shot and killed a Nepalese peacekeeper, Private Deviran Jaisai, near Beco village.

Lieutenant Colonel Martin Dransfield, commander of the New Zealand battalion based in Suai in East Timor's south, said the militiaman was part of a force of up to 50 that crossed into East Timor about July 23.

Alert villagers reported sightings of militia moving east. Then came reports of thefts from household vegetable plots and cattle in the southern hinterland. On August 9 a woman living near Beco, about 20 kilometres west of Suai, told the New Zealand peacekeepers she had been briefly taken prisoner by a large group of heavily armed militia and then released.

Peacekeepers were sent to the scene and it was during this operation that the first fatal exchange of fire took place between militia members who had now split up and a Nepalese platoon at Zumulai in the south.

By August 16, the main militia group had crossed into the Portuguese battalion area of operations near Alas. It had become apparent to the militia that villagers would report their presence to UN peacekeepers.

A sweep by Portuguese troops working south foiled further bids by the militia to move north-east into the sanctuary of highlands. "The Portuguese battalion operation has proved there is no soft centre to the country," the new Australian commander of Sector West, Brigadier Ken Gillespie, told the Herald.

With supplies running low, their mission in disarray, and UN peacekeepers in hot pursuit, the militia had no option but to head back into the sanctuary of Indonesian West Timor.

Aware of the perils of making contact with hostile villagers, the armed gang broke into smaller parties. Their mistake was to retrace their original steps along the same dry watercourses and jungle trails they had used to infiltrate East Timor. This time the New Zealanders had observation posts along likely crossing points.

On Tuesday morning a group of 15 militiamen were seen picking their way west across a riverbed. At 11.53am the first of the three armed men came into view of the waiting New Zealanders. From 20 metres, the lead scout in the group was felled with a hail of shots.

No peacekeepers were hurt in the brief exchange that followed and a Fijian border observation post later reported seeing 13 militiamen crossing back into West Timor. They were not looking for a fight, the Fijians said.

'Insulted' Guterres threatens to take over police post

Lindsay Murdoch, Jakarta -- Eurico Guterres, the swaggering militia leader blamed for atrocities in East and West Timor who continues to thumb his nose at authorities, has threatened to mobilise his followers against Indonesia's regional police post.

Guterres led a militia rampage through police headquarters in the West Timor town of Atambua on Sunday, claiming insult at his exclusion from a visit there by Indonesia's Vice-President, Ms Megawati Sukarnoputri.

Two senior United Nations staff attending a ceremony to mark the handover of militia weapons were bundled into a room under police protection and later said they feared for their lives.

"I give a one-week deadline [for the police chief] to explain why I had been taken to the intelligence room so that I couldn't meet Megawati," Guterres, 29, was quoted as saying yesterday by the official Antara news agency.

If his demand were ignored he would mobilise his followers to occupy the police station in Kupang, West Timor's capital. "The security authorities think I have no access to Megawati," Guterres said. "The truth is even now I can get hold of her by mobile phone."

Of all the crimes against humanity committed in East Timor last year, Guterres's were the most public. On April 17 senior Indonesian police and military officers in Dili and foreign journalists were among dozens of people who saw Guterres whipping his militia thugs into a frenzy outside the then offices of the East Timor governor on Dili's waterfront.

Cameras recorded Guterres exhorting his men to declare war on the pro-independence Carrascalao family. "Capture and kill them all if necessary," Guterres urged his men, who had been trucked in armed with home-made rifles, machetes and iron bars. Within an hour about 100 of Guterres's militia had stormed the house of Mr Manuel Carrascalao and killed 12 people.

The attack is one of five in East Timor last year that are the focus of an investigation by Indonesia's Attorney-General, but Guterres is not on the list of 19 people named last month as suspects.

The former Dili gang leader is an important person in Indonesia. Too important, it seems, to face prosecution. Guterres is a youth wing leader of Ms Megawati's political party, and has been seen leading at least one party rally in Jakarta.

When three senior Indonesian ministers flew to Bali this month to offer an island to resettle refugees living in camps in West Timor, Guterres was among 17 militia leaders invited to attend -- on a day he was supposed to face questioning by prosecutors in Jakarta. He claimed he never received a summons.

Guterres lives in Kupang, where he is always flanked by bodyguards and is driven around in a four-wheel drive with tinted windows. He appears to have plenty of money to fly around Indonesia, often staying at a three-star hotel in Jakarta, but does not have a job. Guterres says disarming the militias is a waste of time because "unless all the stores are closed don't blame us if home-made weapons show up".

Washington's patience running out

Washington -- Senior US government officials are actively considering steps, including moving to postpone next month's donors' meeting for Indonesia, if the government of President Abdurrahman Wahid does not follow through on a pledge to disarm militia forces in West Timor and take strong measures to improve a deteriorating human-rights situation throughout the archipelago.

US officials, led by Pentagon chief William Cohen who visited Jakarta last week, have warned their Indonesian counterparts in unusually blunt language that they are prepared to cut off all but humanitarian aid if certain minimal steps are not taken right away, particularly in West Timor where army-backed militia killed three UN relief workers during a rampage earlier this month.

As Cohen was speaking, the Pentagon confirmed that it had suspended military-to-military ties with Indonesia just five months after they had resumed.

The murders prompted the UN High Commissioner for Refugees (UNHCR) to withdraw all 400 UN staff from West Timor, leaving some 120,000 East Timorese, who were forced to flee there last year, at the mercy of the militias and their army sponsors. Red Cross officials who have remained in the camps warned this week that food would run short by the end of the month in the absence of more UN relief.

Indonesian authorities, who this week said they had arrested six militia members in connection with the killings, have promised to disarm and disband the militias if they have not voluntarily turned in their weapons by next Monday, September 25.

That pledge, which was made to the UN Security Council this week, was repeated to US officials by Wahid's coordinating minister for political and security affairs, Bambong Yudhoyono, who flew directly to Washington from New York for high-level talks.

But whether Jakarta will actually follow through remains subject to serious doubt among US officials here who see both Wahid and Yudhoyono as well-intentioned but unable to exercise effective control over local military commanders.

"It's not even clear if the top brass in Jakarta really have control over their own army," said one administration official who added that the formal chain of command within the military appears to have broken down in the wake of last year's UN intervention in East Timor after the militias, with military support, virtually razed the former Portuguese colony.

In addition to disarming the militias and prosecuting those responsible for the murders of the UN staff, Washington is demanding that Indonesia permit the UN Security Council to send a mission to West Timor to assess the general security situation in West Timor and permit the East Timorese there to return home.

"We look for results, not just rhetoric," said a State Department spokesman who noted the government has long promised to disarm the militias without following up. "We're encouraged that the government has for the first time set a timetable for dealing with the militias."

Indonesia, which has yet to recover from Asia's devastating financial crisis in 1997-98, is particularly dependent on external aid at the moment, so the threat of an aid suspension, which was first raised by World Bank President James Wolfensohn in a letter to Wahid shortly after the militia murders, is seen as a major threat. The Bank convenes and chairs the meeting of the Consultative Group on Indonesia (CGI), where both multilateral and bilateral donors pledge assistance for the coming year.

"If that didn't get their attention, nothing will," said one US official. "I would ask you to do your utmost to stop the violence before any more innocent lives are lost," Wolfensohn wrote in a letter delivered to Wahid, who was in New York for the UN's Millennium Summit 10 days ago.

Adding that he hoped to be report to the donors that the violence had ended and that the refugees were being permitted to return to East Timor, Wolfensohn noted that "[this] issue is being watched closely by the international community."

The letter was leaked to the Washington Post, and Bank officials confirmed the accuracy of the quotations. The Bank Friday sent out formal invitations to the CGI, which is scheduled for October 18-19 in Tokyo, but there is no certainty that it will take place then. If the army fails to move decisively against the militias after Monday, the Clinton administration is likely to try to put off the meeting, although European donors and Japan are more reluctant to take such strong action, according to knowledgeable sources.

For his part, Cohen, who has defended a rapprochement between the Pentagon and the Indonesian army since last May, was unusually direct in his remarks. "Failure [to disband the militias]," he warned last weekend, "will have consequences for Jakarta's relations with the international community and it could in fact jeopardize continued economic assistance."

Several activist groups and the East Timorese government, which generally has pursued a conciliatory policy toward Indonesia since Jakarta's withdrawal one year ago, already are urging a delay in the CGI meeting.

On September 12, the National Council of Timorese Resistance (CNRT) called for putting it off until Jakarta dismantles the militias and arrests all those responsible for the violence there and for recent infiltrations into East Timor, and permits East Timorese in West Timor to return home.

New York-based Human Rights Watch (HRW) added its voice on September 20, insisting that the CGI delay its meeting until specific conditions are met; among them, an independent investigation into the killing of the UN staff; clear steps toward disbanding the militia "in a way that does not simply export the thuggery to another location"; and the arrests and beginning of trials against 19 officers and militia leaders identified last month by the Attorney-General as suspects in last year's rampage in East Timor.

"We've had enough promises," said Sidney Jones, HRW's Asia director and an Indonesia expert in her own right, "Now we want results." While Timor is currently the focus of US and activist concern, continuing violence elsewhere in Indonesia, particularly recent high-profile killings in restive Aceh province, an important oil- and gas-producing region, has also become worrisome.

Last month, a US-based and well-respected human-rights activist, Jafar Siddiq disappeared in Medan in northern Sumatra. His badly mutilated body turned up with those of four other victims two weeks ago under circumstances which activists here believe implicate the security forces.

On September 16, a prominent academic and university rector, Safwan Idris, was assassinated at his home by gunmen who, according to still unconfirmed reports, were linked to the Mobile Brigade police forces in Aceh. Idris, a scholar on Islam, had served on an independent commission set up by the government to investigate past atrocities and abuses by the military in Aceh and was considered a leading candidate for Aceh's governorship. No arrests have been reported.

Falintil patrol fires on militia

Mark Dodd, Dili -- Falintil guerillas, acting as scouts for Portuguese peacekeepers, have for the first time opened fire on suspected militia members conducting cross-border raids from West Timor.

A Portuguese military spokesman, Captain Pedro Dias, confirmed yesterday that Falintil guerillas accompanying a patrol of Portuguese paratroops on a security sweep near the southern hamlet of Alas opened fire on Saturday after a militiaman was sighted raising his rifle.

In a gunfight yesterday, New Zealand peacekeepers shot dead a militia member south-west of Kulit, eight kilometres from the border. The shooting followed the sighting of a group of 15 heavily armed militiamen earlier in the day, a UN spokesman said.

Captain Mick Tafe said the group was well armed and equipped. Australian and New Zealand helicopters were late yesterday helping to track the other militia members.

In the clash near Alas, several hundred rounds of ammunition were fired in a 15-minute burst when the heavily armed Portuguese patrol and three accompanying Falintil scouts spotted three armed militiamen in dense bush. No shots were returned by the militia.

The incident was captured on video by the documentary-maker Max Stahl, who achieved fame with his footage of the 1991 Santa Cruz cemetery massacre. The video clearly shows three Falintil guerillas wearing Portuguese military fatigues and armed with an American M-16 and an Indonesian 7.62mm Beretta assault rifle and SS-1 -- probably captured weapons.

Moments before shots were fired, Falintil scouts are shown pointing to intricately camouflaged hideouts and the smouldering remains of a campfire used by a group of suspected militia estimated to number between seven and 15, being tracked by the Portuguese paratroops.

"The operation is still going on," Captain Dias said yesterday. "The aim is to get the militia groups to surrender. We are still tracking these groups."

Falintil comprises about 1,200 armed fighters based in a UN- supervised cantonment at their mountain headquarters at Aileu, about 48 kilometres south of Dili. They have been strongly lobbying to be allowed a more active role in counter-insurgency operations against the militia, a role the Portuguese command now appears to endorse. Many Falintil veterans speak fluent Portuguese and once served in the Portuguese colonial army in East Timor.

Australian commanders are more ambivalent about cooperation with Falintil. Australian policy is that Falintil be deployed as liaison officers but be kept away from possible combat patrols. The Australian peacekeepers rely on tip-offs from locals about militia crossings from Indonesian West Timor, but the information is often too old to be of use for quick follow-up operations.The Falintil fighters' bushcraft and tracking skills are legendary.

The UN spokeswoman in Dili, Ms Barbara Reis, said yesterday that under new guidelines approved by the United Nations Security Council, Falintil guerillas were allowed to patrol with UN peacekeepers and if necessary use their personal weapons if threatened.

Floods cut off from everything but misery

Mark Dodd, Oecussi -- It is the dry season and the villagers of Malelat, a remote collection of thatched huts amid parched mountains, are discussing an impending problem.

The unfinished concrete bridge across the watercourse dividing the community must be repaired before the monsoon rains at the end of the year, otherwise Maletat will be cut off from the nearest town of any size, Passabe.

Four hours walking distance away, Passabe and its 3,300 people face a similar problem. Here, in East Timor's enclave of Oecussi, set into the northern coast of Indonesia's West Timor, there are many layers of isolation.

