East Timor

Electoral officials determine ballot order in draw

Lusa - July 13, 2001

East Timor's Independent Electoral Commission Friday determined the order in which the territory's 16 political parties and five independent candidates will appear on the national ballot for August 30 constituent assembly elections.

The random draw in Dili was observed by representatives of all the competing parties. Similar draws are being carried out Friday and Saturday in East Timor's 13 districts to determine the ballot arrangement for the 13 district seats in the future 88-member constituent assembly.

On the blue-colored national ballot, representing 75 assembly seats, the top spot went to the newly founded Christian Democratic Party (PDC), followed by the historic Timorese Democratic Union (UDT) of Joao Carrascalao. The historic independence party, Fretilin, occupies fifth place.

The national ballot will carry the parties' names, acronyms and symbols. The 16 parties are followed on the national ballot by five independent candidates. Official campaigning for the territory's first free elections begins Sunday.

Election security stepped up as radical group warns of bloodshed

Sydney Morning Herald - July 13, 2001

Mark Dodd, Dili -- Two days before the start of East Timor's election campaign for a Constituent Assembly, the territory's United Nations administrator, Mr Sergio Vieira de Mello, has promised maximum security to ensure a peaceful and trouble-free ballot.

Answering questions about election security from National Council members two days before the country's 36-member de facto parliament dissolves, Mr Vieira de Mello acknowledged that security was the main concern of East Timorese during the August 30 ballot.

He called on the 1,400-strong armed UN Civilian Police force (CivPol) to be "vigilant and visible", saying they would be supported by another 8,000 armed peacekeepers. "We are going to take all necessary measures to prevent individuals or groups from a small minority trying to subvert law and order during the election campaign and trying to frustrate the aspirations of the vast majority of the East Timorese population," said Mr Vieira de Mello, the head of the UN Transitional Administration in East Timor

He was referring to the Popular Council for the Defence of the Democratic Republic of East Timor, a radical political group opposed to the UN mission that is demanding the reinstatement of a short-lived 1975 republican government. He acknowledged receiving several letters warning of violence including one purportedly signed by a dead former Falintil commander, Nicolau Lobato, saying a force of 2,000 guerilla fighters would soon descend from the mountains to restore "law and order" and that many people would be killed. Another message warned that East Timor would be "swimming in blood" after the elections.

Mr Vieira de Mello urged East Timorese to ignore the rumours. "I think we all know who is spreading these rumours," he told council members, adding: "We have a body of law here that is going to provide security and stability."

One Western diplomat who asked not to be named said there was virtually no chance of a repeat of the militia violence that occurred during the 1999 referendum which left 1,500 people dead, tens of thousands deported and the country in ruins. "There is not going to be civil war," the diplomat said. "We do not expect widespread violence; we think there is a chance of sporadic localised incidents, and we have already seen some. "The issue boils down to who is capable of organising a challenge to the PKF [peacekeeping force] or CivPol."

Mr Vieira de Mello said he would send an assessment mission to report on the current situation in four districts which he considered were most prone to election violence -- Baucau, Viqueque, Same, Dili and the Ermera/Aileu border.

Who gains most from New Timor gap treaty?

Green Left Weekly - July 11, 2001

On July 5, representatives of the East Timor Transitional Cabinet, the United Nations Transitional Administration in East Timor and the Australian government met in Dili and signed the Timor Sea Arrangement, concluding 10 months of negotiating and wrangling over a new deal to replace the Timor Gap treaty.

The new agreement represents a moral and political victory for East Timor, with the Howard government finally conceding to the demands pushed by UNTAET representative Peter Galbraith and East Timorese negotiators Mari Alkatiri and Jose Ramos Horta that East Timor receive at least a 90% share of the royalties from oil and gas developments in the area currently covered by the "joint zone of co-operation".

The new agreement will mean East Timor will receive an estimated $7 billion in revenue from royalties over a 20-year period, providing a crucial source of income for the devastated and newly independent nation.

From the outset, the Howard government negotiating team -- headed by foreign minister Alexander Downer, resources minister Nick Minchin and attorney-general Daryl Williams -- have sought to obstruct East Timor from asserting its rights under international law.

The back down by the Australian government was not motivated by concerns of helping East Timor. It was primarily motivated by the desire to safeguard the interests of oil and gas companies operating in the Timor Gap and the financial windfall for itself and the Northern Territory government ensuring that Darwin becomes the transit port for the export of East Timorese oil and gas.

On top of this, the Howard government was also keenly aware that with East Timor gaining a better royalty deal, this offered another justification not to provide more humanitarian aid and assistance to East Timor. Both the Coalition government and the Labor opposition want to diminish as much as possible responsibility [and any notion of compensation] for the part played by Australia in supporting the 24-year-long Indonesian military occupation.

How "generous" really is this new agreement? Certainly the royalties will make a big difference for East Timor, but the spin-off for US and Australian oil companies operating in the Timor Sea (and for the Northern Territory and Australian governments) is enormous by comparison.

Some $13 billion is expected to be invested in new pipelines and downstream processing in the Northern Territory. The Northern Territory treasury department estimates that these projects will generate $50 billion in economic activity in the NT over the next 20 years.

Downer asserts that the new deal "is a fair and just" agreement, "an agreement with a true basis in international law". An article by Alkatiri and Galbraith in the July 6 Sydney Morning Herald gives a more accurate appraisal of the agreement. They wrote: "The new Timor Sea treaty is a fair deal for East Timor and an even better deal for Australia and the companies developing oil and gas in the Timor Sea ... [the agreement] also rights a historic wrong.

"It will not make East Timor rich. However, if the money is well spent, it will give the people of East Timor the opportunity to escape the grinding poverty that is the legacy of occupation and war".

They added that: "Under international law, East Timor is entitled to a seabed boundary at the mid-point between East Timor and Australia. This would give East Timor not 90 per cent, but 100 per cent of the oil and gas in the Timor Sea.

"Thus while it may look like Australia is making a major concession in moving from the 50/50 revenue sharing it had under the Indonesia treaty to the 90/10 split in this new treaty, it is more than fair for Australia".

And, as Galbraith noted following the signing of the agreement, "it provides a hell of a lot more certainty than they [energy companies] had under a treaty with Indonesia in which they were in effect making investment in stolen property".

Still, the companies and the Australian government are far from satisfied. The corporate media have started a new scare campaign over the prospect that East Timor's new constituent assembly, due to be elected in August, may seek changes before ratifying the treaty or impose at some future date a higher fiscal regime upon companies operating in the Timor Sea.

If a future East Timorese government chooses to make such changes, this is an entirely justifiable and reasonable action to take. The people of East Timor will need as much solidarity as possible in the coming years to defend their newly one independence from the greedy moves of companies in the Timor Sea and the profits-before-people foreign policy of the Australian government.

Deadline passes for challenges to Timorese election candidates

UN News - July 11, 2001 (abridged)

With Wednesday passing as the final deadline for East Timorese to challenge the list of proposed candidates for the upcoming elections, the United Nations transitional administration today said that all political parties and independent candidates had been officially registered.

In all, 16 East Timorese political parties and 17 national and district independent candidates have registered with the UN transitional administration's Independent Electoral Commission (IEC) for the 30 August elections.

Overall, nearly 1,000 East Timorese are now officially registered to run for an 88-member Constituent Assembly, which will comprise 75 national seats and 13 district seats. The Assembly will have 90 days to write and adopt a Constitution for the soon-to-be- independent territory, which is currently run by the UN Transitional Administration in East Timor (UNTAET).

Only half of group of 1,250 Timor refugees able to return

Lusa - July 10, 2001 (abridged)

Only 666 of the 1,250 East Timorese refugees Indonesian authorities said wanted to return to their homeland last month have been able to do so, UN officials said on Tuesday.

Results of the registration drive undertaken by authorities in Indonesian West Timor last month indicated that 1,250 East Timorese refugees above the age of 17 wanted to be repatriated, said Bernard Kerblatt, the representative of the UN High Commission for Refugees (UNHCR) in Dili.

However, as only about half the refugees have so far been able to return to East Timor, the UNHCR officials believe that the others may have been victims of reprisals by the militias opposed to the territory`s independence who still control the refugee camps in West Timor.

UN fears for East Timorese refugees who chose to go home

Agence France Presse - July 10, 2001

Jakarta -- UN officials in East Timor raised concern Tuesday about the fate of refugees who chose to be repatriated from squalid camps in Indonesia during an Indonesian-run census last month.

Interim results from the June 6 and 7 registration drive showed 1,250 East Timorese aged over 17 chose to go back home to East Timor, the chief United Nations refugee agency (UNHCR) official in Dili, Bernard Kerblatt, told AFP.

However, only a few have since returned to East Timor, leaving UNHCR officials worried they could be vulnerable to intimidation by pro-Jakarta militia leaders controlling the camps in Indonesian-ruled West Timor. "That was one month and three days ago," Kerblatt said of the census, speaking by phone from the East Timor capital.

Since then 666 refugees had been repatriated over the East Timor border with the assistance of Indonesian authorities, but their numbers included only a few of those who had formally requested repatriation.

"Where are these people, why aren't they coming?" Kerblatt said. "What we're concerned about is these people [who requested repatriation] are out in the open, without any international protection in these camps, and more or less subject to intimidation.

"As you know in these camps there is no such thing as confidential." Kerblatt said the 1,250 represented several thousand possible repatriations if their dependents were counted as well.

The UNHCR was pressing Indonesia "as a matter of emergency" for the early return of those who registered for repatriation. "We hope through dialogue with the government of Indonesia that eventually they will assist these people," he said.

Provisional results released by Indonesian officials five days after the census showed that of 113,794 refugees who registered, 111,540 or 98 percent opted to remain in Indonesia. The results were greeted with scepticism by the international community and rights groups, who pointed out the camps are still under militia control, leaving anyone who opts to return home open to reprisals.

One group of independent monitors reported that some of the refugees had opted to stay in Indonesia because they feared violence in upcoming August elections in their former homeland. Other refugees said their children were in schools in West Timor and wanted to wait until conditions improved back home, where whole towns were razed by the militia in an orgy of violence.

The refugees are the remainder of more than 250,000 East Timorese who were herded from their homes and over the border by pro- Jakarta militias in the wake of the territory's August 1999 vote to break away from Indonesia. Some 180,000 refugees have since returned home, according to UNHCR records.

UN says militia still intimidating refugees in West Timor

Associated Press - July 10, 2001

Dili -- As a UN security team toured refugee camps near Indonesian controlled West Timor's border with East Timor Tuesday, officials of the world body in Dili warned that pro- Jakarta militias were still intimidating refugees.

The UN team is in West Timor to assess whether it's safe for humanitarian personnel to return to the region where militiamen murdered three aid workers last year. The UN and aid agencies evacuated all staffers from the province after the killings, saying that the region is too unsafe for their return.

The estimated 50,000 East Timorese refugees living in camps in the province have been without international aid since the UN workers left in September, 2000. Richard Manlove, who is heading the mission, Tuesday refused to comment on the conditions in the camps.

However in Dili, East Timor's UN High Commissioner for Refugees Director Bernard Kerblat, said that very few refugees have returned in the past month from West Timor.

"These people still remain in camps where there's a fair degree of intimidation and manipulation from hardcore militias," he said. Kerblat urged the Indonesian government to ensure all refugees who want to return are able to.

Indonesia arrests 23 militia members

Melbourne Age - July 10, 2001

Mark Dodd, Dili -- Indonesian security forces have arrested 23 hardcore militiamen including the notorious leader of the gang involved in the 1999 massacre in East Timor's Suai cathedral.

Diplomatic sources told The Age that the arrests occurred between Thursday and Sunday in the West Timor border town of Atambua after rioting by Laksaur militia members. The 23 militiamen, including gang leader Igidio Mnanek, are members of the Laksaur gang.

In a blunt warning that more action might follow, the Indonesian army commander in charge of West Timor, Major-General Willem da Costa, was quoted on Monday as saying: "We will no longer tolerate delinquent refugees [militias]." Authority for the crackdown by the Indonesian Army could have come only from a senior command level.

There are many reasons for the arrests but rising crime in West Timor attributed to militia gangs is believed to be a significant factor. A desire to restore severed relations with the United Nations is also a strong possibility.

The United Nations Security Council has called on Indonesia to demobilise and disarm the militia gangs while Jakarta is keen to have better relations with East Timor. Improved security in West Timor could result in the return of UN staff evacuated last September after the murder of three UN staff following militia- led riots in Atambua.

Mr Mnanek was cited as a ringleader behind the riots. He is sought by UN prosecutors for his role in the Suai cathedral attack that killed 200.

Yesterday, Indonesian police flew to the south-west town of Suai to gather evidence about the killing last year of New Zealand peacekeeper Leonard Manning, who was shot dead in a militia ambush. The UN Transitional Administration in East Timor has identified Private Manning's alleged killer and asked for his extradition.

The arrests of the 23 militiamen coincide with a rise in fears for the safety of 1250 East Timorese refugees who have not been seen or heard of since requesting repatriation home in an Indonesian Government census in West Timor last month.

The number of refugees who opted for repatriation was likely to be more than 3700, if children under the age of 17 were included, said Bernard Kerblatt, chief of operations for the UN High Commissioner for Refugees in East Timor.

Yesterday Mr Kerblatt expressed fear that the refugees may be facing violence or intimidation by anti-independence militias controlling the camps. He called on Indonesian authorities to guarantee the safety of all East Timorese refugees who requested repatriation during the June 6 census.

Reports of infighting among militia clans across East Timor is causing concern about the safety of tens of thousands of refugees under their control.

Reconciliation talks involving independence leader Xanana Gusmao have also raised fears that refugees will be used as pawns in negotiations with militia leaders facing arrest for 1999 war crimes in East Timor.

Deadly tension

Melbourne Age - July 4, 2001

[This is an exclusive extract from "Appeasing Jakarta: Australia's Complicity in the East Timor Tragedy", the second in the Quarterly Essay series published by Black Inc., Melbourne, $9.95.]

John Birmingham -- The battalion's nickname was strictly and bitterly ironic: "The Brave Ones". A fighting unit with a proud history of child murder, rape, plunder and riot.

You could tell when Battalion 745 had passed through because of their signature legacy of shallow graves, burnt buildings and drinking wells crammed with the mutilated remains of the dead peasants they were pledged to protect.

In September, 1999, they were quartered at the eastern end of Timor, at a barracks complex just north of Los Palos, a forlorn sort of place that had never really recovered from the fighting of 1975. Battalion 745, the Brave Ones, were given the task by Jakarta of making sure things stayed quiet.

They were a territorial outfit, a bunch of second-raters, with a good percentage of their numbers made up by local men. Their training, equipment and operational doctrine were all inferior to the main force units of Kostrad, the army's strategic reserve, and Kopassus, the fearsome and much-hated special forces.

They were not quite as bad as the militia, the military equivalent of those scabrous, stringy-legged wild dogs that haunt the streets of so many towns throughout the archipelago. But 745 were not what you'd call a disciplined or even a remotely formidable military force.

September 21 was the Brave Ones' last full day in East Timor and they held nothing back. It was also a day on which they brushed up close against their own destruction and all but touched off a war between Indonesia and Australia.

Their first victims were Abreu and Egas da Costa, murdered just a few minutes after the convoy had left their own barracks ablaze at Laga. Their deaths were witnessed by Zelia Maria Barbosa Pinto, who hid in an irrigation ditch as she heard the convoy approaching. The da Costa brothers, doubling on a motorbike, weren't as lucky. Their own engine noise masked the approach of the trucks until it was too late and the battalion outriders were on top of them. Somebody in the convoy yelled out that they were terrorists, and as Abreu backed away from the motorcycle and screamed at his brother, "We're going to die," the soldiers opened up on them.

Someone shot Abreu's leg out from under him as he ran. He fell, staggered up and made it a few more feet before a round slapped into the back of his skull and pitched him into the paddy water. His brother didn't get that far; he was shot in the stomach before he could run more than 10 feet. Zelia Pinto watched a soldier walk over and bayonet him.

745, joined by members of the Team Alpha militia, drove through the old Portuguese quarter of Baucau, the second city of East Timor and a major staging point for TNI operations throughout the centre and eastern reaches of the island. From there they took the coast road west for Dili.

Before they drove out later that evening on the last leg of their retreat, a local military commander asked them to refrain from further bloodshed.

Within half an hour they had driven into a potentially catastrophic showdown with the 2nd Cavalry Regiment of the Australian Army.

The Australian modified light armored vehicle, the ASLAV to its friends, is really not that light. Or friendly. It weighs in at about 13 tonnes, depending on its configuration. Standing next to an ASLAV, your average, machete-wielding villain is immediately dwarfed by its blunt mass and, more subtly, by the promise of mayhem contained within its brutish frame. The ASLAV's offensive capabilities and the training and commitment of the men who drove them were the reasons why armed peacekeepers were never going to be welcome in East Timor in the pre-ballot period.

With a neutral, heavily armed force in place, the TNI's scorched earth policy would have been prohibitively expensive, or even impossible to carry through in the face of opposition from the likes of the 2nd Cavalry Regiment.

The TNI had many more troops in place, but behind the comparatively small number of InterFET personnel stood the threat of intervention by the armed forces of those states that had contributed them, including (though not limited to) Australia's traditional allies, the United States and Britain.

The appearance of that foreign armor on Dili's ruined streets signalled to all sides in the East Timor conflict that things had changed; specifically, the immunity to armed sanction enjoyed by pro-Jakarta forces had ended. This transitional phase was the most dangerous moment of the crisis, the point at which miscalculation by InterFET or foolhardiness by militia or TNI units could easily flash into a wider, international conflict.

Into this situation rode the Brave Ones. On the night of September 21, the second day of InterFET's mission, half-a-dozen ASLAVs, disbursed in two groups, were squatting astride the main east-west road through Dili.

During the taut period immediately before and after the arrival of Australian combat forces, Dili was still infested with hundreds of militia bandits and ill-disciplined Indonesian troops.

At all hours of the day and night they tore through the devastated city in trucks and cars, screaming abuse and levelling their weapons at the Australians. Under the rules of engagement they could have been shot at any time for making such threatening gestures, but the Australian troops restrained themselves, despite the heat and stress and physical demands of carrying full combat loads. That stress should not be underestimated. Foot patrols ran all day and night. Sleep was snatched in short bursts among rubble and burning refuse.

Tensions rose as the Australians, most of them very young men, were at last close enough to reach out and touch the material consequence of the TNI's failure. Bodies rotted in drinking wells, drainage ditches and ruined buildings.

Some bodies bore signs of torture and all had been mutilated. In some cases, hands and heads had been cut off in a crude and brutal attempt to hide the victim's identity. The body of a young woman, her hands bound and throat cut, abandoned in a toilet area awash with her blood, was a shocking discovery for the diggers who found her.

Around 10 in the evening, the Brave Ones' motorcycles, riding point on what had grown into a 60-truck convoy, ran up hard against the ASLAV checkpoint. After looting and killing their way across the island from Los Palos, 745 and their Team Alpha cohorts were emotionally unprepared for any resistance.

They had been ordered to chill out back at the Dili barracks, but as the convoy growled and squeaked to a halt in the dark, angry militiamen and soldiers began to shout and wave at the Australians, demanding they move aside.

The Brave Ones' vanguard presented as a sort of B-movie vision of some pirate biker gang from hell, a rat bastard outfit in black T-shirts, camouflage pants, long hair and bandanas, with axes in their eyes and guns at the ready.

The Australians -- assault pioneers, a couple of rifle platoons and six pairs of snipers -- were all kitted out with body armor and night vision equipment, giving them a distinctly threatening, insectile, otherworldly appearance beneath their kevlar helmets.

Unbeknown to the territorials and militia, who were blind in the dark, their every move was being observed in the cool green glow of low-light amplification systems.

The Australian ranking officers, a pair of lieutenants, one of whom spoke Bahasa, informed the motorcycle escort of orders to detain anyone they came across armed and not in uniform. The riders revved their bikes as their spokesman blustered and demanded passage through the blockade. The voices grew loud and more agitated as it became obvious that 745 might not be allowed through immediately.

As more Australian soldiers quietly deployed to support their leader, Indonesians and Timorese dropped from the backs of trucks, unshipping their weapons, crying out, demanding to know the cause of the delay.

