Aceh

British-made Scorpion tanks to be withdrawn from Aceh

Agence France Presse - January, 17, 2004

Jakarta -- Indonesia said Saturday it will withdraw controversial British-made Scorpion light tanks from Aceh province and replace them with a locally-produced model.

The move has nothing to do with British concerns over the use of Scorpions in Aceh, where troops are conducting a major offensive against separatist rebels, Colonel Nachrowi, an Indonesian military spokesman, told AFP.

"True there is a plan to replace Scorpions that we are using for supporting the operation in Aceh," Nachrowi said.

He said 14 armoured vehicles produced by the Indonesian weapons manufacturer PT Pindad will leave from Jakarta's Tanjung Priok port for Aceh on Monday. "It's a new product," he said.

Nachrowi declined to say how many Scorpions would be withdrawn but said he believed none would eventually remain in the province where Indonesia last May launched an all-out offensive against Free Aceh Movement (GAM) rebels.

British Foreign Office Minister Mike O'Brien visited Indonesia on June 3-4 to remind the Indonesian government "of their assurances that they would not use British built military equipment offensively or in violation of human rights," he told the British Parliament after the visit.

"We are actively monitoring compliance with these assurances, with care," he said following Indonesia's June 23 announcement that 36 Scorpions had been deployed in Aceh to defend roads against attack by GAM.

Indonesia's army commander, General Ryamizard Ryacudu, said at the time that Indonesia had the right to use the Scorpions in Aceh.

Nachrowi said the troops manning the Scorpions were reaching the end of their tour in Aceh, as the country was capable of producing its own military vehicles.

During O'Brien's June visit, Indonesia also rejected British appeals not to use British-made Hawk aircraft during the offensive.

Britain's Guardian newspaper had reported the Indonesian military flew four Hawks on the first day of its Aceh operation as close protection for Hercules transport planes. They did not mount attacks.  In a report last month Human Rights Watch accused the Indonesian military of pursuing a campaign of killings, kidnappings and beatings of civilians in Aceh, where GAM has been fighting for independence since 1976.

Acehnese refugees interviewed in Malaysia said Indonesian security forces were guilty of gross human rights abuses, including extrajudicial executions, forced disappearences, beatings and arbitrary arrests, said the report. Indonesia's foreign ministry dismissed the allegations as baseless.

The military says more than 1,200 guerrillas have been killed and more than 2,000 have been captured or surrendered during the eight-month operation.

Ex-general Wiranto positions self as Aceh peacemaker

Reuters - January 15, 2004

Jerry Norton and Tomi Soetjipto, Jakarta -- An Indonesian presidential candidate who once headed the country's armed forces said on Thursday that if elected he would move quickly to end an intensive military campaign against rebels in Aceh province.

"I will soon, of course, have a speedy halt to the military operation in Aceh," former general Wiranto told foreign correspondents.

"We will develop the stronger spirit to rehabilitate and to act on reconciliation with the disputing parties," said the 55-year- old Wiranto, who has been charged with human rights violations by prosecutors in East Timor.

Wiranto, who traded his uniform for civilian clothes in 2000, is considered among the top contenders to be the nominee of Golkar, the second largest party in parliament, in July's presidential election.

Wiranto said he hates bloodshed and believed that in the Aceh conflict "each killing will of course generate a sort of a vengeance" in what could become an unstoppable cycle.

Indonesia has been fighting Free Aceh Movement (GAM) rebels in the resource-rich province at Sumatra's northern tip with varying intensity for some 28 years.

It recently extended what was originally billed as an all-out campaign to crush the rebels. The offensive that began last May has added several thousand casualties to the estimated 10,000 killed earlier in the conflict.

Wiranto is a colourful figure credited with trying to hold down violence during riots in the last days of the authoritarian Suharto regime and for expediting Suharto's resignation.

But he has also been blamed by human rights groups and others for not doing enough to stop sectarian and ethnic clashes after Suharto's fall and as defence minister and military commander -- for the violence in East Timor. More than 1,000 people were killed in the period surrounding a 1999 vote for independence in the then Indonesian-controlled territory.

Wiranto repeated denials on Thursday that he had committed human rights violations, citing an Indonesian investigation. "I was investigated and interrogated" and it was found "I was not guilty and not involved", he said.

East Timor is conducting its own human rights prosecutions over the violence, much of it carried out by pro-Jakarta militia units linked to the Indonesian military. It has indicted a number of current and former Indonesian officers. Indonesia has declined to extradite any. Among some Indonesians such controversy may be less important than the hope Wiranto could provide the strong leadership they feel the sprawling country of 210 million people has lacked under the presidency of Megawati Sukarnoputri.

But Megawati, daughter of the country's founding father and first president Sukarno, remains the odds-on favourite to win the likely run-off election in September.

As many as five candidates are expected to contest in July, making it difficult for anyone to get the required majority.

Four suspected GAM members killed in Aceh

Antara - January 17, 2004

Banda Aceh -- Four people suspected to be members of the separatist Free Aceh Movement (GAM) were killed during separate exchanges of fire with the military in several districts of Aceh province, the military said on Saturday.

Military spokesman Lt. Col. Asef Safari said that the four rebels died on Friday after a gun battle with troops in Pidie, North Aceh, and East Aceh district.

He said that the troops also seized five homemade bombs, hundreds of rounds of ammunition and documents from the rebels.

West Papua

Two more Papuans get 20 years for arsenal theft

Jakarta Post - January 16, 2004

The Wamena District Court sentenced on Thursday two more civilians to 20 years in prison each for their roles in breaking into a military arsenal in Wamena last year and stealing rifles and ammunition.

The two, among the seven defendants in the case, were identified as Michael Haselo and Apot Nagolik. They were the last two defendants to be sentenced in the case. Two other defendants were also sentenced to 20 years in prison each, while the remaining three were sentenced to life imprisonment.

The arsenal theft occurred on April 4 last year. The perpetrators, believed to be members of rebel Free Papua Movement (OPM), made off with 27 rifles and thousands of bullets from the arsenal, belonging to the Indonesian Military (TNI).

Reviewing the Biak massacre

Jakarta Post - January 15, 2004

Kel Dummett -- For the many human rights organizations and individual activists around the world concerned about ongoing human rights violations in the province of Papua, the announcement (The Jakarta Post, January 10, 2003) that an ad hoc team with the National Commission on Human Rights (Komnas HAM) will probe alleged gross violations of human rights in Papua, is great news.

For more than 40 years, the people of Papua have endured horrendous violence, including murder, rape, beatings, summary detention, forcible removal from villages and the burning of houses, schools, churches and health clinics.

And most of this has occurred hidden away from the view of the international community, or shamefully the international community has turned a blind eye to the violations. Amnesty International estimates that more than 100,000 people have been killed since Indonesia took over West Papua following the disputed Act of Free Choice in 1969.

However, it is a concern that Komnas HAM will only investigate two of the seven serious cases identified. One of the cases that will not be investigated is the 1998 massacre of more than 100 people, mostly women and children, on the tiny Papuan island of Biak.

I visited Biak in 2002, and although the island is visually a tropical paradise, the experience was disturbing. The scars of the horrific events that took place on July 6, five years ago, have not healed. Nor have the scars of 40 years of constant, and at times deadly, intimidation by the Indonesian police and military.

In Biak, perhaps more than any other place I visited in Papua, the fear of military intimidation and violence is palpable. As I traveled around Biak with my wife, I felt it was eerily unlike other places we had been. Teenage girls and young women did not engage us with their eyes or a smile. Fear and shame were written on their faces.

Details of the events of that day are not well known outside of Biak, as the massacre received little attention from the world's media. However, after talking to witnesses and survivors, mostly women, and reading a Papuan church report and articles in the Sydney Morning Herald and Sun Herald newspapers, including graphic accounts from two Australian aid workers, the picture of a cold-blooded and brutal attack on defenseless civilians unravels.

At 5 a.m. on July 6, 1998, the army allegedly opened fire on a crowd of sleeping young people at Biak harbor, who had been guarding their Morning Star flag, raised a few days earlier. The entire population of Biak town was rounded up at gunpoint and forced to the harbor area, where for the whole day they were subjected to physical and sexual abuses, including the young children.

More than 100 people -- mostly women, some with babies and young children -- were rounded up and forced on board two naval vessels, where they were stripped, killed and their bodies mutilated and dumped at sea.

No one knows the exact death toll, but a Biak church report documents the recovery of a total of 70 bodies, including those of young children, that either washed ashore or were recovered from fishing nets. The report claims many of the bodies were mutilated -- some with limbs cut off, women with breasts removed, men with penises cut off. The bodies of two women washed ashore on an outer island -- they were tied together at their legs and their vaginas had been crammed with newspaper.

What is most disturbing is the fact that a senior serving Australian military intelligence officer, Capt. Andrew Plunkett, claimed in the Sun Herald newspaper, that the Biak massacre "was a dress rehearsal for the TNI atrocities in East Timor".

Despite an official Australian government report confirming that the massacre took place, the Australian Government, according to Capt. Plunkett "turned a blind eye and did not raise an official public protest", thereby "giving a green light to the Indonesian military's subsequent atrocities in East Timor".

The details of this massacre are so horrendous that I and many other human rights watchers around the world, call on KomnasHam to include the Biak massacre in the cases to be investigated.

[Kel Dummett is from the RMIT University in Melbourne and is also a Director of the human rights watch organization, Global Justice Inc.]

Komnas HAM to question 75 over Papua rights abuses

Jakarta Post - January 17, 2004

Nethy Dharma Somba, Jayapura -- The National Commission on Human Rights (Komnas HAM) has started investigating alleged gross abuses in the Papua province last year and in 2001 and plans to summon 75 local witnesses to give testimony.

Led by Komnas HAM chairman Abdul Hakim Garuda Nusantara, the commission's investigation teams have been in the province since January 12.

They have established representative offices in the Papua towns of Wamena and Wasior, where the military and police are accused of committing extra-judicial killings and torturing civilians.

At least 45 local witnesses will be summoned by the team to probe the Wamena case, in which soldiers allegedly killed seven, tortured 48 and forcibly evacuated some 7,000 Papuans between April and June last year.

The incident was sparked by Free Papua Movement (OPM) members who broke into a military arsenal in Wamena on April 4 and escaped with 29 rifles. Two soldiers, First. Lt. Napitupulu and Chief Sgt. Ruben Lena, and one civilian were killed in the robbery.

The Komnas HAM dispatched a second team to investigate human rights abuses in Wasior in 2001. The three-member group, which recently met with local officials in Manokwari regency, will ask for testimonies from 30 witnesses.

In that case, police allegedly killed three people and tortured 16 more, burning down dozens of homes in raids in retaliation for the deaths of one civilian and five Police Mobile Brigade (Brimob) troops. Those deaths were also blamed on Papuan rebels.

Abdul Hakim said investigations into both cases would be held in two phases, the first on January 26 and the second in March.

Trikora Military Command chief of staff Brig. Gen. Getson Manurung said he would support the teams conducting the probes. "The military will not intimidate the witnesses during the process. If I find out soldiers are committing intimidation, I will not hesitate to take stern action against them," he said.

Earlier, members of the team investigating in Wamena met with local officials in the Jayawijaya regency to inform them of the purpose for their visit and to win their support.

Students face 20 years' jail for raising flag

Green Left Weekly - January 14, 2004

Jason MacLeod -- On December 3, Indonesian security forces detained four West Papuan students for their part, two days earlier, in releasing West Papuan flags -- known as the Morning Star -- attached to balloons in the central Java town of Semarang.

The students' action was to commemorate Indonesian-occupied West Papua's "independence day". In 1961, the West New Guinea Council  a democratically elected body  adopted a national anthem, agreed upon the name West Papua for their country and unveiled the Morning Star flag.

However, the government of Indonesia launched a small-scale invasion to back up diplomatic manoeuvres, finally securing administrative control of the territory in 1963. West Papua was integrated into the Republic of Indonesia after less than 1% of the indigenous Melanesian population voted in the discredited and fraudulent 1969 Act of Free Choice.

The students called for a peaceful dialogue between the Indonesian government and the people of West Papua, mediated by a third party, to resolve the political status of the territory. Charlie Imbir, Chris Ukago, Herman Katmu and high school student Markus Jiwitao face up to 20 years in jail if charged with treason.

Police in Semarang have been conducting house-to-house searches for banners, posters, books on West Papua and other pro-Papua material considered subversive by the state. A demonstration, allegedly involving Indonesians brought in from the town of Solo, was held outside the police headquarters where the students are being detained. The demonstrators called for Jakarta to crackdown on the pro-independence Free Papua Movement (OPM).

Security forces routinely harass West Papuan students studying in Java and many have gone into hiding. In November, unknown men wielding samurai swords and carrying Molotov cocktails attacked a West Papuan student dormitory in Yogyakarta in the early hours of the morning. "We are all scared", said one student who asked not to be named, "and we don't dare return to our dormitories".

Many students believe that the increasing attacks in Java and West Papua are part of an organised state-sponsored crackdown. Indonesian president Megawati Sukarnoputri, Coordinating minister for security and political affairs Susilo Bambang Yudhoyono, chief of the armed forces General Endriartono Sutarto and army chief of staff General Ryamizard Ryacudu have all publicly stated that "separatism" will not be tolerated and have ruled out the possibility of dialogue over West Papua's status.

Sukarnoputri chose December 1 to announce the appointment of Timbul Silaen as the new police chief of Papua province (as West Papua is officially known). Silaen is the infamous former East Timor police chief and an indicted human rights violator. At the same time, notorious East Timor militia leader Eurico Guterres has arrived in Timika in West Papua, near the giant Freeport-Rio Tinto gold and copper mine, to form a militia group  the Red and White Defenders Front (Front Pembela Merah Putih  FPMP).

Silaen and Guterres were accused of crimes against humanity following Indonesian military and militia violence in the wake of East Timor's historic vote for independence in the UN-sponsored referendum in 1999.

"You know, there is the Morning Star flag there. We have to fight it, with our blood if necessary. I think it is very normal if you fight back, with or without arms... So, I told my members, if your area is attacked, you are free to join any militia group to fight the attackers back", said Norman Sophan, FPMP secretary- general.

On November 5, troops from Indonesia's notorious special forces Kopassus raided and killed 10 people as they slept in their beds in Yalengga village in the remote West Papuan highlands. The night before he was killed in his bed, OPM leader Yustinus Murip was seen on SBS television's Dateline program calling for the UN to intervene and support peaceful dialogue to resolve the longstanding conflict.

The attack on Yalengga was the latest in the military operations that have continued in the highlands since April. The attacks have resulted in hundreds of people being displaced and countless rapes, assaults, torture and killings. Scores of health clinics, churches, schools, gardens and villages have been burnt to the ground. Another pro-Jakarta militia, Barisan Merah Putih (Red and White Garrison), has also been set up by the security forces in the highlands town of Wamena. Human rights defenders in Sorong and Fak Fak have reported that the Laskar Jihad militia has established a presence there and enjoys support and protection from the military.

In September, the respected West Papuan human rights organisation ELSHAM (Institute for the Study and Advocacy of Human Rights) had their offices ransacked by thugs in Jakarta. Since then, two senior ELSHAM staffers, John Rumbiak and Yohanes Bonay, have been forced to leave as a result of death threats. Rumbiak is now in exile in the United States.

Yohanes Bonay's child and wife were seriously wounded when unidentified men opened fire with automatic weapons on a car they were travelling in, the same vehicle that only hours before Bonay had decided not to travel in. ELSHAM staff are currently in court, accused by the military of defamation.

West Papuan leaders fear it is only a matter of time before martial law is declared in West Papua.

With each act of violence committed by the Indonesian military, dissent in West Papua deepens and trust in the sincerity of the Indonesian government to constructively resolve the conflict dissipates.

The Megawati government's policy is at odds with the approach taken by former president Abdurrahman Wahid. The Wahid government allowed the Morning Star to fly, provided it was flown lower than the Indonesian flag. Since Megawati came to power, the West Papuan flag has been banned and peaceful flag-raisings forcibly repressed. Seven activists remain in detention in Manokwari after a pre-emptive police action scuttled plans for a December 1 commemoration there.

[Jason MacLeod is an activist with the Australian West Papua Association.]

NGOs call for national dialogue to end conflict in Papua

Antara - January 14, 2004

Jakarta -- A number of non-governmental organizations here on Tuesday called on the government to hold a national dialogue to end conflicts in eastern Papua province.

Bonar Tigor Naipospos, the speaker for the organizations grouped in the National Solidarity for Papua, said the national dialogue could become a wayout for some crucial problems of the province such as cases of human rights abuses and provincial division.

"For some people of Papua year 2003 would be remembered as the year that was marked by conflicts among people particularly as a result of the central administration's decision to split the province into more provinces," he said.