The enclave's own isolation from the main part of East Timor was supposed to end with agreement on an overland corridor through West Timor that was signed in February by the head of the United Nations Transitional Administration in East Timor, Mr Sergio Vieira de Mello, and the Indonesian President, Mr Abdurrahman Wahid. But negotiations stalled, and the issue seems to have been shelved by the UN. Oecussi's 42,000 people remain isolated.

Militia violence and turmoil in refugee camps in West Timor have thwarted hopes of a secure land route for the six-hour drive to Dili.

The result has been the first protests against UNTAET. On Monday and Tuesday last week, about 150 people gathered outside the UN offices in Oecussi to demand a regular passenger ferry service to Dili.

Unlike UN staff and aid workers who are entitled to use the daily UNTAET flights to Dili, local people have to travel in the damp cargo hold of privately-run barges ferrying relief supplies to Oecussi.

The informal passenger service is provided free by the ships' Australian owners who sympathise with the plight of the locals. But even this small concession is likely to stop because UN officials have told barge operators to stop taking passengers because the vessels do not have ferry licences, and lack proper safety equipment and toilets.

Angered at what they perceive as UN procrastination and a reluctance of many larger aid agencies to go near the border because of militia threats, some Oecussian young people are increasingly disenchanted, and banding to form self-help groups.

"I think a lot of NGOs and international organisations are too scared to go close to the border," said volunteer Mr Eddie Pina, an East Timorese returned from living in Perth. "It's 5.30pm, so UNTAET staff are now in the restaurants, drinking their beer."

Mr Pina had just returned from delivering supplies to a remote border community. "The fastest way to get these people material such as clothes and food is for us to do it ourselves," he said. "None of us are getting paid. This time we took rice, a lot of baby food, some books ... but mainly clothing and rice."

Border tensions with Indonesia have led to shortages of fuel, groceries and other necessities and higher prices for Oecussi's impoverished population. Food scarcities now force many villagers living near the border to make a perilous journey into militia- controlled West Timor to scavenge or barter.

"There's been a bit of informal trade and we've had instances of people crossing from East to West who have not returned," said Senior Sergeant John Lehane, from Perth, who has been serving with UN civilian police in Oecussi for four months. "We've opened a missing persons file."

Based at Passabe, Sergeant Lehane said: "The crops are really suffering because of this dry season. Wells are drying up and there are more cases of TB and malaria here than in Oecussi [town]."

Militia weapons handover, a farce ... as usual

Dili -- The head of the UN mission in East Timor on Monday branded Indonesian attempts to disarm pro-Jakarta militias as "pathetic" after two UN observers fled a militia riot at a West Timor police station.

Indonesia's top security minister, Susilo Bambang Yudhoyono, said on Monday the East Timorese militias terrorising West Timor have until Wednesday to give up their guns or police and soldiers would take them by force.

But UN mission chief Sergio Vieira de Mello told reporters in Dili Sunday's riot after a weapons handover in the West Timor town of Atambua attended by Vice-President Megawati Sukarnoputri proved only tough action would work against the militias.

"I personally never took the ... persuasive phase seriously," he said. "I do not believe that the militia will voluntarily surrender their weapons -- and if they did, they would probably surrender the old rotten ones and keep the modern ones. What happened yesterday was pretty pathetic but not a surprise."

Rampaging militiamen slaughtered three foreign UN aid workers in Atambua three weeks ago, outraging the international community and stoking demands for Indonesia to disarm and disband the gangs.

Vieira de Mello said the UN observers fled to East Timor under heavy Indonesian military escort after followers of notorious militia leader Eurico Guterres rioted at the handover at the Atambua police station, many taking their weapons back. The police did nothing to stop the rioting, but locked the UN pair in a room inside the station for their own protection.

Guterres, who holds a key security position with Megawati's own party, abused police and kicked over chairs and furniture after being told Megawati and senior government officials had left without meeting him.

Several of his supporters made threats to the police about the safety of the two UN observers. "The mere fact that despite the presence of Vice-President Megawati in town, of the coordinating minister for security and political affairs [Yudhoyono] and senior TNI [military] and POLRI [police] officials, Mr Guterres could perform in his usual manner at the very headquarters of the Indonesian police in Atambua casts doubt on the ability of the Indonesian authorities to bring the militia under control," Vieira de Mello said.

Indonesia's plan is to persuade the militias to give up their weapons, followed by what it calls a "repressive" phase of enforcement from Thursday. "After that, any possession of weapons will face legal sanctions," Yudhoyono said, adding security forces would begin seizing weapons on Thursday.

Some East Timorese militiamen have started handing over weapons, in a move Jakarta hopes will help calm international anger over the murder of the UN aid workers.

The United Nations Security Council has demanded the militias be disarmed and disbanded and the United States has warned desperately needed aid could be at risk if Indonesia's wayward military did not bring the gangs under control.

Vieira de Mello said the real test of Indonesia's credibility would be what action it takes to break up the militias. "I'll be briefing the [UN] security council on Friday and by then we shall have a clearer idea on whether repression has been more effective, as I always thought, than persuasion."

[An Associated Press report on the same day said that no more weapons had been surrendered since September 24. A gang member, who spoke on condition of anonymity told AP that "Some of us have fled to the hills with our guns" -- James Balowski.]

Whitlam 'backed what we were doing in East Timor'

Lindsay Murdoch -- The Whitlam Government gave Jakarta every indication that Australia favoured Indonesia's 1975 invasion of East Timor, according to Indonesia's former foreign minister, Mr Ali Alatas. He says Australia felt East and West Timor shared a common race and culture, so "it would be better for East Timor to join Indonesia".

At the time Mr Alatas, a senior diplomat, was a personal assistant to Indonesia's then foreign minister, the late Adam Malik. "The Australian Government itself did not want to be involved, although it was under fire from its own people for letting the conflict flare up," Mr Alatas said in an interview with the Jakarta-based magazine Tempo.

He said his government told Mr Whitlam and Mr Gerald Ford then the United States president, "what we were doing" on East Timor, which had been abandoned by Portugal. "They did not show their stance of opposition," Mr Alatas said.

Mr Whitlam has declined so far to comment on revelations concerning his government's role before the invasion contained in documents released by the current Australian Government.

Mr Alatas told Tempo that Indonesia's Cabinet agreed last year to give East Timorese a vote to decide their future because, "we were then very convinced we would win the referendum. Everything was painted with optimism," he said. "This conviction left us unprepared for the result of the referendum." The East Timorese voted overwhelmingly to reject Indonesia's 24-year rule at a United Nations-supervised ballot on August 30 last year.

Mr Alatas said Indonesia's decision to give the East Timorese a vote on independence was initiated by a letter from the Prime Minister, Mr Howard, to the former president, Dr B.J. Habibie, in December 1998. Mr Alatas said that upon careful reading, the letter opposed Indonesia's then plans for East Timor. Australia claimed to "prefer gradual autonomy" towards independence.

"If only the letter had come from another country, it could have been easily understood," Mr Alatas said. "But this was from Australia, our all-time supporter."

CNRT leaders form new social democratic party

Vanja Tanaja, Dili -- The newest addition to East Timor's political landscape was declared formally at the National Council of Timorese Resistance headquarters on September 20: the Social Democratic Party (PSD).

The founders and key leaders of the PSD are leaders of CNRT: Mario Carrascalao, Agio Pereira, Leandro Isaac and Zacarias da Costa.

Carrascalao, founder of the Timorese Democratic Union (UDT) and formerly governor of East Timor under Indonesia, is chairperson of the PSD.

Both Isaac and da Costa were also associated with UDT. Da Costa spent many years in Portugal as a UDT representative. Isaac is well known as one of the few CNRT leaders based in East Timor before and during the ballot in August 1999. Agio Pereira was coordinator of the East Timor Relief Association in Sydney and most recently was the head of the CNRT's National Emergency Commission.

The policies of the PSD include multiparty democracy, transparency and clean government that guarantees the "civil rights" of the population.

It does not "accept the existence of large economic groups, which may monopolise initiatives"; instead it "defends ... an economic life which is focused on the protection of small players, small merchants, traders and peasants". The PSD also states that its purpose is to build the middle class as the basis of social democracy.

It believes in "government intervention" in property ownership and wealth distribution, whilst free education should exist only at the primary level and free health care only for those who cannot afford to pay. The PSD rejects the death penalty, "as human life is beyond the realm of decision-making by a country", and rejects abortion for the same reason.

Echoing Jose Ramos Horta (who was rumoured to be a leader of the PSD prior to its formal inception), the PSD also places great importance on membership of ASEAN. It also argues for the inclusion of East Timor in the Association of Portuguese Speaking Nations "as a logical formulation of the deep cultural-historical ties which unite us all". It defends Portuguese as the official language, but indicates that Tetum may become the official language when "it can no longer be resisted".

The pro-Portuguese sentiments of this layer of the CNRT leaders, who have now become leaders of the PSD, have alienated a layer of the politically conscious youth, who have indicated their preference for English, Indonesian and other languages in the interim period. Portuguese cuts out the generation of youth educated under Indonesia, many of whom who have returned to Indonesia to resume their studies.

The PSD plans a youth wing (Social Democratic Youth) and a workers' wing (Social Democratic Workers).

The Timor Post reported that the secretary general of the Socialist Party of Timor (PST), Avelino da Silva, attended the PSD founding ceremony, welcoming the PSD because the formation of many parties was an indication of democracy in East Timor. He said the PST was distinct from the PSD, using "Marxism as a tool of analysis" and seeking "the liberation of people as a whole, especially the poor and the weak" through socialism.

Guarding profits in the Timor Gap

Jon Land -- Negotiations on the future of the Timor Gap Treaty between the Australian government, the United Nations Transitional Administration for East Timor (UNTAET) and East Timorese representatives are set to resume on October 9-11 in Dili. Both the federal and Northern Territory governments have indicated that they are opposed to any renegotiation of the treaty that would result in a change in the maritime boundary between Australia and East Timor in the latter's favour.

When Ashton Calvert, the secretary of the Department of Foreign Affairs and Trade, announced on August 3 that the next round of talks on the treaty had been pushed back to later in the year, he made the government's stance clear.

"Australia will of course be sensible and reasonable and fair", he said, but "we don't start with a position where we think the thing [the treaty] is in any way lopsided to begin with".

Calvert added that it was "a natural aspiration by the East Timorese that they get a bigger share out of this whole arrangement" and that they will want "more than the status quo".

Canberra's negotiating position will aim to frustrate, rather than facilitate, this "natural aspiration".

A joint press release issued on September 18 by the minister for foreign affairs, the minister for industry and the attorney- general stated that the main priority for the negotiations is to "avoid a legal vacuum" and provide "commercial certainty for the petroleum industry".

The current memorandum of understanding regarding the treaty (signed by UNTAET and the government in February) expires with East Timor's full independence and first elections, which are scheduled for 2001.

According to foreign minister Alexander Downer, as far as the Australian government is concerned, "There shouldn't be much debate" about the maritime boundary. Negotiations should be centred mainly on the issue of royalty distribution, he said.

Downer also believes that East Timor is not in a strong position to argue for a greater share of royalties, because Australia "is already providing a lot of financial support for East Timor".

If the maritime boundary between Australia and East Timor was re-established according to international laws and norms, East Timor would gain sole sovereignty over an area containing some of the largest oil and natural gas fields known to exist in the Timor Sea.

The Howard government's defence of the present terms of the treaty is based upon the position that it held before the East Timorese voted for independence  that the interests and profits of large corporations are more important than the livelihood of the East Timorese.

Many people, including the East Timorese themselves, consider that the current treaty is "lopsided" in favour of Australia. They point out that the treaty was able to come into existence in the first place only because the Australian government recognised the illegal occupation of East Timor by Indonesia.

Over the past 18 months, representatives of the largest Timorese political organisation, the National Council of Timorese Resistance/National Congress (CNRT/NC), have publicly stated that an independent East Timor will not impose higher rates of taxes or levies upon mining companies than those currently outlined in the treaty.

CNRT/NC leader Mari Alkatiri stressed this during the organisation's national congress, held in late August. "They've invested a lot, so we have to respect the commitments they've made and give them guarantees that they will not lose everything", he said.

Alkatiri added, however, "We refuse to accept that East Timor be the successor state to Indonesia to the treaty".

This sentiment was also expressed by Peter Galbraith, the director of political affairs for UNTAET, during a seminar held in Canberra in July, entitled "East Timor and its Maritime Dimensions: Legal and Policy Implications for Australia".

Galbraith told participants that the UN had never recognised the legality of the treaty and that East Timor was not prepared to accept a successor-state model for its continuation.

What is at stake is billions of dollars' worth of investment and profits. According to the September edition of the NT Business Review, if projects currently under consideration in the Timor Sea are realised, the expenditure for mining and exploration companies will be in the order of $12 billion.

Much of this is earmarked for the area known as the "zone of cooperation", and fields close to it, which could change hands if the treaty's maritime boundaries are redrawn.

The Northern Territory is especially dependent on the income generated by the mining and exploration industry. Not surprisingly, the NT chief minister, Denis Burke, has been outspoken in opposing any changes to the treaty that could threaten investment in the territory. Earlier this year Burke claimed that the treaty is "probably the best deal" the East Timorese could expect.

