Indonesia/East Timor News Digest No 42

Yogyakarta -- The Yogyakarta branch of the Alliance of Independent Journalists (AJI) sent a letter to the National Police Chief Gen. Surojo Bimantoro on Friday, protesting the decision to promote Brig. Gen. Mulyono Sulaiman as Jakarta Police chief.

In a two-page letter signed by the AJI's vice chairman Heru Prasetya and secretary Tjahjono EP, the group urged the National Police chief to negate the promotion and instead question Mulyono over the handling of the 1996 murder case of journalist Fuad Muhammad Syafruddin, alias Udin, while he was then the Yogyakarta Police chief.

The alliance said Mulyono was not the right person for the post, because he had proved himself incapable of solving the murder case. "When he was the Yogyakarta Police chief, his men committed a fatal errorby wrongfully arresting Dwi Sumaji alias Iwik in October 1996 for the murder case ... while evidence and witnesses concluded that it was not so," the statement said.

Bantul District Court finally freed Iwik from all charges due to lack of evidence on November 3. "The promotion of a particular figure to such a post should take into consideration his or her achievements and track record. The National PoliceHeadquarters should have a clear quality standard for the position of police chief," the statement said.

Rallies held with different themes

Jakarta Post - October 20, 2000

Jakarta -- Jakartans saw at least three rallies, each of which had a different theme, in the capital on Thursday. But, they had one thing in common: they were all protesting President Abdurrahman Wahid's erratic personal behavior and political stances. The rallies, however, did not cause any traffic congestion and all of the participants dispersed peacefully after staging their protests.

The first rally began at around 9am when dozens of students from the Jakarta State Institute of Islamic Studies (IAIN) staged a protest in front of the Merdeka Palace on Jl. Medan Merdeka Utara in Central Jakarta. They accused President Abdurrahman Wahid of having failed to govern the country well.

In a statement made available to the press, the students stated that Abdurrahman had taken the country further away from the goal of reform and was now following in the footsteps of the New Order regime under then president Soeharto.

"While the country is in the middle of a crisis, Abdurrahman's priority is to put his closest aides in the government, exactly as Soeharto did during his tenure," the statement said.

The students also accused Abdurrahman of encouraging people to demand independence and separation from Indonesia, by offering a referendum to the people of Aceh and financing the Papuan People's Congress earlier this year. After staging their protest in front of the palace for almost two hours, the students eventually dispersed peacefully.

Meanwhile, hundreds of students from various universities in Jakarta staged a protest at the House of Representatives (DPR) compound on Thursday, demanding that Abdurrahman resign from his leading position in the Shimon Peres Foundation.

The students, who came from Muhammadiyah University, the Bung Karno University, the National University and the Ibnu Chaldun University, also demanded that the House be firmer in condemning Israel's recent attacks on the Palestinians.

"We demand that Gus Dur quit the Shimon Peres Foundation because it is a Jewish agency which has helped in the attacks on the Palestinians," spokesman for the protesters Naufal Dunggio said, while referring to the president by his nickname.

The students also called on the six-day 104th conference of the Inter-Parliamentary Union (IPU) here to issue a resolution condemning Israel. The students dispersed after failing to enter the venue of the IPU meeting at the Jakarta Convention Center, which is located near the House compound.

Another student rally was held later in the afternoon in front of the Merdeka Palace, urging Abdurrahman to stop making compromises with the New Order regime and to eject the military from the House.

Dozens of students from Trisakti University, Gunadarma University, and the National Institute of Science and Technology accused the Abdurrahman administration of being closely connected to the New Order regime and the military. After a half an hour of speeches, the students then left the scene peacefully.

Protestors dog Indonesian aid meeting

Agence France-Presse - October 17, 2000

Tokyo -- Protestors on Tuesday appealed to a meeting here of Indonesia's donor nations to force Jakarta to address human- rights abuses before releasing any new aid.

The murders of three UN aid staff in West Timor, violations by soldiers in Aceh and alleged military complicity in violence rocking the Maluku "spice islands" should all dominate donors' deliberations, activists said.

A coalition of Japanese and Indonesian pressure groups said in a statement that "we request that aid be conditioned for achievements on the above-mentioned points."

About 20 protestors picketed the two-day meeting of the Consultative Group on Indonesia (CGI) as it got under way in central Tokyo's Mita Conference Hall.

As delegates' cars swept through the venue gates, the activists held aloft banners reading "To support the government is to support the military too" and "Link aid with human rights."

Another banner was a mock recruitment poster from the Indonesian security forces, promising new recruits the opportunity to "Be a National Hero" by killing innocent civilians and creating social disorder. A handful of police and security guards watched over the peaceful protest outside the venue.

Japan's Finance Minister Kiichi Miyazawa met Rizal Ramli, Indonesia's coordinating minister for the economy, last Tuesday and said Tokyo was ready to announce fresh support for Indonesia at the donor nations' meeting. Japan, Indonesia's biggest donor, is likely to provide fresh loans worth 58 billion yen (540 million dollars), Japanese reports have said.

But some donors are still reluctant to provide fresh aid because of Indonesia's lax security measures against militia groups opposing East Timor's independence, the reports say.

The international community has pressured Indonesia to disarm pro-Jakarta East Timorese militias blamed for the murder of the three UN aid workers in West Timor on September 6.

Japan, however, had been happy to overlook abuses in Indonesia, said one of the protestors. "Japan releases enormous amounts of money to the Indonesian government, despite the fact that Indonesia's human-rights records remains poor," said Natsuko Saeki, head of the Network for Indonesian Democracy (Japan).

"After President (Abdurrahman) Wahid came to power, it appears people started to think that Indonesia was improving its record on human rights," she said. "But actually, the military is starting to regain its political strength."

The activist also urged the countries and organisations attending the World Bank-backed meeting to cancel some of Indonesia's state debt, which is estimated to reach 4.9 billion dollars next year.

"It's estimated about 30 percent of the debt has gone into the pockets of corrupt bureaucrats," Saeki said. "The money never reached the Indonesian public, who are now responsible for paying off the debt. I ask the lending countries to forgive at least 30 percent of their loans to Indonesia.

Anti-governor demo descends into chaos

Detik - October 17, 2000

Maryadi/Fitri & GB, Pontianak -- Tensions between the entrenched Governor of West Kalimantan and the coalition of students and other civilians who want to see him ousted and are on the boil again. An all-in brawl resulted Tuesday when Aspar's supporters occupied the provincial government's offices and then met anti- Aspar demonstrators.

Last week, the central government and House of Representatives gave Aspar Aswin three choices after a vote of no confidence was passed by the Provincial Legislative Council last month. The first option was a forced removal from the province to Jakarta.

Secondly, Aspar could be suspended and last, Aspar could voluntarily resign from his position. Maneuvers to remove Aspar, entrenched in the province since the Suharto era, have been intensifying in recent months. However, Aspar seems intent on clinging to his position, despite the vote of no confidence.

Tuesday's clash began when around 800 Aspar-supporters staged a rally around 9.40am local time, in front of the Provincial Legislative Council. Arriving in two busses and two trucks, the all-male contingent immediately occupied the Council square and delivered orations. They criticised members of the council who passed the vote of no confidence and demanded that the council not suspend Aspar.

Some 1.5 km from the Council, around 900 hundred students from various universities in Pontianak staged another rally demanding Aspar resign. As in previous demonstrations, they delivered orations, burned tires and unfurled banners emblazoned with `Trial Aspar Aswin and his corrupt cronies' and `Aspar Aswin is no longer the governor, form a new administration'.

Initially, the students planned to stage their rally at the Council, but they cancelled the plan when it became known that hundreds of Aspar's supporters had already flocked to the Council. Later, the moved onto the Governor's office at Jl A Yani -- only 500m from the Council building.

Aspar's supporters went to the Governor's office and started to chase the students. Trying to avoid a clash, the students ran away to the large nearby roundabout. However, Aspar's supporters continued to pursue them. A clash was unavoidable.

Students armed themselves with rocks and wooden sticks while many of Aspar's supporters were seen carrying sharp weapons. Seeing Aspar's supporters were better armed, the students pelted their foes with rocks and wood and then ran frantically in all directions. As this news goes on-line, no fatalities have been reported although the clash appears to be continuing sporadically.

East Timor

Fear and loathing spreads in militia ranks

South China Morning Post - October 21, 2000

Joanna Jolly, Kupang and Vaudine England, Jakarta -- Militia leaders fear betrayal in the ranks and suspect the Indonesian military will use other senior militiamen against them.

Leaders Nemecio Lopez de Carvalho and his brother, Cancio, say that the military has already provided money and tickets for two pro-integration leaders to travel to Jakarta to discredit a letter asking for international assistance, which was sent to the UN Security Council earlier this week. In particular, they name chief militia leader Joao Tavares, who they say wanted to be included on a list of militiamen seeking protection, but who has now distanced himself from the letter.

"We think certain people will be used by the TNI [Indonesian army] and Polri [Indonesian police] against us in order to capture us," said Nemecio Lopez de Carvalho. The militia leaders believe that funding is being provided by regional military commander Major-General Kiki Syahnakri for a campaign to prevent them returning to East Timor with 90,000 refugees who they say will follow them.

Analysts and diplomats believe the militias' letter appears to signal a split within militia ranks and may even play into the hands of Indonesian generals accused of rights abuses. But the letter is being taken as genuine and is under serious consideration by the highest levels of the United Nations Transitional Administration in East Timor. If militiamen willing to spill secrets make it to the border with East Timor, a warm welcome could be possible.

In the letter, dated October 14, the militiamen promise to expose those who ordered the violence that laid waste to East Timor after last year's independence ballot. In return, the gang leaders asked for international legal and safety guarantees, for fear, they said, of assassination by Indonesian officers who wanted them silenced.

A key claim in the letter -- that former president Bacharuddin Habibie visited East Timor on August 20 last year to order the destruction -- is disputed. "To say the [then] Indonesian president could have visited East Timor without our knowledge is ludicrous," a UN source said.

In Jakarta, Indonesian police said yesterday that they were considering shifting notorious East Timorese militia leader Eurico Guterres from police detention to house arrest next week. If found guilty of inciting people to carry out crimes against the Government, Guterres faces a maximum of six years in prison.

East Timor independence leader Jose Ramos Horta, sworn in as the territory's first Foreign Minister on Thursday, said his top priority in office would be to mend frayed relations with former ruler Indonesia.

Militia rallies at The Habibie Center

Jakarta Post - October 21, 2000

Jakarta -- Dozens of East Timorese militia members rallied at The Habibie Center on Jl. Kemang Selatan, South Jakarta, on Friday, demanding that its founder B.J. Habibie, who is also a former president, take responsibility for last year's ballot in the former province which led to its independence. The militia members broke a glass door of the building but perpetrated no other violent acts.

According to the protesters, the foundation, inaugurated by President Abdurrahman Wahid in May, should be closed as the institution, originally intended to promote democracy and human rights in the country, had failed to contribute to the welfare of the East Timorese refugees' currently displaced to neighboring East Nusa Tenggara.

A staffer at the foundation, Tengku Arlan, said the group arrived at the building at around 1.30pm and climbed over the gate which had been locked since early morning by staff, who had been informed in advance aboutthe protest. Most of the militia members sat in the building's front yard during the protest, while several others entered the building to talk with the foundation's executive director Ahmad Watik Pratiknya.

Coordinator of the rally, Munawir Ali, said that Habibie, should be put on trial for allowing East Timor to be expunged from the country's map as he had allowed the independence option to be included in the United Nations-sponsored ballot. Habibie's decision has resulted in thousands of East Timorese people now languishing in refugee camps," Munawir said.

Munawir demanded that Habibie come to the building to directly speak to the militia members, or otherwise they would refuse to leave the compound. unawir also demanded that Dewi Fortuna Anwar, special advisor for foreign affairs during Habibie's presidency, come to speak to them. ccording to Arlan, Habibie was currently in Germany while Dewi was in India for unknown reasons.

About two hours after the militia members arrived at the building, Habibie's brother, J.E. (Fanny) Habibie, an executive of the center, came to meet the militia members. n a heated debate, Fanny defended his brother saying that Habibie's decision had been approved by the House of Representatives (DPR).

"It was not Habibie's decision alone. It was the country's decision," Fanny said emotionally. fter debating for about 45 minutes, Fanny left. he militia members also left the building peacefully at about 6.30pm.

Doubts over former Habibie's role in Timor violence

Agence France-Presse - October 19, 2000

Jakarta -- Scepticism ran high in the Indonesian capital on Thursday at a reported claim by East Timorese ex-militiamen that former president BJ Habibie had personally ordered the violence in East Timor last year.

Diplomats told AFP they thought it unlikely that Habibie had passed off unnoticed in the East Timor capital of Dili on August 20 last year, the date militiamen said he had given the order to assembled militia leaders.

Nemecio Lopez de Carvalho, a sub-commander of the umbrella militia organisation, the Pro-Integration Forces (PPI), told Australia's Age newspaper that Habibie, flanked by then-military chief General Wiranto and regional commander Major General Adam Damiri, gave the leaders direct orders.

"Habibie, Wiranto and Damiri came secretly and collected all the militia leaders," De Carvalho was quoted as saying. He said Habibie spoke to them as "as the President of Indonesia and Supreme Commander of the Military."

De Carvalho said the then president told them: "'I give the order to all of you that if autonomy loses, your job is to clean East Timor from the East to the West and leave nothing alive but ants."

In the wake of the UN-sponsored ballot on August 30 in which an overwhelming 78.5 percent voted for independence, enraged Jakarta-backed pro-Indonesia militias went on a rampage of killing, arson and destruction.

More than 250,000 East Timorese were said to have been pushed over the border into Indonesian-ruled West Timor, where an estimated 130,000 remain, mostly stranded in squalid camps.

The claim was also contested by an advisor to Habibie during his 18-month presidency. "It's not possible. I can assure you Habibie has never been to East Timor," he told AFP, requesting anonymity.

"Habibie was extremely fond of the East Timorese. He was the one who made them independent," he said, referring to Habibie's January 1999 decision to allow a plebiscite there in the first place. "Why would he sabotage his own plan?"

De Carvalho is one of four former PPI sub-commanders who have written a letter to the UN Security Council, offering to reveal the full truth behind the militia-led violence, in exchange for safety guarantees. A copy of the letter, dated October 14, and written on PPI headed notepaper was given to a Jakarta-based diplomat earlier this week.

"We will honestly, accurately and thoroughly expose all that we know concerning the various events that occurred in East Timor post-Popular Consultation," the letter stated.

The authors requested international legal and security guarantees in exchange, saying they believed Indonesian military and police were plotting to assassinate key ex-militia commanders to stop them revealing "secrets." The secrets, they said, related to both the post-ballot violence and the killing of three foreign UN aid staff in West Timor on September 6 this year.

The Indonesian military has denied the accusation and accused the four of trying to avoid legal prosecution. Other militia leaders have also distanced themselves from the four.

In the past two months six ex-militiamen have been named suspects in Indonesia's own investigation into the East Timor violence, several have been named suspects in the UN staff killings last month. One ex-commander has been murdered and several others have been named suspects in his death.

[On October 21 the Sydney Morning Herald cited an excerpt from Habibie's diary dated August 20, 1999, which was released by his office. It says that he went swimming in the morning, attended midday prayers at the Baiturrahman mosque, awarded medals at the Merdeka Palace at 1pm, met advisors at 2pm, met Muslim clerics from 3pm to 4pm, was at home by 5pm and attended a wedding from 7pm to 8pm - James Balowski.]

Militias agree to face trial if allowed to return home

Sydney Morning Herald - October 20, 2000

Joanna Jolly, Kupang -- East Timorese militia leaders in West Timor say they will meet all conditions set down by the United Nations, including facing justice, in order to return home.

Eight militia leaders said yesterday in the West Timorese capital, Kupang, that as long as the UN gave them a legally binding security guarantee that they would not be harmed in East or West Timor, they would return, bringing with them most of about 100,000 East Timorese refugees still in West Timor.

"We will accept justice, but there must be fair justice," a militia vice-commander, Nemecio Lopez de Carvalho, said. "We will return as soon as we have a security guarantee from the international community." In Dili, a UN spokeswoman, Ms Barbara Reis, said anyone was welcome to return to East Timor as long as those who did so were prepared to accept the conditions laid down by the UN transitional administration in the territory.

"Everybody is welcome as long as they realise they will face justice if they are implicated in serious crimes; if they renounce violence, if they stop questioning the result of last year's popular consultation and if they realise it is pointless to talk about the allocation of a separate district for refugees." The militia members say they will accept all these conditions, as they believe the Indonesian military and police will assassinate them if they remain in West Timor because of what they know.

In a letter to the UN Security Council this week, the militias said they were ready to release information implicating the Indonesian Government in last year's violence if the UN sent a team into West Timor to conduct disarmament and guarantee their security. The letter carried the names of 55 prominent militia members, including their overall chief, Joao Tavares.

They also demanded that the notorious militia chief Eurico Guterres be tried in the international court in The Hague, rather than in Jakarta, where he is in prison facing an illegal weapons charge.

The letter signals a split between militia leaders and UNTAS, the political body that represents East Timorese pro-integration support groups in West Timor. Kupang newspapers report that UNTAS is critical of the militias' demands, and says they should leave West Timor because they will cause instability if they remain. "Those who feel they are not Indonesian citizens must get out of Indonesia soon," the UNTAS secretary-general, Mr Filomeno Hornay, told the NTT Express.

Local newspapers have also reported that Tavares complained that the militia leaders did not consult him before writing to the UN. The militia leaders yesterday stood by their allegation, made on Wednesday, that the former Indonesian president Dr B.J. Habibie ordered the destruction of East Timor at a secret meeting in Dili on August 20 last year.

"The meeting was very secret and professional. We can prove it through our testimonies," Lopez de Carvalho said. "Habibie came by plane with generals Wiranto, Damiri and Zacky Anwar and we had a meeting with them that lasted more than two hours." General Wiranto was then the armed forces chief, General Damiri the regional commander and General Anwar the intelligence chief.

Trouble behind, trouble ahead for the new leaders in Timor

Taipei Times - October 18, 2000

Andrew Perrin -- Adriano Almeida da Carmo owns the most popular restaurant in the mountain town of Ainaro, in central west East Timor. There is little to recommend it. Chair legs slip through the cracks of the homemade bamboo floor where customers perch precariously, the food is poor, the beer is warm, and, when night falls, the restaurant is plunged into pitch black.

Electricity is a luxury da Carmo, 35, cannot yet afford. But his customers, mostly UN and foreign aid workers, come nonetheless. They have no choice. Da Carmo's restaurant, which opened in June, is the only one in town.

"Welcome to independent East Timor," da Carmo tells all of his new customers. "We have nothing, but soon we can have everything." It is a clarion call now ringing throughout this devastated land, where last year on August 30 the independence vote that ended 24-years of Jakarta rule sent Indonesian military and their militia sidekicks on a rampage of violence and destruction. Hundreds, maybe thousands were killed, in the ensuing fortnight of mayhem, entire towns and villages were razed, and the civil service and all functions of government completely collapsed.

It was assumed that the UN mission that stepped in to administer the territory last year with the sweeping mandate to rebuild the country from scratch, and prepare it for self-government would be here for at least three years.

On arrival in East Timor in November, one senior UN official, staggered by the scale of destruction and the magnitude of the task before the UN, said in private that the mission may have to be extended.

But times have changed. A little over a year on from the turmoil, UN administrators have announced that they are preparing to handover the reigns of power to Timorese leaders possibly as soon as the middle of next year.

According to the new handover timetable, East Timor could become the first new nation of the 21st century by January 2002. The reasoning behind the change of plan is simple, says Sergio Vieira de Mello, the Brazilian diplomat who established the UN presence in Kosovo and now leads the United Nations Transitional Authority in East Timor (UNTAET).

"They [Timorese leaders] have gained a taste for leadership and are impatient for it," he said, during a recent interview in Dili. "Let's face it, after being under colonial and Indonesian rule for so long, I can understand why they are now in a hurry." On the surface, the rebuilding of East Timor appears on track. The enormous task of putting a roof over the heads of at least 500,000 people is moving ahead at full speed as the nation embarks on a building frenzy. Stockpiles of timber and galvanized steel can be seen in every town and village, and the thud of nails driven into wood echoes throughout the countryside. In many areas power has been restored, roads are being repaired, and the telecommunications system is once again operational. Most encouraging of all, farmers the backbone of East Timor's market economy, have returned to the fields.

