Aceh

Human rights violations must be fully investigated

Kompas - October 16, 2004

Jakarta, Kompas -- The Aceh Working Group or AWG is urging the government to investigate human rights violations which have taken place in Aceh, many of which have been suffered by political prisoners in a various Acehnese jails.

One of the AWG members from the Indonesian Legal Aid and Human Rights Association (PBHI), Henri Simarmata, said on Thursday October 14 that although many of the human rights violations occurred when the state of martial law as in place they continued after this was replaced with a state of civil emergency.

According to PHBI's findings, there were 71 cases of beatings and torture of detainees, three cases of prisoners being detained under in appalling physical conditions, 37 cases of detainees' families having to pay money to meet with prisoners and two cases of detainees being interrogated, tortured and held in non- official facilities.

According to Simarmata, most of the torture which was perpetrated against Free Aceh Movement (GAM) detainees was committed by the Military Intelligence Unit (Satuan Gabungan Intelijen) and law enforcement officers. "All of our data was obtained from trial proceedings in Aceh", said Simarmata.

Another member of AWG from the Jakarta Women's Legal Aid Association for Justice (LBH Apik), Astuti Listianingrum, said that there are 51 women who are being detained in prisons and jails in Aceh.

A spokesperson from the Information Coordination Taskforce for the Operation to Restore Security, Ari Mulya Asnawi MM, said that like previous accusations, with regard to human rights violations in Aceh it needs to be proven beforehand if they have actually occurred or not. "If indeed they have, will form a team to investigate it", he said. (sie)

[Translated by James Balowski.]

Yudhoyono must repeal civil emergency within 100 days

Tempo Interactive - October 16, 2004

Jakarta -- The coordinator of Indonesia's NGO Coalition for International Human Rights Advocacy (HRWG), Rafendi Djamin, hopes that president-elect Susilo Bambang Yudhoyono (SBY) will repeal the state of civil emergency in Aceh as part of the program of the first 100 days of his administration and in such a way establish a process of development and the pre-conditions for peace in Aceh.

"A test for SBY will be if he extends the civil emergency. Meaning he isn't serous about resolving the Aceh problem if the civil emergency is not repealed", said Djamin during a discussion titled The Peace Process in Aceh which was held on Monday October 18 in Jakarta. The government of incumbent President Megawati Sukarnoputri was to repeal the state of civil emergency which came into force last June and return Aceh to a state of normality. Based on the guidelines setout by the Megawati administration, the state of civil emergency was to end next November.

Djamin also called on the new government to immediately provide access for human rights monitoring and humanitarian assistance in Aceh. The people of Aceh must also be given greater space to express their views and to organise as well as eliminating their feelings of fear. In this way the conditions in Aceh could be like other parts of the country. "Overall the conditions in Aceh are normal, because GAM [the Free Aceh Movement] is cornered and only remains in a number of isolated places", he said.

He hopes that Yudhoyono will instead use an approach of dialogue to resolve the Aceh problem. The government must also differentiate between the dichotomy of GAM and the TNI (armed forces) in order to create a sense of security. But he continued, the government does not need to issue a new presidential decree in order for the civil emergency to be repealed. "The government [should] use regulations such as [those in force] in other normal areas", he said.

Djamin said in the lead-up to the end of the civil emergency in Aceh, Yudhoyono's administration must enforce laws which are linked with human rights as well as corruption. In his assessment, since martial law and the state of civil emergency have been in place, law enforcement has not run as it should. Moreover corruption has grown and thrived. (Sunariah)

[Translated by James Balowski.]

Army chief says troops must stay in Papua, Aceh

Tempo Interactive - October 13, 2004

Maria Ulfah, Jakarta -- Chief of Army Staff Ryamizard Ryacudu said he would not withdraw troops from conflict areas such as Aceh and Papua.

"Separatists in Aceh and Papua, if left alone, could become seeds of disintegration," he said during a discussion at an inter- religious forum, on Wednesday October 13 in Jakarta. He said that the army would remain deployed in these conflict areas to defend Indonesia's unity.

"What day is it? If I withdraw the troops from Papua on Saturday, there is no doubt that on Sunday they the separatists would declare independence," he said. He also said that the multidimensional crisis to have struck Indonesia remained unsolved.

He said that there were many areas to date which sought independence from Indonesia."This has been limited to discussion, but if ignored, it may very well become reality," Ryamizard said. He likened areas such as Maluku and Poso to a spark in a hay stack which could ignite at any moment. "You only need to blow on it a little, and it will ignite," he said.

He could not confirm whether troops would be maintained in Poso and Maluku. He said this would depend on the condition in these regions, because to date, troop numbers had been halved in order to provide security in areas of conflict. "If Aceh or Papua broke free this would mean the army was incompetent," he stressed. "Because the entire responsibility of defending Indonesia's unity lies in the hands of the army," he said.

[From BBC Worldwide Monitoring, October 14, 2004.]

Eight suspected rebels, marine killed

Agence France Presse - October 15, 2004

Jakarta -- Eight suspected separatists and a marine were killed in a fierce gunbattle in Indonesia's restive Aceh province, a military spokesman said Friday.

Navy Sgt. Agus Wijaya was shot dead Thursday when about 15 marines raided the eastern Aceh village of Titi Bareuh, military spokesman Lt. Col. Ary Mulya Asnawi said. Eight rebels from the Free Aceh Movement were also killed in the firefight, Asnawi said. Troops recovered five machine guns and several hundred bullets, he said.

A rebel spokesman couldn't be reached for comment. It is impossible to verify the military's claims, since it limits journalists' movements in the province and bars them from most rebel-held areas.

Guerrillas have been fighting since 1976 for an independent homeland in the oil- and gas-rich province on the northern tip of Sumatra island. At least 13,000 people have been killed, including almost 2,300 suspected rebels since Jakarta launched a new offensive in May 2003. President-elect Susilo Bambang Yudhoyono, who is to be installed next Thursday, has promised to settle the Aceh conflict.

Both sides have been accused of widespread human rights abuses, including kidnapping, rape and murder. Indonesia has also been accused of locking up rebel sympathizers without charges and torturing them into confessing crimes.

Malaysia destroys migrant camp, detain more than 100

Associated Press - October 13, 2004

Police raided a squatter settlement in a Malaysian jungle, burning down shacks and arresting more than 100 illegal immigrants, mainly from Indonesia's war-torn Aceh province, a human rights group said Wednesday.

Some of those detained in Tuesday's crackdown on the southern outskirts of Kuala Lumpur are believed to have documents issued by the UN's refugee agency identifying them as asylum seekers, the Malaysian chapter of Amnesty International said.

"With the government's rush to deport illegal immigrants, [it] has lost sight of the fact that they are first and foremost human beings entitled to certain rights," the group said in a statement. "The authorities should release all asylum seekers and refugees immediately and unconditionally."

Police and representatives of the UN High Commissioner for Refugees' office in Kuala Lumpur could not immediately be contacted.

Thousands of people from Aceh on Indonesia's Sumatra island have fled to neighboring Malaysia since May 2003, when Indonesian troops launched a major offensive against separatist rebels who have been fighting since 1976 for an independent homeland.

Wealthy, stable Malaysia has long attracted migrants, often fleeing poverty or violence, from around Southeast Asia. Though it relies heavily on foreign laborers for menial work, Malaysia regularly deports illegal immigrants amid concerns of rising crime among them.

Under international law, UN-recognized refugees cannot be deported involuntarily. But Malaysia hasn't signed the 1951 UN Refugee Convention and doesn't recognize political refugees.

Islamic court system inaugurated in Aceh

Agence France Presse - October 12, 2004

An Islamic judicial system has been introduced in Indonesia's restive province of Aceh as part of increased autonomy granted to the staunchly Muslim province by Jakarta.

"The head of the Supreme Court is currently in Aceh to inaugurate the operation of the Sharia Court there," said Andi Syamsu Alam, deputy chairman of the Supreme Court for religious court affairs.

Alam said Supreme Court chairman Bagir Manan inaugurated the system in the provincial capital Banda Aceh on Monday. Under the new system, 19 district/municipal religious courts and one appeal court based in the Acehnese capital will hear cases in addition to the existing network of secular courts.

