Democratic struggle

Government attempt to appease fails to stem angry protests

Jakarta Post - Januay 17, 2003

Kurniawan Hari and Zakki Hakim, Jakarta -- Thousands of people throughout the country took to the streets seeking the cancellation of utility price hikes on Thursday despite a decision by the government to delay the increase in telephone charges.

The protesters, whose numbers were far below those of Wednesday, demanded the government annul the hike in electricity charges and restore the fuel subsidy.

Nearly 700 activists grouped in the Women's Opposition Association (Asosiasi Perempuan Menggugat) marched from the Hotel Indonesia traffic circle to Merdeka Palace on Thursday night, calling on the government to cancel utility price hikes as they were excessively burdensome on the public. The protesters carried candles and posters with messages urging President Megawati to reverse her administration's decision to raise telephone and electricity charges, and remove fuel subsidies on January 1, 2003.

Earlier in the day, hundreds of protesters staged rallies in front of the State Palace. The protesters, mostly students, also demanded that government annul utility price hikes instead of delaying them. "Mega oppresses the people! Cut all prices!" yelled the protesters.

According to the student protesters, the government should scrap all tariff increases and arrest the business tycoons who owe billions of US dollars to the state. "The delay in the telephone charge hike is not enough. All prices must be cut!" one protester said.

Dozens of high school students belonging to Indonesian United Islamic High School Students Action (KAPII) also staged a street rally to pressure the government to reverse its decision. "We don't want to be the slaves of foreign countries!" said the students, carrying banners reading: "We need welfare, not postponements.

Dozens of Megawati's supporters also staged a rally endorsing the price increases but they disappeared shortly after they realized that they were greatly outnumbered by anti-price hike protesters.

In Kendari, Southeast Sulawesi, protesters occupied the PT Telkom offices there and forced Telkom technicians to cut telephone services in the city for five minutes. Company official La Ode Budidaya told Antara on Thursday that the cut, which took place from 1:30 p.m. through 1:35 p.m., had caused tens of millions of rupiah in state losses.

The protesters, who marched from the Kendari-based Holuoleo University, also planned to force state-owned electricity company PT PLN to cut its services for two hours, but called it off after learning that the body of a dead official was laid out in the PLN offices.

Meanwhile, the Indonesian Employers' Association (Apindo) in East Kalimantan threatened not to pay tax should the government not reverse its decision to increase electricity charges and fuel prices. Apindo chairman Gunawan Ariwibowo said on Thursday that the association would wait until February before acting on its threat.

Association members and labor activists in Samarinda have been staging protests for the last couple of days. "The increases in fuel prices and electricity charges have driven production costs up by as much as 20 percent," Gunawan added.

In the troubled province of Aceh, student protesters staged a rally outside the state electricity firm PT PLN, protesting the utility price hike. They said the leadership of Megawati and Vice President Hamzah Haz did not benefit the ordinary people. The protesters also urged the government to detain embezzlers and seize their assets for the benefit of the people.

Meanwhile, hundreds of businesspeople and workers jointly staged a protest outside the Central Kalimantan provincial legislature in Palangkaraya. The protesters urged all members of the People's Consultative Assembly (MPR) and House of Representatives (DPR) from the province to fight for a delay in the utility price hikes. They vowed to continue their protest until their demands were met. Similar protests also took place in Makassar, South Sulawesi, and Mataram in West Nusa Tenggara (NTB).

Rowdy protests against price hikes get meaner

Jakarta Post - January 15, 2003

Jakarta -- Nationwide protests against increases in utility prices entered their second week on Tuesday, turning more militant in some provinces as protesters blocked roads and occupied government offices.

Security concerns due to ongoing demonstrations in Palu, the capital of Central Sulawesi, reportedly forced President Megawati Soekarnoputri to cancel her planned visit to the province.

More than 1,000 demonstrators in Palu turned out to join protests against the hikes in fuel, electricity and telephone rates. Some burned pictures of Megawati and Vice President Hamzah Haz and called for their resignation, detik.com reported.

In Jakarta, several hundred workers tore down the front gates of the House of Representatives, as they demanded lawmakers to force the government to cancel the utility price hikes.

The gates were knocked down a second time by another group of protesters later in the day, but neither groups were able to enter the House's sprawling compound as security was tight inside.

In Semarang, Central Java, more than 200 university students occupied the provincial administration offices while students in the South Sulawesi capital of Makassar blocked roads and caused traffic jams for several hours.

In Riau, students took over state-owned radio station RRI and broadcast their anti-price hike message. They also tried but failed to break down the gates of local telephone operator PT Telkom, Antara reported.

Hundreds of housewives wearing veils were seen joining the protests in Jakarta. Some carried cooking utensils as they gathered before Merdeka Palace to demand that Megawati revoke the price increases.

"What we're facing is the consequences of a government that does not care about the public's interests, facilitates dirty economic practices, and does not have a transparent political system," said Suara Hati Ibu, a women's activist organization.

Tuesday's protests were neither the biggest nor the most violent, but demonstrators have taken more drastic measures to pressure the government.

The protests come on the heels of the demonstrations that were held almost daily last week, but without any results. The government refused to cancel or negotiate the triple price hikes, offering instead cosmetic solutions, such as tax incentives and a speedier disbursement of aid to the poor.

Megawati, in her first public response to the protests last week, said that the decision to raise the prices was painful.

Speaking before supporters of the Indonesian Democratic Party of Struggle (PDI Perjuangan) in Bali, she called on the public to understand that the decision would help the nation in the long run.

Except for the telephone rates, analysts have agreed that slashing the subsidies on fuel and electricity were correct.

However, they added, the move came at a time when public confidence in Megawati was running low. The government pushed ahead with sales of state companies in defiance of labor protests, and recently agreed to drop possible criminal charges against business tycoons who owe the state billions of US dollars.

Legislators have also voiced concern over these policies, even though they had agreed to them earlier. A petition is circulating among them, demanding the cancellation of the utility price increases.

The chairman of the University of Indonesia's student body, Rico Marbun, said students planned another rally on Wednesday, estimating that thousands would turn out for it.

He said they would repeat their demands for the government to drop the price hikes and arrest corrupt business tycoons.

Protesters push down Indonesia parliament's gates

Reuters - January 14, 2003

Achmad Sukarsono and Telly Nathalia, Jakarta -- Thousands of protesters rallied in more than a dozen Indonesian cities on Tuesday and knocked down parliament's gates in the capital, maintaining pressure on the government to review its recent fuel and utility price hikes.

But palace sources denied security worries over the demonstrations were responsible for the cancellation of a presidential trip.

Protests have been a near daily event across the impoverished Asian nation, the world's fourth most populous, since Jakarta announced the price rises earlier this month. However, analysts say thus far they lack the numbers and intensity of those that helped topple former president Suharto in 1998.

While the the government has announced some measures to blunt negative effects from the price hikes on the poor and the economy, it has shown no inclination to reverse the increases.

President Megawati Sukarnoputri has said the policies are necessary to curb state subsidies and end the country's reliance on foreign debt. Protesters remain unimpressed.

"Megawati smiles as the people cry," read one banner in Indonesia's second city of Surabaya. A protester in front of the presidential palace in Jakarta shouted: "Megawati should listen to the people. If she can't, just resign." Palace sources denied reports that demonstrations over the issue on Sulawesi island and related concerns about security had prompted cancellation of a Megawati trip to Makassar and other cities there.

"If it's about security or protests, that can be handled," one palace source told Reuters.

Bad weather

A local government official on Sulawesi said the president's office had blamed the cancellation on "Jakarta's political situation and Makassar's bad weather". Megawati is under fire in parliament over the hikes, despite its approval of them in broad terms last year as part of budget considerations.

Around 500 protesters rallied near the airport in Makassar where Megawati was expected to arrive by midday but dispersed early after hearing the president had cancelled her trip.

In Jakarta, around 200 protesters knocked down the gates of the national parliament. However, two lines of barriers behind the front gates blocked protesters from entering the grounds. After the first group continued its street march and security officers restored the gates, another group came to the central Jakarta compound and knocked them down again.

Inside parliament, many legislators urged Megawati to roll back the hikes, with a key politician accusing her of being unapproachable. "I've proposed [to meet the president] four times ... but up until now there has been no response. I won't beg anymore," said Amien Rais, chief of Indonesia's supreme legislative assembly.

Earlier, around 2,000 demonstrators, mostly Muslim housewives, rallied in front of the presidential palace, bringing along pots and pans, empty oil drums and home telephones.

Street rallies against the controversial price hikes also occurred in at least 12 other cities of the world's largest archipelago with some groups trying to enter facilities owned by the state electricity, oil and telephone firms.

Drop prices and president

Chants of "Drop the prices! Drop Megawati!" were among those heard.

Many groups have threatened to bring more people to the streets and take more aggressive action if Megawati maintains her stance, with some saying a massive rally will take place on Wednesday.

So far the rallies, despite their thousands, have tended to fall short of sponsors' forecasts and -- unlike those in 1998 -- have not seriously disrupted daily life or routine business.

Indeed, Jakarta stocks posted an almost three percent gain on Tuesday, with one fund manager saying: "The protests did not turn out to be as violent as initially feared." And Indonesia's rupiah currency extended gains against the dollar to move close to a one-month high.

Megawati cancels visit as price hike protests continue

Jakarta Post - January 15, 2003

Jakarta -- President Megawati Soekarnoputricanceled a trip to Central Sulawesi on Tuesday following the latest wave of protests around the country over higher fuel and utility prices, AP reported.

Protesters took to the streets in Jakarta and five other cities Tuesday in a second week of demonstrations sparked by a government announcement that rates for fuel, telephone service and electricity would be raised from 6 to 22 percent.

The largest was in Palu, the capital of Central Sulawesi, where nearly 2,000 students burned portraits of Megawati and Vice President Hamzah Haz and briefly occupied a local council building.

President reportedly canceled the planned trip To Palu and Makassar di South Sulawesi due to security concerns.

Separately, Deputy chairman of Megawati's Democratic Party for Struggle (PDI Perjuangan) Parmono Anung told reporters in Jakarta that Megawati planned to invite chairmen of the People's Representatives Assembly (MPR) to discuss the recent issues. "She is making the schedule," he said.

Eearlier in the day, she refused to meet MRP Speaker Amien Rais because "the president wanted to explain in to other MPR chairmen", Pramono said.

Thousands of women rally against price hikes

Jakarta Post - January 14, 2003

Jakarta -- Some 5,000 women staged a rally on Tuesday outside the presidential palace in Central Jakara, protesting the government's decision to increase fuel prices and electricity and telephone rates, Antara reported.

Carrying kitchen utensils and banners, the women, led by the Muslim Women's Solidarity Forum for the Poor, marched along the streets under the hot sun.

They also waved posters, one of which read: Led by a mother, other mothers suffer, referring to President Megawati Soekarnoputri who decided to increase the fuel and utility prices early this year. The rally ended peacefully.

Similar rallies occured across the country. In Medan, North Sumatra, over 1,000 protesters blocked the roads to express their opposition to the hike.

Thousands of protesters, comprising students, workers, and businesspeople, including the blind, also flocked the streets in Surabaya, East Java, Makassar in South Sulawesi, Manado in North Sulawesi as well as Jayapura in Papua.

Continuing protests over price rises

Radio Australia - January 13, 2003

Protests against price hikes for fuel and phone charges are continuing for a second week across Indonesia. The price rises for fuel, electricity and phones are aimed at cutting back on government subsidies as the administration tries to rein in its large budget deficit. But as public pressure increases on President Megawatti Sukarnoputri, political opportunists are seen lurking in the background.

Presenter/Interviewer: Karon Snowdon, Finance correspondent

Speakers: Ditta Indah Sari, head of the National Front for Indonesian Workers Struggle; Peter Duncan, Chief Economist with consulting firm Castle Asia

Snowdon: Demonstrations have entered their fourth day. Students, trade unionists and the poor have been joined in some protests by business groups in demanding the price rises be reversed or delayed. Failing that they want the government to step aside.

Trade Union activist Ditta Indah Sari and other protest organisers say the country is being pressured by the International Monetary Fund, which insisted on subsidy cuts among other measures in return for its five billion dollar loan. Ditta Sari draws a comparison with the mass demonstrations in 1998 which toppled the dictator Soharto.

Sari: "Because yesterday Megawati has announced in Bali that she would not cancel the policy and she would face any consequences regarding this policy. So it's a declaration of a so-called war from the government against the people and we would have to respond with as strong a movement as possible."

Snowdon: Dita Indah Sari, head of the National Front for Indonesian Workers Struggle speaking on a mobile phone on her way to another demonstration outside the presidential palace.

Diesel fuel costs have soared by 22 percent, electricity is up by six, with three similar increases to follow throughout the year, telephone charges are up by an average of 15 percent.

While 60 percent of Indonesians live below or close to the poverty line, such price hikes easily get people onto the streets.

President Megawati says she has no choice to cut back subsidies on fuel and transport if Indonesia is to rid itself of the weight of foreign loans by reducing the deficit. She has said an emphatic "no" to the protestors' demands.

A major debate rages between the activits for social equity and economists who argue its the middle class and the rich who benefit most from cheap fuel and phone charges.

Peter Duncan is Chief Economist with consulting firm Castle Asia.

Duncan: "Subsidies in the past have benefitted the much wealthier elements of the community at the expense of the poorer elements of the community and the former have used the pressure of demonstrations to try to retain them. The present government is now facing up to this situation."

Snowdon: The government's biting of the subsidy bullet is risky politically. Press reports have suggested a number of meetings have taken place between former President Wahid and politicians with an eye on the top job.

House speaker Amin Rais is said to be one. His office has denied such a meeting took place. But Mr Rais did meet with a delegation of protestors led by Dita Sari just before I spoke to her. She agrees the protestors could be playing with fire by petitioning politicians to join in the demonstrators demands for policy changes.

Sari: "Of course Amin Rais and other politicians in the parliament have a very strong interest to take up our position but that doesn't mean they would make a policy that would be on the part of the people. So by drawing more forces outside the parliament together, the alternative would be much much better."

Anti-government protests continue into second week

Jakarta Post - January 14, 2003

Jakarta -- Violence erupted again on Monday as thousands of people embarked on a second week of protests nationwide against the steep rises in fuel prices, and electricity and telephone charges.

However, most of the street rallies proceeded peacefully across the country.

At least three students were injured in a clash between around 50 demonstrating students and police in the nation's second biggest city of Surabaya, East Java.

The scuffle broke out when the police blocked the protesters from trying to occupy the North Surabaya office of state-owned electricity company PT PLN on Jl. Gemblongan.

The three students sustained head, stomach and leg injuries after being beaten and kicked by baton-wielding officers, who had earlier fired warning shots in the air to break up the noisy protest. The victims were rushed to the Dr. Soetomo general hospital for treatment.

Surabaya Police chief Sr. Comr. Itho Sumardi accused the protesters, led by the Democratic People's Party (PRD), of trying to stir anarchy by attempting to occupy the PLN building. "We will not tolerate any rally in which the protesters attempt to damage public facilities," he said.

Meanwhile, the East Java Confederation of All-Indonesian Trade Unions (K-SPSI) vowed on Monday to deploy some 25,000 members for a huge rally on Tuesday to increase the pressure on the government to reverse the price hikes.

In the Central Java capital of Semarang, two of six students from the Semarang State University (Unnes), who had been staging a hunger strike in protest against the increases, were brought to Elizabeth Hospital due to their worsening condition.

Nevertheless, the two students continued to refuse to eat, saying they would not end the hunger strike until the government annulled the price hikes.

In Jakarta, hundreds of demonstrators staged separate rallies outside the presidential offices, at the Hotel Indonesia traffic circle, the House of Representatives, and the office of state- owned telecommunications firm PT Indosat.

Similar demonstrations hit Makassar in South Sulawesi, and Medan in North Sumatra, where thousands of students, workers and other groups urged the central government to heed their demands.