Some of the hard chargers of Team Alpha and 745 began to shoulder their rifles, unaware they could be seen in the dark. Under the UN-sanctioned rules of engagement, they were now dead men. But the Australians, outnumbered many times over, did not open up on them. They did not respond in any obvious way. No orders were given.

But each man slowly raised his Austeyr F 88 from the hip. Guns on the ASLAVS tracked around smoothly, settling on the trucks full of Indonesian soldiers. Photon streams poured out of laser designators, painting bright dots -- visible only through the diggers' night vision goggles -- on the foreheads and chests of those men fated to die first.

As InterFET commander Major-General Peter Cosgrove said later, it is no exaggeration to say that the future of Australia's relationship with Indonesia hung in the balance for the next few minutes. So tenuous was the situation in Dili, and so poisonous was the relationship between the two countries at that moment, that everything then turned on the actions of the young lieutenants and the men standing behind them.

Cosgrove has used the example of this roadblock more than once to illustrate the importance of training, discipline and modern equipment. He saw it, quite rightly, as a small moment of vindication.

But it was also a failure, a nexus point at which the full weight of 24 years of accumulated strategic folly, moral poverty, infamy, lies, naivete and self-delusion suddenly dropped on to the shoulders of a handful of young soldiers.

Dili sees three powers as vital to its future

Australian Financial Review - July 4, 2001

Geoffrey Barker -- It will be the ironic fate of independent East Timor to have its key international economic and security relationships with three countries responsible for much of its historic suffering: Portugal, Indonesia and Australia.

As a poor country facing long-term international dependency, it is already looking to these countries for the economic and security assurances it needs to establish stable foundations for development and progress after independence.

And of the three countries, Australia is of paramount importance, according to Jose Ramos Horta, the Nobel Peace Prize winner who now holds the title of Cabinet member for Foreign Affairs in the United Nations Transitional Administration.

Horta says he would like Australia's relationship with East Timor to be as close as Australia's relationship with Papua New Guinea. "Almost an Australian protectorate" is how he describes the relationship he would like to see.

Portugal, the former colonial power that abandoned East Timor to civil war and Indonesian invasion in 1974-75, Horta sees as an important bridge into the European Union for East Timor. Portugal, for its part, shows every sign of wanting to restore its standing in East Timor, and to use it as a bridge into South-East Asia.

Horta is more reticent about Indonesia, which allowed militias to destroy and murder after East Timor voted for independence in 1999 to end 24 years of Indonesian occupation. Not so Sergio Vieira de Mello, the UN chief now running East Timor.

He says East Timor's relationship with Indonesia is "vital". "They share the same island. East Timor is surrounded east, north and west by Indonesia," he says. De Melo says the two countries have made progress in their relationship, but that it has been difficult for many in Jakarta to reconcile themselves to what had happened in East Timor.

So how do things lie in East Timor's key relationships? Australia, one of the few countries to recognise Indonesia's incorporation of East Timor, substantially restored its reputation in the country when its troops led the UN force that entered the country to restore order in late 1999.

The presence and professional conduct of more than 1,000 Australian troops on the sensitive and still unstable border between East and West Timor have further reinforced Australia's reputation -- as has Australia's decision to fund and build the now almost complete $5 million East Timor Defence Centre about 35 kilometres north-east of Dili at Metinaro.

An Australian Treasury team has drawn up East Timor's budget. AUSaid is funding urgently needed civil projects, including a training program for paramedics to help ease East Timor's dental health crisis.

Also, Australian non-government organisations are involved in activities ranging from helping to establish a truth and reconciliation commission, sorting out East Timor's tangled land-tenure system and other development issues, including political education for women.

That is the upside. One downside is that Australia is perceived as having been slow to resolve East Timor's concerns over the sharing of gas and oil royalties from the Timor Sea, although the responsible UN official, Mr Peter Galbraith, has seriously exacerbated problems.

Another downside is that mixed with the genuinely committed Australians working in East Timor is an army of fast-buck carpetbaggers -- restaurateurs, rough tradesman, and low-life bar operators. They include loud, bearded, tattooed yobs whose boozy behaviour appals the East Timorese and other foreign nationals and diminishes Australia's reputation.

Most Australians, however, seem friendly, well-intentioned, if sometimes naive people. Not so the Portuguese, with whom Australians often have difficult relationships. The Portuguese have returned with imperious colonial attitudes, setting up banks and a large administration in central Dili. Portuguese troops and police insist on being responsible for law and order in the town.

East Timorese, Australians and others find the Portuguese arrogant and overbearing, although the Portuguese have done a fine job in restoring the university and a teachers' college, filling both buildings with books in Portuguese, a language with which many young East Timorese struggle if they speak it at all.

Australian military officials complain of vexatious criticism from the Portuguese who made it extremely difficult for the Australian Defence Force to hand over some M-16 machine guns to the East Timor Defence Force for training purposes.

As for Indonesia, it is unlikely to be willing or able to do many favours for independent East Timor despite de Mello's optimistic claim that, comparing East Timor with the Balkans, it is "a miracle that we have gone as far as we have in the case of East Timor and Indonesia".

Which may be why Jose Ramos Horta says East Timor wants to join as many regional and international organisations as it can as either observers or active participants, including the so-called G-77 non-aligned UN group, ASEAN, the Pacific Forum, APEC and, more surprisingly for an overwhelmingly Catholic country, the Organisation of Islamic Conferences.

Aceh/West Papua

Indonesian army trains Javanese migrants in Aceh

Straits Times - July 13, 2001

Marianne Kearney, Jakarta -- The Indonesian army is training and equipping Javanese migrants in Aceh to defend themselves against independence rebels in the province, non-governmental groups say.

An activist from a rural-development organisation said: "The military has been recruiting people so they can defend themselves." But he said the civilian militia force was made up of just 40 migrants. He added that its members were armed with weapons such as sickles and knives, not military weapons as the Free Aceh Movement (GAM) says.

A military commander in Central Aceh admitted the local migrant population had been armed, but denied that the military was trying to stir up ethnic conflict in central Aceh. Lt-Colonel Rochana said the pro-government militia was a long-established village defence force, which was not organised by the military.

Non-governmental groups say the military may be exploiting recent ethnic tensions arising between the Javanese and local people, in the hope that increased violence would justify tougher military crackdowns.

In the last month, violence in Central Aceh, which was once relatively peaceful, has increased dramatically. More than 100 people have been killed while 12,000 have fled for North Aceh. Both Javanese and Acehnese blame each other for the violence.

GAM rebels have made no secret of their dislike of Javanese migrants. In the past, local commanders have admitted that they had asked Javanese migrants to leave the region, threatening them with death if they refused.

Migrants in Takengon, the capital of Central Aceh, said they were under attack from GAM and had joined the militia to defend their farms, according to the weekly magazine, Tempo. "If you were attacked, are you going to keep silent? We are peaceful farmers. Why are we being killed and our houses burned?" asked a Javanese migrant.

Militia stirs ethnic strife in Aceh

South China Morning Post - July 12, 2001

Vaudine England in Jakarta -- A Javanese militia has formed in Central Aceh and, with encouragement from security forces, is stoking conflict between Acehnese and other ethnic groups in the separatist province, human rights workers and analysts believe.

"My people have been there and found that these claims are true. Many Javanese transmigrants there have been armed by the TNI [Indonesian defence force]," a rights worker said.

The war between the separatist Free Aceh Movement (GAM) and the military has claimed more than 1,000 lives this year. Since a peace plan was announced in May, extra troops have been sent to Aceh and the death toll has risen significantly.

The reports of a new ethnic militia raise concerns that a broader conflict is being encouraged to justify further military intervention. Analysts said such a militia would fit the standard practice of the military in separatist-inclined provinces. But they also warned that the initial reports came from GAM-related groups and need further verification.

However, the claims that elements of the army were creating conflict between civilian groups were given extra weight by a range of informed observers. "The picture is of an East Timor- style divide-and-rule operation, going back over at least a year, carried out by military intelligence figures," one Western analyst said.

A 17-page statement from Sira, the Aceh-based pro-independence Centre for a Referendum, which is related to GAM, said the violence in Central Aceh was caused by groups with names such as "Sons of Java Born in Sumatra". Sira said animosity between ethnic groups were being exploited to spread tension in Aceh.

More than 100 bodies have been found by Red Cross volunteers and others this month, primarily in Central Aceh, home to many ethnic minorities. "We've been able to remove 94 bodies. We have been unable to reach hundreds more," Hajarul Aswad, head of the Indonesian Red Cross office in Takengon, Central Aceh, said a week ago.

He said the group found the bodies of 27 people who had been shot and burned in Simpang Meuderek. In one house, 16 bodies were stacked on top of each other. In Pepedang village, bodies were lying along the roadside, Mr Hajarul said. A journalist from Serambi, a newspaper based in Banda Aceh, found a number of deserted villages in the area.

Villagers in Simpang Lantang told Serambi they had seen troops dressed in camouflage clothes entering the village before four men were shot and houses burned.

Local media said yesterday that an exodus was under way from Central Aceh due to food shortages and a warning from GAM that it planned new attacks on soldiers and police.

Violence elsewhere in Aceh has seen many Javanese migrants flee to Java, and the minority communities of Bataks and Padang from other parts of Sumatra feel increasingly insecure. About 40 per cent of Central Aceh's 250,000 people are Javanese. Acehnese have lived aside migrants from other areas, including Javanese, for decades.

Central Aceh is home to coffee plantations dating back to Dutch times, when labour was brought in from Java. But Javanese who arrived more recently, through the central authorities' transmigration programme, have faced the strongest Acehnese resentment. The Sira statement referred to a history of tension between some Javanese migrants and the local Gayo people. It said indigenous groups had been marginalised by Jakarta's efforts to transfer large populations to outer areas such as Aceh.

Serambi quoted a village leader from Central Aceh as saying: "Since 1926, we have been living here, Acehnese, Gayo, Padang, Batak, Javanese, in harmony with each other. I don't understand why there is so much hostility now."

Jakarta arms Aceh militias as toll soars

Sydney Morning Herald - July 12, 2001

Lindsay Murdoch, Jakarta -- Indonesia has started forming East Timor-style militias in oil- and gas-rich Aceh, where scores of civilians are being murdered under the cover of a brutal crackdown against separatist rebels, say Acehnese leaders and human rights workers.

The death toll in the province at the tip of Sumatra has soared to 848 this year, most of them since the launching in April of a Jakarta-sanctioned military operation to crush the Free Aceh Movement (GAM).

A top Acehnese leader, Mr Hasballah Saad, yesterday appealed to Jakarta to order the military to stop attacking civilians and to allow international observers to monitor the conflict.

"Grave injustices are being committed," Mr Hasballah told the Herald. "The violence is only turning the Acehnese further away from Jakarta's rule. The people are being radicalised." Mr Hasballah said that of the 848 deaths he had confirmed this year, more than 460 of them were neither members of the security forces nor GAM fighters.

"Many are women and children," he said. "There are sinister forces at work ... we don't know who is doing most of the killing. So international observers should be allowed to go there to monitor the situation." Human rights activists in the provincial capital, Banda Aceh, say the extent of the violence over the past several weeks is largely unknown because the security forces are intimidating journalists and human rights workers to stop them going to many rural areas.

Mr Mohammad Nazar, the head of the Aceh Referendum Information Centre, said the military killings were worse than ever before. "We cannot investigate and the local journalists are too intimidated ... but we know massacres are being committed on a horrific scale," he said.

In one of the latest incidents, 16 people were burned to death when a hand grenade was thrown into a small hut. Military spokesmen claimed all of the victims were GAM members. GAM denied the claim, saying only four were fighters and that the rest were innocent civilians. Up to 40 bodies were found several days ago in one remote gorge. The dead have included babies, school children, school teachers, civil servants, rebels, soldiers and police, human rights activists say.

With Indonesia's President, Mr Abdurrahman Wahid, embroiled in a political crisis that threatens to plunge the country into crisis, the escalating violence in Aceh has received little media coverage in Jakarta and has prompted virtually no public debate.

When his cabinet approved a battalion of about 800 specially trained troops to be sent to Aceh in April, Mr Wahid claimed they would only be involved in a limited operation to protect so- called vital installations such as the ExxonMobil gas fields. But within days troops started attacking villages suspected of harbouring GAM rebels, human rights activists say.

Several weeks ago, a further 300 troops from the elite Kopassus special forces were sent to the province, bringing to about 30,000 the number of armed troops and police stationed there. Kopassus troops trained and armed the militias that rampaged through East Timor in 1999.

Reports from central Aceh say the training and arming of pro- Jakarta militias by Indonesian security forces has alarmed locals. The squads are being formed in an area dominated by an estimated 260,000 Javanese settlers, many of whom arrived in the province under a government trans-migration program.

Tempo magazine this week quotes a military spokesman as confirming the formation of the militia, saying it was part of a long-established civilian home defence force.

Twelve dead in Aceh, new attack reported in ExxonMobil area

Agence France Presse - July 10, 2001

Banda Aceh -- Clashes in Indonesia's oil-rich province of Aceh have killed at least 12 people including five suspected separatist rebels, and endangered food supplies to residents, officials said Tuesday.

Guerrillas of the Free Aceh Movement (GAM) said they had attacked an outpost of US oil giant ExxonMobil in retaliation for violence directed at locals by security forces.

Aceh police spokesman Commissioner Sudarsono said five suspected GAM members died in a gunfight in the village of Panca, some 40 kilometers (25 miles) east of here on Monday. But local GAM spokesman Ayah Sofyan told AFP that only one rebel had been killed and the four other victims were civilians "brutally shot dead by troops."

Sofyan said the bodies could not be retrieved yet as the military was barring access to the area. Humanitarian workers in Banda Aceh confirmed the ban on entering the area.

On Monday, villagers found seven bodies at three separate locations in Central Aceh, district spokesman Zulkifli Rahmat told AFP. Three of the bodies had gunshot wounds and the others were already decomposed. "The seven bodies have already been buried by local residents," Rahmat said, adding that the killers were unknown.

Unknown men on Monday night torched some 130 houses and shops in Lampahan in Central Aceh, most of them owned by ethnic Acehnese, Rahman said. The area is about one kilometer from the headquarters of an army battalion and an elite police unit.

More than 1,200 people took temporary refuge at the main mosque and a school in Lampahan, a subdistrict town.

Violence in Central Aceh in the past week has halted the supply of food and fuel from the neighbouring districts of North Aceh and Bireun, Rahmat added.

Drivers of supply trucks were afraid to travel the road, fearing ambushes, he said. "If in another week, no supplies of essential foodstuffs arrive in Central Aceh, then the 250,000 people in the district may suffer from famine," he said. The shortage has already caused prices to rise drastically in the district, Rahmat said.

Electricity supplies to the district have already been disrupted for lack of fuel, and Central Aceh now has to rely on limited supplies from North Aceh.

The North Aceh GAM spokesman, Teungku Jamaica, said rebels attacked a security outpost within the Cluster IV area of the closed-off ExxonMobil gas operation in Lhoksukon on Monday. "We fired grenades, mortars and gunshots in retaliation for the actions of security personnel who have continuously roughed up the local population around ExxonMobil," Jamaica said. But the police spokesman said the attack consisted only of "one or two shots" and added there were no casualties.

The government, which is losing 100 million dollars a month in lost liquefied natural gas exports, is pushing ExxonMobil to reopen its facilities closed due to the violence since March 9.

More than 1,000 people, mostly civilians, have been killed in Aceh this year in violence involving the separatist rebels and security forces.

Fresh violence claims at least nine more lives in Aceh

Agence France Presse - July 9, 2001

Banda Aceh -- At least nine people and possibly up to 14 died in weekend violence in Indonesia's blood-drenched Aceh province, the military and residents said Monday.

Soldiers killed three members of the Free Aceh Movement (GAM) on Sunday in a raid on a house at the Pusong Baru village in North Aceh, residents and rebels said. "The three were sleeping in the house when they were shot at from the roof," a witness who requested anonymity said. A local GAM spokesman confirmed the killings of his colleagues.

The Serambi daily quoted local military spokesman, Lieutenant Colonel Firdaus, as saying the raid followed a tip-off from a rebel who had surrendered, but he declined to name him. A handgun with ammunition, one hand grenade and a list of names were confiscated, he said, adding that in the Samadua subdistrict of South Aceh, 10 GAM members had surrendered to the local military on Friday.

Troops also raided a suspected GAM base in the forest of Krueng Batee in South Aceh on Sunday after the arrest of a local commander, the military's Lieutenant Colonel Purwanto told the Serambi. But the base was empty when troops arrived and they only found radio communication equipment, ammunition and one home-made bomb.

A military spokesman, Major Edi Sulistiadie, said two rebels were killed in a 15-minute gunfight with soldiers on Saturday at Sapik in South Aceh. South Aceh GAM spokesman, Ayah Manggeng, told the Serambi a man who was taken away from his house in Padang Sawah by Indonesian police Saturday was found dead with gunshot wounds the next morning.

On Sunday, another body was found in the Keude Sibleuh area of South Aceh Sunday, residents said, while an aid worker said the decomposing corpse of a school janitor was found near a West Aceh beach on Saturday.

The body of a resident was found on Saturday in the Blang Malu area of Pidie district and seven other villagers were missing after a recent police sweep, a human rights worker said. "According to the residents the victim ran when he saw police entered the area to search for GAM hideouts," the activist, who asked not to be named, said. He said police also arrested three other residents.

Meanwhile, a GAM spokesman, Ishak Daud, claimed that Indonesian security forces shot dead five civilians and torture 14 others in the Afdeling plantation area in East Aceh on Saturday. But the claim could not be immediately confirmed with the police.

More than 1,000 people, most of them civilians, have been killed this year in violence involving the separatist rebels and security forces. Casualties have increased since the government began to deploy more troops in Aceh in April to crack down on the rebels who have been fighting for an Islamic state in the oil- rich province since the mid-1970s.

US maintains recognition of Indonesia's control over Aceh

Jakarta Post - July 8, 2001

Jakarta -- The United States government has maintained its support for the unitary state of Indonesia, saying it will never back any effort by Aceh separatists to secede from the country, aUS official said in Washington D.C. on Friday.

"The US government and people hope Indonesia could maintain its integrity," the US State Department's director for the Philippines, Indonesia, Malaysia, Brunei and Singapore, Robert Fitts, told Antara.

Commenting on the Free Aceh Movement (GAM)'s demand for independence for the province, Fitts said such separatism could not be considered the demand of all Acehnese as GAM only represented one group.

He, however, noted that the Indonesian government should settle the problems in Aceh by fully understanding all of the aspirations of the Acehnese. He said what the US supported was the search for internal political and economic solutions through negotiation, not force. The US, he pointed out, believed efforts to settle any problem using military force would only bring Indonesia to a difficult position in the international community.

On the possible resumption of military cooperation between Indonesia and the US, Fitts said Washington would pay more attention to police cooperation as the US government believed the Indonesian National Police would play a bigger role in stabilizing Indonesia.

After the police force separated from the Indonesian Military and a system of democracy was implemented in Indonesia, the US took the view that the police would begin to play a larger role in maintaining security, he added.

The US government always supports the Indonesian government in settling all its domestic problems through negotiation, not through a military approach, he asserted.

Fitts further said the Bush administration was ready to help Indonesia improve the quality of its police force. A cooperation between the two countries' police forces could be in the form of education by providing some Indonesian police personnel with special training in the US, he said.

Elite power struggle

Ambition fuelling battle for control of Indonesian police

Straits Times - July 14, 2001

Devi Asmarani, Jakarta -- It is personal ambition, not political partisanship, that is fuelling a dispute between middle and high-ranking officers over who should lead the Indonesian police force, according to police sources here.

The saga over the controversial sacking of defiant police chief General Suroyo Bimantoro has brought to light cut-throat rivalries within the ranks of the police corps and how this makes them susceptible to a "divide and rule" approach.

A retired police chief still influential within the force told The Straits Times: "The person who wants to divide and rule the police force has succeeded in doing it, because they can read the situation very well.