"Cases involving non-Muslims are still handled by the [secular] judicial court," Alam told AFP. The Sharia Court, he said, would not use the penal and civil code but will be based on qanuns, decrees governing formal and material laws on particular issues that are formulated by local government. Alam said that the Supreme Court remained the highest court of appeal in the Sharia court system.

The government of Indonesia in 2001 accorded broad special autonomy for Aceh as part of efforts to curb dissent and separatism there.

Aceh is currently under civilian emergency status and the military has launched an all-out offensive to crush separatist rebels there since May last year.

Under the autonomy scheme, Aceh gets a larger share from its natural resources, can gradually implement sharia, and can have its own education and judicial system.

West Papua

Tension High in Papua Village

Jakarta Post - October 17, 2004

Indonesia -- The situation in Tinggi Nambut village, Puncak Jaya regency remained tense on Friday, following the murder of five construction workers, all migrants from Makassar, South Sulawesi province earlier on Tuesday.

Fearing a backlash from the Indonesian Police, the alleged Papuan separatists, who have been accused over the killings of the migrants and have been holed up in the village, located in the central highlands of Papua, burned down public buildings, including elementary schools and the subdistrict cooperative office on Friday.

No fatalities were reported during the fires, which were apparently aimed at shifting the attention of the Indonesian police, according to preliminary speculation by Comr. Wempy Batlayeri, the chief of Paniai police overseeing Puncak Jaya regency in Papua province, on Saturday.

Gunmen block release of bodies in Papua

Jakarta Post - October 16, 2004

Nethy Dharma Somba, Jayapura -- A group of suspected Papuan separatists remained in control of a hamlet in Puncak Jaya on Friday, as efforts to negotiate the release of bodies of five migrants killed in a Tuesday attack failed and fears rose of further bloodshed.

A group of gunmen on Friday prohibited two priests and five other negotiators from entering Tinggi Nambut and removing the bodies of the five victims (not six as reported on Thursday).

"Our seven messengers tried to negotiate in order to evacuate the victims, but were blocked by four armed men before arriving at the hamlet," Paniai deputy chief Comr. Wempy Batlayeri told The Jakarta Post.

"They have returned to [regency capital] Mulia," Wempy said. A newly created regency in Papua, Puncak Jaya, does not yet have a district police station.

The Puncak Jaya administration said it was still attempting to negotiate with the armed group to evacuate the bodies from the location. "So far, we are still making persuasive overtures," Wempy said.

Efforts to remove the bodies from Tinggi Nambut began on Wednesday but security forces were unable to enter the hamlet.

The armed group earlier destroyed five bridges linking roads to the hamlet and felled trees over roads to the area. They were also reported to have set fire to buildings.

Papua Governor Jaap Solossa has called for security forces to take decisive action against the unknown number of gunmen, who authorities believe are members of the separatist Free Papua Organization (OPM), in order to prevent disorder from spreading to other areas.

Ten police Mobile Brigade (Brimob) officers were being sent on Friday to Mulia from the neighboring Enarotali region to help more than 100 police and military personnel already deployed in the area.

Papua Police have ordered their Mimika district office to dispatch dozens of officers to Mulia, while the Jayawijaya Police were asked to remain on standby.

Despite the latest killings, Salossa said Papua should not be considered unsafe as the violence had taken place in a remote area.

Salossa said since the special autonomy law for Papua was implemented in 2002, the province's economy had improved and locals were not easily provoked by sporadic attacks blamed on OPM members.

Tuesday's ambush was launched at about 11 p.m. when five hard-top jeeps were stopped by the armed assailants who then shot dead all of their drivers; migrants mostly from Makassar, South Sulawesi.

Col. W.P. Simanjuntak, deputy chief of the intelligence division of Trikora Military Command, overseeing Papua, said on Thursday the cars were carrying construction workers to Mulia from the Ilu district.

The remaining workers, Papuan residents, had been contracted to build a road in Ilu. They escaped the ambush and fled to Mulia, where they reported the attack to soldiers.

The incident was the third attack in Tinggi Nambut allegedly by Papuan rebels during the past three months. The first violence erupted on Aug. 17, 2004 when two rebels injured two soldiers on patrol.

On September 14, soldiers exchanged gunfire with OPM members, injuring one rebel and one soldier.

Labour issues

Prolonged crisis hit low-income workers

Jakarta Post - October 14, 2004

Ridwan Max Sijabat, Jakarta -- Low-income workers have endured hard times since the economic crisis hit the country in 1997, and many have come to expect nothing better.

Wiguna Saragih, a 25-year-old employee of a ceramic factory in Cileungsi, Bogor, West Java, said she and her fellow workers had received part of their wages in cash and the rest in the form of ceramic ware since the crisis.

Her rental room near the factory site is overcrowded with thousands of ceramic articles. "This year, I received only around Rp 350,000 (US$38.5) per month plus ceramic articles worth Rp 350,000. Our employers have faced a cash-flow problem, and we accept the policy to avoid dismissal," she told The Jakarta Post here on Wednesday.

She said a number of workers had been dismissed over the last three years, while the rest continued working under the new payment arrangement. "We have to accept the remuneration policy, otherwise we have to quit. It's almost impossible to find a new job nowadays," she said.

Wiguna -- who has been working in the factory since 1996 -- said, while trying to sell ceramic articles from her stockpile to family members and their neighbors on her days off, she has to manage her small salary to survive. "On paper, I can no longer survive in Jakarta," she said, adding that, if the economy did not improve, she would return to her hometown Parapat in North Sumatra.

Debby Maliana, a married employee of a garment factory located hundreds of meters away from president-elect Susilo Bambang Yudhoyono's residence in Cikeas, Bogor, has experienced similar hardships. She said her husband, who was dismissed by a local ceramic factory seven months ago, has rented their motorcycle to a motorbike taxi provider for additional income. They have a two-year-old daughter.

"As a mother, I must be able to manage our gross monthly income, which totals Rp 1 million, to pay for our rental room and meet our needs," she said. The family spends Rp 100,000 on the monthly wage of their housemaid and more on milk for their daughter.

Mega Sabrina, an attendant of a stand selling basic goods at a big mall in Lebak Bulus, South Jakarta, said she had no choice but to accept her job, although she recently graduated from secretary school. "Thank God, I can work in the shopping mall, after failing to get a job as a secretary," she said.

She used her senior high school diploma when applying for her current job. She has been working for six months, after being jobless for almost two years.

Mega said her monthly salary was no longer enough to cover her daily basic needs, but she did not dare to ask for a raise. "The minimum salary is still OK since I am living with my parents in a housing complex located only two kilometers from my workplace. Besides, I am still single," she said.

Dita Indah Sari, chairperson of the National Front for the Struggle of Indonesian Workers (FNBI), called on the new government to enforce the law and scrap the high-cost economy, to create a favorable investment climate that would enable small-and medium- scale companies to pay workers more than the minimum wage.

"Most employers are no longer able to pay minimum wages because of the weak-law enforcement, high-cost economy and corrupt bureaucracy," she said.

She lashed out at the manpower minister's circular, which delays the implementation of regional minimum wages based on humane physical needs until 2006. The circular has justified employers' reluctance to increase workers' salaries, she said.

Dita said that, despite the annual hike in the minimum wage, workers had become poorer. "The annual pay hike serves to adjust to the inflation rate, but the nominal increase does not really cover the inflation," Dita said.

Sofyan Wanandi, chairman of the Indonesian Employers' Association (Apindo) expressed his optimism that the next government would be able to fight corruption and the high-cost economy, enforce the law, and maintain security and political stability in a bid to lure more investors.

He agreed that the minimum wage should be determined, not only by the needs of workers, but by the inflation rate, economic growth, productivity and companies' financial capabilities.

Government must fight human trafficking

Jakarta Post - October 13, 2004

Ridwan Max Sijabat, Jakarta -- Casingkem binti Aspin and Istiqomah binti Misnad are two of many Indonesian migrant workers who have been victims of human trafficking that involved corrupt government officials, local and international syndicates.

Apart from the political motives behind their recent abduction in Iraq, the main question is why and how they entered Iraq when the government has prohibited Indonesian workers from going to the war-ravaged country.

Upon their recent arrival home following their release by their captors, the two women admitted to using fake documents to leave for Amman, Jordan. They said they were not aware that they were to be sent to Iraq.

