Democratic struggle

Demonstrators demands activist's release

Detikcom - February 3, 2003

Jafar G. Bua, Palu -- The Central Sulawesi Poor People's Forum (Forum Rakyat Miskin Sulawesi Tengah, FRMST) protested the arrest of 13 pro-democracy activist during a recent incident when the offices of the Indonesian Democratic Party of Struggle (PDIP) were damaged. They also demanded that the Sulteng police investigate a number of PDIP Sulteng figures who triggered the destruction.

The demands were presented by activists from FRMST and the Sulteng branch of the People's Democratic Party (PRD) when they held an action in front of the Sulteng police headquarters on Jalan Sam Ratulangi on Monday. As well as protesting the arrest of their comrades, the action which involved some 1000 FRMST and PRD activist also demanded a reduction in prices.

According to Feri Anwar, the chairperson of the Sulteng PRD branch, the damage to the PDIP offices in Sulteng on January 15 was triggered by PDIP officials who held a violent action against one of the demonstrators.

They demanded that the PDIP officials, Muharam Nurdin (the secretary of PDIP Sulteng who is also a member of the Sulteng regional parliament), Safrun Abdullah (deputy speaker of the Sulteng regional parliament) and Burhan Lamangkona (a member of the Donggala parliament) be investigated. They also gave an ultimatum that they should be held for 3 X 24 hours. If not they would mobilize even more people.

In response Sulteng police spokesperson Ricky Wakano explained that they are still carrying out an investigation of the suspects so they cannot be released. And in order to investigate members of the PDIP, the Sulteng and Donggala parliament, the police must obtain permission from the governor first.

Ricky Wakano's statement was greeted by yells of "Reduce prices, overthrow Mega, and free the pro-democracy activists".

[Translated by James Balowski.]

Labour issues

Workers, employers close to agreement

Jakarta Post - February 6, 2003

Moch. N. Kurniawan and Rendi A. Witular, Jakarta -- Workers and employers have inched closer to a workable agreement with regard to several contentious and crucial issues in the labor protection and development bill, which is expected to be endorsed by the House of Representatives this month.

Four key issues that have been recently settled by employers and labor unions during their discussions over the past four months dealt with industrial strikes, sabbatical vacations, dismissals and severance payments.

Muhammad Rodja, secretary general of the Reformed SPSI, said that both sides were of the same opinion that workers were obliged to let their employers and security authorities know about any planned strikes and that any strike focusing on labor rights would still allow the strikers to be paid by the employer.

Labor strikes aimed at protesting any public policy would be funded by labor unions.

Musni Tambusai, director general for industrial relations at the Ministry of Manpower and Transmigration, said that both sides were also of the same opinion that workers employed for six years consecutively had a right to a two- month sabbatical, in addition to their the annual vacation time.

He said labor unions and employers also could understand that workers who were dismissed for committing crimes would receive only payments equal to any annual bonuses outstanding, while those who resigned voluntarily would receive a service payment to be agreed upon by both sides.

The Association of Indonesian Employers (Apindo) appreciated the mutual understanding between workers and employers on their own demands and objections to the bill, saying it had been long awaited by both the industrial sector and the House.

"With the mutual understanding, both employers and workers have a new awareness to maintain companies as sources of profit for investors and sources of income for workers," Apindo Deputy Chairman Djimanto told The Jakarta Post by telephone.

He called on the House to review the jail sentences the bill threatens to impose on employers who violate the law because not all violations committed within a business environment were crimes. "The bill should threaten to impose administrative sanctions and fines in line with ILO conventions," he said, referring to the UN labor agency.

The House decided to cancel the bill last November as a response to objections and protests lodged both by employers and labor unions.

Musni, Rodja and Djimanto said they hoped the House and the government would agree to endorse the bill this month since both sides (workers and employers) had settled their differences.

The bill on labor protection is scheduled to be brought up by the House's special committee at a plenary meeting on February 11 for endorsement.

Students/youth

Indonesian students in fresh protests

BBC News - February 6, 2003

Several hundred protestors scuffled with police during a rowdy demonstration outside President Megawati Sukarnoputri's official residence in Jakarta.

The protestors were calling on the president to resign, and carrying signs showing her as the devil.

Police cordoned off the area, but had to resort to a baton charge when the crowd failed to disperse.

The latest demonstrations follow weeks of protests over fuel price hikes, which threatened to destabilize President Megawati's financial reform programme.

Anger over the proposed increases led to a government climb-down and the demonstrations had largely died down. But discontent amongst ordinary Indonesians has not gone away.

"We demand that Megawati resign because she no longer supports the ordinary people, " one student told the French news agency AFP.

One policeman was apparently taken hostage by the crowd, and at least two people were arrested. It was unclear if there were any injuries.

Critics say that President Megawati has failed to address economic mismanagement and endemic corruption in Indonesia.

Sharp rises in fuel prices at the height of the financial crisis in May 1998 triggered rioting which contributed to the fall of then-President Suharto.

Students in rowdy anti-president protest

Reuters - February 6, 2003

Jakarta -- About 1,000 Indonesian students staged a rowdy protest outside the home of President Megawati Sukarnoputri on Thursday calling for her to step down.

Hundreds of police formed a cordon to stop the protesters approaching Megawati's official residence in central Jakarta.

A policeman was dragged into the crowd during the confrontation but it was not clear if there were any injuries, witnesses said. "The policemen beat the students back with batons," a witness said.

Student groups have been attacking Megawati's leadership since the government increased utility prices earlier this year.

The government rolled-back on the price rises in the face of protests but the rallies have continued with students blaming Megawati for failing to pull the country out of years of economic hardship following the Asian financial crisis of the late 1990s.

Activist burn posters of Megawati in Palu

Detikcom - February 3, 2003

Jafar G. Bua, Palu -- The arrest of student activists has not lessened the number of demonstrations. In an action today, Monday, around 1000 activists from the Central Sulawesi Poor People's Forum (Forum Rakyat Miskin Sulawesi Tengah, FRMST) demanded that President Megawati Sukarnoputri resign and proceeded to burn posters of Megawati. The posters of Megawati were burn in front of the Sulteng Military Police offices on Jalan Sultan Hasanuddin. "Reduce prices, overthrow Mega", they yelled while calling on the people to join in burning the posters.

Similar calls were made during an action held in front of the Sulteng local police headquarters on Jalan Sam Ratulangi, Palu. At the same time they held a long-march which started at 9.30am from Jalan Hasanuddin, Jalan Sudirman, then on to Jalan Sam Ratulangi. They then gathered at Jalan Sam Ratulangi because as well as the Sulteng police offices, the office of the Sulteng governor and regional parliament are located there.

During the action, the FRMST activists refereed to Megawati as an lackey of the IMF and Western imperialism. They stated that Megawati's policies, which protect the black conglomerates, show that her government does not side with the people. "Arrest the black conglomerates. Seize the assets of the black conglomerates" they shouted.

Wardah Hafidz and George Aditjondro

The action also involved around 100 rickshaw drivers and well well known activists such as Wardah Hafidz from the Urban Poor Consortium, George Aditjondro, and Jhonson Panjaitan from the Indonesian Legal Aid Foundation.

Jhonson, when asked to speak, said that the government and the legislative institutions have already agreed to sell the assets and resources of the nation to foreign interests. The example being the divestment of Indosat.

Meanwhile in George's speech, he warned Megawati that previously here struggle was supported by pro-democracy activist. So it is very ironic that the Megawati government is now arresting pro- democracy activists. The ones that should be arrested are the black conglomerates and the bad debtors.

[Translated by James Balowski.]

Aceh

Hopes high for Aceh peace deal to last forever

Jakarta Post - February 8, 2003

Kornelius Purba, Aceh -- As stipulated by the cessation of hostilities agreement signed by Indonesia and the Free Aceh Movement (GAM), the GAM rebels are to begin disarming by February 9, while the Indonesian Military (TNI) and the National Police will at the same time begin pulling back their combat forces to defensive areas.

The Jakarta Post journalist Kornelius Purba was in Aceh from January 23 to February 5, and he reports on the situation in the province and the implementation of the cease-fire agreement.

An Army officer described how his stint in strife-torn Aceh resembled the movie Sleeping with the Enemy in which Julia Roberts stars.

He said he had to get along with a member of the Free Aceh Movement (GAM), whom he may have killed under other circumstances had the Indonesian government and the rebel group failed to reach a peace deal.

The captain recalled his first experience in December, when he had to sleep in the next room to a GAM member in Riza Hotel in Sigli, Pidie regency. Because he was barred from carrying any weapons, the officer called the chief of the local district military command to send some personnel to secretly guard his hotel room.

"I could not sleep until morning. I did not want to be killed in my sleep," said the officer who refused to be identified.

A few days later he met with the rebel, who told the captain of the same experience. After that they agreed to depend on one another for protection because they would have to live together for a few months to come. At night sometimes they would walk out together to find something to eat.

The military officer and his GAM next-door neighbor are members of the monitoring team of the Joint Security Commission (JSC), set up to supervise the peace process in Aceh. The team in Pidie is headed by Maj. Suthep Anuchon from Thailand. "It is part of the confidence building measures," said Suthep.

After 26 years of living dangerously, a sense of security has swept through Indonesia's westernmost province of Aceh over the last two months, from the provincial capital Banda Aceh to rebel strongholds like regencies Pidie and East Aceh.

Peace had become a luxury commodity in the rebellious territory in the past, but now the Acehnese people can taste a slice of the good fortune.

For many people, walking or sitting in public parks without fear at night is a treat. Their evenings were often shattered by sudden bomb explosions or dead bodies lying on the streets. "For years we experienced a nightmare. Now we can enjoy a peaceful life," said Hotli a local photographer who works for an international news agency.

The number of killings has also sharply declined. Even the Indonesian Military (TNI) soldiers and police personnel, who battled with GAM rebels for almost three decades, share a common view that Aceh now is safer for everyone. "People are happy with this peace," Tengku Kamaruzzaman, a senior GAM official told The Jakarta Post.