Democratic struggle

For the sake of democracy, the PRD is not afraid of death

Reporter - January 17, 2004

Remember the People's Democratic Party (PRD), remember how radical these young people were in the struggling for democracy. Although they admit they are still weak in terms of building a mass base, to this day the PRD is still consistent in its mission of struggle. That is, for the sake of democracy, they are not afraid of death. That's how extreme they are.

According to former PRD chairperson Harris Rusli Moti, this party of young people still has a clear program to respond to the economic and political problems which are being endured by society at the moment. That, he says, can be seen from their struggle against neoliberal economic policies which are being forced on our country by the advanced countries.

"In political terms, from the start the PRD was the most consistent in carrying out the struggle against the old forces and were the first to teach the people how to carry out such a struggle. Not just an economic struggle, but also a political struggle", revealed Harris yesterday during an event to introduce the new leadership board members from the ranks of the party with the symbol of a star and half circle of notches for a flag.

Harris explained that there has been no change in the PRD's struggle. They are still consistent in taking it forward in this historical period."When [the party] was first established in 1996, we fought the forces of the New Order [regime of former President Suharto]. When that regime fell, we were still consistent in carrying out the struggle against their leftovers and the [current] regime which supports the New Order", he explained.

Taking up the issue of Aceh and West Papua, he went on to say that the PRD's position has not changed. We were aware then and now, about our vision of how to resolve society's problems, which is by forming a [political] vehicle for them. There is nothing which will change the fortunes of society except the people themselves. This is the PRD's call to make the people aware that people themselves must also have the courage to organise said Harris. "Don't pin your hopes on the parliament, the political parties, or the current elite forces", he asserted.

Senayan is not the goal

The parliamentary struggle is not the primary aim of this party with the red flag. Even if they were able to get into Senayan [the national parliament], this must be understood as being part of their fight to assist the extra-parliamentary struggle. "[To try and get] one or two legislative candidates into the parliament, not to just discuss the state budget and all sort of other things, but to mobilise people in a revolutionary way so that they have the courage to bring down this regime which is not `right'", he explained.

During the launch of the new leadership, PRD secretary general Zely Ariane explained that the PRD has stated explicitly that there is not one political party participating in the elections which has a program which can provide a solution to the [problems of] Indonesian people. The four issues which are their main concern, militarism, the welfare of the people, the struggle for women's rights and corruption, have still to become a central part of the programs of these political parties.

Nevertheless said the activist, the PRD does not have a position or interest in -- as they say -- boycotting the elections. The PRD is only interested in making people realise that the 2004 elections do not have any real meaning and will not produce any [real change]."We will provide the evidence, this election will have no [meaningful] outcome", she explained yesterday.t, if the ordinary people still decide to choose and use their right to vote in the 2004 elections, we will leave that up to them", she asserted.

The new general chairperson of the PRD for the period 2004-2006, Yusuf Lakaseng, went on to explain that the PRD's resolution asserts that the coming elections are not the solution which is need by the people. What is needed by the people at the moment is the establishment of a people's government which is able to resolve the basic issues which are bearing down on ordinary people. This government would be an alliance of all the mass organisations of the people's struggle which will include trade unions, farmers, students, artists, low-ranking solders and political parties along with individuals who are sincere in struggling for the interests of the people.

The principle struggle at this time is to organise the oppressed classes to become the class in power. With this consciousness, they will be able to build socialism in Indonesia.

During the launch of the new leadership, the PRD also received the full support of Faisal Syarifuddin from the Aceh People's Association for their commitment to continue to pay attention to the peoples of Aceh, West Papua and other parts in Indonesia which are still "oppressed". Similar support was also offered by Hans Gebze from the Papua Students Alliance. (imt)

[Translated by James Balowski.]

Labour issues

Fired aircraft firm workers go from zoo to ministry to camp

Jakarta Post - January 14, 2004

Jakarta -- Thousands of dismissed workers of PT Dirgantara Indonesia (PT DI), a state-owned aerospace company in Bandung, West Java, have refused to go home, and say they will stay for another two days in Jakarta despite having little confidence that the Central Committee for the Settlement of Labor Disputes (P4P) will rule in their favor.

The chairman of the biggest trade union in the company, the SP FKK, Arief Winardi, said that the workers would stay in Jakarta until the central committee made a final ruling on the case on Thursday.

"We won't go back home until we know for sure what is happening. We are waiting for the committee's decision, which we hope will be in our favor," he said after a hearing with the committee at the Ministry of Manpower and Transmigration Building here on Tuesday.

The demonstration by the workers at the ministry caused major congestion along Jl. Gatot Subroto as the workers marched from Ragunan Zoo, where they spent the night on Monday, to the ministry.

Lawyer Johnson Panjaitan, who accompanied the workers during the hearing, said that both the committee and the management should be aware that the protests could turn violent.

"The workers have decide to stay in town for another two days to wait for the central committee's decision as PT DI management failed to show up during the hearing. This means we have to wait here until Thursday," he said.

The central committee hearing, presided over by Sabar Sianturi, was adjourned until Thursday to wait for management explanations on the many issues raised by the workers during the hearing.

"We have to adjourn the hearing to give the management a chance to give their side of the story. If management fails to show up on Thursday, we will make an ex parte decision based on the employees' arguments," he said.

During the hearing, Arief and Johnson argued against the management's decision to lay off 6,600 of the 9,350 PT DI workers and subsequently to dismiss them, claiming the company's financial difficulties were caused by corruption, inefficiency and mismanagement.

"A month after the company's financial problems were exposed by the media in July, the labor union submitted a proposal to save the company and avoid any dismissals, but the management ignored this. Meanwhile, the president director was holding extravagant meetings in four-star hotels in Bandung trying to find a solution to the problems," said Arief.

The central committee's decision will not be final as, besides the possibility of it being vetoed by the manpower and transmigration minister, both sides to the dispute are allowed to appeal to the Supreme Court.

Lawyer Kemalsyah Siregar, who represented management during the hearing, was unable to give detailed information on the company's financial difficulties, and failed to produce the management's written directions ordering the layoffs and dismissals.

The workers' are not overly optimistic of winning their case as Law No. 13/2003 allows ailing companies to dismiss their workers.

The Indonesian Bank Restructuring Agency (IBRA) said it had disbursed US$50 million (Rp 43 billion) to PT DI to provide severance payments to the dismissed workers.

The workers have said that they will only accept the dismissals if twice the amount of severance pay required by Chapter 156 of Law No. 13/2003 was provided to them.

In July, the management of DI decided to lay off 9,670 employees as the company was suffering continuing financial difficulties, and was unable to pay its debts to local and overseas creditors, and the workers' monthly salaries.

The government then intervened by asking the state minister for state-owned enterprises and IBRA to help solve the company's financial difficulties.

The company, which was a pet project of former technology minister B.J. Habibie in the 1980s, was plunged into financial crisis after the fall of president Soeharto in 1998. Under Soeharto, the company was regarded as a matter of national pride.

DI received an initial capital injection of Rp 1.6 trillion when it was established in 1986. However, it was never economic and had to subsidized by the state throughout the 1990s.

The post-Habibie administrations came to the conclusion that the firm was a financial burden on the state.

The aircraft company produced the CN-235 and N-250, which were much touted during the Soeharto days as shining examples of the progress made by the Indonesian industrial sector.

2004 elections

Public asked to monitor goods, services to KPU

Antara - January 16, 2004

Jakarta -- The Indonesia Procurement Watch (IPW) has called on the public to monitor the procurement of goods and services in the General Election Commission (KPU) for the 2004 election.

A member of the IPW Supervisory Board, Batara Lumbanraja, said on Thursday the supply of goods and services for the general election was closely related to the state budget and hence it would need public supervision.

The World Bank as well as Transparency International have indicated that goods and services procurement had become one source of corruption.

Regarding the procurement of goods and services, Lumbanraja said, the commission's work in the field would affect the quality of the general election.

Therefore, Lumbanraja said, IPW would encourage KPU to be transparent, accountable, fair and avoid any irregularities.

The organization has also called on the active participation of the public in the monitoring and they can file a complaint through IPW's hotline (021) 8296452, PO Box 8877 JKSTB, or e-mail ipwatch@cbn.net.id.

Lumbanraja said, IPW has also investigated an alleged mark-up in the development of the 238 billion rupiah (US$28.4 million) busway project conducted by the Jakarta city administration. "IPW is investigating indications of irregularities in the supply of goods and services [in the busway project]," Lumbanraja said.

The organization has called on the Jakarta administration to uphold the principle of transparency and accountability, and conveyed any data or documents needed for the investigation.

Wiranto poses real challenge to Megawati

Australian Financial Review - January 17, 2004

Andrew Burrell, Jakarta -- Sharing lunch with an indicted war criminal accused of overseeing the slaughter of 1500 people is hardly an everyday experience. Neither is it as difficult as it might seem.

Indonesia's smiling former armed forces chief Wiranto chomped on roasted chicken and sipped iced water, while chatting pleasantly, even humbly, with a group of Jakarta's foreign journalists on Thursday.

The charismatic 56-year-old, more famous in Indonesia for singing soppy love songs than for his alleged human rights violations in East Timor, is a man on the hustings. The lunch date was part of an attempted image makeover that may help deliver him the presidency at elections this year, when 145 million Indonesians will vote directly for their head of state for the first time.

Such a mission by a man so closely associated with the authoritarian Soeharto regime would have been unthinkable a few years ago. But in 2004, with the spirit of reformasi waning and nostalgia for Soeharto surging, a Wiranto presidency has become realistic.

After four years in the political wilderness, Wiranto is back on the front pages of Indonesia's vibrant press, running an energetic campaign that involves criss-crossing the massive archipelago in a chartered plane.

The retired four-star general is, after all, a good story. Unlike some others, he doesn't shy away from answering claims about the excesses committed during his period in power. A new self-penned book, Witness in the Storm: Truth Revealed by Wiranto, addresses many of the allegations head-on (albeit with stony denials of responsibility) and has been translated into English.

Rumours abound of how his campaign is funded by Soeharto family money or the military, or that Wiranto has formed alliances with potential running mates. His popularity is aided by him singing on the campaign trail, often songs from an album of ballads he released a couple of years ago.

Indonesian politics is volatile and unpredictable, but opinion polls give Wiranto a real chance of toppling the frontrunner, President Megawati Soekarnoputri.

His revival has also coincided with a change in fortunes for Indonesia's military, which was sidelined in disgrace after the events of 1998 but which has been able to regain much of its influence under Megawati, despite losing its right to seats in parliament.

Polls indicate that another retired general, chief security minister Susilo Bambang Yudhoyono, is another main contender for the top job -- if he decides to run.

"The president of Indonesia should definitely come from the military," says Cik Bujang, a businessman in central Jakarta. "And I think Wiranto is the best candidate to be president because his track record in the military is good and clean."

The elections will likely be held in two stages: a first round on July5 and, assuming no single candidate wins more than 50 per cent of the vote, a final run-off between the top two names on September 20.

If Wiranto does become president, he will face some immediate hurdles. Chief among them is a distinct lack of support, even a sense of revulsion, among many Western countries, including Australia and the United States, for his candidacy. Last year, United Nations-funded prosecutors in East Timor indicted Wiranto on charges of crimes against humanity, claiming he bore ultimate command responsibility for the military-backed slaughter and destruction during Indonesia's bloody withdrawal from its breakaway province in 1999.

Indonesia has refused to extradite any military leaders over the carnage, but East Timor's chief prosecutor insists he is close to obtaining an Interpol warrant for Wiranto, which could lead to his arrest if he travels abroad. Wiranto denies such a warrant would affect his ability to be president, or to interact with other countries.

The human rights claims are unlikely to become a domestic issue in the campaign, according to a think tank, the International Crisis Group. For most Indonesians, the East Timor bloodshed is an issue best forgotten. "Indeed, Wiranto would probably be more vulnerable electorally to charges of having failed to prevent the loss of East Timor," the ICG says. A former trusted aide of Wiranto, former general Kiki Syahnakie, says his old colleague is popular because he has the proven ability to manage a crisis. He, too, is sure that most voters will ignore the human rights claims.

"You have to understand this is the way of thinking among the middle and lower classes," says Syahnakie, who was indicted for crimes against humanity by East Timor's prosecutors. "Those kinds of sensitivities about the human rights abuses only develop among the upper, educated class."

Nor is there much risk that most voters would worry about a return, after only six years, to authoritarianism or militarism under a Wiranto presidency, analysts say. According to military strategist Agus Wijoyo, Wiranto has been able to successfully sell himself as a proponent of democracy because he supported the transition from Soeharto to his successor, BJ Habibie, in 1998 when he had the clear opportunity to seize power himself.

Unsurprisingly, Wiranto is campaigning in the provinces on a law-and-order platform in an attempt to capitalise on the rising nostalgia, especially at village level, for the sense of security and stability during Soeharto's rule.

He is also running hard on economic recovery, telling the packed lunchtime audience that included foreign diplomats and businesspeople this week that he would address Indonesia's weak legal system and burgeoning corruption -- although he failed to provide any details of practical measures.

He also talks about the struggle of the Indonesian people since the economic crisis hit in 1997. As about half of Indonesia's population lives on less than $US2 ($2.60) a day, any promise to again provide the cheap rice that was common in the Soeharto era is bound to be a vote-winner.

Wiranto depicts himself as a man of peace, taking credit for stopping the bloodshed in Aceh in the late 1990s and promising to end the present offensive in the troubled province if he were elected president, a plan that will hardly make him popular with Indonesia's crop of military leaders.

He says the allegations of human rights abuses in East Timor were exaggerated and never proved by a court. He insists he ensured the lead-up to the independence ballot in 1999 was peaceful and the violence that erupted later was beyond his control.

He also paints himself as a patriotic man who has been called back to duty by his nation, compelled to return to the political sphere after once mulling a post-military career as a corn farmer.

Born in Yogyakarta on April 4, 1947, Wiranto began his military career soon after graduating from the National Military Academy in 1968. According to Kevin O'Rourke's book, Reformasi, Wiranto whiled away the first half of his career in mundane army jobs, including a 12-year stint in a sleepy outpost in North Sulawesi.

By 1980, after contemplating early retirement to become a county magistrate, he had managed to secure a position in the army's strategic reserve, after which he was transferred to Jakarta.

Then followed a meteoric rise through the ranks, under Soeharto's close supervision. By 1989, Wiranto had been made personal adjutant to the president, one of the military's most coveted jobs. In 1995, he was made commander of the Jakarta garrison, and in the following year elevated to commander of Kostrad, the army's main combat force. In June 1997, he was made a four-star general and sworn in as army chief-of-staff, and the word in military circles was that Soeharto was grooming his protege to be his eventual successor.

The following year, with unrest mounting against the regime, Soeharto elevated Wiranto to minister of defence and armed forces chief -- the first time since the 1970s that one man had held the two jobs at the same time.

But Wiranto's period in these roles coincided with some of Indonesia's most publicised recent abuses, such as the Trisakti and Semanggi shootings in Jakarta, clashes with police in Maluku and, most notoriously, the East Timor scorched-earth campaign. Wiranto was sacked in January 2000 by president Abdurrahman Wahid.

Before a rejuvenated Wiranto can take on Megawati this year, he must first claim the prized nomination of the Golkar party, the election vehicle that kept Soeharto in power for 32 years.

This will be no simple task. Wiranto faces his toughest opposition from Golkar's powerful chairman Akbar Tandjung, a wily politician who has been convicted of corruption but is awaiting an appeal verdict, rumoured to be handed down soon. A successful appeal would set up an intriguing clash with Wiranto, but a loss would end Tandjung's political career and pave the way for Wiranto.

Behind these frontrunners are two wealthy businessmen: media magnate Surya Paloh, who owns the Metro TV station and the Media Indonesia newspaper, and the chairman of the chamber of commerce, Aburizal Bakrie.

Rounding out the Golkar field are three nominees with little chance: cabinet minister Jusuf Kalla, Soeharto's former son-in- law Prabowo Subianto, and the Sultan of Yogyakarta, who is popular in Central Java but will struggle elsewhere.

Wiranto has so far garnered most of his support from Golkar's local branches. As part of a party convention last year to choose its candidates, Wiranto won 124 districts, followed by Tandjung with 91 and Paloh with 64.

The make-up of the presidential race will hinge on the results of the April 5 legislative elections. If Golkar outpolls Megawati's Indonesian Democratic Party of Struggle (PDIP), as most analysts expect, the two big parties will likely field separate candidates. Megawati is already confirmed as her party's nominee.

If the PDIP finishes first, Golkar's party bosses may decide to settle for the vice-presidency on a potentially unbeatable joint ticket with PDIP, the only other major secular-nationalist party. Whatever the outcome, such decisions will have to be finalised by late April or early May.