And in devastated towns such as Ainaro, the markets are again open for business and a sprinkling of entrepreneurial Timorese with big ambitions but little capital like da Carmo are stepping into the void left by the departed Indonesian businessmen.

But to physically rebuild a country upon the ashes of the old is one thing, transforming it into a democratic state with all the trappings of government in place is another. As de Mello himself is quick to point out, following the August 30 vote the hasty departure of thousands of Indonesians who virtually ran the local government, educational systems, justice system and the territory's commercial life has left the country devoid of any infrastructure. Rebuilding these institutions from the ground up is an overwhelming proposition and critics of the new handover timetable suggest de Mello's plan to fast track the road to nationhood and self-rule will lead to trouble. At the heart of the criticism is his decision in April to bow to the demands of the National Council of Timorese Resistance (CNRT) a coalition of pro-independence parties, led by former resistance leader Xanana Gusmao and allow them a greater decision-making role in government. The new political structure has led to the creation of an executive cabinet that answers to de Mello, and whose top positions CNRT officials occupy.

"We talk about democracy but when have we ever experienced participatory democracy,"asked a high profile member of the Timorese independence movement under Indonesian rule, now scathing in his criticism of the CNRT leadership. "We have been bound by the chains of colonial and Indonesian rule for centuries. We need a strong period of civic education to educate the people about political process. Now in 12-18 months we are supposed to have a democratic country. We don't have a constitution. We don't have a security or civil force. And we don't have any economy to speak of. It's absurd." De Mello has heard the criticisms before. And he is unmoved. He claims that established political philosophy had to be thrown out of the window in favor of pragmatic decisions that respond to the difficult reality on the ground.

In the early days of the mission, he now admits, UNTAET failed in its duty to consult adequately with the Timorese on crucial issues such as unemployment and food distribution that had led to rioting in the streets of Dili in April. Since deciding to allow the CNRT more say in the decisions of government, he has been impressed with the progress.

"The learning process is mutual and it is enriching," he said. "It is good to see the Timorese motivated and running in public office in their own country. They have gained a better understanding of what government is all about, and will soon be ready to take over." But genuine concerns remain about the kind of country Timor's new leaders will inherit once the US$520 million conscience money from international donors has dried up, and UNTAET has departed. Even before last year's destruction, OECD and World Bank figures ranked East Timor as one of the poorest places on the planet. The situation is not expected to improve in the near future. Much of the money pouring in from donors is being spent on rebuilding what was destroyed and establishing basic services. According to one UN official, who works in an economic development unit, it will take years of stability and a wise government before the Timorese can expect to enjoy a standard of living that compares to that in which they were used to under Indonesian rule. "Neither stability nor a wise government are assured," the official said.

But more troubling still, the culture of violence and mistrust that has infiltrated Timorese society following more than two decades of repressive Indonesian rule now threatens to explode into mass civil and social unrest.

In the capital Dili, gangs of unemployed youths patrol the streets at night and murders and petty crime have become commonplace. In towns and villages throughout the country young children play a game called "militia" with remarkably realistic toy automatic guns made from bamboo.

"We are used to solving our problems with guns and machetes, not reason," said Joao da Silva Sarmento, the president of the East Timor Student Solidarity Council (ETSSC). "It will take years to filter this out of our system, but years we do not have." The culture of violence is no stranger to Luis Carrilho. A Portuguese policeman serving on his third UN mission, Carrilho now runs the Police Training College in Dili, with a staff of 25 instructors from all around the world. Like everything in this reborn nation, to create a new police force Carrilho has had to start from scratch. None of his recruits have had any previous experience in policing except, he says, to have been arrested by the feared special police under Indonesian rule.

"We have had to get through to our trainees that the police force is to protect citizens, not to protect the state against citizens," he said. "The law as before was abused by the police. We have pushed here that it is not OK to beat your wife, to kill your neighbor. It will take some time. Our students initially wanted more training in self-defense. We told them that the brain and the pen are the best weapons. They got the message." But the lessons learned inside the new training academy may have little value once the graduates take to the streets. During a lecture on police procedure, 50 students listened attentively to an instructor describe the process of getting a case to court.

"The first stage is collecting evidence at the scene, then have it analyzed in the laboratory, then by a pathologist, then you have an exhibit to take to court," he said. But in East Timor today there are no trained laboratory technicians, no pathologists and the legal system, though operational, could not yet be described as functional. Prisons are full to overflowing. UN administrator de Mello admits his mission is flying by the seat of its pants.

"We are pioneering here," he said. "We are improvising. We are inventing new models for this kind of mission." Whether it will be successful, only time will tell. Yet at CNRT headquarters, bunkered down in the old UN compound in Dili that came under heavy militia attack during what Timorese called `Black September', the future is not feared.

"We have the confidence that our people can work and rebuild our nation," said Jose Ramos Horta, the winner of the Nobel Peace prize and the man already flagged to become East Timor's first foreign minister. "People say we are not ready. But we have been preparing for this moment for 24 years. There should be no criticism. Now is the time for us to work, not to complain."

[Andrew Perrin is a contributing reporter for the Taipei Times.]

Militia leader fears army will kill him

Associated Press - October 19, 2000

Jakarta -- An East Timorese militia leader claimed yesterday his life was in danger because he had threatened to expose details of the Indonesian army's involvement in last year's destruction of the territory.

Senior Indonesian military and police officers, however, denied the claim. "I am being tracked by army and police intelligence officers," militia chief Joanico Cesario said in a telephone interview from West Timor. "I feel like a fugitive."

The militia chief said he and three other gang leaders had sent a letter to the UN Security Council offering information about the violence that swept the fledgling half-island country after it voted overwhelmingly for independence from Indonesia last year.

Human-rights groups have long blamed the Indonesian military for inciting and training the militia gangs, which went on a rampage that killed at least 250 people.

Several army generals and militiamen have been named suspects in an Indonesian government inquiry into last year's violence and destruction. However, no charges have been filed.

On September 5, a prominent militia leader and suspect in the investigation was murdered in Indonesian West Timor.

His killing triggered a deadly riot by a militia mob that left three foreign aid workers dead. Cesario, who heads the 60-member "Saka" militia, said he feared for his life because of what he knew. "I am scared," he said.

Maj-Gen Kiki Syahnakri, regional military commander, and senior police officers denied their forces had tried to stop East Timorese militia from talking to investigators. "No one has threatened the four men," said provincial police chief Brig-Gen I Made Mangku Pastika.

The Jakarta Post quoted General Kiki as saying that the four were most likely threatened in terms of violation of the law, because they were allegedly implicated in several crimes, including their resistance to surrendering their weapons.

'Habibie told militia to leave nothing alive but ants'

South China Morning Post - October 19, 2000

Joanna Jolly, Kupang -- Former Indonesian president Bacharuddin Habibie vowed to cleanse East Timor of "everything but ants" if it voted for independence, militia leaders claim.

The East Timorese militia holed up in West Timor say they are ready to release evidence implicating Mr Habibie and his generals in the destruction of East Timor in return for political asylum.

The militiamen, who have sent a letter to the United Nations Security Council offering documents backing up their claims over the violence that followed the East Timor referendum, say they believe Jakarta's military will try to kill them if they stay in West Timor.

They say the information includes documents and witness accounts of a meeting on August 20 last year in Dili at the Government Office for Women's Affairs at which former president Habibie, the then armed forces chief General Wiranto and former Udayana (regional) Commander Adam Damiri were present.

"Habibie, Wiranto and Damiri came secretly and collected all the militia leaders," said Nemecio Lopez de Carvalho, whose account was backed up by 30 top militiamen now in Kupang.

"Habibie said to us, as the president of Indonesia and supreme commander of the military: 'I give the order to all of you that if autonomy loses, your job is to clean East Timor from the East to the West and leave nothing alive but ants'."

The group of leaders, which includes former Baucau militia chief Joanico Cesario and the notoriously brutal Mahidi chief Cancio Lopes de Carvalho, say they have extensive documentary proof that the Indonesian military gave money and arms, provided training and controlled the militia. In their letter to the UN Security Council, the leaders asked for security guarantees and legal immunity in exchange for their testimony before an international war crimes tribunal.

"They used us like killing machines. We were created by the TNI [Indonesian army] and Polri [Indonesian police] in order to kill each other. This machine was controlled by the TNI and Polri. It was as if they were using a remote control," Nemecio said.

The militia now believe the Indonesian authorities are trying to kill them to prevent this information from becoming public. "The machine did not gain its aims and they are blaming us. We believe they will abandon us and try to destroy us," Nemecio said.

Militia leaders cite the murder and mutilation of a former Suai- based top militiaman, Olivio Mendoza Moruk, in Betun on September 5 as proof that the TNI is trying to assassinate them.

"Before Olivio was assassinated, he went to the Bishop of Atambua and asked to confess. We do not have concrete evidence to say his murder was carried out by TNI and Polri, but who else wants to wipe out the witnesses to last year?" Nemecio said.

The leaders say that, following Olivio's murder, the TNI and police manipulated militia anger to kill four UNHCR workers in Atambua on September 6. And despite pledges by the Indonesian Government to disarm the militia in West Timor, the militia say they still have many automatic weapons.

But they say they will not hand their weapons to the TNI. Instead, they want a UN team to visit West Timor and supervise the disarmament so they can begin the task of reconciliation with East Timor and negotiate for the return of about 120,000 refugees.

[On October 19 Agence France-Presse quoted Guterres as dismissing the letter as the "emotional" and "personal" statement of a small group of his sub-ordinates who wrote it without his authorisation. The commander of the umbrella Pro-Integration Fighters (PPI), Joao Tavares told the Java Post newspaper that the letter had angered other ex-militia leaders. "They included my name and Eurico Guterres' name without our knowledge ... as former PPI commander and deputy commander [respectively], [we] knew nothing of their plan and we feel we have been disregarded," Tavares said - James Balowski.]

Militia 'ready to fight' as police prepare to enforce deadline

Sydney Morning Herald - October 18, 2000

Lindsay Murdoch, Jayapura -- Pro-independence leaders and militia in West Papua vowed yesterday to defy a government order to pull down the separatist Morning Star flag by tomorrow, setting the stage for more violence in the Indonesian province.

The commander of a 4,000-strong squad of militia based in the provincial capital Jayapura, Mr Alex Baransano, said his men and women were ready to fight. "For sure there will clashes. The people of Papua want to be independent ... they will not allow the flag to be brought down."

Mr Baransano said 22,000 pro-independence militia, called Satgas, were on standby across the province that was formerly called Irian Jaya. Thousands of villagers were trying to converge on Jayapura and other Papuan towns to stop Indonesian police and soldiers bringing down the flag, he said. "We don't want violence, but it is our duty to protect the people."

The independence leader Mr Theys Eluay also predicted violence and said he was ready to die in defence of the flag, which has been flying for months outside his home on Jayapura's outskirts. "The flag is part of us ... part of the Papuan people. That is why we are ready to die."

Pro-independence hardliners are angry that police, acting on orders from the government in Jakarta, say they will enforce tomorrow's deadline for the flag to be brought in the province's main towns.

But other supporters of independence, fearing a bloodbath, want to hold a ceremony to lower the flag. "We can't see a way out of clashes," a church source in Jayapura said. "Nobody seems prepared to talk compromise."

The provincial police chief, Brigadier-General Sylvanus Wenas, directed a tirade of abuse against Papuans during a meeting yesterday with representatives of more than 20 non-government organisations in Jayapura, a source at the meeting said. "Wenas said the Papuans were killers and could not trusted," the source said.

Tensions have risen dramatically across the province since President Abdurrahman Wahid announced a ban on the flag last week, saying it had been used as a symbol of independence. Earlier, Mr Wahid had said the flag could be flown as long as it was alongside and below the Indonesian flag. But a Cabinet meeting early this month chaired by the Vice-President, Ms Megawati Sukarnoputri, ordered Indonesian authorities to crack down on pro-independence groups and to bring down separatist flags.

Facing strong criticisms at home and abroad over many issues, including his Government's inability to stem a tide of separatist sentiment, Mr Wahid last Friday delivered his strongest condemnation of separatist demands, saying the Government was ready to fight them.

Police attempts on October 6 to chainsaw a pole flying the flag in the highlands town of Wamena provoked a rampage by villagers that left more than 40 people dead and scores hurt. The violence caused about 10,000 mainly Indonesian settlers to flee their homes and take refuge in military and police barracks.

Human rights and church representatives in Jayapura yesterday complained to General Wenas about police suggestions that non- indigenous Papuans arm themselves in case of attack. "The police are creating a highly volatile situation," a human rights official said.

The emergence of East Timor-style pro-independence militia in the province early this year alarmed human rights and church groups. They were funded in part by shadowy crime figures in Jakarta with links to the youth wing of Golkar, the party that kept the disgraced former president Soeharto in power for 32 years.

Some observers have speculated that the militia, many of whom flout the law, were encouraged to give Indonesia's security forces an excuse to impose military rule in the province.

Wearing a T-shirt declaring "fight today, victory tomorrow", Mr Eluay said his followers would rally tomorrow to block Indonesian police carrying out orders from Jakarta. "We don't have weapons. We don't have guns," he said. "We only want peace for the Papua nation."

Ex-governor Abilio opts for international tribunal

Jakarta Post - October 18, 2000

Jakarta -- The last governor of East Timor Abilio Jose Osorio Soares said on Tuesday that he preferred an international tribunal to try human rights violations which occurred after the referendum in the former Indonesian territory, saying it was fairer that the country's judicial system.

"I'd rather have the case tried by an international tribunal in Den Haag, the Netherlands so that I can also disclose what really happened in East Timor during the self-determination ballot and after that," Abilio said as quoted by Antara in Kupang, the capital of East Nusa Tenggara. "If my testimony is revealed here, who will listen to me? I don't think the government now want to hear my voice. I'm just a refugee now."

Abilio vowed that before an international tribunal, he would disclose the role of the United States government and United Nations Mission in East Timor (UNAMET) in the unfair ballot last year. He alleged that the US had been one-sided as they closed their eyes to the fact that thousands of prointegration supporters were killed by the pro-independence armed groups.

Abilio was named as one of the suspects by the Attorney General's Office in crimes against humanity in East Timor. "I can accept what I am blamed for with an open heart but I have a strong belief that the truth will speak by itself," Abilio added.

The government objected to the international call to hold an international tribunal for the suspects of the human rights abuse in East Timor saying Indonesia would uphold justice within it sown judicial system.

Timor militia suspects disappear

BBC - 17 October, 2000

Prosecutors in Indonesia have admitted that six of the 22 suspects wanted for questioning in connection with human rights abuses in East Timor last year have gone missing.

A spokesman for the attorney-general's office said they included some of the most notorious pro-Jakarta militia leaders accused of carrying out atrocities during the independence referendum last August.

He said the six suspects had been expected to appear for questioning in Jakarta last week but they had failed to turn up, even though they had apparently left for the capital from their base in West Timor seven days ago.

The Indonesian government is under pressure to prosecute those responsible for gross human rights violations, otherwise an international tribunal may be set up.

The attorney-general's spokesman said his office now had no idea where the suspects were, and he admitted they had no police guard with them as they travelled to Jakarta.

List of suspects

Among the suspects who have gone missing is Manuel Sousa, leader of one of the most feared militia groups, known as "Red and White Iron". The group has been accused of some of the worst atrocities committed against independence supporters in East Timor last year.

Last month, shortly after the attorney general released a list of suspects wanted for questioning, one militia leader was shot dead in West Timor in mysterious circumstances. Officials were sharply criticised at the time for not providing police guards for the suspects.

BBC Jakarta Correspondent Richard Galpin says the disappearances of the militia suspects are likely to provoke further criticism of Indonesian attempts to bring to justice those responsible for the wave of killings and destruction which followed East Timor's historic vote for independence. At present there is little sign that any of the suspects, who include senior army generals, will be brought to justice at any time soon.

Without action on the part of the Indonesians, the United Nations is pressing for the creation of an international war crimes tribunal -- a move Jakarta has said would constitute unwarranted interference in its internal affairs.

Militias offer to reveal all about East Timor

Agence France-Presse - October 17, 2000

Jakarta -- Four former leaders of pro-Indonesia militias who helped run a campaign of wholesale murder and looting in East Timor last year have offered to reveal everything they know in exchange for guarantees of safety.

In a letter addressed to the UN Security Council, the four accused the Indonesian military of trying to assassinate them before they disclosed army involvment in the violence that swept East Timor in September 1999 after the territory voted for independence.

The letter, dated October 14 and a copy of which was obtained here Tuesday, was sent by four former commanders: Joanico Cesario, Domingo Pereira, Cancio Lopez de Caravalho and Nemecio Lopez de Carvalho.

The writers said copies had been sent to 35 people including United Nations Secretary General Kofi Annan, Pope John Paul II, and the leaders of the United States, Britain, France, China and Russia as well as Indonesia's most senior politicians.

The four offered to "honestly, accurately and thoroughly expose all that we know concerning the various events that occurred in East Timor" in exchange for legal guarantees from the Security Council.

They accused the Indonesian military of "acts of terror and intimidation" and of trying to kill militia commanders for their knowledge of "secrets concerning various cases of human rights violations and crimes against humanity in East Timor."

The four said the military also seemed to believe they knew the circumstances of the murder of three UN relief workers based at refugee camps in Atambua, West Timor, on September 6 this year. They had also become targets "in order to destroy both witnesses and evidence" surrounding those killings, they said.

A UN-supervised ballot held on August 30 last year resulted in an overwhelming vote for independence from Indonesia in East Timor. The result sparked an orgy of militia-led destruction and violence that left around 600 people dead. Indonesia-backed militias forced some 300,000 East Timorese over the border into West Timor, where 130,000 remain, mostly in squalid camps.

The four writers were seeking guarantees of safety for 54 militia leaders, members and advisors, including notorious Aitarak (Thorn) militia leader Eurico Guterres. The letter stated that militia leaders' "lives and safety are being threatened" and asked that the 54 be cantoned in a secure area in West Timor.

It stated the militias were now "fully committed" to their own disarmament and disbandment. "We ... will not use West Timor as the base for physical/armed conflict," the letter stated.

One of the six commanders named as a suspect in Indonesia's own investigation into last year's violence in East Timor was killed and dismembered on September 5 this year.

Meanwhile, Guterres is under arrest in Jakarta and under investigation as a suspect in human rights crimes in the territory. He has dismissed the letter as the "personal statement" of "a handful of PPI members," and urged his supporters to ignore it.

Hope of prosecutions 25 years after Balibo killings

Sydney Morning Herald - October 16, 2000

Hamish Mcdonald, Dili -- A quarter century ago, just about the time most readers will open this newspaper at home or on the way to work, five young television newsmen from Sydney and Melbourne were shot and stabbed to death while trying to surrender to Indonesian soldiers at the village of Balibo west of here.

For 25 years, the search by relatives and others for the full story of what happened and who was responsible at Balibo has come up against brick walls: Indonesian denials about their covert invasion, Australia's protection of secret intelligence, fear among the vulnerable Timorese witnesses.

But now, in what still seems a scarcely believable twist of history, a half-dozen senior police from around the world, working from a room in the former Indonesian Army headquarters in Dili, are moving steadily towards prosecutions in the Balibo case.

Their work could ultimately see criminal or human rights charges laid against former Indonesian soldiers for the murder of Australians Greg Shackleton and Tony Stewart, Britons Brian Peters and Malcolm Rennie, and New Zealander Gary Cunningham, who were all working for Australian TV stations.

The police -- who include an Australian Federal Police officer, a member of the Royal Canadian Mounted Police, and officers from Nepal, Bosnia, the United States, and Nigeria -- are members of the civilian police attached to the United Nations transitional administration here.

Their interest in the case started two months ago when an Australian soldier serving with UN peacekeepers filed a report of encountering a new witness -- a Timorese who had not been interviewed in any inquiry or told his story. The Timorese was not a witness to the killings, but provided a wealth of direct testimony that supports the identification of Indonesians involved, and led to interviews with direct witnesses.

The police team still appears some time away from finalising a case which it can confidently refer to a magistrate who, under the European system of law applying in East Timor, will be the authority launching prosecutions. But fears of missing a 25-year statute of limitations deadline under Portuguese law are misplaced.

According to the UN's assistant police commissioner in East Timor, Mr Antero Lopes, the case is valid as long as it was opened before expiry of 25 years from the crime. "We are in time to conduct this case, and to close it once and for all."

Mr Lopes said police aimed to build a convincing body of evidence that could lead either to a criminal prosecution for murder, or to charges of crimes against humanity under international conventions administered by the UN human rights agency.