An Army corporal stood at the gate the Iskandar Muda Military Command (Kodam) on Jl. Jend. A. Yani in Banda Aceh. He said he felt more secure now standing in front of the office because before the December 9 peace accord, he was always worried about GAM snipers. "Now that peace has come, I want to go home. I miss my family," said the soldier, a West Java native.

Security conditions have improved greatly in the province for those who run businesses.

"Now I can open my kedai kopi [coffee shop] until late night. Before the peace agreement I had to close before 7 p.m.," said Jalil Ibrahim, who owns a small coffee shop across from the Baiturrahman grand mosque in Banda Aceh.

Ayi Jufridan, a reporter for Serambi Indonesia daily, hopes both GAM and Indonesia will avoid violence and choose political settlement through dialog to reach their goals.

Zaini Hasyim, a peanut trader, enjoys the freedom from fear. He said that after the peace accord he could drive his Kijang van at night when he returned to Banda Aceh from Sare in Greater Aceh. Before the signing of the peace agreement, even during the day time he would think twice about driving alone.

Despite the semblance of peace, armed police and military personnel were seen patrolling major streets in Banda Aceh early this month. Similar sights were also visible in Sigli, Bireun, Lhokseumawe, Langsa and other towns, although they looked more relaxed compared to Banda Aceh.

Military posts along the highway connecting Banda Aceh and Medan in North Sumatra remain operational, although soldiers there were busy reading newspapers or chatting with one another. A big announcement in front of each security post tells passersby not to give anything to the soldiers. However at some major security posts, truck drivers would often stop to give money.

Public transportation vehicles traveling between Banda Aceh and Medan and trucks carrying commodities have now resumed their night operations. Previously they only worked in daylight hours because GAM, the military or police often extorted money from them in the past.

"The problem is no longer about security, but passengers. The number of passengers remains very low, perhaps due to economic hardship," said Fajar Baizuri, a bus driver in Bireun.

Lhokseumawe, the biggest industrial city in the province, has also found a new life. Night life has slowly returned to normal, where shops, restaurants and the local market open until late.

A security guard at Selat Malaka Hotel in the city expressed relief that number of the hotel guests had significantly increased. "The boss can smile now. Before this he always looked at me with a stone face," the guard noted.

In Langsa, East Aceh, a 45-year old woman expressed her hope that both TNI, police or GAM would no longer disturb the life of the ordinary people.

"If they want to continue the war, I hope they can do it deep in the jungle. I just hope we will be free from violence for good," said the woman who sells VCDs.

However most Acehnese would answer, "we don't know," when asked how long peace could last in the war-torn province. Many of them are afraid that the two warring parties are undergoing a military build-up during the cease-fire as GAM and the military believe their only goal is to eliminate their enemies.

Observers have said eternal peace can prevail in the province when the government and all involved parties have the political will to overcome the roots of the bloody conflict in Aceh.

The government has made a good start and if it is sincere about healing the people's broken hearts we can hope that children can play freely in public parks and enjoy their school years without any security disturbances.

Mechanism unclear for GAM to lay down arms

Jakarta Post - February 8, 2003

Nani Farida, Aceh -- Demilitarization in the restive province of Aceh is scheduled to start on Sunday as part of last December's peace deal to end long-standing hostilities, but exactly how it will work remains unclear.

The Joint Security Committee (JSC) has yet to draw up the operational mechanism for demilitarization, which will affect both the Indonesian Military (TNI) and the Free Aceh Movement (GAM).

Mark Knight of the committee said JSC officials were discussing the mechanism.

"We will not talk about this in detail to the press because it is still being discussed," he told a news conference in the province's capital of Banda Aceh on Thursday.

He said demilitarization would involve GAM and TNI, both of whom must carry it out simultaneously and gradually over a period of five months.

Knight said the military would be expected to restructure troops deployed across Aceh from offensive to defensive positions. And the police had to review the function of its Mobile Brigade (Brimob) so as to resume its "normal" service without carrying long-barrel guns instead of pistols, he added.

Meanwhile, GAM must lay down arms under the supervision of the JSC, comprising representatives of GAM, the government and the Henry Dunant Centre (HDC), which brokered the peace deal on December 9, Knight said.

Sofyan Ibrahim Tiba, a senior GAM envoy in the JSC, separately said GAM members had not objected to disarming on the condition that TNI was ready to abide by the demilitarization rules.

Proposing a mechanism for GAM's demilitarization, he said the military should withdraw its security personnel from posts in villages and the National Police (Polri) change Brimob's role as a combat force.

"All should be done in an equal manner. If TNI/Polri relocate 25 percent of their personnel, GAM will also lay down 25 percent of its arms," Sofyan said, citing an example.

He said that there should be assurances that only GAM and the JSC knew where GAM would store its arms. "We don't want to be trapped. Therefore, TNI should stay away from the process of GAM laying down arms.

Yet Sofyan said that GAM wanted to retain control of its weapons until after achieving its main goal of Aceh's independence, a struggle that has cost 10,000 lives since 1976. "We will cease using them, and we want HDC to make sure that our weapons are not confiscated," Sofyan said.

He said that despite the truce, GAM was unable to fully trust the Indonesian government in its effort to support the fragile peace deal. Sofyan was apparently referring to a recent statement by Aceh Military Commander Maj. Gen. Djali Yusuf, who threatened to hunt down rebels should they refuse to lay down their arms.

Such a comment could disrupt the situation on the part of GAM, Sofyan said. "It could make GAM change its mind," he said.

The truce has significantly reduced bloodshed in Aceh, although sporadic outbreaks of violence do still occur, with both GAM and the military having violated the cease-fire.

Civilians demand role in fragile Aceh peace

Jakarta Post - February 5, 2003

Nani Farida, Aceh -- Residents of the troubled Aceh are angry about what they see as their exclusion from the peace process, which has yet to bring a complete halt to separatist violence.

Residents say that those in charge of the peace process are sidelining them and their efforts to get involved in implementing the December 9 peace pact.

"We are only spectators. We cannot even provide input to the Henry Dunant Centre [HDC] and the Joint Security Committee [JSC]," said Rufriadi, head of the Banda Aceh Legal Aid Institute.

He said that he and other community members had written several times to the HDC and JSC complaining about violations of the truce, but had received no response. "JSC officials have always told us that they do not have the time to discuss those letters," Rufriadi told The Jakarta Post on Monday.

Furthermore, he said, activists from non-governmental organizations occasionally have become the target of abuse after complaining about continued violence in Aceh.

Since the peace accord, Rufriadi said, his office had received reports that at least two activists had been put on a list of wanted people after refusing to answer three police summons for questioning.

"The two activists are M. Nazar and Kautsar Muhammad Yus, both [former political prisoners] now being sought by the police for organizing a major rally," Rufriadi said. Nazar is a leader of the Aceh Referendum Information Center (SIRA), which has been campaigning for a referendum to decide whether Aceh will remain a part of Indonesia or become independent.

Rufriadi lamented the unequal treatment of civilians in the peace process, saying the rebel Free Aceh Movement (GAM) was allowed to "socialize" the truce while other community members were branded as provocateurs when they expressed their opinions.

He also criticized the JSC, which comprises representatives of the HDC, GAM and the Indonesian Military (TNI), for focusing only on incidents that affect their members, not civilians. "The peace pact only belongs to the TNI, GAM and the JSC, while civilian groups are merely onlookers," Kautsar told the Post.

In response, the head of Aceh's Iskandar Muda Military Command, Maj. Gen. M. Djali Yusuf, accused civilian groups like SIRA and the Voice of the Acehnese People (Sura) of attempting to disrupt the peace deal. "We believe they come to subdistricts to twist the facts of the truce," he said.

Meanwhile, local politician Sayed Fuad Zakaria urged everyone in Aceh to help guard the peace deal in order to end 26 years of hostility in the resource-rich province, which have killed some 10,000 people. "I hope this momentum will be maintained so as to create long-lasting peace in Aceh," he was quoted by Antara as saying on Tuesday.

The truce has significantly reduced violence in the province, but sporadic outbreaks of violence involving troops and armed rebels continue to occur, claiming lives on both sides.

Djali also said the TNI was prepared for the worst, including the possibility of rebels refusing to lay down their arms by February 9.

He said the military had yet to discuss plans for more reinforcement troops in Aceh. "The number of troops is enough right now, with about 22,600 soldiers." He also urged the JSC to be tougher in dealing with truce violations by members of GAM and TNI. "We will deliver this [request] through Coordinating Minister for Political and Security Affairs [Susilo Bambang Yudhoyono]."

Acehnese demand justice, government gives cash

Jakarta Post - February 4, 2003

Tiarma Siboro, Lhokseumawe -- Compensation money is often given in exchange for a loss of property or a relative, but it cannot bring back a loved one, or in many cases, compensate for the bitter feelings felt.

Hundreds of Acehnese received on Saturday a small sum of money from the central government in an apparent attempt to win back those people's hearts after years of conflict that has left them with painful memories.

"I'm poor, look at me. I have five children, one of them was killed by security officers during the conflict. But I'm not among those getting compensation," Azmi Teuku Imam Abdullah, 67, of the Meunasah village in Lhokseumawe in the north of Aceh. "Many have been wounded ... billions of rupiah wouldn't heal us. For me, justice is the most important thing," he said as he broke into tears.

Azmi was one of hundreds of villagers who braved a heavy rain over the weekend to gather for humanitarian assistance provided by the central government. The program followed the signing of the cessation of hostilities agreement between Indonesia and the Free Aceh Movement (GAM) in Geneva on December 9, 2002. The aid was meant to compensate the people's sufferings during years of conflict in the natural resource-rich province.

Coordinating Minister for People's Welfare Yusuf Kalla made a two-day visit to the province over the weekend, marking the start of the program, which is scheduled to last for the next five months. They handed out Rp 1.6 billion (US$177,700) of the total pledge of Rp 381 billion. Accompanying Yusuf were Minister of Social Affairs Bachtiar Chamsyah, Minister of Women's Empowerment Sri Redjeki Soemaryoto and Minister of Health Achmad Suyudi.

The program includes rehabilitation of social infrastructure; bringing home refugees; rebuilding schools, mosques and other social facilities. Aid for widows, orphans, handicapped people and the poor affected by more than 26 years of conflict between the central government and GAM, who are said to be the beneficiaries of the program.