A typically uncompromising Wiranto says he would never accept the vice-presidency. "An old soldier never dies," he smiles, before spouting another favourite motto that seems to suit Indonesia's evolving democracy in 2004. "Just let the people vote."

Presidential hopeful Wiranto fires first salvo

Straits Times - January 17, 2004

Robert Go, Jakarta -- Indonesia's reform initiatives have failed and the country needs a strong leader "who can do better", said retired General Wiranto.

The Suharto-era armed forces commander has become a serious contender for presidential elections later this year.

During an unprecedented two-hour luncheon talk attended by foreign journalists and diplomats on Thursday, he said he was a champion of democracy who has heard a "call of duty" to go for the top job, as there is "a lack of leadership in the country".

These remarks represented Gen Wiranto's first public salvoes against President Megawati Sukarnoputri and the reform-era government.

Said the one-time aide-de-camp to former strongman Suharto: "If we want to be honest, the process of reform, which has been in place for the past five years, has not actually brought about significant change."

He also blamed the slowness of Indonesia's economic recovery on the government in power, saying: "A weak and visionless leader will never be able to accelerate the process of restoring stability and national economy."

On Indonesia's serious problems -- poverty, rising unemployment, separatism, sectarian conflicts and terrorism -- he argued that the people "deserve a government that is much better than what is in place".

Although he is "optimistic" about his chances, he faces a first challenge from rivals within the political party of his choice, Suharto's Golkar party.

Golkar was discredited after Suharto's downfall in 1998, but its strong regional network has facilitated a rejuvenation during the last five years.

It has floated at least seven potential presidential candidates, including party leader and Parliamentary Speaker Akbar Tandjung, who maintains a strong support network despite a graft conviction.

Analysts said Golkar could increase its share of parliamentary seats in April's legislative elections, perhaps at the expense of Ms Megawati's PDI-P party.

Gen Wiranto is also dodging allegations of human rights abuses related to massacres that took place around East Timor's separation from Indonesia in 1999. United Nations prosecutors have issued an indictment for him.

He attempted to address his track record, saying: "A commander in chief should not always be held accountable for what military personnel have done." He drew a comparison to massacres by American forces during the Vietnam War, and pointed out that the US commander was not accused of human rights violations.

Panwaslu warns of fake diplomas from candidates

Jakarta Post - January 17, 2004

Moch. N. Kurniawan, Jakarta -- The Election Supervisory Committee (Panwaslu) revealed on Friday its suspicion that thousands of legislative candidates had submitted fake diplomas to the General Elections Commission (KPU) among their required application documents.

Panwaslu deputy chairman Saut H. Sirait said the candidates in question had presented certificates from a learning program for high school dropouts, the Paket C program, which would enable them to run in the regional legislative election.

Most of the cases are in Jakarta, Central Java, East Java, Bali, West Kalimantan, Central Kalimantan and South Kalimantan.

Saut said the suspicion was not unfounded, as the certificates were mostly issued in 2003 and many of the aspirants had obtained them from regencies or provinces of which they were not residents.

He also said many of the certificates were issued by the local office of the ministry of education, not by the schools that hosted the program. "These findings indicate aspirants have tried to falsify their certificates," Saut said.

He said, for example, that candidates from Bali had obtained certificates from Bekasi, West Java, while those from West Kalimantan had certificates issued in Tangerang, Banten. "The great number of cases have made us suspicious. We will investigate the cases, but it will take time," he said.

He admitted the Panwaslu had not yet found similar cases among candidates to the House of Representatives, due to difficulties in obtaining their documents.

The Elections Law says legislative aspirants must be high school graduates or high school dropouts who had passed the final exams after attending the government-sanctioned Paket C program.

The KPU and its regional chapters expect legislative candidates to submit complete documents on January 19 at the latest; otherwise they will be disqualified.

A second verification process will be conducted from January 20 to January 26 before the KPU announce the final line-up of candidates on January 28 and January 29.

Saut said the Panwaslu would also follow up reports that a number of civil servants may have still received January salaries from the state, although they had resigned in December from their posts in order to contest the general elections.

Meanwhile, the Panwaslu submitted on Friday its 15-point amendment to the campaign instructions issued by the KPU.

Saut said that among the proposed revisions were a definition of what constitutes a campaign and other campaign activities that did not violate the General Elections Law.

The instructions define an election campaign of political parties and/or regional legislative candidates as those activities held to promote their political platforms through the mass media and at open or closed venues to non-member voters to obtain maximum support during a particular period set by the KPU.

Saut said this definition was not in line with the General Elections Law, which did not include the condition, "to obtain maximum support".

"This disparity would cause a different legal consequence if a violation is committed during campaigns. Under the General Election Law, law enforcers are not obligated to prove the condition, 'to obtain maximum support'," he said.

If the KPU insisted on its definition, he said, the Panwaslu would refer to the General Election Law instead.

Saut also said the KPU should clearly delineate other campaign activities that do not violate the General Elections Law, or parties would easily abuse the campaign instructions.

"For example, the KPU must explicitly add mass rallies, music concerts, public contests and walk-a-thons in its instructions. If it fails do so, parties will say that such activities are not considered campaigns," he said.

The legislative campaign period will run from March 11 to April 1.

Lack of voter education may cause ballot error: Analyst

Jakarta Post - January 17, 2004

Kurniawan Hari, Jakarta -- As most voters are unaware of the new electoral system, political parties are likely to encourage supporters to punch the logo of political parties on ballot papers instead of marking the names of legislative candidates, a political analyst says.

Consequently, this will lead to the election -- or reelection -- of legislative candidates loyal to political parties rather than the election of candidates fighting for public interests, said Arbi Sanit, a lecturer with the University of Indonesia.

"I believe the Elections Law was designed to maintain the status quo, so the performance of legislators will be the same," he said at a discussion here.

Under the Elections Law, voters are to mark both party logos and legislative candidates on the ballot papers, a system that was adopted to allow the public to select candidates they considered to best represent their interests.

Ballot papers will be declared invalid if voters mark only the name of their chosen candidate. However, the law stipulates that ballot papers bearing a mark on the party logo alone, as in past elections, would be considered valid.

Article 107 of the General Elections Law says that candidates are elected as legislators if they gain a certain number of votes. Priority will be given to those at the top of the candidates list if no candidate has collected adequate votes.

As the list of legislative candidates is drawn up by political parties, this will result in the winning parties represented by legislators from the top of their lists -- most likely those loyal to party leaders and interests rather than public interests.

This scenario may become real, as a survey conducted by the Center for Electoral Reform (Cetro) revealed that more than half of the country's 145 million registered voters still do not know how to punch ballot papers properly.

The survey showed that 43 percent of 2,995 people surveyed in December punched party logos only, while 34 percent simply did not know where to punch. Only 23 percent marked their ballot papers properly. Voters who were unaware of the voting procedures were mostly those from remote villages, the elderly, farmers, taxi drivers and public transportation drivers.

Most legislative candidates have tried to take advantage of the confusion among voters by encouraging them to mark party logos only.

Muslim-based United Development Party (PPP) chairman Djuhad Mahja acknowledged on Friday that the new system was confusing and that his party would not risk the people's confusion.

He added that PPP leaders had discussed the issue and most of them feared a possible decrease in the votes the PPP would garner in the legislative election on April 5, 2004. "If the people become confused, it will be better for them to punch the party logo only," he said.

Rully Chairul Azwar, deputy secretary-general of the Golkar Party, disagreed, saying that all parties must provide the public with information on the proper voting procedure.

He said proper voter education was one thing, and the validity of the ballot papers was another. "I reject the campaign of urging voters to punch only the party logo during the election. It is a kind of misinformation," he said.

Voters will be choosing from among 24 political parties in the legislative election. Parties or coalitions of parties that gain 3 percent of seats in the House of Representatives or 5 percent of total votes would be allowed to contest in the first direct presidential election scheduled for July 5.

KPU urges media to be professional

Jakarta Post - January 14, 2004

Moch. N. Kurniawan, Jakarta -- The General Elections Commission (KPU), the Election Supervisory Committee and the Indonesian Broadcasting Commission (KPI) are drafting election campaign guidelines to govern coverage on radio and television, which will set limitations on the length of the advertising slots allocated to candidates.

KPU member Hamid Awaluddin said on Tuesday that the guidelines would not allow party or Regional Representatives Council (DPD) candidates to book more than 10 slots of 30 seconds duration during each day of the campaign. This was in line with KPU Instruction No. 701/2004 on the election campaign, he said.

Election candidates would also be banned from buying slots. If this was not the case, it was feared that the big parties with huge financial resources would gain an unfair advantage.

"These guidelines will provide the Election Supervisory Committee with yardsticks for conducting monitoring during the campaign," Hamid told a press conference after a meeting of members of KPU, the supervisory committee, the KPI and representatives of non- governmental organizations.

The discussions on the drafting of the guidelines would start on Thursday.

The KPU instruction stipulates that parties and DPD candidates will only be allocated a maximum of 10 spots on radio with a duration of 60 seconds per spot, and are prohibited from using slots allotted to other candidates for whatever reason.

Hamid said the guidelines would also require all TV and radio stations to announce publicly their advertising rates for the election campaign and the payment procedures.

Meanwhile, KPI chairman Victor Menayang said the planned guidelines would protect radio and television stations from pressure from the political parties, provide parties with equal opportunities to air advertisements, and ensure that the public received high quality information.

He said that those broadcasters who violated the guidelines would be punished.

"The violators will receive punishments ranging from reprimands to being ordered to stop airing news as provided for in the Broadcasting Law," he said.

Supervisory committee chairman Komaruddin Hidayat had something else to say, however.

"There will be no punishments. These guidelines are not regulations but rather suggestions," he said. The KPU instruction on the election campaign says nothing about sanctions.

Victor also said it would be difficult to regulate the editorial policy of media outlets in covering the election as this would greatly depend on the outlets themselves.

"We have to admit that for some media outlets certain parties are newsmakers while others are not," he said.

A senior executive of the Media Election Coalition, Indra J. Piliang, hailed the plan to draft campaign guidelines for the media, saying it would make it easier for his organization to monitor the campaign, particularly in the electronic media.

New regulations as election count-down begins

Radio Australia - January 13, 2004

Indonesia's progress towards national elections has had a rather inasupicious start ... with the Indonesian Electoral Commission rejecting calls to extend enrolment deadlines.

Presenter/Interviewer: James Panichi Speakers: Dr Nazaruddin Sjamsuddin, General Elections Commission chairman; Dr Robert Elson, professor in South East Asian history, University of Queensland.

Panichi: According to some reports, many of the almost 9,000 candidates for the April legislative elections have failed to meet the new registration requirements.

It was the first time candidates had been asked to present the Electoral Commission -- known as the KPU -- with a medical certificate, a declaration of personal wealth and a certificate attesting to a lack of a criminal record.

But Dr Nazaruddin says the Electoral Commission is determined to stick to its schedule.

Nazaruddin: "We have planned everything and everything must go according to our agenda. Every party and every candidate must follow that agenda very tightly."

Panichi: Although many of the candidates say that there is just too much bureaucracy to get through and they just didn't have time to do it...

Nazaruddin: "Well, we have been giving them enough time. In fact, there has been more than three months to start collecting all the initiatives needed."

Panichi: In other words, the KPU doesn't intend to bend the rules for anyone.

The Commission believes all candidates -- who in December passed the first stage of the eligibility screening -- were given ample warning of the new requirements.

Nazaruddin: "They were given this information a long time ago and they must also know about the law. The law was passed about ten months ago. So, they should know everything they need to, to follow these elections."

Panichi: Under the new laws, Indonesia is facing either two or three national elections this year. The April ballot could be the first of two to elect legislators to the national assembly, and literally thousands more to a variety of provincial and district assemblies.

The KPU's mammoth task is the result of changes introduced to increase political accountability -- including the greater scrutiny of both candidates and parties. As a result, only 40 political parties have been accepted out of a field of 100.

Robert Elson is professor in South East Asian history at Australia's University of Queensland.

Elson: "It is a more convoluted and elaborated process in Indonesia, simply because of the long history of authoritarian rule under the new order and its sudden relaxation after 1998 brought forward a great welling up of popular sentiment for participatory democracy of various kinds.

"The result was that there was a proliferation of parties. This [vetting process] is simply a measure of the Indonesian authorities desire to curtail what was seen to be a divisive proliferation of parties and also to ensure that those parties which did contest the election did have some kind of serious, or reasonably serious coverage and depths in terms of their memberships."

Panichi: But while changes to party and candidate elegibility may be attracting some attention, the most important change -- the direct election of the president -- is likely to be the KPU's biggest challenge.

Under the old system, it was up to MPs elected to the legislature to choose the executive. This year, for the first time, the electorate will have the final say.

Elson: "This process is an attempt to democratise the presidential election, because the president remains a very powerful figure in Indonesia. The political elite, if you like, thought with some justification that a position of that power needed to be exposed to some kind of popular process of gaining a mandate.

"And that's the reason for this very decisive change in Indonesian politics for 2004."

Party defends Tutut's candidacy

Jakarta Post - January 14, 2004

Jakarta -- In response to earlier protests that Siti Hardiyanti "Tutut" Rukmana's presidential nomination was solely based on the desire to uphold New Order values, Chairman of the Concern for the Nation Functional Party (PKPB) R. Hartono claimed that her candidacy reflected the will of the people.

"There is no connection with the Cendana clique, no pressure and no directions from them. [Former president] Soeharto can do nothing and has difficulties to with communication," Antara quoted Hartono as saying on Tuesday.

Tutut is the daughter of Soeharto and the Cendana clique refers to the relatives of the Soeharto clan, which is based at Jl. Cendana in Menteng.

He said the nomination by PKPB of Tutut was based on the people's wishes and she was ready to be nominated simply because she wanted to contribute something to the nation.

He said previously that Tutut's nomination was on the explicit instructions of Soeharto. He also hit back at critics, calling them "anti-Pancasila" for urging people not to cast their votes for parties maintaining New Order's values Pancasila is the 5- point state ideology embraced by Soeharto and the New Order for 32 years.

Hartono was known to be quite loyal to Soeharto during the latter's tenure and was quite close with Tutut when he was the Army's chief of staff in 1997. Hartono however said that Tutut, Soeharto's eldest daughter, has yet to decide whether to accept the nomination or not.

He said he hoped his party would be one of the top-five after the legislative election on April 5. "PKPB is ready to bargain with other parties to make a coalition in nominating a presidential candidate," he added.

TNI vows to help with elections

Jakarta Post - January 14, 2004

Jakarta -- Despite only having 50 percent of its troops available, the Indonesian Military (TNI) would still be ready to help the police secure the 2004 general elections, an officer says.

"We are ready even though some 50 percent of our forces have been deployed in areas of conflict in the country," Lt. Gen. Djamari Chaniago, TNI's chief for general affairs, told reporters on Tuesday.

He said that soldiers deployed in conflict areas in the country may also help the police secure the elections. "They may secure the polls where they are currently serving," Djamari said. TNI has more than 300,000 army, navy and air force personnel.

Nearly 145 million voters are expected to participate in the legislative election on April 5 and the two-round direct presidential elections on July 5 and September 20 respectively.

A total of 24 political parties are eligible to contest in the elections.

Parties criticized for weak nominees

Jakarta Post - January 14, 2004

Jakarta -- The maneuver of some political parties to include celebrity personalities on their legislative candidate lists clearly shows that those parties are desperate to lure voters, an analyst says.

Faisal Basri, chief of the Committee for the Preparation of the Indonesian Movement (KPPI), said Tuesday that there was little relevance between the actual needs of the nation and the legislative candidates abilities.

While the nation was in need of addressing unemployment and poverty issues, political parties were busy nominating actors and actresses seats as legislative candidates.

"It wouldn't be a problem if the political parties were preparing to do television soap operas," Faisal said at a discussion Tuesday.

Among celebrity personalities listed as legislative candidates are Sophia Latjuba and Marissa Haque by the Indonesian Democratic Party of Struggle; Nurul Arifin by Golkar; Emillia Contessa and Mieke Widjaya by the United Development Party; Rieke Dyah Pitaloka by the National Awakening Party; and Dede Yusuf and Paquita Wijaya by the National Mandate Party.

Candidates may be disqualified

Jakarta Post - January 14, 2004

Abdul Khalik, Jakarta -- With 30 percent of Jakarta's legislative candidates facing possible disqualification, doubts are emerging as to just how qualified the Jakarta Provincial Elections Commission (KPUD) and its supervisory committee (Panwaslu) are to do its job.

"At least 60 percent or more than 900 candidates failed to submit the required documents by the deadline on December 29. After we called them one by one, we found half of them could not present valid documents," said the KPUD chairman, Mohamad Taufik, on Tuesday.

"For example, KPUD decided that two candidates must be excluded from the list because they were only 19 years old while eight candidates have used fake medical records from Fatmawati hospital. We have also been told by many schools that the certificates we are checking are not valid," he said.