"Every time there is a change in leadership, there are always hopes and fear. I am certain that those who want Bimantoro out of the picture are seeking career opportunities out of the conflict, while their rivals who have been promoted to good positions by Bimantoro are afraid of what may happen to them."

The internal conflict is pitting police officers still loyal to Gen. Bimantoro against those who support his anointed replacement, deputy Commissioner General Chairudin Ismail. Gen. Bimantoro's backers, mostly older officers from his class of 1970, have expressed displeasure with Com-Gen. Chaerudin for accepting President Abdurrahman Wahid's appointment, calling him ambitious. They have snubbed his several attempts to call meetings, publicly attending to affairs involving Gen. Bimantoro instead.

Gen Bimantoro was suspended and then sacked last month by Mr Abdurrahman after the police chief refused to resign. But the general claimed his removal was illegal as it had not been cleared by Parliament.

Sources said Gen Bimantoro's supporters at police headquarters outnumbered those who wanted him to resign because he had secured top posts for them during his nine months as police chief.

In early June, immediately after refusing to resign, Gen Bimantoro appointed 94 mid and high-ranking officers to new positions. The appointments were followed by a series of public statements by local police chiefs in support of Gen Bimantoro, including one by Jakarta Police Chief Insp-Gen Sofjan Jacob.

But their sentiment is not shared by some of their younger colleagues -- officers belonging to the classes of 1971 to 1973. About 150 mid-ranking officers recently demanded the resignation of Gen Bimantoro and his backers, alleging that they were politicising the police force.

"We demand police chief Gen Suroyo Bimantoro and several high- ranking officers who back him stop this sickening act of insubordination and leave the National Police to be led by a younger generation," said Senior Commissioner Alfons L. at Tuesday's gathering of mid-ranking officers.

Police standoff may lead to Jakarta clash

Straits Times - July 14, 2001

Marianne Kearney, Jakarta -- The current standoff between Indonesian President Abdurrahman Wahid and his police chief, and within the top ranks of the force, could lead to a dangerous showdown in Jakarta, say analysts.

Sacked police chief General Suroyo Bimantoro's refusal to step down, has split a demoralised police force already suffering from discipline problems.

This split -- said to be among those who feel his sacking is illegal and those who finds his defiance an act of insubordination -- could provoke clashes if Mr Abdurrahman tries to dissolve the Parliament. The public bickering at the top, if translated into divided loyalties among ground commanders in- charge of well-armed units could spell disaster if they interpreted their orders differently, analysts warned. Worse, confusion in police ranks could result in clashes with the more disciplined military.

Another concern is that if the President's supporters descend on the capital in force, the police and the military may be split over how to handle mass demonstrations, particularly if pro- Abdurrahman supporters become more violent.

Some factions of the police and military may favour a tough crackdown as they did recently in East Java, while the middle- ranking commanders may resist using force to break up violent demonstrations.

Mr Abdurrahman appears to have gained some support from middle- ranking police officers, who on Monday criticised Gen Bimantoro for refusing to obey the President and step down. These officers were later rewarded with promotions.

Analysts said this could set a dangerous precedent. As it is, the police are increasingly reluctant to follow the orders of their senior commanders, while the senior commanders themselves have refused to follow the President's order. "This is dangerous, it could make the police independent of government institutions," said political analyst Tomi Legowo.

The political standoff had also distracted the police from the task of solving serious crimes, such as Wednesday's bomb blast, said Mr Legowo. The police admitted that they had no clues as to the motive behind the bomb blast, which was the 14th major explosion in Jakarta over the past 18 months, the Jakarta Post reported yesterday. The effect of a divided police force was less likely to be felt outside Jakarta and Java, said analysts, as it was the military and not the police who held the key to security in outer islands.

Military analyst Bob Lowry said: "The police don't matter so much because they don't have the firepower at the moment." Mr Legowo, however, said the ability of police to respond quickly to sudden outbreaks of sectarian or ethnic violence in areas such as Maluku, Kalimantan and Sulawesi would be affected due to a lack of co-ordination between the top commanders and the lower ranks.

Political analysts not sure what game Gus Dur is playing

Straits Times - July 14, 2001

Marianne Kearney, Jakarta -- Thursday's order to arrest Indonesia's sacked police chief Bimantoro and yesterday's backdown from the arrest indicate that President Abdurrahman Wahid is willing to fight to the end in his bid to cling to power, said analysts.

However, it is still open to debate whether the President is embarking on the first steps towards declaring a civil emergency, or just raising the political ante in a game of brinkmanship. Mr Abdurrahman knows that if he declares a civil emergency, he won't have sufficient police backing to dissolve the parliament, observers pointed out.

But the embattled Indonesian leader hopes to use emergency rule as a way to split the political parties that have been backing his impeachment. "He wants to order the disbandment of Golkar and thereby create a debate in the DPR over Golkar's stance," said one analyst.

The President believes that if he tries to break up Golkar, the party of ex-president Suharto, he will gain considerable support from other parties that resent Golkar's influential position. "This will create some room to manoeuvre," said the analyst.

But the local media also reported that the President was still negotiating a compromise with party leaders, such as United Development Party (PPP) chief Hamzah Haz.

Other observers are not so certain that Mr Abdurrahman really intends to declare emergency rule and said the President's threats are just part of the psychological warfare to rattle his political rivals.

Said one diplomat: "He's trying to force out his opponents, to spook them a bit." The diplomat said Mr Abdurrahman might be trying to isolate his opponents and then go on the offensive either by threatening to arrest them, or launching further investigations into their political or business deals.

An editorial in yesterday's Jakarta Post also said that the main purpose behind Mr Abdurrahman's decision to sack the police chief was to allow him to arrest his political opponents.

Analysts agree that it will be virtually impossible for Mr Abdurrahman to enforce a state of civil emergency. Even police officers supportive of Mr Abdurrahman are unlikely to agree to the dissolving of parliament, particularly as the military will not back such a move.

However, observers say the President will not retreat and have not ruled out his use of violence as a means of forcing parliament to back down. Analyst Bob Lowry said: "He shows no signs of accepting his fate. He will use whatever means possible."

Wahid digs in as foes threaten snap hearing

South China Morning Post - July 14, 2001 (abridged)

Agencies in Cirebon and Jakarta -- Isolated and facing open defiance within the police force, President Abdurrahman Wahid said yesterday he will declare a state of emergency next Friday unless lawmakers abandon their drive to impeach him. Political opponents said if Mr Wahid went ahead with his threat, they would hold a snap impeachment hearing.

Speaking at an Islamic boarding school in West Java province, Mr Wahid repeated his demand that rival political parties agree to a compromise deal and allow him to serve out his term until 2004. "If not, on July 20 at 6pm I will declare a state of emergency," he said. Under emergency rule, Mr Wahid can dissolve the People's Consultative Assembly (MPR), Indonesia's highest legislative body, before it launches impeachment proceedings against him on August 1. Mr Wahid has also threatened to call early parliamentary elections.

Speaking after attending mosque in Cirebon, Mr Wahid said emergency rule would be "in line with the constitution". He said a 10-member council consisting of prominent political figures would run the country until elections next year.

Mr Wahid's ultimatum, the latest in a series of threats against the assembly, was immediately denounced by the body's chairman, Amien Rais. He warned that the assembly was prepared to go into session "within one or two hours" of any declaration of an emergency and immediately sack Mr Wahid. "If Wahid issues a decree declaring a state of emergency or dissolves the Parliament, the MPR leaders will meet one or two hours later ... and the next day we will convene a special session," Mr Rais said.

He was speaking after parliamentary leaders met for an hour following Mr Wahid's renewed emergency threat. The assembly is demanding that Mr Wahid make an accountability speech on August 1, before its 700 members decide whether to dismiss him over allegations of corruption and incompetence.

Mr Wahid yesterday said he was willing to address the assembly on matters of national importance but would not make a formal accountability speech. He said legislators must sign written guarantees that they would not move against him.

The police and military, who appear to have thrown their support behind his likely successor, Vice-President Megawati Sukarnoputri, have repeatedly said they will not enforce a state of emergency.

Ms Megawati was quoted as telling a congress of regional party leaders that the August 1 impeachment session was inevitable. The Jakarta Post quoted her as saying: "The party has been observing the President and concluded that the special session cannot be avoided."

Unrest anticipated in East Java: Police chief

Jakarta Post - July 13, 2001

Surabaya -- East Java's security forces were ready to anticipate possible outbreaks of violence, ahead of the August1 special session of the People's Consultative Assembly (MPR), police chief Insp. Gen Sutanto said on Thursday.

"We are all out preparing ourselves to maintain a conducive situation here. Almost all forces will be deployed, including backup from the Indonesian Military (TNI) and from Bali Police," the police chief told reporters, after attending a meeting with East Java Governor Imam Utomo at the latter's office.

Sutanto maintained that he had held a meeting with his subordinates, police chiefs in the province. "They all reported, that for the time being security was under control." "I have also instructed provocative [political] banners to be pulled down immediately," Sutanto added.

The province of 35 million people is well known as the stronghold for supporters of President Abdurrahman, who was born in the town of Jombang. Sutanto branded the province as vulnerable to unrest. Thousands of Abdurrahman's supporters staged violent rallies in several towns across the province when the House of Representatives issued censures against Abdurrahman. Many are worried that diehard supporters would "take up arms" if their icon, President Abdurrahman, was impeached or unseated at the special session on August 1.

Officer Sutanto said that weapons crackdowns at public places, including bus terminals and railway stations had also been conducted. "The most important thing for us is to maintain public safety before, during and after the MPR special session." When asked about possible mass mobilization to Jakarta, Sutanto said,"We have approached kyai, Muslim clerics and ask them to control their followers."

Earlier, Governor Imam Utomo had instructed subordinates to take down any inflammatory banners in a bid to maintain peace ahead of the special session. "The banners will only disturb the stable situation in our province," Imam said, when asked to comment on the increase of banners in several areas in the province over the past few days.

Inflammatory political remarks have been written on the banners. For example, in North Surabaya, some banners read: SI Digelar Perang Saudara Menjalar, (If A Special Session Is Held, Civil War Will Occur); Amien Rais-Akbar Tandjung, Aku Haus Darahmu, (Amien Rais-Akbar Tandjung, I Thirst For Your Blood); and Gus Dur Dijatuhkan, Negara dalam Kehancuran, (If Gus Dur Is Toppled, the Country Will Be Devastated).

Banners can also be found at public places in several towns in the province, such as Pasuruan, Bondowoso, Mojokerto, Banyuwangi, Probolinggo and Sidoarjo.

Tensions ease as Indonesian police pull back

Reuters - July 13, 2001

Jakarta -- Indonesian police who rushed to their commander's home to protect him from arrest pulled back overnight after President Abdurrahman Wahid appeared to back down.

Only a handful of police guarded General Bimantoro's houses in Jakarta and the city of Surabaya on Friday, saying they were part of the normal guard always stationed outside his homes. "There are no special security measures, I've been guarding this house for years. It's normal," one policeman told Reuters outside Bimantoro's official residence in Jakarta.

On Thursday, two police tanks and almost 100 men brandishing automatic weapons rallied at Bimantoro's Jakarta home after Wahid, struggling to hold on to power, ordered his arrest for refusing a presidential order to quit.

Wahid backs down

But cabinet secretary Marzuki Darusman told reporters at a hastily called late night news conference no arrest order had been given, although Wahid wanted Bimantoro arrested.

Senior military and police officers, including Bimantoro, have publicly opposed Wahid's threat to declare a state of emergency to stave off impeachment moves. Senior generals supported Bimantoro in his showdown with Wahid but middle-ranking officers sided with Wahid, raising fears of violence between rival police groups.

Bimantoro, believed to be in Singapore for medical checks, told the Media Indonesia daily he had done nothing wrong and was ready to resign if Wahid followed correct procedures, including securing parliament's approval.

Parliament has so far rejected the sacking. "I'm willing to account for my actions and those of my men in the field at any time to the President," Media Indonesia quoted Bimantoro as saying.

Wahid has given his enemies until next Friday to back off from their push to oust him, or he will declare a state of emergency and call fresh elections. But it is unlikely he has enough support in the security forces or the civil service to carry out his threat.

Indonesia's supreme People's Consultative Assembly (MPR) is due to meet from August 1 to consider impeaching Wahid over his chaotic 20 month rule. But after Thursday's move, MPR chief Amien Rais said political leaders would hold an emergency meeting to consider bringing forward the special session.

Now almost completely isolated, Wahid is virtually certain to be dumped and replaced by his popular but estranged vice president, Megawati Sukarnoputri, who would serve out his five-year term to 2004.

Compromise unlikely

Megawati, who has increasingly distanced herself from her one- time close friend and mentor, on Thursday made her strongest attack yet in a move that makes a face-saving compromise unlikely. Asked about the chances of a deal, Megawati was quoted as saying she found it tough to work with the erratic Wahid.

Wahid, who insisted he still has the military's support, told CNN on Thursday he would carry out his threat if his enemies did not abandon their efforts to oust him. "Yes, I will declare a state of emergency," he said, adding he would run again. "Among the people, I am still popular."

Wahid orders arrest of police chief

South China Morning Post - July 13, 2001

Vaudine England, Jakarta -- President Abdurrahman Wahid yesterday ordered the arrest of the police chief he has been trying to sack for weeks, widening the struggle over his impeachment by raising fresh allegations of politicking by the police.

Mr Wahid ordered officials to "take firm legal action against those guilty of insubordination", including national police chief General Suroyo Bimantoro. Presidential spokesman Adhie Massardi said Jakarta's police chief, General Sofyan Yacob, might also face detention over an alleged plot to arrest the President.

General Bimantoro is thought to be in Singapore for medical tests and his arrest is unlikely. Dozens of heavily armed police backed by armoured cars gathered outside his house last night in a show of defiance to Mr Wahid.

Mr Wahid was said to be angered by a meeting of retired police officers and lawyers on Wednesday that called on the Supreme Court to hold a judicial review to declare Mr Wahid's bid to sack General Bimantoro illegal.

The arrest order follows a week of division within police ranks, a fortnight ahead of a special session of the People's Consultative Assembly (MPR) that aims to impeach Mr Wahid. In an unprecedented move, more than 150 middle-ranking police officers met on Monday to call on General Bimantoro to follow Mr Wahid's order to step down. "This matter has confused middle-ranking officers because General Bimantoro should actually submit to the President's orders ... but this is something he has not done. Instead, he is defying presidential orders," a senior commander, Alfon, told the meeting.

"I stress that this meeting is not being held to defy our superior officer [General Bimantoro], but there are rules and regulations that need to be followed." Another officer, senior commander Salikhin, said: "We, the members of the National Police, will not tolerate the political intervention of the House of Representatives (DPR). The National Police chief is directly subordinate to the President, and not the DPR." The next day, senior police admitted they had no prior knowledge of the middle-ranking officers' meeting. General Bimantoro took a 10-day leave of absence, with his backers claiming he remained in charge.

Police announced that General Bimantoro's duties would be taken over by National Police deputy chief General Chaeruddin Ismail -- the man chosen by Mr Wahid to replace the general. The day after General Bimantoro went on leave, scores of officers received promotions that Mr Wahid's staff claim were due months ago and had nothing to do with Monday's meeting.

The DPR has supported General Bimantoro. DPR members say changes to police or military command must go through Parliament and that Mr Wahid has overridden proper procedure. Mr Wahid says the August 1 special assembly session of the MPR is illegal, but police and army officers intend to "secure the session", in support of Parliament's right to impeach the President.

Rift widening between Megawati and sister, says analyst

Straits Times - July 11, 2001

London -- The situation within the Sukarno family is deteriorating with a clear split between the sisters widening and "becoming more serious now", political analyst Hermawan Sulistyo has said.

He told the BBC's East Asia Today programme that more critical segments of Indonesian society had tried to get Ms Rachmawati Sukarnoputri "into their camps" against her sister, Vice- President Megawati Sukarnoputri. Mr Hermawan said on the programme on Monday that "to some degree, they"ve succeeded".

Explaining the reasons for what he saw as the estrangement between the two sisters, he said: "In the eyes of Rachmawati, Megawati is only the biological daughter of her father, while she is the real ideological daughter."

He said the country's founding President Sukarno often took a young Ms Rachmawati to political meetings and events, and trained her in politics. "So the President wanted Rachmawati rather than Megawati to be the politician," he said.

The rift between the two has been apparent ever since Ms Rachmawati refused to be involved in Ms Megawati's Indonesian Democratic Party-Struggle (PDI-P). It came under the media spotlight recently during a rally in East Java marking the 100th anniversary of Mr Sukarno's birth. There, in front of Ms Megawati, President Abdurrahman Wahid, top political leaders and thousands of people, Ms Rachmawati launched what was seen as a stinging atack on her older sister.

She warned that vital issues such as nation-building were being ignored while the country's Parliament had launched what she described as a coup d'etat -- a reference to the efforts to remove Mr Abdurrahman as President.

The BBC said that in recent months, Mr Abdurrahman had tried to woo Ms Rachmawati to his side in an effort to sow doubts and create divisions within the PDI-P over the planned impeachment of the President next month.

Gus Dur `will resort to backdoor dealing'

Straits Times - July 11, 2001

Devi Asmarani, Jakarta -- Political compromise, intimidation, constitutional deadlock and a divide-and-rule approach to weaken his enemies are some of the options that Mr Abdurrahman Wahid would likely turn to, so as to prevent the People's Consultative Assembly from impeaching him in August.

Political observers have already dismissed as ineffective his threat to impose martial law if no compromise is reached by July 20. Aside from lacking military support, it would only fuel Parliament's efforts to expedite the general session to impeach him.

Instead, Mr Abdurrahman would likely continue backdoor dealings with his political opponents. Said Mr Kusnanto Anggoro of the Centre for Strategic Information Studies: "The political elites are very inconsistent, they change their stance easily."

The President's team of lobbyists, which includes some of his Cabinet ministers, have been working to negotiate with leaders of major political parties to convince them to drop their plan to remove him.

If reconciliation appears distant, he could go for political intimidation by prosecuting politicians on alleged graft charges. The Attorney-General's office is already probing several MPs -- including House speaker Akbar Tandjung and Indonesian Democratic Party-Struggle's Arifin Panigoro.

The move seemed to have softened Mr Akbar, Golkar Party's chairman, who said recently there was no need to speed up a special session to hold impeachment hearings.

Mr Abdurrahman could also take advantage of the constitutional deadlock over procedural matters in the special session. He had argued that the Assembly could not make him give accountability reports during the session as it was unconstitutional.

Ridep think-tank's Mr Sudjati Djiwandono said: "It is true that the Constitution says the President only gives accountability reports at the end of his term."

Political observers also noted that Mr Abdurrahman had managed to create internal rifts in some of the institutions that had shown declining support for him. His move to sack defiant Police Chief General Suroyo Bimantoro has fuelled a split within the police force between those who supported the general's leadership and those who thought the President's order should be complied with.

Within the military, the President has fuelled rifts between top officers who support him and those who oppose his move to meddle in its internal affairs.

But in the end, money politics "may play an important role in his last-ditch efforts to survive the presidency," said Mr Kusnanto.

If the Assembly votes in secret rather than openly on whether to accept his report at the August session, some politicians from rival parties could swing their vote for his camp, he said.

100 cops accuse defiant chief of disobedience

Agence France Presse - July 10, 2001

Jakarta -- More than 100 middle-ranking Indonesian police officers yesterday spoke out against their chief, who has defied his sacking by President Abdurrahman Wahid, accusing him of disobedience.

In a petition issued after a meeting at the national police headquarters, the officers stressed that the Indonesian police were under the ultimate command of the President.

The statement, carried by Detikcom online news, said: "We urge former police chief General Suroyo Bimantoro and high-ranking officers supporting him to cease the sickening disobedience. It is not worthy of praise and could set a bad precedent which is detrimental to the police institution as far as the line of command is concerned."

The officers said support by top police officers for Gen Bimantoro was "authoritarian and not in line with the aspirations of some 200,000 police members". They also urged Parliament to stop using the dismissal as a "political tool" to attack the President and cease recognising Gen Bimantoro as the police chief.

Mr Abdurrahman sought the general's resignation last month and suspended him when he refused. The move incensed a hostile parliament, as it contravened a House law requiring the legislature's approval for appointing and dismissing the police chief.