Around 3,000 protesters in Makassar vowed that they would not allow President Megawati Soekarnoputri to visit South Sulawesi in the future, calling for a vote of no-confidence against her.

During the noisy rally, the demonstrators again hijacked fuel trucks belonging to state-owned oil and gas company PT Pertamina. However, they let them go later.

In Bandung, West Java, some 1,000 students and workers picketed the provincial legislative council and the West Java governor's office. No violence was reported, however. In Manado, some 30 students from the Indonesian Muslim Student Movement (PMII) and other groups staged a peaceful anti-price hike rally.

Despite the mounting public opposition, the government has refused to bow to the protesters' demands to cancel the rises.

On Sunday, Megawati defended the policy, saying it would help the economy in the long run. She said the subsidies only benefited the middle and upper-income brackets, but not the poor.

labour issues

Job accidents increase, safety measures do not

Jakarta Post - January 17, 2003

M. Taufiqurrahman, Jakarta -- Novi had to rush to her factory because she was afraid of being late for her night shift and it never occurred to her that something awful was going to happen at work.

As it turned out she fell asleep on the job and nearly had a finger cut off while doing at the assembly line of a cotton factory. "I dozed off a little while, and I inadvertently cut the tip of my middle finger off," Novi, 22 , told The Jakarta Post on Monday.

Little did she realize then that her misfortune would become a driving force for her fellow workers to put pressure on the company to apply the required standard safety measures and join the social security schemes for laborers.

Many companies in Indonesia neglect to abide by the on-the-job safety rules where more than 100,000 accidents happen in work places every year. What happened to Novi, 22, was just an example of the situation that a lowly-paid laborer must endure as a result of poor labor protection and toothless government regulations.

Although Novi was immediately rushed to a 24-hour company clinic after the accident, she had to wait until the following morning to have her injury treated because the clinic's 24-hour staff were also apparently dozing off for awhile. "The clinic in my work place was indeed supposed to be open for 24 hours, but since the 1998 troubles it is very unreliable, and the company did not want to uphold the 24-hour-ruling," she explained.

If the clinic was operating that night, Novi's finger could have been saved, her fellow workers believe. Worse still, Novi had a hard time obtaining compensation from the social security company PT Jamsostek. "It took me quite a long time to get a letter of recommendation from my company before I could go to ask for compensation from Jamsostek," she said, adding that she eventually got Rp 590,000 (US$ 65) from PT Jamsostek, which she deemed an inadequate amount.

Another tragedy regarding workers' misfortune was also experienced by Naib, who once worked for a pulp company in Cakung, North Jakarta. His job was to feed bamboo through a mill shredder. One day the bamboo clogged up the machine so he decided he would help the bamboo through with his leg. However, his other leg got caught in the shredder with tragic results. "The mill was not equipped with safety gear, and the company had time and again promised to provide it, but never kept its promise until that tragic event took place," said Malik, a friend of Naib.

Two months after the incident Naib's health deteriorated markedly and he passed away. The company gave him Rp 3 million (US$ 330) as compensation although he had worked for many years with them. Naib could not claim compensation from PT Jamsostek as his company had never registered him as participant of the social security program.

The high number of workplace accidents was affirmed by a recent report from the International Labor Organization (ILO) which said that, with 57,000 work-related accidents in the first six months of 2002, Indonesia's worker safety measures constituted the worst in the Southeast Asian region.

"That such a high number of accidents prevail in companies across the country does not surprise me, as work safety is relegated to second place after minimum wage fulfillment," said Bomer Pasaribu, a former manpower minister. He also said that lack of supervision of labor safety was the main reason for the high number of accidents. "The government lacks the personnel to implement laws on labor safety. There is only one official to oversee 700 companies while the ideal number is one for every 50 establishments," he said.

The proper implementation of the law on labor safety has also been the concern of another labor activist. "Thus far, I don't see any enactment of the labor safety legislation, to the point where companies perceive the violation of those rulings as no mistake at all," Dita Indah Sari from the National Front for the Struggle of Indonesian Workers (FNPBI).

Realizing that laborers could not count on the government to uphold the law, Dita suggested that laborers must better organize themselves so that they could exert stronger pressure on the employers. "Workers in danger-prone occupations such as construction, forestry and fishery should have a stronger trade union," she said. Labor activists have agreed that there must be a stronger labor union which could truly defend and protect the workers' interests.

"After the incident with Novi, we set up a labor union in that company, and afterwards the company heeds our demands for a social security program," said Eka, a labor activist in Penjaringan, North Jakarta. Now, laborers in the company have three programs of workers security, comprising accidents, retirement and death security.

Workers stage protests in Bogor

Jakarta Post - January 15, 2003

Bogor -- Some 2,000 workers in Bogor regency, West Java, staged a protest on Tuesday demanding minimum wages the same as for workers in the nearby regions of Jakarta, Bekasi and Tangerang, at the regent's office.

The regency administration has not yet set the minimum wage for this year, while last year, it was Rp 576,000 (US$64.7). The workers demanded that it be increased to Rp 631,000, similar to the other regions.

"We will continue to stage rallies until we receive a similar minimum wage as our fellow workers in Bekasi, Jakarta and Tangerang," said one of the protesters, Cecep Sasmita.

"We have sent a letter to the regent on the matter but there has been no response." Bogor vice regent, Nana Suryana, told the workers that the administration would increase the minimum wage but it would take time to process it.

The workers, however, demanded a prompt decision to increase their wages immediately.

Labor movement in Indonesia still weak

Jakarta Post - January 15, 2003

Jakarta -- The recent protest involving only about 3,000 workers in Jakarta, instead of the threatened 25,000 people, is further proof of how weak the labor movement in Indonesia is, and of its failure so far to harness its potentially powerful political leverage, say labor experts.

The fragmented labor movement is seen as one of the main contributing factors to the failure of the protest, according to former manpower minister Bomer Pasaribu "Unions in Indonesia are similar to political parties. There are too many of them, but only a few of them have clear programs to fight for their common goals," Bomer told The Jakarta Post on Monday.

Official records show that there are more than 60 registered national labor union federations, 140 labor unions and some 11,000 company-level unions. Those unions have an estimated combined membership of 11 million workers.

The huge membership claimed by labor unions could become a powerful political force if they united to fight for their common interests.

"Unfortunately, these unions are divided based on ethnic group, religion and political affiliation. Not to mention the various organizational, managerial and leadership problems that also affect them," said Bomer, who is also the chairman of the Center for Labor and Development Studies (CLDS).

Another factor, according to labor expert Tutur Suwito, is the low social awareness of workers. Consequently, they will join rallies or protests only if the issues directly affect them individually.

"Many workers decided not to join the recent protests [against the price hikes] as they had yet to feel the effects of the hikes," said the former chairman of the Jakarta Labor Institute (IPJ).

"If the price hikes cause their company to lay them off, it is only then that they will react to the hikes. It has always been like that with other issues. Instead of proposing programs that could improve their welfare, workers impulsively react to existing policies," added Tutur.

Weak leadership is also responsible for the unions' failure to mobilize large crowds to protest the recent price hikes.

Many unions in Indonesia were founded, and later managed, by non-governmental organization (NGO) activists, such as Dita Indah Sari and Muchtar Pakpahan. This, sometimes, inadvertently results in the workers being too dependent upon their activist patrons, thus impairing the capacity-building process among the workers themselves.

This weak leadership is also the result of the long history of oppression instituted by former president Soeharto, who allowed only government-sanctioned unions to exist.

This New Order oppression has impaired the labor movement's ability to groom potential leaders from among the ranks of workers, and also significantly increased the workers' distrust of unions.

The labor movement has grown significantly since the fall of Soeharto, and, in fact, several labors unions, according to Bomer, have shown their ability to pursue a clear agenda and mobilize their members in doing so.

"Labor unions in state-owned companies are far better than those in private firms. They are more capable of mobilizing their members and are less tainted by particular political interests," he said.

In order to empower labor unions, Bomer stressed the need for an improved labor law, especially after the implementation of regional autonomy.

In addition, Bomer suggested the establishment of an equal and meaningful bipartite relationship between workers and employers, and a tripartite relationship involving the government, so as to facilitate negotiations to resolve disputes.

Aceh

Recent Aceh ceasefire agreement tested by killings

Radio Australia - January 16, 2003

An Indonesian soldier has been killed by rebels in the province of Aceh, putting a five-week old ceasefire to the test. The Indonesian government and the separatist Free Aceh Movement signed a cessation of hostilities agreement in Geneva on December 9. Twenty one people have been killed in Aceh since the deal was struck. Despite these incidents, observers say the ceasefire has dramatically reduced the level of violence in the provice and brought a fundamental change in atmosphere.

Transcript:

Mares: Earlier this week a delegation of foreign diplomats travelled to Aceh to show their support for the peace process. At the end of the trip, United States Ambassador Ralph Boyce described the ceasefire agreement in Aceh as "a good start", but cautioned that lasting peace remains a distant prospect. It's an assessment shared by Sidney Jones, the Jakarta-based Director of the Indonesia Project for the International Crisis Group, who has just completed her own trip to assess the situation in Aceh:

Jones: It's rather extraordinary because, on the one hand, there is an incredible change in atmospherics (sic). From the day that agreement was signed on December 9, you have people staying out late at night, people using the major thoroughfares 24 hours a day. It's as though everyone in Aceh decided that peace was at hand and they decided that the security problems had vanished, when in fact a lot remains unresolved. And you look at the agreement and you talk to both sides and it's clear that the agreement papers over major differences, and deliberately so. It was more important to get an agreement on paper than to work out every little detail.

Mares: The December 9 cessation of hostilities agreement was brokered by the Swiss based non-government organisation, the Henri Dunant Centre. Under the deal, a Joint Security Committee has been set up to monitor and investigate breaches of the ceasefire. The committee comprises government representatives, members of the rebel Free Aceh Movement or GAM, and international mediators. Henri Dunant Centre spokesman in Aceh, Steve Daly, says that the Committee is working well and that violent incidents since December 9 do not constitute a threat to the ceasefire agreement itself:

Daly: Right now we are in a confidence-building period and the overall security situation in Aceh has been unbelievably improved and the numbers are incredibly dramatic. Since December 9, there have been 13 civilian deaths total in Aceh. That's down from an average of 87 civilian deaths per month for the previous nine months up to the signing of the agreement on December 9. So that in itself is quite dramatic. And adding to that, there have only been two civilian deaths in the last two weeks. I think everybody has expected that there would be continued incidents in isolated pockets and they are taking place. But no, I don't think it puts any significant strain on the basic agreement. Everything seems to be moving forward very well actually. And I would add to that that things are probably moving better and faster than anyone had expected.

Mares: What about the process of returning Aceh to some kind of normality, has progress also been made there in getting people back to their homes and so on?

Daly: Yes. Earlier this week our tripartite monitoring teams escorted 2,500 internally displaced Acehnese to their home villages. They had fled their villages a month ago fearing unknown security issues. Normalcy would be overstating the situation here. But, it is another sign that security has been greatly restored to Aceh.

Mares: Steve Daly from the Henri Dunant Centre in Aceh. Despite the evident progress, there are major obstacles to a lasting peace in Aceh. Sidney Jones from the International Crisis Group says there is a huge gulf between Indonesian government and the Free Aceh Movement, or GAM, on key issues.

Jones: There are completely, diametrically opposed interpretations of, for example, what the placement of arms means with respect to GAM, the Free Aceh Movement. Will GAM give up its arms? What have they agreed to do? Is it demilitarisation which is how the Indonesian government likes to think of it? Or is it simply registering weapons but not giving them up, which seems to be GAM's interpretation. Another big issue is the political end game and whether or not GAM will participate in elections. Elections to GAM means a referendum on the autonomy law. Elections to the Indonesian army means GAM will join a major political party just like any other Indonesian citizen.

Mares: And hold elections for a provincial assembly within the Indonesian republic.

Jones: Yes. And then a third major sticking point is on the issue of relocation of the army because the army sees itself as basically keeping its positions as is, but changing to a defensive posture. The rebels and many Achenese see relocation as meaning pulling back to barracks and there is a wide gap between those two.

Mares: Sidney Jones says the best chance for long term peace is the pressure coming from the people of Aceh who are desperate to see an end to violence:

Jones: There is a chance that that popular pressure could actually push the issue to the point where both sides might be more willing to compromise than they would have been before December 9.

Foreign envoys weigh support for Aceh truce

Jakarta Post - January 14, 2003

Nani Farida, Banda Aceh -- Ambassadors from the United States, Japan and Italy arrived here on Monday for a two-day visit to show support for a recent peace agreement to end decades of hostilities in the troubled province of Aceh.

World Bank country director Andrew Steer was also among the delegation members that included US Ambassador to Indonesia Ralph L. Boyce, Japanese Ambassador Yutaka Iimura, and Italian Ambassador Franscesco Maria Greco who represented the European Union.

They were accompanied by Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono and Minister of Trade and Industry Rini Suwandi.

The three foreign envoys and the ministers went straight into a closed-door meeting with Aceh Governor Abdullah Puteh, all the regents in Aceh, and other local government officials.

The visit came more than one month after the Indonesian government and the rebel Free Aceh Movement (GAM) signed a peace deal on December 9 in Geneva to cease all hostilities in the conflict which seen some 10,000 killed since 1976.

"We are here to celebrate and honor the signing of the cessation of hostilities agreement," Boyce told the meeting, referring to the peace accord.

"We believe the people of Aceh want peace and deserve peace. We believe the government in Jakarta wants peace and is trying to carry out the hard work of bringing peace to Aceh," he added.

Iimura concurred with Boyce, saying: "Peace is important, not only for the people of Aceh, not only for the people of Indonesia, but also for the Southeast Asia region".

"The European Union is for the integrity and unity of Indonesia and also supports the decentralization process," Greco said. "The European Union also supports the process of dialog to solve the conflict in Aceh and the ongoing process. Let peace go ahead," he added.

Boyce said the two-day visit reflected the world community's support for the peace process in the resource-rich province. "Our work and our support, will be, of course, dependent on the security environment," he said.

Iimura said that the visit was to follow up on the Tokyo Preparatory Conference on Peace and Reconstruction in Aceh which took place on December 3.

Donors at the conference agreed that a coordinated approach by a number of countries to support Aceh would make for more effective use of aid. The current visit is to further assess the development needs in the province.

World Bank's Steer said four teams had come to Aceh to identify crucial needs to develop the province's economic, social and governmental affairs.

The teams were drafting a report to be discussed in a conference with the Consultative Group on Indonesia (CGI) scheduled for January 21 and January 22 in Bali, he said. He said there will be a special session to discuss the reconstruction process in Aceh during the conference.

Steer said the peace process should sincerely be maintained so as to smooth the way for foreign aid to Aceh, adding that if peace was not ensured, fund assistance would be halted.

He could not give the amount of aid that would go to the province. "The important thing now is not how much aid will be given to Aceh but ... how to do reconstruction and rehabilitation in Aceh so that it can become a new era for a new Aceh", he said.

Minister Susilo told the same forum that security was increasingly getting better in Aceh despite the fact that sporadic violence still broke out since the peace pact. "We hope there will be no one wanting to disrupt and betray the ongoing peace process," he said.

The foreign delegation was slated to meet Indonesian and GAM representatives in the Joint Security Committee being tasked with monitoring the truce enforcement in Aceh.

Mission to go on, vows freed nurse

New York Times - January 13, 2003

Jane Perlez, Banda Aceh -- An American nurse freed after having been convicted by the Indonesian authorities of visa violations, which involved contacting separatist rebels, says she wants to continue her one-woman health mission among displaced people.

Joy Lee Sadler, 57, who was released on Friday, seemed relieved that four months in detention, including three on a hunger strike and what she called the hell of the first week in captivity at a military camp, was over.

She would return to the United States within days, she said. "I have no hard feelings toward anyone, only at stupidity and cruelty," she said.