Law No. 12/2003 on general elections and KPU regulations stipulate that all candidates must be 21 years old or above to be elected as representatives. They must be certified as healthy and should be senior high school graduates. They must also have a valid Jakarta identity card.

KPUD will wait until January 19 to decide whether these candidates are qualified. If the candidates fail to qualify then the parties will have to propose new names to the KPU before January 27, after which the KPUD will announce the list of eligible candidates for the 24 political parties contesting the polls.

KPUD spokesman, Hamdan Rasyid, said that most of the parties had failed to fulfill the quota for woman candidates. "Most parties have submitted lists with only 10 percent to 15 percent of woman candidates. Many parties believe they do not have to comply with the 30 percent quota by law. So far, only the Prosperous Justice Party (PKS) and Indonesian Justice and Unity Party (PKPI) have fulfilled the quota," he said.

A survey by the Voice of Justice group (Suaka) charged that the KPUD had neglected the voting rights of Jakarta's marginalized groups such as street vendors, laborers, scavengers, the unemployed people and housewives by concentrating only on the middle to higher income groups. The survey said that 92 percent of the 410 respondents were not aware that there had been a change in the electoral law while 93 percent did not understand how to vote. Most of them, 86 percent, did not know the KPUD existed and almost 90 percent did not understand its function.

Taufik rejected the survey, saying that KPUD had done many things to promote the Elections Law and regulations up to the subdistrict level, but admitted that the voting mechanism would be promoted this month. "We promoted the essence of the Election Law and regulations up until December. We'll promote how to vote starting this month," he said.

A trainer for the Jakarta Elections Supervisory Committee (Panwasluda), the only agency that has the authority to supervise the KPUD, Rusdin Moh. Nur, said that Panwaslu personnel had difficulties in enforcing the regulations on electoral violations, such as campaign violations and conflict resolution.

"They can understand the meaning of the articles in the law but have difficulties in matching violations with the relevant articles," he said.

'Let women show they don't belong at home'

Jakarta Post - January 14, 2004

With the January 19 deadline approaching for some 24 political parties to resubmit their lists of legislative candidate, there is concern that not all of the parties will be able to meet the 30 percent quota for women candidates for the April 5 general election. But even those political parties that have met this quota placed most of their women candidates at the bottom of their lists. The Jakarta Post spoke with some city residents about this issue.

Rita, 35, sells soft drinks near Monas in Central Jakarta. She lives in Bekasi with her husband and three-year-old daughter: Good for them, those women politicians and legislative candidates, I pray for their success! Let them show that women today do not just belong in the kitchen and the house.

We shouldn't underestimate those female entertainers who want to be legislators .... Give them a chance to show what they have inside their heads and to defend us women. I hope the next president is a woman, but I won't vote for Megawati because she has failed in her duty.

Zaky Mahendra Putra, 25, is a former student activist who now works at a printing company in Central Jakarta. He lives in Depok: I think it's great to have a policy to help women compete with the men, as many of the interests of women are not being accommodated in the legislative councils.

However, there are several problems with the implementation of the policy, because it seems to me that men are not ready for women to play a larger role in politics. For example, there are few women's names at the top of the lists of legislative candidates, even for the big three parties.

Another possible problem is that not many women can do the job because they have had to stay at home for so long taking care of the domestic duties. The limited stock of capable women contributes to their lack of competitiveness against the men.

Unemployment could seriously threaten elections

Jakarta Post - January 18, 2004

Ridwan Max Sijabat, Jakarta -- Manpower and Transmigration Minister Jacob Nuwa Wea said on Friday that the number of unemployed people would increase by about 2.5 million to over 45 million this year.

He added that the millions of unemployed could pose a serious threat to political stability and the elections if no measures were taken to help cope with it. "Most of the newly unemployed will be young people, mostly elementary and high school dropouts as well as university graduates who will not be able to find jobs," he said during a press conference on the 2004 labor situation here.

The unemployment problem has reached an alarming level because of the 42.7 million unemployed workers, 10.8 million were in the category of full unemployment and 31.9 million in the disguised unemployment category (informal sector or part-time workers).

Jacob called on political parties not to manipulate the unemployment situation during the election campaign to prevent violence and to maintain political and economic stability, saying that the jobless were definitely a group that is vulnerable to provocation and political chaos prior to and during the elections.

"The government actually is not worried about the political condition during the elections because there are still many people who do earn a good living and enjoy life," he added.

Indonesia will hold its main legislative election on April 5 and the direct presidential election on July 5, with a possible run- off on Sept. 20.

Jacob said that besides his own programs at the Manpower and Transmigration Ministry, he had been coordinating with other fellow ministers to help solve the unemployment problem.

"I have signed MOUs with the tourism minister, agriculture minister and maritime development minister to put on the table all problems in carrying out programs to absorb the unemployed in those three sectors.

He said the Agriculture Minister would prepare labor intensive social safety net projects, the Tourism Ministry would provide training programs for workers who will eventually be employed in the tourism sector while the Maritime Development Ministry would provide nets and vessels so people could work as fishermen.

He, however, did not hazard a guess about how many of the unemployed could be absorbed in the three sectors.

The minister said the government would continue to develop the labor export and the labor placement at home to help reduce the unemployment rate to a minimum.

"The Manpower and Transmigration Ministry has set a target of sending around one million workers to the Middle East and Asia- Pacific region this year and resettle thousands of others in palm-oil plantations at home," he said.

Chairman of the Indonesian Employers' Association (Apindo) Sofjan Wanandi expressed his great concern over a possible unemployment explosion this year, saying the unemployment rate could reach 50 million this year because many manufacturing and forestry companies would have lay off their employees due to a dearth of new international manufacturing orders and a government-lowered logging quota.

Labor observer Bomer Pasaribu said he was skeptical that the government would be able to ease the unemployment problem because of the Indonesian workers' low bargaining position and the long election season.

"In addition to increasingly scarce labor opportunities, Indonesian workers were unable to compete with those from the Philippines, Vietnam, China and Thailand when it comes to working in Singapore, Malaysia, Taiwan, South Korea and the Middle East. Indonesian workers have no other alternatives but to enter the informal sectors which are prone to labor abuses. And violence against Indonesian workers will continue overseas because most of them will only be able to get jobs in the informal sector," he said.

We have fought to combat corruption: Akbar Tandjung

Jakarta Post - January 18, 2004

A'an Suryana, Jakarta -- While highlighting improvements in the economy and national stability as its main platforms, the Golkar Party has vowed not to snub the increasingly louder anticorruption voices during the upcoming election campaign.

"It's a matter of accentuation. In fact, we have fought and will always combat corruption," Golkar chairman Akbar Tandjung stated during a meeting with The Jakarta Post on Thursday.

Akbar said, however, the party would put the economy at the top of its priority list. "We have learned that economic improvement is the main concern of people, especially those in rural areas," he said, Golkar, Akbar said, understood that people were disappointed with the country's economy, which had not recovered since the crisis hit in 1997.

The reform movement, to which people rendered much hope to bring prosperity to Indonesians, has failed to improve the economy in some areas, bringing mounting skepticism to people whether the post-reform governments, including that of President Megawati Soekarnoputri, can lead the nation out of crisis, Akbar said.

The disappointment, according to Akbar, was aggravated by the fact that the nation had been facing unrest and separatism following the reform movement.

"People are now longing for the good ol' days when the Golkar Party was ruling. And, that is true. We were able at that time to offer the people a strong, decisive and able government, that could bring stability and prosperity to people," he said, referring to the three-decade rule of the New Order regime under former president Soeharto.

Akbar said the party would still rely on its traditional voter base, like civil servants, farmers and families of the Indonesian Military (TNI).

However, he asserted that the party had made a break with the past and would join forces with the society in eradicating corruption, collusion and nepotism.

As evidence of that, he said Golkar legislators at the House of Representatives (DPR) had helped speed up the establishment of the Corruption Eradication Commission (KPK).

"It was not well covered by the media, perhaps," said Akbar, who was flanked by other Golkar executives, including deputy chairman Theo Sambuaga and secretary general Lt. Gen. (ret) Budi Harsono.

The anticorruption drive, which is mainly being spearheaded by the urban educated middle class, will be among the main themes that Golkar would pursue in the campaign period in the upcoming general election, Akbar added.

Akbar bitterly acknowledged that Golkar had been dogged by corruption charges and the stigma of the New Order oppression.

The party chairman and presidential candidate is awaiting for the Supreme Court's verdict of his appeal of the three-year jail term handed to him in a graft case. Asked about Golkar's vote target in the April election, Akbar said the party was eying an increase to of 30 percent overall from 22.4 percent in 1999. "It is a realistic target," said Akbar.

The optimism was attributed to the fact that many people were disappointed with the post-reform governments. He said Golkar would benefit from in-fighting that was plaguing its arch rival, the Megawati-led Indonesian Democratic Party of Struggle. Megawati's party won 34 percent of the votes in 1999. "We might well win the general election overall," Akbar concluded.

Burying the New Order = Burying Pancasila: Hartono

Detik.com - January 14, 2004

Luhur Hertanto, Jakarta -- Functional Party of National Concern (PKPB), [former army chief of staff] R. Hartono is ready to face people who want to bury the New Order [regime of former President Suharto]. According to Hartono, burying the New Order is the same as burying [the state ideology of] Pancasila.

This was explained by the retired four star general during a press conference at the Borobudur Hotel on Jl Lapangan Banteng in Jakarta on Tuesday January 13.

"Go ahead and criticise [us]. These are people who know little but talk a lot. The New Order is a mental attitude [which aims] to purify Pancasila and the 1945 Constitution. If you don't like Pak Harto [President Suharto] fine, but don't bury the New Order", explained Hartono.

Not afraid of being named a rotten pollution? The former army chief said that what determines if a party member is good or bad is the party."Not this tiny bunch of people. We will sue them if their charges are not accompanied by evidence", he threatened.

During this opportunity, Hartono also said that to date, [Suharto's eldest daughter] Siti Hardiyanti "Tutut" Rukmana has yet to give an answer to PKPB's proposal that she be their presidential candidate. Because of this added Hartono, there is still an opportunity for new names to emerge as the party's presidential candidate.

"Although there has yet to be any input from local [branches], all of them are still asking for Mbak [big sister] Tutut to be the presidential candidate", said Hartono.

What is clear he said, is that is issue has yet to be discussed seriously by PKPB's national working meeting. According to Hartono, the national working meeting has only discussed strategies on winning the elections.

"The issue of the presidential candidate is still waiting on the results of the legislative elections. If [we] obtain up to five per cent of the vote, this means that we will have the right to participate in the nomination of a presidential [candidate]. What's the point of discussing it now, come on, we don't [even] know yet if we will be able to put forward a nomination or not", said Hartono. (djo)

[Translated by James Balowski.]

Corruption/collusion/nepotism

Beddu Amang goes to prison for corruption

Jakarta Post - January 17, 2004

The Jakarta Post, Jakarta -- Former State Logistics Agency (Bulog) head Beddu Amang began serving a four-year prison sentence for graft on Friday after the Supreme Court rejected his appeal.

Accompanied by his lawyers, who had been successful in preventing their client from being detained since the prosecution began in 2000, Beddu arrived at the Cipinang Penitentiary in East Jakarta on Friday afternoon.

The head of the South Jakarta Prosecutor's Office, R. Himawan, and his staff picked up the convict from the National Police Headquarters, where Beddu was being held over another graft case involving the markup of livestock feed imported by Bulog through four private companies in 1997.

As he walked to the prosecutor's car, Beddu insisted that he was only a state official who was implementing the policies of his bosses. "I am a former state official. I was just a subordinate implementing the two government policies," he told the swarm of reporters surrounding him.

Clad in a gray sweater, Beddu said he had received a written order to implement the policies that would later turn him into a graft suspect. However, he refused to say whether he was referring to former president Soeharto, who stepped down in May 1998 after more than 30 years in office.

Police investigators said they would continue their investigation into the second graft case allegedly involving Beddu despite his imprisonment.

"We can question him here or at the penitentiary," said Sr. Comr. Marsudhi Hanafi, the director of corruption and white-collar crime at the National Police Headquarters. On January 6, the Supreme Court rejected the appeal filed by Beddu's lawyers.

Beddu was sentenced to two years in jail by the South Jakarta District Court in 2001 for his involvement in a land swap deal that prosecutors said caused the state Rp 95.4 billion in losses.

Beddu appealed the verdict to the Jakarta High Court, which in 2002 upheld the guilty verdict and increase Beddu's jail term to four years in 2002.

The crime occurred in 1995 when Bulog signed a deal with a company owned by Hutomo "Tommy" Mandala Putra, the youngest son of then president Soeharto.

The deal allowed Tommy's company to build a hypermarket on Bulog-owned land in Kelapa Gading, North Jakarta. In return, Tommy was to provide a plot of land to Bulog. Tommy, however, failed to hand over the land to Bulog as agreed. Instead, Bulog paid Tommy's company billions of rupiah for a plot of land to replace the land it lost in Kelapa Gading.

Tommy was tried by the same court for his involvement in the case and was sentenced to 18 months in prison in September 2000. However, he fled before he could begin serving the sentence.

Tommy is now serving a 15 year jail term for his involvement in the contract killing of a Supreme Court justice who rejected his appeal in the land swap case.

Campaign against rotten politicians

Demonstration demands rotten politicians be taken to court

Detik.com - January 14, 2004

Arif Shodiq Pujiharto, Jakarta - Around 50 people from the group Youth Community Mistrusts the Elections (Kaum Muda Tidak Percaya Pemilu) held a demonstration at the offices of the National Elections Commission (KPU) in Jakarta on Wednesday January 14 demanding that the KPU have the courage to bring rotten politicians to court.

The action was joined by activists from the Muslim Students Association Reform (HMI-MPO), the Democratic Students Network (Jaringan Mahasiswa Demokratik) and the Association of Evicted People (Persatuan Rakyat Tergusur). They held a long-march from the Hotel Indonesia roundabout directly to the KPU offices where they held speeches.

"We do not believe the 2004 elections are a solution for the people to [overcome] the [economic and political] crisis. There are no political parties which care about the ordinary people. We ask that the KPU have the courage to bring the rotten politicians and political parties to court", said one of the speakers.

As is common in demonstrations, shouting "participants in an anti-poor people's election" they carried flags and posters with the writing"The 2004 Elections are an Arena to Deceive the People" and "Elections = Consolidation of the Betrayal of the People". (aan)

[Translated by James Balowski.]

Media/press freedom

Chief editor questioned over libel complaint

Jakarta Post - January 13, 2004

Yemris Fointuna, Kupang -- The chief editor of the Timor Express (Timex) daily complied with a police summons on Monday for questioning over libel accusations made by the Wirasakti Military commander.

Editor Yusak Riwu Rohi, who was accompanied by a team of nine lawyers led by Lorens Mega Man, arrived at the Kupang Police office at 9 a.m. The group was received by local police chief of detectives First Insp. Robertus Hery.

However, Robertus denied that the summons was to question Yusak over a report carried by his newspaper, which the local military considered defamatory. "The presence of Yusak Riwo Rohi was aimed only for coordination and was not to question him as a witness," Robertus said.

Robertus admitted the police were confused about whether to use Press Law No. 40/1999 or the Criminal Code in investigating the libel case. "A police team is still studying it," he said.

The case surfaced after Wirasakti military commander Col. Moeswarno Moesanif accused Timex of defaming his office in a report that criticized the military for being involved in developing resettlements for former East Timorese refugees.

The report, published last Friday, quoted Karel Yani Mbuik, deputy chairman of the Indonesian Democratic Party of Struggle (PDI-P) for the East Nusa Tenggara chapter.

It accused Moesanif's office of using around Rp 5 billion (US$588,235) of Rp 53 billion in assistance from Japan to build houses for soldiers who were among the former East Timorese refugees. The command oversees security in Kupang, East Nusa Tenggara.

The Army had to respond to the accusations because it had no right to be involved in such a project, Mbuik was quoted in the article as saying.

Mbuik also alleged irregularities in the project and urged the Development Finance Comptroller (BPKP) to investigate the case.

Responding to the report, Moesanif accused the newspaper and Mbuik of tarnishing his and the military's image. Last Friday, the commander took the libel case to the Kupang Police.

Yusak later criticized Moesanif's legal move, saying he should have his right to reply as regulated by Press Law No. 40/1999 to clarify the report.

Regional/communal conflicts

Security operation in Poso extended

Jakarta Post - January 14, 2004

Ruslan Sangadji and Irvan NR, Palu -- The major police operation "Sintuwu Maroso", aimed at maintaining security in the troubled regency of Poso, has been extended for another six months, a top police officer said on Tuesday.