Gen Bimantoro said last week that he accepted the dismissal, but has refused to hand over his command baton and uniform, until his sacking is approved by parliament.

Army chief doubts Wahid's emergency threat

Agence France Presse - July 10, 2001

Jakarta -- Indonesia's army chief has played down President Abdurrahman Wahid's renewed threat to declare a state of emergency if political parties fail to compromise with him by July 20, local media reported Tuesday.

Wahid issued the deadline in response to the parties' virtually unanimous snubbing Monday of his invitation to crisis talks, which had been seen as a last-ditch effort to avoid almost certain impeachment next month.

But army chief of staff General Endriartono Sutarto said the beleaguered president was unlikely to follow through with his frequently repeated threat. "I personally know Gus Dur well. He is a wise and shrewd person and therefore he will not impose such a decree because that would worsen the already chaotic situation," Sutarto was quoted as saying in the Jakarta Post.

Wahid's estranged deputy Megawati Sukarnoputri and the leaders of all major political parties shunned Monday's talks, underlining Wahid's isolation as his impeachment hearing draws near.

After lunching with the only party leader to show up, Matori Abdul Djalil of the pro-Wahid National Awakening Party (PKB), Wahid announced he would dissolve both houses of parliament and hold fresh elections within a year if there is no breakthrough in the political impasse by July 20.

Chief security minister, Agum Gumelar, vowed to prevent Wahid from carrying out his threat. "The president has many times reiterated his will to issue a decree ... but as his minister I have to prevent it," the Post quoted Gumelar, a retired general, as saying. On the private SCTV network Monday, Gumelar also sought to play down the threat: "Don't view this as the president's final decision," he said.

Sutarto and other top military and police brass have repeatedly voiced their opposition to a state of either military or civil emergency. However only the support of the police is required for a civil emergency, and Wahid appears on the verge of winning a month-long battle to replace the chief of police who has declared his opposition to an emergency declaration.

The country's top legislature, the 700-member national assembly, will hold a special week-long session starting August 1 to decide whether to impeach Wahid on the grounds of incompetence and his implication in two financial scandals, in which he has been cleared by state prosecutors. It is widely expected that Wahid will be impeached and replace by vice president Megawati.

Sharing out the cake

Tempo - July 3-9, 2001

It's a big cake and it's ready for the cutting, or so they think. The cake is called Megawati Sukarnoputri's presidency. It has to be shared out very carefully, each piece exactly the right size. If not the whole cake could just break up and fall apart in a big mess.

Perhaps this is why Mega has been treading so carefully. Many people say they want Sukarno's eldest daughter back in the palace her father once occupied. But will they abandon her a few miles down the road and leave her to her fate, like President Abdurrahman Wahid?

"The cake is not ready. Why are people already talking about sharing it out?" Mega said recently, as quoted by Feisal Tamin, head of the functional groups faction in the supreme People's Consultative Assembly (MPR).

Like it or not, that is what is happening. In the runup to the MPR special session, due to open on August 1, the cake and how to cut it up will be the big topic of discussion among the five big parties in the pro-Mega camp. In a symbolic boost to their fragile alliance, its status has been raised from that of factional leaders in parliament to the level of party secretary- generals.

And as they discuss sharing out the cake, they will also be determining whether or not Mega's government will be based on firm foundations, or liable to collapse from within like that of Indonesia's current president.

These are sensitive talks. There are two extremely sensitive areas. One is the vice presidency and the other is the makeup of Mega's new cabinet. And they are proving difficult areas to tackle. Two weeks ago the word went around that the pro-Mega coalition was on the verge of splintering. Senior officials in the Central Axis of Muslim groups and Golkar started to doubt the commitment of Mega's own nationalist Indonesian Democratic Party of Struggle (PDI-P). They suspected PDI-P of seeking to go its own way in government. Mega learned in 1999 that winning the election does not necessarily ensure the presidency-at least in Indonesia. PDI-P needs friends.

And PDI-P's would-be friends were suspicious of Mega's reluctance to share out the cake. PDI-P seemed unwilling to get down to this nitty-gritty before the special session got underway, the long awaited meeting which is likely to sack Wahid and replace him with Mega. Unless her coalition falls apart first, that is.

A meeting of party leaders was scheduled for Sunday two weeks ago at Jalan Kebagusan in Jakarta, where Mega has her private residence. Then it was cancelled because Mega objected. The original plan was that several key agreements would be formalized at this meeting, including who would be Mega's vice president and how the cabinet would look.

Around the same time there was a meeting in Jalan Jenggala, at the home of Arifin Panigoro, PDI-P's faction leader in the House of Representatives (DPR). The same cracks in the alliance were all too visible. One Central Axis politician says the inter- faction meeting that evening was poorly attended. Those who turned up were listless. Normally it is much more lively. Ade Komarudin from Golkar, who usually turns up, could not stay too long this time. Alvin Lie, deputy secretary-general of the National Mandate Party (PAN), chose to go home to Semarang. In fact, the main people at the event were PDI-P's cowboys, like Meilono Suwondo and Heri Akhmadi.

"We have got lazy. We installed the equipment to shake Gus Dur for 14 months. Why is it still like this?" said one source sadly. MPR speaker Amien Rais confirmed the growing malaise. "I also heard them, and the symptoms are indeed rather strong," he said.

But Amien said he did not think it was bad enough to kill off the coalition. So said Rully Chairul Azwar of Golkar, a deputy chairman of the special ad hoc committee of the MPR's working committee, who often attends the inter-faction forum. "Friends from the Central Axis indeed are annoyed," he said.

Alimarwan Hanan, United Development Party (PPP) secretary general, said that although the anti-Wahid front was still intact, his people are getting tense. "Why is it as if Mega is lazy about taking decisions?"

Within PDI-P they see things a little differently. Some within the party are urging Mega to avoid horse-trading. Haryanto Taslam from the `old board' faction, the old Mega loyalists, espies traps in the 1945 Constitution which could be used to destroy Mega's aspirations. They have not been properly discussed, he says.

Take Section 8 of the constitution. This merely notes that if the president `stops' before his or her term is over, his or her deputy automatically will be promoted to replace him or her. So what if Wahid `is stopped' at the special session. In other words he is fired rather than resigning of his own free will or being incapacitated. There is no guarantee in law that Mega will immediately be promoted to replace him. The addition of the clause `if the president is stopped' to the constitution is so far only a proposed amendment.

Moreover, says Taslam, the talks about a coalition only touch the issue of sharing out seats. They have not touched on more basic issues like ideology and the future system of government. "And as if Gus Dur is certain to go down. This is not ethical," he added. On the other hand, he said, if the other parties keep forcing the issue of sharing out authority there is a good chance this coalition will fall apart by itself. All Wahid need do is sit back and wait.

Amien, Wahid's arch-foe, saw the danger and acted fast. He met Megawati and gave her a guarantee that the Central Axis would not try to topple her until 2004, when the next general election is scheduled for. And Mega immediately handed the issue of filling the vice president's seat over to the party chairmen.

"Whether it is filled or left empty depends on friends in the political parties. The main thing is, not from outside the parties," said Mega, as quoted by a Tempo source.

Amien confirmed this meeting and said he indeed asked Mega not to believe the rumor that she would be shaken in her turn after six months as president. "That never even a little bit came to my mind. If it was like that, I would be a low-quality person," he said.

Three days later, the inter-faction forum again held a meeting at the Hotel Boulevard in Plaza Park, Jakarta. The star of the show finally arrived, at least in spirit. PDI-P secretary-general Sutjipto came bringing Mega's `vote'. It was essentially the same as Amien's. Mega kicked the vice presidency ball over to the party leaders. PDI-P also guaranteed that it would not leave other parties out when it drew up its cabinet. Sutjipto also asked that the delayed party leaders meeting should not be made an issue. Mega confirmed that the much-awaited forum would be called two weeks before the special session. And Mega also confirmed that she would not accept any offer of compromise from Wahid in any form whatsoever.

Alvin of PAN also attended the meeting and confirmed that the vice presidency was discussed, and the cabinet. "But it was only limited to the structure," he said.

According to Rully, the next cabinet will be much fatter than the present one. According to the temporary agreement, there will be 34 full ministers or officials of ministerial rank, plus seven junior ministers. There will be junior ministers for overseas trade, human rights and regional autonomy among other things. Muhammad Yamin, a PDI-P legislator known to be close to Mega's influential husband Taufiq Kiemas, said the cabinet seats would be shared between parties on a proportional basis, according to how they did in the 1999 election. Two other factors also need to be borne in mind-balance between the regions and between religions. Every party will send three candidates for every post it is allotted. But the final say will be with Mega.

The vice-presidency is a hot potato right now. Indeed if agreement cannot be reached on this sensitive issue the result could be to destroy Mega's fragile coalition and rock the coming coalition government.

Six names have been put forward by various groups. The United Development Party (PPP) is keen to see its chairman Hamzah Haz take the second slot. Another candidate judged to have a chance is former chief security minister General (ret) Susilo Bambang Yudhoyono. At least the military will like him. Other manes mentioned are Golkar chief Akbar Tandjung and Crescent-Star Party (PBB) chief Yusril Ihza Mahendra. Amien even put forward the name of Sultan Hamengku Buwono X of Yogyakarta. In Amien's view the governor of Yogyakarta might turn out to be a dark horse since he has not been involved in the recent political conflict.

Matori Abdul Djalil, chairman of Wahid's National Awakening Party (PKB), has also been mentioned as a possible. Amien's own name has been put forward by some, but he says he wants to stay where he is at the moment-MPR speaker.

The contest over who will be Mega's sidekick looks likely to be long and hard. PPP has been on the attack right from the start. It has not just put forward a candidate. PPP secretary-general Alimarwan Hanan says they have lobbied intensively for him. Deputy secretary general Bachtiar Chamsyah backs this up. Within the party, there is strong pressure for them to get a nice big piece of the cake out of their involvement in the inter-party caucus. The answer, said Bachtiar, is to give the vice presidency to Hamzah. Hamzah was the only candidate who stood against Megawati in the 1999 vice presidential race after a series of candidates dropped out late.

Akbar has said he does not want the job. On Wednesday last week he said he did not want to enter the ring. "Our party will not put a candidate forward," he said.

But there is pressure from his supporters. Rully, for example, has clearly stated that they are going to push Akbar towards the arena. Perhaps Golkar, the runner up in the 1999 election, may just be playing a game of two-faced politics.

What about Susilo? Asked for his views, the former general just laughed. "I do not want to give a view or a statement on whether I am ready or not," he said. Yusril did much the same. But Amien said it was quite clear Yusril's PBB would push him.

This sensitive matter will soon be discussed. According to the schedule, Amien, Akbar, Hamzah and Yusril are to meet this week. If they come to an agreement, the decision will be brought to a meeting of party chairman in mid July to be approved. But what if they cannot find a solution? Then the decision will have to be taken, once again, through a vote in the special session. Clearly the final score will depend heavily on Mega's own vote.

Where would PDI-P's 185 votes go? Yamin from PDI-P put forward an interesting analysis. Mega has outlined her sidekick must be from the parties. If this is true it means that you can forget Susilo or the Sultan. "Yudhoyono's chance is slim," Yamin said.

Matori is backed by a section of the `old board' faction within PDI-P, but his chance is also minimal. He is unlikely to get many votes from the Central Axis or Golkar. In the quality of his leadership and his experience in government, Akbar clearly surpasses Yusril and Hamzah. Only the Golkar chief is being investigated by Attorney General Baharuddin Lopa right now over money allegedly missing from the State Logistics Agency Bulog. He is still carrying a heavy load from the past, when he served disgraced former president Suharto as a minister.

That leaves Yusril and Hamzah. And if there was a duel between them, it seems Hamzah has the better chance of victory. Why?

According to Yamin, Hamzah can satisfy a lot of groups. Although he is not in the Wahid fold, he is a figure from Nahdlatul Ulama and can claim to represent the NU masses. Islamic right-wingers also like him, the people who in 1999 strongly opposed a female president. He comes from Ketapang in West Kalimantan and so Hamzah as a non-Javanese can keep the regions happy. He is also the leader of the third largest party, with 70 votes in the MPR and 58 in the DPR. And all these factors will be a good blend. They will strengthen the foundations of Mega's government, so it cannot easily be rocked like the Wahid government.

Well, Amien is still doubtful about the unity of the coalition. On several recent occasions, he has recounted a tale from the War of Uhud during the time of the Prophet Muhammad. After winning one battle, the Muslim soldiers forgot themselves. When the fighting was not yet over, they were busy sharing out the spoils. The archers who were guarding the castle also left their posts to join in the plunder. And they were crushed when the enemy retaliated.

Wahid has not yet been silenced despite two censure motions and impending impeachment. If the `War of Uhud' plot happens, Wahid will be delighted.

[Karaniya Dharmasaputra, Adi Prasetya, Levi Silalahi, Wens Manggut and Edy Budiyarso.]

Matchmaking

Tempo - July 3-9, 2001

Impeachment is not here yet. President Abdurrahman Wahid is not yet absolutely certain to fall. Megawati Sukarnoputri for now remains vice president. But that has not stopped the cross-party caucus pushing their candidates for the vice presidency under `President Megawati'. Who are the candidates and what are their chances?

Akbar Tandjung

Akbar Tandjung's name was put forward after People's Consultative Assembly (MPR) speaker Amien Rais met with Crescent-Star Party (PBB) chairman Yusril Ihza Mahendra two months ago. At that time, according to Yusril, Amien agreed to find a figure from outside Java to be the new president's number two. That effectively meant Akbar Tandjung, Hamzah Haz or Yusril himself.

As of last week the Golkar party officially had not come out with any name to compete for the vice presidency. Akbar, Golkar's chairman, has long publicly rejected the post.

But under the logic that the winner of the 1999 election has the right to occupy one important post, Akbar's chances would theoretically be good. Golkar got the second largest number of seats in the MPR after Megawati's PDI-P. Apart from that, Akbar is a politician and bureaucrat who has been tested. He was in Suharto's cabinet time and time again, and has served as sports minister and state secretary. He has also been chairman of the influential Islamic Students Association (HMI).

Golkar is playing it smart. As a legacy from Suharto's New Order, its popularity is not that great. A reputation as a Suharto minister is not that much of a recommendation these days. Many groups would find it difficult to accept Akbar as vice president. PKB clearly will oppose him. The Central Axis, especially PPP, clearly would rather choose their own candidate.

Hamzah Haz

The PPP politicians are loudly trumpeting their chairman Hamzah Haz for the vice presidency. Choosing Hamzah, 61, in their view, makes sense because PPP came third in the 1999 election. PDI-P has got its quota, or will: the presidency. Golkar got the speakership of the House of Representatives (DPR) so it is only right that PPP should get the vice presidency.

Hamzah looks to be the favorite in this race. The former coordinating minister for people's welfare is backed by the Central Axis. Amien's PAN has endorsed him, through the chairman of its central board A.M. Fatwa.

Megawati needs Hamzah in a way because of his background as an NU figure. The hope is that the NU people can be slowly convinced again to support Megawati. And because Hamzah comes from West Kalimantan, people outside Java may support him. The Mega-Hamzah duo would also reflect a coalition between nationalists and Islamic groups.

Only it appears Megawati is uncomfortable with Hamzah. However much PDI-P people deny this, is it hard to brush aside. The fact is that before Hamzah was one of those figures who rejected a female president in 1999, only later to `correct' his position.

Apart from that Hamzah is not very popular with non-Islamic minorities. PPP has put forward the idea of reviving the Jakarta Charter. There are fears that PPP wants to turn Indonesia into an Islamic state.

Matori Abdul Djalil

Although he serves as chairman of the president's PKB, Matori Abdul Djalil is known to be close to Megawati. Closer than President Abdurrahman Wahid, in fact. He is the PKB politician who two years ago almost alone backed Megawati for president, not Wahid.

Born in Salatiga, Central Java on July 11, 1942, Matori has been active in politics since he led the Indonesian Islamic Students Union's city branch. His name only emerged on the national stage in the early 1990s when he led resistance by a number of NU politicians within PPP, then dominated by Indonesian Muslims. Wahid chose him to become the leader of PKB "because he is the most political in the NU crowd who generally are ulamas".

Mathematically, Matori's chance is slim. PKB has only 51 seats in the MPR, or 11 percent. Other parties naturally will not immediately support him. The Central Axis clearly wants either Hamzah or Yusril. However, Matori still has some hope. Just say Wahid really does fall and Megawati becomes president. Megawati really will not want PKB, Wahid's party, to totally lose face.

Matori himself has not commented on the vice-presidency. He appears reluctant to be put forward as a candidate. "If this time there are those who already start to talk about the issue of vice presidential candidates, that means they are the ones with ambition," he has said.

Sri Sultan Hamengku Buwono X

The 56-year-old King of Yogya was a popular figure at the time the reform movement had just begun. In May 1998, two days before former president Suharto resigned, he gave a speech to his people in front of the North Town Square of Yogyakarta. Since that time he has been seen again and again on the national stage.

The name of the sultan has been mentioned every time there is a process of succession of leadership in this country, but only as a dark horse or compromise candidate, as towards the 1999 MPR session which elected Wahid. This time his name has been mentioned again by MPR Speaker Amien Rais. Amien told Tempo there was a possibility that the vice presidency could be filled by a figure from outside the DPR like the sultan because he was seen as a figure who was quite credible and was never involved in conflict.

So what are his chances? Small. The sultan is not a political figure with great influence. Although involved in political meetings like the 1998 Ciganjur I and the 2000 Yogyakarta Meeting, attended by national figures like Akbar, Amien, Megawati and Wahid, the sultan is seen more as a figure of spiritual and traditional strength. His true supporters are only the people of Yogyakarta and the area around it. Outside Java, his name is scarcely heard and his influence minimal. He also does not have a base in the political parties. As if he really gained the vice- presidency, he might be accused of being a leader who did not work for it.

Susilo Bambang Yudhoyono

It is hard to see a military man leading this country again any time soon. Yet it must be admitted that the TNI represents has an established system of leadership training. And so the name of the former chief security minister Susilo Bambang Yudhoyono has emerged in the ring of the vice presidential candidates.

Susilo's chances are quite good, especially if the Mega-Hamzah or Mega-Matori duos fail at the special session. Susilo can be accepted by the political parties and of course by the TNI itself. He is helped by his image of an intellectual soldier. Apart from that, many people see him as a sturdy figure with a high level of integrity. Susilo, for example, dared to oppose Wahid's plan for a state of emergency, which resulted in him being kicked out of the cabinet.

However, the way to a Megawati-Susilo duo is clearly not straight or clear. As a former member of the TNI, there could be strong resistance to the idea of Vice President Susilo.

Susilo himself rejects talk of the vice presidency and his chances. The former chief security minister takes the view that it is not ethical to talk about the issue when there is still someone in the presidency and the vice presidency right now. He says that there are many `best sons of the nation' who have integrity, capability and support from the people. Yusril Ihza Mahendra

Born in Belitung on February 5, 1956, Yusril's name suddenly became popular when he became an important player in the change of national leadership in May 1998. He was the one who prepared the speeches of former president Suharto, including for the steps to his resignation.

Two months ago, Yusril met MPR Speaker Amien at the DPR building to talk about problems which the country would face, including choosing a vice president if Megawati becomes president. Since that time Yusril has been cited in the contest to become Mega's number two.

What would he bring apart from chairmanship of the Crescent-Star Party? His party is even far smaller than Wahid's PKB. This is what makes many people pessimistic about his chances. However, this legal expert has experience as a bureaucrat, expert staff member at the state secretariat and justice and human rights ministers, and also an activist when he was still a student.

Although the chairman of the PBB's faction in the DPR, Ahmad Sumargono, says his party is ready to support Yusril, no other party has offered to help. The Central Axis looks likely to choose Hamzah over this lecturer in constitutional law. Also, as the chairman of an Islamic party which tends to be rather closed, Yusril clearly will not be accepted by non-Islamic groups.

PDI-P revives community posts

Jakarta Post - July 9, 2001

Bandung -- The Indonesian Democratic Party of Struggle (PDI Perjuangan) has asked its supporters across the country to revive community posts in the lead-up to the special session of the People's Consultative Assembly (MPR) in August.