With the record high price of oil, the return on oil and gas developments in the Timor Sea holds even greater appeal for mining and petrochemical companies.

Over $8.5 billion worth of oil was produced in the Timor Sea from 1986 to March 2000.

Woodside Energy, for example, has posted a record half year profit of $436 million as a result of commercial production at the Laminara/Corallina field, which came on line last November. A promotional advertisement in the NT Business Review by Woodside states that 25 million barrels of oil have been extracted in the first six months of operation.

The most significant developments are based on tapping the huge natural gas reserves, such as the Bayu-Undan field, where US- based Phillips Petroleum plans to invest $2.2 billion in the liquid stripping phase to facilitate production of 400 million barrels of LPG and condensate. Multiplex has signed a letter of intent with Phillips to construct a 500-kilometre pipeline to Darwin.

The world's largest producer of methanol, the Canadian-based Methanex, has also signed a letter of intent with Shell and Woodside. The two oil companies will supply Methanex with natural gas for a $1.5 billion methanol plant to be located at Glyde Point near Darwin.
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Government/politics

Gus Dur vows to reopen case

Derwin Pereira, Jakarta -- President Abdurrahman Wahid, attempting to contain the political fallout from the collapse of the multi-million-dollar corruption case against former President Suharto, has vowed to have it reopened.

In what some observers regarded as a move to placate his administration's critics, the Muslim cleric attacked the legal system and suggested that the judges who dismissed the case were "biased" in their verdict.

"We have been too lenient," he told reporters on Thursday while on a flight from Venezuela to Brazil, part of his 10-day trip to South America. "Even a thief stealing a chicken can end up in jail. Pak Harto was not locked up in jail, but left at home."

The President disclosed that he had telephoned Attorney-General Marzuki Darusman, who has already said that he intends to "fight for justice" in the appeals court.

Reflecting widely-held sentiments about the country's legal system, Mr Abdurrahman said he would ask the Chief Justice to provide judges who are "clean, determined and cannot be bought" to reopen the case.

In a shock ruling on Thursday, a panel of five judges freed Mr Suharto from the possibility of jail after declaring that he was medically unfit to stand trial. His travel ban and house arrest were also lifted.

Sources told The Straits Times that at least two of the judges received death threats days before the trial. "This means that the government will have a tough time going after Suharto again, given the pervasiveness of militia-style tactics in Jakarta now," said one senior official who declined to be named. "'No judge is going to put his life on the line to hang Suharto."

Besides, it would also be difficult to launch an appeal, given that the former leader had already been declared "permanently unfit" to stand trial by an independent team of court-appointed doctors.

Mr Marzuki acknowledged that "it will not be an easy ride" for the prosecution, given such legal technicalities. His office had, on Wednesday, asked the judges to carry out a trial in absentia. But this was rejected outright by all of the five judges.

Under such circumstances, Mr Abdurrahman's comments from South America appears to be a "shot in the dark" as he now has to grapple with forces, and foes, that might use the dismissal of the case to undermine his government's credibility even further.

The dilemma Mr Abdurrahman had faced was in balancing his political survival with public expectations that the 79-year-old former general would be convicted. The President's failure to deliver has now shattered the edifice of his government's reform agenda.

Diplomatic sources said that even with Mr Suharto's youngest son Hutomo "Tommy" Mandala Putra about to be put behind bars after his conviction in a land scam, there will continue to be residual resentment against the administration for letting Mr Suharto go free.

The most likely pressure-point will come, not from legislators, but from activists and student groups who fought pitched battles with security forces on Thursday after the court verdict.

Police and military personnel were placed on alert yesterday for possible fresh violence. Although nothing happened, reports here said the alert would be heightened over the weekend, given that the government's decision to raise fuel prices by 12 per cent will take effect tomorrow.

Suharto's gain, Gus Dur's loss

The dismissal of former President Suharto's graft case has provoked widespread dismay in Indonesia, with newspapers attacking President Abdurrahman, saying the ruling could destroy the Muslim cleric's anti-graft campaign. Here is an excerpt of The Jakarta Post editorial on the issue

The South Jakarta District Court's decision to dismiss the corruption charges against former president Suharto on the grounds that he is too ill to stand trial will have much wider repercussions that go beyond the US$590 million case brought by the state prosecutors.

The ruling has not only effectively closed the door on all legal avenues to try the former tyrant for his past actions, but it could also destroy President Abdurrahman Wahid's anti-graft campaign.

The court decision, ultimately, undermines the credibility of President Abdurrahman who was elected in October on promises of returning the rule of law and upholding good governance and clean government. With his popularity at a very low ebb, the court decision cannot bode well for the already shaky public confidence in his ability to govern.

The government's corruption case against Suharto has been wrought with controversy from the start. The case brought to court was weak to begin with. Many people felt that even if Suharto was convicted, it would have had little significance as far as revealing the truth and upholding justice in this country are concerned -- the main objectives of any court hearing.

In the case brought before the court, Suharto was being tried not in his capacity as former president of the republic but as chairman of seven charitable organisations.

The sum involved is not the billions of dollars he and his family were supposed to have amassed using or abusing his position as the most powerful man in the country for 32 years, but a paltry US$590 million of state funds which he has been accused of funnelling to companies owned by his foundations.

From the moment Attorney-General Marzuki Darusman reopened the Suharto files in December, the government was constantly being outwitted by Suharto and his lawyers. The investigation dragged on as the lawyers contested the government every step of the way to court.

Even when the case was eventually tried in three hearings, including the one on Thursday, Suharto never once set foot in the courtroom. His ailing health, a tool which the lawyers used effectively to slow down the legal process, was the decisive factor in the judges' decision to dismiss the case.

The grounds for dismissal -- that he is permanently unfit to stand trial -- have effectively ruled out future investigations or trials against Suharto for other far more serious crimes, particularly human-right abuses which his regime allegedly perpetrated.

If the chief goal of these legal exercises is to seek the truth and uphold justice, and not exact retribution, the South Jakarta District Court judges have now killed those hopes for good. The nation will never learn the truth about many of the still unexplained events when it was ruled by Suharto.

The court ruling to dismiss Suharto's case will also make it difficult, if not impossible, for the government to prosecute other corruptors who benefited while he ruled the country.

His cronies and children have always been shielded by his power when confronted with the question of how they secured lucrative business contracts and trade privileges. Their popular legal defence has been to say that those business practices were perfectly legitimate by the standards of the time. If anyone was at fault, they claim now, it should be Suharto or members of the administration who made and supervised the rules. Now that he cannot be tried, these corruptors must feel relieved that they are off the hook.

President Abdurrahman has made a Suharto trial the cornerstone of his much-publicised anti-graft campaign. We leave it to medical and legal experts to decide whether the South Jakarta District Court was right to dismiss the corruption case against Suharto.

But rightly or wrongly, the decision has caused untold, irreparable damage to the nation's quest for truth and justice, to the nation's struggle to wipe out corruption, and most of all, to the credibility and public standing of the government of President Abdurrahman Wahid.

No respite for Wahid in wake of Soeharto ruling

Lindsay Murdoch, Jakarta -- On many of Jakarta's balmy evenings, the plush suburb of Menteng looks like a battlefield as protesters fight police blocking them from the house with the red tile roof at No 8 Cendana Street.

And if Soeharto, Indonesia's disgraced former president, peered over the front fence he would see the swirl of tear gas, rocks and petrol bombs. The country he has turned his back on doesn't resemble Beirut of the 1980s or Belfast -- yet. But, two years after his downfall amid widespread bloodshed, Soeharto is still causing mayhem.

A court's decision on Thursday to dismiss corruption charges against him on the grounds he is too ill to stand trial provoked more street battles. It also plunged the country into a new and dangerous phase of its transition from dictatorship to democracy. Adding to the danger is the prospect of a new wave of protest over a 12 per cent rise in the price of fuel this weekend.

The court decision greatly undermines the credibility of President Abdurrahman Wahid as his hold on the country steadily weakens. It is also a major setback for the Government's efforts to bring Soeharto, his family and cronies to justice for massive corruption during his 32-year rule. "Since the dismissal was due to health problems, other parties cannot take Soeharto to any court in the future," said his lawyer, Juan Felix Tampubolon.

Even before the decision the public's confidence in Mr Wahid's ability to govern had hit rock bottom amid a series of bombings he blames on Soeharto's family, stalled economic recovery, palace scandals, communal and separatist violence and back-tracking on efforts to reform the discredited and demoralised armed forces.

The court decision "shows that the Government is not serious in fighting against corruption, collusion and nepotism", said lawyer Todung Mulya Lubis, who successfully defended Time magazine from a libel suit by Soeharto early this year.

A Soeharto conviction would have been symbolic of the return of the rule of law across the archipelago. It will now be difficult, if not impossible, for the Government to pursue the Soeharto family or its cronies through the corrupt and politicised judicial system Soeharto left behind. If you believe his lawyers, Soeharto has been reduced to a feeble, depressive man whose mental and intellectual capacity has been debilitated and he spends his time doing little more than feeding his chooks in the backyard. But few Indonesians do.

And many analysts saw the trial as only a half-hearted attempt at justice. The charges related to the stealing of $A1.07billion from charities Soeharto set up when in office. But the Government estimates the family's ill-gotten fortune at more than $A60billion.

No real attempt has been made to force the family to return money to the state. Many people felt that even if Soeharto were convicted, the case would have had little significance in revealing the truth of his rule. Mr Wahid has indicated his support for the setting up a South African-style truth commission but like so much else in Indonesia, little is moving on the idea.

Anger over the court decision will probably be softened when Soeharto's youngest son, Tommy, goes to jail after being convicted over land corruption. But as the Jakarta Post said in an editorial, the decision to abandon the case against his father has caused "untold irreparable damage to the nation's quest for truth and justice, to the nation's struggle to wipe out corruption and, most of all, to the credibility and public standing of the Government of Abdurrahman Wahid".

Councillors likely to get land, cars

Jakarta -- Despite widespread public disproval, the city administration has apparently bowed to councillors demands and allocated them Rp 40.43 billion (US$4.5 million) of the 2000 City Budget to buy land and cars.

The funds have been disguised as "welfare" for the city council's "secretariat employees". Councillor Amarullah Asbah of the Golkar Party admitted that the money had been allocated for the welfare of councillors and not for council secretariat employees.

Most of the money is to subsidize the purchase of land and vehicles for councillors, Amarullah told The Jakarta Post on Wednesday evening. "Actually, the allocation of the money has violated no rules and we have only asked for as much as we need, no more than that," Amarullah said. "The fund will be used for the purchase of plots of lands and other 'welfare allowances' for us, the councillors," he said.

According to the (March-December) 2000 City Budget, Rp 380 million from the Rp 40.43 billion will be used for the welfare of secretariat employees, while the rest will go to councillors.

However, another part of the budget also allocates Rp 14 billion for councillor welfare, such as medical expenses, official trip expenses and other allowances. No councillors wanted to comment on the matter.

Many people have questioned the councillors ethics, who have been at their posts for some seven months, for asking for such facilities. A few months ago councillors asked to be given a plot of land valued at Rp 200 million (US$23,255) and a car worth Rp 90 million.

Staff at the city administration have disclosed, however, that many of the councillors plan to take the cash instead of the land or cars should their proposal be fulfilled.

City Council speaker Edy Waluyo has claimed that even if they were allowed to receive the land and cars, they would have to pay for them in installments. The payments would be deducted from their monthly salaries. Aside from a monthly wage of Rp 6 million, city councillors can bring home extra earnings of at least Rp 4 million per month from various bonuses, none of them performance related.

Ruling creates dilemma for Wahid

Vaudine England, Jakarta -- The South Jakarta Court's decision yesterday to close the fraud case against former president Suharto poses one of the gravest challenges yet to the Government of President Abdurrahman Wahid, and is unlikely to provide closure for many Indonesians.

Members of radical, sometimes militant, student groups whose actions helped depose Suharto in May 1998 were already saying yesterday that if Mr Wahid fails to press for a "real trial" of Suharto, then they will agitate for Mr Wahid's fall too.

"The doctors are all lying," said demonstrator Zul Sikri on the independent doctors' report to the court that Suharto was medically and mentally unfit to stand trial. "Suharto must go to jail and we will keep protesting until that happens."

Mr Wahid, who is on one of his foreign trips, on Wednesday appeared to encourage students to protest -- and even take the law into their own hands -- in comments made to the Indonesian community in Caracas, Venezuela, where he is attending an Opec summit. "The most they can do is throw stones at the windows. Leave them be. I mean, Suharto was very corrupt, wasn't he?" Mr Wahid was quoted as saying by the national news agency Antara.

"It is not the military personnels' duty to ban people from staging demonstrations. Prohibiting university students from demonstrating only happened during the New Order [Suharto] administration," he added.

Lawyers and political analysts suggested that the Government probably knew which way the Suharto case would end up before Mr Wahid left on his travels on Monday. Only last Saturday, Attorney-General Marzuki Darusman was saying that the public must be prepared to accept whatever decision the court made on Suharto's health.