They said they were "sponsored" by a local syndicate which used the names and documents of two local labor recruitment companies to send them to its international counterpart in Amman.

Casingkem used a fake identity card from Sukabumi, West Java, to apply for a passport from the immigration office in South Jakarta, while Istiqomah used a passport issued under the name of Rosidah binti Amoh, a resident of Malang in East Java.

The two passports were not issued by the specially-authorized unit of the immigration office in Cipinang, East Jakarta that processes applications for workers hired by labor recruitment companies and the applications cited PT Sabrina and PT Akbar Insan Mandiri as their sponsors.

PT Sabrina, which the two workers said was based in Condet in East Jakarta, was not registered with the manpower and transmigration ministry. But PT Akbar strongly denied being the sponsor of the workers.

In a later development that clearly demonstrated the ministry's incompetence, Minister of Manpower and Transmigration Jacob Nuwa Wea carried out an investigation into the case by interrogating the owners of PT Sabrina Paramitha and of PT Akbar, immigration and labor officials in the presence of the two women workers.

To be fair and professional, the minister who had arbitrarily revoked the two companies' licenses, should entrust the case to the police to carry out a thorough investigation and to reveal the syndicate behind the smuggling of the two women overseas.

Besides, the government also seemed quite slow in responding to the increasing incidents of human trafficking which the minister said were very difficult to detect.

Labor activists and exporters have estimated that of the two million Indonesians working overseas, 50 percent, or one million, are illegal. They said that 90 percent of Indonesians working illegally overseas faced violence and sexually harassment.

According to data of the manpower ministry and the observation of local non-governmental organizations, most Indonesian migrant workers overseas who were treated inhumanely were illegal.

In fact, many Indonesian women and girls have been trafficked to Malaysia and the Middle East to be employed as sex workers.

So far, the government has yet to show political will to prevent workers from working illegally overseas as well as to crack down on syndicates smuggling the illegal workers. This was evidenced by the recent summoning of relevant government officers in line with the two women's illegal departure to Jordan and Iraq.

Many workers prefer to travel overseas illegally because of the complicated procedures and the expense of meeting all formal requirements. They choose to depart using fake documents to avoid the excessive costs and arduous procedures, without realizing that being illegal migrant workers makes them highly vulnerable to blackmail and other forms of exploitation by their employers or others.

It is no wonder, the number of Indonesians working illegally in Malaysia has reached an estimated 700,000. They are paid way below the standard rate for migrant laborers, forced to work around 10 hours a day, seven days a week. Most of their wages are withheld by their employers.

The illegal departure of Indonesian workers overseas could be halted, or at least minimized, only if the government declares war against human trafficking and takes strict actions against corrupt labor and immigration officials.

First of all, the government should deal firmly with corrupt officials at the directorate general for immigration and manpower ministry who allow workers to seek job overseas without necessary documents.

The government should also intensify cooperation with the immigration officials of countries that receive Indonesian workers, especially those at the main ports of entry, to detect Indonesian workers using fake documents and their sponsors.

The government should immediately enforce the newly endorsed law on migrant worker protection to help minimize the trafficking of women and children.

[The author is a staff writer for The Jakarta Post.]

Government delays new ruling on minimum wage

Jakarta Post - October 13, 2004

Ridwan Max Sijabat, Jakarta -- Outgoing Minister of Manpower and Transmigration Jacob Nuwa Wea has issued a circular delaying the implementation of the use of a more humane criteria than basic physical needs in determining regional minimum wages until 2006.

Article 89 of Law No. 13/2003 on labor, which will take effect in January 2005, stipulates that the provincial minimum wages determined by governors shall be determined on the basis of "humane physical needs", which is presumed to be far higher than the minimum basic needs.

The issuance of the circular means that any wage increase would be nominal as it mainly aims at offsetting the effects of inflation, not increasing workers' purchasing power.

The circular, issued last week amid intensive tripartite discussions on minimum wages in provinces, said the government had decided to delay enforcing the labor law due to the prolonged economic crisis.

"The government decides to delay enforcing the new ruling on minimum wages because of continued economic difficulties and because workers and employers have yet to submit detailed information about humane physical needs," Minister Nuwa Wea told The Jakarta Post here on Tuesday.

Nuwa Wea said the circular implied that there would be no real increase in the minimum wages in 2005 and workers should be prepared for such conditions.

Workers, employers and provincial administrations are conducting intensive tripartite discussions to set the provincial minimum wages for the 2005 fiscal year.

According to the labor law, the minimum wages shall be announced to the public in December and will take effect in January the following year. A bipartite forum representing workers and employers in Jakarta had recently agreed to raise the minimum wage to Rp 1.2 million (US$130) from the current Rp 671,550, but Minister Nuwa Wea called for a review for fear that it would encourage poor provinces to propose intolerable wage hikes.

Industrial relations expert Payaman Simanjuntak said the ministerial circular was regrettable and not a wise solution for the conflicting interests of workers and employers.

He argued that the government could encourage the National Wages Research Board to set realistic components of the humane physical needs to allow major companies to pay their workers at least in line with the new ruling.

"The law has prepared a mechanism for small companies and those facing financial difficulties to be exempted from the new law," he said.

Payaman, who is also former director general of labor industrial relations and supervision at the Manpower and Transmigration Ministry, said that the minimum basic needs was no longer an appropriate guide in determining the minimum wages as its components were inhumane and unrealistic.

Meanwhile, Djimanto, secretary-general of the Indonesian Employers' Association (Apindo) said on Tuesday that more companies would likely close if the new labor law took effect in such difficult economic conditions.

"We will have no other alternative but to close down or relocate to other countries if the government enforces the new law," he said without elaborating.

Companies should be required to provide day care

Jakarta Post - October 12, 2004

Ati Nurbaiti, Jakarta -- A former teacher and ticketing agent for an airline sought work one day at a hat shop. She wasn't exactly seeking a career in sales; "I just needed to know if I could still work" after a long spell at home, she said. She seemed satisfied with the answer and continued to seek money making opportunities during the periods when she could not leave the young ones for a full time job -- taking in boarders, for instance, or serving a stint as an Avon lady.

This was in the 1960s, my mother's admission of her need to regain her confidence in the workplace was surprising for someone who had raised four children alone after she was widowed at 38.

It would be safe to say the same anxiety has been common over the years among young mothers; it is the silent panic that grows during the years of a 24-hour cycle of managing the home and family that the women themselves do not consider "real work". Thus they wonder whether once they have the chance, they would be adequately equipped to face the rising competition in the workplace.

A job vacancy with an age limit of late 20s and three years experience shuts the door for aspiring women who have had no one to rely on but themselves in taking care of the children.

What goes largely undiscussed is that the most sought after age group for fresh talent, is not only the same period where one is eager to go out into the world, to test one's skills in the workplace and gain some independence (in part, your own money), it is also the period considered healthy for childbearing and breaking your back over toddlers.

It's a tough choice, which may help to explain the big gap between women's participation and that of men in employment. Statistics show that last year, in the 20-34 age group in the country there were some 25 million men compared to about half the figure for women.

Witness the many single, carefree-looking working women well into and over their 30s in Jakarta alone, and governments in Japan and Singapore, for instance, coaxing educated women with incentives to get married and have children for fear of slowing population growth and hence the work force.

True, Indonesians are relatively privileged with the advantage of the extended family and the cheap labor force helping to care for the home. But families are not as extended as they used to be, and in many cases, one parent staying at home means a very thinly spread single income.

And as lawyer and now legislator Nursyahbani Katjasungkana said, women should not have to choose between work and child care. Companies should be required to provide child care facilities.

It will never be a perfect world where childrearing in tandem with a career work out well for any parent. Nevertheless a law making it mandatory for companies to provide day care facilities would greatly increase the options for working parents. The awareness that child care is both parents' responsibility -- while child birth and breast-feeding is indeed a God-given role for women -- would define child care facilities not only as a woman's right, but the right to adequate care for children of all working parents.

As it is, women, anxious to live up to expectations would rarely speak up and even ask for child care facilities. Never mind that we've ratified the conventions against discrimination of women and the right of the child.

Given that child care should be a joint responsibility, the easy way out cannot be to follow the conservative line and ban women from working outside the home to ensure the well being of the next generation. A stressed out parent is not the best companion for a child for most of the day.