PDI Perjuangan deputy chairman Roy B. Janis said here on Sunday the order was aimed at enhancing communication between party supporters. "We have asked PDI Perjuangan supporters to activate the posts mainly for the purpose of internal communication, which we believe will yield a lot of benefits," Roy said.

Husband of PDI Perjuangan chairwoman Megawati Soekarnouputri, Taufik Kiemas, led a ceremony to mark the re-establishment of 1,000 community posts across West Java. Roy said the number of the posts nationwide could reach tens of thousands.

The government ordered the closure of the posts prior to the 1999 general election for security reasons. Megawati said last month the posts would serve as places where party supporters could launch relief operations to help victims of disaster or rioting. "Now that the MPR special session is drawing near, the posts should operate again, to maintain people's security," Roy said, without elaborating.

Many believe the session, which may serve as an impeachment hearing for President Abdurrahman Wahid, is liable to incite rioting, particularly in Abdurrahman's home base of East Java.

President told to go on despite calls to step down

Jakarta Post - July 8, 2001

Jakarta -- Embattled President Abdurrahman "Gus Dur" Wahid received a rare show of support from those who were jailed and persecuted during the New Order era.

Author Pramoedya Ananta Toer, who was imprisoned for years for his writings, which the New Order government considered communistic, said on Saturday the President should not step down.

"Gus Dur told me about all the criticism and calls for him to resign. But I told him to remain courageous and continue ruling the country," the author said following the President's visit to his residence in Bojong Gede, Bogor, south of Jakarta, as quoted by SCTV. "I told the President there was no guarantee that those critics were better than him," he said.

On Friday, the President visited the younger sister of Vice President Megawati Soekarnoputri, Rachmawati Soekarnoputri.

Rachmawati, whose Bung Karno University was shut down by former president Soeharto's administration, also told the President that he should not step down, the television station reported.

Presidency `up for auction' as vote approaches

South China Morning Post - July 9, 2001

Vaudine England, Jakarta -- A meeting between political leaders and Abdurrahman Wahid set for today will probably fail, making the embattled President appear weaker than ever. But the business of reaching a compromise is going on regardless -- behind closed doors.

"The presidency is up for auction," said a former Golkar party member. "Large amounts of money are moving, which doesn't necessarily mean that people will vote for who's paying them. But it leaves the odds at 50-50 that Mr Wahid will keep his job."

The source, who is close to members of Parliament and the ruling elite, said Mr Wahid was prepared to pay billions of rupiah to lure politicians. Opportunistic business figures are providing the cash, the source said, and the amounts can easily be matched by figures close to Vice-President Megawati Sukarnoputri.

Mr Wahid and Ms Megawati deny ever paying bribes to get ahead. But with an impeachment hearing due in the 700-seat People's Consultative Assembly (MPR) on August 1, garnering numbers in the house is the top political priority.

Even the rise of this year's death toll in Aceh to more than 1,000 people has been ignored. Military-backed police and local militias are hammering independence fighters in Aceh, killing civilians in the process.

But the issue has been largely ignored as politicians decide which way to go. "Few people in town now want to be seen publicly associated with a president who could be out of office in a month," a diplomat said. "But that doesn't mean they're not talking to him on the side."

The bribery will be influenced by whether the vote over Mr Wahid's future will be a secret or public ballot. Pressure is on for an open vote, to nullify the vote-buying. But some analysts argue that the willingness of politicians to accept cash on the side makes it in everyone's interest to have a secret poll.

The belief in some quarters that Mr Wahid still has cards to play is affecting political calculations. "What can he do? He can choose to give his mandate back to the MPR, which would effectively be a call for early elections," a member of Parliament said. "And a new election would take a year to organise, getting him through his current crisis."

An early poll should require the assent of Parliament, but the rules have been stretched in the absence of a clear constitution and the rule of law. "Everyone needs money and, of course, every side can play the same game. MPR members can take money from everywhere. So if they're going to renege on any pay-off deal, they will want a secret vote too," the former Golkar member said.

With so much room for bribery, it has become increasingly difficult to predict events. Mutual blackmail would appear to be a way of life if the insights of some parliamentarians are true. They suggest that some people are forced out of cabinet or back into it according to debts or revelations of deals.

They also argue that some caucuses within Parliament, such as the Iramasuka group of eastern Indonesian politicians, are more likely to support Mr Wahid as a better bet for getting senior positions for their own.

Such matters are of more personal importance to the players in this drama than whether or not a public meeting of party leaders is held today. The meeting has already been postponed several times and most parties are distancing themselves from Mr Wahid as much as possible.

Regional/communal conflicts

TNI supports joint security troops

Jakarta Post - July 13, 2001

Jakarta -- Indonesian Military (TNI) chief Adm. Widodo A.S. sounded on Thursday his strong support for stern measures taken by joint-security troops to restore law and order in strife-torn Ambon.

"Amid condemnation, troops have tried to maintain security and order there. I am standing here asking for understanding from members of the House of Representative to respond proportionately to the real situation in Ambon," Widodo said in a hearing with House Commission I on politics, security, and foreign affairs and Commission II on legal and home affairs. "A very complicated situation has ensued the prolonged sectarian conflict, cornering my troops, even though they remain neutral," Widodo said.

Concerns over the presence of the TNI joint security troops in Ambon have risen following an attack conducted by troops against a clinic belonging to Laskar Jihad on June 14. The incident, which took place in Galunggung and Kebon Cengkih, claimed at least 20 lives, including one soldier and wounded 30 others. The troops then arrested 15 armed civilians of Laskar Jihad.

Even the National Commission on Human Rights (Komnas HAM) blamed troops for violating human rights by attacking the clinic and established a fact-finding team to investigate whether the troops carried out gross human rights violations.

Also present at the hearing were Governor of Maluku Saleh Latuconsina, chairman of the local House Z. Sahuburua, all the chiefs of staff, Maluku Military commander Brig. Gen. Moestopo and Maluku Police chief Brig. Gen. Edi Darnadi. Saleh said that the situation in Ambon had worsened as about 800 weapons were in civilian hands. Moestopo said that the three-floor house raided by soldiers was not actually a clinic, as one of its floors was being used to store military equipment, such as weapons, homemade bombs, military boots and uniforms.

At the end of the hearing, Army Chief of Staff Gen. Endriartono Sutarto expressed his anger when some legislators kept demanding that TNI withdraw its troops from Ambon. "The TNI has ordered troops to conduct search operations for armed civilians. Of course, in carrying out their duties they may sometimes have to kill people. But, please underline this, my troops only kill guilty people."

Christians fight for ancestral lands

South China Morning Post - July 10, 2001

Chris McCall in Tentena, Central Sulawesi -- With guns that look like cut-out toys, a Christian army is fighting a war to hold on to its ancestral lands. It is based in Tentena, a beautiful lakeside town that visitors to Indonesia once flocked to.

This is Sulawesi's troubled Poso district. The Muslims who live down on the coast consider a trip to Tentena a one-way ticket to death. "Don't go to Tentena," they urge you, their voices trembling with fear.

They have good reason. Last year, more than 300 people were killed in savage bloodletting in Poso, most of them Muslims, many beheaded. At that time, the Christians thought they had won. Now the war is back and plenty have been killed again on both sides, more than a dozen in the last month.

In Tentena, boys as young as 16 walk around town with weapons welded together from bits of piping and spare wood. No one stops them. Jakarta's writ barely runs here. At night, dozens armed with these crude but deadly weapons man roadblocks almost to the coast, to the outskirts of Poso town, where Christian territory ends and Muslim territory begins. Only a very brave Muslim would dare cross these lines.

Near the coast, the Christian "red" forces gather at night to await the next attack from the Muslim "whites". Or to prepare their own counter-attack, trekking for hours through the hills and preparing arrows laced with poison, skills passed down from their ancestors.

When the battle is over, the Christian wounded are rushed back to Tentena for treatment. If any Muslims are taken with them, Muslims in Poso conclude they have been "taken hostage", even if they have only been taken to Tentena's hospital for treatment.

Almost every home still standing has a cross on the wall so no one makes a deadly mistake. The few police keep close to their little police station, in the shadow of the Central Sulawesi Christian Church, the real authority on the shores of Lake Poso.

The "reds" do not trust the police, particularly the paramilitary "mobile brigade". They accuse these neo-soldiers of siding with their enemies and helping them in attacks on Christian communities. Tentena gets little help from the local Government, medical or otherwise. It is dominated by Muslims.

For the Christians, Poso's problems are the fault of Muslims who manipulated the local Government for personal gain, channelling funds to Muslim organisations and keeping the lucrative key posts for Muslims. Yet the indigenous people are nearly all Christians, descendants of headhunters and scalpers whose conversion to Christianity began just a century ago. Through migration, they have come close to becoming a minority in their own land.

Letters for Tentena are opened and read in Poso, they say. And they accuse the provincial legal system of bias. More than 100 Christians have been prosecuted over last year's violence against a handful of Muslims, virtually the only "rioters" to have been charged with anything in Indonesia in the last three years. In the most serious case, three Christians were sentenced to death for planning the violence. Their case is under appeal in the Supreme Court.

Down on the coast, the cocoa and coconut groves once tended by Muslims are growing wild. The Muslims still left there have increasingly adopted the peci cap and the headscarf so their neighbours make no mistake either. But Tentena is their fear. They have set up their own roadblocks and it is a brave Christian who dares to pass them. Christians accuse the "whites" of receiving help from outside. Top local officials in the police and military have confirmed there are jihad forces at work in Poso, they claim.

But Tentena is surrounded. High ground is its advantage but isolation is its weakness. The main road to the provincial capital Palu runs right through Poso town. To the south the road heads to Makassar, Sulawesi's main city. Most of south Sulawesi is Muslim. Perhaps it is no coincidence that much of the latest fighting has been around the southern end of Lake Poso, where a group of Muslim migrants lives. Cut the road and you cut off Tentena's only supply line.

Human rights/law

Marsillam appointed as new Attorney General

Jakarta Post - July 11, 2001

Jakarta -- President Abdurrahman Wahid appointed on Tuesday his old friend and current Minister of Justice and Human Rights Marsillam Simanjuntak as the new attorney general to replace the late Baharuddin Lopa.

Presidential spokesman Wimar Witoelar who made the official announcement also said Minister of Defense Mahfud MD would take over from Marsillam at the Ministry of Justice while the defense portfolio would be handled by Coordinating Minister for Political, Social and Security Affairs Gen. [ret.] Agum Gumelar.

"The President believes this (reshuffle) will receive a positive public response," Wimar said. However the President has not signed the decrees on their appointments.

According to Wimar, Marsillam and Mahfud will need several days to settle things at their current posts before taking up their new roles. Wimar further disclosed that the President wanted to allow acting Attorney General Soeparman to complete his investigation of major corruption cases and other duties.

No date has been set for the swearing-in-ceremonies, however it is expected to take place within 10 days. Wimar hinted that the transfer of duties would take place before the start of the People's Consultative Assembly (MPR) special session on August 1.

It has been a case of musical chairs for Marsillam who is known as a former neighbor and long-time friend of the President. Abdurrahman recruited Marsillam as Cabinet secretary in January 2000. In June he replaced Lopa at the Ministry of Justice following Lopa's appointment as attorney general. Lopa died last week in Riyadh, Saudi Arabia.

Abdurrahman and Marsillam have been friends since they were neighbors in Matraman, East Jakarta. In 1991, they established the Forum of Democracy along with other prodemocracy activists. The forum was one of the few organizations that dared to speak out against the Soeharto regime during the 1990s.

Born in Yogyakarta in 1943, Marsillam, a medical doctor by training, is no novice to politics or the law. He took part in the massive student protests that led to the downfall of president Sukarno in 1966, and received his political tutelage mostly from former leaders of the Indonesian Socialist Party (PSI), which Sukarno banned in 1960.

He later studied law at the University of Indonesia. In his thesis, he said he found traits of neofacism in the 1945 Constitution. He also read Hegel at Berkeley University, California.

Meanwhile, leading human rights lawyer Todung Mulya Lubis has been "in hiding" in Australia these last few days to duck an offer from Abdurrahman to serve in the Cabinet, friends said. Todung, a close friend of the President, had been mentioned as one of the chief candidates for the attorney general post. Until Marsilam's appointment on Tuesday, his cellphone was disconnected or he was simply not taking any calls, according to a close friend.

Lopa's death has been particularly untimely for the President who is desperately trying to win over public support with high profile corruption cases.

Commenting on his new post, Marsillam said "it is not bad that the public have great expectations, not only of me but of anyone becoming attorney general." "Yes it will be tough," he replied on his task ahead.

Separately, Mahfud said he was ready to accept the post, although he preferred to leave the Ministry of Defense after completing the new defense bill. The new bill is very strategic as, if passed, it would abolish the role of the military in politics.

When asked about his new mission, Mahfud said he would prioritize the eradication of corruption, collusion and nepotism. "My target is to clean up the conduct of judges ... especially judges who are working in big cities," Mahfud remarked.

Vice President Megawati Soekarnoputri has refused to comment on the latest changes. "Ibu Megawati was not consulted ... but it's the President's right to choose ministers," Indonesian Democratic Party of Struggle (PDI Perjuangan) deputy secretary general Agnita Singadikane Irsal told The Jakarta Post on Tuesday.

"She's concentrating on her daily duties in the government and is less bothered with the Cabinet changes than with how the Cabinet can help her in running her daily duties," Agnita remarked.

Gus Dur criticizes House conclusion on shootings

Jakarta Post - July 11, 2001

Jakarta -- President Abdurrahman Wahid shared the public's disappointment on Tuesday over the conclusions of the House of Representatives (DPR) on the Trisakti and Semanggi fatal shooting incidents in which 30 youths, mostly students, were killed.

The House's conclusion that the incidents were merely an "ordinary human rights violation" was a politically motivated finding, presidential chief spokesman Wimar Witoelar quoted the President as saying.

"The cases could not be described as pure crimes. It is proper to suspect there is a political dimension behind the incidents," Wimar quoted the President as saying during a media briefing at Bina Graha presidential office.

The President also noted the incident at the House on Monday where Sumarsih, mother of a victim of the first Semanggi killing in 1998, threw eggs at the members of the special committee after the closing of the House's plenary session that heard the committee's report.

"The President is concerned with the result of the committee of Trisakti, Semanggi I and Semanggi II and the throwing of eggs by Ibu Sumarsih," the spokesman of the President said.

Relatives of the victims, students and human rights activists, were outraged when the House failed on Monday to satisfy their demands to declare the three incidents gross human rights violations and to establish an ad hoc court to prosecute the suspects in the incidents. They also protested the committee's recommendation to try the civilian suspects at the district court, and military officer suspects at a military tribunal.

In May 1998, riot police allegedly shot dead four Trisakti students during a peaceful demonstration around the university compound. The killings triggered nationwide protests and forced president Soeharto to end his 32-year rule.

Under then president B.J. Habibie's administration, security members also killed 16 people at the Semanggi cloverleaf in October 1998. One month before Abdurrahman's election as president in October 1999, 10 others were killed during a demonstration against Habibie.

Habibie declared the four Trisakti students reform heroes but did little to find their killers. Former military chief Gen. (ret.) Wiranto protested his innocence in the three tragedies.

"Hopefully our struggles to defend human rights will not perish [with the committee's finding]," Wimar quoted Abdurrahman as saying.

Separately, Commission for Missing Persons and Victims of Violence (Kontras) secretary Usman Hamid deplored the House's conclusion and described it as a victory for the military and the police in covering up their past crimes against humanity.

Usman also said the House had betrayed the decree of the People's Consultative Assembly that mandated the enforcement of law and protection of human rights. "The DPR has become the political whipping boy of TNI and the police by completely ignoring people's demands for justice," said Usman.

Indonesian Legal Aid and Human Rights Association (PBHI) chairman Hendardi, also blasted the conclusions on the three fatal incidents. "They [the legislators] deserve to be called the preservers of impunity who perpetuate the policies of the New Order in protecting violators of the law," Hendardi said in a statement.

100 students attack parliament complex

Detik - July 9, 2001

Maryadi/HD, Jakarta -- In rejection to Trisakti-Semanggi House special committee's recommendation to bring the case into military's court not into Human Rights court, around 100 students are attacking the parliament complex this Monday.

They are coming from various elements namely Alliance for State's Violence Victim (AKKRA), City Forum (Forkot), Student of Trisakti Action Front (KAMTRI), City Front and FPPI. They came to parliament building by two metro minibus, one kopaja bus and one pick up car with full of soundsystem.

Those demonstrators regretted to special committee's decicion for not recommending Trisakti case to Human Rights' court. They judged the recommendation as the Human Rights and Law abuse. They then call on the people to issue vote of no confidence to the parliament and judged them to have taken to New Order's side.

Eggs thrown at DPR over probe findings

Jakarta Post - July 10, 2001

Jakarta -- Relatives and parents of students slain in the Trisakti and Semanggi shootings expressed disappointment at the findings of a House of Representative special committee investigating the incidents by throwing eggs during a House session on Monday.

Sumarsih, mother of the late Norma Irawan, one of the victims of the Semanggi cloverleaf shooting in 1998, threw eggs as the committee concluded their over eight-month long investigation by recommending further probes of the incidents. At least four eggs landed on legislator seats as Sumarsih cried out: "The House is not the representative of the people!"

The House special committee submitted on Monday their investigation into the Trisakti and Semanggi shootings with a proposal that if necessary a human rights ad hoc tribunal be establishment for the case.

In a plenary House session, the special committee said the tribunal for the shootings at Trisakti University in 1998 and the Semanggi cloverleaf in 1998 and 1999 should be established through a presidential decree.

Special committee chairman Panda Nababan of the Indonesian Democratic Party of Struggle (PDI Perjuangan) said in his report that the government should also ask the National Commission on Human Rights (Komnas HAM) to conduct a special investigation into the cases.

Panda, however, pointed out that since the cases occurred before the issuance of Law No.26/2000 on a human rights court, the special investigative team could only conduct an investigation after the president issued a decree on an ad hoc tribunal. "Without the legal authority [of the decree] it would be difficult for Komnas HAM to summon suspects or witnesses," Panda said.

Four students from Trisakti University were shot dead during an antigovernment rally on May 12, 1998, a precursor to the fall of former president Soeharto. At least 16 students were shot dead at the Semanggi cloverleaf on October 13, 1998, as they protested the convening of a special session of the People's Consultative Assembly. And 10 students were shot and killed at Semanggi on September 24, 1999, as they protested against the passage of a state security law.

News & issues

Money talks in Jakarta school admissions

Straits Times - July 12, 2001

Devi Asmarani, Jakarta -- A three-day registration period now under way for the start of the new school year is bringing smiles -- and extra income -- to teachers and education officials ever eager to offer their "services" to frantic parents.

Unfazed by high demand for places in some secondary schools, and that their children may not meet the entry requirements, parents are resorting to buka toko -- which literally means "open shop" but in reality means opening up their wallets and forking out money.

The registration period is big business with the performances and grades of students taking second place to the amount that parents are willing to pay to teachers and officials on the take. Officials may charge between 500,000 rupiah (US$50) and more than 10 million rupiah for helping the children secure a place in a public secondary school of their choice.

And today -- the final day of registration -- is usually when buka toko is at its most hectic. Officials and teachers have been seen slipping telephone numbers to parents at the schools where children are being selected.

"It is not a matter of how smart your child is, but how much money you are willing to spend," said a mother registering her daughter at a secondary school in central Jakarta.

To be accepted into a public school, students must meet the required score of the National Junior High School Exit Test -- the NEM score -- set by each secondary school. But these scores hardly matter anymore. The process of selecting applicants is so obscure that parents often end up paying anyway just to guarantee that their child is selected for the school.

One parent, Madam Sudiro, said her son had graduated with a score of 44.11 out of 60 but she was afraid this might not be enough to get him into South Jakarta's SMU 70 school, whose minimum entry- requirement score is 43.99.

"I am negotiating with a person who has connections at the Education Ministry," she said. "He wants 4 million, but I'm trying to get it down to 2.5 million." Three years ago, she spent what she said was the "pre-crisis rate" of 5 million rupiah to get her older son into the same school as he had a much lower NEM score.