She and her British companion Lesley McCulloch, 43, who has been lecturing in Australia, were arrested in guerilla territory in September. McCulloch is due to be released next month. Both women were travelling on tourist visas.

A court in Banda Aceh, the capital of Aceh province, found the women guilty of visa violations on December 30. Sadler was given a four-month sentence.

McCulloch, the more politically oriented of the pair, who is known as a partisan of the separatist rebels, was sentenced to five months' jail. The time they had already served was taken into account by the judge.

An unlikely humanitarian worker in such a distant place, Sadler, is HIV positive, having contracted the virus from a surgery patient in Iowa. She said she was inspired by the example of an Iowa doctor, Daniel Murphy, with whom she worked in East Timor in 1998.

Her life took a different turn when she met McCulloch in a supermarket in Banda Aceh. Two weeks later they decided to travel together into the rural areas. Sadler carried some basic medical equipment -- stethoscope, blood pressure equipment and a few medicines she had bought here.

Sadler and McCulloch were arrested on September 11 when the military stopped the bus on which they were travelling. She had just finished treating some displaced civilians in a makeshift camp.

"Right away the commander hit Lesley with a truncheon," Sadler said. "I hit the commander and all hell broke loose."

West Papua

Border crackdown threatens refugee security

Radio Australia - January 17, 2003

The main border crossings between the Indonesian province of Papua and PNG have been shut down because of an Indonesian military operation against Papuan separatist rebels. Thousands of Indonesian troups have been moved into the border area to flush out the OPM, which is the Free West Papua guerilla army. Christian leaders say civilians living along the border are getting caught up in the hostilities.

Transcript:

Fitzgerald: An intensive military operation against Papuans who want to break away from Indonesian control has been underway in the province formerly known as Irian Jaya for over a year.

But this month the focus of the operation has intensified along the Indonesian-PNG border turning the area into a volatile and dangerous no mans' land.

Samson Mesambe, an aid worker for the Catholic Church on the PNG side of the border says there's been incursions by Indonesian troops onto PNG soil during the recent fighting.

Mesambe: I see that military buildup on the other side of the border, the Indonesian border compared to our side of the border, we've got the two units of mobile squad police and platoon of PNG soldiers manning the border at the moment because this latest fighting's between the OPM rebels than the Indonesian army.

Fitzgerald: So far, other border crossings remain open or it's not possible for people to cross into PNG as they have in the past?

Mesambe: So far I think since these troubles started this traditional border crossing where these villagers used to go to Jayapura. That's closed for indefinite period, which we don't know when it will be open again. And the road is closed. At the moment, crosses (sic) not only the villagers but those travelling for tourist or business persons, are not allowed to use the road because that's where the fighting is taking place and it's only possible by, travel only by boat, only by boat.

Fitzgerald: John Ondewami is a spokesperson for the Free Papua OPM rebels. He says fighting along the border is part of an Indonesian campaign to wipe out the OPM.

Ondewami: The Indonesians believe that the OPM are using this area as their main base to run a political and military campaign against the Indonesian government. Therefore the Indonesian government puts pressure on Somare government in Papua New Guinea in order to crush the OPM and its activities.

Fitzgerald: Indonesia has called for an extradition treaty with neighbouring PNG so separatists escaping over the border can be handed back to Indonesian authorities. Mr Ondewami claims although PNG hasn't yet agreed to the treaty, there's been a hardening of attitude towards the Papuan cause since the election of the new PNG government led by Sir Michael Somare.

He says Somare's government wants to close down Papuan refugee camps, which have been providing protection along the border since 1969.

Ondewami: I think Somare has been friendly with Indonesian politics, Indonesian government and pursued this joint cooperation against the West Papuans. It's not surprising if and when (sic) Somare now come back again to the power he continues the old Papuan policy against the people of West Papua who seek protections in Papua New Guinea. So it's a huge setback for the whole West Papuan refugees in Papua New Guinea, and I assume that as a consequence of that, many West Papuans will be deported forcibly from Papua New Guinea, especially those now living in Vanimo area; also in the Jaku and Vutong areas, to West Papua.

Fitzgerald: The Papua New Guinea Prime Minister hasn't yet commented on Indonesia's border offensive but his Foreign Minister says PNG is in communication with Jakarta over the issue.

Carlos Yuni, the Governor of the PNG northern border province of Sandaun admits he wants all Papuan refugee camps removed from Papua New Guinea soil.

Yuni: Refugee camps in Vanimo must be removed because there is in there some of the trouble makers are using our Papua New Guinea side of the border to engage in illegal activities along the border.

Fitzgerald: The Catholic Bishop of the PNG border town of Vanimo has issued a statement saying he believes the security of Papuan refugees in PNG is under threat. Samson Mesambe who works with the refugee border crossers for the church agrees.

Mesambe: Now at the moment these border crossers that we are looking after are living in fear because of these latest developments on this border crisis are going on.

FBI joins inquiry into US murders in Papua

Sydney Morning Herald - January 17, 2003

Matthew Moore, Jakarta -- The Indonesian military has pledged full co-operation with a new FBI investigation into the fatal shootings of two American school teachers at the Freeport mine in Papua last year.

A US official said a small group of FBI officers would arrive in Indonesia within days to help Indonesian police uncover who planned and carried out the attack that killed three people and wounded 12 others, mainly US teachers.

The agreement to allow the FBI to join the inquiry comes after the Herald revealed before Christmas that President George Bush had sent a message to Indonesia's President Megawati Sukarnoputri insisting that the killers had to be found and that FBI involvement in the investigation was a condition to renewing military links between the two countries.

Western governments and human right groups have accused members of the Indonesian military of carrying out the attack, but the Indonesian military hierarchy is adamant that its members were not involved.

Indonesia's military spokesman, General Sjafrie Samsuddin, said yesterday: "We welcome the FBI involvement and -- don't get it wrong -- it was the TNI [military] who had the initiative in the beginning to invite the FBI to investigate. We then put up the idea to the Government, and the Government agreed."

While General Sjafrie promised the military would give full access to FBI and Indonesian police investigators, he said the TNI wanted a result. "Please announce it if we are guilty and please announce it if we are not.

The unnamed US official said this week that all levels of the Indonesian Government, as well as the military, had agreed on the need for FBI involvement. "[They] understand this is a very important issue for the American people, and a barrier to get to the bottom of what happened in the murders of two American citizens is going to have an effect on our whole relationship," the official said. "This is not an issue where the military-to- military component of our relationship could be affected by this; it's the whole relationship.

With the police inquiry stalled, a new inquiry will have to start from scratch more than four months after the attack, the US official said. The suspected involvement of elements of the military will also make it a much more sensitive investigation than the multinational force working on the Bali bombings.

Indonesia takes senior policemen off Freeport case

Australian Financial Review - January 14, 2003

Tim Dodd, Jakarta -- Two senior Indonesian police officers who uncovered evidence of army involvement in the killing of three teachers near the Freeport mine in Papua last August have been transferred to new posts.

The pair, the deputy police commander in Papua, Brigadier-General Raziman Tarigan, and the local commander in Timika (near the Freeport mine), Assistant Senior Commissioner Sumarjiyo, are no longer involved in the investigation which was handed over to a joint military police team last week.

Indonesia's military is now trying to divert attention away from the witness-supported allegations that the Indonesian army ambushed a convoy of teachers who were on a sightseeing trip in mountainous country near the Freeport mine on August 31. Three of the teachers -- including two Americans -- who taught in a school for children of Freeport employees were killed.

Yesterday, the armed forces spokesman, Brigadier General Ratyono, warned the Indonesian public not to be misled by opinion and speculation about the alleged army involvement in the Freeport shootings. "We will let the legal process continue and it will bring us to the definitive result," he said.

Last month Brigadier Raziman was quoted as saying that there was evidence that soldiers from Kostrad (the army's strategic reserve force) were involved in the shooting. The previous month he said that a native Papuan witness, Deky Murib, had reported the involvement of members of Kopassus, the Indonesian army's special forces. Yesterday, Brigadier Raziman said that he stood by his earlier statements.

Indonesia draws a line over West Papua

Asia Times - January 14, 2003

Alan Boyd, Sydney -- Indonesia may close its key border crossing into Papua New Guinea (PNG) after renewed separatist tensions in the rebellious province of West Papua (formerly Irian Jaya) that aid workers claim are being partly inflamed by Muslim extremists.

Hundreds of Indonesian troops have been moved to the 800 kilometer frontier after a series of attacks by Organisasi Papua Merdeka (OPM) guerrillas that Jakarta says are being launched from Papua New Guinean territory.

While the PNG government has issued its own ultimatum to the OPM, Indonesian authorities are pressing for the closure of a border crossing near the village of Wutung that would sever the main escape pipeline for victims of the fighting.

"Our understanding is that [closure] is Indonesia's fallback position in lieu of an implicit undertaking by PNG to keep the OPM out. Clearly this is not a practical proposition from either a security or political perspective," said a diplomat.

As many as 20,000 Papuans have fled to PNG from Indonesia's West Papua province since Dutch-based academics launched the OPM independence separatist movement in the mid-1960s.

The OPM uses the scattered shantytowns just inside PNG as recruitment bases and for staging attacks against the nearby Indonesian army and border police garrisons. These have limited impact: Despite a claimed strength of 65,000, the OPM has only a few hundred committed fighters, most armed with little more than spears and knives and with minimal training.

But the attacks do serve a more potent political purpose in attracting village support and keeping the flagging movement alive in the eyes of the OPM's overseas supporters.

PNG newspapers reported at the weekend that Jakarta had reacted to the latest attacks by mobilizing an unprecedented 1,500 troops, backed by helicopter gunships and fixed-wing spotter planes.

Foreign diplomats believe it is more likely that the permanent garrison of 150 troops was boosted to 400-500, but nonetheless view the buildup as a sign that Indonesian patience is running out.

It is equally apparent that attitudes are hardening toward neighboring PNG, which publicly condemns the OPM but takes little direct action out of a reluctance to offend its own substantial Papuan population. Most of the border crossings are manned only by customs staff on the PNG side. Port Moresby blames financial constraints, but is more likely to be acceding to demands by local politicians that it allow a free flow of border crossers.

However, the rising tempo of recent incidents has raised the security barometer to a level where more resources are likely to be committed, if only to protect PNG's territorial integrity.

Port Moresby is particularly concerned that Indonesian land forces have crossed into PNG on at least three instances in the last two weeks in pursuit of OPM suspects, while helicopters have repeatedly violated PNG airspace.

Weary of PNG's reluctance to hand over OPM operatives that it believes are sheltering in the camps, Indonesia has also apparently taken to handing out summary justice.

The wife of West Papuan human-rights leader Johannes Bonay was one of two women injured when gunmen opened fire on a convoy of cars near the border last week.

Several other villagers, believed to be PNG nationals, were hurt in separate shooting attacks by an unidentified group in the Wutung area, several kilometers within PNG territory.

Indonesia blamed all of the incidents on the OPM. However, diplomats are generally skeptical of guerrilla involvement, noting that they lack the firepower and motivation for targeting civilians.

"Militias were used by the TNI [Indonesian military] with considerable success in Timor to weaken the base of civilian support for guerrillas, and yes, one would have to say this has a similar pattern," said another diplomat. "What little we do know is that the assailants were not wearing military insignia but were far too well organized and equipped for a ragtag outfit like the OPM. I think we can draw our own conclusions from that."

TNI-backed militiamen first began to appear in numbers in West Papua as part of a concerted crackdown on dissent following the murder of nationalist leader Theys Eluay in November 2001.

Seven members of Indonesia's army special forces went on trial last week for the killing, which is believed to have been part of a deliberate TNI strategy to destabilize West Papua and justify military intervention.

Aid workers believe that the tensions were partly fueled by Laskar Jihad, a notorious Muslim extremist group with links to Osama bin Laden's al-Qaeda terrorist network and the bombing of churches in the Maluku islands.

Laskar Jihad has reputedly been training Javanese settlers to resist the Christian OPM, ahead of an expected new wave of resettlements from Indonesia's crowded central provinces.

The Javanization of West Papua has been inevitable since North American and European mining firms began uncovering the lucrative resource base that lies within its sprawling rainforests.

Within the next five years the province is expected to become one of the biggest producers of natural gas in Asia, as well as a significant source of gold and other precious metals.

PNG, conscious that it will day provide a valuable supporting role, will undoubtedly do Indonesia's bidding over the refugees issue. Since 1990 it has been quietly sending back new arrivals, in the knowledge that many deportees face certain imprisonment and possible execution.

For all of Port Moresby's protestations, an informal understanding has been in force for years that the Indonesians may pursue suspected separatists across the border as much as they please.

In effect this agreement, which is due to be reaffirmed in talks next month, delegates authority for security on both sides of the border to Indonesian forces while PNG keeps a careful distance.

There is speculation that Port Moresby may even bow to Jakarta's demands for a formal extradition treaty that could be used to target individual OPM leaders who seek sanctuary across the border.

Less direct pressure is being felt from the United States and Australia, PNG's biggest donor nations, which are keen to protect their investments and normalize ties with the discredited TNI.

These were downgraded after militia atrocities in Timor in 1999 but have become imperative since the terrorist attacks in the US and the more recent Bali nightclub bombings. Ironically, Washington and Canberra now need the TNI's support in countering the same isolated pockets of Muslim extremism that are reportedly being advanced by the Indonesian armed forces in Irian Jaya.

Trapped between these conflicting interests, the OPM has never enjoyed support from foreign governments, and its standing has fallen further as terrorism takes center stage.

In September the movement was blamed for the shooting deaths of two Americans and an Indonesian teacher who were on a sightseeing tour from the giant US-owned Freeport gold mine in West Papua.

Despite independent evidence that suggested Indonesian soldiers were responsible for the attack, Jakarta blamed the OPM. Washington was not convinced, and investigations continue.

Neo-liberal globalisation

Indonesia asked to open its labor market

Jakarta Post - January 15, 2003

Rendi A. Witular, Jakarta -- Indonesian managers, and professionals such as doctors and lawyers could find themselves competing with their foreign peers for jobs here in the near future if the government surrenders to pressure to open the country's labor market.

Arsa Suthisna, head of research and development at the Ministry of Manpower and Transmigration, said at a seminar on Tuesday that the liberalization of the domestic labor market was part of the World Trade Organization (WTO) agreement in Doha, Qatar in 2001.

He said that there were some 16 nations including the US, Japan, Panama, Switzerland, Australia, New Zealand, Taiwan, Singapore, Norway, Hong Kong, Korea, Canada, Poland, India, China and countries in the European Union who wanted to export their professional workers and managers to Indonesia. This also means that Indonesian professionals and managers would also be allowed to seek jobs in those countries. These countries are now demanding that the government revoke the Economic Need Test (ENT) ruling, a policy that enables a country to limit or to shut doors to foreign workers.

But with many of Indonesia's managers and professional workers lacking in quality and skill compared to foreigners, liberalizing the labor sector could create a much greater unemployment problem in the country.

With this in mind, Minister of Manpower and Transmigration, Jacob Nuwa Wea said that Indonesia was not yet ready to fully liberalize its labor sector. He said that a special task force had been sent to Geneva to renegotiate the WTO scheme.

Under the initial plan, the liberalization of the labor market is scheduled to begin this March, but the WTO scheme allows Indonesia to delay in until 2005 if the above 16 nations agree to it. Indonesia would be branded as an uncooperative nation if it declines to apply the WTO agreement. This has serious economic consequences.

"We have asked for a postponement, as we are not ready yet to liberalize our labor sector. We still need time to enhance the quality of our workers," said Jacob in the seminar.

He said that most of the country's professionals had no international certificates yet. He feared that opening the doors for foreign professionals would worsen the country's unemployment problem.

Based on the current data from the ministry, 59 percent of the country's labor force has only an elementary school education, and only 5 percent graduated from high school or universities.

The recent unemployment figure from National Statistics Agency (BPS) shows that the country's full unemployment reached 8.1 million, while half unemployment is some 36 million. The country has a total labor force of 97.6 million from the total population of 210 million.