"Another stage of the operation was completed in December. But after an evaluation we have decided to extend it for another six months, starting in January this year," operation commander and South Sulewesi provincial police chief Brig. Gen. Taufik Ridha said.

The police made the decision after consulting with the Poso regent, the governor of South Sulawesi and the chief of the Tadulako resort command, which oversees South Sulawesi, Taufik said.

Public perceptions that the security situation in Poso was still unstable meant the heavy police presence in the region needed to continue, he said.

Some 7,000 personnel from the police's Mobile Brigade (Brimob) continue to patrol hot spots and are deployed in security posts in Poso. They come from Brimob's headquarters in Kelapa Dua, North Jakarta, the East Java and the South Sulawesi provincial police. Assisting them is a unit of detectives from the National Police Headquarters in Jakarta. This force is supported by about 900 Indonesian Military (TNI) personnel.

South Sulawesi, especially the Poso regency, has been subject to tight security measures after bloody sectarian violence rocked the regency in 2000. Over 2,000 people have been killed in the conflict in recent times.

In a separate development, the South Sulawesi Prosecutor's Office said it was ready to prosecute 16 people suspected to be involved in an attack in Beteleme in the Morowali regency.

The attack, which claimed three lives and burned down 35 houses, happened on October 10 last year.

Prosecutor's office spokesman Firdaus Jahja said on Tuesday all the dossiers of the 16 suspects had been completed. "But we are waiting a decision from the Ministry of Justice and Human Rights on the place of the trial," he said.

The ministry will decide whether the trial is held in Palu, the capital of South Sulawesi or in the Morowali regency. "Due to security reasons, we want the trial to be held in Palu," Firdaus said.

Human rights/law

Government completes draconian draft tax law

Jakarta Post - January 14, 2004

Rendi A. Witular, Jakarta -- The Directorate General of Taxation has completed the revision of the country's tax laws, which will include greater power for the tax office to detain major tax evaders without trial and impose stronger sanctions on a range of lesser violations.

According to a draft of the revised version of the General Tax Procedure Law No. 16/2000, a copy of which was made available to The Jakarta Post on Tuesday, a tax official assigned to investigate a tax crime will have special powers -- much like the police -- to capture and detain people suspected of committing tax crimes.

Moreover, the directorate will also have direct and full authority to investigate a tax crime without consulting the police, which is the way the current system works, but has been deemed inefficient.

Aside from finishing the revision on the tax procedure law, the directorate has also concluded the drafting of laws for value- added taxes, luxury taxes and income taxes. The drafts are expected to be submitted to the House of Representatives for deliberation in February.

The revision of the tax laws, which are part of the government's key economic reform measures after graduating from the International Monetary Fund bailout program, is aimed at boosting tax revenue and compliance.

Granting greater power to tax officials to detain people may become a controversial issue and will likely meet with protests from various groups.

I Made Gde Erata, head of the tax reform team at the tax directorate, who has also been involved in the revisions, told the Post that it was part of the government's reform drive and that the law could still be revised. "The law is still subject to change," he said.

The tax directorate has previously said that it needed a stronger legal basis to be able to act decisively against uncooperative taxpayers amid growing concerns over the astronomical amount of tax arrears.

Currently, the tax officials are only permitted to detain people suspected of tax evasion as stipulated under Government Regulation No. 137/2000, which came into effect early in 2001. But with the revised law, the tax office can also detain people suspected of committing other forms of tax violations.

The tax office has detained two suspected violators, including one foreigner, since the government regulation became effective.

But the move has been strongly opposed by businessmen and economists, who said that such policies could further encourage extortion and collusion as it could be abused by the thousands of unscrupulous tax officials to fleece taxpayers.

Other controversial points under the draft of the general tax procedure law is the authority for the tax directorate to directly confiscate assets, bank accounts, account receivables and commercial papers belonging to those deemed to be uncooperative taxpayers, without the consent or involvement of the police or state bailiff.

Sanctions for tax violations will also become much stiffer. For example, a corporate taxpayer will be penalized a Rp 1 million (US$120) fine if it fails to submit its annual tax notice, known as a Surat Pemberitahuan Tahunan (SPT), on time. The penalty is higher than the Rp 100,000 fine currently imposed.

The tax directorate has refused demands from businessmen to include in the draft revision an article that covers a reimbursement for reckless or intentional disregard of guidelines by the tax officials, which are known to occur frequently.

Other key points in the draft law

• Taxpayers will be fined Rp 500,000 for failing to submit their value-added tax forms, known locally as PPN, and Rp 50,000 for other taxes.
• Corporate taxpayers will be fined Rp 1 million for not being on time with their annual tax statements and Rp 250,000 for individual taxpayers.
• Taxpayers will have to pay a monthly interest of 2 percent of their unpaid taxes.
• Corporate taxpayers that fail to comply with tax notices accurately or intentionally refuse to report activities subject to taxation, will be fined 10 percent of total reported taxes.
• Taxpayers will be sent to prison for a maximum of six years or a financial penalty of four times the amount of the unpaid taxes for failing to have a tax register number; intentionally falsifying tax reports; rejecting an audit; fake documents; or failing to keep accounting reports, notes and documents related to the payment of taxes.
• Taxpayers who received a tax restitution illegally face a maximum 6-year imprisonment or a fine four times the amount of the withdrawn restitution.
• Taxpayers who intentionally issue a false tax notice could also be imprisoned up to six years or fined Rp 500 million.
• The tax directorate has the authority to state the amount of tax if there is an indication that the taxpayer has not reported the tax properly based on reports from state and private institutions.

Judicial reform faces Parliamentary hurdle

Radio Australia - January 13, 2004

Indonesia's efforts to reform its judiciary could face another blow if the parliament passes a bill that would bar non -career judges from sitting on the Supreme Court bench. Often portrayed as corrupt, dysfunctional and ineffective .... an attempt was made in 2000 to change that image.

Non-career judges were brought into the Supreme Court in a bid to develop a more independent and clean judiciary.

Presenter/Interviewer: Kanaha Sabapathy Speakers: Zacky Husein, Director of Law Programs, Asia Foundation Jakarta.

Husein: There is still a lot of trust if you will in the judiciary. We did a survey on the perception of the citizen on the judiciary and the level of acceptance or the level of trust or confidence in the court is still quite high.

Sabapathy: In 2000 there was a move to try and create greater transparency within the judiciary and to that extent there was the introduction of non-career judges onto the justice system. To what extent has that helped?

Husein: It has helped a lot I think. If anything the pool of people from the non-career have brought new blood to the judiciary, and with that they've brought a lot of new initiatives to the court. The new Chief Justice now is a non-career justice, he was previously an academic and he served also as a director general at the Ministry of Justice. He's now making it clear that decision of the court should be accessible by all the people and not just for the parties who are contesting at the court. How this is actually being operationalised is another thing, but from the leadership there's already that statement coming up. It is something that is a complete 360-degree change from the previous chief justice for example.

Sabapathy: The parliament is now looking at changing the law that would bar non-career judges from being appointed to the Supreme Court bench. Would this be a blow to judicial reform?

Husein: Well you have to look at it from two levels. I think there is a continuing struggle within the judiciary from the reformist camp and from those who like the status quo. You can just imagine it's career judiciary system here in Indonesia, and so every judge who has studied at the district court level would want to one day become a Supreme Court justice. Also the non- career are not performing any better than the career justices. You need to select them more carefully, not only from the integrity point of view, but also those that can actually do the job so they have the managerial capacity as well.

Sabapathy: The Supreme Court itself launched a blueprint if I'm not mistaken in October. What's important about this blueprint?

Husein: It is for the first time in the history of the judiciary that they've been able to come up with a comprehensive, tackle problems at the judiciary. So that in itself is important. It sets a framework for them to work and then to achieve it in a certain timeframe. The process for putting together was also important because it was not only conducted internally, but it involves an outside Indonesian NGO called the Institute for the Independence of the Judiciary. So the final outcome of the blueprint reflects thinking from both inside and outside of the court. So it represented more of a document that stakeholders can buy into. It also sets a framework for a donor system, so donors can be more disciplined in offering their assistance to the court because there's a list of things that they can refer to, as opposed to before coming in and offering a lot of interesting things to the court, which the court might not necessarily need. So it helps discipline the donor as well.

Yudhoyono plays down democracy and human rights

Laksamana.Net - January 11, 2004

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono says democracy and human rights should not be considered the absolute goals of the Indonesian nation.

"Democracy, human rights, concern for the environment and other concepts being promoted by Western countries are all good, but they cannot become absolute goals because pursuing them as such will not be good for the country," he was quoted as saying by state news agency Antara.

The minister was speaking Saturday in the North Sumatra capital of Medan at a seminar on religion, the mass media and world peace. The event was organized by the Waspada daily newspaper and the State Institute of Islamic Studies. Yudhoyono said not all of the concepts espoused by Western countries need necessarily be adopted, as the most important thing for Indonesia is to maintain balance and proper law enforcement.

His latest comments are quite different from the remarks he made at the annual dinner of the United States -- Indonesia Society (USINDO) on September 19 in Washington DC. In a speech entitled "Keeping the Promise of Reformasi", he told the USINDO dinner that Indonesia's key challenge is "to connect democracy with good governance". "I do not have a crystal ball in front of me, but I know that Indonesia will come out of the smoke and haze with a stronger, more vibrant democracy. I know this because in all the places I have visited through Indonesia -- Aceh, Ambon, Balikpapan, Makassar, Medan, Yogyakarta, Padang, Jayapura -- in all these places, I have met countless Indonesians who conveyed to me with glowing eyes that they continue to believe in the promise of democracy and reformasi," he said.

He further said: "Democracy does not automatically give us national unity, economic recovery, political stability, human rights, social equity or security. Democracy and reformasi can only deliver these things if it is furnished with good governance." He also said Indonesia must continue to consolidate its democratic system. "This requires developing the rules and norms which guide our democratic system, and, more importantly, pushing the Indonesian body politic to develop a habit to working with that system. This also requires a more open policy processes and greater accountability in government."

Commonly referred to as SBY, the 53-year-old retired four-star general, is regarded by many observers as a dark horse for this year's presidential elections. He is untainted by corruption allegations, while his rising popularity has seen him surge ahead of President Megawati Sukarnoputri and several other major contenders in opinion polls.

Nonetheless, some analysts say he is unlikely to win because of his lack of a broad political constituency. So far he had only been named the presidential candidate of the tiny Democratic Party. Presidential aspirant Amien Rais, who is speaker of the People's Consultative Assembly and leader of the National Mandate Party, is rumored to be seeking Yudhoyono as his running mate.

Govenment has failed to promote human rights: Elsham

Jakarta Post - January 14, 2004

Muninggar Sri Saraswati, Jakarta -- The government's failure to reform the Indonesian Military (TNI), the National Police, and the Supreme Court as well as the Attorney General's Office had worsened human rights protection in 2003, a human rights watchdog says.

In its 2003 evaluation of human rights implementation, the Institute for Policy Research and Advocacy or Elsam said that "government policies in politics and economics have put Indonesia in a politically difficult situation vis-a-vis human rights".

"The government and the House of Representatives have only made legislation to support rights enforcement, but have not attempted to boost its implementation," said Ifdhal Kasim, Elsam's director, during a press conference on Tuesday.

According to Elsam, this was a result of the government's failure to reform state institutions such as the TNI, the police, the judiciary and the Attorney General's Office.

The TNI and the police have failed to reform themselves following their separation in 2000, Elsam said, referring to the many clashes between personnel of the two institutions in 2003.

"Reform is only in the sphere of administrative affairs. The police have failed to end its militaristic culture, while the TNI insists on maintaining its involvement in the country's internal security," Ifdhal said.

He referred to the deployment of the military in the early stages of several conflicts across the country, such as in Aceh and Poso, last year.

Ifdhal specifically criticized the poor performance of the Attorney General's Office following its failure to put defendants in the East Timor rights trial in jail.

"The President must separate the Attorney General's Office from the executive branch. How can the Attorney General's Office work independently if it is included in the President's Cabinet? It means the Attorney General's Office must support government policy and will not be able to be independent," he said.

Ifdhal also said that the Attorney General's Office must stop "employing a militaristic approach in its office culture", referring to the practice of using a uniform with a tag to show an official's rank.

"The New Order always installed a military officer as the attorney general, therefore, the civilian institution has become very militaristic," he said.

Ifdhal said that this background made it "difficult psychologically" for prosecutors to prosecute high-ranking military officers in the East Timor rights trial.

Several military and police officers were brought to court for their role in human rights violations in East Timor in 1999 but most of them were acquitted. Even those sentenced to prison remain free pending an appeal.

Elsam also criticized the poor performance of the Supreme Court, saying that the institution has failed to improve its human resources.

The government, too, Elsam said, has failed to give sufficient political support to the National Commission on Human Rights (Komnas HAM) as a legitimate state body.

"Other state institutions consider Komnas HAM as a non- constitutional body. Therefore, they ignore its presence and instead, publicly denounce the commission despite the fact that it is authorized to investigate human rights violations," he said.

Focus on Jakarta

Governor 'shocked' by busway strike

Jakarta Post - January 17, 2004

Damar Harsanto, Jakarta -- Four days after asking bus drivers to make the TransJakarta Busway project launch a perfect one, Governor Sutiyoso was shocked to discover 30 had gone on strike, demanding clarity in their employment contracts and extra allowances besides their basic salaries. "Strike?" he asked, almost speechless.

City spokesman Muhayat was quick to answer reporters' questions. "There is no strike, Pak. That information came from busway operator Jakarta Express Trans. [The strike] is only a rumor which needs to be checked." Reports on Friday said 30 of the 198 busway drivers had gone on strike.

The drivers said their Rp 2 million (US$238) basic monthly take- home salaries were lower than their previous incomes as regular buses drivers. They usually brought home Rp 2.5 million per month. To express their protest, the striking drivers returned their busway uniforms.

One busway driver said he personally knew of several drivers who refused to go to work on Thursday. "At least four busway drivers are ready to resign. They failed to show up today," he said on Friday.

Sutiyoso said he had promised drivers he would look after their welfare. "If they insist on striking, we'll replace them with other drivers," he said. For some drivers, however, the protest was shortlived, a number of them returning to work later in the day.

In other developments, the city administration discovered on Friday the lane divider on Jl. Majapahit had been placed wrongly. The Jakarta Post observed that workers from the City Transportation Agency marked the road to indicate a new lane divider. The administration confirmed the error, and said it planned to shift the divider. "If our evaluation shows that the lane divider is in the wrong place, then we will move it," Sutiyoso said.

He told TransJakarta Busway management head Irzal Djamal and transportation agency head Rustam Effendy to immediately check on the progress of the busway's implementation.

Sutiyoso said his officials would continue to iron out any flaws discovered in the implementation of the busway.

"We hope to minimize similar problems when opening new busway corridors in the future," he said. Thursday's busway kickoff was marred by several incidents, including the breaking of an iron handrail on a bus.

Five of the 56 buses also failed to operate on Thursday after they experienced engine troubles and other technical problems. They are being repaired at Pinang Ranti busway poll in East Jakarta.

Several buses plying the route overlapping the busway corridor from Blok M in South Jakarta and Kota in West Jakarta were still operating on Friday.

News & issues

Mega plans massive party to mark 57th birthday

Jakarta Post - January 17, 2004

Fabiola Desy Unidjaja, Jakarta -- The Indonesian Museum of Records (Muri) will likely add to its collection thanks to President Megawati Soekarnoputri's generous plan to invite 5,300 people to celebrate her 57th birthday on January 23 at the Jababeka industrial estate in Cikarang, West Java.

There is a good chance the museum will declare this fiesta the largest presidential birthday celebration ever held in Indonesian history. The biggest obstacle Megawati faces in grabbing the record is probably her father Sukarno, the country's founding president, who was known to put on huge events during his rule.

According to an internal memo circulated by the Presidential Secretariat on Friday, the President's guests will include orphans, factory workers and businesspeople. The party will be held after Megawati visits factories operating inside the estate on Friday morning.

The President will invite all of the people working at the industrial estate to share in the celebration of her birthday.

Hundreds of orphans from several orphanage in the capital and the surrounding areas will also have the opportunity to have lunch with the First Family. "At the party the President is expected to cut nasi kuning [a traditional rice cone] prepared for her," the memo states.

Megawati was born in Yogyakarta on January 23, 1947. This will be the biggest birthday party Megawati has hosted since replacing Abdurrahman Wahid as President in 2001. She spent her first birthday in office with her family and the second with a small group of members from her Indonesian Democratic Party of Struggle (PDI-P). A palace official, who spoke to The Jakarta Post on the condition of anonymity, expressed concern that the birthday gathering could be construed as an early campaign stop for the upcoming general election. Megawati will also contest the country's first ever direct presidential election in July. Megawati's brother in-law, Santayana Kiemas, was quick to deny the birthday party was a political rally, saying the PDI-P would not be involved in the event.