A team of ministry officials is in charge of the selection process for every high school. But recommendations by the school principal and teachers play an important role in deciding whether an applicant gets in.

The NEM system has been criticised for encouraging "collusion". But Education Minister Yahya Muhaimin has insisted on keeping the system this year despite calls for its termination.

DPR salaries members' inflated salaries

Tempo - July 3-9, 2001

Wens Manggut and Levi Silalahi -- It is an honor to be elected a member of the House of Representatives and the salary is also considered very good. What is a House member's exact remuneration?

The middle-aged man was seen posing in a BMW Jetlee in a car showroom. Dressed in a metallic suit and wearing a colorful tie, his hands were tightly gripped on the steering wheel of the car that cost almost Rp 1 billion. He was smiling from ear to ear. He was not a celebrity, but a member of the House of Representatives (DPR) of a nation ravaged by crisis.

This is typical of many DPR members: stylish clothes, shining cars and a large pay packet plus perks. Currently the contents of their kitchens are also under intense debate ever since the news came out that the 500 DPR members will each receive state-of-the-art washing machines with a price tag of Rp 6 million apiece. In the midst of public protest over price hikes, questions are now being asked about the various facilities members get.

How much exactly do they take home? Since the beginning of April 2000, each DPR member receives a salary of Rp 12 million, an almost three-fold increase from the previous salary of Rp 4.5 million. Not only that, allowances are theirs to take home.

For every session they attend in the DPR, they receive Rp 150,000. These are called session allowances and are given to all those who turn up for a session, whether they have a sincere concern for people's welfare or if they just come to sit and nod off, as is often seen on television. These are just the allowances from the House secretariat. If a ministry or a state- owned enterprise-or their counterparts-is extravagant enough to distribute cash, "Then the session allowances could skyrocket as much as 10 times," a House Commission IX member told Tempo.

If a member is fortunate to be chosen by his faction to join a special committee, then his income goes up even more as the session allowance in this case is Rp 750,000.

Want to listen to complaints from people in the region? Yes, there is an allowance to visit them. The term applied for this kind of remuneration is the intensive communication allowance. This totals Rp 3 million a month or Rp 36 million annually. And if DPR members want to tour the regions, they get Rp 150,000 per day to cover any out-of-pocket expenses as well as a daily lodging allowance of Rp 1.2 million. These tours are usually packed into the DPR recess periods.

An optional extra to the intensive communication allowance is the telephone allowance, whether a member lives in a private residence or an official one at Kalibata, South Jakarta. This allowance-to include power and water costs-amounts to Rp 2 million a month.

To upgrade their homes, DPR members also can take advantage of the Rp 20 million a year house renovation allowance. This comes to Rp 100 million for five years. And then there is also a Rp 1,895,600 income increase allowance as well as a rice allowance of Rp 95,000.

In addition to these allowances, there is a Rp 70 million credit facility for five years or Rp 5.8 million per month. If all the facilities are added up, it amounts to about Rp 20 million," said a Tempo source at the DPR secretariat.

Is it true that House members receive all of these perks? Not all of them, said Paskah Suzeta, a member of House Commission IX. The session allowance, for example, is only given out when draft bills are being debated, while for other sessions they only get lunch. On contributions from counterparts, "It is relative. If the company does not have tactical funds, even for meals it is difficult," he said.

The household affairs chief of the House, Ahmad Muqowan, denied that what member get amounts to luxury. He said the income of a house member was up to the president. "We didn't set it, all we do is receive it," he said. But even what they receive is often smaller than members of regional DPRs in a number of provinces. Ahmad quoted some regional DPR salaries that amount to almost twenty million rupiah.

But several DPR members feel uncomfortable about the many perks they get. Chotibul Umam Wiranu a House member from the PKB factions, feels that they get too much. "There should be a control mechanism for the allowances," Chotibul told reporters on Saturday two weeks ago. There have in fact been many protests. When the new salaries for House members were announced, for example, the Indonesian Teachers Association protested harshly at the excessive pay rise. But the problem is whether or not the people's representatives will ever in fact pay heed to these protests about their inflated salaries and allowance.

Curtain falls on Baligate

Asia Times - July 9, 2001

Bill Guerin, Jakarta -- Russian writer Fyodor Dostoyevsky said "there is no subject so old that something new cannot be said about it". The long-running, serialized saga of Indonesia's "Baligate" scandal, however, leaves little new to be said.

As Bank Indonesian Governor Sjahril Sabirin stands now in the dock of a North Jakarta court, with the International Monetary Fund (IMF) team a few miles away in the center of the capital, revisiting the epic shows the passage of time has changed little in Indonesia. The scandal reached out to two presidents, several ministers and top officials from the Bank of Indonesia and the Indonesian Bank Restructuring Agency (IBRA). It spread outwards to Washington, the IMF and the World Bank.

The plot could not be simpler. In early 1999, one of the country's oldest and largest banks, Bank Bali, paid PT Era Giat Prima (EGP) a "commission" of 546 billion rupiah (US$48 million at current rates) to help it collect 946 billion rupiah from a government agency that was already mandated to make such a payment. Although not unusual in the standard operating procedures in the corridors of power, this transaction was highly suspicious as the interbank loans were guaranteed by the central bank, Bank Indonesia, itself now under the microscope for having failed dismally to control and monitor the vast amounts of rupiah disbursed to ailing banks under the Bank Indonesia Liquidity Assistance Program (BLBI) program.

But Baligate grabbed the headlines because EGP just happened to be partly owned by the deputy treasurer of the then ruling Golkar party, Setya Novanto. Faced by increasing media pressure, Novanto and his business partner Djoko Tjandra, as owners of PT Era Giat Prima, knew what to do. They quickly arranged to repay the 546 billion rupiah to Bank Bali.

The media would have none of this. The idea that it was enough for a thief just to pay back what he had stolen sparked off intense media investigations into the "actors" and it was concluded that then president B J Habibie's informal re-election committee, Tim Sukses (Team Success), was to have benefited from the 546 billion rupiah to buy off a majority share of votes in the People's Consultative Assembly (MPR).

Golkar fancied its chances at getting their man Habibie re- elected, so the ensuing alarm and despondency was easy to predict. This was at a time, remember, before the Indonesian public was bemused and punch-drunk with politics, and the issue generated immense public interest. The mere possibility of the World Bank canceling a $43 billion bail-out was enough to concentrate the minds and seriously endanger Habibie's presidential candidacy. Habibie was at first defiant, saying that it was not his business to know the details -- "I don't care where the money went; the bank owner has every right to use the money as he sees fit."

The World Bank and the IMF cranked up pressure for an independent, public inquiry into the fiasco. World Bank Indonesia director, Mark Baird, called on the Habibie government to "publicly reveal all information about the case and prosecute those involved", adding that "this matter needs to be resolved not only because of the large sums of money involved, but also because of the greater confidence and credibility issues at stake".

That August 16, IMF deputy managing director Stanley Fischer joined the attack by insisting "a satisfactory resolution of the Bank Bali case requires a thorough and independent investigation to be completed as soon as possible". The next day, economic supremo Ginandjar Kartasasmita, himself currently under investigation for graft, was virtually ordered, in writing, to allow international accounting experts PricewaterhouseCoopers (PWC) to audit not only IBRA but also Bank Indonesia.

PWC, faced by obstruction at every turn, did the audit and eventually Satrio Yudono, chief of the Supreme Audit Agency, made a 36-page summary public. Yudono, in spite of the IMF and World Bank thundering, refused to make public the full report on the scandal, ludicrously citing banking secrecy laws as the reason. Both the IMF and the World Bank immediately suspended loans to Indonesia, although they opened up the taps again after a 200- page version of the PWC report was made public by the government

Besides the suspension of IMF and World Bank credits, the scandal and political overtones were a body-blow to IBRA's program of recapitalizing and selling off distressed banks. As rebuilding the collapsed banking sector was, and still remains, a keystone of the policies to kick-start Indonesia's economy, things began to get nasty.

The MPR was set to choose the next president two months on, in November, and Megawati Sukarnoputri's Indonesian Democratic Party of Struggle (PDI-P), realizing they had a golden bullet, promptly claimed that one of Habibie's younger brothers, four Cabinet ministers, two Golkar party leaders and five businessmen were directly involved in the Bank Bali transaction. The PDI-P went further, saying they had "complete and accurate information" and "concrete facts" describing "where and when the suspects met and what they discussed and agreed to commit". They later did just that, by publishing the evidence.

Rudy Ramli, the owner of Bank Bali, was investigated by the police and quickly dropped his bombshell. He named Finance Minister Bambang Subianto, Bank Indonesia Governor Sjahril Sabirin, State Minister of the Empowerment of State Enterprises Tanri Abeng, head of the Supreme Advisory Council (DPA) A A Baramuli, Habibie's younger brother Timmy Habibie, IBRA deputy chairman Pande Lubis and five top businessmen as being involved in the case. Phew! The die was cast.

Golkar was in turmoil. The backstabbing started, with deputy chairman Marzuki Darusman, later to become President Abdurrahman Wahid's Attorney-General, accused of leaking details of the scandal. The House of Representatives, at that time dominated by Golkar, grilled Subianto and IBRA chief Glenn Yusuf over details of the Bank Bali deal.

Wahid, at the time leader of the National Awakening Party (PKB), and heading Indonesia's largest Muslim organization, the 30 million-strong Nahdlatul Ummat (NU), repositioned himself by rescinding his July 21 statement supporting PDI-P's candidate Megawati. The timing of the announcement was hardly a coincidence. With Habibie as a candidate, the Muslim parties were the swing vote and with Habibie floored by the scandal, the Muslims could field their own candidate, confident that Golkar members would choose virtually anyone over Megawati. Weak law enforcement meant that months were wasted trying to finesse the case into the civil courts, notwithstanding that Indonesians knew by now that such corruption was a highly sophisticated practice which cleverly juggled laws, decrees and government institutions to illicitly siphon off state funds. When the dust finally settled, trials of the major suspects began.

Djoko, of course, was the prime suspect, but when his trial started on August 28 last year, in the infamous South Jakarta court, it was clear that the Attorney-General, Marzuki Darusman, had been unable to get his act together. The prosecutor, Ridwan Moekiat, was banished to retirement when the media went after him for his irrelevant questioning of 50 of the 56 witnesses in the case. Worse, the same reporters proved Ridwan's previous implication in a corruption scandal involving the selling of court evidence in the form of land worth billions of rupiah.

Judge Soedarto freed Djoko of all charges over a legal technicality. In acquitting the man widely seen as the main mover of the "money swap", this judge dealt a body blow to any remaining credibility and belief in the upholding of justice. As well as shocking Indonesians themselves, and the free world, Soedarto sent a signal to the other suspects -- and the corruptors waiting in the wings -- that white-collar crime does indeed pay.

It is hardly far-fetched to relate this decision to the later increase in mob justice. Few Indonesians have any faith in the legal system or in the police, and at the lower end of the social strata, frequently dish out instant and savage justice to thieves.

Djoko had been charged, as the former president of EGP, with influencing other suspects in the case to illegally channel the 546 billion rupiah from the insolvent Bank Bali to his own company. The judge also effectively ruled that the money belonged to Djoko, and suggested the government should pursue the freed man in the civil courts.

In the same court in November, Pande Lubis, the former deputy head of IBRA, was also found not guilty on all counts, as the prosecution had "failed to establish guilt". The prosecution appealed over both verdicts. Appeals were heard, Djoko's only last week, but the verdicts were confirmed: No crime committed.

Oddly, this scandal has not coughed up the usual suspect, a kambing hitam (scapegoat) to protect the key players, but the result is the same. There has been no speedy justice or even any justice at all, seen to be done.

Although Bank Indonesia Governor Sabirin, now being tried on accusations of ordering one of his directors, Erman Munzir, to disburse the 904 billion rupiah direct to Bank Bali (notwithstanding that IBRA had not called for the payment to be made), the odds greatly favor a not-guilty verdict. If he is acquitted, the story will end, buried and swept under the carpet, and of interest only to the busy historians. The visiting IMF team will have little, if anything to say. They fondly imagined they could mend the ways of a power elite well versed in cover- ups and who cared little about any threat to withdraw aid to their country.

Teten, crusading leader of the Indonesian Corruption Watch (ICW), has the last word, "The January 1999 cessie [assignment of rights] contract was used as an instrument to commit corruption."

Baligate, then, touched all Indonesians, in one way or another, and if it had been kept under wraps, may have changed the course of destiny. Habibie, with his enormous support from Golkar and the moneyed elite, may well have been re-elected and, for better or worse, led his country towards a different fate.

Environment/health

Smoke haze thickens over West Borneo, peat fires blamed

Agence France Presse - July 12, 2001

Jakarta -- Smoke haze attributed to underground fires continued to choke the city of Pontianak on Indonesian Borneo Thursday, local officials said.

"It is getting worse in the evenings, with visibility down to between 50 and 400 meters but by 8am, it gets better at around 1,000 metres" said Muhammad Chaeran of the meteorology office in Pontianak. The low visibility, he said, continued to delay incoming flights at the Supadio airport of Pontianak, with the earliest landing at around 9am.

Chaeran blamed the thick smoke that cast the pall of haze over Pontianak on smouldering subterranean fires in layers of peat. "The thing is that satellite imaging does not show a substantial number of hot spots in the area," Chaeran said.

The reason, he suspected, is that the smoke comes from undergound fires in the peat layers, which release only smoke on the surface without giving noticeable "hot spot" readings. Hot spots are areas of high temperature detected by satellite that usually indicate surface fires.

Nurul Irsadi of the West Kalimantan Environmental Impact Management Agency, said that only 19 hot spots were detected by satellite in West Kalimantan on Wednesday, two of them near Pontianak and six in the neighbouring Ketapang district.

Irsadi said that the air quality in Pontianak was dangerous, registering a high ash and debris content between 9pm and 2am every night. "It ranges between unhealthy and healthy until 8am and usually healthy after that," Irsadi said. In Medan, the capital of the province of North Sumatra, the haze that has blanketted the city for the past days had noticeably thinned by Thursday thanks to stronger winds, a local meteorolgy office official there said. "Visibility is now at 8,000 metres, much better than in the previous days," she said.

Jakarta blames the haze on land clearing by fire by small farmers and large timber and plantation companies. The government has banned plantations from using fire to clear dense jungle, but has been helpless in enforcing the ban on small farmers across the country.

In 1997-1998 forest and ground fires in Sumatra and Borneo sent thick smoke over the skies of western Indonesia for months that also spilled to neighbouring countries, causing serious health and traffic hazzards and disrupting airline schedules in the region. The choking haze then caused an estimated 9.3 billion dollars in economic losses.

Government has yet to draft plan to end forest fires

Jakarta Post - July 11, 2001

Jakarta -- While neighboring countries have been complaining about the choking haze caused by Indonesia's forest fires and have called on Indonesia to take action to deal with the problem, the Ministry of Forestry said on Tuesday it had yet to formulate a program to swiftly remedy the situation. "So far, we don't have a clear blueprint of how to cope with the problem. We will start to prepare it," minister Marzuki Usman told reporters, following a meeting of all the ministry's senior officials from across the country.

He cited the lack of human resources and funds as reasons behind the ministry's failure to anticipate and cope with the problem. Marzuki said the ministry's officials were too small in number to cover all the forests in the country. The ministry had also yet to receive some Rp 140 billion (US$12.2 million) in reforestation funds this year to handle forest fires, Marzuki said.

Thick smoke has started to cover several local settlements and cities in neighboring countries, causing worries among many people that the haze that blitzed the region in 1997 could recur. The 1997 haze caused extensive health and traffic damage, an estimated US$9.3 billion in economic losses.

In Thailand, AFP reported, residents in five Thai provinces bordering Malaysia were warned on Tuesday to stay indoors or wear face masks, as a choking haze hung over the south of the country.

An environmental health center in the province of Songkhla said the warning was aimed at people who were already suffering from respiratory conditions such as asthma.

"The situation is not yet at a dangerous stage, but we have advised people not to directly inhale the poisonous fumes and to stay indoors, or if they must go outdoors, to wear masks," said the center's director, Ongart Chanacharnmongkol.

In Malaysia, the green hills surrounding Kuala Lumpur were reduced to murky gray shadows even at the top of the Petronas Towers, the world's tallest building, as a haze hung over the city. Smoke appeared to thicken over northern Penang state, which is about 200 km across the Straits of Malacca from the island of Sumatra, the location of the fires.

Director general of forest preservation and natural conservation Wahjudi Wardojo said the 1997 haze was caused by land clearing by farmers but the ministry was still analyzing the cause of this year's haze.

He acknowledged, however, that the dry season had caused hot spots -- areas of high temperature indicating the presence of fire -- to significantly increase this month compared to the previous month.

Wahjudi said West Kalimantan currently had 36 hot spots and East Kalimantan had 10, compared to zero in June. North Sumatra, which last month had only three hot spots, now has 117 hot spots, while Riau, which had no hot spots last month, now has 112 spots. Meanwhile, West Sumatra, which had no hot spots last month, now has 53 hot spots.

In the West Kalimantan capital of Pontianak, a discussion on Government Regulation No. 44/2001 on the control of environmental destruction took place without the presence of State Minister of the Environment Sony Keraf.

The dialog, which was meant to be a forum to promote the regulation, also involved businessmen running plantations and holding forestry concessions. The forum did not seem to bring any concrete steps to deal with the current haze that still blanketed the city.

Visibility in areas like Jl. Ahmad Yani, Supadio airport, Kota Baru and Rasau Jaya was only between 20 and 50 meters. Reports from the airport said on Tuesday that flight schedules were still disrupted. Takeoff and landing schedules were all delayed. The Meteorological and Geophysics Agency predicted that things would get worse in Pontianak as rain is expected to arrive next week.

In efforts to control the situation, Governor Aspar Aswin has instructed all regents to tightly monitor fires in their respective areas. The governor has also asked timber companies not to burn their waste. He also threatened to take stern measures against forest concession holders found causing fires.

Smoke haze blurs sky over several Indonesian cities

Agence France Presse - July 10, 2001

G.K. Goh, Jakarta -- Smoke from land clearing by fire on Tuesday cast a haze over the skies of several cities in Borneo and Sumatra island, causing eye irritations and breathing problems, officials said.

"Visibility is about 5,000 metres now, but motorists complain of eye irritation," said Kusharyanto of the meteorolgy office in Pontianak, the capital of the Indonesian province of West Kalimantan. He said the pattern remained the same as previous days, with thicker haze in the nights until it is pushed away by winds early in the morning.

Kusharyanto said visibility had been around 500 metres at 6:00 am but had improved to 800 metres an hour later. By 9am, visibility had drastically improved to 5,000 metres. The airport control tower said that unlike Monday, the visibility on Tuesday caused no delays to incoming and departing flights.

The haze which had blanketed Pekanbaru, the capital of the Riau province on Sumatra island, had noticeably thinned compared to Monday, an official of the meteorology office there said.

"It rained early this morning, at around 4:30am, clearing the sky from the haze, said the official who only identified himself as Rasyidin. He said that visibility for the past five hours until 9am had hovered around 3,000 metres.

But the smoke cast a haze over Medan, the capital of North Sumatra province. "The sky has been like this since yesterday, grey and hazy," said Firman from the meteorology office in Medan, adding that visibility at 9am was at around 2,000 metres. He said that though the haze was "visually detectable" it was not thick enough to cause discomfort and irritation.

He also said that flights at the nearby Polonia airport were reportedly unaffected. "Most flights have automatic pilot control, and therefore do not rely on visual approach," Firman said.

The arrival of the haze, coinciding with drier climatic conditions have already prompted meteorolgy offices in Pandang, Jambi and Palembang, all in the lower half of Sumatra island, to be on the look out for the first signs of the smoke.

"We still have good visibility levels here, above 12,000 metres, but the air has been very dry these past days and the sky is not as clear as it usually is, said Emrizal from the meteorolgy office in Padang, West Sumatra.

"We are expecting haze in the coming weeks, as the dry season would mean preparation for the next planting season," Emrizal said.

The dense smoke haze which blanketed parts of Indonesia and its neighbours for months three years ago has been blamed on widespread land clearing by fire in Indonesia. The government has banned land clearing using fire by plantations and other large companies, but it has been helpless in enforcing the ban on small farmers across the country.