Other police and legal sources here say the crimes-against- humanity approach could in fact be easier to mount than a criminal case, and could draw in more senior personnel who were not present at Balibo but who may have ordered the attack and may actively or passively have led troops to shoot prisoners.

While it was unlikely any indicted persons would surrender themselves for trial or be handed over by Indonesian authorities, the sources said, they could face arrest and extradition if they travelled abroad. In addition, laying criminal charges could spark civil actions by victims' relatives to attach property owned by the accused outside Indonesia.

A further avenue is being explored by a Sydney solicitor, Mr Rodney Lewis, who has been retained by Mrs Maureen Tolfree, sister of Brian Peters, to seek a NSW coronial inquest into the death of her brother, who lived in Sydney and worked for Channel 9. Mrs Tolfree came to Sydney last week to consult Mr Lewis.

Unlike two previous inquiries by former National Crime Authority chairman Mr Tom Sherman, a coronial inquest would have the power to compel witnesses and take sworn testimony.

Speculation has also begun in Australian legal circles that the recently opened 1974-76 Timor archives of the Department of Foreign Affairs and Trade -- showing Canberra was briefed by Indonesian intelligence sources about the Balibo attack three days beforehand -- might justify an action by relatives against the Federal Government.

The Balibo inquiry is being pursued amid the rubble of a town devastated deliberately only a year ago, in a caseload that includes much more recent and serious atrocities. Yet police deny the interest is disproportionate. "This is where it started," one police official said. "They killed five people there, they got away with it, and then went on and on for nearly 25 years."

Labour struggle

15,000 strike again at electrical goods factory

Detik - October 19, 2000

Budi Sugiharto/BI & GB, Surabaya -- Around 15,000 workers from PT Maspion, an Indonesian electrical manufacturing company in Sidoarjo, Surabaya, East Java, have continued their strike action from Wednesday into Thursday demanding an increase in their meal and transport allowances.

On Wednesday, workers from Unit II walked out and moved onto Unit III, inviting workers to join them. Thousands of workers then approached Unit I and brought production to a complete standstill. Maspion has five Units but IV and V are located in another district.

They demanded an increase in living and transport allowances from Rp 3000 (US33c) to Rp 6000 (US66c). After meeting representatives of the workers, the company would only agree to an increase of Rp 300 (US3c). The protesters vowed to continue their action Thursday.

Thursday's all out strike action started at 7.30am local time. The massive gathering resulted in a major traffic jam in the already congested arterial ways leading to the Maspion factories. It was reported that up to four units from the Mobile Brigade and Police have been deployed to guard the factories.

While some workers did not come to work, thousands of others regathered. It appears they have reassessed their demands slightly and are now seeking an increase from Rp 2,000 to Rp 3,000 for food and from Rp 1,000 to Rp 2,000 for transportation.

Maspion currently employs around 30,000 workers at its five Units producing electrical goods for the domestic and regional markets.

Heri, a worker interviewed by Detik Wednesday, said the average worker earned Rp 288,000 (US$32.54) per month including overtime and other allowances.

Twenty representatives of the striking workers met with management Thursday although it is still unclear if the parties reached agreement or if the strike will continue into Friday.

Negotiations going nowhere between Caltex & Riau locals

Detik - October 18, 2000

Chaidir Anwar Tanjung/GB Detik, Pekanbaru -- Negotiations with angry locals continue to produce few results at Caltexs Riau operations in Sumatra and four vehicles owned by the company have again been seized. Meanwhile, a member of the Riau government has called on the company to give some ground and for locals to control themselves, fearing the fields may go up in flames.

Villagers from the Sungai Rangau area, Bengkalis, Riau Province, Sumatra, halted operations completely earlier in the month (9/10/2000) at oilfields owned by international mining giant Caltex. The trouble started when around 70 locals demanded to be employed by the company or their contractors. After their demands went unheeded, they then seized 37 vehicles. Other locals joined the protest action and eventually occupied five oilfields and halted operations altogether at a cost of Rp 2 billion per day per oilfield.

In negotiations brokered by the police, Caltex agreed to employ 75 locals. However, Caltexs Public Relations officer, Poedyo Oetomo, later announced that they would be reviewing the decision. "Because, in that meeting, we felt under pressure, so we cancelled the resulting agreement. We will renegotiate to solve the problems," said Poedyo after the session.

Speaking with Detik Wednesday, Poedyo said four vehicles were being hostaged by the locals and admitted that the negotiations had yet to reach a solution to the stand-off. "We continue to endeavor to carry out negotiations. Indeed, up until now, there has yet to be agreement by the two sides," he said.

Meanwhile, Drs Mukni, a member of the Riau Provincial Legislative Council, has urged the company to give a little ground in the stand off. "Without some one giving a little, its impossible to reach agreement. Caltex, hopefully also will not be obstinate in rejecting the demands of the people. Anarchy will be the end result," he said.

On the other hand, he also called on the locals to restrain themselves and wished to remind them that if the oil fields were set alight, the local community would suffer the most.

"If the negotiations go ahead and those involved are angry, having the negotiations would be useless. Moreover, why have the peoples requests been reject asap by Caltex. This is the same as triggering a long conflict," he added.

Drs Mukni also admitted that the company would have to rethink its policies on employment and human resources development if it were to employ locals. In the past, even the labourers were brought in from other areas. "If Caltex genuinely wanted to help the people of Riau, from the start it should have helped with human resources amongst the locals. At the very least, with that help, the locals could have worked [as laborers] at Caltex," he said adding that he believed the majority of those requesting work as laborers and security officers were not prepared for the work.

Mukni then explained that there was a strong feeling that Caltex had been very closed off during its operations and that the school established near the fields was exclusively for the children of employees. "We admit that, since reformasi went ahead, they have helped but the results have not been satisfactory," he concluded.

50,000 workers in footwear industry facing dismissal

Jakarta Post - October 16, 2000

Jakarta -- Some 50,000 of the around 500,000 workers employed in 90 footwear factories could face dismissal due to the government's prolonged ban on the import of leather raw materials from South Korea and Japan, a footwear industry executive warned.

Djimanto, secretary general of the Association of Indonesian Footwear Manufacturers (Aprisindo), said that as a result of the ban footwear factories have had to reduce production capacity in the last month which, if the trend continued, would likely precipitate the layoff of about 10 percent of all the workers employed in the industry "A massive dismissal of labor may be unavoidable in the next three months. Several factories operating in Tangerang and Bogor have already dismissed a small number of their workers," he told The Jakarta Post by telephone here on Monday.

He said that national footwear production had slowed since the Directorate General for Livestock Production of the Ministry of Agriculture issued a decree on April 19, banning the import of leather raw materials from Japan and South Korea as it was believed that they could transmit foot-and-mouth disease here.

Djimanto contended that the ban was unjustified as Japan and South Korea processed their leather products in accordance with international standardsbefore being exported to Indonesia and other countries such as China and Thailand. He also pointed out that foot-and-mouth disease had not broken out in either China or Thailand.

Djimanto estimated that around US$500 million in foreign exchange would be lost as a result of a drop in exports due to the lower production. "The government is targeting revenue of $2 billion from this sector and up to August, 60 percent of this target had been reached," he said. According to Djimanto, the industry has so far found itself unable to meet orders amounting to 6.39 million pairs of footwear products worth $83 million.

Djimanto asserted that the government should not blame the footwear industry if mass layoffs resulted. He explained that the industry was finding it difficult to find alternatives to the raw materials imported from Japan and South Korea, while domestic supply was also insufficient to meet demand.

He said Aprisindo has discussed the banning several times with the Ministry of Industry and Trade and the Directorate General of Customs and Excise, but so far the ban remains in place.

Asked as to why the industry did not import from other leather- producing countries, Djimanto said that besides efficiency factors, their production system was already synchronized with raw materials from the two countries. "Most of the footwear factories here were relocated from these two countries," he argued.

In a separate development, the state-owned insurance company PT Jamsostekunder pressure from labor unions, has pledged to improve its performance and service.

"Jamsostek's management is committed to improving its social security program benefits and its services to workers and their families," Supriyono, the company's director of operations and service, said here on Monday.

Supriyono made the statement in response to criticism by labor unions andemployers who had threatened to quit participating in the social security program due to what they described as unsatisfactory service.

Supriyono said the company would also use an on-line system nationwide in running all programs so that every worker would have access to services from all of its branch offices, including the necessary information on their membership in the programs.

The company also recently increased its annual interest rate in the pension fund program from 14 percent to 16 percent while occupational accident and bereavement benefits were boosted by around 50 percent.

30,000 plantation workers strike

Detik - October 16, 2000

Aulia Andri/Fitri & GB, Medan -- Up to 30,000 employees of PT Perkebunan Nusantara (PTPN) II of North Sumatra went on strike Monday while some 2000 others held a lively demonstration at the North Sumatra Provincial Legislative Council demanding their employer implement a previously negotiated work agreement.

PTPN II is a state-owned plantation company overseeing plantations 27 plantations in two regencies and two mayoralties in North Sumatra. According to the leader of the Plantation Workers' Union (SP bun), Josem Ginting, there are at least 14 points in the work agreement which have not been implemented, notably social security measures, health services, transportation and housing.

The demonstrators flocked to the Council's square on Jl Imam Bonjol in Medan, the capital of North Sumatra at around 8am local time. Wearing white headbands emblazoned with "SP bun", the demonstrators assembled to enjoy the days activities which included orations and traditional folk art and performance displays.

They plan to rally for three days in a row and came well-prepared for the three days battle by bringing cooking utensils such as stoves, pans and sleeping mats. Most of the demonstrators come from Langkat regency, Deli Serdang regency, Medan mayoralty and Binjai mayoralty.

Around 50 security personnel were seen on guard in front of the Council chambers directing traffic which had become congested due to the overflow of demonstrators.

Government/politics

How Jakarta won $9 Billion from a den of hesitant donors

Sydney Morning Herald - October 21, 2000

Michael Millett, Tokyo -- The Australian official shrugged his shoulders: "Do you penalise a whole country for the activities of a bunch of thugs?"

That question hung heavily over this week's international donor conference in Tokyo to determine what financial relief should be extended to Indonesia to help prop up its struggling economy over the next year. The answer was clearly "no".

The high-powered Indonesian delegation walked away from the two- day gathering with exactly what it had sought -- $A9.2 billion in pledges from an array of rich nations and world institutions.

But even some of those coughing up the funds later admitted to a sense of dissatisfaction over the machinations and the result. They also conceded the talks had done little to devise a template for further aid talks, leaving unresolved the issue of exactly how much leverage should be used by donor countries to force concessions and/or reforms from intended recipients.

It was the inept handling of the West Timor militia issue by the administration of Indonesia's President Abdurrahman Wahid that made this week's Consultative Group on Indonesia (CGI) meeting such an important case study. The Government's unwillingness or inability to control the pro-Jakarta militia operating within West Timor culminated in the murder on September 6 of three unarmed United Nations workers at Atambua.

The resultant international outrage saw at least two pivotal bodies, the United States Government and the World Bank, directly link the looming CGI talks with Jakarta's human rights performance.

The message was clear: Indonesia risked its hold on the promised funds if it did not move quickly to clean up the situation in West Timor. That meant disarming the militia, bringing the perpetrators of the Atambua murders to justice and vastly improving the lot of the refugees living in the squalid border camps.

While the Government has responded by dropping its opposition to a UN investigation and making some efforts to rein in the militia, many charge that it is a case of too little, too late. West Timor also brought into sharp relief the Government's other failings. Critics claim it has fallen short of its commitments to safeguard human rights in outlying provinces.

The Government also stands accused of backsliding on its economic reform pledges and on its promises to clean up environmental problems, such as the huge amount of illegal logging still taking place in its national parks.

The Tokyo meeting shaped up as a perfect opportunity for the international community to use its financial leverage to push Jakarta back on the reform path. Delegates maintain that leverage was exerted -- both in backroom talks in the conference lead-up and during the CGI meeting itself. "Indonesia was given a clear message that its performance would have to improve on a whole range of issues -- not just West Timor," one official said.

Australia even made the firm link between future aid and the Timor issue in its opening statement, emphasising the need for "continuing and successful Indonesian endeavours to restore security" to the region. "There must be no more Atambuas," AusAID's director-general, Mr Bruce Davis, said. "The international community's commitment to Indonesia and confidence in it as an investment destination will inevitably be influenced by Indonesia's success in resolving these outstanding problems."

Other nations hammered the point. But sources said a tacit agreement had been reached early on that it would be counter- productive to push too hard. Attaching precise riders to the donor pledges would not be used as a tactic.

One motive was to ensure a united front. While the US and some European nations had urged a stronger public stand, Japan, as host and Indonesia's bigger investor, took a more moderate stance.

Australian officials said that while there were differing shades of emphasis, the general assessment was that penalising Indonesia financially would achieve little. "It is not the best way to approach Indonesia. It would inflame nationalist sentiment and most likely make life even harder for Gus Dur [Mr Wahid's nickname]," one official said.

"You have also got to be careful before you penalise a whole country for the activities of what are a bunch of thugs." While conceding that the Wahid Government has fallen well short of performance targets, officials believe it deserves some sympathy.

Visit by Wahid looks increasingly unlikely

Sydney Morning Herald - October 21, 2000

Jakarta -- Indonesia's Foreign Minister, Mr Alwi Shihab, has said President Abdurrahman Wahid will probably postpone a working trip to Australia next month, ministry officials and reports said yesterday.

The Antara news agency quoted Mr Shihab as saying in Seoul that Mr Wahid's planned meeting with Australian leaders, already delayed several times, would not take place next month.

"I think Gus Dur's [Mr Wahid's popular name] trip which had been planned for this coming November will not take place," Antara quoted Mr Shihab saying on the sidelines of the Asia-Europe heads of state meeting in South Korea. A Foreign Ministry official in Jakarta confirmed that Mr Shihab had made the statement but did not elaborate.

However, Mr Shihab said he, the Trade Minister, Mr Luhut Panjaitan, and the Chief Economic Minister, Mr Rizal Ramli, would visit Australia on November 25 and 26 in an effort to strengthen trade ties between Jakarta and Canberra.

Ties between the two countries nosedived last year after Australia led an international peacekeeping force to East Timor after the United Nations-conducted ballot on self-determination.

The Indonesian parliament earlier this month vetoed Mr Wahid's trip to Australia next month, saying Indonesians were pained by Australia's constant criticism of their country.

Mr Wahid later said he accepted the parliament's view, and agreed to await results of a study on "whether their [the Australian] attitude has changed or not". "If there are no changes, we will follow what has been suggested," he added.

Australia for years was among the few countries in the world to recognise Indonesian sovereignty over East Timor, which was incorporated into the Indonesian archipelago in 1976 without UN recognition.

Gus Dur's unsuitability to govern gains currency

Straits Times - October 21, 2000

Susan Sim, Jakarta -- President Abdurrahman Wahid has been telling insiders this new joke for some weeks now: "There are three bodies beginning with the initials A.S. which do not like me.

"Adi Sasono, Amerika Serikat and Aryanti Sitepu," he will intone before erupting into laughter, referring to a former friend- turned-foe who was a minister in the Habibie government, the United States and the woman who claimed to have had an adulterous affair with him in 1996.

He can now add another A.S. to the list: Alip Suwondo. Mr Suwondo, as everyone knows, is the masseur who allegedly bamboozled a Bulog official into giving him 35 billion rupiah (S$7.3 million) under the guise of presidential authority.

He went on the run as soon as the public, and the police, became interested in knowing who benefited from his scam, and was arrested only last Saturday. And now, even the insiders are worried he might be able to provide a hostile Parliament with the excuse it has been looking for to prove the President's unsuitability to govern.

Perhaps for the first time, the question "Can he be impeached for this?" is being whispered in the corridors of power with some urgency. For, unlike earlier false alarms, the President has recently made quite a number of enemies among those who might have interesting tales to tittle-tattle, including a couple of police chiefs, one of whom might think he lost his job for arresting Mr Suwondo.

Meanwhile, the President is marking his first anniversary in power blissfully doing what he likes best -- hobnobbing with fellow world leaders. Although Indonesians might quibble over whether his constant travels provide good value for money, there is no doubt he is the country's best salesman.

The government can claim some justifiable credit for its success this week in persuading the Consultative Group on Indonesia (CGI) to pour more money down a seemingly bottomless pit.

Mr Rizal Ramli's economic team worked hard to project an image of policy coherence and accountability, and Mr Susilo Bambang Yudhuyuno's security group took some hard collective decisions the President himself would not take, like ordering the arrest of a notorious East Timorese militia leader whose continued liberty had irked donor countries.

But, in truth, there was no way the CGI would not lend the Abdurrahman government the US$4.8 billion, not unless donor countries wanted to give his enemies the green light to unseat him, and watch the democratic process unravel (and lose all hope of ever recovering the US$60 billion Jakarta already owes).

Gus Dur might be angry over not being on Washington's A-list after his recent tongue-lashing from Secretary of State Madeleine Albright -- she took umbrage at his sexist remark that Vice- President Megawati Sukarnoputri needed to shower while the new Cabinet was being announced in August -- but he knows they still consider him their best friend here. If nothing else, he epitomises for a slightly paranoid West a moderate Islam that is beating back the hard edge of Islamic fundamentalism that others like Adi Sasono and even Assembly Speaker Amien Rais sometimes represent.

But it is always a mistake to boast at home of one's utility to the West. And Mr Abdurrahman did precisely that when Parliament leaders came to his palace for their consultation on October 10.

Ministers present said he spoke behind the closed doors for more than two hours about the goodwill and investments he had earned for Indonesia on his foreign trips, oblivious of the rising tension in the room. When it was time for legislators to speak, Deputy Speaker A M Fatwa launched into a blistering attack.

"Why would any country ask you to solve their conflicts when you cannot solve Indonesia's? Don't you realise they are only entertaining you?" he shouted as a total silence descended on the room, a minister recounted.

"I suggest," the politician from Mr Amien Rais' National Mandate Party (PAN) concluded after an hour, "that you pray to God to ask for guidance as to whether you can hold on to your job if you change your behaviour or whether you should resign."

And then Mr Fatwa added a caveat that stunned the entire room: "If you decide to continue, it is better you have a psychiatrist by your side to whisper to you." It was only at this point that Parliament Speaker Akbar Tandjung cut him off, another minister told The Straits Times.

It is the Parliament's fixation to recycle the same old issues. Without any clear ideological divide or policy differences to justify their antipathy towards the President, politicians like Mr Fatwa are focusing on character issues.

And their no-holds-barred tactics are tolerated and tacitly encouraged by party leaders who see themselves in a zero-sum game vis-a-vis the President -- when he's up, they gain nothing. A year ago, these same party leaders thought they had everything to gain, and nothing to lose, if Mr Abdurrahman became President with their votes.

Gus Dur delays prosecuting three national debtors

Straits Times - October 21, 2000

Robert Go, Jakarta -- President Abdurrahman Wahid has announced temporary immunity from legal prosecution for three of Indonesia's biggest debtors in yet another controversial disclosure that is sure to draw fire from the country's angry legislators.

The move follows a recent government bailout of one of the debtors' companies and raises questions over the President's personal integrity and the administration's resolve to restructure the country's corporations and banks.

Speaking in South Korea, where he is attending a summit of Asian and European leaders, Mr Abdurrahman revealed that he has stopped the Attorney-General's investigations against Mr Marimutu Sinivasan of Texmaco, Mr Prajogo Pangestu of Barito Pacific and Mr Syamsul Nursalim of Gadjah Tunggal.

"Their businesses are key to boosting exports and can greatly contribute to the economic recovery process," he said. Mr Abdurrahman quickly added that the three would be brought to court "when the time comes" and that other debtors would not be eligible for similar reprieves.

The three conglomerates employ hundreds of thousands of workers and their products constitute a sizeable chunk of Indonesia's exports, which this year is expected to reach US$55.4 billion.

Combined corporate debts for the three groups, however, amount to over 60 trillion rupiah (S$11.4 billion) -- a figure that is 20 per cent of next year's state budget -- and Barito Pacific and Gadjah Tunggal both owe additional money to the state.

Legislators said yesterday that the President has once again blindly opened the door to another potential scandal. "This represents special treatment of the conglomerates, while ordinary citizens continue to pay for the cost of restructuring the economy," said Mr Tjahjo Kumolo, vice-secretary of the Democratic Party of Struggle (PDI-P).

Mr Tjahjo also decried that the President made his remarks while abroad and in the company of international leaders. "Gus Dur has just reinforced the perception that Indonesia's legal system is a complete joke."