"I don't know how the local administrators are deciding it, but a lot of people who received the compensation money were not victims of the conflict. Do you see that man with the cane? He has had that handicap since he was born," Azmi said, while pointing to the villager who was standing before Kalla as he handed him Rp 2.5 million.

During their short visit, the ministers held a very tight schedule as they tried to meet villagers in five regencies -- Piddie, North Aceh, Aceh Besar, Lhokseumawe, Bireun, and Tamiang -- hoping to cultivate loyalty from the Acehnese, most of whom have been embittered by the conflict.

"It's going to take time to convince us whether the government is serious about addressing the problems here. One or two days visiting and giving us small change is nothing compared to the decades of prolonged suffering caused by the government's policy here," another villager named Usman of Krueng Geukeuh village in North Aceh, said.

Usman, 59, a veteran local journalist, further said that the absence of justice and the widespread poverty in Aceh had motivated local people to continue fighting against the government.

GAM has been fighting for independence since 1976. Over 10,000 people, mostly civilians, have reportedly been killed during the period of armed conflict, The continuing violence claimed more than 1,700 lives last year.

Usman was jailed by security officers in 1990, a year after the government declared Aceh a military operation area (DOM).

The government has only pursued the trial of military officers blamed for the massacre at one Islamic boarding school belonging to the Acehnese Muslim cleric Teungku Bantaqiah in Beutong Ateh in 1999, while other cases of rights violations remain unsolved and mostly uninvestigated.

"I've seen many cases of injustice in this country. If the government does not insist on punishing those responsible for various rights abuses, then don't even try to appease us with fake trials," Usman said, expressing his pessimism with a reference to the current East Timor human rights trials.

Three more mass graves found in Aceh

Jakarta Post - February 4, 2003

Nani Farida, Banda Aceh -- With the signing on December ember 9, 2002 of the cessation of hostilities agreement between Indonesia and the Free Aceh Movement (GAM), the Acehnese people began to feel emboldened enough to speak about the crimes committed by GAM in the past, starting with the three mass graves found in Kemukiman Manggamat, South Aceh.

A group of residents from the village met on Monday with Maj. Gen. Djali M. Jusuf, chief of the Iskandarmuda Military Command overseeing Aceh, to report their finding the graves two months ago, and to call for authorities to follow up with a thorough investigation.

The group said the three mass graves were found accidentally by locals on January 30, and contained the skeletons of 16 men from the villages of Jambo Papan and Sarah Baru, some 665 kilometers southeast of Banda Aceh.

Effendi, head of Sarah Baru Village, said villagers knew the 16 skeletons were those of men from the clothes they were wearing.

"The mass grave in Jambo Papan contained four skeletons, while the other two in Sawah Baru contained 12 skeletons," he said, adding that the skeletons were reburied in an Islamic burial ceremony.

Residents of Kemukiman Manggamat believed that the mass graves was evidence of GAM"s bloody crackdown against locals on June 5, 2001.

Effendi said that on that day, a group of GAM rebels raided the village for those who refused to support the separatist movement, and dozens of locals were arrested because they had no money to give to GAM.

"The villagers were intimidated and forced to pay money to GAM. Those who were unable to pay money were tortured to death and their bodies buried," said Effendi.

Along with Effendi, Amran, secretary of the village, said villagers believed there were many more mass graves in the districts because hundreds of villagers had been arrested and abducted during the raids.

Djali called on human rights institutions and the Henry Dunant Centre (HDC) facilitating the peace process to conduct a thorough investigation on the mass graves and the villagers' accounts.

"Human rights institutions and the HDC should investigate the mass graves and pressure GAM in this," he said, adding that he had ordered an Army Strategic Reserve Command group (Kostrad) to accompany people in the district to look for other mass graves.

Last week, the Oil and Gas Coordinating Body (BP Migas) complained about the widespread extortion of oil and gas companies in the province by GAM rebels after the peace accord had been signed. A number of villages have also reported that GAM extorted money from villages which were strongholds of the separatist movement.

GAM has reportedly forced villages to pay Rp 10 million (USS$1,110) and has coerced contractor companies to set aside 10 percent of the contract value of their projects as contributions toward GAM.

The National Commission of Human Rights has also found dozens of mass graves in Lhokseumawe containing thousands of bodies belonging to those who were killed during the military operation conducted between 1989 and 1999 in the province under former president Soeharto's repressive regime.

The military has made an apology to the people, especially to the Acehnese, for the mass killings during the operation to quell the separatist movement.

None of the security personnel who were involved in the atrocity have been brought to trial so far.

Aceh rebels ready to hand over arms to government

Agence France Presse - February 4, 2003

Banda Aceh -- Separatist rebels in Indonesia's Aceh province yesterday said that they were ready to start handing over weapons under a December ember peace deal but questioned the army's commitment to the pact.

Sofyan Dawod, who is a local commander of the Free Aceh Movement (GAM) and its military spokesman, said the movement was prepared to move forward from the current confidence-building phase to the process of demilitarisation.

Under a December 9 agreement signed in Geneva, demilitarisation is to begin on February 9, with GAM storing weapons at designated sites and the army relocating its forces and changing its role "from a strike force to a defensive force". The military has threatened to use force against the rebels if they fail to disarm from the due date.

The Geneva-based Henry Dunant Centre, which has mediated peace talks since 2000, will keep one of the keys to the arms dumps.

Witnesses said as many as 12,000 people proceeded by car, truck or on foot to a field in the Meurah Mulia district of North Aceh to a rally to promote the peace pact. The event was addressed by both Mr Dawod and local GAM "governor" Teungku Said Adnan Adami. Security forces made no attempt to block the rally.

Mr Adami urged the people not to respect the official administration in Aceh and told village chiefs to no longer obey officially appointed sub-district chiefs, saying that they would otherwise become auxiliaries of the Indonesian government.

Aceh truce violations threaten peace deal

Jakarta Post - February 3, 2003

Nani Farida, Aceh -- The almost two-month-old cessation of hostilities agreement between Indonesia and the Free Aceh Movement (GAM) is under threat by violations committed by both sides.

Both GAM and the military have been found guilty of numerous violations and neither side has taken action against those responsible for the breaches, leading to a loss of mutual confidence.

The local military has gone so far as to accuse GAM of consolidating its operations and extorting residents in order to purchase weapons.

The Joint Security Committee (JSC), which oversees the implementation of the peace accord, has recorded a total of 499 complaints of violations over the last two months.

The chief of the Lilawangsa Military District in Lhokseumawe, A. Y. Nasution, said he had evidence that GAM was forcing villages to give Rp 30 million to the separatist movement for the purchase of arms.

"GAM has set February 12 as the deadline for village heads in the province to pay the money, in line with the celebration of the Islamic Day of Sacrifice. Also, GAM has used villagers as human shields in their attacks on administration and military personnel.

"We call on our brothers in GAM not to use innocent people as shields in any confrontation with us. And GAM should no longer incite innocent people to violence against security personnel," he said.

The Oil and Gas Implementing Body (GP Migas) also has complained of extortion by GAM of oil and gas mining companies in the province. It accuses GAM of extorting companies following the signing of the peace agreement on December 9, 2002.

JSC, which includes representatives from the Indonesian government and GAM, as well as international monitors, has received 499 reports of violations by both sides. It is investigating 49 cases and has completed investigations into three cases.

GAM has yet to impose sanctions against its members who were found guilty of shooting a soldier in Lokop, East Aceh, on January 14, and another one in Lammo, Aceh Jaya, on January 16.

Nasution urged GAM to comply with the peace deal and to stop reinforcing its armed wing, which he said would only lead to further unrest in the province.

"According to the peace accord, Aceh remains an integral part of Indonesia, so GAM should not dream of independence as long as the military is still in the province. Ask its members to go back to their previous lives," he said.

Maj. Gen. Djali Yusuf, chief of the Iskandar Muda Military Command, threatened to use force if GAM continued to violate the truce accord.

"If they violate the agreement, there's no other option for us but to use force and take emergency action," Djali Yusuf was quoted as saying by the local Serambi daily.

"GAM has spread many lies among the public. If they do not want [to abide by the agreement] just say so. February 9 will be the test," he said, referring to the date by which GAM is required to start turning in its weapons at designated sites.

And last Friday, the rebels accused the military of bad faith. "We ... feel that the Indonesian side is still not sincere in honoring the clauses of the agreement. They are still intensely seeking any loophole to be used and abused for their advantage," GAM spokesman Sofyan Daud said.

"The TNA [Aceh national army] is still sending condolences to the families of victims of killings and other atrocities perpetrated by the Indonesian side," Daud said as quoted by AFP.

Since the signing of the peace deal at least 19 civilians, three rebels and five members of the security forces have been killed, which still represents a decrease in the violence in the province.

West Papua

Papua's three-way split gets go-ahead

Straits Times - February 8, 2003

Jakarta -- Indonesia has decided to go ahead with its decision to divide the easternmost Papua province into three smaller provinces in the face of objections from local officials and religious leaders who have warned the move may spark unrest.

Justifying the move as necessary to speed up development programmes, Minister of Home Affairs Hari Sabarno said on Thursday: "It seems almost impossible at present to manage the large island with 28 regencies under one province."

Papua, with a population of 2.4 million, is 3 1/2 times bigger than Java, which is divided into four provinces, including Jakarta. The large region is home to a giant copper and gold mine in Timika, a liquefied gas mine in Tangguh, Manokwari, and several oil fields. But 60 per cent of its population is still uneducated and follows a life of basic survival in remote areas.

Mr Hari insisted that Papua has already been legally divided into three provinces since 1999, when the law was endorsed during former president B.J. Habibie's term.

"Even acting governors for the two new provinces have already been appointed, but the enforcement of the law was delayed because of the presidential succession from Habibie to his successor Abdurrahman Wahid," he said.

The minister added he has delivered an official letter to Papua Governor Jaap Salossa and all regents in the province to inform them about the government's decision.

In Manokwari, officials and informal leaders took part in a ceremony to officiate the province of West Irian Jaya with Brig- Gen Oktavianus Atururi as acting governor.