What follows should be a policy and change in mindset toward shifting the perception that childrearing is the sole responsibility of the mother. Mothers everywhere are worshiped for their noble, uncomplaining role -- but they are hard pressed to find help when they need it.

There is indeed last year's law on manpower which stipulates that employers should allow women employees to breast-feed their young during working hours. But nothing has followed in terms of regulations on standards for such facilities.

The few day care centers in the metropolis compared to millions of children of working parents attest to the absence of policy in this area.

Entire companies are clearly running on the advantage of the country having legions of poor families whose daughters seek work as maids, a job in which child care is lumped together with all other chores -- sometimes also washing the car and a bit of gardening too -- for barely a dollar a day.

Even with more day care facilities many parents here would still prefer to have their children cared for at home under a watchful eye, or a phone call, from their mothers or mothers-in-law. A day care center is still an alien concept for many a middle class woman whose exposure to such facilities has been the hair raising stories of neglect, not unlike the stigma attached to homes for the elderly.

But as this paper's interviews and coverage of some day care facilities have revealed, the women say they now have a better choice than having to trust a lone minder with their child for most of the day. Others have cited their youngsters learning social skills with their peers, a better scenario than that of the little brats hitting their sitters.

Policy makers could look to the early 20th century for inspiration -- plantation owners in the country were said to have institutionalized day care after they found that women workers were more productive when they had someone helping to look after their babies somewhere near them, as the women could concentrate on their work better.

Or policy makers could simply drop by Kramat Jati market in East Jakarta and watch the children play in a center. Before the day care center was set up, the children of workers there -- women who peel shallots -- were left to play on their own and rest on their makeshift mattress -- sacks of shallots.

It may be prudent for companies to provide day care facilities, if they can help lure more potential talented women in their prime back to the workplace and ensure that the babies get the breast milk and proper care they need. Not to mention gender equality -- and the need to end the exploitation that comes with the perception that caring for the home and family comes cheap.

[The author is a staff writer for The Jakarta Post.]

'War on terrorism'

Ba'asyir charged with terrorism

Jakarta Post - October 16, 2004

Abdul Khalik, Jakarta -- After many delays, state prosecutors finally submitted the file on Abu Bakar Ba'asyir to the South Jakarta District Court on Friday, charging him with masterminding the Bali bombings and the JW Marriott Hotel attack.

Prosecutor Andi Herman said Ba'asyir, believed to be the spiritual leader of regional terrorist network Jamaah Islamiyah (JI), was being charged under Law No. 15/2003 on terrorism for the hotel attack and a number of articles of the Criminal Code, including Article 187, for the Bali bombing.

Ba'asyir could face a firing squad if found guilty, or could be sentenced to life if found guilty under the relevant articles of the Criminal Code.

"We filed a 65-page formal indictment against Ba'asyir with the South Jakarta District Court at around 2 p.m. today. We have charged him under two laws. We expect he can be brought to trial within the next two weeks," Andi told The Jakarta Post.

Ba'asyir has denied all the charges. Prosecutors had planned to charge Ba'asyir with the Bali 2002 attacks using the Antiterrorism Law, but changed their minds after the Constitutional Court ruled that Law No. 16/2003, which allowed the retroactive application of law no. 15, was unconstitutional. The laws, endorsed in January, preceded the August 2003 Marriott bombings.

On Friday in Sydney Agence France Presse reported that Australian Foreign Minister Alexander Downer said the charges showed Indonesia's determination to pursue JI. "The government welcomes the charges against Abu Bakar Ba'asyir," Downer said. "This is a demonstration of Indonesia's commitment to the prosecution of those responsible for the Bali bombings."

The JI is a UN-listed terrorist organization blamed for the October 12, 2002, Bali bombings that killed 202 people including 88 Australians, and the Aug. 5, 2003, JW Marriott Hotel attack in Jakarta. Police have also linked JI with the recent bombing outside the Australian Embassy, which claimed 10 lives.

The prosecutors had planned to submit the case file in the fourth week of September, but later rescheduled this to the first week of October for unclear reasons. This deadline was also allowed to pass.

Andi said Ba'asyir, 66, was being charged under articles 14, 15, 17 and 18 of the Antiterrorism Law (No. 15/2003) for planning, organizing, abetting and perpetrating the Aug. 5, 2003, terrorist attack on the Marriott, which killed 12 people and injured more than 80 others.

He said there was evidence that Ba'asyir had planned the Marriott attack. He also accused the cleric of illegal possession of explosives found at a house on Jl. Sri Rejeki, Semarang, Central Java, in 2003.

Police confiscated a huge quantity of explosives and arms at the house, as well as documents stating that Ba'asyir was the leader of JI, during a raid last year.

Police said earlier that Ba'asyir was responsible for a series of terrorist attacks in Indonesia between 1999 and 2003.

Andi said the prosecutors were also using a number of articles in the Criminal Code, including Article 187, to charge Ba'asyir with involvement in the Bali bombings.

He was tried last year but the court ruled that the prosecution had failed to prove his involvement in terrorist activities. However, he was sentenced to 18 months in prison for immigration offenses and document forgery.

He was rearrested shortly after his release in April 30 this year. This triggered violent clashes between his supporters and the police that left more than 100 people injured.

Families remember Bali, Britain forgets

Sydney Morning Herald - October 13, 2004

Survivors and family and friends of victims gathered on a chilly London evening to remember the 28 Britons killed by the Bali bombs two years ago but the rest of the nation seemed to have forgotten the atrocity.

The second anniversary of the bombs, which claimed 202 lives in Kuta, did not rate a paragraph in any of Britain's national newspapers or a mention on television news.

But around 200 members of the tight-knit UK Bali Bombing Victims Group met in an atmosphere of friendly reunion on the deck of HMS Belfast on the River Thames for a moving ceremony which steered away from the church services of the past.

"Everyone knows each other well, we've all formed this community, everybody gives each other a lot of support," said Susanna Miller, whose brother Dan was killed by the bombs while his wife Polly spent nine weeks in a Brisbane hospital being treated for burns.

"Everybody's glad that at least here with us tonight people remember Bali. Although it is often seen as just an Australian tragedy, 57 Europeans were killed, 28 British, at least here we know everyone understands.

"I don't think it gets the recognition it deserves. Not the least, it has a lot of very, very current issues. Obviously, terrorism and the threat from militant Islamic groups is still very strong.

"I think the [British] media aren't interested. The media don't seem interested in longer-term stories and what's happening to the families over time and that's a great frustration." But the 28 British families have not just wallowed in their own grief.

The UK Bali Bombing Victims Group does not just help each other, it has raised over STG600,000 ($A1.47 million) in the past two years for various charities including Balinese orphans and a burns victims charity set up by Polly Miller.

"We didn't want a completely miserable memorial service again, we wanted to showcase the charities, we wanted to celebrate the fact we've raised more than STG600,000," Susanna Miller said.

The main charity highlighted was the Daniel Braden Reconciliation Trust -- established by the family of a British victim -- which organises trips on tall ships for youth from diverse backgrounds to encourage racial and religious tolerance.

Moored alongside the Belfast was one ship which sailed up the Thames crewed by six Israeli Jews, one Israeli Arab, five Palestinians, nine Indonesian Muslims, nine British Muslims, five Americans and 13 British Christians.

Jocelyn Waller, whose son Ed was killed in Bali, gave a speech in which he criticised the British government for failing to upgrade its travel warning at the time, followed by some brief prayers.

Fireman Russell Ward tossed a wreath of 28 white lilies against the biting wind and drizzle into the Thames near Tower Bridge as a saxophone lament rang out from the HMS Belfast.

When Ward, who volunteered while on holiday in Bali to work tirelessly to help victims, including Australian Jodie Cearns, threw the wreath, family members hugged and people who were strangers two years ago embraced and comforted each other in their united grief.

Waller then invited everyone in out of the cold to drink and eat and just "to be together, which is why we are here".

Emotional ceremonies mark anniversary of Bali bombings

Agence France Presse - October 13, 2004

A sunset ceremony in the waves off Bali's shores ended an emotional day of tribute to the 202 people killed two years ago when Islamic militant bombs tore through the heart of Indonesia's resort island.

As survivors and the friends and families of victims joined locals for a candlelit vigil on Bali's Kuta beach, a fleet of young Australian and Balinese surfers headed to sea to mark the anniversary of the October 12, 2002 attacks.