Mr Alvin Lie, a legislator from the National Mandate Party, also questioned the President's motives. "The President has protected some of the biggest offenders in this country. You have to wonder what goes on behind closed presidential doors," he said.

Both parliamentarians also rejected the President's argument that since the conglomerate owners play such crucial roles within their businesses, prosecuting them endangers the companies' welfare. "Save the companies, but the government has to investigate those who contributed to the problems. If the owners are tied to the companies, it would be better to prosecute now, not later," said Mr Lie.

But Mr Wimar Witoelar, a recently appointed presidential spokesman, gave a different spin: "This is actually the first time the President actually stated that he would bring certain people who were allegedly involved in a financial scandal to trial." "You can't interpret the President in the conventional manner, but have to place it in the context of reform," he told The Straits Times.

Previously, former economic czar Kwik Kian Gie, who now sits in parliament as a PDI-P representative, was the first to disclose that Mr Abdurrahman may have special interests in the three conglomerates, along with a fourth -- the Salim Group.

The former minister, who resigned his position in August prior to a Cabinet reshuffle, declined to comment on this issue yesterday, but expressed the belief that many of Indonesia's debtors would perhaps never face prosecution.

Running mate to Megawati: No way

Straits Times - October 20, 2000

Derwin Pereira, Jakarta -- Parliamentary Speaker Akbar Tandjung sought to downplay suggestions yesterday that he would team up as a running mate to Ms Megawati Sukarnoputri in the case of a leadership change. He said if President Abdurrahman Wahid were to fall, Ms Megawati, who is now Vice-President, would be his constitutional successor.

Who would fill the Vice-President's post would be decided by the new Indonesian leader and Parliament, he added. He said his Golkar party was unlikely to nominate him or any other candidate for the vice-presidency.

He said: "If Megawati fails as President, it will also reflect badly on Golkar. It is better for us to remain in opposition until 2004. Golkar's target is the next general election. Then, we will be interested in seeking power."

He was also confident that the former ruling party would improve its showing at the next election. "We lost a lot of votes in the last election because we were identified with the Suharto regime," he said.

"The climate then was not too favourable for us. But in 2004, we will regain lost ground by winning over voters upset with the performance of the PDI-P and the newer political parties."

Gus Dur unlikely to last to 2004, says Akbar

Straits Times - October 20, 2000

Derwin Pereira, Jakarta -- Indonesia's Parliamentary Speaker Akbar Tandjung said yesterday that it was very hard for the beleaguered President Abdurrahman Wahid to last out his term until 2004 given growing pressures in the legislature to oust him.

He told The Straits Times in an interview that the three largest factions in parliament -- the Indonesian Democratic Party of Survival (PDI-P), Golkar and the United Development Party (PPP) -- were all veering towards holding an emergency session of the national assembly (MPR) within a year's time to hold the President accountable for Indonesia's debilitating problems.

"A lot of legislators are increasingly frustrated with Gus Dur's inability to resolve our political and economic problems," he said, using the President's nickname.

He disclosed that Parliamentary members were now talking openly about using next year's August MPR session to hold an emergency meeting akin to what happened in 1999 when legislators toppled former president B.J. Habibie through a secret ballot.

While acknowledging that the President had survived the threat of impeachment earlier this year, he said that politics in Indonesia were slowly changing against him. Said Mr Akbar: "The problem is that Gus Dur is doing little to change his style of leadership. He has also not been able to handle several problems since taking over and has been involved in scandals. "The momentum to replace him is getting stronger."

The dismissal of two ministers and financial scandals linked to the palace -- "Buloggate" and "Bruneigate" -- had set legislators on a collision course with the President. The million-dollar Buloggate scandal in particular, the Parliamentary Speaker noted, had dented Mr Abdurrahman's credibility.

The Buloggate probe centres on whether the President allowed his former personal masseur Alip Agung Suwondo to use his name to obtain US$4 million from the state food distribution agency Bulog in January. Police arrested Mr Suwondo who is also the President's former spiritual adviser last week after a week-long stakeout at his villa in Puncak, a mountain resort in West Java.

Mr Akbar said that legislators would summon Mr Suwondo along with two others for a parliamentary grilling in the months to come. If there was sufficient evidence that the President was involved, legislators would serve notice for him to appear before the House of Representatives.

Referring to the President's refusal to cave in to parliamentary pressure previously, he said that the year-old parliament could convene an emergency session in such circumstances. In a veiled threat to Mr Abdurrahman, he said: "It is our right to seek clarification from the President. If he fails to turn up, he can be jailed for up to one year."

Donors send 'strong political message' while promising $9 billion

Sydney Morning Herald - October 19, 2000

Michael Millett, Tokyo -- International donors will provide another $US4.8 billion in aid for Indonesia, despite expressing serious misgivings about its political, economic and environmental performance over the past year.

The financial commitment -- the amount Indonesia had requested to help overcome its chronic budget shortfall -- came after key Indonesian officials vowed to work harder on reforms across virtually every aspect of public administration.

The struggling nation has fallen well short of its earlier pledges to overhaul the economy. It has also attracted international criticism over its apparent reluctance or clear inability to control the military and pro-Jakarta militia who are causing havoc in West Timor.

Indonesia's errant behaviour triggered pre-conference warnings that future aid could be jeopardised if the administration of President Abdurrahman Wahid did not "lift its game". Officials involved in the Consultative Group on Indonesia meeting in Tokyo said this message had been reinforced at the two-day gathering.

Jakarta had been given "a strong political message" about the international community's impatience. But they also conceded privately that Indonesia's fragile economic and political state made it impossible for the threats on aid to be carried out.

"There was a clear acknowledgment at the CGI that a lot more needs to be done and at a much faster pace," an Australian official said. "The international community is not satisfied that the authorities have done all they can to ensure the safety of the refugees and to disarm the militias.

"They [the Indonesian Government] have assured us that things are being done, we must accept this. But there was also an acceptance that pushing too hard would be counter-productive."

Donor countries, including Australia, are concerned that tightening the financial screws would make life even harder for the Wahid Government, further frustrating the reform program.

Withdrawing aid would simply involve more hardship for the general population, and could inflame dangerous nationalist sentiment. "The stability of the country is important to everybody," the Australian official said. "You don't want a situation where too many opportunities are given to madcap nationalists to say 'We don't want the West, we don't need the Americans'."

Sources said the refusal of Japan, as host nation, to countenance "conditionality" as part of the relief package had forced other nations, particularly the US, to soften their position. However, they pointed out that Indonesia had been taken to task over its "backsliding" in a number of reform areas. The donor countries had also extracted new pledges on painful and politically sensitive corporate debt restructuring.

[On October 20 the Straits Times reported that some 100 protesters staged a noisy but peaceful rally outside Jakarta's presidential palace. Organisers accused Mr Abdurrahman of using economic changes prescribed by international lenders to make deals with rich business interests at the expense of ordinary people who are bearing the brunt of Indonesia's ongoing economic crisis - James Balowski.]

Donor nations tell Jakarta: reform or no more cash

Sydney Morning Herald - October 18, 2000

Michael Millett, Tokyo -- Indonesia yesterday parried criticism of its performance on everything from human rights to the environment as it sought to persuade the international community to hand over another $A9.2 billion to ease its crippling financial problems.

International donor bodies, including Australia, used the opening of the two-day Consultative Group meeting in Tokyo to pledge further help for the beleaguered nation, acknowledging its desperate need for foreign cash.

But the delegates, representing 18 countries and a range of international bodies including the World Bank and the International Monetary Fund, also expressed frustration at Indonesia's inability to live up to its commitments on economic, political and environmental reform. It is understood they warned that Indonesia could not expect further help without demonstrating significant progress in a number of areas.

Some pivotal donor groups -- notably the United States and the World Bank -- have explicitly tied aid promises to Indonesia's willingness to curb the activities of pro-Indonesia militias operating in West Timor.

That threat followed the murder of three United Nations workers in Atambua last month, and the inability or unwillingness of the Wahid administration to prevent the militias preying on East Timorese refugees in squalid camps along the border.

Jakarta has taken some steps to rein in the militia, including ordering the seizure of weapons. But international critics say the efforts are half-hearted and that the Government has no power or real desire to force its military to clean up the situation in West Timor.

Sources said a number of countries backed the US in demanding a better human rights response from Indonesian authorities. There was also criticism of Jakarta's economic performance. While the Government has been working with the IMF in cleaning up the economy, it has been accused of backsliding in politically sensitive areas.

Delegates stressed the need for the Government to adhere to its corporate restructuring program, despite its clamour for special debt relief. President Abdurrahman Wahid has been accused of favouring business cronies in recent financial bailouts.

There was even reference to the Government's lack of progress on the environmental front. The European Union tabled a report highlighting the extent of illegal logging still happening in many of Indonesia's remote "protected" regions.

Indonesia was also assailed outside the conference room, with human rights groups demanding that the country's powerful military stop meddling in politics and that the conference be postponed until Jakarta provided solid evidence that the militia groups had been disarmed.

The Indonesian delegation acknowledged before the talks that it was expecting a much tougher meeting than previous aid conferences. But it appears to have argued successfully that cutting off aid would be counter-productive, hurting Indonesians while doing little to resolve the problems raised. Japan, Indonesia's biggest aid donor, has declined to apply any real pressure.

MPR chairman calls for new leadership

Straits Times - October 18, 2000

Derwin Pereira, Jakarta -- The leader of Indonesia's highest legislative body said yesterday that the country was desperately in need of a new leadership, one that was based on an alliance between Ms Megawati Sukarnoputri and Parliamentary Speaker Akbar Tandjung as her running mate.

National Assembly (MPR) chairman Amien Rais said that both of them represented the biggest political parties in the legislature, giving them political legitimacy to take over the reigns of power from the beleaguered President Abdurrahman Wahid. Ms Megawati heads the Indonesian Democratic Party-Struggle (PDI- P) and Mr Akbar, Golkar.

In an interview with The Straits Times, the chairman said that Ms Megawati, the current Vice-President, and Mr Akbar would be able to arrest political instability and economic downturn in a country where President Abdurrahman "has lost the plot on how to govern". "Megawati and Akbar have a broad appeal among the legislators, unlike Gus Dur who appears to be losing his grip," he said, using the President's nickname.

He noted that it is not just PDI-P securing 33 per cent or Golkar 22 per cent of the votes in last year's historic national election that gives Ms Megawati and Mr Akbar the "right of leadership".

Both, he said, formed a "good and practical alliance" given that they represented respectively Java and non-Java, and broader cultural and ideological streams of both the nationalists and Islam. The two also complemented one another in other ways.

Ms Megawati had broad appeal among the masses as a symbol of her late father and founding father of Indonesia, Mr Sukarno. On the other hand, having worked in previous administrations, Mr Akbar had practical experience in running the government.

Mr Amien said that a Megawati-Akbar partnership would gain greater support in political circles in the months to come given Mr Abdurrahman's failure to handle a host of crippling problems in the sprawling archipelago.

Describing the current government's performance as "poor", he said that the President had failed on his pledge to carry out reforms in the country. Corruption was still rampant, maybe even more so now, he said.

He added that the trial of former president Suharto and the subsequent quashing of the multi-million-dollar corruption charges were nothing but a "big farce" which dented further the credibility of the Indonesian legal system.

Another concern, he said, was that little was being done to resuscitate a battered economy that looked to have only marginally improved since the 1998 financial meltdown.

At the same time, separatist tensions were on the rise in Aceh and Irian Jaya, coupled with sporadic violence in different parts of the sprawling archipelago.

"We have reached a stage where Indonesians do not feel secure in their own country," he said. "I perfectly understand the sentiments of foreign investors in not putting their money in Indonesia." He said that pressures could grow for an emergency MPR session if the President failed to respond to prevailing problems quickly.

It was likely that Mr Abdurrahman would cling on to power for another year at most, he added. "Gus Dur is running out of time," he said. "We cannot be held hostage to his dismal performance. Given that some of the problems he inherited have become worse during his tenure, it might be wise for him to just hand the baton to others."

Asked about his own political ambitions, Mr Amien appeared to backtrack slightly on his comments earlier this year that he had a 50-50 chance of becoming President if direct election was held in 2004. "I want Megawati and Akbar to take charge for now. I will be patient and wait four more years to see whether it is feasible for me to make a bid for the top job."

US denies Gelbard meddling in military appointments

Indonesian Observer - October 17, 2000

Jakarta -- The US Embassy yesterday rejected reports that Ambassador Robert Gelbard had tried to intervene in the selection of the countrys new Army chief.

The US Embassy categorically denies press reports quoting Defense Minister [Mohammad] Mahfud as saying that the US ambassador tried to influence the selection of the chief of the Army, said a statement from the embassy. The national media quoted Mahfud as saying Gelbard had urged the government to appoint outspoken Lieutenant General Agus Wirahadikusumah as the new Army chief.

President Abdurrahman Wahid on October 9 named General Endriartono Sutarto as Army chief, replacing General Tyasno Sudarto. The head of state also installed Admiral Indroko Sastrowiryono as the new Navy chief. The appointment of senior officials in the Indonesian government is an internal matter of the Indonesian government, the US Embassy statement said.

Neither the US ambassador nor any other US official sought to influence the decision of the appointment of the Army chief or any other Indonesian military official with President Wahid or with any other officials of the Indonesian government.

The embassy also refuted reports that Gelbard had met Agus in Singapore on October 8. Nor had the Indonesian three-star general met any US government officials during his recent visit to America, it said. Agus has said he visited the US to see his son who is studying there.

The US Embassy is deeply concerned by these kinds of false statements emanating from the Defense Ministry and elsewhere, the release said, quoting the state department spokesman as labeling the reports as astonishing and irresponsible. They are also harmful to the good relations between the United States and Indonesia.

Mahfuds statement sparked an anti-US protest yesterday at the embassy. Demonstrators demanded that the government expelled Gelbard from Indonesia. A group of parliamentarians led by soothsayer Permadi from the Indonesian Democratic Party of Struggle (PDI-P) and Ahmad Sumargono from the Crescent Star Party (PBB) picketed the front gate of the US Embassy. TNI [the Indonesian Defense Forces] is not the American armed forces, do not stir it up, read a poster carried by one of the legislators.

Sentiments against the US have been mounting over recent weeks, mainly because of US partiality in the Middle East conflict. The superpower has been accused of refraining from criticizing Israel for killing dozens of Palestinians. Analysts say the anti-US sentiment here means the last thing that many senior generals would want is an Army chief who follows American advice.

Agus is a close confidante of President Abdurrahman Wahid and has been praised by reformists for uncovering corruption within the Armys Strategic Reserve Command (Kostrad) that involved former Kostrad chief Lieutenant General Djaja Suparman.

The move made him popular among pro-reform politicians and other civilians, but sources said many senior military officials were angered by his actions. Agus replaced Djaja as Kostrad chief earlier this year but was later dumped, apparently because he had upset the military hierarchy by calling for reforms an end to corruption. He made himself many enemies in the top brass by openly calling on the military to pull out of politics.

A meeting of top Army officials earlier this month discussed whether Agus should face a military council of honor for having aired the Armys dirty linen in public. He has been accused of violating the military code of ethics.

Aceh/West Papua

Aceh, Irian Jaya may secede, Amien warns

Straits Times - October 18, 2000

Derwin Pereira, Jakarta -- National Assembly (MPR) chairman Amien Rais warned yesterday that Aceh and Irian Jaya could break apart from Indonesia in one to two years' time if Jakarta did nothing to address separatist pressures there.

Mr Amien said that the current government was pursuing "ad hoc measures" to problems in the restive provinces instead of decisive policy initiatives that included a fairer wealth distribution and an end to human rights abuses.

"The thing that obsesses me most now is the threat of disintegration," he told The Straits Times in an interview. "It is becoming more real and imminent. If Indonesia pursues the path of the former Soviet Union or Yugoslavia, there will be so much chaos and anarchy."

He said that East Timor provided a "classic example" of what Indonesia could expect if provinces like Aceh and Irian Jaya broke apart from the archipelago.

It led to a huge outflow of refugees, human rights problems and international intervention. Mr Amien said that it could also lead to ethnic cleansing of the Javanese and other minorities in these areas.

He stressed that Jakarta should adopt long-term solutions to keep the provinces within the Indonesian fold. For a start, revenue sharing needed to be more "just" to ensure that the central government did not keep the "lion's share". "There is a lot of anger and frustration because wealth from the resources in these provinces are not distributed fairly," he said.

Coupled with that were resentment over human riots violations by Indonesian armed forces (TNI) personnel or army-backed elements in Aceh and Irian Jaya. Mr Amien disclosed that he was shocked when a senior official from the State Coordinating Intelligence Body (Bakin) told him that the organisation was not tasked by the President to collect intelligence from these places.

He said if the government was not pro-active, it was only a matter of time before the two provinces went their own way. "It will become very messy for Indonesia because other provinces might want to follow suit," he said. "If nothing significant is done by the current administration, Aceh and Irian Jaya might just go in one or two years' time."

Papua separatist leader promises no more blood

Agence France-Presse - October 21, 2000

Jakarta -- The man spearheading the independence movement in Indonesia's Irian Jaya province on Saturday played down fears of further bloodshed in the remote area over flying the separatist Morning Star flag. "There will be no more bloodshed," Theys Eluay, chief of the Papua Praesidium Council, told AFP.

Eluay's low-key line runs counter to fears expressed by human rights workers and other separatist supporters, who are nervous a new hardline approach by Jakarta against flying the separarist flag will cost lives in the province, also known as West Papua.

Attempts by police to remove the Morning Star flag from the hinterland town of Wamena on October 6 sparked riots that killed six Papuans and 31 non-Papuan settlers.

The central government reacted by declaring a full ban on the flag, and police set a staggered series of deadlines for its removal, starting with the provincial capital Jayapura on October 19.

When it announced the ban the Indonesian cabinet said the flag had become a symbol of separatism. Separatist civilian guards grouped under the Papua Taskforce earlier this week declared they were ready to die in defence of the flag, and warned any casualties among Irian Jaya's settler population would be "the responsibility of police."

Citing fears of violence, police last Tuesday backed off on the deadline and promised to let the Morning Star flags fly until Praesidium leaders secure a direct order from Indonesian President Abdurrahman Wahid.

Eluay is now in Jakarta to pursue talks with Wahid. "If the flags have to come down, it will be done in a decent way," Eluay said, when asked about pledges of martyrdom by Taskforce members vowing to keep the Morning Star hoisted.

Taskforce commander Boy Eluay -- Theys' son -- said on Thursday even if Wahid ordered the removal of the flags, thousands of Taskforce members would be ready to become "martyrs and victims" to keep it flying. "We won't fight, but we are ready to be made victims of in defence of the Morning Star," Boy Eluay told AFP by phone from the provincial capital of Jayapura on Thursday.

Theys Eluay said he had yet to formally request a meeting with Wahid. "On Monday we will send a letter to the palace requesting a meeting," Eluay told AFP on Saturday.

Wahid has been out of the country since the suspension of the ban and no meeting has yet been scheduled, although a palace spokesman has said he will "probably" meet the Praesidium leaders. The president was due to return from a trip to Malaysia, South Korea and Singapore at around midnight Saturday, a palace spokesman said.

Wahid first authorised the flying of the Morning Star flag in December last year, on the condition that it flew alongside and beneath Indonesia's national flag.

Two Morning Star flags are still flying in Jayapura, and dozens remain hoisted in towns outside Jayapura, most in violation of Wahid's condition, police there have said.

Anthropologists say the flag has come to symbolize an end to misery and an era of freedom for Papuans, many of whom believe that the act of flying it will summon a saviour figure.

Papuans have made increasingly vociferous calls for independence in recent years, climaxing with a mass congress in June this year at which they demanded Jakarta recognise that they had been independent since December 1961.

Independence leaders say a UN-conducted "act of free choice" in 1969, which led to the former Dutch territory becoming part of Indonesia, was unrepresentative.

Wahid has pledged not to tolerate separatism in the province, promising broad autonomy instead by the end of the year. Irian Jaya's 2.5 million people are mainly Melanesian Christians, who fall into some 250 tribes.

[On October 17 the Sydney Morning Herald reported that around 100 people from West Papua protested outside the vice-presidential palace on October 16, blaming the country's military for the recent violence. They said the military had triggered separatist sentiment, and urged the Vice-President Megawati Sukarnoputri, to defuse the situation - James Balowski.]

Church leaders call for Timor style ballot to end Irian stife

Agence France-Presse - October 22, 2000

Melbourne -- Church leaders from Australia and Irian Jaya called here Friday for an East Timor-style independence ballot to stop escalating violence in the troubled Indonesian province.