The move sparked strong protests from both Papuan authorities and religious leaders, who said it contravened a law that guaranteed special autonomy to Papua.

This law states that the formation of new provinces should gain approval from the Papuan consultative assembly, which has yet to be established.

Five religious leaders in Papua issued a joint statement opposing the decision, saying it could cause unrest among the people and the local political elite.

Governor Jaap Salossa said the time was not right to develop Papua into three provinces because they were short of people to run the provinces. The military has supported the formation of the two new provinces in order to weaken the separatist Free Papua Movement.

Soldiers implicated in Papuan murder

Radio Australia - February 6, 2003

The Indonesian military has indicated for the first time that it was involved in the murder of Papuan pro-independence leader, Theys Eluay 14 months ago. Lieutenant Colonel Hartomo of Indonesia's notorious Kopassus special force has told a court martial hearing in Surabaya that one of his soldiers was involved in assaulting the chief prior to his death after he refused to drop plans to seek Papuan independence from Indonesia. The military originally denied involvement in his death but following a police investigation seven officers and soldiers have been charged over the killing.

Presenter/Interviewer: Linda Lopresti

Speakers: Aristides Katoppo, Indonesian journalist and commentator

Katoppo: This is something new but I think they have been arrested for quite some while now. So I think the policy was to really find out who was responsible.

Lopresti: The seven military officials and soldiers accused of the crime are now facing a court martial with very long jail terms attached if they're found guilty. Do you think the punishment will stop there or do you think there'll be a broader reaction from the Indonesian government?

Katoppo: At the moment the new policy is indeed that if they're trespassing or breach of law or extra-judicial killings by even military personnel, it should be prosecuted. And in fact one of the first times when so many officers in the one unit have all been prosecuted, although it seems now of course the lowest- ranking private is going to take the rap.

Lopresti: That is the one that was named by Lieutenant Colonel Hartomo?

Katoppo: Yes.

Lopresti: But what about the mastermind of this crime?

Katoppo: Well that is of course there is a lot of speculation, one aspect of is in fact that this was done by members of a Kopassus unit in the special forces and I think in the past there have been questions of exactly what line of command brought, whether it goes through the regional command. But you know in fact the one thing being sorted out is you know the practices of the past in which there was also a line of command through the intelligence connection.

Lopresti: Do you think the Indonesian public will be surprised to hear that their Kopassus special forces were involved in assassinating Theys Eluay, a moderate Papuan leader?

Katoppo: I don't think they will be surprised. I think some tongues will be wagging about the real officer who gave the order will be punished. In this case of course formerly all those who have been prosecuted are in fact pointing to the unit and considering the command structure they are indeed the ones who are responsible. But there's a lot of speculation based on past experiences that well you know what I mean, the order was certainly not given through army headquarters, nor by the Kopassus headquarters, nor by the armed forces chain of command. So that is why these are you know mistakes from the past, which have to be straightened out.

Soldier killed Papua leader, says officer

Associated Press - February 6, 2003

Jakarta -- In the first public admission that the military was behind the killing of Papuan independence leader Theys Eluay, an Indonesian army officer told a court martial yesterday that one of his men strangled the politician.

Lt-Colonel Hartomo told the tribunal in Surabaya that one of his subordinates, Private Ahmad Zulfahmi, asphyxiated Mr Theys after failing to persuade him to drop plans to seek independence for the restive Indonesian province.

Mr Theys was found dead on the outskirts of Jayapura, the capital of Papua province, in November 2001. Earlier that night, he had attended a dinner hosted by the Indonesian army's special forces unit.

The death of the activist, who led a peaceful independence campaign, sharply increased the distrust felt by Papuans towards Indonesian security forces. The latter are often viewed as occupiers. It also prompted foreign activists to intensify their push for an independent Papua.

Military prosecutors in the port city of Surabaya have charged seven officers and soldiers in connection with Mr Theys' death.

Lt-Col Hartomo, one of the seven, insisted that he had nothing to do with the killing and that he learned about it a day later.

"I called Pte Zulfahmi and asked him what happened," he said. "He told me that he had choked him." Last week, a second defendant, Lt Agus Supriyanto, said his superiors had ordered him and Pte Zulfahmi to pressure Mr Theys to stop promoting independence.

But when he resisted their pleas, Lt Agus said Pte Zulfahmi tried to silence the screaming politician by putting a hand over his mouth. Mr Theys was alive and alone in his car when the soldiers drove off, he testified. If found guilty, the defendants face up to 15 years in prison.

Indonesia replaces Papua army commander

Associated Press - February 4, 2003

Jakarta -- The Indonesian army announced Tuesday that it will replace its commander in Papua province amid allegations his troops killed two US teachers and a prominent politician.

Maj. Gen. Mahidin Simbolon will be replaced as head of the Papuan regional command by his deputy, Brig. Gen. Nurdin Zaenal, an army spokesman said. The move is part of a major reshuffle in the Indonesian army which will affect 27 generals, said the spokesman, Brig. Gen. Ratyono.

Simbolon will be reassigned to the army's command in Jakarta, he said. Seven Indonesian soldiers are facing courts martial for the killing in November 2001 of Theys Eluay, who was a leading advocate of a referendum on self-determination for Papua, Indonesia's easternmost region.

Last August, unidentified gunmen ambushed a group of American teachers near a giant gold and copper mine run by US-based Freeport-Port McMoran in central Papua. Two Americans and an Indonesian were killed and eight Americans injured. The attack, widely believed to have been carried out by soldiers, was allegedly aimed at discrediting a Papuan separatist movement.

The incident has strained ties with Washington and prompted moves in the US Congress to ban military ties until those responsible are brought to justice. Ratyono described the reshuffle, which includes the heads of the military districts in Jakarta and Maluku -- the scene of a three-year sectarian war that ended in 2002 -- as "routine." But a senior officer at armed forces headquarters, who spoke on condition of anonymity, confirmed that Simbolon was being replaced because of the "ongoing problems in Papua."

Embassy denies military to blame for Freeport deaths

Australian Financial Review - February 3, 2003

Sri Jegarajah, Jakarta -- The United States embassy in Jakarta has denied a New York Times report alleging Indonesian soldiers killed two US teachers last August, saying such a conclusion was premature because investigations were still continuing.

Last week the NY Times cited unidentified US officials as blaming the deaths on Indonesian soldiers who had ambushed the vehicle carrying the teachers and other Freeport McMoRan Copper & Gold staff in Indonesia's easternmost province of Papua.

"The investigation is ongoing and we have not come to any conclusions about who is responsible," the embassy said in an email statement on Saturday, declaring that the report was "not true".

Papua is one of several remote provinces with separatist movements fighting for independence from Jakarta. Security concerns escalated after the August 31 attack on a mountain road near the Grasberg mine operated by the Indonesian arm of Freeport-McMoRan. An Indonesian man also died, and at least a dozen other people were hurt. The dead Americans were Edwin Burgon and Ricky Lynn Spier, school teachers employed by Freeport-McMoRan.

"We have urged the Indonesian government, at the highest levels, to mount a serious investigation into the Papua killings," the US embassy said. A satisfactory resolution of this case was a priority for the Bush administration, it said.

Freeport-McMoRan, through its subsidiary PT Freeport Indonesia, owns the world's largest gold deposit in Irian Jaya, also known as West Papua, on the western end of the island of New Guinea. The military blamed the deaths on the separatist Free Papua Movement, a charge the group denied. The movement has asked for an independent investigation. The US has sent Federal Bureau of Investigation agents to assist in the probe.

The Freeport incident has wider ramifications. The US has been contemplating resuming military ties with Indonesia to further the alliance in the global fight against terrorism. The US suspended direct military links after allegations of human rights abuses and atrocities by Indonesian troops in the then-province of East Timor in 1999. Then, military-linked militia waged a campaign of terror against East Timorese before and during an independence referendum. More than 1000 civilians were killed and an estimated 290,000 fled.

Neo-liberal globalisation

Privatization needed to boost water distribution: World Bank

Jakarta Post - February 5, 2003

Moch. N. Kurniawan, Jakarta -- The World Bank is calling on the government to proceed with its higly criticized plan to actively involve the private sector in managing clean water services to help improve people's access to water.

Richard M. Hopkins, Regional Water and Sanitation Specialist of East Asia and the Pacific World Bank Office, said on Tuesday that the involvement of the private sector in managing clean water services was necessary as the government would never have enough funds to meet the demand for water.

"Private firms will help expand clean water distribution to people at affordable prices, but at the same time enable the firms to make profit," Hopkins said at a press briefing jointly held by AusAid and the World Bank on water supply and sanitation policy.

Therefore, a law to regulate the involvement of the private sector in the clean water business must be pursued, he added.

He was commenting on the current controversy over the water resources bill that would allow for widespread participation from private firms in managing clean water services.

Hopkins said without clear regulations, private firms would become like a mafia, citing the ugly practices by clean water providers in dry areas, where they set the rate of their product 10 times higher than the price set by the tap water company.

The tap water business in Jakarta has sparked controversy due to the absence of a clear contract agreement between private tap water firms and city water company PDAM Jaya, for example on the pricing structure.

At present, private firms have been allowed to provide tap water, serve areas that lack clean water and produce bottled drinking water.

Under the draft law on water resources, an independent body must be set up to oversee the performance of private firms, which would include ensuring that water rates would not overburden the public.

"I think the present opposition against the broad involvement of the private sector in managing water services is an emotional response," Hopkins said. He cited Macau and Chile as success stories of private firms managing clean water services.

But he admitted that in Argentina, there was difficulty with private firms in the water business due to a weak contract agreement.

The government submitted the bill on water resources to the House of Representatives last year, and private sector involvement has drawn criticism from various parties.

Opposition to the bill has come from, among others, the Kehati Biodiversity Foundation and the Indonesian Forum for the Environment (Walhi).

Kehati executive director Ismid Hadad decided that the bill would bring more hardship to the people, including millions of farmers, which he claimed would have to pay for irrigation water.

They said they feared that if the bill were passed into law in its current state, it would endorse privatization without much governmental control, and this would lead to excessive water exploitation by private entities, higher water rates and also limit the urban poor's access to water.