The simple ceremony saw flowers scattered into the waters as the surfers formed a circle beyond the breakers to honour those who died -- most of them young Western holidaymakers.

"It's a beautiful tribute to the victims, in a particularly Australian way -- on the beach," said Rhiannon Munday of Sydney, who lost two close friends in the blasts.

Some 88 Australians were killed along with people from 21 other countries by the bombs detonated by the Al-Qaeda-linked Jemaah Islamiyah regional terrorist group in a deliberate attempt to target Western tourists.

Earlier, Australian ambassador David Ritchie led a gathering of mourners in 202 seconds of silence in an event at the site of the bombings where a monument bearing the names of the dead has been built.

"The events of that day have become part of our own lives, they represent a loss of innocence, a tragedy for all of those who value peace, beauty and what is right," Ritchie said.

"We are here, united not only in our grief and sympathy but also in our determination to eradicate this evil from our world." As the morning ceremony began, widows and children of the Indonesian victims were joined by 120 Australians, many dressed in beach wear and black armbands, to lay wreaths and flowers around the monument.

Many survivors, still struggling to overcome the injuries and memories of the attack on Bali's Kuta tourist strip, joined in a tearful rendition of Australia's unofficial national anthem "Waltzing Matilda".

"It is good after two years, when I have had time to heal, to come back to something like this," said Andrew Csabi of Australia's Gold Coast, who lost a leg in the bombing.

Australian survivor Mitch Ryan was with other members of his Southport Sharks football team mourning the loss of team mate Billy Hardy.

"It doesn't get any easier, it is still a real emotional time, but I have got great friends and family and everyone looks after each other," said Ryan, who was also injured in the blasts.

Many of those attending the event were expected come together for a final vigil at the site shortly before midnight, at the precise time of the first explosion.

In Canberra, newly re-elected Prime Minister John Howard attended a church service to commemorate the bombing victims, while several hundred tourists also turned out to witness Tuesday's ceremony in Bali.

Although visitors are returning to the island, Bali is still struggling to pick up after the bombs, and subsequent attacks in the world's largest Muslim populated nation, hit its vital tourism industry.

The Bali attack, the worst in terms of human casualty since the September 11, 2001 strikes, have been followed by a deadly blast at Jakarta's Marriott hotel in August 2003 and on the city's Australian embassy last month.

Security was tight for Tuesday's ceremony, with armoured vehicles blocking off streets around the bomb site, a helicopter buzzing over head and six snipers positioned on rooftops.

Bali's police chief Inspector General I Made Mangku Pastika, who led operations to capture more than 30 people involved in the attack, said 1,000 officers had been deployed around the ceremony with fears terrorists could strike again. "Everybody thinks that, so we must prepare," he told reporters.

The two main suspects in the Bali bombing and subsequent attacks, Malaysians Azahari Husin and Noordin Mohammed Top, remain at large.

US praises Indonesia's anti-terror progress

Reuters - October 11, 2004

Jerry Norton, Jakarta -- Public attitudes towards terrorism in Indonesia have changed dramatically in the two years since the Bali bombing, and the country is now facing up to the problem, the outgoing US ambassador said on Monday. Ambassador Ralph Boyce said he was "quite confident that continued strong attention to the problem of terrorism in Indonesia will be very high up" on the agenda of incoming president Susilo Bambang Yudhoyono, who takes office next week.

On October 12, 2002, the world's most populous Muslim country suffered the deadliest attack since the September 11, 2001 assaults in the United States. Blasts in nightclubs on the resort island of Bali killed 202, mostly foreign tourists.

In August last year a car bomb at Jakarta's JW Marriott hotel killed 12, mostly Indonesians, and last month a similar blast outside the Australian embassy killed nine, all Indonesians.

All three attacks were blamed on the al Qaeda-linked Southeast Asian militant Muslim network, Jemaah Islamiah.

Boyce, who arrived in Indonesia in late 2002, told reporters that in his first year there was a "sense of pushing a boulder up a hill in terms of getting the terrorism issue on the agenda" with the general public.

Several other Southeast Asian nations criticised Indonesia in that period as a laggard in fighting terrorism.

But Boyce said the series of attacks "altered that completely", adding: "The country has now very much faced up to the challenges of this age we're all living in."

Ex-general Yudhoyono, a former chief security minister, is to be sworn in on October 20 after beating incumbent Megawati Sukarnoputri in a September runoff ballot.

The outgoing US envoy was less complimentary about Indonesia's performance in dealing with the accountability of its military for human rights violations in East Timor.

At least 1,000 people were killed in violence surrounding a vote for independence in 1999 in the tiny territory, then under Indonesian rule.

Most of the deaths were blamed on pro-Jakarta militia backed by elements of the Indonesian military. Indonesian courts tried some of those accused of violence, but nearly all of those indicted were acquitted. Rights groups say far more should have been put on trial.

These "much touted East Timor ad hoc trials on human rights violations didn't produce anything. If anything they were a deep disappointment," said Boyce, adding that until there was a good- faith effort at accountability over East Timor, there could not be normalisation of military-to-military relations between Indonesia and the United States.

Washington's dissatisfaction over the issue excludes Indonesia from purchasing US military equipment and from other programmes involving access to military gear.

Bali in the shadow of terror

Asia Times - October 12, 2004

Yeo Wei Meng -- Shortly before midnight on October 12, 2002, a devastating terror attack was launched at the beachside town of Kuta on the island of Bali, Indonesia. Two bombs exploded in quick succession in Paddy's Irish Pub and outside the Sari Club. The blast and subsequent fires left more than 202 people dead and several hundred injured, most of them young vacationers from Australia and other Western countries.

It has been exactly two years since the Bali bombings, an event that introduced the world to al-Qaeda-linked Jemaah Islamiyah (JI), the pioneer vanguard of Islamic militants in Southeast Asia. The question now is, what has become of JI and what are its prospects?

With the arrest of many senior JI operatives, it might appear that the group's capacity and capability to mount large-scale coordinated operations aimed at destroying multiple domestic and foreign targets within the region have been dented. However, this is clearly not the case. The JI network in Southeast Asia remains intact and retains the capacity and capability to mount another operation of Bali's scale, as was made clear by last month's attack on the Australian Embassy in Jakarta.

JI network resilient and robust

There are many reasons for believing that the JI threat in this region will continue to exist. Even with the arrest of senior JI operatives such as Hambali in Thailand, the JI network has proved to be resilient and robust. One regional intelligence agency has estimated that there are about 400 JI members in Indonesia alone, of whom only 80 have been arrested.

Moreover, JI's cell structure has become more streamlined, without the different layers of communication that once characterized the outfit and made it more vulnerable to intelligence infiltration. There is now no longer a regional shura (an assembly that meets for mutual consultation). Nor are there the mantiqis, districts or territories, made up of several branches, or wakalahs, that once composed the JI organization. The whole outfit has been reconfigured, making it harder for intelligence agencies to keep track. Now JI is a loosely defined network of independent cells playing the most predominant roles under the leadership of several key individuals in the JI central command.

There are also indications that JI is breaking into smaller independent splinter groups. Last December, Malaysian marine police detained a small boat off the coast of Sabah and detained the crew. Under interrogation last month, one of them, an Indonesian named Ahmad Said Maulana, said he was involved in a plot to drive an explosives-laden vehicle into the national police headquarters in Jakarta, officials say. The attack was planned for early July, to coincide with Indonesia's national Police Day celebrations. Ahmad, now in custody in Malaysia, told his interrogators he was a member of a previously unknown radical group called Republik Persatuan Islam Indonesia a splinter group of JI. Apart from Republik Persatuan Islam Indonesia, regional security agencies also are observing the activities of another JI offshoot, Batalion Abu Bakar.

Senior JI members still active

A number of senior members in the JI central command are also still active in the region, among them Dr Azahari Husin and Abu Hanifiah, the leaders of JI's Malaysian cell. Yasin Syawal, who is JI founder Abdullah Sungkar's son-in-law and the current head of Laskar Jundullah, the militant wing of the Indonesian Mujahideen Council (MMI), is also still at large. Another important individual on the run is Zulkarnaen, believed to be the head of Laskar Khos, an Arabic phrase meaning "special force", whose members are prepared to die in their attacks.