Haze has also been reported to have covered some parts of Malaysia and southern Thailand in the past week.

West Kalimantan and Riau were among several Indonesian regions affected by thick smog in 1997-98, which also spilled over to several neighbouring countries, causing extensive health and traffic dangers. The choking haze caused an estimated 9.3 billion dollars in economic losses.

Arms/armed forces

Dialog sought to bring US, Indonesian Military closer

Jakarta Post - July 12, 2001

Jakarta -- A US lobbyist for Indonesia revealed on Wednesday that he would try to help foster dialog between the United States government and the Indonesian Military (TNI) to promote better mutual understanding.

Visiting President of the US-Indonesia Society (USINDO), Paul M. Cleveland, said he would undertake further talks with the TNI to materialize the dialog, which is aimed at improving their relationship.

Cleveland stressed that the US recognizes TNI as an important national institution whose reform is crucial to completing a successful transition to a democratic Indonesia.

Cleveland, a former US ambassador to Malaysia, remarked that there may initially be "small concessions" reached in the informal dialog, which, if agreed, would bring together members of Congress and experts.

He expects the TNI to discuss a possible blueprint of how the institution will reform itself during the dialog. "It will not be easy but [the dialog] has to be done quickly. I will have further conversations with my best friend Agus Widjojo," he told a seminar on reviewing the international outlook of the Bush administration.

Both Cleveland and TNI's chief of territorial affairs Lt. Gen. Agus Widjojo were speakers at the seminar held by the American Studies Center at the University of Indonesia and the American Studies Association of Indonesia (ASAI).

But Cleveland warned of undue expectancy saying that there was still a long way to go before Washington lifts military restrictions imposed due to alleged human rights violations. He pointed out that the light sentences given by an Indonesian court to punish murderers of UN volunteers in Atambua, East Nusa Tenggara, was particularly discouraging.

"In the planned dialog, the US government will reveal its purposes, interests and what the TNI should do, while the TNI is expected to say: 'Here is our plan to reform.' This way, we can understand each other. And perhaps, when we can see changes in TNI, then the government will take the lifting of the embargo into consideration," Cleveland told journalists after the session.

Responding to Cleveland's remarks, Agus was somewhat aloof, saying that TNI will take it into consideration. "We're open to such efforts to improve our military ties. We understand that democracy and human rights issues will always be the platform of foreign policy taken by some countries. The existing embargo is the US's internal policy ... Maybe because they have a different perception. We hope for better military-to-military ties," he said.

During the session, Agus assumed positively that the Bush administration would tend to be more "benign" toward Indonesia. "The US will see Indonesia as the most strategic country in the region, meaning that an unstable Indonesia will disturb regional security, which will eventually burden the US's efforts to achieve its national interests in the region ... It seems that the attitudes of the new administration is far from those shown by the previous administration, which kept on lecturing us on democracy, economic reform and human rights issues," he remarked.

US Ambassador Robert S. Gelbard, in his opening remarks, underlined that his government firmly supports Indonesia in the latter's efforts to become a more democratic state.

"The US supports democratic change around the world because this is consistent with our values and because we believe it is what the vast majority of the world's people want. [However] each nation must determine the most appropriate democratic system, consistent with its culture and values as well as with universally-recognized rights," he said.

US hopes to restore modest ties with TNI

Straits Times - July 9, 2001

Lee Siew Hua, Washington -- US President George W. Bush's administration is seeking congressional support to restore a modest level of contact with the Indonesian military, as part of its overall policy review of a nation important to Asian stability.

The proposals are "quite modest", Mr Tim Rieser, foreign-policy aide to Senator Patrick Leahy told The Straits Times.

Officials have made the case to Congress in recent briefings that the US wants to keep certain channels open to Indonesia's armed forces (TNI) -- viewed as a unifying national institution amid the country's tumult -- without resuming full contact.

They said the US would conduct only non-lethal training, and observed that the US had cut off even minimal contacts that were of value. An example would be training for humanitarian missions.

Mr Ralph "Skip" Boyce, who will become the US' next ambassador to Jakarta, has assured members of Congress that he will personally vet every Indonesian participant in future bilateral contacts, to make sure they have not been involved in atrocities, or condoned them.

In particular, Senator Leahy's views will influence any move towards better ties with TNI. He sponsored the 1999 Leahy Amendment, which banned US military sales and training to Indonesia until the armed forces enact reforms -- including holding accountable those military elements involved in East Timor abuses.

Mr Rieser said the senator did not view contact with the TNI as a bad move, depending on the nature of the message that the administration would send. He said: "The message, as I understand it, is that we will have these contacts to support reform of the Indonesian military. If the military is not willing to reform, then these contacts would end."

One official emphasised to The Straits Times that there had not been regular, close relations with the TNI for some time, and that a fuller resumption of ties was not anticipated soon.

However, there have been fresh discussions within the US administration at the Deputy Secretary level. US officials have also visited Capitol Hill to discuss the appropriate level of contact with the TNI, while keeping in mind that the Leahy Amendment circumscribes contact. They do not want to signal wrongly that it is business as usual with the armed forces.

An Indonesian diplomat was pleased with the discussions stirring in Washington. He said: "As long as people are deliberating, then there can be progress. The problem is not only between Indonesia and the US, but also between groups in the US.

"Meanwhile, let's have cooperation on things that are not too controversial, like training the police, or having Indonesian observers at exercises. That will serve as a step-by-step normalisation of full cooperation."

The Council on Foreign Relations is releasing a report on US policy towards South-east Asia. It concludes: "The US must cease hectoring Jakarta and instead do its utmost to help stabilise Indonesia's democracy and its economy, as well as re-engage with Indonesia's military."

Council member Robert Manning told The Straits Times: "With separatist activities going on, the military seems, by default, to be the most important political element." The US has more chance to influence Indonesia, and the outlook for Asian stability, if there was more dialogue, he said.

International relations

US congressman endorses humanitarian aid for Indonesia

Jakarta Post - July 9, 2001

Jakarta -- American congressman Tony P. Hall said on Saturday that he fully endorsed US humanitarian programs in Indonesia, in spite of Jakarta's failure to punish the perpetrators of violence in East Timor two years ago.

Completing his tour of Indonesia and East Timor, the Democratic representative from Ohio gave a thumbs down to the present Indonesian legal system in delivering fair and good justice, which he described as a main pillar of democracy.

Hall, who has championed the cause of East Timor's independence through the US House of Representatives for more than 20 years, ruled out linking US humanitarian aid programs to Jakarta's ability to try those responsible for the mayhem before and after East Timor became independent in 1999.

"When it comes to humanitarian aid, there must be no strings attached," he said during a media conference at the conclusion of his three-day visit to Indonesia. Hall has long been active in humanitarian and hunger-related work, and was nominated for the Nobel Peace Prize in 1998, 1999 and 2001.

Hall said that upon returning home, he would recommend Washington continue supporting humanitarian programs in Indonesia through such organizations as the World Vision and the World Food Program (WFP), and various local non-governmental organizations. "These are very good projects," he said of the humanitarian programs in Indonesia which received US government funding.

Hall visited on Saturday one of the 800 food distribution centers run by the WFP, which are scattered throughout Jakarta's poor districts. The United States is financing about half of this year's US$68 million budget for the WFP's 800 food distribution centers in Jakarta and another 400 outside the capital. Hall also met with President Abdurrahman Wahid on Friday, during which he was briefed about Indonesia's struggling transition to democracy.

The congressman said that at the talks he underlined the need for Indonesia to build a fair and good legal system. When asked if he was confident the present legal system was capable of delivering justice to the perpetrators of violence in East Timor, Hall said: "No. But hopeful, yes. I'm hopeful for the future of East Timor. For Indonesia, I don't know."

Asked about the likelihood of Washington resuming some military aid programs for Indonesia, which were terminated in the wake of the East Timor mayhem, Hall insisted that there first should be a fair legal system in place. Washington has insisted that those responsible for the violence in East Timor must be punished before these military cooperation programs can be resumed.

Hall said there should be justice in both West Timor, where there are more than 100,000 East Timorese refugees, and in East Timor itself. He said that based on his talks with leaders in East Timor, he believed that between 30,000 and 40,000 East Timorese refugees in West Timor wanted to return home, but most held back largely for fear that they would have no place to go when they returned. With the United Nations peacekeeping force in East Timor, there should be no concern about security, he said. "There is nothing to fear. There's a lot of protection back there."

Hall called on the United States and the international community to continue supporting East Timor after a new administration is set up in Dili following next month's election. "The challenges of rebuilding not just physical but human infrastructure are great, and the fact that East Timor has passed its early test with flying colors does not mean it can complete this work alone. In fact, it cannot," he said.

Economy & investment

Jakarta happier with new IMF draft pact

Straits Times - July 14, 2001

Robert Go, Jakarta -- A new draft agreement between the International Monetary Fund and Indonesia will impose fewer conditions and targets for the country, in what is perhaps an admission that IMF's past policies for the country may have missed the mark.

The IMF's board is expected to approve this latest letter of intent, which will trigger the continuation of a stalled US$5- billion programme and the release of a US$400-million tranche, before September.

IMF Asia-Pacific Director Anoop Singh said: "The government is facing a difficult economic situation. We now have a good appreciation of the need to be patient." Defending the IMF's past demands, Mr Singh said: "Look at the letters of intent in the context of the period in which it was done and the priorities then."

The IMF halted its programme last December after the government missed several key reform targets. A team sent in April failed to reach an accord with Jakarta and left empty handed. Some Indonesian officials said the IMF breached its role as a macro- economic institution when it insisted on micromanaging specific reform targets, especially those for restructuring agency Ibra.

Yesterday, a visibly pleased Finance Minister Rizal Ramli said: "This draft includes a simplification and a streamlining of past agreements. It only has 35 'conditionalities' instead of the 140 that were included in past agreements. Previous agreements touched on sectoral issues and other things. This focuses on the core functions of the IMF's assistance."

Mr Dipo Alam, a lead negotiator for the government, described the current draft agreement as more reasonable and achievable. He said: "It is a victory for both. The IMF wins too if they get all their targets met by the government." IMF approval before September is crucial to Indonesia, which faces two important meetings with its international creditors grouped under the Paris Club and the CGI. Without IMF support, Jakarta will not get debt-rescheduling facilities and future commitments from the two creditor groups.

Indonesian legislators want IMF to `go to hell'

Asia Times - July 13, 2001

Jakarta -- Indonesian legislators have asked the International Monetary Fund (IMF) to write off the country's foreign debts, including those to other donors recommended by the Fund.

The Indonesian government has a foreign debt of around US$67 billion. The debts have caused damage to the country's economy rather than helping it develop, said the legislators at a meeting with Coordinating Minister for Economy Burhanuddin Abdullah Wednesday. Burhanuddin said, "We are aware of the criticism directed to the IMF and personally I know IMF has failed in its program in various countries." He added that the IMF's failure in the 1990s caused suffering, environmental damage and social uprising.

Burhanuddin also said many of the prerequisites set by the Fund were not suitable for the conditions of the countries it was seeking to help. Based on its statute, the IMF may be involved only in macro economic and financial affairs of a country and it may not interfere in details in corporate management, he said. However, he assured the lawmakers he would see that the new Letter of Intent (LoI), expected to be completed in the next two days, would better reflect the interest of the country.

Finance Minister Rizal Ramli, who was also present at the meeting, said the IMF had made wrong diagnose in the case of Indonesia, which has to pay a heavy price by adopting high interest rate that worsened the liquidity problem for banks. "They might not do it on purpose but some said it has been their adopted method, that IMF's success ratio in developing nations is only 40 percent," Ramli said.

He added that the next LoI should focus only on macro economy and finance and it may not touch on micro economic affairs, which IMF would not understand. The IMF should not fix a time table for asset sales, and set the prices and methods of selling the assets, he said.

Legislator Permadi said the government should not go halfway in opposing the IMF and the malpractices committed by the Fund in Indonesia, which has cost the country heavily. "We can follow the example taken by Malaysia who dare to say 'go to Hell' with IMF'," Permadi said.

Earlier in the day day 50 legislators signed a statement demanding the IMF cancel the entire debts of the country.

However, Indonesia's credibility abroad depends on the IMF's disbursal of a long-delayed $400 million loan tranche, says one analyst. "So long as the IMF has not disbursed its loan, Indonesia's credibility will not improve," Umar Djuoro of the Center for Information and Development Studies (CIDES) said on Wednesday.

Earlier on Tuesday, Dipo Alam, chairman of the Indonesian team negotiating with the IMF, said the government is optimistic the IMF would disburse its loan by August as both sides have found no hurdle in their discussion on a new LOI -- a precondition for the disbursement of the loan. Djuoro said the disbursement of the IMF loan is important not only because it has something to do with other IMF programs, such as the Consultative Group on Indonesia, but it will also augment the country's foreign exchange reserves.

As such, the government needs to review its policies, particularly on macroeconomy and banking to make them compatible with the IMF measures, such as on the planned acquisition of publicly listed Bank International Indonesia by state-owned Bank Mandiri, Alam said.

He added that if the government has already signed a new LOI with the IMF, it is duty-bound to implement it consistently. "So far, the government is not serious in implementing it," he said.

Alam said he fully supports the postponement until August of the loan disbursement pending developments in the wake of the special session of the People's Consultative Assembly (MPR), the country's supreme law- and policy-making body. A new president and new government are expected to emerge from the special session of the MPR early next month that is widely expected to go ahead with its motion to impeach President Abdurrahman Wahid.

"The IMF appears [to be delaying the disbursement of the loan intentionally until August] so as not to leave an impression that it is siding with the next government. This is because what the IMF will do next is a kind of its support to the government," he said. The IMF held up the $400 million loan package to Indonesia last December after the government missed several of its reform targets as stipulated in the LOI signed in September last year.

August `the earliest date' for Jakarta loan

Straits Times - July 13, 2001

Robert Go, Jakarta -- A long-delayed International Monetary Fund (IMF) loan tranche to Indonesia, worth around US$400 million (S$728 million), would be released next month. But this was likely to happen only after Jakarta's political questions were resolved, a key Indonesian adviser and analysts said yesterday.

Senior economist Dr M Sadli said: "The team will go back to Washington with a draft of the new letter of intent. It will take until the end of the month for them to prepare a deal. "It's got little to do with politics, but at the earliest, the new agreement can only be signed in August." Dr Sadli's remarks came after Asia-Pacific Director Anoop Singh told Vice-President Megawati Sukarnoputri of the IMF's commitment to Indonesia.

Mr Singh added that Ms Megawati had asked for more flexibility from the IMF, given Indonesia's severe problems. IMF First Managing Director Stanley Fischer earlier said the timetable for the next loan tranche to Indonesia was "not certain by any means because of the potential instabilities".

Several analysts have speculated that the IMF would wait until the first week of August, when President Abdurrahman Wahid will face an impeachment challenge from legislators, before deciding the fate of its loans.

Dr Raden Pardede, head of Danareksa Research Institute, said: "It makes sense for them to wait. Otherwise, they may have to deal with a new government team and further revisions of their agreements." An IMF source, however, said "We do not base our decisions on political considerations."

We can co-exist, some shopowners say

Straits Times - July 9, 2001

Robert Go, Jakarta -- While the KPPU anti-monopoly commission is concerned that mini-mart chains such as Indomaret are driving out smaller retailers, the views expressed by individual shopkeepers tell a different story.

Mr Rian Ariska sells cigarettes and snacks from a street-side stall right next to an Indomaret shop in West Jakarta. "I opened shop here six months ago on purpose. It was already a busy junction, with lots of people traffic. Part of it is the Indomaret store next door," he said. "My prices are the same, and sometimes are cheaper than inside, so people who know that still come to me."

Ms Nani Kristyawati, a spokesman for Indomaret, said Indomaret locations could co-exist with traditional provision shops through franchising. Of Indomaret's total 506 operating stores in the urban centres of Jakarta, Bandung and Surabaya, 142 are franchises operated by individual shopkeepers.

"The franchise option started in 1997 and is a definite way in which we can offer cooperation with the local communities and traditional retailers."

Mini-marts threaten Jakarta's old provision shops

Straits Times - July 9, 2001

Robert Go, Jakarta -- Mini-marts selling everything from cold drinks and milk to bread and snacks in colourful packages are changing the way Indonesian consumers shop for their daily needs.

A government watchdog, however, last week banned Indomaret, the country's leading mini-mart chain, from expanding into new locations in Jakarta. The worry expressed by the two-year-old anti-monopoly commission KPPU was that mini-marts could spell the end of traditional provision shops, from which many low-to-medium-income families made their living.

Indeed, Indomaret stores and other mini-marts are a drastic departure from, and have distinct advantages over, the old-style shops, or warungs.

Sharing some similarities with the Econ mini-marts that appeared in Singapore housing estates in the early 80s, Indonesia's mini- marts are clean and air-conditioned with staple items such as sugar, laundry detergent, cooking oil and eggs displayed on well-organised shelves.

Warungs, on the other hand, are often cluttered, wooden shacks or dimly lit, less-than-sanitary units offering, among others, un- refrigerated drinks and eggs. One shopper, Ms Sulasmi, said: "Mini-marts are nice and stock more products. I still go to the warung when I need a quick item or two, but otherwise, I go to mini-marts."

Prices at mini-marts, according to her and other shoppers, are competitive and can be lower than at family-run warungs. Dr Raden Pardede, head of Danareksa Research Institute, said: "Mini-marts have clear advantages compared to traditional shops, but the KPPU decision is understandable if the interest is to preserve or help traditional warungs."

He said old-style shops were still the backbone of the small- scale economy and were crucial sources of income for many families. "If warungs go out of business, it could impact severely the unemployment figures and reduce further the poor's capacity to deal with the crisis," he said.

However, critics of the ruling said it missed the mark when it described Indomaret mini-marts as monopolistic and predatory. Mr Kustarjono Prodjolalito of retailer group Aprindo said: "We need instead to educate traditional retailers on new business methods and make them more competitive.

"If older shops are losing to mini-marts, it is because they lost in presentation and technology, not because of unfair practices. That's why the KPPU ruling is puzzling." Previous studies support the co-existence of mini-marts and small retailers.

Mr Edy Priyono of The Asia Foundation recently wrote: "It is not the case that small businesses are completely unable to compete with large retailers. "If small businesses are pushed out, the question is whether they are pushed out by unfair practices or by other factors."

The economics of misery

Asian Times - July 3, 2001

Bill Guerin, Jakarta -- Board or alight wherever and whenever they like. In the middle of the road, or, if there's no room, at the roadside. At the entrance of the inner city toll road, on a roundabout, in a road junction when the lights are green, and so on. This freedom costs Jakarta bus users dearly in more ways than one.

On Saturday, city councillors finally approved a 30 percent increase in bus fares to be implemented as of July 3. The fares for regular buses will increase from 500 rupiah (4 US cents) to 650 rupiah, express and medium buses from rupiah 700 rupiah to 800 rupiah, and air-conditioned express bus fares will rise from 2,500 rupiah to 3,000 rupiah. This is less than the city administration wanted. Their proposal was for fare rises of almost 60 percent.

The government has promised a subsidy for bus operators, with savings from the recent cut in fuel subsidies, but Sutiyoso, the venerable Jakarta governor, thinks his city will not get this manna from heaven -- he told journalists at City Hall that "imagining receipt of the subsidy is like imagining the moon falling to earth".

Sutisyo presides over a city where the industrialization of the Suharto era and ensuing substantial migration from rural areas has created growth patterns that have taken a heavy toll on the physical infrastructure as well as the quality of life. Characteristically armed with field surveys and calculations, he blamed the increases fairly and squarely on the rise in fuel prices. The Indonesian Consumers Foundation (YLKI), however, has done its homework and says the fuel rise component would only add 5 percent to total operating costs.

Jakarta public transport commuters should be thankful for the YLKI as they themselves are, collectively, non-vocal and resigned to their fate. Semi-comatose from the carbon monoxide levels or sensory overload perhaps, these poor souls face up to misery, pollution and downright danger every time they cross the city. Because of the congested traffic, buses are forced to run at a slow speeds, and any turnaround time and punctuality is out of the question. Alighting from buses requires a certain level of dexterity, as most of the time the bus is still moving.