"If Mr Suharto is found to be unfit for the legal process, to the extent that the medical team has come out with a fair and objective examination, then I think the public will have to accept that," Mr Marzuki said.

He highlighted the need for a legal process against Suharto to be acceptable in the court of public opinion. The trial "will have to go through to the very end to the point where the public is satisfied that the legal system has exhausted, as far as possible, this case", he said.

But prosecutors have been left with few options. Yesterday's decision to drop the case followed discussion -- and rejection -- by the bench of prosecutors' requests to bring Suharto to court anyway so that the court could decide his fitness for trail, or to allow an appeal to the Supreme Court for the holding of a trial in absentia. Lawyers said they knew of few further options, although anything was possible and further redrawing of the verdict could not be ruled out.

In defence of the Government's handling of public demands for Suharto to be convicted, some lawyers argued that the administration had done its best by starting a transparent court process and could not be blamed if, because of genuine ill- health, the defendant could not be tried.

"That won't fly," a foreign lawyer in Jakarta said, contradicting this view. "Even if you assume Suharto is really ill, there is always some way to enforce accountability, through apologies or money returns. Now this blatant lack of accountability will trickle down through the system. It will fester and grow."

The lawyer and several diplomats agreed that although Mr Wahid and Mr Marzuki probably knew Suharto would be able to escape trial by claiming ill-health, they had to push the legal process as far as it would go. "The whole trial thing was a kind of bone to throw at the students. The students are saying it was all a whitewash, and they're probably right," a political observer said. "It's a dramatic triumph for the former first family."
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Regional conflicts

Ammunitions and M-16 rifles seized in North Maluku

Jakarta -- Security authorities confiscated hundreds of rounds of ammunition, explosive materials and several M-16 rifles from a ship which was attempting to dock at East Halmahera in the North Maluku province. The weapons and ammunition were seized from the motor boat Albatim which had traveled from Bitung in North Sulawesi to the Maba district, the capital of Central Halmahera.

Local police chief Supt. M. Luluhima confirmed the seizure and said that security authorities had detained six people for questioning in connection with the ownership of the weapons and ammunition. "We're questioning the ship's crew and according to them the weapons and ammunition were ordered by a local businessman," he said, adding that he had not received full details of the seizure as the military was still processing the information.

Maluku asylum seekers spend night at Swiss embassy

Jakarta -- Six young Christians said Thursday they spent a sleepless night in the grounds of the Swiss embassy after jumping into the mission to highlight the sectarian conflict in the Maluku islands.

"They [Swiss diplomats] offered us breakfast. It was very kind of them, but we refused because our friends are bringing us food every six hours," one of the six, Arnold Thenu, told AFP by mobile phone from the chancery grounds.

"We didn't sleep, we stayed up talking," said Thenu, a 25-year- old law student of a private Christian university here. He added the group, all from Indonesia's strife-torn Maluku islands, had been told they would have an early morning meeting with the diplomats.

The Swiss foreign ministry in Bern has said that one of the group -- five young men and a woman -- had on Wednesday had asked for asylum, and all six had threatened suicide if the diplomats refused to meet them.

Swiss foreign ministry spokesperson Monica Schmutz Cattaneo said the other demands were that the five not seeking asylum be assured of safe passage out of the embassy, and that Bern help draw world attention to the Maluku conflict.

About 4,000 people have died and more than half a million have been left homeless since the Muslim- Christian unrest erupted in the Malukus, also known as the spice islands, in January 1999. "They spoke of the systematic elimination of Christians by Muslims in the Malukus," Cattaneo said.

Thenu said on Thursday another of the group might ask for asylum on Thursday "because he felt uneasy with the situation and not safe." A Swiss embassy official, speaking at the locked embassy gate here, said the six would not be allowed into the chancery building, or to give a press conference.

The official declined to give his name and said any comment must come from Bern. Still draped along the front fence of the mission was a huge banner reading: "Save the Moluccas!" -- the Dutch spelling for the islands.

In a statement issued outside the embassy Wednesday, the Mahamuda Siwalima [Maluku Youth] said: "We are worried that if it is not speedily settled, the conflict in the Malukus would sooner or later become a gradual ethnic cleansing."

The group called on the Swiss government and the United Nations to help, "in an active and objective way, the investigation, the handling, the safeguarding and the settlement of the problems in Maluku."

They said they had chosen the Swiss embassy because the UN commission on human rights is headquartered in Geneva. "In reality, the disunity [in the Malukus] was created by mercenaries from Jakarta who came to disunite the Muslims and the Christians in Ambon," said Jamie, one of 14 protestors picketting outside the embassy.

Christian activists have documented cases where uniformed and armed soldiers have taken part in attacks against Christians in several areas of the Malukus. They have since called on the United Nations, or any foreign nation, to intervene in the conflict to provide neutral arbitration.

The bloodshed on the islands first broke out after a trivial dispute between a Christian public transport driver and a Muslim in Ambon on January 19, 1999.

127 families of transmigrants face uncertainty

Padang -- As many as 127 families from Aceh, who had to leave the restive town for security reasons, are facing uncertainty in West Sumatra. The families, supposed to be resettled in the Silaut VI resettlement area in the Pesisir Selatan regency, have yet to be properly handled. The local administration seems to be unprepared to receive them.

West Sumatra provincial administration spokesman Zulkhaidir said on Wednesday that funding was the main constraint. "We are trying to do our best to help them. We are responsible for their fate here." Zulkhaidir did not say how much money had been set aside by the administration for the resettlement program.

The families, migrants who had spent years in Aceh, are now being housed in temporary shelters in the Silaut VI resettlement area, some 300 kilometers from the West Sumatra capital of Padang.

They have yet to get plots of land to cultivate and no houses have been made available for them. Many of them have been forced to live with relatives and work for a tea plantation belonging to PT Hefina Niaga.

According to Article 28 of government Regulation No. 42/1973, each transmigrant family is entitled to two hectares of land, 1.75 hectares for agriculture and 0.25 hectares for housing in resettlement areas.

Meanwhile the Indonesian Red Cross (PMI) said that Indonesia now has about one million internally displaced people, driven from their homes by sectarian conflicts, separatist struggles and natural disasters.

PMI chief and former finance minister Mar'ie Muhammad said that to cope with the growing flood of displaced people, the government needs to set up a national commission on refugees.

Mar'ie made the suggestion after receiving a financial donation from a Jakarta-based newspaper for victims of this year's earthquake in Bengkulu and three ambulances from the International Committee of the Red Cross (ICRC), the news agency said.

The commission, he said, could be independent, with members representing non-governmental organizations, volunteers and the government. It could handle and coordinate aid.

Previously released government figures have shown that more than half a million people have been driven from their homes by months of sectarian conflict in the Maluku islands.

Another estimated 130,000 people driven from the former Indonesian province of East Timor are still living in camps in East Nusa Tenggara. Ethnic and religious violence have also driven thousands more from their homes in Kalimantan and Sulawesi.

Without giving a complete breakdown of the figures Mar'ie said that the one million displaced people were now scattered over 14 provinces.

PMI, as a humanitarian organization, would continue to channel domestic as well as international relief aid to those who are victims of natural disasters or social conflicts, he said.

Muslims slaughter Christians in Ambon

Jakarta -- At least 32 Christians were killed in a day-long attack by Muslims on an outlying village in Ambon, the capital of Indonesia's Maluku islands, a church worker said yesterday.

The Muslim attackers were helped by government soldiers during the attack on the village of Hatiwe Besar on Tuesday, said Mr Noya Fileopistos, of the Christian co-ordinating post at the Maranatha church in Ambon.

All the victims, many of whom died violently, were Christians. 'They have been able to evacuate 32 bodies," he said by telephone. "Most of them, including a 10-month-old infant, were shot and their bodies tossed into fires" of houses torched by the attackers, he said. But no new violence had been reported yesterday, he said.

The attackers had used mortars and automatic rifles and had come from other parts of the city. Some of the residents from Hatiwe Besar had managed to flee the ruined village by sea and were sheltering at the Nehemia Protestant church in the Benteng Gudang Arang area of Ambon city. "There are about 500 refugees staying at the church. All of them fled by speedboat and small passenger boats because they could not use the land route," Mr Fileopistos said. Earlier reports of the fighting yesterday had put the number of dead at nine.

The Maluku islands have been torn apart by almost two years of Muslim-Christian conflict, which has left some 4,000 people dead and a trail of destruction.

Nine killed in Muslim attack in Maluku islands

Jakarta -- At least nine people were killed and 15 others injured in an attack by Muslims Tuesday on a Christian village in Ambon, the capital of Indonesia's restive Maluku islands, a report and church worker said.

The Muslim attackers were aided by soldiers during the attack on the village of Hatiwe Besar, said Sammy Weileruni of the Christian coordinating post at the Maranatha church in Ambon. Weileruni said all the dead were Christians.

The Antara news agency quoted an employee of the state Haulussy hospital in Ambon as saying that 22 dead and wounded had been brought there from the violence in Hative and several other nearby Christian villages. Seven were already dead or died after arrival.

Antara also said that two other men were killed but their bodies were not taken to the hospital. One of them died inside the car that was torched by attackers.

Max Siahaya, also from the Maranatha church in Ambon, said the attackers had used mortars and automatic rifles. Weileruni said the assailants had come from other parts of the city and some of them had travelled by boat across the bay that divides the city. Hatiwe Besar is located near Ambon's Patimura airport.

"There was a navy ship at that time but security personnel didn't do anything to stop the attackers," Weileruni said. Muslim support groups could not be reached immedately for comment.

Earlier in the day a worker at Ambon's main state Haulussy hospital said six people had been brought in with gunshot wounds. Antara said the attackers were from several Muslim villages along Ambon Bay, east of Hatiwe Besar. Weileruni said several houses were also burned in the attack.

Siahaya said a priest, Z. Soumeru, was taken away by uniformed soldiers and that his whereabouts was unknown. "We do not know whether they were real soldiers or just people trying to pass themselves off as soldiers. What is clear is he [Soumeru] was taken away and we don't know where he has been taken to or how is he now," Siahaya said.

Meanwhile Antara reported that two men who had been arrested trying to smuggle in ammunition and explosives into Ternate, in North Maluku, in July had been sentenced to three months jail each. The two were separately sentenced at the Ternate court earlier this month, the head of the local prosecutor's office, Suud Azus, said according to Antara.

One of them was caught while disembarking in Ternate with 14 bullets and 1,097 bomb detonators on July 22. Another was caught trying to land with 29 ammunition magazines for M-16 rifles. Antara said a third suspect who had been arrested with 49 rounds of ammunition and two handguns, would be tried soon.

The Maluku islands have been torn apart by almost two years of Muslim-Christian conflict, which has left some 4,000 people of both faiths dead and a trail of destruction.

Five injured in fresh clashes on Ambon island

Ambon -- A fresh community clash broke out in Ambon Island on Monday morning when residents from Tial and Tulehu villages attacked nearby Suli village, injuring at least five residents and destroying dozens of houses, an official said.

Spokesman of the civil emergency post in Ambon Maj. M. Djari said at least 40 houses in Suli village in Salahutu district, Central Maluku have been razed and five Suli residents injured as a result of the clash. Djari said the victims were rushed to the Indonesian Navy hospital in Ambon for immediate treatment.

The predominantly Christian Suli village was attacked by Tulehu residents from the hills and neighboring Tial residents who initiated the clash by shooting and firing mortars.

The attack forced dozens of Suli residents to take refuge in nearby Passo village. Suli residents questioned the Pattimura military personnel for their failure to take quick action to stop the rampage as the Tulehu village is located near the Pattimura Military Headquarters.

Separately, Governor Saleh Latuconsina, who had confirmed the attack on Monday, ordered the deployment of two companies of joint military-police troops to the bordering area. The governor also urged security personnel to take stern action against those who were responsible or involved in the attack.

So far, there has been no official explanation of the motive for the attack but there was a possibility that the clash was triggered by recent community clashes in neighboring Saparua Island, also in Central Maluku. The clash in Saparua Island that erupted on Wednesday has claimed at least 13 lives and injured 27 others.

Meanwhile in Saparua Island, the joint police-military troops, conducted on Monday, a sweeping operation in the villages which were involved in the recent community clashes. The objective of the operation was to strip all residents of illegal firearms and weapons. Later in the afternoon, hundreds of Christian residents staged a peaceful rally at the governor's office on Jl. Pattimura, protesting the failure of the leaders of the civil emergency administration in Maluku province in restoring security and order.

The protesters were received by Latuconsina and Maluku Provincial Legislative Council Speaker Etty Sahuburua. Both leaders vowed to convey the protesters' aspirations to the central government.

While pointing at the leaders' failure, the protesters also stressed the importance of the United Nations' intervention in ending the violence.

The protesters' spokesman Jimmy Mailoa from the All-Maluku Protestant Churches declared a week of mourning starting from September 26 for Christians, telling them to stay at home, fast and pray. Christian residents were told to wear black clothes or ribbons if they had to go outdoors.
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Aceh/West Papua

Aceh: A bloody truce

Dini Djalal, Banda Aceh and Lhokseumawe -- Aceh is a war zone. Children are so accustomed to explosions and gunfire they make a game of dropping to the ground to avoid injury.