It is also likely that one of the two Singapore JI members who were not apprehended by Indonesian authorities will replace Mas Selamat Kastari, the alleged head of the Singapore branch of JI who was arrested in February 2003, as the chief of JI's Singapore operations. Other senior members who have been on the run include Zulkifli Marzuki, JI's chief financier; Noordin Din bin Mohammed, aka Top, a top explosives expert; and Zulkifli bin Hir, the current leader of Kumpulan Mujahidin Malaysia (KMM), who is suspected to be hiding in Mindanao.

In addition, while the arrest of Hambali in September 2003 in Thailand has hurt JI's capability, the al-Qaeda-JI nexus will remain, as many senior JI operatives formed links with higher- ranking al-Qaeda agents while serving in Afghanistan during the Soviet occupation. For example, both Yasin Syawal and Zulkarnaen were the first batch of Indonesians who were trained in a camp led by Abdul Rasul Sayyaf, the Afghan mujahideen commander, a close aide to Osama bin Laden. As such, the capture of Hambali will provide an opportunity for other individuals from the central command of JI to take control of al-Qaeda operations in Southeast Asia while also maintaining close contacts with senior al-Qaeda operatives.

Laskar Khos and suicide bombing

Laskar Khos also adds a new dimension to JI's military capabilities. Known as the elite "special forces" in the network, the unit emerged as early as 2000 in Poso, on the island of Sulawesi. Though it is difficult to ascertain how many people there are in the group, given that it is even more shadowy than JI, the members are drawn from individual terrorist cells. Under the stewardship of Zulkarnaen, Laskar Khos's objective is to carry out assassination and bombing operations.

In addition, JI remains a threat in that the group has added suicide bombing to its attack capabilities. Both the 2002 Bali bombings and the JW Marriott Hotel blast in August 2003 involved suicide bombers. So did the 2002 McDonald's blast in Makassar, South Sulawesi, committed by Laskar Jundullah, a JI associate group. Unfortunately, because of the "effectiveness" of suicide bombing, it is likely there will be more attacks of this nature. While regional security agencies are working tirelessly to combat terrorism, JI is working to rebuild its own capabilities to launch another attack. Like al-Qaeda, JI places great emphasis on training, and currently is refocusing its efforts on mounting large-scale operations in the region. JI is rebuilding its capabilities on the fringes of the archipelago, especially in East Kalimantan, the Riau islands and conventional strongholds such as Sulawesi and Maluku, where several of its members have bloodied their hands in sectarian and religious conflicts in recent years. Some JI members have even reportedly regrouped and have been lying low in Bangladesh and Pakistan preparing for another attack in Southeast Asia.

No plans to stop funds

Security agencies have yet to come out with a coherent plan to stop funds being channeled to terrorist groups such as JI. Though countries in the region have clamped down on illegal money laundering activities, it must be noted that funds used in the financing of terrorism do not necessarily derive from criminal activity, which is a requisite element of most existing money laundering offences. Currently in Indonesia, it is estimated that 15-20% of Islamic charity funds are diverted to various politically motivated groups, and even some terrorist groups. For example, Laskar Jundullah has receive funding from Kompak, the largest Islamic charity organization in Indonesia, as well as from the Al Haramain foundation, an international charity based in Saudi Arabia. Therefore, successful participation in this fight by the financial sector requires global cooperation between governments and financial institutions. The latter can assist governments and their agencies in the fight against terrorism through prevention, detection and information sharing. They can also prevent terrorist groups from accessing their financial services; assist governments in their efforts to detect suspected terrorist financing; and promptly respond to governmental enquiries.

Another related point is that some countries have yet to confront the issue of terrorism head-on. Though JI cells were successfully thwarted and neutralized in Singapore, Malaysia and the Philippines, Indonesia continues to be the proverbial stick in the mud. The Indonesian government has been far too cautious in confronting the JI problem. Even after Bali, Jakarta has only gone after JI members directly connected to the Kuta Beach bomb blast, not JI as an organization and not its political wing, the MMI. For example, any individual in Indonesia who is known to be a JI operative cannot be arrested unless he commits or attempts to commit an unlawful act. As a result, JI will be able to operate inside Indonesia and continue to use Indonesia as a launching pad for attacks on its neighbors.

Last but not least, the international environment has become more favorable for Islamic militants. The worsening of the Israel- Palestine issue and the ability of al-Qaeda to survive and retaliate in Middle East, East Africa and Southeast Asia have unleashed a torrent of support. The US occupation in Iraq will only compound the problem and swell the flow of recruits and other forms of support to Islamic militants and radical Islamic political groups pursuing an aggressive agenda based on terror in the near future.

Conclusion

Despite regional security agencies' success in disrupting the JI network in Southeast Asia, JI remains a threat and will continue to be a scourge in the region for the foreseeable future. So long as the factors discussed above exist, the JI network will remain intact. JI operatives are indeed currently moving across borders, establishing lines of communication among themselves, and maintaining their operational capability.

The "war on terrorism" in Southeast Asia will be long and arduous. Governments in this region must work together if they are to have any chance of eliminating the JI threat. The JI specter is still with us and it is essential to exorcise it before more innocent lives are lost.

[Yeo Wei Meng, a former research analyst for the Political Violence and Terrorism Program at the Institute of Defense and Strategic Studies, is currently working toward a master's degree at the Edmund Walsh School of Foreign Service at Georgetown University in Washington, DC. Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.]

Government & politics

Yudhoyono to name civilian as defence minister

Straits Times - October 15, 2004

Bogor -- Indonesia's President-elect Susilo Bambang Yudhoyono said yesterday he would pick a non-military defence minister as part of efforts to rein in the powerful armed forces through civilian control.

Dr Yudhoyono, who takes office next week after a landslide election victory over incumbent Megawati Sukarnoputri, said he would start interviewing candidates today and ask them to sign an'accountability contract'.

The new defence minister would be a person who understands "the place of the military in national life, democracy and human rights", the former general told reporters at his house in Bogor, south of Jakarta.

"For that position I have chosen to appoint a civilian who understands defence issues, so that military reform can proceed well and defence policies can be developed in a good manner", he added.

Under former president Suharto, the military was allowed to grow into a potent political force, controlling various civilian positions and enjoying reserved seats in Parliament.

Since Mr Suharto's downfall in 1998, the armed forces have been under strong pressure to abandon politics and atone for human rights abuses. Their right to legislative seats was abolished this year.

The United States has tied any resumption of military cooperation with Indonesia to military reform, including calling to account the army-backed militia violence surrounding Timor Leste's independence vote in 1999. Military cooperation with the US was sharply reduced in 1999 by a congressional amendment during the Timor Leste turmoil, in which 1,400 people died.

Dr Yudhoyono said his Cabinet, which he is expected to announce at his inauguration next Wednesday, would consist of 34 members. They would be chosen on the basis of their "personal integrity, capability, experience and acceptability", he said.

He said he would revive the ministries of sports and housing, which were scrapped after Mr Suharto's resignation, and intended to split the trade and industry portfolio.

Dr Yudhoyono, who will be Indonesia's first democratically- elected leader, has made ambitious pledges to reform the country's sluggish economy and stamp out endemic corruption, which has scared away badly-needed foreign investment.

Meanwhile, in another development, the two camps in Indonesia's Parliament look set for a round of debate over the resignation of armed forces chief Endriartono Sutarto last week.

Outgoing President Megawati has told the Speaker of the House of Representatives, Mr Agung Laksono, in a letter about the resignation and her appointment of army chief General Ryamizard Ryacudu as the new armed forces chief.

Golkar, which leads the nationhood coalition that supported Ms Megawati in last month's presidential election, wants the House to discuss and approve Gen Endriartono's resignation and Gen Ryamizard's appointment as his replacement immediately.

But the opposing camp, the people's coalition that supports Dr Yudhoyono, says that discussions should be delayed until the inauguration of the new president.

The House is scheduled to convene a plenary session today to discuss the resignation issue.

SBY starts selecting his ministers

Jakarta Post - October 16, 2004

Tiarma Siboro and M. Taufiqurrahman, Bogor -- Five prospective candidates who would likely fill posts in the Cabinet of president-elect Susilo Bambang Yudhoyono were summoned for interviews on Friday, the first time such a mechanism has been used in the selection of ministers, at least in the public eye.