Melbourne Anglican Bishop Hilton Deakin and Pastor Martin Luther Wanma of Irian Jaya made the call as Indonesia put off a deadline for nationalists in the province to lower their separatist flags.

Indonesian authorities had given separatists in the remote, resource-rich province, known to its nationalists as West Papua, until Friday to take down their Morning Star flag.

Indonesia's President Abdurrahman Wahid had previously decreed that the flag could be flown next to, but lower than, the red and white Indonesian flag.

Deakin called for an end to the violent clashes between Indonesian security forces and the separatists as a "first step". "But the West Papuan people as a whole are seeking independence from the Indonesian republic," he said. "There will eventually need to be a referendum because the referendum is the normal, universally accepted vehicle for a people expressing their will."

Pastor Wanma said flag-raising ceremonies across the province were a symbol of separatists' desire for independence. The independence leaders would not accept offers of autonomy or federation within the Indonesian republic, he said. "Our flag is a part of Papua," he said.

"We hope the end of our struggle must be a referendum. It's a good solution." Wanma is in Australia for the first time to attend an Asia Pacific regional conference of religious leaders.

Doctor Wan Azizah, wife of jailed Malaysian opposition leader Anwar Ibrahim, and deposed former Fijian prime minister Mahendra Chaudhry are also scheduled to attend the conference.

Australian Foreign Minister Alexander Downer said this month that Australia believed Irian Jaya should remain part of Indonesia and urged Indonesia to adopt restraint in dealing with it.

Separatist flag still flying as police back away from showdown

Sydney Morning Herald - October 19, 2000

Lindsay Murdoch, Jakarta -- Police have backed away from today's deadline for the lowering of separatist flags in West Papua, saying that any attempt to enforce it would have provoked more bloody clashes in the troubled Indonesian province.

A compromise was reached late on Tuesday between local police and military chiefs, the governor and the pro-independence Presidium of the Papua Council, to extend the deadline until council leaders could meet President Abdurrahman Wahid, a West Papua police spokesman said. West Papua was formerly known as Irian Jaya.

Jakarta had earlier ordered a crackdown on pro-independence groups, including 22,000 militia who say they will fight to stop the flags being lowered. But the provincial police chief, Brigadier-General Sylvanus Wenas, yesterday told the Herald that he saw it as his duty "to ensure there are no victims". "I do not support using force to lower the flags at this time," General Wenas said. "It would cause many victims."

But the Government is transferring him back to Jakarta as part of a national reshuffle of senior police officers, and there are fears that his replacement will adopt a more hardline approach.

Human rights and church groups say that until police announced the decision not to pull down dozens of Morning Star flags in most towns of the province, widespread violence had appeared inevitable.

They warned last night that a violent showdown would only be delayed if proposed talks between Government and pro-independence leaders reached a compromise. "It looks bad," a church official said. "The Government's handling of this has been incompetent. Do they not understand how volatile the situation here is?"

Thousands of highland villagers, who say they are prepared to fight, have been converging on the capital, Jayapura, where 4,000 pro-independence militia armed with clubs are guarding three flagpoles in separate locations.

Indonesia's Cabinet last week imposed a ban on flying the flag, saying it had become a symbol of independence for about one million indigenous Papuans. Earlier, Mr Wahid had said the flags, which were banned during the 32-year rule of Soeharto, could be raised as long as they flew alongside but below the Indonesian flag.

The ban followed bloody clashes in the highlands town of Wamena on October 6 when about 40 people, mostly Indonesian settlers, were killed when villagers started rampaging as police cut down a pole flying the flag.

General Wenas said any move by police today to lower the flag would also have provoked clashes between rival community groups. He said many villagers believed that flying the flag meant they had obtained their freedom.

"But I ask them what does freedom mean," he said. "They really think it means they can take whatever they want, they can do anything. They think it means there is no longer any rule of law."

General Wenas foreshadowed a crackdown on the militia, many of whom were criminals who extorted money and favours from the community, he said. Pro-independence leaders insist on meeting Mr Wahid to ask him to explain what they see as inconsistent policies toward West Papua.

Aceh violence kills 74 within 10 months

Jakarta Post - October 17, 2000

Banda Aceh -- The campaign of violence perpetrated by the Free Aceh Movement (GAM) separatist rebels over the past 10 months has claimed 74 lives, police said here on Monday.

Aceh Police inspector Sr. Supt. H.M. Ramli Irsyad said the fatalities included eight military soldiers and 11 police personnel. The figure excluded nine people who were killed or found dead in three separate locations in East Aceh on Sunday.

Ramli said at least 127 people, including 46 military soldiers and 57 police officers, were injured during the same period, in which the Aceh Police, backed by the military, launched an anti- rebel special operation code named Cinta Meunasah.

He said GAM had intensified their campaign of terror, by conducting a series of bomb and arson attacks on local government and police facilities,despite the implementation of the humanitarian pause which is aimed at reducing violence.

"The separatist rebels have also intimidated local residents by opening fire and abducting both residents and security officers," Ramli said.

He urged the security authorities to uphold the supremacy of the law, especially as Aceh braces for the first anniversary celebration of the referendum demand on November 8 and GAM's 24th anniversary on December 4.

Ramli predicted that GAM would intensify its activities ahead of the two events. "I urge local police officers to take stern but lawful actions against the separatist movement," he said.

Security authorities in East Aceh said the latest violence in the regency on Sunday killed eight people and injured a soldier. East Aceh Military Command Lt. Col. Denny K. Irawan said two GAM members were killed in Alue Punti village, Bayeun district, near the place where local residents discovered the body of a police officer, First Sgt. Ramli, who had been missing since October 9. The body was half burned when it was found.

On Sunday evening, a gunfight between GAM members and a joint military and police force erupted in the neighboring village of Simpang Nenas. It left four GAM members killed and one military officer injured. Deputy chief of the Cinta Meunasah operation Supt. Yatim Suyatmo confirmed on Monday that four GAM members died, while two others managed toescape.

In a separate incident, Zulkarnaini from the Anti Violence Student Forum (FOMATAK), said two residents were found dead on Sunday after being arrested by police in Bantayan village, Simpang Ulin district, for allegedly helping GAM. "The two were abandoned in the street and only one of them was known as a GAM member," he said. East Aceh's GAM spokesman Abu Kalifah confirmed on Sunday that one of thetwo was a movement member but stressed that he was unarmed when arrested bythe police.

Separately, East Aceh police chief Supt. Abdullah Hayati gave a different account, saying that the two alleged GAM members were shot dead in a gunfight after they attacked patrolling security personnel.

Human rights/law

Munir refuses to help government

Jakarta Post - October 21, 2000

Jakarta -- Noted rights activist Munir refused on Friday to help the government draft a revision of the Emergency Law and argued that such a lawis completely unnecessary.

"This country doesn't need such a law. I will not help the government revise the Emergency Law as requested by Minister of Justice and Human Rights Yusril Ihza Mahendra because there is no need for it," Munir said.

"I will help the government only if Yusril can prove that Indonesia really needs such a law," he told journalists during a joint conference held by several legal watchdogs to condemn the Emergency Law.

Munir said the government should also issue a regulation revoking Law No. 23/1959 on subversion and reject the new law. He also urged the House of Representatives to rescind their approval for the new Emergency Law. "By revoking both existing laws, the government can no longer use the subversion law as a bargaining chip in arguing that the new law is more humane than its predecessor," he said.

Munir claimed that the government should prioritize several other laws which are currently awaiting revision, such as the laws on human rights, the police and the Criminal Procedures Code. "Its better to revise other laws aimed at protecting the people's rights rather than working on a tool for the government to maintain power," he said. "Or even better, to make a new law which protects the people's rights when they are violated," he added.

The government decided to postpone approving the law which was enacted bythe House in September last year following wide-scale public protests. A team from the justice and human rights ministry, the defense ministry, the Indonesian Military (TNI) and the National Police has been formed to review the law.

On Thursday, Yusril told journalists that during a meeting with several legal watchdogs scrutinizing the Emergency Law, he had given Munir a deadline of October 27 to produce a revised version of the law to be presented to the House so that it could be quickly put into effect. However, Munir denied that he had offered to help revise the law, saying that no agreement had been made during Wednesday's meeting between the watchdogs and the minister.

Chairman of PRD protests to Ombudsman

Detik - October 19, 2000

Titis Widyatmoko/Hendra & PT, Jakarta -- Chairman of the People's Democratic Party (PRD) Budiman Sudjatmiko has met the National Ombudsman Commission, complaining about the continuing blundering process involving the civil case of 13 officials who have been charged for their involvement in the July 27 incident.

Budiman voiced his dissatisfaction today at the Ombudsman office, Graha Mustika Ratu in Jl Gatot Subroto, South Jakarta, where he was directly received by Head Ombudsman, Antonius Sujata.

As reported earlier, the second session of the PRD law suit against leaders of the New Order regime of former president Suharto progressed with the reading of the accusations by the PRD's legal team. They are suing for damages of Rp 6 billion (US$603,136) for the persecution the party experienced under the regime. The court was adjourned for two weeks to hear the response of the defendants.

The victims involved in the case are PRD activists including Budiman Sudjatmiko, Petrus Hari Haryanto, Garda Sembiring, and Jacobus Eko Kurniawan who were imprisoned along with around 75 other PRD members and supporters.

The PRD has named 13 of the New Orders most prominent figures in their case, including Suharto himself and many of the militarys top brass. The case centers on the 27 July 1996 bloody raid on the offices of the Indonesian Democratic Party (PDI) by hired thugs backed by the military, which sparked massive riots in the capital. The regime immediately undertook a propaganda campaign against the fledgling party, calling it the dalang or mastermind of the riots, and numerous party leaders were jailed for over 3 years under archaic subversion laws.

Besides the President/Supreme Commander of the Armed Forces General (Ret.): HM Suharto, the 12 defendants are: Commander of the Indonesian Armed Forces ABRI: General Feisal Tanjung Chief of Staff of Social-Political Affairs (ABRI): LetGen Syarwan Hamid Chief of National Police: General (Pol) Dibyo Widodo Army Chief of Staff: General R. Hartono Minister of Home Affairs: Yogie Suardi Memet Chief of Armed Forces Intellegence: MajGen Syamsir Siregar Attorney General: Singgih SH Ministry of Justice: Oetojo Oesman SH Minister for Information: Harmoko Commander of the Jakarta Military Area: Major General Soetiyoso (currently Govenor of Jakarta) Commander of the Brawjijaya V Military District: Major General (ret.) Imam Utomo.

According to Budiman, several unprofessional incidents occurred during the trial disrupting proceedings. For example the defendants undisciplined and unruly behavior. In addition to this the lawyer for the Commander of the Jakarta Military Area: Major General Soetiyoso (currently Governor of Jakarta) continually arrived late and the judges tolerated his behavior. Further compounding Budimans frustrations were the council of judges refusal of the trial to be held in line with Suharto's trial.

"These unprofessional incidents during the process of the trial is an indicator of unfairness in court," said Budiman. He further added that because of the clumsiness surrounding the case, he is concerned about the upcoming temporary decision, which could harm the PRD as the prosecutor. Antonius Sujata has said that he would look into the case.

Leading human rights groups reject emergency laws

Detik - October 18, 2000

DSB & HD/GB, Jakarta -- New revised laws concerning the introduction and implementation of a State of Emergency are to be passed by the parliament by 30 October according to the Minister of Justice and Human Rights. However, Indonesias four leading legal and human rights organisations have condemned the legislation and urged the government and House to reject it outright.

The Commission for Disappearances and Victims of Violence (Kontras), the Institute for Policy Research and Advocacy (Elsam), the Legal Aid Institute (LBH) and the Foundation of the Indonesian Legal Aid Institute (YLBHI) convened a press gathering at the YLBHI offices Wednesday.

Spokesman for the group, Munir, who recently received a prestigious international award for his human rights work, urged the government and parliament to prevent the passing of the revised legislation.

"We say the State of Emergency law must be rejected," he said firmly. "Rejecting the legislation represents a part of the responsibility for political change which strives for democracy," Munir, a member of the YLBHI central leadership council, added. "The same position must also be carried through by the House of Representatives through taking the initiative and proposing a new law which is in keeping with the process of political change," he said.

The groups were particularly opposed to the perceived tendency to protect politically repressive instruments under the militaristic discourse of the New Order regime of former president Suharto. "The desire of the House to pass the State of Emergency law betrays the ideals of reformasi, the desire is politically amoral," Munir said.

The law was drafted during the tenure of Suhartos hand-picked successor, BJ Habibie, and passed by the last New Order parliament to replace the more repressive 1959 Law on state emergencies. Thousands of people, including students, took to the streets protesting at that time and at least four people, including a student of the University of Indonesia, were killed during the protests.

Pressure on the President to pass the bill has been mounting from the House. The House leadership argues that the police and Indonesian Military (TNI) need a legal basis to deal with increasing violence in restive provinces. Last week, House Speaker, Akbar Tanjung of the Golkar Party which ruled Indonesia in partnership with the military during the New Order, stated the bill was already in effect because it had not been passed within 30 days of being enacted by the House.

The four human rights groups, however, have long protested the bill and the revisions undertaken by the government. Munir reminded them in the press gathering that many among them had previously condemned the Habibie-era bill.

"Pak Mahfud who is now Minister of Defense said at the time that if the law was passed the result would be state terrorism. Pak Armin Arsono, Muhaimin Iskandar, Matori, Taufikurahman (National Awakening Party leaders), Megawati (Sukarnoputri, Vice President), Gus Dur (President Wahid), Marzuki Darusman (Attorney General) also similarly joined the rejection. However, after they've sat in parliament and the cabinet, they've changed to become supporters of the State of Emergency law," Munir concluded.

Speaking to the press Tuesday, Elsams Executive Director Abdul Hakim, criticised the law for failing to even protect the four basic human rights. "The four rights which can not be violated are the right to life, the right to freedom from torture, the right to freedom from slavery and the right to freedom from arbitrary arrest. Im not saying the these arent present in the law, but they are not explicitly outlined," he said.

Their protest, however, maybe in vain as the House and government have apparently agreed to pass the legislation after revisions have been made.

During the first meeting of the laws revision team Tuesday, Minister for Justice and Human Rights, Yusril Izha Mahendra, said the law would be passed on 30 October. "According to the agreement last night with Akbar Tanjung, the State of Emergency bill will be passed into law in two weeks. So, around 30 October the law will have been passed," he said adding that his earlier statement that it would be passed on 24 October had not taken into account the difficulties of satisfactorily revising the bill.

At the same time, however, Yusril admitted that the team was committed to rectifying passages seen to violate human rights but had yet to isolate them as the meeting had just been convened. "Let the working team give the additions to the law. I myself will not regulate any part. So, just let whatever is to be changed be handed over to the team," he said. The Minister, it seems is resigned to the fact that there is a joint decision by the House and President to pass the law after the revisions have been finalised. "I also want the law to be withdrawn," Yusril muttered.

He also revealed that there was a stipulation to regulate emergency situations and that it was indeed the same as that contained in the 1959 law. However, the regulations governing it were different. In anticipating flare ups in restive provinces, when the revisions were yet to be completed, the government would rely on directives from the central government.

This little nugget of information is particularly relevant to provinces currently under a civil emergency, such as Maluku and North Maluku. Likewise, the security situation would be regulated by central government directives in other provinces where renewed violence has led to many calls for emergency powers to be divested in the armed forces. As negotiations appear to drag on and protests are heard unabated from civil society, a huge question mark still hangs over the 30 October deadline and the future of the bill.

Witness claims Soeharto played role in graft case

Jakarta Post - October 17, 2000

Jakarta -- A witness in the multimillion dollar graft trial of timber baron Mohamad "Bob" Hasan told a court hearing on Monday that in 1992 then president Soeharto ordered that a forestry mapping permit be granted to a firm belonging to the defendant.

"I was ordered by then president Soeharto not to give security clearance, which allows for forestry mapping and shooting of (forest) aerial photographs, to any other firm other than PT Mapindo Parama (MP)," former director general of forestry inventory and planning at the Ministry of Forestry, Soenarsan Sastrodimitro, told the hearing at the Central Jakarta District Court presided over by Judge Subardi.

Prosecutors have accused Hasan of causing the state US$75.62 million in losses and $168 million in losses to the Association of Indonesian Forest Concessionaires (APHI), via a fraudulent mapping project which was not preceded by an open tender.

Soenarsan said he was specifically ordered by Soeharto, in a meeting on how APHI would coordinate the defendant's firm in carrying out the 1989 mapping project, at the presidential palace in November 1992.

"Soeharto told me in front of everybody at the 'expose' that I should stop issuing permits for any other firm, except for that of the defendant,"he said. The defendant, who chaired APHI from 1989 to 1998, initially granted the project to PT Adikarto Printindo (AP) in 1989, a firm whose shares he eventually bought in full and whose name he changed to PT Mapindo Parama in1991.

"The then forestry minister, Hasjrul Harahap, also ordered me to recommend only one firm -- the defendant's firm -- for the project, despite the firm's obvious inability to complete the project single-handedly," the witness, who was director general from February 1989 until June 1993, said. The project involved the mapping and shooting of aerial photographs of 88.63 million hectares of forest concessions belonging to 599 concessionaires. However, Soenarsan said, the work done by MP was carried out too slowly since it was handling the project alone.

The witness admitted to having recommended PT AP to the forestry ministry, saying that it was the minister's wish. "PT AP worked by the rules, but it was only one firm. It should have worked with more firms ... I recommended 18 reputable consulting firms, including PT AP, but the minister picked only PT AP," Soenarsan said.

"I also told the minister that concessionaires were all scared of Bob Hasan ... and that they really did not want him in charge of the project. But it was no use." Soenarsan also told the hearing that officials of Hasan's company had been seen trying to extort money from concessionaires. "I immediately reported this to the minister, whom I believe informed you (Hasan) of the matter. To my knowledge, the minister told me that upon hearing the news, you (Hasan) fired those officials," he said.

He said he had no idea about the disbursement of $87 million from the reforestation fund which was used for the aerial mapping of protected forests. "Such a project did not happen until 1996, by which time I was already retired. In general, the use of reforestation funds must be legalized by the president," he said. Soenarsan said that the permit issued by the forestry ministry was for the mapping and shooting of aerial photographs for concession areas belonging to only 81 of the 599 companies, or 8.85 million hectares of forest concessions.

"The defendant also carried out the photographing project, by making forest concessionaires pay $2 per cubic meter of logs bound for export," Soenarsan said. "While 75 companies paid before the photographs were taken, six state-owned forest companies refused. They were allowed by the Ministry of Forestry to postpone payment until after delivery of the photographs.

"Since they never received the photographs, they never ended up paying." He identified the six companies as state-owned forestry companies PT Inhutani I in East Kalimantan, PT Inhutani II in South Kalimantan, PT Inhutani III in Central Kalimantan, PT Inhutani IV in North Sumatra, PT Inhutani V in South Sumatra and state forestry firm Perum Perhutani.

Earlier APHI said that it had paid MP $2.49 per photographed hectare, whereas in comparison, Perum Perhutani used another firm's services and paid only $1.80 per photographed hectare. Chief prosecutor Arnold Angkouw repeatedly implied at the hearing that Mapindo had marked up the contract for the mapping project.

Another witness, Haposan Simatupang, who is an auditor at the ministry's inspectorate, told the hearing that auditors had found a circular dated September 1, 1988, one year before the defendant, as APHI chairman, granted theproject to PT AP.

"The letter, signed by the defendant, was addressed to the executive board of the Association of Indonesian Wood Panel Producers (Apkindo) informing it that $2 per cubic meter of logs bound for export should be paid as fees by forest concessionaires," Haposan said. When asked who was the Apkindo chief then, Haposan answered: "the defendant".

Hamid named suspect in July 27 attack on PDI office

Indonesian Observer - October 17, 2000 (slightly abridged)

Jakarta -- Former home affairs minister Syarwan Hamid was yesterday named a suspect in the 1996 attack on the headquarters of the Indonesian Democratic Party (PDI). Syarwan, a retired lieutenant general, was head of the militarys social and political affairs department at the time of the brutal attack.

He yesterday failed to comply with a summons to appear at Military Police headquarters, where a joint civilian-military team is investigating the incident. But a source in the team said Syarwan has been declared a suspect.

Another former military official who has also been named a suspect in the case is Jakarta Governor Sutiyoso. Sutiyoso, a retired major general, was the city's military commander when hired thugs and security forces launched the assualt against the PDI headquarters on July 27, 1996.