"It is a personal or a presidential event, separate from the party. Therefore it cannot be considered a campaign rally," Santayana told the Post.

When asked about possible negative reactions to the massive birthday party, the palace official said: "We are still preparing the event, but in the end it is up to the President to decide whether she will have it like that or not."

Customers complain on tap water rate hike

Jakarta Post - January 17, 2004

Multa Fidrus, Tangerang Water utility customers in Tangerang regency are irate over skyrocketing bills that are at least 300 percent higher than the bills they received in December.

Sukiyatno, who lives in Kebon Besar subdistrict, Batu Ceper district, told The Jakarta Post on Friday that he was shocked to see his water bill this month.

"I used to pay Rp 49,000 [US$5.8] each month. But now they're looking for Rp 264,000. I was shocked," he complained. Sukiyatno, who works in a textile fiber factory, said he was sure the amount of water he used this month was the same as last month.

For vegetable vendor Na'un, a 60-year-old water utility customer living in Serpong, his bill increased from Rp 50,000 last month to Rp 160,000 this month. He said he could not afford to pay the difference.

"I'm up in arms about this hike. I can't pay a bill like this. If I have to spend Rp 160,000 per month on water alone, how will I be able to feed my family," said the father of seven.

A similar complaint also came from Havie, a young housewife living in Bugel subdistrict, Karawaci. "I live in a 36-square- meter low-cost house, but the water utility categorizes the place where I live as a luxury estate. I don't understand the calculations they are using. This is pure extortion," she said.

The complaints, however, appear unlikely to change the policy adopted by the Tangerang regency water utility, PDAM Tirta Kerta Raharja (TKR), with officials adamantly rejecting any review of the recent hike.

"There's nothing we can do about the customers' complaints. No compromise is possible as the hike has been approved by the regency council and administration," said Sunarto, an official from PDAM. "The price hike is normal." He also said that another price hike would take place in July for business and industrial customers.

Sunarto said the company had to raise its water charges as the production cost for a cubic meter of water was Rp 2,700 while customers had only be paying Rp 1,800 per cubic meter of water.

He denied reports that the hike was intended to cover the company's debts of Rp 300 billion. "The hike has nothing to do with our debts, although we have been warned by the central government about it," he said. The utility's president, Utar Sutarya, advised the public to be more careful in using water.

Meanwhile, Tangerang Regent Ismet Iskandar said that his administration had no intention of reviewing the hike as the local council had approved the decision. "The councillors only asked for better service in light of the increase. I personally believe the current price is affordable."

Rent-a-crowd business thrives on Indonesian democracy

Reuters - January 15, 2004

Dan Eaton, Jakarta -- In a slum just a stone's throw from the gaudy mansions of Indonesia's elite, Rizal trades in human flesh and misery. Angry students, the urban poor, the rural poor, supporters, opposers, all can be arranged for a price.

"Over the years, I've had orders for people from the parties of two presidents, but I'll work for anyone," says the 30-year-old Jakarta man, one of thousands of Indonesians who make a living arranging mobs.

In the world's fourth most populous country, politics has traditionally been about crowds -- huge, noisy and sometimes violent masses.

However, Rizal's is an industry which has blossomed since mobs took to the streets in 1998, ousting former autocratic president Suharto and giving birth to a shaky democracy.

"Under Suharto of course demonstrations were not allowed. You'd be arrested and put in jail," Dewi Fortuna Anwar, a political analyst and former presidential adviser, told Reuters.

Because political rallies and political campaigns in Indonesia are still mass based, rather than rooted in issues, some parties need to reassure themselves and their competitors that they have followers, so they rent mobs, she says.

"It's become a business ... Not all crowds are rented, but it shows political shallowness and economic need." And it's an industry many see getting a boost from the country's first democratic presidential elections this year.

Manoeuvring is already under way to line up slates, and the cast of characters is colourful to say the least. One party has the ailing Suharto's business mogul daughter at the top.

Three others are headed by daughters of Indonesia's first president Sukarno -- including incumbent President Megawati Sukarnoputri. A blind cleric and former president thrown out for alleged incompetence heads another party, while a politician appealing a fraud conviction leads one of the strongest. Few Indonesians expect a clean fight.

With an air of despondency, the Jakarta Post said in a recent editorial: "What leaders we have today have been groomed over the last 20 years, and a rotten regime breeds rotten leaders."

Political theatre

Twenty-four parties have the green light to participate, virtually guaranteeing that no party will win a parliamentary majority on April 5 and that the presidential race in July will go to a runoff.

Analysts say large rallies are a certainty and some fear the tension could spur violence, as happened on the resort isle of Bali in October, when two people were killed and vehicles torched in a clash between supporters of the country's two main parties.

New arrivals in the steaming capital of the sprawling equatorial nation of some 17,000 islands and 210 million people are struck by the vast number of public demonstrations.

"Demos", as they are known locally, take place on an almost daily basis, snarling traffic as crowds march and wave banners.

What is not immediately obvious to the casual observer is that many are carefully stage-managed pieces of political theatre rather than expressions of ordinary Indonesians' aspirations.

"If a politician disagrees with another, he organises a protest," says Rizal, clad casually in blue jeans, a green t-shirt and flip-flops.

Working from his home in dusty Cikini -- a poor area of the capital handily located in Menteng, which also includes the inner city mansions of many of Jakarta's elite, where Megawati and Suharto rub shoulders with diplomats and bankers -- Rizal reckons 2004 will be a very good year.

"Lots of political parties and many, many candidates," he says. "I can smell the money, but I'm very worried that with all those competing factions there will be clashes."

A virtual crowd

Rizal said one mob organiser he knew had already had his first election-related job, helping to create a virtual crowd by buying supporters' identities for one political party so it could meet the threshold required to run candidates.

"Students can be a good source of income too. A recent job I had was for university students who wanted to protest corruption outside the attorney general's office. They wanted 100 people." As a professional go-between, he explains, he receives "orders". He can rustle up 100 demonstrators at a moment's notice, or, given a little more time and working with others in the business, he can lay on a cast of thousands.

Dozens of Jakarta slums and even whole villages outside the capital have become fertile recruiting grounds. Demonstrators receive anything from 15,000 rupiah ($1.80) to 50,000 rupiah each, a boxed lunch and a bottle of water before being loaded into buses or trucks and driven to the demo site, where they are given banners to wave and headbands or T-shirts.

If everything goes smoothly, they disperse -- or are dispersed by club-wielding police -- a few hours later.

"It's the responsibility of the person ordering the protest to pay the medical bills," said Rizal. "I don't think it's wrong. People choose to sell their support because they are poor and need the money."

[Additional reporting by Telly Nathalia.]

Environment

Megawati indecisive on sand exportation issue

Jakarta Post - January 18, 2004

Fabiola Desy Unidjaja, Jakarta -- Riau Governor Mohamad Rusli and Minister of Maritime and Fishery Rokhmin Dahuri competed on Friday for President Megawati Soekarnoputri's endorsement of their opposite stances over the sea sand export policy to Singapore.

The governor, whose provincial revenue depends greatly on the lucrative sand export, urged the President to lift the complete ban of sand exports from Riau to Singapore, assuring her that he was ready with a more environmentally friendly sand quarrying system.

Meanwhile, the minister told the President the government should stick to the prohibition for the sake of the country's territorial integrity.

"I believe that it could be done properly as long as it does not damage the environment," the governor said after meeting with the President. The governor, who met with her before the minister, said that the province was ready to comply with the zoning map that has been issued by the central government should the sand mining be resumed.

Megawati, however, did not give a firm answer to the governor. "The President only said the issue would be discussed further," Rusli replied, when asked about Megawati's comment on the request.

The minister, who is in charge for the sand export issue, was not convinced of the governor's commitment.

"I'd be grateful if the local authority is ready to comply with the map. But even with that, we still cannot resume the mining before we officially determine the sea border with Singapore." The governor is not alone. Minister of Industry and Trade Rini Suwandi proposed the resumption of the export by imposing tough regulations and increase the selling price. She is of the opinion that illegal exports had become more rampant with the embargo policy.

Separately, Minister of Foreign Affairs Hassan Wirayuda said that Singapore had agreed to discuss the border issue through a joint commission between the two countries. However, no date has been set to open the new round of negotiations. One of the government's reasons for prohibiting sand exports to Singapore in January last year, was to curb illegal sand mining that had seriously damaged the province's maritime environment. Several islets there are under serious threat of disappearing due to erosion as the protective sand barriers are removed.

The decision also was made because there is a possibility that the sea border between the two countries will cut further into what is now Indonesian territory if the islets between the two countries disappear.

Environmental groups, like the Indonesian Environmental Forum (Walhi) supported the decision to halt the dredging, saying that it ruins the coral reef and damages the sea ecosystem around Riau islands.

Another reason is to force Singapore's government to resume negotiations to determine the two countries' sea boundary. There is growing concern here that Singapore used Riau's sand to expand the extent of its territory through its coastal reclamation.

Over the next seven years, the country is expected to import some 1.8 billion cubic meters.

Meanwhile, Rokhmin insisted that the government would not change its position as long as Singapore did not change its stance.

"As long as there is no border arrangement with Singapore we will not lift the ban, we may continue with the export if they are willing to discuss the border issue with us," said Rokhmin.

Aid & development

Government to prioritize energy research

Jakarta Post - January 17, 2004

Eva C. Komandjaja, Jakarta -- The government will spend much of the budget allocated for research and development over the coming 20 years on developing new rice varieties and alternative energy resources.

The secretary of the Office of the State Minister for Research and Technology Ashwin Sasongko said on Friday that focusing research on these two areas would improve the country's food security and avoid a possible energy crisis in the future.

"These choices are highly pertinent as we have seen how East Nusa Tenggara and East Java are facing food shortages due to crop failures inflicted by the long dry season. In addition, our oil reserves are decreasing," Ashwin said. The National Atomic Energy Agency (BATAN) is developing a new variety of rice that can withstand drought and produce greater yields.

Ashwin said that success in inventing a new, high-yielding variety would help the country achieve self-sufficiency in the food sector in the next few years.

Bambang Prasetyo, an assistant to the deputy state minister for research, said his office was working together with the Ministry of Agriculture to formulate specific programs, such as a biotechnology development program to support the food security program.

"We will launch a pilot project with the help of the Ministry of Agriculture. The project itself is expected to start in 2005. We are still working on the details at the moment," said Bambang.

He added that Indonesia's oil and gas reserves were diminishing rapidly, and according to BP Migas would only last for another 20 years.

Bambang said that the office of the state minister was also working together with the Ministry of Energy and Mineral Resources to encourage the use of brown coal as an alternative energy resource.

Indonesia has abundant supplies of brown coal, especially in Sumatra. However, brown coal needs processing before it can be used.

Apart from brown coal, Bambang said that the office of the state ministry would collaborate with other state research and technology institutions in developing biodiesel technology.

Research and development priorities would be discussed during a two-day meeting on Monday and Tuesday.

With a total budget of Rp 900 billion (US$107 million) to be spent on research and technology per year, Ashwin said Indonesia would focus on food and energy development.

"Our neighbors, such as Singapore and Malaysia, allocate approximately 1 to 2 percent of their Gross Domestic Products (GDP) on technology and research, while we only put aside 0.18 percent," said Ashwin.

Therefore, Ashwin urged the government to pay more attention to scientific and technological development in the country.

Health & education

Indonesia still struggling with nationwide leprosy

Jakarta Post - January 14, 2004

Eva C. Komandjaja, Jakarta -- Indonesia is facing daunting challenges in its efforts to eradicate leprosy, which remains a serious health problem in 111 of its 440 regencies and mayoralties.

Director General of Communicable Diseases Umar Fahmi at the Ministry of Health said on Tuesday that the government had set a target of reducing the number of leprosy cases to under 1 in 10,000 people by 2005, but the fear of leprosy among people, geography and lack of funds were great obstacles.

"Most lepers are found in relatively poor, densely populated and remote areas, making it difficult to combat the disease. There are also many other health problems that need more attention than leprosy," Umar said at a media conference held to mark World Leprosy Day, which falls during the last week of January in Asia.

The health ministry recorded 19,805 lepers nationwide, a figure that ranks Indonesia as the second Asian country with the greatest number of leprosy cases, after India. Most cases are found in East Java, Central Java, Jakarta, Nanggroe Aceh Darussalam, South Kalimantan and South Sulawesi.

The World Health Organization (WHO) has set a prevalence rate of leprosy at one per 10,000 people.

Leprosy is a chronic disease caused by the Mycobacterium leprae bacillus, which can cause permanent physical deformities, muscular atrophies and mutilations if medical treatment is not given immediately. The disease can be transmitted through direct contact and exposure over a long period of time, and has an incubation period of two to five years.

The disease is curable with proper medication within a year after it has been contracted.

Umar said the government had established the National Alliance for Leprosy Eradication (ANEK) and had conducted the Rapid Village Survey (RVS) involving local people to record leprosy cases in isolated rural areas.

Medication for leprosy is provided free at community health centers across the country, he said.

Farid Husain, the deputy Coordinating Minister for People's Welfare in charge of health coordination and environment, said the government had appointed several hospitals in Banten, South Sulawesi, South Sumatra and East Java to provide free surgery for lepers.

Many foreign institutions and non-governmental organizations, such as the Netherlands Leprosy Relief, the Sasakawa Memorial Health Foundation, the Leprosy Mission International and Novartis, have contributed about 90 percent of the total budget for leprosy eradication.

Director of Social Services and Rehabilitation for Disabled People Irna Kurniasih at the Ministry of Social Affairs said the ministry had resettled lepers in 23 special housing facilities near hospitals that treat leprosy.

The ministry has also provided Rp 1.3 million (US$153) in housing and annual aid to families of people suffering from leprosy.

"We are discussing the possibility of providing more job opportunities for them. The Ministry of Manpower and Transmigration currently allows only a one percent quota to disabled people," said Irna.

Bali/tourism

Visa changes darken Bali's happy holiday recovery

Asia Times - January 16, 2004

Gary LaMoshi, Denpasar -- It was a merry Christmas and a happy new year for Bali. Tourists packed hotels to enjoy a peaceful tropical idyll during the festive season, giving Balinese reason to celebrate during their own Galungan and Kuningan holidays this month.

More than half of the families on the island earn their livelihoods from tourism; some estimates put the figure as high as 80 percent. This joyous beginning may prove to be the high point of 2004 for the hub of Indonesia's tourism industry and the spokes it supports.

Bali's hotels enjoyed high occupancy rates for the holidays, according to hospitality-industry sources. But that's nothing new for the island's traditional high season (along with the July- August Northern Hemisphere summer holidays). Holiday makers packed Bali even in December 2002, just weeks after bombs ripped through Kuta killing more than 200 people, most of them tourists.

In 2002, though, those tourists were mainly Indonesians. Different this season "was a marked increase in support from international markets", according to Bali Hotels Association chairman Robert Kelsall, "giving a glimmer of hope that a recovery from some key international markets is imminent". Those overseas markets are critical for Bali and for Indonesian tourism, an industry that brings the nation more foreign exchange than any industry except energy.

Back to the future

After the October 12, 2002, Bali bombings, foreign tourist arrivals on the island throughout 2003 stabilized around the levels of 1997-98, www.balidiscovery.com reports, or about 25 percent below 2000, the last year free of the impact of September 11, 2001, and subsequent terror attacks. Even those figures may fail to capture the full impact of the decline.

Bali Discovery president director J M Daniels estimates that crucial Western markets remained down 30-60 percent from 2000 levels during this festive season. Kelsall, whose association -- previously known as Casa Grande Bali -- represents 54 leading hotels, agrees: "Certain markets are certainly depressed, in particular some key European markets where travel advisories [against visiting Bali] still exist" such as Britain, traditionally Bali's leading European Union source of tourists.

Visitors from Asia, notably Taiwan, have taken the places of some Western tourists in the visa lines at Bali's Ngurah Rai International Airport. Compared with Westerners, Asian vacationers tend toward shorter stays and group tours, meaning rock-bottom prices on hotels and other services. Domestic tourists visit even more briefly and spend less than foreigners. So shortfalls in tourism revenue generally are greater than the 25 percent drop in foreign arrivals suggests.

Indonesian tourism officials share Kelsall's optimism about recovery in overseas markets. The government has set targets of 5 million overseas visitors and $5 billion in foreign-exchange revenue for 2004. This year's target was revised downward to 4.6 million, and actual figures expected in a few weeks will likely fall just short of that goal.