The government has assured the people however, that they would not have to pay for river water used for daily needs such as bathing, washing clothes, cleaning and cooking, and that water used for farming and fish ponds owned by small-scale farmers would also remain free of charge.

Government & politics

Golkar strives to contain internal rift over Akbar

Jakarta Post - February 5, 2003

Fabiola Desy Unidjaja and Kurniawan Hari, Jakarta -- As demands from within Golkar grow for chairman Akbar Tandjung to quit his post, party leaders are now scrambling to save the organization from falling apart by diverting attention away from Akbar's corruption case.

Golkar central executive board (DPP) members have told The Jakarta Post that preparations are underway for the party to hold a national conference in March to name its presidential candidates for the 2004 general election as well as a party caretaker should Akbar go to jail.

"We are trying to accommodate our constituents' aspirations for the presidential race in 2004 to ensure that our candidates receive full support from the electorate," co-chairman Syamsul Muarif told the Post on Monday.

Akbar, who is also Speaker of the House of Representatives (DPR), has been declared guilty of corruption and sentenced to three years in jail both by the Central Jakarta district court and the Jakarta High Court for his role in a Rp 40 billion (US$4.7 million) financial scandal involving the State Logistics Agency (Bulog). He is free pending appeal to the Supreme Court.

His conviction has triggered calls from anti-corruption campaigners for Akbar to quit as House Speaker.

Pressure has also been mounting from within the party for the veteran politician to relinquish his chairmanship, arguing that Akbar was a liability to Golkar, a political vehicle used by former dictator Soeharto to run the country for over 30 years.

A party source told the Post Tuesday that all Golkar leaders agreed that Akbar's corruption case would hurt the party's preparations for the 2004 election.

"We agree that we have to move forward and contain people's furor over Akbar's case by holding a national conference," said the source, adding that the party was fully aware that they could not depend on certain figures from inside Golkar. The source also said that they were preparing to have one caretaker and set their eyes on Yogyakarta Governor Sultan Hamengkubuwono X should Akbar go to jail. Syamsul refused to confirm the allegation.

Some of Golkar's regional branches have been loudly demanding Akbar's replacement, but most seem to want to keep him, citing his success in leading the party through hard times after the downfall of its patron Soeharto in 1998.

It is hoped that by engaging the party in a presidential candidate debate, pressure from within the party for Akbar to quit his chairmanship would die down.

Syamsul said the planned conference is designed to net presidential candidates favored by the people at the grassroots, not the ones appointed by DPP members.

"The presidential candidates do not have to be from the party, they could be other leaders or even from other parties, but will receive the support from Golkar," Syamsul stressed.

Golkar co-chairman Slamet Effendy Yusuf, meanwhile, said that there would be a preliminary meeting among delegates on February 27 and February 28 in Jakarta to discuss who would become Golkar's presidential and vice presidential candidates in the 2004 election.

The meeting, he said, would set out the criteria and selection mechanisms only. "We won't name any candidates yet, to avoid disputes," Slamet said on Tuesday.

Theo L. Sambuaga, a Golkar co-chairman who has been calling for Akbar's ouster, said Tuesday that the meeting would only discuss preparations for the upcoming elections.

Bumpy road ahead to polls next year

Straits Times - February 4, 2003

Warren Fernandez, Jakarta -- Brace yourselves -- the next 18 months are going to be tense and turbulent as Indonesia heads down a bumpy road to the 2004 polls.

Talk to political insiders and you will hear riveting accounts of how close some quarters of the Indonesian military came to seizing power two weeks ago, in the face of popular opposition to the Megawati government's slashing of some subsidies. The word "coup" trips lightly off many lips.

That policy U-turn has weakened President Megawati Sukarnoputri's government, by giving the impression that it was weak, indecisive and capable of being unnerved by popular pressure. Opposition street fighters I met were brimful with pride at the way they had forced the government's hand. And they are thirsting for more.

There is even talk about the government being replaced in the next few months by a presidium of various parties, which would rule until the elections next year, with a view to restoring order.

While this does not seem likely -- for now -- many observers believe the authorities will now adopt a cautious approach, mindful that any political mis-steps could bring the rent-a-crowd gang back on the streets, egged on by the government's critics.

And there are many. Nearly 240 parties have lined up to contest the polls next year. The joke in Jakarta is that for every two people you meet in the streets, there are three who want to be leader. Each contender knows he will have to form alliances if he is to get ahead, and the wooing of parties has begun.

The biggest catch will be the leadership of Golkar. With its chairman Akbar Tandjung under a cloud over graft charges, the party's top post is up for grabs. Contenders include former military chief Wiranto, who re-emerged on the scene recently and is said to be eyeing the job. But, he is unlikely to play second fiddle to Ms Megawati. Ms Megawati's supporters won't just sit back and let that happen. Their favourite seems to be Coordinating Minister for People's Welfare Yusuf Kalla. With him as Golkar chief, a deal could be struck for a winning PDI-P- Golkar ticket.

But there are many others with their own supporters and ambitions. Among them are top security minister Susilo Bambang Yudhoyono, popular Yogyakarta governor Sultan Hamengkubuwono X, Muhammadiyah chief Ahmad Syafii Maarif and People's Consultative Assembly chairman Amien Rais.

With so much at stake, so many contenders and so many deals to be done, the political shadow play ahead will no doubt be lively, long-drawn -- and lucrative.

Corruption/collusion/nepotism

IBRA starts legal action against five ex-bank owners

Jakarta Post - February 5, 2003

Dadan Wijaksana and Damar Harsanto, Jakarta -- In an apparent bid to appease public criticism, the Indonesian Bank Restructuring Agency (IBRA) started another round of legal action against five former bank owners who have been deemed uncooperative in settling their debts to the state.

IBRA chairman Syafruddin Temenggung, accompanied by Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, handed over files on the cases to police on Tuesday.

"This is part of the government's efforts to uphold the law," Syafruddin told reporters during a press conference after handing over the documents to National Police chief Da'i Bachtiar.

The five former owners of closed banks are Fadel Muhammad (former owner of Bank Intan and currently the governor of Gorontalo Province), Trijono Gondokusumo (Bank Putera Surya Perkasa), Santosa Sumali (Bank Bahari and Bank Metropolitan), and Baringin Panggabean and Joseph Januardy (Bank Namura Internusa Maduma).

The former bank owners owe the state some Rp 2.18 trillion (around US$240 million), a relatively small amount compared to the size of the debts owed by other high profile ex-bank owners.

This means that the government will probably continue to come under criticism for being too soft in taking action against the larger debtors.

Some 35 ex-bank owners became indebted to the state after the government injected around Rp 145 trillion worth of liquidity support funds to help their banks stay afloat during the financial crisis of the late 1990s.

But an audit by the Supreme Audit Agency (BPK) revealed that most of the money was misused by the bank owners, who also violated legal lending limit rulings by channeling their banks' money to affiliated businesses, a practice that contributed to the financial crisis.

For more than four years, the government has failed to recoup the money. But instead of taking strong legal action, President Megawati Soekarnoputri late last year issued a decree allowing IBRA to exonerate the debtors of their banking crimes in the past as long as they were cooperative in settling their debts. This led to a public outcry.

Among of the ex-bank owners to be given legal immunity were the Salim family (former owners of BCA who owe more than Rp 52 trillion to the government), and Sjamsul Nursalim (former owner of the now-defunct Bank BDNI), another large debtor.

Over the years, IBRA has more often than not ended up on the losing side in the courts against the errant debtors. The agency previously filed legal charges against 10 ex-bank owners, but the cases mostly ended up with the courts acquitting the bankers of all charges.

One of the most controversial cases took place several weeks ago when a Jakarta court acquitted the former co-owner of the now- defunct Bank Umum Nasional (BUN), Kaharudin Ongko, of all charges.

The court instead sent the bank's former president, Leonard Tanubrata, to jail for 10 years. The court argued that as a commissioner, Kaharudin was not responsible for any of the activities undertaken by the bank's directors.

For the same reason, the court had also earlier acquitted the former owner of the now-defunct Modern Bank, Samadikun Hartono.

Syafruddin has said that in order to avoid further losses, the agency had modified its litigation strategy to leave it better equipped in the legal struggles against recalcitrant debtors.

He cited one profound difficulty, the fact that courts often cite company law to limit the scope of any charges to the board of directors, thus excluding shareholders. "This makes it difficult for us to hold the companies' shareholders responsible for failing to repay their debts to the state," Syafruddin said.

To overcome that, he said, the agency was finalizing a new strategy, which would include the entire management of a troubled bank -- including its directors, commissioners and shareholders -- in one legal action.

Focus on Jakarta

City budget falls short of serving the public: Critics

Jakarta Post - February 3, 2003

Ahmad Junaidi, Jakarta -- The 2003 city budget, which amounts to Rp 10.98 trillion, will better serve the city administration and council, instead of the general public, critics have said.

This year's budget, which was approved by the council's 11 factions on Friday, increased by about 10 percent from last year's budget, which was Rp 9.7 trillion.

This year's budget also uses different terms, especially for its spending, such as administration spending and public and capital spending, while last year's budget was spent on routine and development expenditures.

Some Rp 3.8 trillion or 36 percent of the budget will be used for general administration spending, including the salaries of the governor, deputy governor, 85 councillors and the administration's 90,000 employees.

The budget has allocated Rp 8 billion for Governor Sutiyoso's salary, Rp 5 billion for Deputy Governor Fauzi Bowo and Rp 117 billion for the salaries of the 85 city councillors.

As much as Rp 3.7 trillion or 32 percent of the budget is earmarked for the operation and maintenance of public facilities, such as dump trucks and ambulances. However, some of the money will also go to the salaries of employees involved with the facilities' operation and maintenance.

The budget allocates Rp 2.9 trillion for capital spending, Rp 403 billion for transferred spending and Rp 74 billion for contingency funds. Transferred spending refers to donations, which are directly transferred to religious organizations.

Overall, this year's budget is not much different from last year's as most of the funding, or about 70 percent, will only be used for administration spending or routine spending, while the remaining 30 percent will go toward capital spending or development spending.

The 10.98 trillion budget, derived mostly through taxes from the public, has set aside funding for solving problems, such as mass transportation and flooding.