Coordinator of the Indonesian lobby team for labor liberalization at the WTO forum, Adolf Warrouw, said that the 16 countries had proposed managerial level jobs in several sectors such as energy, mining, financial, tourism and telecommunications, and several in professional sectors such as medical, law, accounting and engineering.

Adolf further said that thus far, the government was considering whether to agree on opening the labor market in the shipping and construction sectors since many Indonesian workers in these areas have already gained international certificates.

Indonesia unwilling player in global FTA game

Asia Times - January 11, 2003

Bill Guerin -- A year ago Indonesia's debut into the free-trade era took place when it opened its markets to the ASEAN Free Trade Area (AFTA).

The landmark event, on January 1, 2002, was notable mainly for the silence of the government that had preceded the move, and the apathy of the people and business community. Public ignorance of AFTA prevailed.

One year on, the six founding members of the Association of Southeast Asian Nations reiterated their commitment to opening up their national economies when, on January 1 this year, they cut their tariff barriers on major products to between zero and 5 percent. The five other countries are Brunei, Malaysia, Singapore, the Philippines and Thailand.

The six signatories of AFTA had agreed in 1992 to reduce tariff barriers to these levels by 2008 but the timetable was moved forward to this year in response to the rapid introduction of free-trade initiatives around the globe. The newer ASEAN member states, Vietnam, Cambodia, Laos and Myanmar, have been given longer to ready themselves and will come on board some time between 2006 and 2010.

In Indonesia labor organizations and members of the Indonesian Business Association (Apindo) have joined forces and are threatening a general strike if the recent fuel, power and telephone tariff hikes are not withdrawn. They contend that hundreds of businesses will fold, and hundreds of thousands more will be thrown out of work if these rises go through. The anti- AFTA elements see the hikes, and those still in the pipeline, simply as proof that the government is more concerned about the country's global position than the welfare of its people.

Some schools of thought put this demonstrable anger and despair down to a lack of "socialization" by the government. They note that there is little public awareness of the importance of AFTA and the government is said to have failed to communicate with the public on the theoretical opportunities AFTA offered Indonesia.

Former president Suharto championed the cause of AFTA from the outset. From the time of the first ASEAN summit in 1976 he was its strongest protagonist. Domestic political stability at home and the country's business conglomerates sustained Suharto's grand vision of economic development or otherwise, gradually geared up to expand their horizons.

After Suharto fell from power in 1998, his successors have lost a lot of the respect and kudos for Indonesia that came with the rapid enlargement of ASEAN in the past few years.

A new collective leadership marks the end of Indonesia's dominant role under Suharto and the dearth of publicity about AFTA in Indonesia has allowed domestic free-trade critics trying to protect their industries to steal the moral high ground. Hardly surprisingly, opposition to free trade has come from business and labor groups.

The increased levels of competition spawned by AFTA opens the door to bankruptcy for inefficient companies that have been hiding behind protectionist barriers.

The recent threat of terrorism may do more than mutual economic interests to speed up progress toward common goals in a regional body that came into being almost unannounced. Indonesia, however, has little, if any, prestige left.

After the terror attacks of September 11, 2001, the United States, the region's largest trading partner, and the West generally began to pay much more attention to Southeast Asia. Washington courted President Megawati Sukarnoputri, as the leader of the world's most populous Muslim nation, but it took the tragedy of Kuta Beach to bring Indonesia into the fight against terrorism.

Prevarication cost Megawati, and thus Indonesia, their long-held leadership in ASEAN and the chance to speak from that position of power when negotiating with their ASEAN neighbors.

Malaysia, Singapore, the Philippines, and even Thailand gained US and regional respect for their harsh actions against alleged terrorist organizations operating in their territories.

Minister of Industry and Trade Rini M S Soewandi has been consistent in her belief that AFTA is a great opportunity for Indonesian industries to boost their competitiveness and efficiency on order to win against the tight competition in a group of countries that produce similar products.

Indonesia by January last year had already cut import tariffs on more than 90 percent of the 7,137 products in the AFTA inclusion list to 5 percent or lower. Tariffs on the remaining 69 products, mostly chemical and plastic products, were kept above 5 percent but these were reduced to 5 percent or lower on January 1 this year.

Rini, as onetime chief executive officer of Indonesia's biggest auto maker, Astra International, has been unable to secure similar protection for the Indonesian automotive industry as that granted to Malaysia. Kuala Lumpur has won protection for its national car, the Proton, against imported vehicles until 2005.

Some sectors have been looking forward to AFTA. Anthony Sunarjo, chairman of the Indonesian Pharmaceutical Association (GP Farmasi Indonesia) points out that Indonesian pharmaceuticals are the cheapest in Asia after India's and China's, so his members will certainly be able to compete on the ASEAN market.

He worries, however, that other ASEAN member countries will seek to bar Indonesian pharmaceutical products from entering their markets by setting up various non-tariff barriers, including imposing complicated requirements for Indonesian drug producers to register their products in their respective countries.

For Indonesians imported goods will no longer carry the high price tags they had in the past and lower prices and a wider range of product choice should benefit the public in the long run. However, other, more domestic obstacles seem likely to negate such theoretical benefits.

Thomas Darmawan, chairman of the Indonesian Food and Beverages Association (GAPMI) voiced concerns over the numerous levies imposed by regional governments and the widespread practice of extortion by local officials. These factors, he said, had led to price increases of local food products that will make it harder to compete with cheaper imported food products from AFTA.

He also said that, aside from these levies, local players also had to pay high transport costs in order to secure their business, which also contributed to raising the price of local food products.

However, Indah Suksmaningsih, chairwoman of the Indonesian Consumer Foundation (YLKI), says that while the AFTA scheme outlines in detail the benefit of free trade for corporations across the region, it has singularly failed to address the importance of consumer protection.

"Where do consumers go to complain about defective goods from Malaysia, for example?" she asked, adding that AFTA will be beneficial to the public only if the freedom of trade is balanced by a fair disputes settlement system for consumers.

Another important objective, more pressing for Indonesia than the other five countries, is to lure foreign investment into the region. The free flow of production goods among ASEAN countries should tempt foreign enterprises wanting to set up a global production base.

The increasing competition from the might of China, especially since its entrance into the World Trade Organization, and the ensuing billions of dollars in investment it gained, has concentrated the minds of ASEAN member governments.

They see the pressing need to succeed in selling the regional market bloc, with a population of more than 500 million, as a more attractive, alternative manufacturing base to China. Collectively, ASEAN stands a better chance of competing against China than if its members were to try to compete individually.

The United States is focusing on bilateral agreements with ASEAN members rather than a multilateral agreement, and thus compromising ASEAN's commitment to regional integration.

Though the largest market among the six founding member countries with almost 210 million people, Indonesia's lack of strong leadership has taken its toll. The government has yet to come up with any semblance of a strategy for industries to make the most of the benefits and opportunities offered by AFTA; hence its poor cooperation with the Indonesian Chamber of Commerce and Industry (Kadin), which is a staunch critic of AFTA.

The ministers concerned will not only need to drive hard bargains in negotiations to determine common standards and mechanisms between members, but will be intellectually challenged to create an investment climate conducive for foreign and domestic investors.

Inefficient domestic industries need to be brought into line with neighboring competitors in terms of cost, production and distribution.

Caving in to pressure from industrialists demanding protection will not only weaken Indonesia's economic prospects within the region but would have a knock on effect leaving ASEAN industries uncompetitive internationally, and ASEAN of little relevance to the economic interests of the people of the member states.

If they succeed in bringing in new investment, this will upgrade industries, improve the skills of the workforce and stimulate economic activity in general. It would also strengthen ASEAN's bargaining position to negotiate free-trade agreements (FTAs) with other regions and could push more ASEAN members to break rank and conclude deals with other countries individually, as Singapore has done.

Singapore has long been impatient with the slow progress toward the regional trade grouping and, in the aftermath of the 1997 economic crisis, has signed FTAs with Japan, Australia, and, more recently, the United States.

The focus was to promote the region as an open, stable and low- cost manufacturing center with an integrated market of more than 500 million consumers.

That may no longer be the game plan. Economists say the lack of enforcement mechanisms has allowed Malaysia, Indonesia and the Philippines to take advantage of the rules and temporarily announce higher tariffs on goods to protect key domestic sectors.

Such protectionism weakens the momentum for regionwide free trade in Southeast Asia and appears to confirm the new target is a much larger free-trade area -- between ASEAN and China -- that may be in place as early as 2015.

Government & politics

Plot to use protests to oust Megawati

Straits Times - January 17, 2003

Jakarta -- Intelligence information has uncovered a plot to use the current protests against fuel and utility price hikes to overthrow the government, Indonesia's top security minister said yesterday.

Plotters may use students and other protesters as martyrs to achieve their objective, he said and warned of tough government action if the protesters turned violent. "Who is behind this we don't know, but that's the finding. We've heard [political] figures speak of a presidium [to replace the present government]," Mr Susilo Bambang Yudhoyono told reporters.

"It's possible there are attempts to victimise students or other protesters. This is very disconcerting," he said, after meeting national police chief General Da'i Bachtiar and intelligence chief Abdullah Hendropriyono.

The minister said: "We have asked the police to enhance their alertness and take pro-active steps to prevent the possibility of any unnecessary victims falling to political interests or agendas."

Indonesian activists continued with their protests yesterday over the price increases. Their anger continued despite a government move to appease them and unhappy parliamentarians by proposing to delay an average 15 per cent increase in phone call charges. However, the demonstrators said this would not help the poor.

The political landscape

Laksamana.Net - January 14, 2003

[The following is a by Jeffrey Winters, Northwestern University, via Joyo Indonesia News Service.]

I would like to offer the following observations:

1. Party loyalty remains relatively weak in Indonesia. The electorate is fluid partly because the parties themselves have not achieved Definition (ideology, clear statement of principles, promises about the future), Motivation (linking party support to expected or actual change/benefit for supporters), and Participation (mobilization, activism, grassroots engagement). Most parties have not even tried to make progress toward greater DMP.

2. As the number of parties proliferates, all existing major parties have fragmented (either openly or just below the surface). For this reason all of the major parties are weaker and in greater disarray. This is a common phenomenon when parties lack ideological definition. Parties operate mainly as shells for grabbing power. Fights among party elites are almost exclusively about dividing the spoils and about personalities (egos, jealousies, and personal loyalties).

3. As of January 2003, indications are that all the major parties will receive a smaller percentage than they did in 1999. PDI-P is split and Megawati's performance has been poor. She can no longer campaign credibly as a reformist. She has completely ignored the 27 July emotional base/strength of her party and embraced the New Order bureaucracy and the TNI (both utterly unreformed). For those who really believed in the P for "perjuangan," alienation runs deep. The PDIP still has its core nationalist base, but it could see a drop of 10 percentage points. Golkar is also split, Akbar Tanjung is a convicted criminal (under appeal), and the party will not have the 1999 advantage of being in power and using dirty money again to run the election. Golkar could see a 5-8 point drop in 2004. PKB also split while its leading figure, Gus Dur, is perceived as having been an ineffective president. PKB could lose 2-4 percentage points. PAN also split and the party has lost its image as a broad-umbrella party and is now more narrowly Islamist (A.M. Fatwa, etc). Amien Rais, who cannot shake the image of being an inconsistent opportunist and has no mass base across the country, has likely peaked politically at his position of Speaker of the MPR (and he won't get it again). He will not be able to be kingmaker in 2004 as he was in 1999 with the Poros Tengah because PKB-Gus Dur was the real key to that alliance. PAN won only a small percentage of the vote in the last election and can expect to get even less in 2004. PPP also split, though this is offset slightly by having Hamzah Haz in the VP seat. If Haz runs for president it will be against Megawati and thus against his own government and role in it. Haz has very few ideas, and the ones he has take the country nowhere. PPP could lose 2-4 percentage points in 2004.

4. Estimated conservatively, between 20-30% of the vote that went to these major parties in 1999 is now free-floating and available to be grabbed. A key question is whether a single new emerging political force could grab it (Eros Djarot's PNBK, which has been gaining momentum fast?), or whether existing parties that had a weak showing in 1999 will do better (Partai Keadilan, for instance, could see its support base double or even triple in 2004). If the free-floating segment of the electorate gets divided in dozens of different directions, its impact on the big parties will obviously be less significant.

5. The key to grabbing the votes the major parties will lose in 2004 is having a genuine alternative available that the people can support with enthusiasm based on the DMP factors mentioned above. Money politics will not be enough to hold it together. Only a strong and inspiring (and genuinely reformist) political message/movement can serve as the glue to hold the pieces solid. This will not be easy given current levels of cynicism about "reformasi."

Concluding Remarks: Polling Center Indonesia (PCI), one of the few professional companies assessing public opinion in Indonesia, has done surveys showing that 67.3% of people believe the Government could not eliminate corruption and 59.5% did not believe it could create jobs. This is a resounding vote of no- confidence.

PCI's survey in August 2002 showed that only 58% of people who voted for PDI-P in 1999 were certain they would do so again in 2004. The figures for the other parties were even lower: PAN (53), Golkar (52), PPP (48), PKB (40), and PBB (29). This reflects a deep sentiment of dissatisfaction with the performance of all the parties.

In the same survey, only 38% of voters said they would "definitely" choose the same party in 2004 as in 1999. 10% said they would not vote, 34% responded that they were undecided (floating), and a full 18% said they would "definitely" not choose the same party that they did on 1999. These figures represent a massive degree of fluidity.

Feelings of dissatisfaction regarding the current government under President Megawati (PDI-P) are growing. In January 2003 there are already signs that opposition is mobilizing and the criticisms are mounting. PDI-P's single claim to legitimacy in the last election was the promise that corruption would be cleaned up. This has not happened. On the contrary, the public perception is spreading that the system has corrupted the PDI-P leadership rather than the PDI-P leadership coming in and cleaning up the system. In the rough-and-tumble politics of Indonesia, it does not matter whether these perceptions are backed up by facts and evidence. It is a dramatic reversal of fortunes for the PDI-P that the allegations are being made at all and that they are sticking and growing stronger.

Throughout most of 2002, the dominant view was that Megawati was assured a second term until 2009. The October 2002 Bali explosion marked the turning point (both domestically and internationally). Since then her government has been on a slide. As of January 2003, there are no longer any assurances that Megawati will win a second term. This perception is growing even within the PDI-P itself. Watch for a last minute attempt by the PDI-P in the August 2003 MPR session to block direct elections of the president.

House moves to save face over price increases

Jakarta Post - January 15, 2003

Kurniawan Hari and Fabiola Desy Unidjaja, Jakarta -- The House of Representatives (DPR) moved to save face in the price hike controversy on Tuesday, urging President Megawati Soekarnoputri to take into serious consideration the protests against the recent utility and fuel price increases.

Emerging from a more than three-hour meeting involving House leaders, faction chairman and commission members, legislators claimed that the decision to increase electricity and telephone charges, and to remove fuel subsidies was solely the responsibility of the executive.

"The decision on fuel prices is a decision of the government. This comes within the power of the executive," House Speaker Akbar Tandjung said.

During the meeting, several legislators urged the government to scrap the utility price increases, while others simply asked the government to heed to people's wishes. A delay in the utility price increases would mean the revision of the 2003 State Budget.

In a bid to finance the budget, the government announced increases on January 1 in telephone and electricity tariffs, and the removal of fuel subsidies.

The new policy has been strongly opposed by trade unions, students, non-governmental organizations and some legislators, who argue that the increases are too burdensome on the general public.

The House, however, has to take its share of the blame as it agreed to raise telephone and electricity charges and remove fuel subsidies when it endorsed the 2003 National Development Program (Propenas) and the State Budget in 2002. The government would not have introduced the increases had the House not vouchsafed its approval.

By asking the government to take into account the people's aspirations regarding the utility price hikes, the House is basically denying responsibility for its own decision, thus washing its hands of the issue and leaving the government to face the flak alone.