Indonesian soldiers are helping the police build bunkers and rig anti-grenade nets in front of their posts amid daily shelling by rebels fighting for independence in this devoutly Muslim, resource-rich province on the northern tip of Sumatra.

In Lhokseumawe, home to the province's lucrative natural-gas processing plants, only combat-ready soldiers walk the streets after 9pm. Villagers say they're anxious that a military search for separatists could prompt another round of beatings by government troops or police. Aid projects are paralyzed -- even though the "Humanitarian Pause," a truce intended to last until January 15, is supposed to facilitate aid. Even the authorities are afraid: Recently, police chasing thieves who stole a police car turned back when they neared territory held by separatists.

Government soldiers continue to battle with the rebels of the Free Aceh Movement even though negotiators in Geneva called a ceasefire in June, and agreed in September to extend it for three months as they pursue a political solution to the 25-year-old conflict. A spate of bombings, kidnappings and murders is jeopardizing the fragile trust that mediators are trying to build between the two sides.

Instead of preparing for peace, Aceh is preparing for tragedy. Leaders in Jakarta have offered autonomy to the rebels, known as GAM, and while GAM continues to fight for independence, the two sides appear closer on the autonomy issue. But such an agreement, many Acehnese fear, could bring more violence as a leadership struggle ensues between GAM hardliners, a more moderate breakaway faction and a criminal wing.

In this scenario, an autonomy deal would be signed by moderates and rejected by hardliners, and while the two fought it out, the criminal wing would continue extorting "taxes" from the local populace.

More than 120 people have been killed in Aceh since June, most of them civilians; at least 400 more have been tortured or kidnapped. Three aid workers were beaten by police in late August, prompting outside agencies, including USAID and Oxfam, to threaten a suspension of aid.

Provincial authorities claim that 60% of their regional offices no longer function, an unconfirmed statistic that is being used by military officials as an argument to declare a civil emergency and scrap the truce.

Ramli Ridwan, Aceh's Jakarta-appointed governor, agrees that the only way to reclaim the countryside is "with the strength of the military." Ramli's support for tough measures hints at Jakarta's fast-disappearing faith in dialogue and negotiation. New Defence Minister Mahfud Mahmudin claims GAM has used the truce as an opportunity to strengthen its hold on villages.

It was always going to be difficult to convince the two sides to accept the truce. Negotiators close to the military say the army leadership never agreed to it.

Moreover, the truce agreement provided no punishment for taking up arms. Col. Sulaiman Achmad Basyir, a military representative on the committee overseeing the agreement, admits the rules are weak. "It is not a formal truce but an understanding," he explains. Describing the violence as a vicious circle of revenge, Sulaiman is loath to tell soldiers to wait to be killed. "If our troops are attacked, we cannot order them not to chase their attackers."

Regional military chief Col. Syarifuddin Tippe blames the violence squarely on the rebels, claiming their handshakes are deceptive. "They may talk differently in the diplomatic forum, but the war continues."

Tippe claims the rebels leaders at the negotiating table have no control over their men in the field. Indeed, a military official recalls a visit by GAM commanders to the truce implementing committee's office in Banda Aceh, the provincial capital. The committee comprises representatives from GAM, the military and the Indonesian government, but the visiting GAM commanders barked at their colleagues "You don't represent us!" the military official says.

These allegations of disunity in rebel ranks are steadfastly denied by Abu Sofyan Daud, who commands rebel forces in Lhokseumawe. As black-clad recruits toy with AK-47s and Russian grenade-launchers at a remote hillside post, Daud tells the Review that his troops are "controlling themselves" at their base camps. If they strike out, he says, they do so in self-defence. "We don't look for trouble. Trouble comes to us." Daud blames the continued violence on the military, which he says has been pouring in reinforcements from all over Indonesia. He claims that in North Aceh alone there are 20,000 troops. Police say there are only 11,000 security personnel in the entire province.

After a decade of brutal military-led operations in the province, the police have formally been put in charge of security -- but still get military help. Police spokesman Col. Kusbini Imbar admits that the force is overstretched and has to rely on the military for assistance and "war expertise."

In Lhokseumawe, where flames from the gas fields loom over ramshackle huts, GAM is as feared as the Indonesian security forces. Umi Kalsum's husband was killed in the late 1980s during the military's "shock therapy" campaign of killing and detaining thousands of GAM sympathizers. Yet she is more frightened now than ever, because now she fears everyone. "Before, at least you knew the military is behind the killings. Now the killers are always unknown," says Kalsum.

Amnesty International and Human Rights Watch have reported an increase in the targeting of humanitarian workers in Aceh in recent weeks, implicating police in many of the latest violations. But activists in Aceh suggest that GAM is also guilty of human-rights violations. "They act against civilians suspected of helping the government," says Aguswandi, of the Commission for Missing Persons and Victims of Violence.

More worryingly, the separatist movement is being wracked by a growing criminal element that is apparently succeeding in its efforts to impose a local form of taxation. Residents say each village household must pay 1,000 rupiah (12 cents) monthly to GAM; in towns, GAM collects up to 10 times that amount. Businesses are reportedly forced to pay millions of rupiah, depending on their size.

GAM commander Daud denies intimidation takes place. He doesn't deny, however, that the movement is well-funded. "People willingly give money to our cause," he says, claiming that 90% of the population want independence.

Many, perhaps most, Acehnese do want independence, but they dread being governed by what they view as a floundering leadership. GAM is comprised of several factions and has no structure, say analysts; that makes it difficult for local people to demand accountability -- and for mediators to produce a comprehensive peace plan.

The result is confusion and disillusionment. Behind closed doors, the citizens of Lhokseumawe now scorn the rebels. "Our leaders have no education, only brawn. If we are given independence, we still won't be free," complains one woman.

Paranoia is rampant, and criticism is uttered in hushed tones, if at all. "The police look for GAM in the hills, but actually they are your neighbours," says Yusuf Pase, a human-rights lawyer in Lhokseumawe. Aid agencies have had trouble gaining access to villages, most of which are in GAM's hands, despite rebel promises of better access.

But all aid efforts could be derailed by the devastating scenario of all-out war. A local journalist echoes a warning by military intelligence of what will happen if peace efforts collapse: "After January, there will be no mercy." That vicious prospect may already have arrived.

Truce extension welcomed, civilians want role in talks

Banda Aceh -- Indonesian police and separatist rebels in Aceh province on Monday welcomed a three-month truce extension with a landmark clause on efforts to find a political solution. But civilian groups immediately demanded a voice in the dialogue, and said it would be meaningless if they were left out.

Differences were also apparent in the preception of the truce -- extended until January 15, 2001 -- with police saying they would continue patrolling, and the separatist Free Aceh Movement (GAM) saying they would attack any patrols.

A joint statement issued in Switzerland on Monday said both sides had agreed on Sunday to a "second phase of the Humanitarian Pause" and "to enter into exploratory talks in order to arrive at a lasting and comprehensive political solution for Aceh."

In Jakarta Foreign Ministry spokesman Sulaiman Abdulmanan said the truce now had "more substance." "There will be discussion on a political solution to the Aceh problem during this second phase," Abdulmanan said. It is the first time the two sides have agreed to an open political dialogue since the GAM rebels began fighting for a separate Islamic state in 1976.

The joint press statement said the agreement included a commitment to "significantly improve the effectiveness" of the truce. "In this connection the parties agreed initially to expand the Monitoring Teams to the four most affected districts," it said.

When the truce was first signed in May both sides made it clear they were sticking to their own goals -- Jakarta to keep Aceh as a part of Indonesia, and the GAM to keep pushing for independence.

Aceh police chief Brigadier General Doddy Sumantyawan told AFP that police supported the truce's extension, but would continue sending patrols into villages. "We will keep making routine patrols in the villages to create calm and enforce the law," he said.

But in declaring the rebels' support for the ceasefire extension, spokesman Abu Sofyan Daud, deputy commander of the rebels' North Aceh chapter, threatened to attack troops who continued to carry out patrols. "If they still conduct patrols in the villages to search for GAM members, we will attack them," Daud told AFP.

Both sides accuse each other of violating the truce. GAM says Indonesian troops have killed more than 65 of its fighters since the truce came into effect on June 2. More than 20 Indonesian troops have been killed, the army says.

Students and rights activists in Aceh said the people must be involved in the political dialogue for it to have any meaning. "That political dialogue must incorporate the aspirations of all the community by also involving students, non-government organisations, and ulemas [Muslim teachers]," the head of the Aceh Referendum Information Center, Mohammad Nazar, told AFP.

Nazar also said that troops from outside the province should be withdrawn ahead of any dialogue. "If the security in Aceh is not conducive, the political dialogue must be delayed," he told AFP.

The founder of the Aceh-based Care Human Rights Forum, Abdullah Ghani Nurdin, said civilian role in the dialogue was crucial. "The nature of the agenda for political dialogue must ... involve civilian movements also," he said.

Meanwhile killings continued in Aceh over the weekend, despite the truce. Four civilians were killed in Madat village in East Aceh during a gunfight between troops and guerrillas, district police chief Superintendent Abdullah Hayati said. He said those killed were GAM members.

But villagers contacted by AFP said the victims were farmers shot dead as they returned home from the rice fields. "Since Sunday morning troops have been sweeping peoples' homes here. They've been shooting at the air, scaring people," a villager said.

A policeman was wounded when he was shot by two unknown people in Pidie district, Hayati said, and four civilians were wounded in a grenade attack in the North Aceh village of Pantonlabu. Police there said GAM guerillas threw the grenade at a police post, but a spokesman for the rebels denied doing so.

A shootout in the centre of the provincial capital, Banda Aceh, on Sunday night left a policeman and a teenager seriously injured, Aceh Besar police said.
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Human rights/law

Order to drop probe into judges

Jakarta -- A Jakarta court has ordered investigators to drop an inquiry into corruption allegations against two Indonesian supreme court justices. South Jakarta District Court Judge Rusmandani on Friday upheld a demand by the two accused justices that the investigation was invalid because the inquiry team had acted beyond its authority.

The Joint Anti-Corruption Team set up in May by presidential decree announced in August that its investigations showed that three active and retired Supreme Court judges had accepted bribes totalling US$22,500. Two of those named appealed, and the third, retired justice Yahya Harahap, denied the charges but filed no appeal.

The decision by the South Jakarta District Court was expected to be a further setback to the government's drive to clean up the notoriously corrupt Indonesian court system. The same court earlier this week dismissed corruption charges against former President Suharto on grounds of ill health, prompting street demonstrations by students.

Mr M. Silaban, the head of the investigating team, which also includes police and state prosecutors, said he planned to appeal against Friday's decision by the South Jakarta court to the Supreme Court. Mr Silaban also said the team had no plans to drop its investigation.

Rethink needed on what case represents

Susan Sim, Jakarta -- It is not an equation that the angry young demonstrators give two hoots about, but the donor countries probably care more about the fate of the Indonesian orangutan than whether former President Suharto goes to jail.

When the Consultative Group on Indonesia (CGI) meets in mid- October to decide on Jakarta's request for a loan of US$4.8 billion, member nations are going to assess, after receiving due satisfaction on the issue of militia disarmament in West Timor and sectarian strife in Maluku, Indonesia's progress in legal reform, among other things.

Legal reform starts with institution-building, with the overhaul of a corrupt judiciary and law enforcement bodies. Without strengthening and staffing these institutions with competent prosecutors, judges and policemen with moral fibre, no government can, say, hope to stop the illegal logging of Kalimantan's forests -- another issue of increasing concern to the world for obvious environmental reasons and because this is the natural habitat of the fast-dwindling orangutan.

The connection between Jakarta's ability to cut the cosy ties between politics and organised crime and where a senile Suharto spends the twilight of his life is a little more tenuous.

Attorney-General Marzuki Darusman says charging him for ripping off the country while ruling with an iron fist has great symbolic value in reversing the culture of lawlessness here. In terms of setting salutary examples, there is indeed nothing like making a former president appear as vulnerable as the average Budi.

But instead, Indonesians have just been treated to another show of Mr Suharto and his lawyers cocking a snook at the law. He did not even bother to show up to plead his physical and mental incapacitation to answer the charges. It is this deliberate snubbing of the courts and, by extension, the society he and his clan have no more right to lord over, that hurts most.

In some ways there is a certain inevitability to this sandiwara, this operatic farce. Whatever the merit of allegations of corrupt courts, or judges intimidated by death threats in the Suharto case, the fact is that the Abdurrahman government has yet to root out the rot in the judicial system.

The general assumption is that the new government rushed into a narrowly-defined, lightweight case against Suharto -- thereby earning the ire of those who want him condemned for human rights abuses -- to demonstrate its reformist credentials.

As a recent Wall Street Journal editorial rationalised on behalf of Mr Abdurrahman, "bringing the former first family to justice is seen as a necessary part of the process of solidifying democratic gains".

But, it went on to argue in "Trial by Fire', "there are reasons to doubt that this in fact should be the government's highest priority if it threatens to destroy efforts to unify the country and establish civilian control over the military".