The budget has allocated Rp 200 billion for projects to manage flooding, including for the appropriation of part of the land needed for the 23-kilometer-long east flood canal project.

It has also earmarked Rp 83 billion for the controversial busway project, which has been criticized for possibly adding to the traffic jams along Jl. Jend. Sudirman and Jl. MH. Thamrin, Central Jakarta, instead of easing congestion.

The budget also allocates Rp 136 billion for the City Public Order Agency and Rp 27 billion for the purchase of equipment for the city police.

Critics have protested the amount of funding for the Public Order Agency and the police as the budget only allocates Rp 26 billion for the poor.

Critics have also said it was ironic that the Rp 136 billion allocated for public order officers would be used to evict the poor, such as people living along the riverbanks, street vendors and pedicab drivers.

Another irony was cited in the allocation of funding for the salaries of the governor, deputy governor and the city's 85 councillors, which will reach a total of Rp 130 billion, in comparison to the Rp 26 billion earmarked for the city's 1.2 million poor.

News & issues

Jakarta eases the pressure on Chinese

Melburne Age - February 8, 2003

Indonesia is gradually winding back the elaborate system of discrimination against its Chinese citizens.

Foreign travellers arriving in Indonesia are still asked if they are carrying pornographic magazines or more than a litre of liquor, but the question asking if you possess material printed in Chinese has suddenly disappeared.

For the first time in nearly 40 years, this requirement to declare Chinese language books, magazines and newspapers has been scrapped.

In Indonesia's bookstores, Chinese titles now sit side by side those in Indonesian and English. Until a few years ago, Chinese- Indonesian dictionaries could be sold only if they used Latin letters throughout.

Schools are now teaching children how to read and write with Chinese characters. Chinese films screen on television and in cinemas. Any town with a sizeable Chinese population has a Chinese radio station.

Everywhere there are public signs that the elaborate system of discrimination against Chinese Indonesians refined over decades by former president Soeharto is being gradually wound back. In the most dramatic gesture of all, President Megawati Soekarnoputri declared this year's Chinese New Year, known as Imlek, would be a national holiday.

Jakarta's Chinatown was once famous as the only Chinatown with no Chinese writing. Now it is festooned with banners and lanterns decorated in Indonesian and Chinese language welcoming the year of the sheep.

These new freedoms have helped begin to erase some of the bitterness and fear among the Chinese Indonesian community whose members were murdered and raped and had their businesses burnt in the nationwide riots of 1998.

But many Chinese say much of the change is gloss and predict full equality will only come with years of struggle. At the heart of their resentment is the issue of identity.

Indonesian adult citizens must carry an identity card. If you are a Chinese Indonesian you cannot get one without first getting another identity document called an SKBRI (Republic of Indonesia Citizenship Certificate). And if you are a Chinese Indonesian living in Jakarta the local Government insists you also have a card called a K-1.

Getting the SKBRI can require approval from a dozen Government institutions starting at the local neighbourhood administration office, moving through the local Government bureaucracy, on to the police, the courts and finally to the Ministry of Justice. In a country as corrupt as Indonesia, officials can seek bribes at every step. "It's a lengthy, costly, miserable process," says head of the Chinese Indonesian Association Eddie Lembong.

In theory, no one should even need one any more as the SKBRI has been abolished by presidential decree, but the officials who still benefit from its existence are not about to forget it.

Without one, Mr Lembong says, Chinese still struggle to get into state universities, get credit from a bank, get a birth certificate for their children or a passport for themselves. Lawyer Frans Winarta, who founded anti-discrimination group GANDI to push for Chinese equality, says he has documented 64 separate but interwoven laws, regulations, presidential decrees and other instruments forbidding or restricting Chinese activities.

President Soeharto used them in part to force Chinese assimilation, calling on Chinese to abandon their "exclusiveness", banning public practice of religion and cultural festivals.

Special rules applying to the Chinese were around long before Mr Soeharto seized power with the Dutch colonisers dividing the population into three categories, with Chinese included in one called "foreign orientals".

Mr Winarta describes the decades of restrictions on Chinese language and culture as "a kind of cultural genocide" that poisoned Indonesian minds and left many believing all Chinese culture was bad.

"This sticks in the minds of so many people ... even some of my friends who claim they are human rights advocates," he says. Mr Winarta says even scrapping all the regulations would do little unless the Government and Chinese Indonesians work to overcome a legacy of discrimination.

Police bombing renews Jakarta fears

Melbourne Age - February 4 2003

Matthew Moore, Jakarta -- Indonesia's national police headquarters was rocked by a bomb blast early yesterday.

While the explosion injured no one and caused only minor damage, it sent shockwaves through the country's campaign to convince the world that it has implemented effective security measures in the wake of the Bali bombings.

Indonesian police chief General Da'I Bachtiar promised to step up security in public areas across Jakarta as police were embarrassed at the ease with which bombers exploded a device so close to their offices.

The bomb was detonated on the ground floor terrace of a two- storey function room 10 metres inside the perimeter fence that surrounds the headquarters. The bomb, which police say was detonated by a timer, blew a small hole in the concrete terrace, destroyed the terrace ceiling and smashed windows up to 30 metres away.

Chief of Detectives Erwin Mappaseng said the device was a pipe bomb wrapped in concrete, using a common explosive known as "black powder", which was also used in an explosion in northern Sulawesi in October that was linked to Bali blasts.

Meanwhile, police have arrested a suspected Islamic terrorist whom Singapore Prime Minister Goh Chok Tong accused of planning to attack Singapore's Changi Airport.

General Mappaseng said police on Sunday night arrested Mas Selamat Kastari who, he said, was the head of Singapore's branch of outlawed Islamic group Jemaah Islamiah.

Mr Kastari was arrested on Batam Island just a short boat ride from Singapore where he has been wanted since early last year for plans to hijack British and US jets and crash them into Changi Airport.

Yesterday's blast in Jakarta might easily have injured people had a police officer not noticed the suspicious black plastic bag containing the bomb at 6.30am. He called the bomb squad, which had not arrived by the time it exploded about 7.15am.

General Bachtiar described it as "a warning to us; we must not drop our guard". He addressed parliament on the issue, explaining that parts of the headquarters had tight security while other parts were for public use and were not normally closely guarded. Police say they have no suspects so far.

Police spokesman General Edward Aritonang was asked if the bombing might be connected with the detention of radical Muslim cleric Abu Bakar Bashir, whom police have recently accused of involvement in the Bali blasts . "All possibilities are being taken into consideration," he said.

Security in Jakarta has been transformed since the Bali bombings, with officials at many public buildings searching cars and bags.

Yesterday's blast is likely to prompt a renewed effort to ensure public areas are safe. But the detonation of the bomb shows how difficult that can be.

Police were questioning about six people as General Bachtiar vowed to find out who was responsible. "This is a challenge for the police to immediately solve the case," he said. "Who did it, what's the motive to put a bomb in a police office?"

Bomb at police HQ has 'political message' - police chief

Agence France Presse - February 3, 2003

A bomb which exploded at Indonesia's national police headquarters has heightened fears of new attacks in the country, the police chief said.

General Da'i Bachtiar, speaking to legislators just hours after the Monday morning explosion, said the incident had "a huge political impact" in a country still recovering from the Bali blasts last October 12 which killed more than 190 people.

The Bali blast is blamed on regional terror group Jemaah Islamiyah, whose alleged spiritual leader Abu Bakar Bashir is detained at the headquarters in the southern Jakarta suburb of Kebayoran.

No one was hurt by the explosion outside a function hall inside the police compound at around 7:15 am. But legislators asked Bachtiar how such an incident could happen at national police headquarters.

"I would like to apologise for this incident because it has caused public unease, particularly because the bombing raised the fear of new attacks to new heights," Bachtiar told the scheduled meeting of a parliamentary security committee.

The bomb "is a small incident but it has huge political impact," he said. "I'm sure there is some sort of political message," he added, without elaborating.

The blast broke several windows, damaged the entrance and blew a big hole in the wooden ceiling of the function hall lobby. At least one vehicle was damaged.

National police spokesman Edward Aritonang said a policeman found a black bag outside the hall, which can be rented by the public, at about 6.30 am. The "low explosive" bomb exploded while the area was cordoned off. "This is a weakness of our security system," he said.

Asked if the blast might be related to Bashir's detention there, Aritonang said that "all possibilities are being taken into consideration."

Forensic scientists gathered evidence and placed items in plastic bags. Aritonang said police are checking details of a party which rented the hall for a wedding Sunday evening, including the catering and cleaning service.

Bachtiar said the bomb used a timer. "We are trying to unravel this case as quickly as possible with hopes we can find the perpetrator and the motive," he told the legislators.

He told reporters the bomb was made from plastic pipes stuffed with explosive powder and sealed with cement.

Asked if he believes the bombing was a warning related to the Bali investigation, Bachtiar said: "For sure we are not afraid of terrorist threats and we have to face them because that's our job."

Police have arrested 30 people over the Bali bombing -- five main suspects, four would-be suicide bombers, and 21 people who assisted the five.

Monday's bombing was the first attack in the capital since a man hurled a grenade near a US embassy residence last September.

The blast missed the house but killed the man who handled the grenade and injured the driver of their vehicle. The driver was later arrested. Three people including the bomber were killed last December in a blast at a McDonald's restaurant in the eastern city of Makassar. Local police said the group which staged that attack is part of the network that carried out the Bali bombing.

Police have said they want Bashir to face charges of treason and of staging a series of bomb attacks on Indonesian churches on Christmas Eve 2000. They said last week that the Muslim cleric is also likely to be declared a suspect in the Bali blast.

Environment

NGO to sue companies over recent flooding in Riau

Jakarta Post - February 8, 2003

Jakarta -- The Riau chapter of Koham (Human Rights Commission) will sue 11 plywood and pulp and paper companies operating in Riau for allegedly causing the recent flooding in the province, Antara has reported.

The companies are PT Indah Kiat Pulp and Paper group, PT Panca Eka, PT Siak Raya Timber, PT Surya Dumai, PT Arjuna Plywood, PT Kampari Plywood, PT Sarikatul Mas, PT Taman Ros Masterindo, PT Riau Andalan Pulp and Paper (RAPP), PT Tribakti Sarimas and PT Sola Gratia.