The magic of Bali tourism

In calling for approximately 5 percent growth in tourism, the Indonesian government apparently believes in miracles. Legislators slashed the Ministry of Culture and Tourism's promotional funding request by 68 percent to Rp113.5 billion ($13.5 million), far below major ASEAN (Association of Southeast Asian Nations) rivals' budgets. More ominously, Indonesia will hold legislative elections in April and separate presidential voting, most likely requiring two more trips to the polls. Two people died late last year in northern Bali in clashes among party faithful. More electoral violence is likely across the sprawling Indonesian archipelago, and this will not encourage tourism even if it's a thousand kilometers away from Bali; one hidden consequence of the 2002 bombing is that tourists now know Bali is part of Indonesia.

Given budget constraints and the demands of democracy, lower spending and the electoral uncertainties may be unavoidable. But the Indonesian government has chosen to go out of its way to discourage foreign tourism.

The Ministry of Justice and Human Rights, which runs the immigration counters at ports of entry, announced on January 2 that it will introduce new rules for tourist visas on February 1. The new policy narrows the list of countries and territories eligible for free 60-day visas on arrival from 48 to 11. The new preferred list excludes most major sources of tourism in Indonesia, such as Australia, Japan, the United Kingdom and Taiwan, while including lightweights Chile, Peru, Morocco and Vietnam.

Passport holders from another 20 countries plus Taiwan can buy visas when they arrive, $10 for up to three days, and $25 for up to 30 days (down from 60 days); everyone else must apply at an Indonesian embassy or consulate before arrival. Various reasons have been advanced for the policy change, from generating funds to computerize the Immigration Department to reciprocity -- granting the same visa privileges to other countries that they grant to Indonesia -- to the rumor that Justice and Human Rights Minister Yuzril Ihza Mahendra wanted revenge after being forced to remove his shoes before boarding a plane in Australia.

Minister of Culture and Tourism I Gede Ardika, the only Balinese in the cabinet, is calling on the government to reconsider the implementation date, as is the hospitality industry. "We are saying 'the time is not right!'" Kelsall explains. "Bali Hotels Association has been petitioning the government, along with other tourism stakeholders, to try and delay implementation of the visa fee until tourism has properly recovered and other obstacles, such as travel advisories, have been removed."

Kelsall, who is also the general manger of Kuta's four-star Bali Dynasty Resort, cites a survey in member hotels that found 30 percent of guests would seriously reconsider coming to Bali if they faced a visa fee. Letters to balidiscovery.com also indicate a negative impact on tourism from the new rules. One travel agent calls the visa changes "good news for Australia and other competitor destinations", and others cited the expense, particularly for a family of four or more.

"What are you guys thinking?" one letter writer asked the Indonesian government. Whatever it may be, the authorities in Jakarta aren't thinking about helping Bali and the nation's critical tourism industry overcome the uncertainties it faces and build toward sustainable growth. In other words, visa rules may change, but it's still business as usual.

Armed forces/police

More police officers moonlighting

Jakarta Post - January 17, 2004

M. Taufiqurrahman and Abdul Khalik, Jakarta -- A police watchdog blamed the unfinished reform at Jakarta Police headquarters, which affects more than 500 middle-ranking personnel, for an increasing trend in working side jobs, both legal and illegal.

Police Watch director Rashid Lubis said on Friday that since the reform drive was initiated in mid-2002, hundreds of police officers were left without jobs as their departments were disbanded and new posts had yet to be set up.

"These unattached officers have more than enough time to moonlight in side jobs, backed by all their privileges and authority as security officers," Rashid told The Jakarta Post.

Despite growing concern over the idle officers, he said, Jakarta Police chief Insp. Gen. Makbul Padmanagara could do nothing.

"The chief has issued circulars ordering the transfer of idle personnel to other departments, but these were disregarded as only National Police chief Gen. Da'i Bachtiar has authority over middle-ranking officers," he said.

Rashid was commenting on the increasing number of criminal cases in which active police personnel were implicated, whether on or off duty.

On Thursday, three policemen were arrested for assaulting the rival of a businessman for whom they worked as guards.

Last Sunday, middle-ranking officer Comr. Puja Laksana was arrested in possession of 900 ecstasy pills, and on Friday, police arrested Puja's accomplice, Kawi, who was believed to be a drug supplier.

Police Watch's latest survey revealed an increasing number of officers involved in robbery, thuggery, gambling and drug trafficking cases. At least 14 drug cases and 90 assault cases in 2003 involved police personnel.

Three years after becoming independent of the Armed Forces (ABRI) -- now the Indonesian Military (TNI) -- the National Police still have tough challenges ahead to rid itself of corruption and the use of violence in dealing with the public.

Separately, University of Indonesia criminologist Adrianus Meliala pointed out that the Jakarta Police still had a number of auxiliary and supporting divisions, the mainspring for unruly moonlighting policemen.

"We all know that divisions such as research and development, health, logistics and forensics have become liabilities to the Jakarta Police, because the staff, who work less hours, are also authorized to use guns and other means of force as detectives." Jakarta Police spokesman Sr. Comr. Prasetyo, however, defended moonlighting police, saying that personnel were free to use their off-duty time as they chose, and that there was no sanction against taking on side jobs.

"Some personnel work from nine to five and afterwards they are free to go anywhere they wish. Others have more flexible working hours and they can conduct other activities as long it does not interfere with their main duty as police," he said.

Newcrest 'pays soldiers and police'

Green Left Weekly - January 14, 2004

Igor O'Neill, Jakarta -- On January 7, riot police opened fire on local residents protesting against the environmental and social impacts of Melbourne-based mining company Newcrest's Toguraci goldmining operation on the Indonesian island of Halmahera. At least one person was shot dead, several were savagely beaten and six were detained.

In October, 2000 locals began a five-week occupation of the Tougaraci deposit.

Activists and traditional landowners protested outside the National Commission for Human Rights (Komnas-HAM), the Indonesian government's main human rights body, in central Jakarta on January 8, calling for an investigation into the incident.

"We're here because of the shooting incident towards our people. They were just trying to demand their traditional forest rights and protect the forest", said Usman Sergi, of the Mining Advocacy Network, who is one of 6000 traditional owners from the area demanding that Newcrest compensate them for their land.

Newcrest claims that the protesters were "intruders" and "illegal miners". Newcrest's general manager of corporate affairs Peter Reeve said Newcrest regretted the "incident" but it is "now [a matter] between the police and those people".

Indonesia specialist Dr Damien Kingsbury has challenged the company's account. "Newcrest's denial of responsibility for death and injury at the site is contradicted by the company earlier confirming that it pays senior soldiers and police for protection. If this violence was not at the direct and specific order of Newcrest, then it was by officers employed by Newcrest acting on Newcrest's behalf", Kingsbury said.

Newcrest signed its lease to operate the Toguraci gold mine with the corrupt administration of Indonesia's deposed dictator Suharto. The lease gave Newcrest access to land occupied by indigenous people, without consultation or consent. Local communities are seeking negotiations with the company, asking that their traditional land rights be respected. The company has refused.

[Igor O'Neill is an activist with the Mineral Policy Institute.]

Regional offices to revitalize network: BIN

Jakarta Post - January 13, 2004

Fabiola Desy Unidjaja, Jakarta -- State Intelligence Agency (BIN) chief Hendropriyono said on Monday that the planned establishment of his agency's branches at the provincial, municipal and regental levels was aimed at revitalizing the office.

Speaking publicly for the first time on Monday regarding the plan, Hendropriyono said the move was designed to inject new life into intelligence offices across the country. "We already have the network up to the municipal level, but we need to revitalize the system," Hendropriyono said before attending a Cabinet meeting with President Megawati Soekarnoputri.

"The posts are already there, but some have no personnel, while some need to be strengthened," said the retired three-star Army general. However, he refused to disclose the number of existing personnel on the field and possible additional people to strengthen the intelligence community.

Hendropriyono first floated the idea to set up intelligence offices at the municipal level following the deadly Bali bombing that killed more than 200 people on October 12, 2002. For some, the terrorist attack as well as several ensuing bomb attacks pointed to poor performance on the part of intelligence agencies.

After receiving Presidential Instruction No. 5/2002 that reinstated BIN's coordinating authority, Hendropriyono said that coordination should begin at the grassroots level. With the coordinating authority, intelligence officers from the police, military and prosecutor's office should report the results of their intelligence analysis to BIN.

Hendropriyono said the government would still discuss the legal basis for the establishment of these offices. A staff member at the State Secretariat said on Monday that BIN had not yet submitted a written proposal on the planned establishment of intelligence offices at the provincial and municipal and regental levels.

"They [BIN office] should submit the draft first before we can do anything with it and so far we have not received a draft from them," the official told The Jakarta Post.

The debate over the establishment of these intelligence offices came to the fore again after State Minister for Administrative Reforms Feisal Tamim said that President Megawati was ready to sign a decree to officiate the branches. He said last week that the decree would detail the structure of the offices and appoint regional government leaders as supervisors of the intelligence community.

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono, however, expressed concern over the plan, saying that such a move should obtain approval from the Cabinet.

Controversial plan to expand the Intelligence Agency

National Public Radio (US) - January 14, 2004

Indonesia's President Megawati Sukarnoputri has controversial plans to expand the country's National Intelligence Agency. The agency intends to open offices at the provincial and municipal level and to build a new university devoted entirely to intelligence training. Officials defend the move as a way to prevent terrorist attacks in the sprawling Muslim country. But critics regard it as a regression to Indonesia's recent past under longtime dictator Suharto. Kelly McEvers reports from Jakarta.

Kelly McEvers: It's expected that a presidential decree will increase the size of the intelligence agency, allowing Megawati to circumvent the legislature.

Indonesia's first anti-terrorism laws also were enacted by presidential decree. That was just after the October 2002 bombing on the resort island of Bali that killed more than 200 people.

Megawati's government was sharply criticized after that attack, especially the intelligence agency, known here by its acronym BIN, for failing to take the

terrorism threat seriously. BIN has been expanding since then. And Megawati recently broke ground on a BIN-sponsored intelligence school on the northwestern island of Bataan. (Soundbite of ground-breaking ceremony)

McEvers: At the ceremony, Megawati said the military will no longer play the dominant role in intelligence. She was referring to the so-called New Order era under Suharto when a 300,000- strong army helped keep the dictator in power by maintaining a culture of fear. Security analyst Ken Conboy, who has written a book on the history of Indonesian intelligence.

Mr. Ken Conboy (Security Analyst; Author): Traditionally the military intelligence agency during the New Order was by far and away the most powerful, the most influential, the most capable intelligence organization in Indonesia.

McEvers: But then, in 1998, amid economic collapse and mass street protests, Suharto fell.

Mr. Conboy: After '98 things started to change, slowly at first, but it quickly gained momentum after 9/11 in the States. There was a civilian intelligence agency that jumped to the front of the pack and has really been carving out a niche for itself as, I would say, the premier intelligence agency in Indonesia now.

McEvers: Yet critics say there are still troubling connections between the new intelligence agency and the old apparatus under Suharto. The chief of BIN himself is a former military general who also holds a powerful position in Megawati's government. In recent months BIN has been fighting to increase its capabilities, not only to gather intelligence but to apprehend and detain suspects as well.

Foreign governments like the US, Britain and Australia will provide support to the BIN school. They also are working closely with the national police. US officials say strengthening both the intelligence and the police, similar to the CIA and the FBI, is a more democratic approach to fighting terror because neither agency will become too powerful.

US officials will not say how their own intelligence agents might be influencing BIN. Reformers say this sets a bad example in a fledgling democracy. Smita Noto Susanto heads the Center for Democratic Reform.

Ms. Smita Noto Susanto (Center for Democratic Reform): Because the United States decides what the agenda should be and, by terrorism, not promoting democracy, then I am very pessimistic that we will ever make it to a democracy like we anticipated in 1998.

McEvers: One former BIN official, who asked not to be identified, suggested that the old way of gathering intelligence under Suharto might have been more effective than the so-called democratic approach. Back then interrogations were enforced with the threat of a pistol shot. Nowadays, he said, potential informants are befriended, taken to lunch, offered money. Democracy, he said, can be so expensive.

BIN's potential overlap with Army commands queried

Jakarta Post - January 18, 2004

Muninggar Sri Saraswati & Sandy Darmosumarto, Jakarta -- An activist with a rights watchdog, which had reported in December that the national intelligence body was already beginning activities at the district level, questioned a potential overlapping of functions with the military's territorial commands.

"I am afraid Indonesia will turn into a police state. People would be monitored by many intelligence bodies," Munir of Imparsial said on Friday. The territorial commands of the Indonesian Military (TNI) also have intelligence functions.

In December, Imparsial had warned that BIN had started expanding its powers to the district level across the country. Imparsial had noted that BIN had recruited officials at regional administrations to support its operations in Bitung and West Java, based on reports from its network.

"We fear that the move will turn public servants into agents who meddle in social and political life," Munir said.

On Wednesday, State Minister for Administrative Reforms Feisal Tamin disclosed the plan to allow BIN to open offices in all provinces, regencies and municipalities across the country.

He said that the plan would be supported by a presidential decree. According to Tamin, each of BIN's representative offices would be under the auspices of both BIN headquarters and the regional administration.

However, Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono said that the plan had to first secure approval from the Cabinet.

Last month West Java Governor R. Nuriana said the provincial intelligence coordination body (Bakorinda) would be revived pending directions from Jakarta. He said it was important given the weakness in early detection, for instance, of terrorist activities.

The lack of coordination among state intelligence agencies has been criticized following the October 12 Bali bombing that killed 202 people. Following the Bali bombing President Megawati Soekarnoputri appointed BIN as the sole coordinator for all intelligence activities in the country.

On Friday Hermawan Sulistyo of the Indonesian Institute of Sciences (LIPI) said that BIN should instead "improve its coordination and the quality of their intelligence officers" as its main obligation is to prevent high-profile crimes, such as terrorist attacks.

"As coordinator, BIN must be able to guarantee that intelligence officers from the National Police and the Indonesian Military always report their findings to them," Hermawan said.

He warned that the plan to expand BIN would lead to state interference in civilian life and would be prone to abuse. "Officers could blackmail people or seek to put their "enemies" in jail," Hermawan said, citing the 2003 antiterrorism law which allows intelligence officers to arrest suspected terrorists.

Prior to BIN, the New Order government set up the National Coordinating Intelligence Agency (Bakin) to detect possible spread of communism. It was later revamped by former president Abdurrahman Wahid and renamed BIN.

Police said the expansion of BIN was not a problem. "The more information we receive the better ... Other institutions besides the police also possess intelligence units. There is a mutual exchange of information," said National Police deputy spokesman, Brig. Gen. Soenarko.

International relations

Indonesian generals on watch list

Melbourne Age - January 17 2004

Matthew Moore, Jakarta -- The US State Department is to put several serving and former Indonesian military officers, including a leading presidential candidate, on a watch list of indicted war criminals, effectively barring them from entering the US.

The list includes General Wiranto, former head of the armed forces and a leading presidential candidate in the elections this year, whom the Defence Department once considered a reform-minded professional. General Wiranto and others on the list were among eight Indonesian army officers indicted last year on war crimes charges in Dili District court by East Timor's Prosecutor- General, using evidence gathered by the UN serious crimes unit.

A member of General Wiranto's presidential campaign team played down any damage the US move would cause to his presidential aims and said a ban on visiting the US would not apply if General Wiranto was elected president. "People I have spoken to are convinced his name is not on the list," he said.

"And assuming he was on this list, and every indication is he's not, and he was elected president, a ban no longer applies because it becomes a diplomatic matter." In recent months, General Wiranto has emerged as a front-runner to win the nomination of former president Soeharto's Golkar Party, which would allow him to challenge President Megawati Soekarnoputri in the July poll. However, satisfactorily explaining his role in East Timor's bloodshed remains a significant obstacle.

The State Department move comes as the UN remains under pressure from human rights groups and some governments to take action against Indonesia for its perceived failure to seriously pursue those responsible for crimes in East Timor. An Indonesian ad hoc tribunal set up under UN pressure prosecuted 18 officers and officials for war crimes but acquitted most of them and allowed those convicted to stay free on appeal. Some senior officers, including General Wiranto, head of the armed forces at the time of East Timor's independence vote, were not investigated or prosecuted.

The refusal to prosecute has angered State Department officials, who believe the tribunal disregarded the evidence. The decision to deny those individuals visas to enter the US was an attempt to show the Administration's disapproval, an official said. "Had there been a generalised perception that the prosecution was vigorous and a reasoned judgment was made," the visa process "would have been looked at in a different light," said a US Government official. The names will be added to a State Department watch list. The other names believed to be on the list are General Zacky Anwar Makarim, Major-General Kiki Syahnakri, General Adam Damiri, Colonel Tono Suratman and Colonel Mohammad Noer Muis.

Indonesians barred from US

Washington Post - January 16, 2004

Dana Priest and Peter Slevin -- The State Department has decided to put a half-dozen current and former Indonesian military officers, including a leading presidential candidate, on a watch list of indicted war criminals, effectively barring them from entering the United States, according to US government officials.