Singapore's Senior Minister Lee Kuan Yew put it more bluntly: the Suharto trial is not crucial to Indonesia's peace and stability. "It's a country where the power structure is in transition and we may not know what it will look like in a steady state for quite a while. The Suharto trial has nothing to do with this," he said at a pre-launch press conference on his memoirs a fortnight ago.

Why was Jakarta in such a rush to prosecute Mr Suharto? The fabled Suharto billions, his enjoyment of which gnaw at the public imagination. Even some in the president's inner circle wonder if he too caught that bug, if only to be in a surer position to shore up his own political base.

Witness his clemency for money offers some months ago. Witness too the manner in which he sent then-Mines Minister Susilo Bambang Yudhyuno to negotiate a secret political settlement in return for the return of at least half of the family fortunes.

Suharto daughter Siti "Tutut" Hardiyanti Rukmana lost no time telling her contacts in the government that the president also sent his own daughter Yenny to watch over Mr Bambang.

One Cabinet minister, tipped off by her before Mr Abdurrahman scuttled the talks by boasting prematurely about its success in New York, wonders to this day in what capacity Mr Bambang was sent by the president -- on behalf of the state or himself.

"This trial is about the money. Gus Dur wants to get hold of the money, so he's applying pressure on Suharto and his children," the minister claims.

The Supreme Court judgment sentencing Mr Suharto's favourite son Tommy to 18 months' jail barely 48 hours before Thursday's trial also appears too coincidental to be accidental.

Did the government know the Suharto case would be tossed out on medical grounds and so offered Tommy up as a sacrificial goat to the altar of public opinion, to slake public anger? If that is the case, then what would it take to bow to the lynch mob that has already convicted the entire clan, trial or no trial, due process or otherwise?

If trying Suharto is really vital to breaking the culture of impunity, to restoring a sense of justice to Indonesians, then there are other legal avenues other parts of the government should be exploring.

What is to stop the people's representatives from summoning the former president to parliament instead of merely blaming the A-G for mishandling the case? Legislators could symbolically repudiate Mr Suharto and all the evils he stood for through one of the highest legal instruments of the land, an Act of parliament.

Never happen? Then perhaps a national rethink on what the Suharto case represents to Indonesians and Indonesia is in order.

Soeharto ruled unfit to stand trial

Lindsay Murdoch, Jakarta -- An Indonesian court yesterday dismissed corruption charges against former president Soeharto as the Government intensified its confrontation with his family and angry protesters clashed with police on the streets.

A panel of five judges abandoned the trial after 24 doctors appointed by the Attorney-General gave evidence that Soeharto, 79, was medically unfit to be tried for alleged embezzlement of $A1 billion from charities.

"The entire clinical, psychiatric and psychogeriatric findings show that Soeharto is mentally unfit for trial," Dr Jakaria of the University of Indonesia said. Prosecutors said they would appeal.

As judges were reading the decision police fired tear gas and plastic bullets at hundreds of anti-Soeharto demonstrators throwing stones and fuel bombs outside the complex where the trial was being held.

Witnesses said at least three people were injured by police beatings. Protesters also attacked a busload of Soeharto supporters, seriously injuring at least two. Later, soldiers fired warning shots above the heads of scores of students who were headed towards Soeharto's house, where hundreds of his supporters had gathered.

Speaking earlier in Caracas, Venezuela, during a 10-day overseas trip, President Abdurrahman Wahid said security forces should allow students to protest outside Soeharto's house, where streets have been blocked by security forces since his downfall in 1998.

"The most they can do is throw stones at the windows," Mr Wahid said. "Leave them be. I mean Soeharto was very corrupt wasn't he?"

In effect Mr Wahid, convinced that the Soeharto family is behind a series of bombings in Jakarta, is sharply raising the stakes to get the family to negotiate a settlement with the Government, including paying back billions of dollars stolen during the former president's 32 years in power.

But the dropping of the charges makes it more difficult for the Government to negotiate a deal. Mr Wahid had said he would pardon Soeharto if he was found guilty and he returned his ill-gotten fortune.

The respected Governor of Yogyakarta, Sultan Hamengkubuwono X, described Mr Wahid's remarks about protesters at Soeharto's house as inappropriate. "It is unethical for a president to say such a thing," the official Antara news agency quoted him as saying. "I have nothing against student protests, but vandalism is another thing and it is not right."

The Justice Minister, Mr Yusril Ihza Mahendra, meanwhile ordered the arrest of Soeharto's youngest son, Hutomo "Tommy" Mandala Putra, who was sentenced on appeal by the Supreme Court on Tuesday to 18 months' jail over a corrupt land deal.

Tommy's lawyers say they will seek a further appeal, but an official at the Attorney-General's office said that unless Tommy sought an amnesty he would be jailed on Monday in Jakarta's Cipinang prison.

Tommy, who is married with five children, would be the first member of the Soeharto family to go to jail. "He is cornered. The Government is playing it very tough, " an Asian diplomat monitoring the case said. "The only possibility for Tommy not to go to jail is to ask for a pardon, but he would first have to admit his guilt."

AFP reports that Indonesian police shot and killed four people as they tried to fend off a mob attacking a police station in East Java. It quoted the national police chief, Commissioner Saroyo Bimantoro, as saying yesterday that about 600 people carrying fuel bombs, sickles and other weapons attacked the Bondowoso district police station at 7pm on Wednesday.

They set fire to it in protest at the release of a murder suspect due to lack of evidence, having earlier torched the suspect's home, the police chief said.

All charges against Soeharto dismissed

Jakarta -- The South Jakarta District Court dropped on Thursday multimillion-dollar graft charges against former president Soeharto after hearing medical arguments from an independent team of doctors that he was mentally and physically unfit to stand trial.

The court also released the defendant from his city arrest status. "The court orders the case's registration number to be scratched from the court's criminal case registers," presiding judge Lalu Mariyun, who is also chief of the South Jakarta District Court, said.

"The ruling is primarily based on facts produced by a total of 60 doctors from three different teams who have examined the defendant, deeming him permanently unfit to stand trial," judge Soemarno said.

Soeharto, 79, who resigned as president in May 1998, failed to attend Thursday's hearing. He was a no-show at two previous sessions due to ill health. The initial hearing was on August 31 this year.

Soeharto was accused of stealing US$571 million from the state by funneling money from seven charity foundations he chaired into the businesses belonging to his family and cronies. Prosecutor Muchtar Arifin told the hearing he would appeal to the Jakarta High Court.

The South Jakarta District Court is notorious for controversial rulings, including the decision to exonerate Soeharto's son, Hutomo "Tommy" Mandala Putra, who was involved in a fraudulent land exchange deal, and businessman Djoko S. Tjandra, the primary suspect in the Rp 546 billion Bank Bali scandal.

After the hearing, Soeharto's defense lawyer Assegaf said his client, who had suffered three strokes, would never have to face court in his lifetime. "His ailing status is permanent, as has been proven by the doctors in court. How can he ever be tried?" Assegaf said.

Chief of the South Jakarta Prosecutor's Office, Antasari Azhar, said his office would file an appeal within a week. "In our appeal, we'll try to get the judges to visit the defendant at his residence and see for themselves, or push for the court to get the Supreme Court to issue a decree on the continuance of the trial without the defendant's presence [in court]." Teten Masduki, coordinator of Indonesian Corruption Watch, agreed: "The Supreme Court should issue a decree for an in-absentia trial," Teten said.

The hearing was brought alive when Marlina S. Mahajudin, a psychiatrist from the Surabaya-based Airlangga University's School of Medicine, testified. Marlina, a member of the 24-member medical team, gave the final word on Soeharto's health. She said the former army general scored 65 out of 100 percent, a moderate score, in physical tests such as eating, washing and going up and down stairs by himself.

"He is however senile due to strokes. His speech is disturbed and he cannot give detailed descriptions," Marlina said. She said he reacted to her questions with rises in blood pressure and heartbeat rate. When asked whether he felt whether he was useless, he bowed his head and said "Allah".

"His family has restricted him from watching Ketoprak Humor [a comedy sketch show] and traditional wayang puppet shows which he watches with an empty stare in his eyes." "His verbal responses are limited to short sentences. He can't repeat what one says very well. I had to repeat 'I am ... buying ... a mango' very slowly for him to repeat it," she said. She also said he had a very short attention span, so much so that if someone interrupted a person asking him a question, he would forget it.

Marlina said Soeharto had failed comprehension tests given to high school and elementary school students, which showed that he had a very bad memory. "I asked him to draw a person, and he drew this, in 60 seconds," she said, pulling out a drawing of what looked like a distorted keyhole.

Separately, Attorney General Marzuki Darusman confirmed that the South Jakarta Prosecutor's Office would appeal to the Jakarta High Court, saying that the district court's decision was against the justice expected by the people. "During the session, the government prosecutor proposed the panel of justices check Soeharto's health in his residence but they ignored it," he said, after attending a meeting with ministers under the coordination of the coordinating minister for political, social and security affairs here on Thursday.

"The prosecutor also proposed that the district court hold an in-absentia trial for Soeharto or that the court allows the Attorney General's Office to bring the defendant to hospital for treatment at the government's cost, but none of them were endorsed," he added.

House of Representatives Speaker Akbar Tandjung said the court's decision to drop the charges should be respected as it was issued upon the recommendation of an independent team of doctors. "If Soeharto physically can't undergo the legal process, how can we force him.

"The public should accept the reality," Akbar, who is also chairman of the Golkar Party, said. He said the nation should now focus on the recent Supreme Court's decision to sentence Tommy, Soeharto's son, to 18-months in prison.

Suharto son avoids jail, for now

Vaudine England, Jakarta -- Prosecutors were deciding yesterday whether to arrest the youngest son of former president Suharto after a surprise ruling by the Supreme Court sentencing him to 18 months' jail on graft charges. Lawyers for Hutomo "Tommy" Mandala Putra said they were planning an appeal against the decision, which reversed a lower court acquittal last October.

Hutomo and business associate Ricardo Gelael were originally cleared of corruption charges relating to a 1995 land deal with state logistics agency Bulog because of a lack of evidence. But the Supreme Court, currently being reconstituted by President Abdurrahman Wahid, chose to look again at the case and decided last Friday to announce Hutomo's guilt and sentence him to jail. The verdict was only made public on Tuesday.

Even though the sentencing was unlikely to lead smoothly to the jailing of Hutomo, political machinations lay behind the timing of the announcement.

The week before, Mr Wahid ordered police to arrest Hutomo in connection with the recent spate of bomb attacks allegedly connected with his father's trial. But police refused to detain the gambling playboy, citing a lack of evidence. Mr Wahid then sacked police chief General Rusdiharjo.

A few days later, Attorney-General Marzuki Darusman hinted that the struggle against Hutomo was not over, adding that other ways were being sought to deliver the message that the Government was serious about prosecuting the Suharto family.

The Supreme Court move does have legal basis, unlike Mr Wahid's earlier arrest order against Hutomo over the bombings in which the executive arm of government sought to influence the theoretically separate judiciary.

"It's true that in the UK and the US, once someone has been acquitted of charges, there can be no going back to review the case," said a legal expert. "But in Indonesia and in other jurisdictions, a higher court such as the Supreme Court can overturn anything that has happened in a lower court ... nothing is ever final here until someone is dead."

The lawyer said the Supreme Court comprised more than 40 judges and that hearings usually involved three of them. The key to winning a favourable judgment was to influence the choice of judges, usually by the payment of large bribes. One of the two Supreme Court judges currently being tried for corruption by the Attorney-General's special Joint Investigation Team to Eradicate Corruption, Marnis Kahar, was among those who had earlier exonerated Hutomo. Local reports pointed out that when Hutomo was sentenced, Kahar was absent.

"I don't think anything just happens by chance in the courts here," said a veteran foreign lawyer. "This sentencing is intended to send a very strong statement to Tommy that he had better watch his back. But I'd be very surprised to see him behind bars any time soon. This is quite a transparent bargaining process."

Another observer described the to-and-froing between Hutomo and Mr Wahid's Government as "a bidding war". "Tommy [allegedly] bought the judges first, and then the Government threatened and changed some judges. So now it's up to Tommy to up the ante," the observer said. "Unfortunately, I think Tommy's pockets are deeper than the Government's."

Police forced peasant activists

Jakarta -- Two activists testified in a pre-trial hearing on Tuesday that they saw the police using force to expel four of their colleagues, who were on a hunger strike, from the People's Consultative Assembly complex last month.

The witnesses corroborated the claim by the four activists from the Agrarian Reform Consortium (KPA) -- Anton Sulton, Idham Kurniawan, Mohamad Hafiz Azdam and Usep Setiawan -- that they were removed from the building against their will.

The four, who staged the hunger strike to draw attention to various land conflicts in Indonesia, have filed a lawsuit against the police with the South Jakarta District Court, demanding compensation of Rp 4.1 billion ($576,000).

Dede Shineba of KPA Jakarta told the court on Tuesday that he saw some 50 police officers force Idham and Anton into an ambulance. He said he saw an officer kick Usep and Idham in the back. All four were in good health and would have been able to walk to the ambulance, he added.