Early in the afternoon, daughter of the country's first vice president Mohammad Hatta, Meutia Hatta, rector of the West Java- based Bandung Institute of Technology (ITB) Kusmayanto Kadiman and a member of Susilo's campaign team Sofyan Jalil, took turns in meeting with Susilo, an occasion considered as a recruitment process for the ministerial posts.

Other candidates, former Indonesian Military (TNI) chief Adm. (ret) Widodo A.S. and former chairman of the Indonesian Congress for Youth (KNPI) Adyaksa Dault arrived late Friday at Susilo's private residence in Cikeas, Bogor for interviews.

Susilo is expected to single out 33 individuals from scores of prospective candidates for over 30 posts in his Cabinet. Meutia, who arrived first in the afternoon, said after the meeting Susilo talked at length with her for about an hour on nationalism and character building as well as women, cultural and tourism issues.

"Pak Susilo did not disclose what ministerial post he would assign for me. But as a civil servant, I am ready to carry out my job at any ministerial post," she told reporters who flocked Susilo's private residence.

Meutia currently serves as deputy minister of cultural affairs at the office of the State Minister for Tourism and Culture. Speculation was rife that Meutia would be assigned as minister for social affairs or state minister of women's empowerment. She left Susilo's residence accompanied by economist Chatib Basri of the University of Indonesia.

Kusmayanto, who was to meet Susilo after Meutia, said that Susilo asked him questions on education, telecommunication and information technology. "Pak Susilo also asked whether I was a member of a political party and whether I was willing to discard my political career if elected as one of his aides," Kusmayanto said, adding that he received a call early in the morning about the meeting from one of Susilo's confidants. Kusmayanto speculated that he might be assigned either for the post of education minister or state minister for research and technology.

Shortly after Sofyan -- who has been billed as a candidate for the state minister for state enterprises or the minister of communication -- entered Susilo's private room for the interview. Sofyan said later there was no mention about what ministerial post Susilo would confer to him. "However, I will learn quickly and accept any post granted to me and take that as a challenge," he said.

He said that Susilo's aide Maj. Gen. (ret) Sudi Silalahi asked for his presence at Susilo's residence from an early morning call. Before the interviews, Susilo met envoys from 17 Middle Eastern and African countries including Egypt, Saudi Arabia, Libya, Iraq, Palestine and Yemen.

One of Susilo's spokesman, diplomat Dino Patti Djalal, said among many issues raised by Susilo during the meeting was the protection for the bulk of Indonesian migrant workers in the Middle Eastern countries and the dramatic rise of oil prices which had dealt a severe blow to the global economy. Susilo is expected to summon executive director of Bank Mandiri ECW Nelloe and director of state telecommunication company PT Telkom Kristiono for interviews on Saturday.

Cumbersome bureaucracy undermines competitiveness

Jakarta Post - October 15, 2004

Tony Hotland, Jakarta -- Indonesia's global competitiveness has improved over the past year, and yet it is battered by an inefficient bureaucracy, inconsistent policies and corruption, according to the World Economic Forum (WEF).

The forum's latest global competitiveness report, released here on Thursday, shows that Indonesia ranks 69th out of 104 countries surveyed this year in terms of growth competitiveness and 44th out of 103 in terms of business competitiveness.

This is an improvement from last year, when Indonesia's growth competitiveness ranked 72nd and business competitiveness 60th, and also marks the first improvement recorded since Indonesia joined the WEF in 1996.

The WEF is an independent, international organization that groups together corporate leaders and provides a platform for addressing global issues.

Tulus Tambunan, head of research at the Indonesian Chamber of Commerce and Industry (Kadin), said a quick assessment of the report showed that the considerably better security condition and higher growth rate contributed to Indonesia's improved standing.

The Growth Competitiveness Index examines three macro factors critical to economic growth: quality of macroeconomic environment, public institutions and technological development.

Meanwhile, the complementary Business Competitiveness Index evaluates two areas critical to the business climate: the sophistication of the operating practices of companies and the quality of the business environment in each country.

Aside from the inefficient bureaucracy, inconsistent policies and corruption that top the list of most problematic factors, the WEF report also pointed to inadequate infrastructure, tax rates, tax regulations, access to financing, restrictive labor regulations, crime and theft, government instability and poor work ethics as inhibitive for doing business in Indonesia.

Tulus said the report only confirmed the conditions that had shackled businesses here. The cumbersome bureaucracy, for example, provide a loophole for charging foreign and domestic investors illegal fees, which could comprise 25 percent to 30 percent of production costs.

Inconsistent policies have also cost local and foreign businesses alike, with overlapping regulations making it difficult for businesses to make long-term plans and strategies, Tulus said. "For businessmen here, these problems are the main factors that have bogged them down, and the government must resolve these issues quickly," he said.

While it has shown initial improvement, Indonesia still has a long way to go before it can vie with other Asian countries in terms of growth competitiveness. Neighboring Singapore, for example, ranks 7th, Malaysia at 31st, Thailand at 34th, China at 46th and India at 55th.

In terms of business competitiveness, Indonesia lags far behind Singapore, ranked 10th, followed by Hong Kong at 11th, Malaysia at 23rd, India at 30th and Thailand at 37th.

The world's top five in growth competitiveness are Finland, the United States, Sweden, Taiwan and Denmark, while leading in business competitiveness are the United States, Finland, Germany, Sweden and Switzerland.

MPR leaders spurn Volvos, royal suites

Jakarta Post - October 14, 2004

Kurniawan Hari, Jakarta -- Apparently wishing to prove their commitment to leading modest lifestyles, all four leaders of the People's Consultative Assembly (MPR) said on Wednesday that they would refuse the Volvo cars to which they were entitled.

They also said that they would eschew staying in royal suites in the Mulia Hotel during the Assembly's plenary session scheduled for October 19 and October 20, saying they wanted standard rooms instead.

"The message is clear, we want to reduce state expenditure. We hope the example we are setting will be followed by other state officials," Assembly Speaker Hidayat Nur Wahid of the Prosperous Justice Party (PKS) told the press here.

He said he had told the Assembly secretariat to convey the message to the State Secretariat, the institution that finances the purchase of official cars for state officials.

Hidayat was accompanied by his three deputies, AM Fatwa of the National Mandate Party (PAN), and Mooryati Soedibyo and M. Aksa Mahmud of the Regional Representatives Council (DPD).

By tradition, senior state officials, including the House speaker and deputy speakers, Assembly speaker and deputy speakers, and Cabinet ministers are given Volvo cars as their official vehicles. The speaker of the newly-established DPD was also in line for a Volvo. Volvo cars cost between Rp 378.5 million and Rp 950 million each, depending on the type.

Fatwa, who is the House deputy speaker for the 1999-2004 period, was Wednesday using a Volvo S-90 series car. He promised, however, that he would soon return the official car to its garage.

Hidayat said the cost-saving moves were necessary to reduce the burden on the state budget. Although the Assembly leaders said they would be willing to accept other, cheaper cars, they did not say what their preferred cars were. "The most important thing is that the official cars do not give the impression that the Assembly leaders are living in luxury," he said.

He said the move would also counter speculation that the plenary session to elect Assembly leaders from October 1 through October 6 had to be extended due to rivalry among the candidates -- all anxious to get their hands on state facilities.

Aksa Mahmud, meanwhile, acknowledged that the royal suites were equipped with saunas. "It's excessive. All we need are rooms for sleeping and discussions. We only need standard rooms that cost Rp 400,000," he said.

The Hotel Mulia charges US$370, or around Rp 3.33 million per night, for its royal suites. "We will be staying at the hotel for work, not for leisure and saunas. We have to end all this luxury," said Mooryati, the owner of cosmetics producer PT Mustika Ratu.

Commenting on public suspicions that the move was a political one designed to ensure his reelection in the 2009 election, Hidayat said that he was only fulfilling the aspirations of the people, who want their leaders to have a sense of crisis. "I've never thought about campaigning [for 2009]. My concern is that the people need serious and committed leaders," Hidayat added.

Aksa and Fatwa said that they hoped their moves would be followed by other state institutions, including state enterprises.