Head of Koham Riau AB Purba said on Friday that the pulp and paper companies had allegedly destroyed forests in Riau, which resulted in widespread flooding.

"The flooding, which damaged the environment and claimed lives, is due to deforestation by the companies," he said.

Koham would also sue the Riau forestry agency for permitting the companies to operate in Riau's forests.

Widespread deforestation, including illegal logging, has been blamed for the recent flooding in Riau, which claimed at least five lives.

Inside Jakarta's smuggling zoo

Asia Times - February 6, 2003

Kafil Yamin, Jakarta -- The market is dirty, is chaotic and reeks of animals. Called the Pramuka pet market, its bazaar-like atmosphere, punctuated by the calls of creatures in distress, camouflage well the fact that this untidy sprawl in the eastern part of Indonesia's capital is a key part of a multimillion- dollar smuggling operation.

About 30 kilometers away and, like Pramuka, within the municipal confines of Jakarta is Barito, another pet market. This too has a profusion of birdcages swinging overhead, while hutches containing monkeys, dogs and cats line the narrow walkways.

Most visitors to Pramuka and Barito are bona fide -- including local bird lovers in search of bird feed.

What few know is that both markets have a global reputation, though a very dubious one indeed, one they got a glimpse of when the Indonesian police struck twice in January to prevent rare and protected animals from being smuggled out.

On January 20, Japanese national Ohashi Masayuki was stopped at Jakarta's Sukarno-Hatta International Airport.

Among the 85 animals he was attempting to smuggle out were rare gibbons and endangered squirrels. Just two days later, three Kuwaitis were thwarted in their bid to spirit away rare and protected Indonesian wildlife.

The alarming scale of the smuggling was revealed by a vendor in the Pramuka market, who said he sells an average of 150 rare wild animals every month. "My regular customers are from Japan, the Middle East and Malaysia," he said. "If we make a deal -- which includes a guarantee for delivery -- then I send the animals to the airport."

The vendor says the animals come from the forests of Sumatra, East and West Nusatenggara, Papua and Kalimantan provinces. He then spoke of an arrangement that resembles a supply chain: "When we get an order and agree with the prices, then we contact our regular suppliers and tell them what we need."

That chain extends from markets such as Pramuka and Barito outward across the far-flung archipelago. It thrives with impunity despite Indonesia being a party to the Convention on International Trade in Endangered Species (CITES) from l978.

The criminal practice continues to flourish because of a lack of law enforcement and because of the huge price that rare species command from international buyers. Like narcotics, the "street value" of smuggled endangered species is far higher than what the vendors pay -- a rare cockatoo sold in Indonesia for Rp3 million (US$260) can fetch up to $2,600 abroad.

The vendor claimed there is "no difficulty" in passing through the customs and airport security. "We just give them some money and they take care of our things," he explained, adding that payoffs are reserved for at least three institutions in the airports: customs, the airport pet quarantine bureau, and forestry officials.

Another pet vendor in the Barito market said that when deals are agreed upon, "agents" in destination countries stand ready to secure the delivery. "I have been working with a Malaysian company to do this business for two years," he said, claiming that there are international airlines willing to carry such prohibited cargo.

With the stakes spiking up to about a million US dollars a day -- the estimate of one customs official of the international value of animals smuggled out of Indonesia in a 24-hour period -- the suppliers and vendors control a market that is more lucrative than illegal logging.

In fact, the director general for forest protection and natural conservation, I Made Sumadia Gelgel, said: "It is estimated the losses [from animal smuggling] are much higher than losses caused by log smuggling."

This translates into an enormous sum. The Forestry Ministry reckons that every year, illegal logging costs Indonesia Rp30 trillion ($3.4 billion), and that this activity annually destroys 1.6 million hectares of forest.

Compared with the profits to be had from smuggling, the legal trade in animal species -- those species not covered by the CITES can be traded legally -- is relatively minuscule. Live reptiles, birds, corals, reptile skins, butterflies, and wild orchids earned Indonesia an average of $20 million per year in the last three years.

The country is the largest exporter of birds in Asia -- and is, more surprisingly, the biggest importer in Asia. Among the world's bird-exporting countries it ranks fourth after Senegal, Tanzania, and Argentina.

But contesting the official lament about the plundering of Indonesia's natural wealth is Iwan Setiawan, staff member of the Indonesian Environment Information Center (PILI). In September, he led a team to research the trafficking in endangered species in the Pramuka and Barito pet markets.

He said he found some protected animals on sale and evidence of transactions, and reported his findings to the ministries of Forestry and Environment, the Nature Conservation Body and the police. The result? Nothing, said Iwan, which has led him to conclude that there is a nexus between the smugglers of endangered species and the authorities.

It is a view that is repeated by the Gibbon Foundation, a conservation group based in Jakarta. A member of the group's office explained that the foundation had at one time entered into a cooperation agreement with the Forestry Ministry to map wild- animal populations using satellite imagery. The aim was to identify the remaining concentrations of wild species.

"But this invaluable information was leaked out," said the staffer. "Then we found traces of professional hunters in the regions and the animals had gone."

Forest firm being blamed for West Java landslides

Jakarta Post - February 4, 2003

Yuli Tri Suwarni and Agus Maryono, Bandung/Cilacap -- State-owned forestry company PT Perhutani has increasingly come under fire for its failure to stop the rampant deforestation blamed for last week's deadly landslides that killed more than 30 people in West Java.

West Java Governor R. Nuriana has officially reprimanded the Perhutani office responsible for the management of forests in the province, including the forest on Mount Mandalawangi, from which mud and rocks came down to bury dozens of houses in Kedungora subdistrict, Garut regency, on January 28, leaving at least 21 people dead.

Three days later, another 10 villagers died when a landslide swept over their homes in the adjacent regency of Kuningan.

"Since before the implementation of regional autonomy, the central government, through Perhutani, has been the sole manager of forests in West Java, which have been damaged," he said.

Perhutani, which is in charge of almost half of West Java's forests, has yet to respond to the criticism.

However, a spokesman for the company, Dachlan Sudrajat, shifted the blame to locals who looted the forests and converted them into farmland.

"Several times we demanded firm action against the forest settlers, but the legal authorities did nothing," he said.

Aside from the governor's criticism of Perhutani, the forestry firm is also facing a class-action suit from an alliance of non- governmental organizations.

The head of the West Java forestry office, Edi Supriadi, accused the state-owned forestry company of failing to maintain the ecological balance in the province.

"It [Perhutani] should not just want to make a profit by selling logs from the forests, but should also manage the forests properly along with locals. It should not allow the forests to be looted and in the end blame villagers for deforestation," he said.

Edi acknowledged that land conversion and illegal logging were difficult to stop because of population growth and widespread poverty.

Experts have warned that West Java remains prone to flooding and landslides because of its unstable soil and massive deforestation from illegal logging.

According to these experts, the main areas of deforestation in the province are Garut, Tasikmalaya, Bandung, Bogor, Puncak and Cianjur.

West Java is the country's most vulnerable province to landslides, according to the Bandung-based Directorate General for Geology and the Mitigation of Natural Disasters.

According to data from the agency, more than 500 landslides have occurred in Indonesia over the last 10 years, 70 percent of them in West Java, which is home to about three million people.

The local forestry office said that in 20 years the amount of forests in West Java and the adjacent province of Banten had fallen from 1,774,186 hectares to 1,000,743 hectares, due to the continued development of industrial areas and housing settlements.

About 260,937 hectares of forests are conserved areas and another 240,402 hectares are protected, while the remaining 500,000 hectares are located in Perhutani's limited production area, which spreads along the Citanduy, Cimanuk, Citarum, Ciliwung and Cisadane rivers.

Apart from the forests, another 1,325,525 hectares of land in West Java should have been conserved as water catchment areas.

However, much of this land has been converted for use as farms, plantations, resettlement areas and for other functions.

In another disaster, a landslide swept through a hot springs resort in Pacet, Mojokerto, East Java, last month killing at least 32 people. That disaster has been blamed on deforestation in the area.

The state minister for the environment warned recently that the forests in Java would disappear by 2005 unless logging was halted. Meanwhile, about 10,000 people fled their homes in Cilacap regency, Central Java, as flooding extended to 26 villages in Wanareja subdistrict on Monday. One person has reportedly died at a shelter since flooding struck the regency on Thursday. Many others are suffering from skin irritations, diarrhea and fever.

Hundreds of people living in makeshift shelters, mosques and school buildings face the possibility of disease from unclean water and food.

Health & education

140,000 TB sufferers in Indonesia die every year

Jakarta Post - February 8, 2003

Jakarta -- An estimated 140,000 out of 583,000 current tuberculosis sufferers in Indonesia die every year compared to 2 million worldwide, Sri Astuti Suparmanto, the Health Ministry's acting director general for contagious disease control and environmental health, said here on Friday.

"The number of TB sufferers in Indonesia has reached 583,000 a year and 262,000 of them have positive saliva capable of spreading the disease to other people," Sri told Antara news agency.

The World Health Organization (WHO) estimates the number of TB sufferers worldwide at 8 million.

The high mortality rate of TB sufferers in Indonesia is closely linked to the fact that they are reluctant to go to health centers, she said.

Sri said the government had made anti-TB drugs in every health service center available to TB sufferers free of charge. "By taking the drugs for six consecutive months, through the so- called "DOTS" (Directly, Observed Treatment, Short-Course) program, TB sufferers will recover from their disease," she said.

Armed forces/police

Reshuffle aimed at 'rejuvenating Jakarta military'

Straits Times - February 6, 2003

Jakarta -- The Indonesian military (TNI) is undertaking a major reshuffle of 120 strategic positions, including the three deputies to the chiefs of staff of the army, the navy and the air force.

Without giving details, TNI commander Endriartono Sutarto said on Tuesday that he had approved the proposed reshuffle, which was aimed at "rejuvenating" the military. "The reshuffle has nothing to do with the political or security situation. There's nothing special about it," the general said during a break in a hearing before a parliamentary panel on political, security and foreign affairs.