These passengers are carried on a total of 5,441 full-sized buses and 4,981 medium-sized buses that have been operating in the capital for more than 20 years. Those who daily brave the hazards of pollution, pickpockets and muggers on the buses and at the terminals fare little better than the bus drivers themselves, who now pay an average daily bus rental fee of 360,000 rupiah and daily fuel costs of 100,000 rupiah. This gives them a take-home pay of between 15,000 rupiah and 20,000 rupiah, compared with 25,000 rupiah to 40,000 rupiah a day before the fuel price increase.

Traffic jams, overpowering pollution from vehicle exhausts and a public transport system which runs on its own haphazard timetable are the lot of the poor consumer. Metro Jakarta's population is around 9 million, though this total swells to about 12 million during the day. The Land Transportation Owners' Association (Organda) , with another city agency, the Land Transportation Agency (DLLAJ), rules over all transport issues in the metropolis.

Confusion reigned earlier as the government kicked its heels over revealing the form of the subsidy and the mechanism by which it would be channeled. It only recently announced that the subsidy will amount to 216.4 billion rupiah and be divided among owners and operators of city buses and trains, excluding the angkot, small vans, as well as for the procurement of new buses for the city-run Jakarta public bus company, PPD. This appears to badly discriminate between big buses and passengers on the angkot, who now have to pay fares that are 20-40 percent higher than before.

The subsidy will only be made available in 20 cities to the operators of 7,987 large buses and 8,747 medium-sized buses. Drivers will not benefit from the subsidy anyway, as it is paid to the operators. The consequences of the fuel price ride hit drivers hard as the cost of fuel comes out of their own pockets and not from the operators. Even if the operators reduced the daily vehicle rental fees, as has been done by one transport cooperative, Kopaja, the drivers would still feel the brunt.

The cost of spare parts has risen by between 300-400 percent since the monetary crisis began in 1997 and maintenance costs account for some 40 percent of operating costs.

The woes are exacerbated by the fact that the new fares are still far below the level needed to cover operating costs. In March, Organda proved that the cost of operating a medium-sized bus was 1,160 rupiah per passenger carried, although the fare then was only 700 rupiah. Regular buses cost 1,100 rupiah per passenger to run, in return for a fare of 500 rupiah. The dilapidated state of public transport has been a major issue for years. Little official attention has been paid, probably due to the quirk that, although of course Jakarta is the capital, it is also a "region". The physical infrastructure and services of the city appear to be considered "local", and therefore do not receive the focus accorded to national issues

Smoke and fog in the capital have earned it third position in the world rankings of most polluted cities, as apparently only Mexico City and Bangkok are worse. Ear splitting noise and dangerous and reckless driving define the misery for commuters.

The city needs a total of 7,718 new buses, 3,707 large buses and 4,011 minibuses to replace the current fleet, which is more than 20 years old. The buses belong to 14 private companies and the government strategy is to subsidize imported new buses and taxis instead of handing out cash to compensate for the fuel price rise. Minister of Industry and Trade Luhut Panjaitan has announced that new buses are to be exempted from value added tax and import duties. The government will also subsidize the interest on loans by up to 14 percent. If the minister's plan comes to fruition, the subsidy for large buses will amount to 20 million rupiah a unit, and for medium-sized buses, 15 million rupiah. Pandjaitan believes that subsidizing imported new vehicles would bring greater benefit to commuters and he is willing to lower the import tax from 40 percent to 5 or 10 percent for completely-knocked-down (CKD) vehicles to help local auto assemblers.

Unfortunately, the two big assembling companies in Magelang, Central Java, PT Tugas Anda and PT Delima Jaya, can only assemble 30 vehicles per month, while the city needs 3,000 buses within the near future. The subsidy will also cover the difference between commercial interest loan rates and the 14 percent per annum on loans that the companies will be offered to buy buses.

By lowering investment costs, operators will be more likely to update their fleets with the estimated 4,200 new buses and 13,200 new taxis, which Panjaitan expects, could start hitting the streets of the metropolis within six months. However, this is only a plan and one which is to be proposed to Vice President Megawati Sukarnoputri, presumably on the assumption that by the time the deal might be settled, the good lady will be the new president. President Abdurrahman Wahid faces impeachment proceedings beginning on August 1. The soaring inflation of the past few years and the sharp fall in the value of the rupiah mean fares are still very low. For example, the fare for air- conditioned buses in 1991 was 1,000 rupiah and over 10 years later it will now be only 3,000 rupiah.

Organda has agreed to the increase in fares of the ubiquitous public transportation angkot but says bus fares should remain the same. Owners of the angkot vehicles want a fare increase of at least 20 percent. These are privately owned, but one large cooperative, the Wahana Kalpika Cooperative (KWK), runs 6,000 vans across the city. Again, the drivers bear the brunt. Most busy angkot will use up to 40 liters of fuel a day. With the 300 rupiah increase in the petrol price -- from 1,150 rupiah to 1,450 rupiah -- it will cost the drivers an additional 12,000 rupiah a day, just for fuel.

Although the fuel price is only 9.8 percent of the van's operational costs, the ensuing increase in the price of spare parts will severely impact on these costs.

Conversely, a large bus, according to Organda figures, which uses 120 liters of diesel a day, will be subsidized by 300 rupiah for each liter or 36,000 rupiah a day. A medium bus, using say 80 liters of diesel daily, would get compensation of 24,000 rupiah a day, State bus company Perum PPD, beset by financial problems because of its oversized workforce and the vast number of aging vehicles it runs, pays 5,600 employees from government subsidies that stem from the large losses the company incurs. Operating costs are 3.5 billion rupiah a month, of which at least 1 billion rupiah goes on fuel for a fleet of 454 buses.

The city administration wants to buy 2,000 Perkasa buses made by Texmaco, the integrated textile and engineering conglomerate. However, Texmaco itself sought some $60 million from the state owned Bank Mandiri last year to finance the procurement of materials and components for the buses, but was turned down, as it still owes around 19 trillion rupiah to the Indonesian Bank Restructuring Agency. The city had also planned to import buses from China with prices ranging from 160 million rupiah to 250 million rupiah each, excluding the 60 percent import tax. However, banks refused to provide credit as they saw that companies would not be able to service the loans because of the previous low bus fares.

Sutiyoso, where public transport issues are at stake, can throw up as much of a smoke screen as the aged, battered buses themselves. He caused confusion, chaos and anger last year when in November he signed off a controversial decree which allowed taxi companies to raise the flag fall from 2,000 rupiah to 3,000 rupiah, and increase the charge from 900 rupiah per kilometer to 1,300 rupiah per kilometer. Jakarta's taxi operators were free to decide whether or not they wished to increase their fares and at least seven of the city's 32 taxi companies are still charging the old fare. This has resulted in Jakarta having a two-tiered tariff for the 16,000 registered cabs available for hire. The remaining 6,000 failed the transport vehicle road test.

Voting with their feet

Far Eastern Economic Review - July 12, 2001

John McBeth, Jakarta -- Smartly dressed in a suit, tie and polished shoes, the nervous Indonesian visa applicant gave the American consular official interviewing him a strange feeling that he wasn't the businessman he claimed. So the official, drawing on years of experience, asked him to take the ultimate test: Undo and re-knot his tie. Shamefaced, the man couldn't do it.

Only a trickle this time last year, the visa line at the US embassy in Jakarta has grown into one of the world's longest, matching those in Manila, Seoul and Mexico City. The surge has seen the refusal rate rise from 8% to over 40%. Indonesians, it seems, are doing something they have rarely done before: If they are not actually migrating, many are contemplating life abroad.

Concerned at the deteriorating political situation, the economic crisis and slumping employment, the number of Indonesians seeking five-year non-immigrant visas to the US was 50% higher in the first five months of this year than at the same time last year. That amounts to more than 700 people a day -- more than half ethnic Chinese, and a significant proportion from East Java, Jakarta and Kalimantan.

The main reason appears to be the looming political demise of President Abdurrahman Wahid, who despite his failings has the authority to enforce a policy of religious pluralism that reassures Indonesia's Chinese community. If Vice-President Megawati Sukarnoputri replaces him there is worry that nationalistic Islamic fervour will grow. "We don't think Megawati has the same authority to deal with the hardline Muslims," says an Indonesian-Chinese businessman. "She has to be careful in how she deals with them because she knows her limitations."

A similar increase in visa applications hasn't been noticed at the Australian or other Western embassies, but the United States is especially attractive. It doesn't monitor departures, thereby ensuring that the large number of stay-behinds is difficult to detect in a country swollen by 10 million illegal immigrants. And apart from issuing longer-term visas, the US has granted political asylum to more than 2,000 Indonesians -- most ethnic Chinese -- in the past three years. "The increase in applications is undoubtedly due to the sense of insecurity, coupled with the willingness of the US to issue visas liberally," says Arthur Helton, programme director at the Council on Foreign Relations in New York.

The extent of the new brain drain is hard to gauge, but appears mainly confined to Western-educated professionals in finance and information technology. Sadly these are the very kind of people Indonesia needs if it is to keep pressing for economic reform and recovery. Some lost jobs in Jakarta and found positions paying more in the United States, Singapore or Hong Kong -- the three prime destinations.

Weekend commuters to Singapore

Security has been important for the Indonesian-Chinese since they were targets in the May 1998 riots that ended President Suharto's rule. One manifestation of that unease is parents parking their teenage children overseas. An estimated 7,000 Indonesians attend high school in Singapore alone. But fear isn't always the key. "I'm more worried about what the economic crisis has done to education standards," says a financial consultant with two daughters at school in Singapore.

The consultant is among 60 to 70 Indonesian businessmen who spend weekends in Singapore, leaving Jakarta each Friday afternoon and returning on Monday morning. He says Singapore goes out of its way to offer permanent residence to Indonesian-Chinese, including an increasing number venturing overseas for jobs that often aren't available at home.

"The [economic] crisis may have hit back in 1998, but it is only now that companies are laying off people," says Manggi Habir, a 48-year-old Indonesian executive who left his job at the head of a rating agency to attend Harvard University. "Also, after years of crisis, it is now settling in some people's minds that they have to look to their future elsewhere." Habir has personal reasons for going back to the books, but business friends are complimenting him on his "exquisite timing."

There's another dimension. Some prominent figures, like former Local Autonomy Minister Ryaas Rasyid and economist Sri Mulyani Indrawati, are leaving on sabbaticals while the country is mired in crisis. Rasyid is taking six months off to teach at the University of Northern Illinois, his alma mater. Sri Mulyani is taking a year-long "constructive break" at Georgia State University and says her ability to influence events is limited in the current political and economic vacuum. At least they're still planning to come back.

BCA's mysterious suitors

Far Eastern Economic Review - July 12, 2001

Sadanand Dhume, Jakarta -- If the script had unfolded as planned on June 30 officials at the Indonesian Bank Restructuring Agency, or IBRA, would have been popping champagne and posing for pictures after selling a 30% stake in Bank Central Asia, once the country's largest private bank.

But when it comes to asset sales in Indonesia, you can usually count on a twist in the tale. As the Review went to press, IBRA had yet to announce a winner for its much-awaited "strategic" sale. Persons involved with the deal say the agency is unhappy with the only two bids on the table -- from vulture fund Newbridge Capital and Indonesian Recovery Company, a joint venture between Asia Debt Management, a Hong Kong-based company and Bhakti Investama, an Indonesian investment bank.

The bids are said to be lower than IBRA would have liked -- starting as low as $200 million for a 30% stake in the bank. The quality of the bidders is also a concern. Analysts in Jakarta are convinced that BCA's former owners, the Salim Group, are positioning themselves to reclaim the bank taken away from them at the height of Indonesia's economic crisis in 1998. Anthony Salim, president of the Salim Group, did not respond to phone calls or faxes.

According to an industry insider, IBRA, stuck with two unappealing suitors, has left the door open for a possible belated offer from Taiwan's ambitious Fubon Group. Meanwhile, the agency is putting a brave face on the confusion by going ahead with a sale of 10% of BCA to the public, even though under the original plan this was supposed to follow the strategic sale.

IBRA's disappointment is understandable. BCA is widely regarded as Indonesia's best large bank and one of its most saleable assets. IBRA had hoped that the bank's eight million customers, vast network, profitable operations and freshly scrubbed balance sheet would make it irresistible. The agency's stated intention was to sell a substantial chunk -- somewhere between 20% and 30% -- to a so-called strategic investor by the end of June. Another 10%-20% was to have been subsequently offered to the public to bring the total divestment to 40%.

The stakes remain high. Three years after the government poured billions of dollars into one of the largest bank bailouts in history, Indonesia's economy is still in the doldrums. Successfully selling part of BCA will bring in a large chunk of change for the government's cash-strapped budget. It also has the potential to give IBRA some sorely needed credibility, to win Indonesia a pat on the back from the International Monetary Fund and to attract the attention of international investors for whom the country has all but fallen off the map.

IBRA's new chairman

But it won't be easy. Indonesia is in the midst of an uncertain succession drama with President Abdurrahman Wahid facing possible impeachment on August 1. The banking sector remains a shambles. To add to the confusion, on June 25 Edwin Gerungan, IBRA's fifth chairman in a little over three years, was sacked to make way for an associate of Finance Minister Rizal Ramli.

Even before that, political turmoil, the relatively small stake on offer and the ghost of an earlier attempt by foreigners to buy an Indonesian bank had scared away the best suitors -- large foreign banks with deep pockets, technical expertise and high credibility. Left in the fray are investors with large appetites for risk and questionable pedigrees. But Taiwan's Fubon Group, a late but strong contender, might yet pull the rug out from under both Newbridge and IRC.

For someone willing to take a long-term bet on Indonesia's economic future, BCA is the best the bombed-out banking system has to offer. It is one of the best-known brands in Indonesia with nearly 800 branches, more than 2,000 ATMs and about eight million account holders. About a quarter of all Indonesian savings accounts -- a cheap source of funds for banks -- are parked with BCA. The bank processes one in three credit-card transactions in the country. In the year ended December 31 2000, profit after tax nearly tripled to 1.8 trillion rupiah ($158.5 million). Meanwhile, the percentage of non-performing loans was more than halved to just over 4%.

Jerry Ng, BCA's second-in-command, says the bank can fatten its bottom line by "mining" its customers. This means offering them everything from credit cards and mortgages to insurance products and mutual funds. He also hopes to strengthen the bank's already dominant role in the processing of credit-card transactions and bring in additional income from other services such as cash settlement.

But Ng acknowledges that this won't be enough to sustain profitability. The bank's rising earnings -- driven largely by interest income from the floating-rate bonds with which it was recapitalized -- are not sustainable without stepped-up lending. He estimates BCA's loan to deposit ratio at about 11% compared to a desirable range of 65%-70%.

BCA rose to prominence under the 32-year rule of former President Suharto and became the pre-eminent financial symbol of his New Order regime. The bank was founded by Liem Sioe Liong, also known as Sudono Salim, whose sprawling Salim Group dominated the country's economic landscape like no other -- at one time contributing 5% of Indonesia's economic output. BCA helped power the growth of Salim Group companies in instant noodles, cement and flour milling. A cosy relationship with the first family was an essential element of the group's success. Two of the former president's children owned 30% of the bank.

When the Asian financial crisis brought down Suharto, in May 1998, it took BCA with him. Like many other Indonesian banks, BCA had violated the law by lending excessively to Salim Group companies. Customers nervous about the group's future without Suharto's protection sparked a run on the bank. Panicked depositors, at times waiting in long lines snaking down Jakarta's Jalan Sudirman, withdrew more than $1.1 billion from the bank in a matter of weeks. BCA was rescued with a capital injection from the government of 28.5 trillion rupiah. Another 61 trillion rupiah worth of government bonds was used to wipe clean the bank's loans to Salim Group companies. As a result, BCA was handed over to IBRA, which was given 93% of the bank. The remaining 7% stayed with the Salim family, but the Indonesian Finance Ministry has asked them to sell it by September 7.

Today's BCA, says Ng, is very different from the bank brought down three years ago. For one, it is now publicly listed rather than privately owned. Last year, IBRA sold 22.5% of the bank in a public offering. (The 40% now up for grabs will reduce IBRA's stake to about 30%.) The Salim-era board of directors and board of commissioners have both been replaced. The only senior manager from the Salim era kept in place was the head of operations. In short, BCA used to be a privately-owned bank that sucked in low- cost funds and funnelled them to Salim Group companies. It is now a publicly-listed company with a professional board and no proclivity toward owner-driven lending.

IBRA needs to get this right. It is behind target to raise 27 trillion rupiah this year even as the government struggles with a larger-than-expected budget deficit. Moreover, the entire asset- disposal process in Indonesia has come under a cloud thanks to a series of well-publicized snafus. The sale in March of Salim Group plantations to Malaysia's Kumpulan Guthrie is being investigated by parliament. And Canadian insurance company Manulife's attempt to buy its Indonesian partner's stake at a government auction has been tied up in knots by legal manoeuvrings and what the company says are arbitrary arrests.

According to Lin Che Wei, SG Securities' president-director in Indonesia, the best possible outcome for the country would be an investment by a major international bank. This, he says, would bring in not only cash, but also much needed credibility. That credibility will have to wait. For now, none of the top four foreign banks in Indonesia -- Citibank, ABN Amro, HSBC and Standard Chartered -- want a piece of BCA.

It may be the best bank in the country, but it's still in Indonesia. Political turmoil makes any acquisition here a hard sell to a board sitting in New York or London or Amsterdam. Foreign banks would like majority ownership and that isn't on the table -- at least not yet. Foreign banks have also learned lessons from last year's abortive attempt by Standard Chartered to take over Bank Bali -- which was rebuffed by Indonesian managers and workers angered in part by the British bank's aloof management style and high salaries for expatriate employees.

With major foreign banks staying away, the field is clear for so-called vulture funds, whose strategy is to buy cheap, boost earnings and sell at a profit after a few years. Last year Newbridge Capital took over Korea First Bank and installed an American CEO. Newbridge has made a bid for BCA but is holding out for an assurance of management control. Company officials refused to comment for this story.

Indonesian Recovery Company has a no-strings-attached bid on the table. One of IRC's parents, Bhakti Investama, was part of a consortium that beat Newbridge for a stake in automaker Astra International. Local press reports have said that Bhakti is a front for Anthony Salim, BCA's former owner and Liem Sioe Liong's son. Hary Tanoesoedibjo, Bhakti's CEO, failed to show up for a scheduled interview with the Review. In the past he has denied fronting for Salim.

Simon Case, the head of IRC, refused to comment. But a Hong Kong-based director of Asia Debt Management, Anthony Wood, denies that the company has any ties with Salim or investment from any Indonesian investor. "Asia Debt Management is entirely independent," says Wood. But questions about the company remain. Its Web site shows that the board and executive management report to a company in the Bahamas. And its debt-recovery fund appears to be based in Maurtius.

The preponderance of financial rather than strategic investors has the potential to raise further difficulties with Indonesia's parliament. Some analysts speculate that strategic investors are only interested in BCA because they have already found a buyer -- Salim. In Indonesia selling back assets to businessmen close to Suharto is an explosive issue, and parliament has said that this should not be allowed. But in practice, says a Western analyst, the absence of a major foreign investor means there's little that IBRA can do to prevent the bank from ultimately being sold back to Salim.

A surprise beneficiary of IBRA's dilemma may be Taiwan's Fubon Group. According to a person close to the negotiations, Fubon executives contacted IBRA after final bids were in on June 25, and expressed interest in BCA. But they have asked for more time. The group has deep pockets and a proven record in the financial sector in Taiwan. Last year, Citibank bought a 15% stake in five Fubon businesses for $800 million and the group's ambitions include selling insurance products across Asia. BCA, with its large customer base would be a natural fit. Fubon officials were unavailable for comment.

Whoever ends up getting the nod from IBRA will have to run the gauntlet of parliament. Benny Pasaribu, a legislator from the Indonesian Democratic Party for Struggle who heads parliament's powerful commission on banking and finance, says IBRA's decision won't be final. "If we hear that there is discrimination against a bidder and malpractice and they choose whoever they like or dislike, then we may ask the government to stop the deal," he says.