Raylewen T.F. of the United People Coordinating Forum (FKMB) in Bandung told the court that he did not see any of the officers produce an arrest warrant when they took the activists. Police have denied the claims and insisted that the activists voluntarily left the building after negotiations with the officer in charge.

Subsequent to their removal, the four activists went missing for nearly two weeks, prompting speculation that they had been kidnapped. Since their return, however, police have not been able to question them to investigate their claims of abduction. Judge Muchtar Ritonga adjourned the pre-trial hearing until Wednesday to announce his findings.

'Petrus' phantom assassins maybe employed again

Khairul Ikhwan D/BI & GB, Jakarta -- The notorious `Petrus' killings of the 1980s, when possibly thousands of underworld figures were eliminated by the security forces under orders from former president Suharto, might seem like a distant memory in the new democratic Indonesia. Not so.

The North Sumatra Provincial Legislative Council is apparently considering employing phantom assassins from the police to combat increasing criminal activity.

Speaking to Detik last Sunday, Council member Eron Lumban Gaol said that he had made a special request before the Council after witnessing the rapid decline in security in the provincial capital Medan and many other parts of the country in recent years.

Eron said that in the near future the Medan police planned to raid certain areas for firearms and other weapons. He then added that, "The mysterious assassins must be activated again. The National Police, in this case the North Sumatra Police, must prepare to carry this out."

Eron is the deputy leader of the Indonesian Democratic Party of Struggle in North Sumatra, which is headed by Vice President Megawati Sukarnoputri, and a member of Council Commission II which deals with law and internal affairs.

He believes that these `phantoms' should be allowed to operate without public notification. Without a hint of irony, he then added, "At this time, when we are in the middle of learning about democracy, the guarantee of security is very much needed. The phantom assassins are one way to do this," he said Eron explained that in the 80's, criminality had been drastically reduced after the phantom assassins were deployed. Criminals elements had to think twice before acting.

He emphasized that the police must target specific criminals when the operation commences. "The Legislative Council will support the North Sumatra Police if they are ready to implement `petrus' but like I said before, don't be indiscriminate in deciding the targets," Eron said.

He also admitted that he has been terrorised by unidentified phone callers for his strong remarks on Medan's criminal scene. The terror started after his comments on the murder of Kaleb Situmorang, who was shot to death last week. He claimed Kaleb had been targeted because of his knowledge of the bombing incident in Medan earlier in the week.
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News & issues

City set for violent protests over fuel hike

Jakarta -- City authorities say they are fully prepared for violent protests, strikes and shortages when fuel prices are raised on Sunday.

The authorities said on Thursday 200 buses were on standby should bus drivers in the capital go on strike to protest the 12 percent fuel price hike.

The police will deploy thousands of personnel to assure the smooth distribution of gas, kerosene, and basic goods. Officers will guard gas stations, markets, business centers and offices.

City Hall hosted a meeting attended by representatives from the Jakarta administration, police, military, market operator PD Pasar Jaya and Land Transportation Control Agency (DLLAJ).

Mostly middle-ranking representatives were present, unusually for an important meeting. The city administration, for instance, was represented by city secretary Fauzi Bowo, while the Jakarta Police by operation control command deputy chief Supt. Yuwanto.

"In today's meeting, we checked each institution's final preparations ahead of the October 1 fuel hike. We all know that fuel hikes are a sensitive issue that can lead to social unrest," Fauzi said.

Fauzi said the 200 extra buses would be borrowed from several private bus companies, such as Mayasari, Damri and Steady Safe, in anticipation of possible strikes by workers with the city- owned bus company, PPD. "We have heard about the strike plan and even though we are not sure about it, we choose to be prepared," he said.

Supt. Yuwanto said that his boss, Jakarta Police chief Gen. Nurfaizi, had ordered all police chiefs in the capital to enhance security in their areas and work together with security guards at business centers to anticipate unrest.

"Gen. Nurfaizi ordered us on Monday to keep an eye out for groups that could use the moment to create instability in the capital," Yuwanto said. The police, however, are unable to identify the groups, he added.

Increasing fuel prices is a tough political decision for the government as in the past it has often led to protests and unrest. The last time the government increased fuel prices was in May 1998. Protests and bloody riots in Jakarta followed, contributing to the downfall of then president Soeharto two weeks later.

Under the plan, the price of premium gasoline will increase to Rp 1,150 from Rp 1,000 per liter, automotive diesel oil to Rp 600 from Rp 550, kerosene to Rp 350 from Rp 280, and bunker oil to Rp 400 from Rp 350.

Deputy governor of administrative affairs Abdul Kahfi said on Wednesday that the capital would be hit by strikes and protests ahead of the hike. The strikes, he said, may well take place at bus terminals, while protesters could flock to the State Palace, the House of Representatives building and City Hall.

Last week, state-owned oil company Pertamina promised that Jakarta would experience no difficulties, such as panic buying, ahead of the rises, saying the firm had beefed up its gasoline stocks.

"For Jakarta, we have prepared a total of 7,600 kiloliters of gasoline," Pertamina spokesman Ramli Djaffar said, adding the amount included premium, diesel oil, kerosene and bunker fuel. The company, he said, was prepared for dropping fuel directly to areas reporting shortages but asked local government to watch the distribution.

Officer Yuwanto said: "To secure the distribution of gas and essential goods, Jakarta Police will conduct a joint operation with neighboring West Java and East Java Police to secure the northern coastal area of Java to ensure smooth distribution." PD Pasar Jaya head Syahrir Tanjung said the public had no reason to worry about the supply of basic needs and staple foodstuffs as there were adequate stocks so far.

"The public have nothing to worry about because we have enough stocks and so far the prices of basic goods are still stable," Syahrir said.

Media reports have said the price of several items, such as noodles, eggs, and milk formula has started to increase over the past few days. People have also reported that goods have started disappearing from the markets. "Some distributors began hoarding items, waiting for new prices in line with the fuel hike," said a shop manager.

Bondowoso Police shoot dead five attackers

Jakarta -- Five people were shot dead by police who were attempting to fend off a mob attacking a police station in the East Java town of Bondowoso, National Police chief Gen. Surojo Bimantoro said on Thursday.

"I have a report from the East Java Police chief that yesterday [Wednesday] at 5pm, an attack on the Bondowoso district police station took place by some 600 people carrying fuel bombs, sickles and other weapons," Bimantoro told journalists after attending a Cabinet meeting.

The attackers set fire to Bondowoso Police station and in their efforts to repel and disperse the mob, police shot dead five and left several injured. "In facing it [the attack], the police went through all existing procedures, from using rubber bullets to live ones," Bimantoro said.

He said the attack was in protest of the release of a murder suspect. Police released the suspect due to lack of evidence, Bimantoro said, but the move angered the local population who torched the suspect's home and later attacked the police station.

He said that the situation in Bondowoso had since returned to normal. "The situation is now calm," Bimantoro said, adding that the province's police chief, Insp. Gen. Dai Bachtiar, had immediately gone to Bondowoso and held talks with local public and religious leaders.

Bondowoso Police chief Supt. Marwoto Suto said later in the day, however, that security personnel were still on high alert to anticipate further unrest. He also said that a platoon of police Mobile Brigade personnel and one battalion of Army troops from the nearby town of Jember would be deployed to Bondowoso to reinforce security.

However, from the East Java provincial capital of Surabaya, the regional chief of the Nahdlatul Ulama Muslim organization, Ali Maschan Moesa, claimed that the unrest was sparked by people's discontent over Marwoto's possible involvement in a gambling ring. "The East Java Police chief has even acknowledged that he [Marwoto] is slow in tackling gambling. But the people of Bondowoso feel that he is not only slow but actually behind the gambling," Ali said as quoted by Antara, adding that Marwoto must be replaced.

"The police chief has promised that he will be replaced ... I have told people the news, and that's why the situation has calmed down," Ali added.

Youth group leader held for attack on US consulate

Jakarta -- The leader of a youth group linked to the Indonesian military has been detained for allegedly instigating and funding an attack on a United States consulate office to protest against US involvement in Timor.

Gatot Sutantra, deputy head of the East Java branch of the Indonesian Forum for Children of Retired Soldiers, was named as a suspect with three others arrested earlier, The Jakarta Post reported yesterday.

On September 15, dozens of protesters tore down the US flag at the consulate in Surabaya, the capital of East Java province, and set it on fire.

They also pelted the compound with stones, condemning Washington for pressuring Indonesia to disarm pro-Jakarta militias, who were blamed for killing three United Nations workers in the border town of Atambua on September 6.

Police chief Sri Kersno said: "Gatot asked activists from various organisations to join in defending the country's interest and to influence public opinion with protests against what he perceived as American intervention in Atambua."

A witness told police he received 1.2 million rupiah (S$240) from Gatot to persuade people to join the rally, said the daily. The police chief said pedicab drivers were paid 10,000 rupiah each to take part in the rally.

New bomb rocks Kontras' office ahead of Suharto hearing

Ali Kotarumalos, Jakarta -- A bomb exploded outside the office of a prominent Indonesian human rights group Wednesday, just hours before the corruption trial of ex-dictator Suharto was set to resume. There were no injuries in bombing, the latest in series of blasts that have terrorized Jakarta, and damage was minimal.

The explosion occurred late Wednesday in front of Kontras, an organization that investigates cases of kidnappings and violence by Indonesia's security forces.

Witnesses said two bombs were hurled at the building by two men on a motorcycle. One of the devices failed to detonate and was discovered nearby. Police said both bombs were relatively small.

Munir, the chairman of Kontras, said his office had received several anonymous bomb threats recently. Like many Indonesians he uses only one name.

Arrested army pair 'planted exchange bombs'

Agencies in Jakarta -- Two soldiers among 28 suspects arrested over a spate of bombings in the capital planted the explosives at the Jakarta Stock Exchange which killed 15 people, police said yesterday. But police said they were still looking for the mastermind behind the blasts.

The two soldiers, along with a civilian, were arrested in Bandung on Sunday after a shootout with police which left two officers and one of the suspects injured. Brigadier-General Dadang Garnida, the national police spokesman, said security forces had evidence the two soldiers were responsible for building and placing the bomb in a garage at the exchange on September 13 and that police were still hunting for three suspects.

National police chief General Surojo Bimantoro said: "The recent blasts are being looked into, case by case, and we are still searching for links between one and the other. We want to find the mastermind."

As well as the blast at the stock exchange, there have been several other bombings recently, including a car bomb outside the Philippine ambassador's residence that killed two people and injured dozens. One of the 28 suspects arrested told police the group also planned to attack the US Embassy.

Some of the blasts coincided with advances in a corruption case against former dictator Suharto. Some people have speculated they were the work of his supporters and elements of the security forces opposed to President Abdurrahman Wahid's democratic reforms.

Lawyers for Suharto, who was ousted from office in 1998 amid pro-democracy protests, have denied the allegations. The former strongman's trial is scheduled to reconvene tomorrow. Police have stepped up patrols and alertness ahead of the hearing.

General Bimantoro said all 28 suspects, including the soldiers, were from Aceh, where separatists are fighting for independence. Acehnese rebels have denied any involvement in the bombings. The national police chief said on Monday that the two soldiers were acting as individuals and working outside the military chain of command.

"I have ordered Kostrad [strategic reserve] and Kopassus [special forces] chiefs to take steps to investigate the involvement of the two soldiers," armed forces chief Admiral Widodo Adi Sucipto said, vowing there would be no cover-up. The Kopassus member arrested in Bandung was a deserter, General Bimantoro said. He said a Kostrad soldier, Ibrahim, was also being held.
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Economy & investment

Government raises fuel prices by an average of 12 percent

Jakarta -- The government on Saturday raised fuel prices by an average of 12 percent to help offset soaring oil prices in international markets. The new prices are effective as of Sunday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said raising fuel prices was a hard decision but the government did not have many choices other than to take the measure in a bid to cut the large subsidies for domestic fuel sales.

The price of premium gasoline was increased by 15 percent to Rp 1,150 (about 13.5 US cents) from Rp 1,000, automotive diesel by 9 percent to Rp 600 from Rp 550, industrial diesel by 10 percent to Rp 550 from Rp 500, kerosene by 25 percent to Rp 350 from Rp 280 and bunker fuel by 14 percent from Rp 350 to Rp 400.

"The plan to raise fuel prices by an average of 12 percent has already been approved by the House of Representatives with the enactment of the budget for fiscal 2000," Purnomo told a press conference.

Purnomo said that with the price increases, the government would be able to reduce fuel subsidy expenditure to about Rp 800 billion (US20 per barrel and an exchange rate of Rp 7,500 to the US dollar.

House of Representatives speaker Akbar Tanjung and the deputy speaker of the People's Consultative Assembly, Husni Thamrin, said that they would ask the government to review the price hike if it caused a steep increase in the prices of basic commodities.

In general, the overall situation across the country, including in the capital Jakarta, on Saturday ahead of the planned fuel hike remained calm and the expected long lines of motorists queueing for fuel at gas stations were scarcely in evidence. In Greater Jakarta, a long line was seen only at a gas station in the Lippo Karawaci complex in Tangerang.