Akbar, also the chairman of Golkar, the second biggest faction in the House, justified the House's call for the annulling of the price increases, saying that it (the House) was only involved in approving outline programs.

"The House was only involved in drafting the broad policies," said Akbar, who was sentenced to three years in jail for his role in the misappropriation of Rp 40 billion from the National Logistics Agency (Bulog). He is still at liberty pending appeal.

House leaders, faction chairmen, and the relevant commissions are scheduled to hold a consultation meeting with the three coordinating ministers of Megawati's Cabinet on Wednesday evening to discuss the price hikes.

Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, according to an expert advisor, was ready to answer the House's questions, while Coordinating Minister for Social Welfare Jusuf Kalla has canceled a trip to Poso, Central Sulawesi, so as to attend the consultation meeting. Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono is expected to arrive from Aceh on Wednesday afternoon.

The consultation meeting, according to Akbar, is aimed at finding the best solution to the controversy.

Meanwhile, Megawati said on Tuesday that she had decided to meet with People's Consultative Assembly (MPR) leaders instead of a meeting face-to-face with MPR Speaker Amien Rais as he had requested.

Price hikes will help cut foreign debt, says Mega

Straits Times - January 13, 2003

Mengwi -- President Megawati Sukarnoputri yesterday defended her decision to raise fuel and power prices, arguing they were needed to end the country's reliance on foreign debt.

Protests have erupted across the nation over the past week, though they have been nothing like the wave of demonstrations over hikes in fuel prices that toppled the country's former president Suharto four years ago.

Some protesters have threatened bigger rallies and demanded Mrs Megawati's resignation if she refuses to roll back the price rises. No major rally took place during the weekend but hundreds of students staged a march to the centre of Solo in Central Java yesterday.

"I chose an unpopular but constructive policy for the long run, rather than opting for a populist step that may trouble us further," the President admitted, addressing tens of thousands of supporters of her Indonesian Democratic Party Struggle (PDI-P) at an anniversary commemoration in Bali.

"In the long run, we can reduce our foreign debt and no longer be tied up." She blamed past governments for the country's problematic foreign debt.

"The people have always been soothed by the lullaby of subsidies ... patching things with excessive exploitation of our natural resources and foreign loans," she said.

"It gained public support but destroyed our economic foundation. After 30 years placated by cheap prices, the hikes are indeed not easy to accept, but this is the best choice we have." She asked the people to stand behind her on this. "Indonesia, which is actually rich, can no longer conduct an economic policy which only relies on foreign assistance," she said.

"With all humility, I ask for the understanding of all PDI-P members and of the Indonesian nation, so that this choice to rebuild a stronger nation can be understood and supported, even though it is really difficult."

Earlier, 11 leading student groups called for more mass demonstrations today in a joint statement read out at the headquarters of the Muhammadiyah, the country's second-largest Islamic movement.

The government raised fuel prices by up to 22 per cent on January 2 in an attempt to reduce costly fuel subsidies and contain its budget deficit. Electricity and telephone charges were also raised on January 1. According to some estimates, the hikes could throw some three million Indonesians into poverty.

Indonesia said on Thursday that it may not seek a fresh loan programme with the International Monetary Fund when the current US$5-billion agreement expires later this year.

Jakarta has also announced a plan for six trillion rupiah in tax breaks to boost consumer spending in the wake of the price increases.

Attempts emerge to unseat Mega

Jakarta Post - January 13, 2003

Jakarta -- Riding the momentum initiated by mounting anti- government protests, several individuals representing different groups have become united in their efforts to unseat President Megawati Soekarnoputri and Vice President Hamzah Haz.

A detailed plan to unseat Megawati and Hamzah was discussed during a meeting hosted by Bung Karno Nationalist Party (PNBK) chairman Eros Jarot in Jakarta on Friday.

Various elements in society, such as student organizations, labor unions, non-governmental organizations (NGOs), legislators and individuals, attended the meeting.

Eros said on Saturday that the meeting had in principle agreed to set up a national presidium to replace Megawati and Hamzah and run the country.

"We have a common view that the Megawati-Hamzah administration can no longer be maintained. It is only a matter of how [to unseat the government]," Eros told The Jakarta Post.

His words confirm an earlier statement by Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono, who said that there were some movements trying to topple the government.

Among those attending Friday's meeting at PNBK's office, according to a source, were Teten Masduki from the Indonesian Corruption Watch (ICW), Andi William Sinaga from the Indonesian Prosperity Trade Union (SBSI) and representatives from a number of organizations, such as Kosgoro, the Social Democratic Labor Party, the Student Executive Body and the City Forum (Forkot).

Several influential legislators were also present, including Meilono Suwondo from Megawati's Indonesian Democratic Party of Struggle (PDI Perjuangan), Alvin Lee from the National Mandate Party (PAN) and Julius Usman from the Golkar Party.

Eros, a former close aide of Megawati's and a former executive of PDI Perjuangan, said that he and other people in the group were discussing ways to topple Megawati and then establish a presidium.

Eros, however, refused to disclose who would sit on the committee. One source told the Post that People's Consultative Assembly (MPR) Speaker Amien Rais and former president Abdurrahman Wahid were among those who had been invited to join the proposed presidium.

Abdurrahman confirmed on Thursday that he was invited to sit on the committee. He refused to mention the persons or groups that had invited him.

Initial speculation also hinted at Gen. (ret) Wiranto, former Indonesian Military commander and chief security minister, following a number of meetings between Wiranto and Abdurrahman.

Abdurrahman admitted that he had met Wiranto and also Amien on separate occasions recently. But he denied that they had discussed the issue of the proposed presidium.

The movement to unseat Megawati and Hamzah comes at a time when a series of mass antigovernment rallies have hit the country following the simultaneous utility price hikes earlier this month.

Eros, however, denied that his group was using the demonstrations to the movement's benefit.

Nevertheless, the chairman of the Indonesian Employers Association (Apindo), Djimanto, noticed that a certain group had tried to use the movement against the price hikes for its own political interest.

Although Djimanto said that his organization was still free from political influence, representatives of Apindo and labor organizations would meet with Amien on Monday.

Eros said that he and his friends realized that taking drastic measures, such as unseating Megawati and Hamzah, could have repercussions that further burden people.

"We will still go ahead, based on our calculations. The cost of changing the leadership is equal to the cost of doing nothing, and allowing corruption, collusion and nepotism to continue. It's like dealing with cancer. It's better that it is cut out, otherwise the disease will spread," he said.

He noted that disappointment and frustration with the current government not only affected students and activists but had spread into all levels of society.

"If we keep our ears open, you will hear people in coffee shops, markets and offices talking about the government's failures and they are saying that their lives have become worse," he added.

Megawati's party joins call for review of price hikes

Straits Times - January 14, 2003

Devi Asmarani, Jakarta -- The Indonesian Democratic Party- Struggle (PDI-P) headed by President Megawati Sukarnoputri has joined the chorus of protesters calling on her administration to review its price increases for fuel and utilities.

The party's unexpected stance yesterday came in the face of mounting pressure on her government to reverse the hikes which took effect on New Year's Day.

Fuel prices went up 22 per cent, electricity charges rose 6 per cent and telephone rates increased by an average of 15 per cent.

Yesterday, scores of lawmakers from various parties, riding the mounting anti-government tide, echoed these very demands when Parliament met for the first time this year. They warned that the government could just lose its legitimacy should their concerns go unaddressed.

The PDI-P faction chairman in Parliament, Mr Roy B.B. Janis, told reporters yesterday: 'We expect the government to postpone the enactment of the policy and, if possible, to lower the hikes. We are the people's representatives, it is our job to tell the government this because it is making people suffer." He added that other avenues were open to the government to achieve its goals.

Fifty-nine lawmakers signed a petition demanding that Parliament reject the price hikes. They also asked that the government throw out its policy where businessmen who owe money to the state are pardoned because they had helped it to recover billions of dollars from shut-down banks.

The petition also called on Jakarta to halt the country's dependence on the International Monetary Fund (IMF) and other international financial institutions.

Mr Lukman Hakim Saifuddin of the United Development Party who read the petition during a parliamentary plenary session yesterday told The Straits Times: "We want to show the public that we had nothing to do with all these decisions, despite the government's claim that we had approved them." He said he hoped Parliament would raise its concerns during a meeting between the President and parliamentary leaders that is to take place tomorrow.

"I think if the government has a conscience and is sharp politically, it would listen to us." There has been growing talk about toppling the current administration.

Several student groups, labour unions, non-government organisations, legislators and individuals met over the weekend to talk about setting up a "national presidium" to replace the Megawati-Hamzah leadership. Street protests across the country entered their second week yesterday.

National Assembly Speaker Amien Rais has hinted that the government should be prepared for a "constitutional means of removal" if it refused to yield to the protesters' demand. "A government on the verge of falling usually loses its sensitivity," he told reporters yesterday.

Analysts, however, expressed doubts that the movement would lead to the President's fall, considering the military and major parties' support for the Megawati government. But they feel that her lack of response has harmed her political career and her administration's performance.

"Megawati should communicate to the public, to convince them on the need to lift the subsidies, but she has only done this to smaller and contained audiences such as during her speech to her PDI-P followers on Sunday," said political analyst Bantarto Bandoro.

Corruption/collusion/nepotism

'Police rely on money from drug dealers'

Jakarta Post - January 17, 2003

Leo Wahyudi S -- Drug abuse is one of the serious problems facing the country, especially big cities like Jakarta. Under the antidrug laws which allow the death penalty for drug traffickers, 21 people have been sentenced to death. But none have been executed. The Jakarta Post talked to several people about the government's efforts to deal with drug problems.

Kremi, not his real name, 28, is a civil servant who works for the Ministry of Justice. He resides in East Jakarta: It's common for the death sentence to be given to high-profile drug traffickers. Unfortunately, I'm not optimistic that it will have a significant impact on the efforts to eradicate drug cases.

In fact, none of the 21 defendants who have been given the death penalty have been executed so far. Only if the firing squad shot to death one of the defendants, it might be a deterrent. I think the problem is complex because the police need money from drug traffickers to support police operations.

A police officer has once told me that the police indeed need financial support to continue cracking down on criminals. The fight against drugs will be effective only when law enforcers are clean and the corrupt are replaced by the new generation. I'm responsible for upholding the image of law to the public, but in fact I'm ashamed to admit that law enforcers' attitude is embarrassing.

Nobody trusts the law and its enforcers now. This is ironical, isn't it? We have heard how lawyers, prosecutors and judges often extort defendants in exchange for freedom. Police even offer various prices for different quality cells to convicted felons. In short, it's hard to describe the rotten court mafia. Money again has ridiculed justice.

Rita Olivia, 29, has worked as a lawyer at the Jakarta Legal Aid Institute for six years. She resides in Bekasi: I think the death sentence for caliber drug dealers has no significant impact on drug problems. There are still many drug dealers and abusers out there. Everybody knows that some nasty police officers might back up the illegal business. So, law enforcement is questionable in the eyes of the public.

I wonder if the arrest of drug traffickers is really in accordance with legal procedures. I'm skeptical about drug abuse eradication in the country. Only when the law enforcers have a strong commitment problems could be overcome. Personally, I disagree with the death sentence because it's against the international covenant on human rights.

Tatok, 27, a sidewalk vendor, sells accessories in Blok M, South Jakarta. He resides on Jl. Petukangan, South Jakarta: I do agree with the death penalty for drug traffickers because the rampant drug problems are intolerable. Regretfully, none of them has been executed. What's the significance of a verdict without its execution? The public is waiting for this.

If law enforcers were honest and dedicated to their jobs, the drug problems would be less rampant. We can see that some of the evidence is never brought to the court because some of it (illegal drugs) has been taken by police for their own benefit. Personally I have never taken any kind of drugs. I prefer alcoholic drinks.

I won't step down: Akbar

Jakarta Post - January 17, 2003

Jakarta -- Speaker of the House of Representatives Akbar Tandjung insisted that he would retain his position despite the fact that he has been convicted twice by two different courts for graft.

"I won't [step down] as the verdict is not yet final. I still have the chance to appeal to the Supreme Court. Until [the verdict] is final, I am still innocent," Akbar told reporters, aired by El Shinta radio station.

He, who admitted that he was disappointed by the verdict, said that he was innocent in the graft case involving the misuse of Rp 40 million of State Logistics Agency (Bulog) funds in 1999.

On Friday, the Jakarta High Court upheld the verdict by a lower court sentencing Akbar to three years in jail for the offense. The High Court declared that Akbar was guilty of misusing the funds, which was supposedly distributed to the poor. Many believe that the money was actually channeled to Akbar's Golkar Party for the 1999 elections.

Analysts have said that the verdict could endanger Akbar's prospects as a presidential candidate for the upcoming 2004 elections, as an extant law bans convicts from running for president.

'Corruption' in Indonesia logging war

BBC News - January 14, 2003

Rachel Harvey, Jakarta -- Rampant corruption in Indonesia is hampering attempts to tackle the problem of illegal logging, according to a report.

Indonesia's forests, home to endangered species, such as the orang-utan and Clouded Leopard, are being stripped. Campaigners claim up to 70% of Indonesia's timber comes from illegal sources.

The report comes ahead of a donors' meeting in Bali next week, at which the issue of sustainable forest management is due to be discussed.

National scourge

Indonesia's forests are disappearing at an alarming rate. Even in protected areas, such as national parks, huge swathes of unique tropical habitat are being destroyed by illegal logging.

According to the Environmental Investigation Agency (EIA), government efforts to tackle the problem are being undermined by widespread corruption.

In its report, the EIA said officials from the police and judiciary are being bribed or intimidated by powerful timber barons who are continuing to exploit Indonesia's natural resources with impunity.

'Out of control'

The director of the agency, David Curry, said the situation had reached a critical point.

"It's completely out of control," he said. "If you go out into any forested area, you will see illegal saw mills, you will see illegal loggers. "It's not difficult. They're absolutely everywhere. They're walking through police posts.

"No one's doing anything about this, other than taking their backhanders and letting business go on as usual." The EIA is calling for greater international pressure to force the Indonesian Government to confront the issue.

It wants to see an independent forest crimes unit established, with the power to arrest and prosecute anyone found to be involved in illegal logging operations.

Sustainable management of Indonesia's forests is on the agenda of a meeting of international donors in Bali, next week.

The message from environmentalists is that without a genuine commitment to root out corruption, all promises of help are doomed to failure.

Regional/communal conflicts

Bomb explodes in Ambon, causes chaos

Jakarta Post - January 14, 2003

Jakarta -- Shortly after several cabinet ministers arrived in Ambon, Maluku, an unidentified man threw bombs at passing cars, which exploded and damaged the rear end of a public minivan on Tuesday, Antara reported.

The first bomb, which was thrown at a private-owned car, failed to explode, but the second did. No casualties were reported during the incident.

The incident sparked anger among local residents of Batu Merah, where the incident took place. They later threw stones at the car allegedly carrying the bombers.

The driver, identified as Edy Singkeri, was injured and was sent to a nearby hospital. Meanwhile a soldier, identified as First Sgt. Edy Suatemo, was also injured after he attempted to calm down the angry mob.

Maluku Police Chief Brig. Gen. Bambang Sutrisno confirmed the incident, but he said the situation was under control.

"Everything is under control here. The ministers even passed through the area before they flew back to Jakarta," he said.

The identity of the ministers were not disclosed, nor were their agenda in the province, which has been locked in a bloody sectarian conflict for over six years.

Human rights/law

Soeharto blamed for Priok atrocity

Jakarta Post - January 17, 2003

Jakarta -- The National Commission for Missing Persons and Victims of Violence (Kontras) demanded on Thursday the Attorney General's Office charge former president Soeharto and his generals suspects with crimes against humanity committed in Tanjung Priok, North Jakarta 19 years ago.

Kontras chairman Ori Rahman expressed discontent with the fact that prosecutors investigating the Tanjung Priok massacre exempted Soeharto, Gen. (ret) Benny Moerdani and Gen. (ret) Try Sutrisno from 14 suspects declared recently.