At least five people were killed during the attack, which sparked mass riots in Central Jakarta. The PDI building had been occupied by supporters of then opposition figurehead Megawati Soekarnoputri.

Sutiyoso earlier this year admitted that former president Soeharto had implicity ordered the attack in order to silence the Megawati loyalists who were criticizing the government and military. Satunet.com online news portal reported that Sutiyoso and Syarwan will be interrogated by investigators next week.

Following the 1998 resignation of Soeharto, police investigated the July 27 incident. Predictably, they only came up with a group of civilian suspects, even though it was widely believed the military had orchestrated the attack.

The civilian suspects include: Soerjadi, former PDI secretary general Buttu Hutapea, and former PDI security head Alex W. Siregar. They had been detained by police until a few months ago and are now free.

A group of youths calling themselves the Student Alumni Forum for Law Enforcement (FMAPH) yesterday said Syarwan is a victim of a revenge attack being conducted by the new government. The youths are from Riau, Syarwans home province. They said there will be violence if legal action is taken against their regions most famous son.

Without intending to interfere in the joint investigation team, we, the people of Riau, demand the plan to detain Syarwan be delayed. If our demand is ignored, dont blame us if there is public unrest in Riau, FMAPH Chairman Ramlan Comel was quoted as saying by Detikcom in the provincial capital of Pekanbaru.

As head of social and political affairs in the armed forces, Syarwan is believed by many to have masterminded the attack against the PDI office. But Ramelan insisted that Syarwan had no authority to order the attack.

News & issues

Citizens grade Gus Dur on anniversary of presidency

Jakarta Post - October 20, 2000

Elected on October 20, 1999 amid a growing division among people -- especially between supporters of B.J. Habibie and those of Megawati Soekarnoputri -- Abdurrahman, or Gus Dur, was the escape hatch. He was, for many, "the lesser" of several evils. Does this view still hold now? The Jakarta Post recently asked a number of people to "grade" Gus Dur's performance over thepast year.

Sita Aripurnami Kayam, program coordinator of service for survivors at the National Commission on Human Rights for Women: I am rating him a six for his attention to women issues.

In his one year as president, he has not taken any concrete actions to protect women's rights. He does not directly give voice to this cause, but he is somewhat better than his predecessors.

His choice of state minister for the empowerment of women, Khofifah IndarParawansa, testifies to this improvement. Even the change in the name of the office is an improvement; it used to be office of state minister for women's roles.

Khofifah is quite good, she supports those who work to help women victims of violence, she launches policies that fight violence against women. If she does all this through discussion with the President, then that means the President is all right in this matter. But I wouldn't know if it turns out that Khofifah thinks about all these herself.

We can also see that the President's wife has concerns about women's issues. She recently established the Puan Amal Hayati, a group that works to empower women victims of violence through pesantren (Islamic boarding school).

It seems to me, then, that he is very supportive of the women's cause. Although I don't know how he is as an individual, certainly his wife and subordinates do care about the rights of women. That's why I am giving him a six.

He sometimes is patronizing of women, and makes stupid remarks such as that quip about Megawati taking too much time in the bath. But he is rather good in things that matter. I remember when, in a meeting of the INFID (forum of non government organizations) in Japan in 1993, I tried to present a paper on the sex industry, I tried to tell the forum how marginalization of women by industry often forced them to become sex workers. Many people opposed my presenting the paper. Then Gus Dur spoke up and defended my topic. Because of his support, I got to present the paper.

I see him as an accessible person, we can talk to him about serious matters. The fact that his wife can be very outspoken on some issues such as Presidential Decree No. 10 (on polygamy) means he is quite a democratic person.

He does have a sharp tongue, sometimes, but he can also be very open. I am optimistic that if he stays in office for the rest of the five year period, his government will pay attention to women's causes. Unlike his predecessors, he does not mind being rebuked or criticized. He is not repressive or bureaucratic.

Longgena Ginting of the Indonesian Environmental Forum (Walhi): I am failing him for his lack of attention to environmental issues. In general, environmental protection has yet to be given a priority. His mark is poor in this issue.

An example of this poor attention would be the persistent problem of illegal logging -- we know this continues because of high demand by the industry. The government is busy raiding illegal loggers but fails to attend to the roots of the problem. Another example is forest fires which continue because of the politics of natural forest conversion.

The administration of Gus Dur has encouraged political changes but in reality not much has changed. In the forestry sector, for example, Indonesia made a commitment to some changes during the Consultative Group on Indonesia (CGI) meeting last year, but this commitment has yet to be kept. Illegal felling continues, forest exploitation goes on. No meaningful change out there. In fact, we have reached a critical point, a very worrying setback.

With the introduction of the new regional autonomy law, a regent will be able to issue concessions for areas less than 100 hectares. The law has yet to go into effect but we understand that the regent of Kutai in East Kalimantan has issued at least 200 licenses. This law gives regents carte blanche, especially because of the poor legislative control in the regions.

We are suggesting that Gus Dur impose a two-year moratorium on logging in order to downsize the industry, to give time for our forests to recover. We are calling for a one year moratorium on mining because mining activities have now exceeded sustainability.

I understand that many parties will resist this call, but do we want to commit national suicide? By holding this moratorium, we will lose US$ 3 billion in income each year, but will save the country US$ 8.5 billion from illegal logging.

Edy Suandi Hamid, an economist at the Yogyakarta-based Indonesian Islamic University: If I'm a professor evaluating Gus Dur's economic performance I will certainly say that he fails. Why? If we look at the existing recovery indicators, they show that his economic performance is not good.

Just look at the value of the rupiah. So far we don't see any significant progress in it. It's even getting worse and worse. This proves that he cannot create the infrastructure needed for economic recovery, which not only deals with economic variables but also with non-economic variables such as creating a good climate for foreign investment.

Foreign investment will come only if political stability, security, and certainty of the law are present. Yet, as we all see, he has not created any of these variables. As a result, foreign investors are reluctant to invest here. It's true that we currently have an economic development of three percent, but it's not because of a movement toward economic recovery. It's because of consumer demand. And this will not last. There are other variables indicating some progress, such as export improvement and a decline in inflation. Yet, unless there is a certainty of the rupiah's value, these two variables could drop again anytime. The drop in the rupiah's value would lead to the drop of other economic variables.

Bambang Cipto, a political observer of Yogyakarta Muhammadiyah University: Gus Dur's government is in a process of falling into pieces. It's therefore difficult for us to hope for more from it. Unless there is a political miracle that can convince observers and politicians that Gus Dur is capable of mending the condition, we can hope for nothing.

Gus Dur is losing legitimacy in the House of Representatives. Yet, instead of mending the worsening relations with the House to get back the legitimacy, he seeks another legitimacy from abroad, especially from third world countries. It won't help at all. It's just an empty symbolic legitimacy.

Moreover, the Indonesian Military (TNI) is showing a clearer attitude towards Gus Dur's government by keeping a distance from it and showing resistance to it. The arrest of Suwondo (Gus Dur's masseur implicated in the Rp 35 billion scandal known as the Buloggate) indicates that Gus Dur is losing his legitimacy from among TNI/Police members. It serves as a kind of warning for Gus Dur not to interfere too deep in TNI's internal affairs.

In other words, if I were a professor grading his performance, I would say he fails. In this case, if he really wants to mend the condition, he has to be honest about his current legitimacy, especially from the House. Therefore, in order to get it back, he has to satisfy the House by fulfilling what the House wants. Domestic legitimacy is the strongest legitimacy.

Things would be different if he could show that he was capable of handling the threat of disintegration in Aceh and Irian Jaya. If that were the case, a balancing act with the House would emerge. But, this surely needs powerful political resources, which I believe, Gus Dur does not have.

Amien Rais, chairman of the People's Consultative Assembly: If we wish to speak for the good of us all, and if you ask me what Gus Dur's grade is during the year he is governing the country, I would say he fails most subjects," Amien said as quoted recently by Antara.

"I am evaluating him on his administration's performance in economic and security affairs. Our security is becoming even worse, the horizontal conflicts involving different ethnic groups, religions and other groups are increasing.

In the economic field, the crisis is continuing. When Gus Dur assumed the presidency, the rupiah was 7,300 to the US dollar, it is now almost 9,000. I am also concerned about the threat of disintegration, something which is very dangerous and is becoming more apparent in Aceh and Irian Jaya.

I am calling on all components of the nation to review whether all of the policies of Gus Dur up to now are on the right track. If his administration is considered good, then it should be supported; if his government is messy, then [people] should take a stance against it.

We must ask our own conscience, if it says Gus Dur's administration is messy, we really have to take a stance. If it is good, then we can go on. Personally, I think that much is lacking with his administration, but I am hoping that I am wrong in this case.

Dewi Fortuna Anwar, a political observer with the Habibie Center, on Abdurrahman Wahid's frequent overseas trips and their effectiveness to gain support for domestic purposes: "Gus Dur's political communication is quite good, but if the domestic institution is not strong then all those overseas trips will not bear fruit, especially in term of economic recovery," Dewi said in Surabaya as quoted by Antara recently.

"Because there's no security in the country, no follow-up from those overseas trips can materialize. Under the New Order, Soeharto's domestic institutions were strong so his policies were applied smoothly. Now, there is no such institutionalization, so Gus Dur formulates his own foreign policies -- namely to help curb separatism, to increase efforts for economic recovery, and to build democratization.

"But those policies are not effective because he fails to visit relevant countries; rather he makes visits indiscriminately. For instance, after winning several agreements in Washington, Gus Dur went to Cuba. So of course those agreements became nothing because the US does not see eye to eye with Cuba.

In addition, Gus Dur's remarks abroad are often seen as official statements of the government of Indonesia. But, because within the country the institutions are not supportive of those statements, the [international world's] confidence declines.

Mochtar Mas'oed, a political scientist at the Gadjah Mada University in Yogyakarta: Gus Dur's overseas trips in the earlier stage of his presidency were something that we could understand; they were needed to convince the international world of the presence of a new leader with a new vision," Mochtar said as quoted by Antara.

"But now we can't say, because we can't understand what his agenda is in making those trips, because he himself does not explain it to the public. His policies then get only partial responses from the public. Really, if Gus Dur wants to have his overseas trips to have influence over domestic policies, he should tell the public about his agenda.

Ita Herawati, a 24-year-old fruits vendor in Jl. Godean, Yogyakarta: I haven't seen any significant progress in Gus Dur's administration so far. The economic condition is just as bad as when the economic crisis first hit the country. The political condition is just the same. I am afraid that if nothing is done about it, the state will go bankrupt.

What concerns me the most is the way Gus Dur easily chooses someone and dismisses another from his cabinet. I don't see it as a wise thing. He seems to easily accept other's suggestions in doing so. He should make up his mind and choose the right persons for the right positions. That way would avoid hiring too many persons from his own circles.

Kus Indarwati, 47, a housewife in Pakuncen village, Yogyakarta: Gus Dur, as far as I have noticed, has not yet led his administration well. The fact that he fired numerous government officials whom he himself chose proves this. As a result, the country's security condition is uncontrollable. I don't know whether it is related, but every time he dismissed officials there was always a bombing incident.

Such a government is indeed a messy one. He runs the state any way he wants. He should consult other people before hiring or firing government officials. I am afraid that if nothing is done about it, violence will break out everywhere. And it's always us, the small people, who suffer the most. This country could just fall apart.

Regarding staple food prices, they have risen, but they are still affordable. Yet, once the price increases are uncontrolled, I'm afraid we will no longer be able to buy them. The point is, Gus Dur has to mend his ways. If he cannot do so, someone else better replace him.

Charles Himawan, a legal expert at the University of Indonesia and member of the National Commission on Human Rights: Let's not grade him, I don't feel comfortable with that. But it seems to me that Gus Dur is not yet convinced about how important law enforcement is.

It is true that if we speak about law enforcement, we're in for a long discussion, because it concerns [many people] from the police, the prosecutors, the court ... But there are three stages [of improvement] that can be undertaken: immediate, middle-term and long-term. Really, in the immediate term, Gus Dur should have strengthened our judiciary.

Remember how Gus Dur once said he was looking for "clean" judges [in a bid to ensure clean court proceedings]? Well, this is my suggestion [for an immediate solution in Jakarta]. Place three judges in the district court: one career judge who has the technical knowledge to act as presiding judge, and two non-career judges to make up the team.

Employ such a team for cases with direct economic impact such as Bank Bali scam or Buloggate. Do the same with the high court. I don't think it would be that difficult to find six clean and good judges. I would also suggest that the judges be allowed to have dissenting opinions when preparing for a verdict. Which ever judge has a different opinion from the other two should be given the opportunity to express his opinion.

In order to facilitate such a proceeding, the government must cooperate with the House of Representatives by preparing the relevant laws rather than, time and again, resorting to [ad hoc] decrees. Just add one clause in the law on judicial institutions [to cover the suggested change]. For example, within these one or two years, establish provisions that allow the teaming up of one career judge with two non-career judges.

But cooperation between the government and the legislators is imperative. Otherwise, this won't work. Just look at what happens at the commercial court. The middle-term stages would be implementing such change in other cities and regions. The long- term would a review of a number of laws, including the law on judicial institution.

Slamet Rahardjo, noted director and former actor: Gus Dur has paid scant attention to the film industry. [But] in some cases, he visited some artists when they were ill. This shows, at least, that he does care about film industry, and we, the people in the industry, feel that he gives us hope.

But there is no real action. We need some sort of new institution or board to empower the national film industry. Gus Dur and also [Vice President] Megawati have indicated that they are willing to support the establishment of such a board, but we are still waiting for them to follow up [on this]. The government is expected to financially support this independent board, but the financial support would gradually be reduced. That's why it would be called "an empowerment board" for the film industry.

We are promoting the notion of a draft bill on film to be introduced along with the Broadcast Law, but [for that] we would need government support.

Arist Merdeka Sirait, executive director of the National Commission for Child Protection (Komnas PA): [Abdurrahman Wahid's] government has not paid serious attention to efforts to improve children's welfare.

I don't think Gus Dur is sensitive to the issue of children and their education and health. So far he and the other members of the political elite are busy with their own political interests. They enjoy showing "political violence" and let children watch them.

We can see that children face even more serious problems. The budget for education, for instance, is only 1.4 percent of the gross national product. The figure is much lower than that of Bangladesh (2.6 percent), which we presume to be socially and politically worse off than Indonesia.

There are presently some seven million to 9.1 million children who cannot pursue an education. This is due to this misled concept that we hold, that education is compulsory. We have to change this. Education is the right of children. The government therefore must provide adequate facilities and a proper budget.

Pratikno, a military and political observer at Gadjah Mada University in Yogyakarta: Gus Dur has succeeded in luring the military away from practical, daily politics without creating too much of an uproar in the process. This is a commendable achievement.

The recent changes such as the replacement of officials in the Indonesian Military (TNI) and National Police (Polri) also indicate that Gus Dur is able to control the military and police effectively. The changes also indicate that he is able to establish a new political culture where the civilians hold supremacy over the military. This certainly is important and should be appreciated.

But all these new changes will remain effective only if Gus Dur is also able to provide space for the military to be more professional. This of course requires large funds so that military activities do not resort to non-budgetary funds.

Certainly this poses a dilemma for Gus Dur, because the state is currently short of money [while having to face another difficult option of] taking over the military's businesses. But [taking over the military's businesses] is the only way.

The [legal provisions] on non-budgetary funds must be clarified, and this does not only concern military businesses but also other parties' businesses. This is important to eradicate the traditions of corruption, double-salaries and double-funding.

If the military is allowed to continue to control economic activities, I am really concerned that this might harm their professionalism in the future. It will also make it even more difficult for civilian politicians to hold military personnel accountable.

I Nyoman Moena, senior banker: I have not seen much progress in the economic sector [after Abdurrahman Wahid's first year in the presidency]. In fact, a lot of setbacks have taken place. Inflation this year is now estimated to be more than the 7 percent initial target. The rupiah's exchange rate is currently at about Rp 8,800 per US dollar which is also far beyond the target level of Rp 7,500.

In terms of economic growth, consumption has played a major role instead of investment. This is not a genuine growth. So judging by the economic indicators, there have been a lot of setbacks during the administration of Gus Dur.

Gus Dur's administration lacks seriousness in dealing with the country's economic problems. The administration is too much focused on the political field when in fact economic problems here deserve top priority from the President.

Government wants to improve intelligence capacity

Jakarta Post - October 19, 2000

Jakarta -- The government is revamping the State Intelligence Coordinating Board (Bakin) in order to gain accurate information and intelligence data, Coordinating Minister for Political, Social and Security Affairs Susilo Bambang Yudhoyono said on Wednesday. Susilo said Bakin would be given a new name, National Intelligence Agency (BIN). The government will decide on the matter on October 24 at the latest.

"With Bakin's reorganization, the government hopes to improve the capacity of the state intelligence board because accurate information and intelligence data are needed in making decisions and policies," he said after a special meeting with ministers under his coordination here on Wednesday. He said BIN would have greater authority than Bakin, whose services have been reduced to a coordinative function.

Separately, Minister of Defense Mahfud M.D. said his office would also establish an intelligence agency outside BIN and the currently influential Indonesian Military's Strategic Intelligence Agency (BAIS). "We are planning to establish a defense intelligence agency (DIA) to provide accurate intelligence data to the government because so far, the government has yet to have intelligence sources," he said in a hearing with House of Representatives Commission for foreign policy, security and defense on Wednesday.

He said the new defense intelligence agency would recruit a larger part of BAIS personnel so that the military's intelligence agency could be dissolved because the Army, Navy and Air Force as TNI's entities would havetheir own intelligence sections.

He acknowledged that the plan to establish DIA would depend much on the defense budget. "It is difficult for us to make a decision because the House is very tight with the state budget while the intelligence agency will need unlimited funding to carry out missions," he said.

Government to set up new intelligence body

Indonesian Observer - October 19, 2000

Jakarta -- The government says it will form a new intelligence body so that President Abdurrahman Wahid will receive reliable information and no longer have to rely on rumors and hearsay.

Recognizing the weaknesses of existing intelligence bodies, Defense Minister Mohammad Mahfud yesterday said the Wahid administration needs accurate information, not rumors. We dont want the president to keep receiving information from unofficial sources, as happens at present, Mahfud said at a hearing with the parliament. He said the new intelligence body will be under the control of the Defense Ministry.

The plan was confirmed by Coordinating Minister for Politics, Social and Security Affairs Susilo Bambang Yudhoyono. He said the new information agency will be called the National Intelligence Body (BIN). The government wants to improve the capacity and capabilities of state intelligence. We want intelligence analyses that are accurate, so the government can study them before making certain decisions, he said.

Yudhoyono said the proposal to restructure the intelligence system came from the State Intelligence Coordination Board (BAKIN). He said the new body will be given considerably more authority than BAKIN had. BAKIN and other intelligence bodies have been under for failing to solve cases such as bombings, organized sectarian riots, and ninja killings.

Political analysts say the nations poor intelligence services have prompted Wahid to rely on whisperers. The president has often issued controversial statements that are apparently the result of the incorrect or unverifiable information that he sometimes receives.

Mahfud said most staff at the new intelligence body will be recruited from BAKIN and the Strategic Intelligence Body (BAIS), which is currently under the control of the Indonesian Defense Forces (TNI).

The future intelligence body will be a source of information on national defense. It will provide the president with official information so that he will no longer have to accept inaccurate information.

Mahfud said he has discussed the plan for a new intelligence body with Wahid and TNI Commander Admiral Widodo Adisutjipto. And in principle they agree with the idea. We will hold further discussions on how to establish the new intelligence body.

The minister said the biggest obstacle the Defense Ministry will face in creating a strong intelligence body is a lack of funds. During the New Order era [of former president Soeharto] there was an unlimited budget for intelligence activities. But now there is only the state budget allocation because the House of Representatives always keeps a close watch on spending.

He said the new intelligence body will not be used just for the interests of Wahid, but for the interests of the government in general. The defense minister said the new body will not be designed to frighten people like former intelligence agencies did, because we want the people to help us collect information. We also want the new intelligence body to always be close to the people.

Defense Ministry Secretary General Lieutenant General Soegiono said the structure of the new body will be determined at a meeting on October 24. He said its still unclear whether the body will be a directorate at the Defense Ministry or an agency controlled by the ministry.

Tourist arrivals to Indonesia decline

Jakarta Post - October 17, 2000

Jakarta -- Tourist arrivals in Indonesia dropped 2.19 percent in August to 374,900 people due to security worries during the Annual Session of the People's Consultative Assembly held in the same month, according to data issued by the Central Bureau of Statistics (BPS).