The list includes Gen. Wiranto, the former head of the armed forces who hopes to lead the country, and whom the Defense Department once considered a reform-minded professional. He and the others on the watch list were indicted last year on war crimes charges by a special UN tribunal. The United Nations is investigating the 1999 violence that left 1,500 East Timorese dead in the days surrounding a referendum on East Timor independence from Indonesia.

A subsequent Indonesian ad hoc tribunal refused to investigate or try the officers, and nearly all other lower-level Indonesian police and army personnel charged with human rights abuses in East Timor have been acquitted.

The refusal to prosecute has angered State Department officials, who believe the tribunal disregarded the evidence. The decision to deny those individuals visas to enter the United States was an attempt to show the administration's disapproval, one official said.

"Had there been a generalized perception that the prosecution was vigorous and a reasoned judgment was made," the visa process "would have been looked at in a different light," said one government official involved in the deliberations.

The decision comes as the Bush administration has vastly increased its ties with Indonesia's military and security forces to track down suspected terrorists. At the same time, the US government is pressuring the Indonesian military to cooperate with an FBI investigation of an attack on Americans, including two teachers who were killed, in August 2002, in Papua, an Indonesian province.

An FBI team recently returned from its third trip to Indonesia only partly satisfied with the cooperation of Indonesian authorities. Meanwhile, Patsy Spier, the widow of one of the teachers, met recently with FBI Director Robert S. Mueller III and Deputy Defense Secretary Paul D. Wolfowitz. Both officials, she and other US officials said, assured her they would continue to aggressively pursue the investigation to find the killers.

Eight Americans were wounded in the assault that claimed the teachers' lives. Their vehicle was ambushed on an isolated mountain road in Papua controlled by the military and a US mining company, PT Freeport Indonesia. State Department officials and an Indonesian police investigator have said the preponderance of evidence points to military involvement in the ambush.

The Indonesian military has a long history of human rights abuse. After Suharto, the US-backed authoritarian leader, was driven from power in 1998, Wiranto was viewed by the Defense Department as a reform-minded general who would turn the military into a professional organization subject to civilian control. He has asserted he did not know about or direct the East Timor killings.

The names will be added to a State Department watch list. None has applied to enter the United States, but if they do, their names will pop up on the consular affairs computers, and their requests will be automatically subject to further investigation, a State Department official said. But several officials pointed out that it would be highly unusual for the United States to give a visa to someone indicted for serious war crimes.

Wiranto dismisses report of US ban

Reuters - January 17, 2004 Jakarta -- Former Indonesian military chief and presidential hopeful Wiranto has shrugged off a reported move by United States to bar him from entry over accusations of rights violations, media reported on Sunday. Wiranto, indicted for war crimes by a special UN tribunal for violence in East Timor surrounding its 1999 independence vote, dismissed the report by the Washington Post, calling it as an "old baseless issue," the Jakarta Post reported.

He did not want to go the United States, Wiranto was quoted as saying. "It is an old issue but I have proven that I had no difficulties when I went overseas to Singapore and China. All of a sudden this resurfaces, perhaps to color the presidential campaign," he said.

Wiranto was army commander when militia gangs backed by the Indonesian military rampaged across East Timor in the aftermath of the vote for independence. The United Nations estimated 1,000 people were killed. Wiranto has repeatedly denied accusations of human rights violations.

The State Department has put six current and former Indonesian military officers, including Wiranto, on a watch list of indicted war criminals, effectively barring them from entering the United States, the Washington Post reported on Friday, citing unidentified US government officials.

The Washington Post did not identity the other five officers. Wiranto and military spokesman were not available for comment.

Wiranto, a presidential candidate from the second largest party in parliament, Golkar, is a colorful figure credited with trying to hold down violence during riots in the last days of rule by former autocrat Suharto.

Economy & investment

IBRA prepares to bow out

Asia Times - January 16, 2004

Bill Guerin. Jakarta -- One of the last remaining tasks for the Indonesian Bank Restructuring Agency (IBRA) before it is wound up at the end of next month is selling Bank Permata, the country's 10th-largest bank.

IBRA, which took over several troubled banks in the wake of the late-1990s financial crisis, has succeeded in selling majority stakes in Bank Central Asia (BCA), Bank Niaga, Bank Danamon and Bank Internasional Indonesia (BII) over the past two years. However, repercussions from an earlier bank scandal may thwart the agency's plan to sell up to 71 percent of its 91.3 percent stake in Permata this month.

The timing could hardly have been worse. Hot on the heels of the recent discovery of two major lending-fraud cases at two state- owned banks, Permata remains caught in the middle of a legal dispute between IBRA and the Attorney General's Office (AGO).

The dispute is over ownership of funds totaling Rp456.5 billion (US$54.6 million) used by IBRA in 2001 when four nationalized banks under its control, Bank Universal, Bank Artha, Bank Prima Express and Bank Patriot, were merged with a fifth, Bank Bali, one of the country's oldest and largest banks, to form Permata.

The funds had been held in Bank Bali in an escrow account until the newly created Permata bank was recapitalized with an injection of Rp10.5 trillion in recap bonds and Rp1.16 trillion in cash. The Rp456.5 billion used by IBRA formed part of the cash injection.

By law IBRA must gain approval from the House of Representatives (DPR) for any divestment plans affecting banks under its supervision and it plans to seek this approval during the House's next session, which begins next week.

However, Hakam Najam, a senior legislator on the House's finance commission, has warned that the House may block the planned sale unless there is a resolution of the protracted legal confrontation between the agency and the AGO.

"For Permata, we want everything to be clear first. We don't anything fishy or opaque to be hanging over the bank. Like the cessie case, for example, which is still a problem," Najam said last weekend on the sidelines of a banking seminar.

A "cessie" is an assignment agreement. Najam was referring in this instance to the Bank Bali scandal, dubbed "Baligate". Revisiting the epic shows how the passage of time has changed little in Indonesia. The scandal, which reached out to several ministers and top officials from the Bank of Indonesia and IBRA spread outward to the International Monetary Fund (IMF) and the World Bank. Baligate grabbed the headlines because it involved a company partly owned by the deputy treasurer of the then ruling Golkar party, Setya Novanto

The plot could hardly have been simpler. In early 1999 Bank Bali, faced with a mountain of bad debts, applied for a government rescue and the government decided to put part of the bank up for sale.

UK-owned Standard Chartered Bank, in its due-diligence process prior to making an offer for a 20 percent stake in the bank, found a huge black hole in the bank's books. Some Rp546 billion, the equivalent of $70 million, had found its way from the bank's accounts to PT Era Giat Prima (EGP), headed by Novanto.

Rudy Ramli, founder of Bank Bali, needed to raise millions of dollars so the bank could meet the government's new capital- adequacy standards. If he failed, the state would either take over the bank or shut it down, all strictly in accordance with Indonesia's agreement with the IMF.

Bank Bali was owed more than $100 million by three banks that had been closed. Under the bank-restructuring laws, the government guaranteed the debts of all banks, so Ramli should have been able to recoup the money. However, Bank Bali paid EGP a 60 percent "commission " to help collect a total of Rp946 billion from IBRA. Ramli was investigated by the police, and quickly dropped his bombshell. He named Finance Minister Bambang Subianto, Bank Indonesia governor Sjahril Sabirin, State Minister of the Empowerment of State Enterprises Tanri Abeng, head of the Supreme Advisory Council (DPA) A A Baramuli, then-president B J Habibie's younger brother Timmy Habibie, IBRA deputy chairman Pande Lubis and five top businessmen as being involved in the case. The die was cast!

Faced by increasing media pressure, the owners of EGP, Novanto and his business partner Djoko Tjandra, quickly arranged to repay the "hot" money to Bank Bali.

The controversy sparked intense media investigations. Local media poured scorn on the idea that it was enough for a thief just to pay back what he had stolen. It was alleged that Habibie's informal re-election committee, Tim Sukses (Team Success), was to have benefited from the money, to buy off a majority share of votes in the People's Consultative Assembly (MPR).

The World Bank and the IMF cranked up pressure for an independent, public inquiry into the fiasco, calling on the Habibie government to "publicly reveal all information about the case and prosecute those involved".

Golkar wanted its man Habibie re-elected, so the ensuing alarm and despondency was easy to predict. Habibie was at first defiant, saying it was not his business to know the details "I don't care where the money went; the bank owner has every right to use the money as he sees fit."

International accounting firm PricewaterhouseCoopers (PwC) was appointed by the state audit agency to audit not only IBRA but also Bank Indonesia to get to the truth.

PwC faced obstruction at every turn, and eventually a 36-page document was made public by Satrio Yudono, chief of the Supreme Audit Agency. Yudono, in spite of IMF and World Bank anger, refused to make public the full 123-page report on the scandal, ludicrously citing banking-secrecy laws as the reason.

Both the IMF and the World Bank immediately suspended loans to Indonesia, although they opened up the taps again after the full version of the PwC report was made public by the government.

A special investigation by the House of Representatives backed up the conclusions in the PwC report and found that the transaction between Bank Bali and EGP had been legally defective from the outset, as the latter had not made any payment to take over the bank's claims.

The PwC report described a web of fraud, non-compliance, irregularity, misappropriation, undue preferential treatment, concealment, bribery and corruption involving various institutions, particularly IBRA and the central bank.

It noted that as the debtor was IBRA (ie the government), Bank Bali did not need the services of any other party to collect its claims. Also, if Bank Bali could not collect the money itself it would have meant the claims did not meet the requirements for reimbursement. No other party would have been able to validate the claims for payment, unless they colluded with IBRA or the central bank, which was in charge of verifying the validity of such claims.

Weak law enforcement meant that months were wasted through attempts by lawyers to finesse the case into the civil courts. When the dust finally settled, criminal trials of the major suspects got underway.

Tjandra and two others, central bank governor Syahril Sabirin and IBRA vice chairmen Pande Lubis were charged and tried over a transaction that was against the law and caused losses to the state.

Judge Soedarto freed Tjandra of all charges over a legal technicality. In acquitting the man widely seen as the main mover of the "money swap", the judge sent a signal to the other suspects, and the corruptors waiting in the wings, that white- collar crime does indeed pay.

Tjandra had been charged, as the former president of EGP, with influencing other suspects in the case to illegally channel the $78 million from the insolvent Bank Bali to his own company. The judge also in effect ruled that the money belonged to Tjandra, and suggested the government should pursue the freed man in the civil courts.

Later, in the same court, Pande Lubis, the former deputy head of IBRA, was also found not guilty on all counts, as the prosecution had "failed to establish guilt".

The prosecution appealed both verdicts. Appeals were heard, but the verdicts, which had dealt a body blow to any remaining credibility and belief in the upholding of justice, were confirmed. No crime committed.

Since then the sector has had more than Rp600 trillion of public funds injected by the government through a massive recapitalization program. The restructuring and the ongoing privatization programs play a fundamental role in the recovery and continued growth of the economy, but maintaining the momentum has been made that much more difficult by the spat over Permata and the recent scandals in state-owned Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI), the country's fourth- and second-largest banks respectively.

Seizing back the money from IBRA would endanger the solvency of Permata. With the financial health of the bank under such a threat, and given the recent scandals restoring investor confidence in Indonesia becomes that much more difficult.

The AGO claims the funds used by IBRA were meant to remain in legal limbo, as they were the subject of legal proceedings against the prime suspect in the case, Djoko Tjandra.

As the Supreme Court has recently acquitted Tjandra on all charges, the AGO is insisting now that IBRA return the money, arguing that as executor of the Supreme Court's decision it is legally bound to claim the money back from IBRA and return it to EGP.

However, the investigations also uncovered that after EGP discovered its dealings with Bank Bali had aroused government suspicion, the company restored the right to collect the claims to Bank Bali in March 1999. Thus, it was Bank Bali and not EGP that collected and received the payment for the claims from IBRA. IBRA later annulled the Bank Bali-EGP deal in October 1999.

When central-bank governor Sabirin, tried on accusations of ordering one of his directors, Erman Munzir, to disburse the funds direct to Bank Bali (notwithstanding that IBRA had not called for the payment to be made), was acquitted by the Jakarta High Court in August 2002, most thought the story would end, buried and swept under the carpet, and of interest only to historians.

But this week it was revealed that police are questioning Sabirin and the former head of IBRA, I Putu Gede Ary Suta, in another fraud investigation sparked off by a Supreme Audit Agency (BPK) report in August that alleged that the central bank and IBRA had manipulated Rp20.9 trillion in state funds set aside to protect depositors.

Though a deposit-insurance scheme will replace the existing blanket-guarantee scheme currently being handled by IBRA, the existing scheme guarantees all obligations of closed-down banks, and has helped protect the sector from runs on banks, such as BRI and BNI, where public confidence has been at risk. Some Rp53.78 trillion was held in a special account, Account 502, meant to assure depositors that their cash was safe. In the event of bank closures, the government would use it to pay back depositors.

However, the DPR in 2001, acting on information that most of the funds had been spent, ordered state-audit agency BPK to investigate. Finally, last September, BPK filed reports with the police alleging that the central bank might have incorrectly disbursed Rp17.8 trillion from Account 502, and IBRA was responsible for another Rp3.2 trillion.

Separately, it was announced this week that some Rp24 billion has been embezzled from a branch of Bank Mandiri, the country's biggest bank, in Magelang, Central Java. The provincial police chief, General Didi Widayadi, said last week that the modus operandi was similar to the one used by suspects in the BNI and BRI scandals.

Plans by the central bank to improve corporate governance and intensify surveillance systems may be in the pipeline but recovery is clearly a long way off for the banking sector.

Imminent changes of government also spook would-be investors. With legislative elections due on April 5 and the presidential election in July, investors are likely to remain in "wait and see" mode for several months.

Jakarta stocks hit all-time high

Jakarta Post - January 18, 2004

Rendi A. Witular, Jakarta -- The Jakarta Composite Index skyrocketed on Monday to the highest level in the nation's history, as new investors from the United States and Europe entered the market seeking to capitalize on the rising optimism.

The Index moved full-throttle ahead and ended up by 22.877 points, or 3.1 percent, at 753.692, the highest since the benchmark index began in 1982. It also recorded an all-time high in volume of Rp 1.99 trillion (US$227 million).

Previously, the highest level ever recorded by the bourse was 742.983 on July 9, 1997, one month before the financial crisis hit the region.

As always, shares in state-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) led the Index higher after its American Depository Receipts in the New York Stock Exchange surged by 4.7 percent to $18.45.

Telkom shares, the largest counter on the Jakarta Stock Exchange, ended up by Rp 200 to Rp 7,700.

Cigarette producer Gudang Garam, the second largest counter, also rose by Rp 500 to Rp 14,700 after the government told cigarette producers to increase their output amid an absence in the increase of excise rates this year.

Ferry Yosia Hartoyo, the head of research for PT DBS Vickers Securities Indonesia, said that the surge was mainly fueled by an inflow of capital from new investors in the United States and Europe, taking advantage of the growing market capitalization.

He said that usually only Asian investors were interested in the country's stock market.

"The US and European investors entered Indonesia because they see that now the stock market capitalization is growing to a figure that meets their requirement. Large market capitalization will enable them to rake in higher profits," said Ferry.

However, he said that the investors were still limiting their investment as they were waiting for the development in the country's general election and in the government's efforts to finance the state budget deficit, which is estimated to reach Rp 24.4 trillion this year. If the country could pass all of the obstacles, the Index was estimated to climb higher to even 800, he said.

Elsewhere, Mirza Adityaswara, a stock analyst with PT Bahana Securities, said that 80 percent of the money which entered the stock market on Friday was from foreign investors, making the bourse overly sensitive to negative news, locally or globally.

"With such a huge amount from foreign investors, our stock market remains sensitive to foreign investor sentiment, unlike Thailand which only has 30 percent of foreign funds in its stock market," said Mirza.

Aside from the influx of foreign funds, the surge in the Index was also caused by the optimism that pervaded stock markets worldwide, Mirza said.

Japan's Nikkei Index ended up 1.2 percent to 10,965, while the US Dow Jones industrial average rose by 63.41 points on Thursday, or 0.60 percent, to 10,592.44, its highest finish since March 2002.

Mirza was optimistic that despite a possible correction during the general election, the index would remain firm throughout the year because the country's macroeconomic situation was now relatively "controllable".

Despite its limited direct impact on the country's overall economy, the rally of the index should be a measure to gauge investor confidence in the country's economy.

As for companies, the stable and high index figure can be an effective source of funding and working capital, because the stock market increase the value if companies.

Elsewhere, thanks to capital inflows from foreign investors into the stock market, the Indonesian rupiah ended the day higher at Rp 8,340 against the US dollar. The rupiah ended at Rp 8,345 on Thursday.