Benny and Try were the Armed Forces chief and Jakarta military commander respectively when the bloodshed occurred in 1984. The current Special Forces commander, Maj. Gen. Sriyanto Muntrasan, heads the list of suspects, mostly military officers who were ordered to quell the antigovernment protests at the time.

It is estimated that at least 33 people were killed. "The naming of the suspects does not tell if gross human rights violations took place then," Ori said. He said former minister of justice Ismail Saleh was also to blame for failing to ensure fair trials were held.

Human rights trials criticised

Radio Australia - January 15, 2003

The Human Rights Watch annual report has singled out the government of Indonesia for failing to address human rights abuses by the military. It says human rights workers have faced increased persecution especially when they sought to investigate abuses in regions like Aceh and Papua. The Director of the Indonesia Project for the International Crisis Group in Jakarta goes further, saying the prosecution of crimes committed in East Timor is appalling.

Presenter/Interviewer: Peter Mares

Speakers: Sidney Jones, Jakarta-based Director of the Indonesia Project for the International Crisis Group

Jones: "There was very little effort made to try and actually make a case for crimes against humanity.

"It was more a case of failing to prevent violence between two warring parties, both of which were East Timorese, and that gave judges even had their been the political will to convict very little to go on. Given that it's fairly amazing that we had any convictions at all and even more so that the last conviction was of a military officer. Now the chances are he will get off on appeal and we have some of the major verdicts still to come."

Mares: And why this failure, is it simply a lack of political will?

Jones: "I think it's a combination of factors. Political will is probably the primary one, almost certainly the primary one, but there's also the issue of the legal system in Indonesia not ever having to deal with crimes against humanity before and simply not the knowledge in the system to bring the adequate case had there been the will to do so.

"I think those are the major issues and given that I think some of the judges deserve credit for pushing as far as they did to try and get convictions and in some cases using Rwanda precedents as an example."

Mares: This does seem to contrast with the high level of activity we're seeing in relation to the Bali bombings where the Indonesian police are being praised around the world for their action in relation to that crime?

Jones: "I think there's several factors at work however. "First of all we are dealing with the police and not with the military and the police see that they have everything to gain even in relation to their rivalry with the military by doing a good professional job on the Bali bombings.

"Secondly this has been a kind of on the job training for them in a way that they very much appreciated, particularly with help from the Australian Federal Police who've been marvellous.

"And I think third there's been a real desire to get to the bottom of this, it's not political in the same way that East Timor was seen as being the place where Indonesian unity was being defended and for that reason Indonesian nationalism was at stake. That's not the case with the Bali bombings."

Mares: What does this tell us then about other investigations underway, say for example the case of the murder of Theys Eluay the Papuan leader in the province of Papua where the Indonesian military stand accused by police of the murder, or the shootings at the Freeport mine in Papua where Americans were killed, where again the police have pointed to the military as being responsible for those crimes?

Jones: "I think anywhere in Indonesia where you have the military effectively fighting a counter-insurgency battle against separatists you're going to have this factor of nationalism kick in and you're going to see a total unwillingness on the part of the military to have the facts come to light.

"The military will try to prevent the police from pursuing these inquiries and in fact as I understand that they're already have been some effort to obstruct the case in Papua, both with respect to Theys Eluay as well as the case in Timika. Whether or not it will succeed in all cases I'm not sure but we're seeing an equal obstructionism in Aceh."

Mares: What examples can you give of the problems in Aceh?

Jones: "Well the best example is the Rutter case, which was a case in December 2000 where three humanitarian workers from an anti-torture organisation were killed and a fourth victim escaped at the last moment because he managed to untie himself.

"His information to the police led to the arrest of eight people, including four military and four civilian thugs. "The four civilian thugs all escaped from prison and that's escaped in quotation marks within two months after their arrest.

"The military people were eventually released for lack of evidence when in fact there was a good eyewitness account in great detail naming names and giving descriptions. And the fact that they couldn't even prosecute that case, let alone keep the suspects in prison, is indicative of the lack of will to prosecute."

Indonesia fails to tackle major rights problems: Right Watch

Jakarta Post - January 14, 2003

Jakarta -- The government of President Megawati Sukarnoputri has restored some political stability but failed to address human rights abuses by the military and endemic corruption, Human Rights Watch saidTuesday in its annual report.

The watchdog said human rights campaigners faced increased ersecution especially in the rebellious provinces of Aceh and Papua.

"Despite restoring some political stability to Indonesia during its year and a half in office, the administration of President Megawati Sukarnoputrifailed to deal with several major human rights challenges," the group said, as quoted by AFP. The government made only half-hearted attemps to hold the military accountable for human rights abuses in East Timor in 1999, the rights watchdog said.

The watchdog criticized Indonesia human right tribunal which failed to bring East Timor violators to jail, the trial of Bank Indonesi Governor Sjahril Sabirin and that of Speaker of the House of Representatives Akbar Tandjung.

Sjahril was sentenced to three years in jail for graft but later acquitted by a high court. Akbar, who was sentenced to four years in jail for graft, is currently appealing to a high court. Both remains in their positions.

Focus on Jakarta

Residents lose class action filed against Sutiyoso

Jakarta Post - January 17, 2003

Tertiani ZB Simanjuntak, Jakarta -- Residents of Kelapa Gading district, North Jakarta, lost on Thursday their class-action suit against Governor Sutiyoso at the Jakarta State Administrative Court.

The suit was filed by over 400 families of community unit RW 6 of West Kelapa Gading subdistrict against the governor over his decision to allow the construction of a sports mall in the area, which was designated for social and public facilities.

After a three-month trial, the judges hearing the case decided the suit was invalid. "The suit was filed with the court after the 90-day deadline after an administration policy is issued or after the policy recipient(s) suffer a loss caused by the policy," said presiding judge A. Manurung, who was accompanied by judges Bambang Heriyanto and Disiflin F. Manao.

The judges were referring to Article 55 of Law No. 5/1986 on the State Administrative Court. Supreme Court Circular No. 2/1991 issued on July 9, 1991, gives judges the leeway to count the deadline starting from the day the policy recipient(s) obtained a copy of the written policy or suffer any losses caused by the policy.

The reasoning behind this circular is that not all state institutions make public their policies. Representing the plaintiffs, the head of RW 6, Harry A. Roboth, and a team of lawyers said they would challenge the ruling with the high court. Lawyer Carrel Ticulau said the ruling was flawed because the judges repeatedly ignored demands for a suspension of the construction of the sports mall, and they also did not allow expert witnesses to testify in court on the designated function of the area.

Another lawyer, Tubagus Haryo Karbyanto, said the residents would file a similar suit at the Central Jakarta District Court against Sutiyoso, Yayasan Darma Bakti Mahaka and construction company PT Adhikarya.

The case revolves around the issuance of a gubernatorial decree on July 19, 2001, authorizing Yayasan Darma Bakti Mahaka to build the Kelapa Gading International Basketball Complex on the 26,215 square-meter plot of land on Jl. Kelapa Nias, where the community unit is located. A ceremony to mark the construction took place in conjunction with Jakarta's anniversary on June 22.

The residents say the administration never informed or involved them in the plan. The construction was halted until Sutiyoso renewed the decree on Februrary 8, 2002. On Februrary 25, about 400 families in the community unit, as well as the heads of the neighboring RW 7 and RW 11 community units, signed a petition against the construction, which they said disturbed the peace, obstructed the road and polluted the air.

Moreover, the land is where the squatters along the Kelapa Gading River used to plant vegetables to eat," Roboth told The Jakarta Post after the trial. Ticulau, who also lives in Kelapa Gading, said the residents had spent six months asking the administration to clarify the development of the land.

It was only in August that we finally obtained a copy of the decree and found that no environmental impact analysis had been made. So when we filed the suit at the court on Aug. 12, we were still within the deadline," he said. Despite the administration's claim that the sports mall will be the largest in Southeast Asia, Roboth said the area only consisted of one outdoor basketball court surrounded by 264 shop-houses that were for lease.

The construction is still unfinished, and residents have put up banners expressing their displeasure with the sports mall in order to deter people from leasing the shop-houses.

News & issues

Cafe ransacked by gang of eight

Jakarta Post - January 17, 2003

Bogor -- Eight people, including a man in military uniform, ran amok at a cafe in the district of Kemang in Bogor early Thursday morning, damaging the establishment and injuring the cafe owner and his father, as well as two employees.

Iwan Setiawan, 31, owner of Lumbayung Cafe, said that the incident occurred at around 2 a.m. He was just about to close the cafe when the eight people walked in. The one who wore the military uniform claimed that he was an officer from the Atang Sanjaya Air Force Base, Iwan said.

They asked for beer, but when an employee served them only one bottle, they became angry and hurled the bottle. Iwan's father, Imron Nila, 60, tried to calm them down, and one of the men hit his head with an ashtray. Iwan and two employees were also beaten.

The group then ransacked the cafe before leaving on several motorcycles. Spokesman of the air force base, Capt. M.I. Adam, told reporters that he knew nothing about the incident.

Police detain dozens over PDI-P attack

Jakarta Post - January 17, 2003

La Remmy, Palu -- Police here said on Thursday they had arrested at least 30 people suspected of involvement in an attack on the headquarters of President Megawati Soekarnoputri's party in Palu, Central Sulawesi.

However, six of them were released, due to lack of evidence, and the remaining 24 are being held for interrogation, Central Sulawesi Police chief Brig. Gen. Taufik Ridha said. At least seven of the detained people including students, workers, non- governmental organization activists and jobless people, have confessed to some role in the attack on Wednesday, he added.

The attack was apparently precipitated by hundreds of protesters angry over the steep rise in fuel, electricity and telephone prices, and they directed their anger at the PDI Perjuangan headquarters.

No casualties were reported, however. It took place as Megawati canceled a visit to the Central Sulawesi town of Poso on Wednesday to lead a ceremony marking the National Social Solidarity Day, in which she would have handed over aid to victims of sectarian unrest there.

Sjafrun Abdullah, a deputy party chairman of the Central Sulawesi chapter, said his colleagues had taken Wednesday's incident to the provincial police for investigation. "This [Thursday] morning, six party executives officially reported the attack to the police. We asked them to process the case of destruction of our office. Those proven to be involved in the attack must face justice," he said.

PDI Perjuangan expected the police to take legal action against the attackers, said Sjafrun, who is also a deputy speaker of the provincial legislature. "But if, after a certain deadline the investigation process remains fruitless, PDI Perjuangan militia gangs will round up those responsible for the destruction of our party's headquarters," he warned, but stopped short of an exact date of the deadline.

He confirmed that his party supporters initiated the search for the attackers on Wednesday night, but found none as they were suspected to have fled Palu. Sjafrun, however, denied allegations that PDI Perjuangan private security force had abducted local residents blamed for the attack.

Police personnel and PDI Perjuangan men provided tight guard at the rampaged office on Thursday as it received threats of more attacks from several unidentified callers. Aco, a PDI Perjuangan activist, who received the phone threats, said the callers told him that a mob would storm the office again for a further attacks. In a response, Aco told the callers that PDI Perjuangan was ready to take revenge against them.

Meanwhile, Ferry Anwar of the Presidium for South Sulawesi Poor People's Forum threatened to mobilize thousands of protesters to occupy the provincial police headquarters on Thursday if his colleagues being held for the attack were not released.

But by Thursday evening, the promised occupation did not take place despite hundreds of students staging a noisy rally on Jl. Diponegoro, across town, in a protest against the utility price hikes. They blocked the Palu-Donggala highway for around five hours, causing a heavy traffic jam and seized a fuel station. The demonstrators dispersed after negotiations between them and Palu Police chief Adj. Sr. Comr. Haka Astana.

Mega price hikes fuel Indonesia's discontent

Asia Times - January 15, 2003

Gary LaMoshi, Denpasar -- On New Year's Eve, I pulled into my local Pertamina station. While waiting for my tank to fill, I asked the attendant about gasoline prices for January; for the past year, the Indonesian government has adjusted the cost of fuel on a monthly basis and usually announces the new prices a few days in advance. "Belum tahu," he replied; he didn't know yet.

At the same time, just a couple of kilometers away, President Megawati Sukarnoputri and her cabinet were at the Grand Bali Beach Hotel for a book launching party for Indonesia's first husband Taufik Kiemas. The launch coincided with Taufik's 60th birthday, and a highlight of the day-long festivities was a gigantic cake, of which Megawati enjoyed a presidentially proportioned slice.

On New Year's Day, the government announced that fuel prices would rise 22 percent, along with 15 percent hikes in telephone charges and the first of quarterly 6 percent spikes in electricity rates. Now we know how to say to "let them eat cake" in Bahasa Indonesia.

The price hikes have evoked nationwide protests, now in their second week. Megawati and Vice President Hamzah Haz, an economist who understandably prefers acting as Indonesia's chief mullah to bait the United States, are the principal objects of scorn. Since police have promised arrest to those defacing state symbols, including burning the leaders in effigy, protesters have been more circumspect, assuring that they're not trying to topple the regime. That's wise, given the alternatives; legislators that approved the price hikes last year have joined the howling masses and called for hearings.

The demonstrations, nevertheless, constitute the most serious threat to Megawati's 18-month-old regime. The presence of middle-class and business groups among the usual suspects echoes the coalition that brought down Philippine leader Joseph Estrada two years ago, but the Indonesian military, unlike its Philippine counterpart, has shown no interest. The crassness of the government's sudden announcement and its timing also make it easy for Indonesia's rabble-rousers to connect the dots about what really ails Indonesia's economy. Too easy.

Blame the tycoons

During the waning days of 2002, the administration signed off on implementing the deal made by B J Habibie's government to drop criminal charges against tycoons who abused Rp144.5 trillion (US$16.4 billion) in emergency rescue loans for their banks to speculate against the rupiah and worse.

The original release and discharge (R&D) agreement called for the banks' parent conglomerates to repay the government to escape prosecution. None have. The cooperative ones have made token repayments of dud assets, worth pennies on the dollar, to gain their immunity. Last week, a court found that the R&D deal's implementation precluded a "guilty" verdict against one banker.

Without the threat of prosecution and jail, remote given the "for sale" signs on Indonesian judges, any chance of getting more than nominal repayments and cooperation from tycoons vanishes. Moreover, R&D smoothes the well-traveled road for conglomerates to repurchase their pledged assets at a fraction of the value of the repayment credits they received from the government.

There is much talk about "people's sense of justice" being offended by the price hikes so closely following R&D implementation. There's a belated realization that the state's loan losses through corruption are connected to the budget deficit and the sputtering economy. The two largest Muslim organizations have called on the government to jail corrupt figures, though neither mentioned the top thief, former president Suharto. Of course, the government can argue that it always has and will continue to pursue vigorously all criminals, except, of course, those covered by R&D.

Blame the IMF

Many protesters and authors of negative articles flooding the local press blame Megawati for doing the International Monetary Fund's (IMF) bidding. In fact, the IMF's rescue package urges that Indonesia cut its budget deficit and reduce its mammoth subsidies to encourage more rational investment. The fuel price hikes alone will knock Rp30 trillion off this year's budget gap.

Megawati's government is happy to let the IMF take the blame. That line of thinking conveniently transfers the guilt to foreigners, outside the government's control. Better to be painted as the pawn of Western financiers than the protector of thieves.

While the price hikes have their roots in IMF-directed orthodoxy -- probably not the best prescription for the Indonesian economy at this time -- the protesters miss a key point: eliminating these subsidies makes sense. Fuel and utility price hikes resonate throughout the entire economy through higher transport and production costs, but the direct hits fall on the relatively rich. Overall, few Indonesians own vehicles, fewer than 5 percent have telephones, and 45 percent don't have electricity. The urban middle class that took the hardest lumps in the 1997 crisis will bear the brunt of this assault, not the poor masses the protesters purport to represent.