The fall in tourist arrivals was most noticeable at the port of Tanjung Pinang in Riau with a drop of 14.78 percent, followed by Soekarno-Hatta International Airport in Jakarta with 13.21 percent, and Polonia International Airport, Medan with 5.7 percent.

On the other hand, tourist arrivals increased through Batam, Sam Ratulangi Airport in Manado, Entikong bus station in Pontianak, West Kalimantan, Adi Sumarmo Airport in Solo, Central Java, Tabing Airport in Padang, West Sumatra, and Mataram, the BPS said in a statement. Bali, Indonesia's number one tourist destination, suffered a decrease of 0.2 percent in tourist arrivals in August compared to the previous month, it said.

The number of foreign arrivals from January to August rose by 4.3 percent to 2.7 million people compared to the same period last year. Tourism officials said that the fact that the annual assembly passed off peacefully would encourage more foreign tourists to visit Indonesia.

Fire won't halt Bank Indonesia funds probe

Straits Times - October 16, 2000

Jakarta -- Attorney-General Marzuki Darusman says the loss of documents concerning the mishandling of emergency support funds from Bank Indonesia in a fire on Thursday will not hamper investigations into the case.

"Even if the documents have been destroyed in the fire, this incident will not derail the legal process and the ongoing investigations," Mr Marzuki was quoted by Antara as saying. "Moreover, the Development and Finance Comptroller (BPKP) has confirmed that they still have copies of the documents. I have checked it myself."

Thursday's fire gutted the third floor of the BPKP office in central Jakarta where documents related to the alleged misuse of the central bank's 138.44 trillion rupiah (S$29 billion) liquidity support for ailing banks and state institutions were stored.

BPKP reported that the loans were used improperly by banks as they were not employed to reimburse depositors' money but for other purposes, including currency speculation, lending to affiliated business groups and the repayment of subordinated loans.

The agency claimed that the misuse of the liquidity credits in 1998 by the 43 banks was the result of a lack of supervision by the central bank, then chaired by the currently suspended governor Sjahril Sabirin.

The Attorney-General's Office prosecuted four of the banks last month, including Bank Deka, Bank Istimarat, Bank Pelita and Bank Centris.

This has led to speculation that arson may have been behind Thursday's fire. Mr Marzuki on Friday conceded that the fire was "peculiar", but he refused to elaborate.

Separately, the prominent Indonesian Corruption Watch (ICW) organisation charged that Thursday's fire was part of a systematic effort to sabotage the case. "Regarding the importance of the documents, we suggest that the BPKP immediately hand over its findings to law enforcers and we urge police to start investigating this incident," ICW said in a statement signed by its founder, Teten Masduki.

ICW claimed the destroyed papers concerned cases of alleged graft in several government projects involving former minister of mines and energy Ginandjar Kartasasmita and friends and family of former president Suharto.

Armed men attack Kawanua pub

Jakarta Post - October 16, 2000

Jakarta -- Some 100 armed men in Muslim clothes, stormed the Kawanua puband restaurant on Jl. Abdullah Syafi'i in Tebet district, South Jakarta, inthe early hours of Sunday.

They smashed the pub's windows, chairs and tables, musical instruments, the bar, the kitchen and toilets, causing the owner of the building to suffer millions of rupiah in damages.

Witnesses said the pub was not operating when the group arrived at about 11.30pm on Saturday in three public minibuses, armed with swords, woodensticks, crowbars and axes. "I heard that there would be a raid by civilians, which often happens over the weekend, so I closed the pub even though Saturday nights used to be the busiest night," the pub owner said.

The security guards on duty that night couldn't do anything to prevent the mob and fled to save their lives, returning when the attackers left the building about 30 minutes later. "We're very confused and upset because we had closed the pub but they [the group] still raided us. What else do they want?" said the owner, who also lives in Tebet.

She said the pub, which had operated from 8pm until 2am since late 1998, had previously been raided by people who claimed to be members of theIslamic Defenders Front (FPI). During the initial attack on October 4, 1999, the group had warned the pub to close its operation and just smashed the windows and bar, and injured one of their guests.

The owner said she had followed the FPI's demand, by closing the pub every Thursday and Sunday afternoon, but the group returned to attack the pub again on April 22, 2000. The second raid was even worse and again brought damage to the windows and bar of the venue, which is the only bar located in the residential areaof Tebet.

Several residents in the neighborhood, which has a strong FPI presence, said that they were often disturbed by the loud music coming from the pub. Reza Pahlevi, an executive of the FPI, separately said on Sunday that there was no such direct instruction from FPI headquarters to raid the bar. However, local residents have long observed that the pub had been used as a transaction site for drug dealers and prostitution.

"We have warned them several times, but it seems that they tried to play around with our warnings. The latest attack was the accumulation of our anger," he told The Jakarta Post by phone.

Five hospitalised after police-punk clash

Detik - October 15, 2000

Ulfie MS dan Swastika/GB, Jakarta -- Violence erupted Saturday night near Ratu Plaza on Jl Moestopo, South Jakarta, in what is normally a busy and up-market shopping district when punks hanging out in the area clashed with a truck-load of Mobile Brigade police troops.

The punks had gathered from Jabotabek, Sukabumi and other areas to attend an underground music concert at Moestopo University not far from the shopping district. With over 500 mangy youths on their doorstep, the management of the Plaza Senayan near Ratu Plaza apparently called in the troops.

The truckload of officers arrived on the scene and attempted to clear the area but were harassed by the youths. The police became aggressive and chased the youths into surrounding residential areas. The attacks by the police then apparently enraged local residents in the pooer areas, or kampungs, who joined the punks in turning on the police.

Five people were injured on suffering a cracked skull as the police, punks and their supporters clashed on the streets and in the alleyways. By 3am Sunday the streets around the shopping district were quiet once again.

Bomb explodes at foreign gold mining Company

Asia Pulse - October 16, 2000

Mataram -- A bomb exploded at multinational mining company PT Newmont Nusa Tenggara [NNT] on Friday. The bomb blast, which occurred at around 3.15 am, shattered the backside walls of the company and could be heard three kilometers away from the location. There has been no immediate report on whether there are any casualties.

The Jakarta Post quoted the company's spokesperson as saying the police have been investigating the case and Newmont has told its 54 employees to stay home until the police declared the office safe for them to resume activities. She said the company's copper and gold mining operation in the Batu Hijau area on the island of Sumbawa ran normally despite the incident.

Newmont Nusa Tenggara is a joint company between Newmont Indonesia Limited of the US, Nusa Tenggara Mining Corporation of Japan and local firm PT Pukuafu Indah.

Environment/health

Air pollution in Bandung alarming

Jakarta Post - October 16, 2000

Bandung -- Air pollution resulting from gas emissions has become an obvious problem here, with the local Environmental Impact Management Agencyoffice estimating the number of vehicles exceeding the tolerable exhaust emission limit at 36 percent.

The office's head of the monitoring and control unit, Yusuf Supriatna, said on Monday that the depressing findings came after 719 out of 2,000 randomly checked public and private cars and motorcycles failed the latest emission tests last week.

Only 6.5 percent of the vehicles checked failed the tests last year, according to Yusuf. "The increase in the number of polluting vehicles has certainly drawn great concern," he said. There are around 500,000 vehicles registered in the city, once dubbed the Paris of Java, with an annual growth rate of 2 percent.

The four-day tests were designed to detect levels of carbon monoxide (CO) and hydrocarbon (HC) emitted from gasoline run vehicles as well as the density of exhaust fumes from cars using diesel fuel. Vehicles are considered safe if their gas emissions contain no more than 4.5 percent of CO and 1200 ppm of HC and if their smoke density does not exceed 50 percent.

An expert staff member of the office, Roslina, said that more than half of the diesel engine cars produced by a well-known brand tested last week violated the exhaust density level.

To curb the degree of air pollution, Roslina said the office will emulate Jakarta in distributing emission testers to auto repair shops across the city, beginning next year. Jakarta is the third most polluted city in the world after Mexico City and Bangkok. Roslina said the office would suggest the city administration take stringent measures against motorists whose vehicles were found to violate the tolerable level of polluting emissions.

"Air pollution will be very dangerous to people here because they live ina city surrounded by mountains. Such an area allows polluted air to accumulate rather than disappear," she warned.

Caltex faces new attack from environmentalists

Indonesian Observer - October 16, 2000

Jakarta -- PT Caltex Pacific Indonesia, struggling against disruptions caused by protesting villagers who are demanding jobs, has been accused of using bombs to find oil sources in Riau province.

The Institute for Indonesian Forest Studies (LPHI), a non- governmental organization, said yesterday Caltex had breached environmental laws by detonating explosives to look for oil reserves across the province, Detikcom online news service reported.

LPHI Secretary General Andreas Hery Khahurifan was quoted as saying his group will sue Caltex at the International Court of Justice in the Hague, because of the severe environmental damage. Such activity can no longer be tolerated and should be stopped, he said.

He argued that the bombings could make the surrounding environment infertile, particularly land located within a 40 kilometer radius of Caltexs mining sites. If Caltex continues to use bombs, Riau will become a wasteland. That would inflict suffering on locals.

Khahurifan said Caltexs use of bombs is a violation of human rights as it has made people suffer and threatened the growth of trees and other vegetation. He said non-governmental organizations have blacklisted Caltex due to its environmental record. Of the many companies in Riau, Caltex tops the list when it comes to environmental pollution.

LPHI also accused the giant mining company of polluting a river, where it dumps waste materials, such as hydrocarbon. So areas of land and water in Riau have been polluted by Caltexs waste. We have to immediately halt these activities that are a violation of the environment law. Our government is not yet concerned by the case, Khahurifan said. Caltex has been facing protests from villagers who have demanded that they be employed with the companys local contractors.

Protesters blocked some mining rigs and seized dozens of its vehicles, disrupting productions. Last Thursday, protesting villagers set ablaze one of the vehicles.

A matter of choice

Asiaweek - October 20, 2000

Anastasia Vrachnos, Jakarta -- "Vasectomies! Vasectomies!" screams a bright-red poster in the white, shiny waiting room of the Family Clinic. But the words miss their mark. The men at whom they are aimed are outside, waiting for their wives in the parking lot of this small community clinic in the Jakarta neighborhood of Tebet. Inside, married women with squirming babies and young children sit waiting for appointments. Nurses dispense medicine and advice, while the clientele trade tips on contraceptives. Discussions on IUDs (intrauterine devices), birth-control pills and condoms fill the room.

Ibu Nurul, 25, the mother of a five-year-old boy, extols the virtues of the IUD. "You don't have to remember to do something every day and you don't get fat like with the pills," she tells the others. A generation ago, such talk would have been unimaginable in this predominantly Muslim society. But contraception in Indonesia, after years of being government policy, is slowly but surely becoming a matter of choice.

Call it the fruit of the new democratic era. Indonesia's family- planning program -- Keluarga Berencana, or KB as it is commonly called -- has long been touted as a model of success. In 1994, then-president Suharto was awarded the United Nations' annual population award for his country's successful efforts in family planning. In the three decades of the program's existence, it has managed to lower Indonesia's birthrate from 5.6 to 2.8 children per couple and engage 55% of women to use contraceptives -- numbers that stack up well even against developed nations. But the campaign has been marked by a strong authoritarian streak. Indonesians have started to move away from its influence.

The driving force behind Indonesia's population-control measures is the National Family Planning Coordinating Board, whose zeal and well-endowed coffers helped make "IUD" a household word and put the slogan "Dua anak cukup" ("Two children is enough") on the tip of every Indonesian's tongue. But the success came at a price. Stories of forced sterilizations under the Suharto government -- "safaris," as they were known, in which the army rounded up men and women for vasectomies and tubectomies -- have not faded from many people's minds. There is also a lingering feeling that the limited measure of reproductive control granted to the masses was merely a benign by-product of the government's national-development initiatives. Even the word used to describe the participants in the family-planning program -- akseptor, or "accepter" -- smacks of the top-down, paternalistic approach taken by the Suharto regime. "In Suharto's time, you didn't have a choice," says Bernardus Budiman, family-planning manager at a non-profit organization that markets contraceptives. "You had to follow family planning. Not enough education was given, and the public didn't understand the pros and cons."

Those days are gone, but now Indonesians are facing a new set of challenges. One of the first casualties of the country's economic crisis was social-service programs. The family-planning board lost its budget, and as the rupiah plummeted, so did Indonesia's contraceptive stock. "It was a crisis situation," says Nesim Tumkaya, head of the United Nations Population Fund in Indonesia. "They were running out of contraceptives and not buying any more." With their supplies depleted, health officials worried that poor families who could not afford contraception would drop out of the family-planning program.

At the moment, Indonesia's population is set to double to over 400 million in 44 years. Any acceleration of this trend at a time when the country could barely feed its own people would have spelled disaster. Already, 30% of the 3.5 million babies born in the years since the crisis suffer from serious malnutrition.

Fortunately, Indonesia was able to meet the $60 million needed annually for contraceptives through a major international donor effort spearheaded by the UN And with outside funds came new ideas. "Up to 1998, the Indonesian family-planning program was simply about family planning," says Tumkaya. "But now there is recognition that Indonesia needs to adapt to international standards and show more concern for reproductive choice as a basic human right." According to Tumkaya, this means focusing more on providing "integrated reproductive health services" -- the latest jargon for a package of programs including safe motherhood, contraceptive usage and disease prevention.

For their part, Indonesians seem to have signed on. There is now more emphasis on education and on understanding the pros and cons of various methods of birth control. Participants are no longer "accepters" but "clients." Contraceptives are becoming branded and competing against one another with names like Andalan ("Reliability") and Sutra ("Silk"). There are comic books on reproductive health, while free T-shirts, calendars and playing cards promote contraceptive use. Even midwives are being given rewards, such as cellular phones with free air time, for promoting certain brands of prophylactics.

But like many of the new-found freedoms in post-Suharto Indonesia, this greater measure of reproductive choice is being enjoyed least by the people who need it most -- the poor. Ibu Rasidah, 49, is a midwife who runs a local puskesmas, one of thousands of government-sponsored health clinics that have fallen on hard times because of the economic crisis.

Rasidah and her staff of seven are responsible for ministering to the health needs of the roughly 22,000 residents in their neighborhood. Unlike clients at the privately run Family Clinic across town, Rasidah's patients cannot afford to pay for services. They take what they can get under a state-supported social safety-net program -- and these days it isn't much.

Rasidah describes how the "droppings" of supplies from the family-planning board have dwindled to one or two irregular shipments every six months or so. "We used to give out contraceptives for free and no one would come and take them," she says. "Now people come to us, but we don't have enough to give."

The only thing she does have plenty of is condoms. Three big boxes gather dust in the back of her clinic. "I can't even give them away as water balloons," jokes Rasidah. Although they are one of the cheapest forms of contraception, condoms are unpopular with both men, who feel they lower sexual sensation, and women, who think they promote promiscuity among their men. One health worker tells of an uproar caused by members of a local officers' wives club when his organization provided condoms to their soldier-husbands in a disease-prevention effort.

Another stumbling block to condom use is the widespread notion that responsibility for birth control lies solely with the woman. As Rasidah puts it, her patients believe that "the man's responsibility in contraception extends only to paying for what is necessary." This goes a long way in explaining the 2%-3% male participation in the family-planning program. Health officials acknowledge that this is an area that needs some work.

But the weakest area is women's reproductive health -- perhaps not surprising given that the family-planning program was designed to meet government targets rather than address the needs of women. Family-planning board head Khofifah Indar Parawansa has acknowledged the problem: "Ironically, the program lacks attention to the reproductive health of women, resulting in a towering maternal mortality rate and abortion cases." The abortion rate is especially alarming. Some 1 to 3 million abortions are believed to be performed every year, with one estimate putting the mortality rate as high as 35%. Why such high numbers in a country where abortion is illegal in most cases and frowned upon by society? Part of the answer lies with unmarried women, who do not have access to contraception because there is no place for them in the family-planning program. The hands of health officials are tied by a law that prohibits contraceptive services for unmarried people and by a strong taboo against acknowledging premarital sex.

Health organizations are now trying to address the issue by reaching out to young Indonesians -- through youth centers, radio talk shows and websites. The campaign is sorely needed. Although many youths admit to being sexually active, their knowledge of contraception is often minimal. Health workers talk of teenagers who wanted to know whether kissing for a long time caused pregnancy and those who insisted that jumping up and down after sex flushed away sperm cells.

Back in the Family Clinic in Tebet, the women in the waiting room are laughing and swapping tales, including one about a woman who, imitating a health demonstration, put a condom on her thumb. Ibu Ani, 29, a first-timer to birth control, listens attentively. The potential side effects of the IUD are news to her; she says she chose the IUD because her mother told her to.

Whether it is Ani's mother-knows-best approach or the father- knows-best policy of the Suharto era, it is clear Indonesia still has some way to go in shedding its old mindset.

Arms/armed forces

Indonesian military defends its vast business interests

Associated Press - October 19, 2000

Jakarta -- Indonesia's underfunded military should be allowed to hold on to its vast business interests, as long it ensures they are more accountable and transparent, experts and military officials said Thursday.

Speakers at an international conference in Jakarta said the government's 2001 budget would only account for around 25% of the military's operational costs, including salaries.

Continued military involvement in the private sector is inevitable, they argued. "Our country is not yet able to provide funds to fulfill the minimum needs of the military's operational costs and the welfare of its personnel," Defense Minister Mohamad Mahfud said in a speech read by a ministry official. However, he said that military businesses should be restructured so that troops could share the benefits equally.

At 1.1% of gross domestic product, Indonesian military spending is one of the lowest in Southeast Asia. Experts say that 3% of GDP would be an acceptable level.

Lt. Gen. Agus Widjoyo, army territorial affairs chief, acknowledged that engaging in commerce distracted officers from their primary role and called for internal reform. "Give the businesses a professional management and open them up to public accounting," he said.

The Indonesian military run businesses, many of them tax-free, at all levels and in all sectors of the economy, including manufacturing, property, airlines, mining and timber. Many have been accused of mismanagement and corruption. Moreover, critics claim the military use their power to muscle in on illegal activities, particularly in provinces far from the capital.

The business associations of the military date back to the 1945- 49 war of independence, when many army units and militia had to fend for themselves in their fight against Dutch colonizers. The nationalization of former Dutch-owned businesses in 1957 provided the capital for larger ventures.

The finance ministry warned Thursday that it was "hopeless" for the military to expect more funds soon, saying it had to direct money to the country's poor, still suffering from the effects of a vicious economic crisis. "There are no extra funds coming in the next few years," said Mas Widjaya, director of the state treasury and assets.

Conflicting TNI factions halt reforms

Indonesian Observer - October 18, 2000

Jakarta -- Conflict between three factions within the Indonesian Defense Forces (TNI) is hampering efforts to reform the military, says an academic. Marcus Mietzner, a military analyst from the Australian National University (ANU), says the three factions are radical, moderate and conservative.

He says the militarys problems are exacerbated by the fact that TNI Commander Admiral Widodo Adisutjipto doesnt get strong support from influential officers because he is not from the Army.

Speaking to reporters on Monday on the sidelines of a seminar on civilian-military relations, Mietzner said the three TNI factions are now jockeying for key positions within the military, thereby hindering the reform process.

Giving an example of the military friction, he cited the efforts by several generals to bring former chief of the Armys Strategic Reserves Command (Kostrad) Lieutenant General Agus Wirahadikusumah before a council of officers.

Actually there is no strong reason to take Agus before an Honorary Officers Council, he said, adding that certain generals want to prevent Agus from holding an influential position.

Agus, who is close to President Abdurrahman Wahid, has angered many military officials by exposing corruption in Kostrad. He has also stirred up hardliners by calling on the military to withdraw from politics and take responsibility for past violations of human rights abuse. Mietzner said Agus is a member of the radical faction, that wants swift reforms in the armed forces, in line with demands from civilians.

He said the moderate faction can be represented by TNI Territorial Affairs Chief Lieutenant General Agus Widjojo. This faction mistrusts the various interests of political groups and therefore it wont follow all demands for reform. This faction is suspicious of military officers who are too close to the politicians.

Mietzner said the conservative faction can be represented by Lieutenant General Djaja Suparman. This faction wants the reform process to take place as gradually as possible. It doesnt want civilians to know about reform processes within the military.

The analyst said all three factions share similar political objectives, but they have different approaches toward achieving these objectives. He said reform of the military is also hampered by some external factors, such as differences of opinion among politicians on the role the armed forces should play in Indonesias future.