Owners of fuel kiosks, which can be found on many roadsides across the country, said they had hoarded large stocks of fuel and kerosene in their efforts to earn extra profits in the first days of the new pricing regime.

"We're ready to serve customers at the new prices with the fuel we bought a few days ago," Mardio, a trader in Ungaran, Semarang regency, said. In Salatiga, Central Java; Palembang, South Sumatra and Jambi, there were no signs of people rushing to gas stations for fuel on the last day of the old prices. "But there were more people coming here than usual, filling their tanks right up," said a gas station worker in Jambi, as quoted by Antara.

Meanwhile, gas stations in Pekanbaru, Riau and Mataram, West Nusa Tenggara were swamped by motorists wishing to take advantage of the last hours of the old prices. Retail fuel vendors were also seen among the people queuing at gas stations, bringing their jerrycans.

In Denpasar, Bali, some owners of hardware stores were taking advantage of the situation by increasing the prices of their goods. In Kupang, East Nusa Tenggara, Governor Piet Tallo has decided to increase public transportation fares here starting Sunday.

Like in many other places across the country, local police were also ordered to prepare for any possible unrest that might arise due to the hike in fuel and transportation prices.

In several spots in Palu, Central Sulawesi, Medan, North Sumatra and Makassar, South Sulawesi, protests against the price hikes were still continuing on Saturday. In Medan, students rallied on the streets, calling out that the people should reject the price hikes and asking them to rally on the streets on Monday.

In Yogyakarta, the lines of motorists at major gas stations were much fewer compared to the regular lines on Sunday evenings.

Boom amid gloom

Marianne Kearney Jakarta -- Malam Minggu or Saturday night is always busy in the glass and granite shopping centres that serve as Jakarta's social hubs.

But here in Senayan Plaza, one of the capital's plusher shopping centres, it has never been busier. Teenagers decked out in platform shoes, jogging shoes, jeans and T-shirts crowd around Wendy's ice-cream bar or line up for takeaways at fast-food joints. Young families munching on hamburgers, sushi and pizza crowd the food court, while slickly dressed young couples prowl the designer-label shops.

As the rupiah rides the rough waves created by the latest political fallout or reports of violence in the provinces, the only wave that the shops in Senayan Plaza are riding is the one on the up and up.

Bomb blasts, anti-Suharto demonstrations, as well as last month's political challenges to President Abdurrahman Wahid have not deterred the well-heeled from flocking to the centre's cinemas, shops and restaurants.

For sleekly dressed Christin Suparno, 34, shopping and meeting friends for lunch is at least a weekly event, regardless of the latest slump in the rupiah. "It doesn't make such a big difference. I come here regularly to shop because it has all the latest fashions," she said, showing off her latest purchase -- a pair of black Georgio Armani pants, costing more than $1,700.

The centre is full of fashionably dressed young women and men, who if they do not splurge on exclusive designer labels, will at least buy fashionable but more casual labels.

But not all of those flocking to upmarket shopping centres come to shop. Many come to go to the movies or to eat at the food court and to window shop. Smaller shops and food outlets are also being boosted by hoards of teenagers and young people, who might not have much to spend but bring the crowds.

Such is the pulling power of the newer plazas such as Senayan, that some, such as student Siti Haryonto, 19, are prepared to pay more than twice the usual price of movie tickets to soak up the atmosphere, hang out with friends and, of course, watch a movie. Even if the students only spend 50 000 rupiah (S$10) each, this still contributes to the centres' success. Meanwhile, shoppers, such as Ms Suparno, with much deeper pockets, have helped designer stores to boost their sales by as much as 20 per cent since January.

At Senayan Plaza and Plaza Indonesia -- another of Jakarta's posher shopping centres -- several new designer-label stores have opened recently or are opening in the next few weeks. At Senayan, Fendi's recently installed bright orange, purple and lime green stilettos compete for attention with sleek black and grey outfits from the new Donna Karan New York store.

Luis Vuitton, Bvlgari, Georgio Armani and Christian Dior have already staked out prime space, yet foreign investors believe that Jakarta has yet to reach designer-label saturation point.

Ms Rosalyn Ruhardjo, a retail-property consultant from Jones Lang La Salle said both first-line and second-line brands, such as the more casual Hongkong or American labels, were still queueing for space in Jakarta. "The smart local business people knew there would be a turnaround once the new government came into power and so they got in early and bought up all the available retail space," she said.

The growth in luxury goods has been predicted for some time. As property managers point out, local businesses have been expecting the return of the upper classes once the election was over.

Analysts say the upper class has probably benefited from the early days of the downturn due to the high deposit interest rates being charged then. But though this class has always had the money to spend, it does not make up for it in confidence. This in turn makes the increased spending of the middle- and lower-middle-class consumers surprising.

Sales of items such as Body Shop soaps costing 40,000 rupiah are soaring. The Senayan store's manager, Mr Sugeng, said sales were up by 30 per cent and admitted to being pleasantly surprised by the sudden turnaround in business. "We expected it to improve but not by this much. The number of customers has doubled since January," he said.

Most of the shop's customers were career women (50 per cent) followed by teenagers (30 per cent) and housewives (20 per cent), he added. This again suggests that it is not just the affluent Gucci set but also those in the lower-middle classes who are freeing up their purse strings.

Meanwhile, the fast-food business is sizzling, with food outlets reporting twice as many customers as last year. "For food it doesn't matter, people have money for that," said Mr Hashim, the manager of a Japanese fast-food outlet. He said the rupiah would have to hit 12,000 to the US dollar -- it is now 8,500 -- before it would have an impact on the sales of the pricier items such as Japanese salmon.

Supermarkets catering not just to the upper class but also the lower-middle classes are also expecting a retail boom in the next year or so. Several large supermarkets such as the local Hero and Matahari, as well as the French chain Carrefour have also opened new stores.

Carrefour has opened three new hypermarkets since last year in anticipation of a retail turnaround. Its manager Agus Alwie is confident the sales volume will continue to rise over the coming year.

Parliament's tussle with President Abdurrahman in the past few months has had no effect on sales and Mr Agus is confident business will continue to expand as long as the government remains in power. Mr Agus said that, although Carrefour had opened seven stores, there was still room for growth in Jakarta.

With 30 to 40 per cent of Jakarta's 10 million-strong population qualifying as middle class, he thinks there is a big market yet to be tapped.

Although not all the Carrefour stores have increased their sales, sales in two stores -- where many of the customers are lower- middle class or working class -- have increased by 10 per cent this year. Much of the increased sales have been due to spending on non-essential items, such as electrical goods, he said.

Major local department stores such as Matahari and Ramayana, favourite haunts of the middle class as well as the upper range of the working class, are also showing huge jumps in their sales levels this year.

Matahari, which has department stores in major cities throughout Indonesia, is doing better in the first quarter compared with the whole of last year. Its first-quarter sales of 843.2 billion rupiah far outstrip those of last year's, which totalled 691.2 billion rupiah.

The growing spending power of Indonesian consumers -- ranging from the upper class to the lower-middle class -- is also supported by the country's healthy export figures. In the first quarter of this year, the total value of Indonesia's exports increased by US$4 billion, with strong performances by the manufacturing as well as the mineral and fuels sectors.

Mr Agus's confidence reflects a growing but guarded optimism among Indonesian business people. A recently-conducted survey by private research company Danareksa found that consumer confidence had increased in Jakarta and West Java, although it dropped in Sumatra, Sulawesi and the rest of Java.

Danareksa's survey, which includes people from all classes, showed that spending on durable goods had increased and more people were planning to renovate their homes -- up from 4.9 per cent in July to 8.5 per cent last month.

And planned spending on new motorbikes, the ubiquitous family car for working- and lower-middle-class families, jumped from 2.2 per cent in March to 2.9 per cent last month.

Danareksa's chief researcher Raden Pardede said senior business leaders, while more subdued in their predictions for the next six months, were still more optimistic than they were six months ago.

Over 16 percent of Indonesian families classified as poor

Jakarta -- The economic crisis is still gripping the country, with the number of poor families rising from 6.9 million last year to 7.7 families this year, according to the results of a new survey. The number of poor families make up over 16 percent of the estimated total number of families in the country.

The data was announced on Wednesday by the National Family Planning Board (BKKBN) based on a census it held from February to April. The census also shows an increase in the total number of families in the country from 45.7 million to 47.3 million this year.

The board's deputy for planning and analysis, Mazwar Noerdin, said that the indicator used to measure a poor family is its ability to satisfy food consumption and provide for health, housing and clothing needs.

According to Mazwar, as a result of the crisis, participation in the government's birth control program is also down from 25.2 million participants to 24.5 million.

In the education sector, the census shows that the older the children get, the fewer go to school. For the total 47.5 million children in the country aged between seven to 12 years old, 94.16 percent of them are enrolled in school.

But for young teenagers aged between 13 and 15, only 81.14 of them go to school. No exact figures were released on the total number of children in that age group. As for the teenagers aged from 16 to 18 years old, only 59.5 percent from a total of 11.58 million go to school.

This means that some 4.6 teenagers of that age do not go to school, an increase of about 1.68 percent from last year's census. "Most of them come from poor families, of course. And they end up in the street," Mazwar said, referring to the older teenagers who do not go to school.

The government has initiated several programs to help the poor, and according to Mazwar the board itself has launched a program called the Campaign to Increase Family Incomes (UPPKS) to help housewives establish their own business. It also gives out free contraception.

The board plans to hold another census next month, to ascertain the latest information on poor families. "Based on this data, the government will determine the number of families who deserve free medical services at community health centers and state hospitals," Mazwar said of the planned three-month census. Some Rp 3 billion (US$375,000) has been allocated for the census which will be conducted by some 1.5 million enumerators.

The budget dilemma

Preparing the draft 2001 state budget that will be unveiled to the House of Representatives next week should be one of the most daunting jobs for the one month-old Cabinet, notably its economic team. The biggest challenge is how to make the spending plan reasonably realistic and conducive for strengthening the foundations of the nascent economic recovery in order to sustain and accelerate it.

The dilemma, though, is that a pragmatic budget requires what the International Monetary Fund terms in its latest annual assessment of Indonesia as fiscal consolidation. This essentially calls for painful measures, which are politically unpopular. First of all, the planned increase in domestic fuel prices, already delayed since April, will have to be implemented next month. Another delay of just a few months would sabotage the effort to restore fiscal sustainability and could lead the budget to a devastating deficit explosion.

Next on the urgent reform agenda is the implementation in January of the laws on fiscal decentralization and regional autonomy that will cause a massive drain on the central government's revenues but which is crucial for political stability and preservation of national unity.

Preliminary estimates indicate that some Rp 60 trillion (US$7 billion) or 26 percent of total revenues envisaged in 2001 fiscal year beginning in January will be allocated to provincial and district administrations. The dilemma here is that citizens and local administrations, especially in resource-rich provinces, have been demanding that full-fledged fiscal decentralization start immediately in January. The danger, however, as IMF directors warned in their September 14 review of Indonesia, is that a fiscal decentralization process that is too fast could pose considerable risks to fiscal sustainability as well as to the delivery of essential public services. How the central government manages a pragmatic and phased process will affect political stability in provinces where separatist sentiments are high.

The financial burden of the fiscal decentralization process will be especially taxing on the central government in view of its huge domestic and foreign debt, currently estimated at more than $143 billion, including the equivalent of $67 billion in treasury bonds issued to recapitalize banks.

The finance ministry has estimated that around Rp 110 trillion or more than one third of total spending next year will go to paying interest on bonds and to servicing foreign debts. The estimate on foreign debt servicing has taken into account the rescheduling of $8.5 billion in principal foreign debt to sovereign creditors maturing between 2000 and 2002 that was concluded last April.

Since total revenues for the coming fiscal year are projected at only Rp 230.3 trillion, the budget will end up with an estimated deficit of Rp 53 trillion or as much as 4 percent of gross domestic product. This is the portion expected to be funded from proceeds of the privatization of state companies and the sales of assets by the Indonesian Bank Restructuring Agency (IBRA) and new loans from creditors.

However, since the country's foreign debts are already huge and most creditors' exposure in Indonesia is already close to their respective ceilings, significant new foreign loans will likely be hard to come by, especially in view of the negative international sentiment towards Indonesia after the recent killings of three United Nations workers in West Timor.

Given the severe restrictions on state finances, the impact of the state budget on the economy will most likely be contractive or, at best, neutral. Hence, a much higher pace of the sales of more than Rp 500 trillion worth of assets held by IBRA and privatization of state companies is crucial to accelerate the recovery, currently fueled mainly by private consumption.

IMF directors see progress in these two areas as quite slow. As of last month, or only four months before the end of the current fiscal year, IBRA has collected only about Rp 10 trillion of its Rp 19 trillion revenue target. Even more disappointing is that not a single cent of the Rp 6.5 trillion revenue target set for the sales of state companies has been realized. Accelerating the pace of asset sales and debt restructuring by IBRA are indeed pivotal not only to reduce government debt but, more importantly, to stimulate new investment and capital inflow, without which the budding economic recovery will not be sustainable.