Cushioning the blow for the poorest, the government also announced a Rp5 trillion relief program, including subsidized rice rations. The cost of kerosene, which most poor use for cooking, also remains heavily subsidized.

In the wake of the protests came further announcements last week of an assistance package for small businesses, clumsily timed to head off their participation in a mass protest planned for Thursday in Jakarta (it fizzled, drawing far fewer than its 25,000 anticipated participants), and a further export industry stimulus plan.

Blame the government

The IMF program may be a problem and the failure to jail the corrupt, past and present, certainly is. So is the political class's blatant disregard for appearances, partying down in Bali for the new year and handing regular folks the hangover.

Megawati's notorious reluctance to speak publicly on key issues makes the situation worse. Even when she has a forum, such as her New Year's address on national television just after the stroke of midnight in Bali, she spouts a few cliches and takes a seat. She belatedly came out of her shell on Sunday, 10 days after the price hikes were announced, to tell a party gathering that the subsidies led to piling up foreign debt (curse you, IMF) and that ending them will help the economy in the long run. Normally, her words are revealed only through participants in meetings with her. Merdeka Palace doesn't even have an official spokesperson.

The price hikes would have been far more palatable and understandable if government ministers had interrupted their holiday in Bali to present them as part of a coherent economic strategy. Along with new incentives for business and anti-poverty funding, the ministers would explain how these moves were part of a program to hasten Indonesia's recovery from five years (and counting) of economic crisis.

The real trouble is that the government doesn't have a coherent economic strategy to present. The leadership can toast itself on a number of successes in 2002: the rupiah didn't collapse after the Bali bombings; the Jakarta stock exchange had a better year than Wall Street; interest rates fell from over 16 percent to 12.75 percent; and inflation barely crossed into double digits.

None of those wins, however, moved Indonesia any closer to meaningful recovery, which requires, above all, putting the estimated 30 million unemployed to work. It also requires ending the corruption in business and government that chokes off opportunities for all while benefiting a favored handful (most of whom could be found in Bali over New Year's). Investment figures for 2002, along with yet another decline in foreign capital, featured a fall from internal sources. In other words, even Indonesians don't want to invest in Indonesia any more.

Formulating an economic strategy for Indonesia is hard. Cutting government subsidies is easy, and it keeps people talking about the wrong things. Maybe Megawati isn't as stupid as people think.

Military warns protesters against toppling government

Jakarta Post - January 14, 2003

Karawang -- The Indonesian Military (TNI) on Monday said it was the right of citizens to protest over recent price hikes but warned against hidden agendas, including toppling the government by calling for the establishment of a presidium to rule in the place of the president.

"It's people's right to voice their aspirations [through street rallies] but protesters should not commit 'unconstitutional acts' to get their message across." TNI Chief Gen. Endriartono Sutarto told reporters after briefing Army officers from across the country who gathered here for a two-day meeting.

Endriartono also urged proponents of a national presidium to replace President Megawati Soekarnoputri and Vice President Hamzah Haz not to continue with their plan.

Last Saturday the Bung Karno Nationalist Party (PNBK) chairman Eros Djarot said various elements in society, including student organizations, non-governmental organizations, legislators and individuals agreed in a meeting to set up the presidium.

Pak Amien has acknowledged the existence of such groups, including a presidium. "I urge them not to continue [with their activities]," Endriartono warned.

He was referring to People's Consultative Assembly Speaker Amien Rais, who is among those who staunchly oppose the government's decision to increase fuel prices and utility charges.

Meanwhile Army Chief Gen. Ryamizard Ryacudu said that people's grievances over recent price hikes were genuine and should therefore be heeded.

"Students' aspirations must be heeded because they are genuine and have no vested interests. Students, like soldiers, want nothing but security," Ryamizard told reporters after opening a two-day meeting of Army unit officers and commanders from across the country.

The meeting was attended by 566 officers, including regional military commanders and battalion commanders. Ryamizard reminded the officers that the TNI was a state apparatus and the people's army, and must therefore avoid taking sides.

"We cannot take sides. We are concerned [with the current situation], but people need to be taken care of," he said, adding that he had ordered troops to help people hardest hit by the price hikes.

Ryamizard declined to comment on allegations that there were efforts to topple the government, saying he could not comment on intelligence findings.

He was responding to a question regarding a statement by Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono last week that there were groups aiming to overthrow the government.

Ryamizard denied the officers' meeting was prompted by the latest developments in the country, saying it was previously scheduled.

"Especially in this unfavorable situation, they [unit commanders] must pay close attention to this situation. If, for example, they normally go to bed at 11 p.m., now they have to stay up later to monitor the situation," he said.

Environment

Illegal logging costs $609 million, environmental destruction

Jakarta Post - January 17, 2003

Moch. N. Kurniawan, Jakarta -- Widespread illegal logging costs US$609 million annually in environmental destruction throughout the country, an expert has said.

Senior lecturer at the Bogor Institute of Agriculture (IPB) Bintang Simangunsong said here on Thursday that the main impacts were in the form of carbon consumption, landslides, floods and non-wood product extraction.

According to Bintang, only 18.9 million hectares of 46.8 million hectares assessed were primary or virgin forest, while 14.3 million hectares were already destroyed, more than half of which was due to illegal logging. The destroyed forests could no longer be expected to produce wood.

"This is complete mismanagement of the country's forests by the government. What can we can do with the damaged forest? -- nothing," he told a media conference ahead of the Consultative Group on Indonesia (CGI) meeting next week.

Bintang said at least 1.45 million hectares of forest were felled annually, of which only 0.67 million hectares was legal felling. He said carbon consumption in the forests could be worth U$113 per hectare, while non-wood products could reach $9 per hectare. The government said on Wednesday that illegal logging activities produced 50.7 million cubic meters of timber annually, resulting in financial losses to the state of at least Rp 30.42 trillion ($3.

7 billion). According to Bintang, illegal loggers enjoyed most of the income generated from logging activities. "At least 50 percent of the revenue goes to illegal loggers, 30 percent to private companies and the government only gets 20 percent," he said. "This certainly represents a huge transfer of money from the people to a few illegal loggers and private firms," Bintang added.

Indonesian military (TNI) chief Gen. Endriartono Sutarto acknowledged on Wednesday that certain military personnel were behind many illegal logging operations in the country and promised to crack down on them. TNI and the Ministry of Forestry agreed on Wednesday to set up a joint team to go after illegal loggers throughout the country.

Environmental activists said that overcapacity of the country's pulp, saw, and plywood mills had also encouraged people to engage in illegal logging activities. According to data issued by the Indonesian Forum for the Environment (Walhi), the total capacity of the country's pulp mills, sawmills and plywood factories is 63 million cubic meters per year, while the total legal timber produce is 12 million cubic meters per year, meaning there is an annual shortage of almost 51 million cubic meters of timber.

And to make matters worse, the illegal timber is also directly exported to neighboring countries, including Malaysia, Vietnam, China and India.

The government has tried to crack down on illegal logging through various means, such as agreements with timber importers in receiving countries to refuse illegal timber, and reaching agreements on joint operations with TNI and the police, but the results are far from satisfactory. The joint operation, for example, confiscated only 26,600 cubic meters of illegal timber in 2001.

Walhi called on the government to close down unnecessary pulp, saw and plywood mills to stop illicit logging activities. "It will be impossible to stop illegal logging in Indonesia without addressing the enormous overcapacity in the wood processing sector," said Longgena Ginting, Walhi's executive director.

Water privatization to result in major natural disaster

Jakarta Post - January 15, 2003

Moch. N. Kurniawan, Jakarta -- The Indonesian Forum for the Environment (Walhi) has said that people would have difficulty in obtaining water if the government went ahead with its plan to privatize the natural resource.

It said water shortages might become a major disaster this year as droughts, floods, forest fires and landslides are expected to continue.

Walhi's executive director Longgena Ginting said that once water supplies were privatized, not only would people living in cities pay fees for it, but so would farmers in rural areas, "because the planned privatization is feared to take the side of corporations rather than that of the people".

The government has submitted to the House of Representatives a bill on water, which allows local administrations to privatize water supplies and allow private foreign and domestic investors to enter the market.

Ginting said Walhi and other pro-environment non-governmental organizations (NGOs) had joined forces to oppose the bill, which would deny people's access to water.

House Deputy Speaker Muhaimin Iskandar of the National Awakening Party also said he also shared a similar concern and fear, adding that water supplies would be controlled by the private sector.

He regretted that water sources in mountainous resorts, especially in Java, Sumatra and Kalimantan, were controlled by private companies for business, while domestic and foreign investors have interfered with the supply of water to people in urban areas.

The government policy on water privatization has sparked protests and criticism as it denies people's access to water, and it has not improved the government-owned tap water companies' service to their consumers, he said.

Ginting said that the government had also submitted other bills that give more chances for the private sector to control natural resources, including water, oil and plantations.

He called on the House to be extremely cautious when deliberating the bills since it would be difficult to annul them once they were endorsed.

"The government should supervise private companies when managing water supplies to preserve the environment and avoid natural disasters," he said.

Military ties

US, Indonesia's military closer to renewing ties

Asia Times - January 15, 2003

Tim Shorrock, Washington -- The US Congress may vote as early as this week to restore a military training program for Indonesia despite uncertainties about the Indonesian military's human- rights record, according to House and Senate aides and observers of US-Indonesian relations. But passage of the Bush administration's US$400,000 request for International Military Education and Training (IMET) for Indonesia, while highly symbolic, may not guarantee the immediate start of the program.

Instead, the administration of President George W Bush may delay implementation until the full results of the Federal Bureau of Investigation's (FBI's) investigations into the August 31 killings of two Americans near the FreeportMcMoRan mine in West Papua are made public and Indonesia has taken action to punish those responsible. "When the training commences may be based on the outcome of this case," said an aide to a US lawmaker who has been critical of the Indonesian military, known as TNI. "Just because its authorized doesn't mean it will resume right away." The FBI report, however, is unlikely to be released before the appropriations bills are considered, he added.

Some critics of US policy fear the administration is trying to find a face-saving way to restore military aid to Jakarta by blaming "renegade" units of the Indonesian military for the West Papua ambush, which also killed an Indonesian citizen and left several survivors seriously injured. "If the administration signs off on that, we're essentially conspiring in a cover-up to prevent full accountability by people responsible for the murder of US citizens," said Ed McWilliams, a former State Department official who served as a political officer in the US Embassy in Jakarta during the 1990s.

The $400,000 IMET funding was narrowly approved last summer by the Senate and House appropriations committee after a strong lobbying push by the Bush administration, which linked closer ties to Jakarta to its global war against terrorism. But Congress adjourned before either the House or the Senate could vote on the measure, which is now back before the appropriations committees. Both the House and Senate are likely to consider the 2002 bill before Bush's State of the Union address on January 28.

"It's a small amount, but very symbolic because it was the first thing Congress cut in 1992," said John Miller, an activist with the East Timor Action Network, which opposes the aid package. "The Indonesian military will take it as an endorsement of business as usual."

US military ties with Jakarta were suspended in the 1990s over the TNI's bloody record in East Timor and Indonesia's failure to bring human-rights violators to justice. An amendment by Vermont Senator Patrick Leahy has prohibited new IMET funding until Congress verifies that the Indonesian government is cooperating with investigations and prosecutions of soldiers and military leaders responsible for human-rights abuses in East Timor and provinces in Indonesia. The Senate amendment approved last year overrode Leahy's language.

Leahy will again lead the battle to defeat the IMET spending and will be joined by House opponents, including Representative Nita Lowey of New York. But opponents don't believe they have the votes to defeat the request. "We are in a minority on that subject," said one aide. "We're likely to see the IMET program renewed." Another aide said opponents of the program hope to see the FBI report before any vote takes place. "We're obviously going to raise it, but we're unlikely to get the report before a decision is made," he said.

There is no doubt that the Freeport incident has complicated Bush's plans to resume full military ties with Indonesia. Last month, Bush told Indonesian President Megawati Sukarnoputri to find and punish the perpetrators of the Freeport ambush. He also asked for a joint FBI-Indonesian police investigation into the allegations that elements of the TNI may have been responsible.

Bush made his call after the Washington Post, citing US intelligence, reported that senior Indonesian generals discussed an attack on Freeport before it occurred. The conversations, the Post said, were "aimed at discrediting" a Papuan separatist group the TNI later blamed for the attack, and were supported by intelligence intercepts supplied to US officials by Australia. Observers here believe that the FBI's initial report on the incident will substantiate claims from the Indonesian police and Papuan human-rights groups that the killings were the work of the TNI's special forces.

Last week, however, Indonesian government officials rejected the accusations. "The investigation into the shooting of the Freeport employees on August 31 has yet to find the perpetrators," Indonesian Security Minister Susilo Bambang Yudhoyono said after a cabinet meeting on January 6. "Secondly, charges of involvement by rogue members of the military have been investigated and evidence has not yet been found."

The Megawati government also turned down Bush's request for a joint investigation similar to the one launched after the terrorist bombing in Bali last year. Instead, Indonesian officials have allowed an FBI team into the country but made no commitments on granting access to witnesses and other assistance. "They are outsiders," an aide to Susilo pointedly said.

Some analysts believe Indonesia's decision last week to release an American nurse being held in Aceh for visa violations may be linked to the upcoming debate over restoring IMET. The nurse, Joy Lee Sadler, could become a thorn in the Bush administration's side as it lobbies for increased aid, however. "I will try to lobby the Congress and stop military weapons delivery to Aceh and tell the United States the military cruelties that I have seen and I have experienced," she told the Associated Press upon her release. Lesley McCulloch, 43, an Australia-based academic and occasional Asia Times Online contributor who was arrested with Sadler last September, is due to be released next month (see Indonesia's message: Researchers risk jail, January 3). The administration's response to the lack of cooperation on the West Papua incident has been muted. Bush has yet to make a public statement on the Freeport killings. Deputy Defense Secretary Paul Wolfowitz, the administration's point-man on Indonesia, told the Washington Post in November that, even if the TNI were implicated, US military aid should continue because "more contact with the West and with the United States and moving them in a positive direction is important both to support democracy in Indonesia and to support the fight against terrorism".

The clearest statement of US policy was made on December 17 in a Jakarta speech delivered by US Ambassador Ralph L Boyce. "Full restoration of military ties and foreign military financing depends on Indonesia demonstrating progress toward holding those responsible for past gross human-rights violations accountable for their actions -- something that has not yet happened," he said. "We stand ready to move forward in this area but cannot do so until there is justice for the serious human-rights violations committed in East Timor and elsewhere." He did not specifically mention the Freeport attack.

While IMET may be funded, neither Congress nor the administration is pushing to sell new weapons to Indonesia.

Last month, the RAND Corp, a think-tank funded by the US Air Force, issued a long study on US-Indonesian military ties that urged immediate resumption of IMET. "Since military training for Indonesia was effectively terminated in 1992, there has been a 'lost generation' of Indonesian officers -- officers who have no experience with the United States or who have no understanding of the importance that the United States military attaches to civilian leadership, democracy, and respect for human rights," the report concluded.

"It's in our national interest to have strong bilateral military ties," said retired Colonel John Haseman, a former US defense official in Jakarta who helped write the report, at a December news conference sponsored by RAND and the US-Indonesia Society.

Asked whether TNI involvement in the Freeport ambush would or should compromise IMET funding, RAND analyst Angel Rabasa said that reports about the "obscure incident" are "being taken very, very seriously" within the Bush administration and the Pentagon. But Rabasa, the co-author of the report, argued that a full investigation in Indonesia could help make the case for IMET. "If Indonesia does the right thing, it could strengthen relations and our ability to engage" with the TNI, he said.

Martin Ott, a professor of national-security policy at the National War College, said after the news conference that "some level of TNI involvement" was possible. But even if that were found to be true, Ott said he would support expanded military ties because "on balance you want to build those relationships". He compared the situation to Pakistan, where a "tiny coterie" of military officers trained by the United States led Pakistan's decision to support the US war against terrorism against the wishes of a faction of Islamic officers. "You have a similar template in Indonesia," he said.