There were rumours of a military coup in Indonesia last month after massive protests erupted over planned utility price hikes. President Megawati Sukarnoputri's government was forced to roll back the hikes.

In the reshuffle, the chief of military education and training command, Major-General Darsono, was appointed deputy chief of the army to replace Lt-General Sumarsono.

The chief of the navy's Eastern Fleet, Rear-Admiral I.W.R. Argawa, was named deputy chief of the navy to replace Vice- Admiral Syahroni Kasnadi.

And the assistant to the air force chief for operational affairs, Rear-Marshall Wardoyo, will take over as deputy chief of the air force from Vice-Marshall Ali Munsiri Rappe.

Among other changes in the regional military commands, the military commander in Papua province will be replaced amid allegations that his troops killed two American teachers and prominent local politician Theys Eluay.

Major-General Mahidin Simbolon will hand over his post as head of the Papuan regional command to his deputy, Brigadier-General Nurdin Zaenal, an army spokesman said on Tuesday. Military spokesman Ratyono described the reshuffle, which included the heads of the military districts in Jakarta and strife-torn Maluku, as "routine".

But a senior officer at the armed forces headquarters, who spoke on condition of anonymity, confirmed that Maj-Gen Simbolon was being replaced because of "ongoing problems in Papua"

Economy & investment

Indonesia looks beyond debris for export-led recovery

Bloomberg News - February 4 2003

Indonesia's exports rose 1.2 per cent to $US57 billion ($97.3 billion) in 2002 from a year earlier, helped by higher oil and commodity prices as well as a boost in overseas orders for machinery and other manufactured goods.

Imports rose 0.9 per cent to $US31.24 billion from 2001, yielding a trade surplus of $US25.76 billion, the Bureau of Statistics said. The country's trade surplus last year was 1.6 per cent higher than 2001's $US25.35 billion.

As overseas investments slow, the Government is counting on a recovery in exports and consumer spending to help limit the impact on the economy of last year's terrorist attack on Bali. Jakarta cut its growth forecast for the economy, the Asia- Pacific's sixth largest, after the October 12 attack -- from 5 per cent to 4 per cent.

Still, signs of sluggish global growth, particularly in the US and Japan, and worries over the fallout from a US-led war against Iraq, will curb investment and growth prospects in the archipelago.

The US, Indonesia's largest export market, expanded at a slower- than-expected 0.7 per cent pace in the fourth quarter.

"The story on the export front related to the US and Europe is not going be that favourable," said Craig Chan, head of Asian research at Forecast in Singapore. "There are still huge risk events that could damp demand from the US -- Indonesian non-oil exports could get hit from a war."

December exports rose 13.9 per cent from a year ago to $US4.8 billion on higher oil prices. That was double the 6.9 per cent gain estimated by economists. In Jakarta yesterday the rupiah fell 0.05 per cent to 8876 to the US dollar, while the Composite index was 1.77 points higher at 390.21 in late trading.

Still, economists are sceptical the pace of export recovery can last if Indonesia does not win more foreign investment. Overseas investments into Indonesia have slowed, falling 35 per cent last year to $US9.7 billion, the lowest in nine years. Indonesia needs to attract capital to help fund a 34.4 trillion rupiah ($6.65 billion) budget deficit this year.

"Given there hasn't been much new private investment spending in Indonesia, that is constraining non-oil exports," said Paul Schymyck, an economist at IDEAglobal in Singapore.

The Bali attack also caused foreign governments, including Australia, the US and UK, to issue warnings to its citizens to defer travel to Indonesia. Besides hurting tourism, the move also hurt exporters as buyers stayed away and booked purchases from alternate markets, including Thailand and Vietnam.

Non-oil exports, a measure of industrial activity, rose 2.8 per cent to $US44.89 billion in 2002 from the previous year. For December, non-oil exports of goods such as textiles, palm oil and handicrafts rose 8.3 per cent from a year ago to $US3.62 billion, while non-oil imports rose 38.5 per cent to $US2.36 billion.

Manufacturing accounts for a quarter of the economy. The rise in non-oil exports and imports may signal renewed demand for Indonesian-made goods and orders for more raw material and machinery in anticipation of future orders.

Indonesia had forecast non-oil exports to grow about 2.5 per cent in 2002 after falling 9.3 per cent in 2001 to $US56.32 billion. Exports of palm oil may increase 9 per cent this year.

Exports fare better than expected: BPS

Jakarta Post - February 4, 2003

Dadan Wijaksana, Jakarta -- The country's export performance turned out last year to be better than many had expected, thanks to stronger exports of agriculture and low-end manufacturing products.

The Central Statistics Agency (BPS) reported on Monday that the value of exports rose by 1.21 percent to US$57 billion last year, compared with the level in 2001.

"The increase in full-year [export] performance was mainly driven by a rise in non-oil and gas exports. The rise was good enough to offset a decline in oil and gas exports," BPS chief Soedarti Surbakti told a media conference.

Non-oil and gas exports increased by 2.8 percent to $44.9 billion during the year, from $43.7 billion in 2001. This came as exports in the oil and gas sector were down to $12.1 billion, from $12.7 the previous year.

Soedarti said the relatively better export performance during the year was helped by a better-than-expected showing of the Japan, US and Singapore economies. The three countries have long become the nation's main export destinations, absorbing around 38.6 percent of the country's total non-oil and gas exports.

Non-oil and gas exports to Japan, the US and Singapore in December alone stood at $579 million, $497 million and $324.7 million respectively.

Analysts and industry players had previously painted a bleak picture for 2002 exports due to a host of problems, including the global economic slowdown and domestic uncertainties like lingering labor disputes and security problems, which prompted some foreign buyers to shift orders to other countries.

However, despite a stronger showing in 2002, the contribution to economic growth remains paltry. The 2002 trade surplus, known also as net exports, contributed less than 10 percent to the nation's economic growth.

Over the past few years, the country's economic growth has been driven mainly by domestic consumption. Economists have said that without a significant role from exports and investment, the country could not expect to sustain economic growth at 5 percent to 6 percent, necessary to generate sufficient employment and help reduce poverty.

This year, the government has targeted non-oil and gas exports to grow by 5 percent, thereby still relying on agriculture and low- end manufacturing products, which have proved to be relatively resilient against economic recessions in the developed economies. Meanwhile, the economy is projected to grow by around 4 percent, slightly higher than growth in 2002.

The above export figures should be a good start and confirm that there is still plenty of room for improvement in the country's export performance.

With consumer spending already showing signs of slowing down, plus investor reluctance to commit to the country, given the unfavorable business climate, turning to exports should be the most feasible option for the government to drive the economy.

Elsewhere, BPS said that imports in 2002 totaled $31.24 billion, 0.9 percent higher than the level in 2001. This means the annual trade surplus increased by 1.5 percent to $25.75 billion, from $25.36 billion achieved in 2001.

Record industry dying as piracy gets worse

Jakarta Post - February 3, 2003

Berni K. Moestafa, Jakarta -- Debuts by new Indonesian artists may soon become a thing of the past.

Digital piracy, through the duplication of CDs and VCDs, is rapidly taking over the market and pushing the local recording industry to the brink of extinction.

The end may be as near as five years away, said Arnel Affandi, general manager of the Sound Recording Industry Association of Indonesia (Asiri).

"For every legal album sold on the market there are six illegal ones," he said on the sidelines of a three-day Asia-Pacific symposium on the protection and enforcement of copyright organized by the World Intellectual Property Organization (WIPO).

Sales of pirated recordings, Arnel said, were eating into the industry's market share. Monthly sales of recordings had fallen to below three million from between eight and 12 million in 1997 and before.

In 1997, only 12 percent of the recordings sold were pirated. Now the figure is 600 percent, meaning six pirated recordings are sold for each original one, Arnel said.

He explained that the surge in piracy stemmed from the spread of cheap VCD players. "VCD technology was rejected in Europe and the United States, so they [the pirates] shifted the technology to Southeast Asia in 1998. Indonesia became their prime market due to the political upheaval at that time."

The unbranded VCD players quickly made their way into the homes of families throughout the country, including lower income homes. Today one can purchase dozens of different types of VCD player for less than $10 a unit in places such as the popular Glodok electronics market in West Jakarta, Arnel said. In Jakarta alone, Asiri has documented the presence of 40 illegal machines duplicating CDs and VCDs. Each can spew out at least 500,000 discs per month.

Indonesia's major local record companies are Aquarius, Musica and Indo Semar Sakti. Foreign record companies include Sony Music, BMG Music, Warner Music, Universal Music and EMI Music.

A drawback of the music industry was its unpredictability, as changes in market tastes could make or break artists. If the current rate of piracy prevailed, producers would likely prefer releasing compilation albums or re-releasing the recordings of established artists rather than betting on new artists.

Pressure for the government to act is looming. The United States has already placed Indonesia on its priority watch-list. This is one step below being classified as a priority foreign country, which automatically entails economic sanctions.

These sanctions could start with cuts in export quotas for Indonesian products like textiles and steel, and lead eventually to a full-out embargo.

"I was asked by several non-governmental organizations what the government's response is to that threat. I said there was none." Nonetheless, the government is working on several regulations to cope with the threat of digital piracy.

The Director of Copyright, Industrial Design, Integrated Circuit Layout Design and Trade Secrets at the Ministry of Justice and Human Rights, Emawati Junus, said her office was currently drafting an optical disc regulation.

The regulation would tighten supervision over the production of CDs and VCDs by, among other things, requiring manufacturers to inscribe a serial number on each disc they produce.

But that may not be enough. Arnel said the industry planned an antipiracy campaign to dissuade consumers from buying pirated goods.

And in an unlikely piece of collaboration, Asiri has asked the Indonesian Ulemas Council (MUI) to issue a fatwa (Islamic religious decree) declaring pirated goods to be haram (forbidden under Islamic law). Arnel reasoned that pirated goods were haram as they constituted stolen property. Furthermore, pirates usually turned to porno VCDs to keep duplication machines running as a shutdown would require extra money and time to turn them on again.

"So porno VCDs are traveling along the chain of pirated goods all the way from duplication and distribution right up to sales," he said. Arnel said that the MUI would likely issue a haram edict in the next few weeks.