Jakarta's new army chief vows to fight graft

Straits Times - October 18, 2000

Susan Sim, Jakarta -- Indonesia's tough new army chief will soon invite public auditors to scrutinise the accounts of the service's many business companies and foundations. And if evidence of any illegal activity is found against any officer or soldier, he will throw the book at the culprits, General Endriartono Sutarto vowed yesterday.

Speaking to The Straits Times on the eve of a handing-over ceremony yesterday that sees him taking over actual command of the army from General Tyasno Sudarto, he made it clear, however, that it was not the critics he was seeking to appease. Rather his aim is to make sure that money from the army foundations goes only to improving the welfare of his soldiers and not to line the pockets of a few individuals.

Whether the larger public also has a right to know the results of the audits, he will leave the decision to his superiors, the Defence Minister and the commander of the Indonesian Defence Forces (TNI), he added.

His main concern is to root out corruption. Indeed, finding out the truth about the company finances is but one aspect of a tough love campaign he intends to wage throughout the army to instil discipline and professionalism.

For a start, he will be holding line commanders responsible for any violations of the law by their subordinates, starting with the recent police arrests of two soldiers for their alleged involvement in the bombing of the Jakarta Stock Exchange. Another case would be an ongoing probe into another two soldiers who allegedly sold military weapons to the Free Aceh Movement.

"I'm going to cut down all indiscipline cases by 70 to 80 per cent in three months. I'm a consistent man. I don't care who it is who breaks the law -- lieutenant-generals or privates. All indiscipline will be dealt with. And I will hold their superiors up to two levels up responsible too," he declared, clenching his fist to make his point.

Ironically, whether his tough love campaign succeeds or not may hinge on what he does to one man -- erstwhile rival Lt-Gen Agus Wirahadikusumah. Senior army officers, 45 of whom signed a petition demanding that he face a military honour court for allegedly leaving the country without permission and other procedural violations, are setting this as the real test of their new chief's leadership.

Lt-Gen Agus had in the last few months become a bane to the officer corps for his open criticism of the TNI, and somewhat naked ambition to become Army chief. He left many to suspect that he had been asking politicians and even foreign powers to lobby the President on his behalf.

But Gen Endriartono yesterday dismissed the Harvard-trained officer as "a small problem". He will send him to the honour court if there is evidence he violated military rules, he said. But it will not be for, say, opening up the accounts of the Kostrad business foundations to public audits. "What Agus did there is a very good idea. I will do the same."

The army has no business running companies, he noted. "It is better for us to concentrate on professional matters." But it has had no choice since the state budget cannot accommodate the welfare needs of the soldiers, he said.

Gen Endriartono said he did not know how much income the army companies made, but noted that the decision on whether the military should divest its businesses was not his to take. If the powers-that-be do want divestment to take place, then soldiers must be compensated in some way, he said.

Jakarta and East Java police chiefs sacked

Indonesian Observer - October 18, 2000

Jakarta -- Jakarta Police Chief Inspector General Nurfaizi and East Java Police Chief Inspector General Dai Bachtiar were among 31 middle and high ranking officers who lost their positions in a reshuffle yesterday.

Nurfaizi will soon hold the less strategic position of head of the Police Education and Training Institute. Bachtiar will become chief of the Police Academy in the Central Java capital of Semarang.

National Police spokesman Brigadier General Saleh Saaf denied the reshuffle was politically motivated. He said it was merely a routine process of promotions and transfers conducted in the best interests of the National Police. This reshuffle aims to improve the performance of the police, he said.

Nurfaizi is replaced by Brigadier General Mulyono Sulaeman, former deputy logistics assistant to the National Police chief. Rumors had been circulating since early September that Nurfaizi would be sacked because the government was not happy with his performance, but National Police headquarters always denied the rumors.

The latest unsubstantiated rumor is that Nurfaizis dismissal is linked to Saturday's arrest of President Abdurrahman Wahids former masseur Suwondo. The masseur is the main suspect in the embezzlement of Rp35 billion (US$3.9 million) from an employees foundation of the National Logistics Agency.

Wahid on September 27 sacked General Rusdihardjo as National Police chief because he had refused an order to arrest ex- president Soehartos youngest son Hutomo Tommy Mandala Putra following a deadly bomb blast at the Jakarta Stock Exchange.

Rusdihardjo had also been under fire for failing to resolve other bombing cases throughout the country, as well as the September 3 killings of three staff of the United Nation High Commissioner for Refugees (UNHCR) in West Timor.

A new post was created during yesterdays reshuffle that of National Police deputy chief. The job goes to Inspector General Panji Atmasudirta, former planning affairs assistant to the National Police chief. Panjis old position will be filled by Inspector General James Daniel Sitorus.

The new East Java Police chief will be former North Sumatra Police chief Brigadier General Sutanto. Inspector General Alihamafiah, former head of the Police Education and Training Institute, will be made head of the Police Staff College.

In other rotations, South Sumatra Police Chief Brigadier General Togar Sianipar will be made East Kalimantan Police chief, replacing Brigadier General Bahrum Kasman. Togars old position will be filled by Brigadier General Syahroedin, former chief of the Anti-Riot Police.

Former Director of the Police Detective Unit on Corruption Affairs Brigadier General Timbul Silaen was named director of the Police Detective Unit on Narcotic Affairs.

Economy & investment

Jakarta's paralysis

Asian Wall Street Journal - October 18, 2000

David Roche -- Back in the heady days of the early 1990s, Southeast Asia was in the middle of an economic miracle. Meetings between Asian and European trade ministers were occasions for Asian ministers to explain to their counterparts how Asia did it. Foreign investors were falling over themselves to lend money to Asian banks or invest in or set up Asian companies.

But now it's all changed. The confidence has gone. And now, as fast as Southeast Asia generates export earnings, money flows straight back out. So far, with the exception of Malaysia (which resorted to capital controls), more than two-thirds of the region's entire post-Asian financial crisis current-account surpluses have been invested in financial assets in the United States.

Indonesia, in particular, is at a crisis point. It needs foreign aid to balance its budget and external accounts for 2001. Its international donors, meeting in Tokyo this week, will probably continue to throw money at the administration of President Abdurrahman Wahid.

But don't confuse such charity with restructuring. The budget figures exclude any substantial clean-up of corporate balance sheets that would arise from writing down and auctioning off the assets of bankrupt banks now in the hands of the government's Indonesian Bank Restructuring Agency.

If that were to happen, the ratio of public debt to gross domestic product would jump by about 50 percentage points and interest expenses would lift the budget deficit by another four percentage points of GDP to between 8% and 9%. That's why it won't happen and why Indonesia will continue to struggle.

True, the economy appears to be enjoying a bounce back after the crisis. Right now, it is growing at about 6% and is likely to achieve 4% growth for the year. That sounds good. But it is, alas, both inadequate and unsustainable. It's driven mainly by oil and animal spirits.

Indonesia, therefore, cannot risk standing still. With more than 200 million people, it needs to grow at 8% per year just to absorb the 30% to 40% of the workforce that is currently underemployed or unemployed, in addition to a massive 3% annual growth in available workers. Most of these people are young. They overthrew Suharto's dictatorship to get a better life. If they get a worse one, the result will be an explosion of social turmoil.

The domestic economy (outside oil) remains on its back. Before the Asian crisis, in 1997, investment was $17 billion. In 1999, the figure was $9 billion. This year it's up about 16% -- but it's only the percentage that's big and far short of Indonesia's needs.

Before the emerging market crash, Indonesia had a domestic savings rate of 28% of national income and foreign investment of 4% of GDP. So 32% of GDP in savings was available for investment, which generated a growth rate of 8%. That's $4 of investment for every $1 of growth.

Now the domestic savings rate in Indonesia has fallen to 17% of GDP, reflecting the country's plunge into poverty. Poverty jacks up essential consumption as a proportion of total income. And, of course, there is no foreign investment. Therefore Indonesia can invest only 17% of GDP a year today compared with 28% a few years ago. To be super-optimistic, assume the end of the Suharto kleptocracy has raised the productivity of new investment so that only $3 of investment is necessary for every $1 of growth. The maximum growth rate achievable then would still be less than 6%.

Moreover, capital productivity is unlikely to increase in post- crisis Indonesia. With the equity market turning over just $25 million a day, the only way to allocate capital is through the banks. And they are bust as bust can be and likely to stay that way.

Sure, the government has bought out the banks' bad debts and guaranteed depositors their money. But that cost more than 70% of GDP and will cost another 10% before the job is finished.

The rub is that the bad debts were bought by the government at face value and paid for with bonds. That means that the same bad loans still sit unserviced and unwritten down in the balance sheets of the entire Indonesian corporate sector. Writing down the bad debts would wipe out the entire equity of the Indonesian corporate sector, opening the way for clean new ownership with large foreign stakes.

But Indonesian politics could not survive in such a hygienic house. As long as the balance sheets of the corporate sector remain uncleansed, no one is going to invest or lend. The result is that Indonesia will be starved of investment and burdened with a totally dysfunctional banking system.

The Wahid government could push corporate debt restructuring by empowering IBRA to behave like South Korea's Asset Management Corp. through write-offs and a change of corporate management and ownership. But that is unlikely. Writing off the corporate loans would destroy IBRA's stock of lousy bank assets. IBRA losses would have to be covered by the government issuing more bonds. Writing down the value of the bonds IBRA used to buy the banks' bad debts would spread the burden of restructuring to their shareholders.

But they would likely see the value of their equity reduced to zero. The banks would then have to be nationalized, recapitalized and sold off or closed. Indonesia's corporate sector would have clean balance sheets and capital would start to flow again.

Whatever way is chosen, the result will be to push government debt up to about 130% of GDP, which will cost nearly half of the government budget to service. That's one reason why restructuring won't happen.

The other reason is political. At the core of Indonesia's policy paralysis lie incompetence and corruption. President Wahid is incapable of leading his country out of its appalling fix. His plans to devolve power and money to outlying provinces are more than likely to drain central government coffers of the resources they need to restructure the economy.

The Indonesian parliament and military continue to conspire to find a better leader. Mr. Wahid's betrayal of Vice President Megawati Sukarnoputri on cabinet posts has pushed her to give her party, the Indonesian Democratic Party, or PDI, permission to find a way to impeach Mr. Wahid. The process will take about nine months. During that time, the presidency will be paralyzed -- especially since Mr. Wahid now has the support of less than 20% of parliament.

It all sounds like the prelude to the sound of tank tracks in the streets. But that is unlikely, too. The military is divided about what to do; they are disgraced in the eyes of the public. And the army is far too small to control a nation of Indonesia's size in revolt. We may eventually see a strong "leadership" scenario develop. But right now all the leaders-in-waiting look little better than Mr. Wahid himself.

Of course, Indonesia's problems are its own. But all of Southeast Asia's Mango Republics share some or all of Indonesia's symptoms. And contagion is what counts when it comes to attracting capital from busy foreign investors. That's bad news for Southeast Asia.

[David Roche is a global strategist at Independent Strategy in London.]

Indonesia optimistic about rice self-sufficiency

Indonesian Observer - October 17, 2000

Jakarta -- Indonesia should again be able to achieve rice self- sufficiency, as it did in 1985, Agriculture and Forestry Minister Bungaran Saragih said here yesterday.

Data from the Agriculture and Forestry Ministry shows that the countrys annual rice consumption is now 30 million tons, while world market supply has only reached 20 million tons.

Indonesia could thus not rely on the world market to meet its domestic demand for rice, the minister said during the commemoration of the 20th World Food Day at the State Palace here on Monday. The ministers speech was read out by Health and Peoples Welfare Minister Ahmad Sujudi.

The worlds fourth most populous nation expected unhusked rice production to rise to 53-54 million tons in 2001, from an estimated 50.7 million in 2000 because of continued good weather.

Director-general for Food Crop Production, Syarifuddin Karama, said this would be enough to meet domestic consumption, although the government could not prevent imports. Officials had previously forecast production to rise to about 52 million tons in 2001, from 51 million in 2000.

The good climate is expected to continue next year, he told reporters. This is enough for domestic consumption and there is no need to import.

Karama said the government was looking at ways to protect the domestic rice industry from cheap imports, including a plan to allow imports. We are still working on that, he said.

Increased plantings are also contributing to the rise in production. Officials said earlier this year the area planted with rice had increased to 11.6 million hectares in 2000 from 11.4 million in 1999.

Karama said the National Logistics Agency (Bulog) had about 1.7 million tons of white rice in stock, enough to last until January. He gave no further details. Indonesia produced 49.1 million tons of rice in 1999.

Meanwhile President Abdurrahman Wahid on the occasion of the 20th World Food Day said the government will continue to provide rice subsidies until 2002, based on the agreement with the International Monetary Fund (IMF).

He also said the government has decided to adjust coffee exports according to the policy designed by the Indonesian Coffee Producers Association. Accordingly Wahid called on coffee farmers and exporters to understand the governments decision to reduce exports by 20% due to a drop in the world market price.

Activists urge new approach from donor nations

Agence France-Presse - October 16, 2000

Tokyo -- Activists on Monday urged international donors preparing to meet in Tokyo this week to cut Indonesia's vast debt and tackle wrenching poverty.

Indonesia is to estimate its debt next year at 4.9 billion dollars during the World Bank-backed Consultative Group on Indonesia (CGI) meeting on Wednesday and Thursday, according to Japanese reports.

Japan is likely to provide fresh loans worth 58 billion yen (540 million dollars) to Indonesia to help finance five projects designed to support farming and other industries, the reports said. But Japan and other countries should ensure their money is better spent, argued Indonesian activists at a news conference in Tokyo ahead of the meeting.

"We want CGI to start addressing debt-reduction for Indonesia," said Binny Buchori, executive secretary of the International NGO Forum on Indonesian Development (INFID). "If CGI is responding to poverty reduction, then they should let Indonesia use the money not to repay the debt, but to put more money to investment in social spending," he said. "We want the international community to know that Indonesia's debt burden is very huge, and that of course in Indonesia, big debt is creating more poverty."

Japan, Indonesia's biggest aid donor, should carefully monitor any fresh money it gives to the embattled government of President Abdurrahman Wahid, the INFID activist said. "I think in principle, foreign loans to Indonesia should be allocated to sectors that support productivity," Buchori said.

"So we have to know truly what kind of agricultural activity they are talking about," he said, attacking the lack of any public consultation in the deliberations between Tokyo and Jakarta. "This is the kind of things that we really object [to] because we want ... a public consultation with civil society, NGOs [on] how to use the fund, for what purpose, what kind of project."

Last Tuesday, Finance Minister Kiichi Miyazawa met Rizal Ramli, Indonesia's coordinating minister for the economy, in Tokyo and said his government was ready to announce fresh support for Indonesia at the donor nations' meeting.

But some donors are still reluctant to provide fresh aid because of Indonesia's lax security measures against militia groups opposing East Timor's independence, reports say. The international community has pressured Indonesia to disarm pro- Jakarta East Timorese militias blamed for the murder of three UN aid workers in West Timor on September 6.

Another INFID official, Rivrisond Baswir, said Indonesia's donors had grown wiser since the regime of former strongman Suharto. "There is [some] improvement," he told the news conference. "They [donor countries] agreed that they have done a kind of wrong- doing during the Suharto era because they kept giving Indonesia loans, although they knew that the Suharto regime was a totalitarian" one.

Indonesian assets draw for investors

Agence France-Presse - October 16, 2000

More than 100 institutional investors have shown interest in buying some of the US$62 billion in assets managed by the Indonesian Bank Restructuring Agency (Ibra) at a roadshow in Hong Kong last week. Agency vice-chairman Arwin Rasyid said the positive response from investors revealed their confidence in the Indonesian economy.

The drastic depreciation of the rupiah in late 1997 drove away investors and the financial crisis caused serious damage to the economy and banking sector. The agency was set up under the Ministry of Finance in 1998 to carry our banking reform and to sell the assets of debtors or shareholders of the troubled banks. The assets to be sold include property, shares of companies, and office equipment. The disposals are aimed at raising funds to strengthen the capital of the banks and to pay back government funds used in their rescue.

Indonesia is relying on the asset sales to help plug a 44 trillion rupiah (about HK$38.3 billion) deficit for the year. Amid criticism from the International Monetary Fund over delays in the sale of the agency's stakes in banks, the Indonesian parliament last week voted to put off the sale of Bank Central Asia until next year due to fears it might not fetch a high price on the market.

Concerns over a lack of progress in the restructuring of the economy have made investors wary about buying Indonesian assets. Last week, Mr Rasyid led a delegation to Singapore, Hong Kong and Tokyo to meet potential buyers and present the assets it wants to sell. "Our purpose is to sell, sell, sell," Mr Rasyid told the Business Post.

During the roadshow, Mr Rasyid and other agency representatives met about 200 potential buyers of which about half indicated an interest in the assets. They were mainly long-term investors including fund managers, insurance companies, pension companies, institutional investors and some listed companies.

Mr Rasyid said investors exhibited more interest in this year's asset sales than at last year's roadshow. "The Asian economy has shown signs of recovery and investors are interested in investing in Indonesian assets again," he said.

Mr Rasyid said during the crisis, bad loans at Indonesia's banking institutions were valued at US$65 billion, representing 60 per cent of the country's gross domestic product last year. In comparison, a banking crisis in the United States in the mid- 1980s saw bad debts rising to US$185 billion -- three times Indonesia's level -- but this was equal to only 5 per cent of GDP of the US in the 1980s, he said.

The agency manages three categories of assets. The first is the shareholdings of 13 banks taken over by the Indonesian Government after the financial crisis, worth US$15 billion. Second is the US$32 billion in troubled bank loans transferred to the agency from the 68 banks undergoing restructuring. Third is US$15 billion in assets surrendered by shareholders of the troubled banks to the Indonesian Government as a way to repay the bank debts. This has brought US$62 billion of assets under the agency's umbrella.

Mr Rasyid said the Indonesian Government hopes these assets will be sold before 2004. He refused to predict how much money could be raised from the asset sales. However, he admitted it might be hard to find buyers for some of the banking assets.

Mr Rasyid said the sales process, which started last year, had been smooth. The agency aims to sell US$2.2 billion in assets this year, and in the first nine months it has sold US$1.4 billion in assets. Mr Rasyid was confident that the agency would be able to meet the target.

Meanwhile, Ibra is in the process of selling shares in 16 companies. In the nine-month period, the agency has also sold shares of Hong Kong-based and listed First Pacific Group, Indonesia-based companies including car-maker Astra International, Wisma BCA, Karimun Granite, Aetna Insurance and Dananmon Sanatel. Last year, shares were sold in Indofood and Indo American Ceramic. These sales brought US$615 million into agency coffers.

Mr Rasyid said the agency's sales of its entire 8 per cent stake of First Pacific spread out over August and this month on the Hong Kong stock market garnered US$70 million.

First Pacific is the only locally listed company whose shares are held by the agency. The stake was surrendered by the conglomerate's parent company, Salim Group, to cover debts owned by the group's troubled banking arm -- Bank Central Asia.

First Pacific is a Hong Kong-based conglomerate operating in consumer products, telecommunications, property and banking. After the sales, the agency will no longer holds shares in any locally listed companies.

Despite this, Mr Raysid said Hong Kong was an important market for the agency due to the high number of potential investors willing to invest in the assets it provided.

Unrest in Indonesia costs Caltex 30,000 barrels a day

Bloomberg News - October 16, 2000

Jakarta -- The largest crude oil producer in Indonesia says it has lost 30,000 barrels a day of output this year because of civil unrest.

PT Caltex Pacific Indonesia had produced an average of 710,000 barrels a day so far this year compared with its target of 740,000, said managing director J. Gary Fitzgerald. Last year the company produced 746,000 barrels a day. Production had been disrupted by at least 30 incidents of unrest his year, he said.

Other foreign oil companies have also been affected, preventing Indonesia from meeting its Organisation of Petroleum Exporting Countries quota. "The losses were mainly related to blockades, work stoppages and strikes," said Mr Fitzgerald.

Caltex drills 600 wells a year with 17 drilling rigs and produces oil from 107 fields in Riau province, where it holds four production contracts. Riau has been among the worst affected by civil unrest.

Indonesia faces growing demands for greater autonomy from regional political groups. Local communities are demanding more jobs and compensation for the resources extracted from their land. Last week, villagers blockaded the road leading to two Caltex drilling wells at Kopar in Riau.

The company said it was talking to the local authorities and the protesters and hoped the blockades would be lifted this week.