Economy & investment

Indonesia redefines luxury

Asia Times - January 17, 2003

Bill Guerin -- The Indonesian government raised fuel prices, electricity rates, and telephone charges at the start of the year in an effort to slash expensive subsidies and help ailing state- owned utilities.

However, these measures would have hit businesses hard and a stimulus package of tax breaks quickly followed. Twenty categories of products, including televisions, mobile phones, food and beverages, are no longer considered luxury items.

Cellular phones, TVs up to 21 inches, washing machines, refrigerators, low-output air conditioners, low-end videocassette recorders (VCRs), video compact disc (VCD), digital video disc (DVD) and audio players, low-end cameras and a range of other items will have the luxury tax removed altogether. Tax is being reduced on higher-end VCRs, VCD, DVD and radio/cassette players, high-end cameras and larger TVs, washing machines and air conditioners.

The measures will help reduce the cost of the products, enable manufacturers to compete against cheaper smuggled products and help increase domestic demand. The package will cost the government about Rp6 trillion (US$660 million) in lost tax revenue.

From 1990-95, Indonesia was up among the top-ranked Southeast Asian countries targeted by the world's largest electronics manufacturers. Major producers, mainly from Japan and South Korea, relocated their factories to Indonesia, but a dearth of investment since then has taken a heavy toll on the electronics sector.

Foreign manufacturers still dominate the national electronics industry and make up 90 percent of the total of Indonesia's electronic goods manufacturers, but tax incentives are non- existent. There are no tax incentives or even tax holidays to encourage global electronics producers to set up new Indonesian manufacturing plants for electronic components, consumer and industrial electronics.

New investment is badly needed to anticipate increasing demand for electronic products but despite the massive pool of cheap labor and the attraction of the biggest domestic market in Southeast Asia, manufacturers have steadily moved to neighboring countries such as Malaysia, Vietnam and China because of the unfavorable tax policies in Indonesia.

The high levels of the so called "luxury tax" on imports encouraged smuggling and boosted demand for products with lower prices as the prices of legally imported electronic products became more expensive, which in turn limited market demand.

Electronics giant Sony Corp toward the end of last year shelved its investment plans because of weakening sales, lingering labor conflicts and security problems, sparking genuine fears that only low-end electronic products will be manufactured in Indonesia. The Sony move caused the loss of about 1,000 jobs but the electronics sector employs an estimated 1.19 million, dwarfing the footwear industry's 389,000 and the 250,000 jobs provided by the textile sector. Indonesia's main claim to fame is that it currently produces 50 percent of the VCRs sold in the global marketplace, though the shadow of obsolescence looms as demand moves to digital-based products.

Sony relocated its audio plant to neighboring Malaysia, whose electronics industry, though still largely concentrated at the lower end of the assembly and packaging of semiconductor components and consumer electronic goods, is decidedly export- oriented.

Electrical and electronics products account for more than half of Malaysia's total exports and the country's biggest export product is semiconductor devices used in a diverse range of industries, such as automotive and telecommunications.

Malaysia's Multimedia Super Corridor project has fueled a move toward a stronger technology focus within the sector and the country is likely to benefit from high-tech electronic manufacturing plants, which might, in better circumstances, have been built in Indonesia (see Malaysia's dream of being an IT powerhouse

Conversely, many Singaporean electronics manufacturers have moved production across the water to Indonesia. Electronics manufacturing accounts for almost half of Singapore's manufacturing sector, which itself accounts for around 25 percent of the island's gross domestic product.

Last April, Singapore brought the Indonesian islands Batam and Bintan into their now-concluded bilateral free-trade pact with the United States. The new free-trade agreement will allow electronic components made in Bintan and Batam tax-free entry into the US and give the industry a tremendous boost.

It also boosts the Association of Southeast Asian Nations' (ASEAN) attractiveness as an alternative site for US companies in the face of increasing competition from mighty China, which has won billions of dollars in investment since its entrance into the World Trade Organization.

Demand in the sector is volatile. Though there were signs of an Indonesia consumer spending boom early last year, the sagging domestic consumption that surfaced mid-year saw a fall of 26 percent in sales of electronic goods in July and August.

Weaker consumer confidence in the wake of the Bali bombings further put the brakes on domestic demand and the weak market demand further discouraged new investments in the domestic electronics industry. Last year's sales of electronic products netted only about Rp32 trillion ($3.5 billion) against an expected market potential of about Rp50 trillion. Rampant smuggling and usurious levels of taxes have discouraged new players and angered the existing manufacturers.

At the turn of the century, facing a massive budget deficit, the government brought in an aggressive tax policy. One consequence was that imported electronic goods attracted tax rates of some 20 percent but a stifling 32.5 percent if manufactured in Indonesia.

Lee Kang Hyun, chairman of the Indonesian Electronics Manufacturers' Association (IEMA), who just happens to be the marketing general manager at PT Samsung Electronic Indonesia, says some 50 percent of the electronic products traded in Indonesia are illegally brought into the country. This is a damning indictment and IEMA has been lobbying the government for at least two years to take firm action to curb smuggling.

Local manufacturers whose businesses face serious threats from cheap, smuggled goods have time after time pressed the government to reinstate the pre-shipment import inspection (PSI) system, abandoned in 1995. PSI meant an independent agency One civil servant earns a gross salary of about US$225 per month, barely enough to survive on in ... Jakarta. Yet he not only lives in a prime residential district in South Jakarta but has two motorcycles and a Peugeot convertible. The Corruption in Excess Department could inspect imported goods in their country of origin, taking over this responsibility from the Indonesian customs, where so many officials turn a blind eye to import document manipulation, including under-invoicing and smuggling.

The customs office is widely held to be the nation's most corrupt institution, and known for being vindictive against companies that expose its malpractices in the media. Importers blatantly use under-invoicing to manipulate their product prices. Offering far lower prices than local manufacturers or legitimate importers, their products are highly competitive on the local market.

Samsung Indonesia produces the largest volume of exported electronics in Indonesia and has spent about $65 million to develop its facilities and gear up to become the largest producer in Southeast Asia. Samsung makes a wide range of electronic goods, such as VCRs, CD-ROMs (compact disks - read-only memory), DVD combos, television sets, refrigerators, cellular phones, air conditioners, computer monitors and washing machines.

Samsung was one of a number of major electronics firms left out of a new facility for 10 automotive and electronics companies to clear their imported goods faster and cheaper through customs at Tanjung Priok seaport.

The Directorate General of Customs and Excise introduced the scheme last October, which allows the favored 10 access to a "priority lane" at the port through which they clear their goods without undergoing document examination and physical checks by customs officials. The 10 companies are PT Toyota Astra Motor, PT Astra Daihatsu Motor, PT General Motors Indonesia, PT Indomobil Suzuki Internasional, PT Astra Nissan Diesel Indonesia, PT Denso Indonesian Corp, PT National Gobel, PT Sanyo Industries Indonesia, PT Sharp Yasonta Indonesia and PT LG Electronics Indonesia.

The new fiscal incentives may encourage some of the other main players to enhance their production capacity this year and the Association of Indonesian Electronics Producers (Gabel) points out that slashing luxury taxes has increased the bargaining power of local manufacturers with their principals abroad.

There may be more good news ahead for the sector. Trade and Industry Minister Rini M Soewandi said over the weekend that a second fiscal stimulus package for export-oriented industries was being considered, to help lessen the impact of the utility-price hikes. Domestic consumption has been the mainstay of growth over the past two years and Rini is committed to tax incentives to help local exporters improve their competitiveness overseas.

ASEAN and its free-trade area (AFTA) offer great potential for exports. Electrical and electronic equipment accounts for a substantial share of intra-ASEAN trade, up from 30 percent of inter-regional exports in 1993 to almost 40 percent last year. Last April ASEAN economics ministers signed a mutual recognition agreement (MRA) for such equipment, a move that is expected to reduce significantly the cost of inter-regional trade in these two categories of goods.

The MRA enables member countries to recognize the testing and certification of imported electronics and electrical equipment conducted in another member country or the country of origin. The main benefit is that the entry of electronics and electrical equipment manufactured in one ASEAN country will no longer be subject to testing and certification in the country of importation, which can be technical barriers to trade.

Investors desert Indonesia as rot of corruption sets in

Sydney Morning Herald - January 17, 2003

Matthew Moore, Jakarta -- Millions of Indonesians face poverty as investors continue to desert the country largely because of rampant corruption and collapsing infrastructure, a new report says.

While the Government was praised for keeping its budget under control and bringing down the level of debt, the World Bank report on Indonesia released yesterday said the country had to attract more investors.

The report came as the Government caved in to demonstrators protesting against rises in the price of fuel, electricity and telephone introduced on January 1 as a way of removing subsidies on these items, but which mainly benefit the wealthy.

Although the Government has announced plans to suspend the new telephone charges of 15 per cent, and review the fuel and electricity rises, demonstrators continued to push for all price rises to be dropped.

The World Bank director for Indonesia, Andrew Steer, said it was vital that the Government continue its program of economic reforms, including the removal of these subsidies, but he declined to criticise the decision to abandon the new phone charges approved by parliament last year.

With only 3 per cent of homes having access to a phone, plans to use the extra phone revenue to expand the network are now on hold. The report also warns that too few power stations will result in widespread power shortages. More than 20 outer island systems already have insufficient capacity to meet peak demand, and there will soon be problems on Java and Bali.

"The magnitude of the investments needed in the power sector are enormous," the report says. To cope with even modest growth in demand for power in Java Indonesia would need to build a new power station every year with some estimates putting the cost at more than $50 billion over the next 10 years. But with no plans to build new plants, the report says small businesses will be cut out from the net if power becomes scarce, pushing more people into poverty.

After steady gains in reducing poverty, the percentage of Indonesia's 230 million inhabitants living in poverty has again started to rise. The Asian economic crisis left 27 per cent of Indonesians in poverty in 1999 but that number was brought down to 16 per cent last year. Now the battle against poverty has "stalled", and new investment is vital to give jobs to up to 2.5 million young people who join the labour market each year.

Indonesia's investment climate is deteriorating and ranks among the worst in the world, the report says, with spending on mining exploration dropping from $280 million a year in 1996 to about $36 million last year. A big part of the problem remains corruption in all levels of government, which the report says is getting worse despite measures which have helped highlight the issue.

With so many people living so close to poverty, the World Bank says any disaster or even a small food price rise has the capacity to cause widespread hardship. It estimates the slowdown in economic growth from the Bali bombing pushed an extra million Indonesians into poverty. However, this was a better result than the worst-case scenario of 3 million more people living below the poverty line which had seemed likely immediately following the Bali blasts.

Price hikes add to Indonesians' pain

Asia Times - January 11, 2003

Tony Sitathan, Jakarta -- "I do not know how I am going to survive with three children, an ailing mother and an unemployed husband, with the current increases in basic electricity and telephone charges. Although the fuel increases do not impact me directly since we do not own any means of transportation, now it's more expensive traveling in the metro buses and on the bajai [motorized three-wheelers]," moaned Yati Taruna, a domestic servant who has been working in Jakarta for three years. Her complaints are characteristic of the current situation plaguing Indonesia.

Instead of capital reforms and tight fiscal controls, the government has done the opposite and decided to raise tariffs of electricity, telephone as well as fuel price. Electricity and telephone charges have increased 6 and 15 percent respectively, while fuel prices have increased by Rp60-Rp440 per liter, except for kerosene that is rationed to households.

The government's arguments for raising tariffs lack substance, maintains Gombang Hutagalong. "As a private businessman I can see the direct impact of these tariff hikes. It's not affecting the rich, since the rich are already cushioned [against] any price increases and their savings are hedged in US dollars instead of rupiah. The middle-lower [income groups] and general poorer masses are being affected, since these fuel hikes are also affecting the prices of basic food commodities like rice and sugar as well as cooking oil, [which] has already seen an increase of more than 5 percent."

One wonders how much more the general Indonesian worker, who earns less than Rp800,000 (US$90) a month, can tolerate since inflation was also close to 7 percent in 2002.

But the 6 percent increase in electricity rates is just an initial step. The government plans to increase the electricity tariff in all four quarters of 2003, hence bringing the increase in tariffs close to 24 percent in one year. The increase in the telephone tariff is the second step of the 45.49 percent increases scheduled for 2002-04. The first increase was on February 1, 2002, and the next general increase will be in 2004.

According to Dorodjatun Kuntjoro-Jakti, the coordinating minister for the economy, the increases in electricity, telephone and fuel prices this year are part of the government's effort to reduce a severe misallocation of subsidies in the government budget. He is confident that once economic growth heads back to normalcy, such increases will not create any big impact. "The most important thing is that we have plenty of space for the state budget," he said.

"I am not sure what school of economic thought the minister comes from. Neither do I understand the rationale for any increase in basic necessities at this juncture, especially when Indonesia seems to be losing its credibility [with] foreign investors," responded Ananda Mohanadas, an economics professor at one of the top state universities in Jakarta. "I am really puzzled as to how this measure would improve the state's budgetary imbalance and help to correct the budget deficit. Perhaps it would be wiser to impose such measures once the economy has picked up later in 2003, instead of implementing it now."

There are several theories as to why the government has so blatantly increased these basic commodities. One explanation is that the price hikes are in line with International Monetary Fund (IMF) recommendations that demanded that state subsides be lifted gradually toward the beginning of 2003 if Indonesia is to continue to receive close IMF support as well as much-needed funds. Another theory is that the government needs as much money as possible for campaigning for the 2004 presidential elections.

One political risk analyst based in Jakarta called the price increases a big shakedown, since a great percentage of the state's budget will inevitably be allocated to the main political parties contesting the elections. "Perhaps it's the timing or the mere coincidence of increasing tariffs before an election year. But whatever the reasons behind the tariff increase, Indonesia and Indonesians in general are vehemently and unilaterally opposed to these tariff hikes," he maintained.

The Indonesian Consumer Foundation (YLKI) has criticized the increases and urged Indonesians to protest the price hikes. Indah Suksmaningsih of YLKI said the increases will create serious economic hardship for people in the mid- to low income bracket as most of them are already suffering from the ongoing economic crisis. There have already been several demonstrations held outside the parliament gates and in certain busy intersections of the capital.

Bambang Yudhisthra, a student activist at Tri Sakti University, recalled the days leading to the forced resignation of the former president Suharto. "Suharto too listened to [the] IMF and tried to increase these basic subsidies. That created a lot of discontent and was one of the motivating reasons to put an end to his corrupt regime. I can see similar strains in the Megawati [Sukarnoputri] government, a government that is equally corrupt and authoritarian as well as incredibly slow to react to the rakyat, or people's wishes," he said.

Although conditions during the fall of Suharto were different from today's, many of the reformists of that reformasi era are disillusioned with the current government. "We did not take the punches and the stabs of the military without a reason. We wanted a change for the better," reflected Agus K Widjaja, a retired civil servant acting as an ombudsman to civil servants who served during the Suharto era. "It certainly looks like the sacrifice of our youth and our children have gone to waste.

"Instead of a better government that would be anti-corrupt and pro-business in outlook, we have a weak, struggling government that is dealing with regional integration issues, high levels of corruption, nepotism and scandals that would outrage any other decent government. We have become a basket case for other governments not to emulate, when once back in the early 1960s and late 1970s we were considered a model developing nation by the world."

What then is the government's reaction? Finance Minister Boediono has said that the tax office is reviewing a series of tax cuts for 20 product items that would be an incentive for businesses. He also promised to cut bureaucratic procedures at the customs office and rein in corruption. To those ends, a joint task force consisting of government members and business representatives is to be set up.

"We do not need another joint task force. What we need are clear reforms and a stop to these basic price increases of electricity, telephony charges and fuel," said Jonathan Henardo, the head of a small retail business enterprise group in Jakarta. "Many businessmen are already disfranchised with the central government and having such incentives for businesses is nothing but a small drop in an ocean of economic troubles."