Fiscal balance is still not balancing

Jakarta Post - October 13, 2004

Owen Podger, Jakarta -- The Jakarta Post recognized the significance of the new law on fiscal balance in an editorial on Monday October 4, 2004, by stating: "The most important elements of the new legislation lie in its elaborate, clear-cut provisions on budget accountability and domestic borrowing by regional administrations."

Indeed there are improvements, but not as many as one would hope for. Many of the changes were unnecessary because they are already covered under Law 17/2003, the State Finance Act, Law 1/2004 on treasury operations and Law 15/2004 on auditing.

For example, the new law gives the national government the right to withhold funds from regions that raise revenue outside the new provisions. This will only penalize the citizens of the region, and not the officials who broke the law. There are existing stronger sanctions in Law 17/2003, including restoration of funds, fines and imprisonment for officers who misuse public money.

The formula for the general allocation grant (DAU), which accounts for over 80 percent of the budget in most regions, has not changed significantly and still does not directly address the fiscal needs of regions. The old formula for DAU did not "balance" funds to regions, but linked funding to population size.

The average budget for districts (kota and kabupaten) with more than one million population was Rp 280,000 per capita, while districts half this size received 30 percent more funding per capita. Districts with population between 100,000 and 200,000 have budgets that average Rp 1,000,000 per capita, and districts of half this size receive over 60 percent more.

This type of distribution provides incentives for districts to split into smaller units, not join up to achieve economies of scale through shared overheads and operations.

Another disappointment with the new law is that it does not address the distortion caused by "revenue sharing" of central government income from natural resources.

The more that resource-rich districts receive from the exploitation of their resources, the more DAU they receive, and this disadvantages poor regions with few resources. Revision of the law was a lost opportunity to redistribute funds according to their needs to provide citizens with services.

The DAU formula in the old law was distorted in budget implementation by adding a lump sum for each region regardless of its size. These lump sums were the immediate cause of the distortions reported above, and we trust that the new government will not distort the new law in the same way.

The core problem is getting a fairer budget distribution for all Indonesians. This will not be achieved under this new law, which still equates "funding need" to some formula comprising population, area, building costs, and size of the economy. This is simply wrong, because it cannot define the needs of the people. They want their fair share of good government: Equal access to good schools, hospitals, infrastructure, environmental protection, development controls, security, housing, etc.

The revised law contains articles on regional borrowing. These are misplaced because the scope of this law should be budget distribution, not financial management. The principles of good financial management are contained in Laws 17/2003 and 1/2004. This includes assessing whether borrowing is an appropriate form of financing based on financial return, economic benefits, social and environmental consequences and considering all risks.

The revised law also strengthens management of deconcentrated funds. Over recent years the largest ministries, education, health and human settlements, have had huge budgets that are "deconcentrated" to provinces, who then "contracted" with districts to fund unknown investments, against the principles of decentralization and transparency. The new law allows this funding to continue, though how they are compatible with local strategic planning, and the need for fair allocation between regions, is not addressed at all.

This revised law on budget distribution will make little difference, as it fails to address satisfactorily the central question of budgeting: How can scarce resources be distributed wisely, to implement the objectives and functions of government, to reduce poverty, create jobs, provide services, and protect the environment, for all Indonesians wherever they live? Fiddling with formulae will not achieve this result.

A concerted effort of public sector management reform across all of government is needed, so that there is a clear and proper basis for determining the financial needs of each region.

[The writer is a free-lance consultant on governance reform, and co-author of Asian Development Bank (ADB)'s Country Governance Assessment Report of the Republic of Indonesia soon to be released.]

DPD seeks equality with the House

Jakarta Post - October 13, 2004

Kurniawan Hari, Jakarta -- The successful election of leaders of the People's Consultative Assembly has inspired the Regional Representatives Council (DPD) to propose amendments to the Constitution that would encourage equality between the council and the House of Representatives.

The plan was unveiled on Tuesday during a DPD plenary session to hear progress reports from some of its working groups, including one on the formation of a disciplinary council and another on relations with the House.

"We will assign a separate committee to propose amendments to the Constitution and some related laws. The changes are needed to establish equality between the two law-making bodies," DPD member Muspani said on Tuesday.

Though DPD members are directly elected by the people, the Constitution and Law No. 22/2003 on the composition of the Assembly, the House, the DPD and regional legislatures, reduce the DPD to secondary status compared to the House.

According to legislation, DPD members will be invited to attend House plenary sessions only to hear the president deliver the draft state budget.

The DPD has little legislative power, but can provide suggestions to the House regarding the deliberation of bills on the state budget and regional administration. DPD members can submit their suggestions, but they are not involved in deliberating bills.

The DPD was introduced this year as Indonesia moved to a bicameral representation system in the wake of flagging public trust in political parties. The DPD emulates the Senate in the United States.

Each province has four representatives in the DPD who, like House members, were elected in the legislative election.

The struggle for equality with the House gained momentum earlier this month when the 128-strong DPD push for an Assembly leadership consisting of two House and two DPD representatives.

House members, particularly from parties included in the Nationhood Coalition, rejected the quota, saying the Assembly comprised individual members of the House and the DPD, not two institutions.

GKR Hemas, a DPD member from Yogyakarta, said the Constitution and existing legislation provided the DPD with a weak bargaining position vis-a-vis the House. She said the proposed constitutional amendments would be discussed by a nine-member team.

The Assembly has amended the Constitution four times since 1999, with the last amendment resulting in the introduction of the DPD.

DPD Speaker Ginandjar Kartasasmita said the DPD would take as a reference the work of the Constitutional Commission, which has assessed all of the constitutional amendments between 1999 and 2003.

The commission has said the amendments were flawed and accommodated too many short-term political interests. "The commission suggested, among other things, the DPD's right to veto bills sponsored by the House," Ginandjar said.

The DPD will also propose a revision to the law on the composition of legislative bodies, he added.

Some DPD members attending the plenary session on Tuesday also proposed that the DPD be given the authority to summon the president to explain the draft budget.

PKS leader resigns to focus on Assembly

Jakarta Post - October 12, 2004

M. Taufiqurrahman, Jakarta -- Leader of the Justice Prosperous Party (PKS) Hidayat Nur Wahid relinquished on Monday his chairmanship of the Muslim-based party, saying he would concentrate on his new job as the People's Consultative Assembly (MPR) speaker.

The party's executive board appointed Tifatul Sembiring, formerly coordinator of PKS's activities for Sumatra, as the acting chairman, pending the election of a new leader during its congress slated for April 2005.

Speaking during a press conference to announce his resignation, Hidayat said he was setting an example that once politicians took up state duties, they should surrender their party commitment to avoid conflict of interests.

"The behavior of the elite must change, as we can't expect a sweeping reform to come soon. They should concentrate on working for the public," Hidayat said.

Early last week, Hidayat was elected MPR speaker after beating Sutjipto, a candidate nominated by the Nationhood Coalition consisting of the Indonesian Democratic Party of Struggle (PDI- P), Golkar Party and a number of minor political parties, by just two votes.

Hidayat was nominated by a coalition of political parties that supported president-elect Susilo Bambang Yudhoyono.

Outgoing and former state officials, including President Megawati Soekarnoputri, Akbar Tandjung, Hamzah Haz and Amien Rais, have kept their top positions at their respective parties intact.

Analysts have said due to Hidayat's rise to the Assembly's top post, Susilo's position is now secure, as any move to impeach him will likely be thwarted by the Assembly.

However, Hidayat countered the suggestion, saying he would not turn the Assembly into an institution that would simply validate any efforts to impeach or defend the president.

"Do not view the MPR as the gatekeeper for thwarting or building strength for an impeachment," he told reporters here.

Meanwhile, Tifatul said that he would empower the party to reach out for more constituents especially those in the rural areas. "Critics have said that urban population makes up most of our constituents. We must change this, we have to campaign ourselves down to the village level," he said.

Hidayat, assumed the party's top post since 1999 after the then Prosperous Party (PK) leader Nur Mahmudi Ismail quit office for joining the cabinet of president Abdurrahman "Gus Dur" Wahid administration.

Next government may not be effective: Expert

Jakarta Post - October 12, 2004

Kurniawan Hari, Jakarta -- President-elect Susilo Bambang Yudhoyono may have won by a landslide, but it is questionable how effective his administration will be because most regional administrations and legislatures are controlled by different political parties, analysts say.

Riswandha Imawan of Gadjah Mada University in Yogyakarta said on Monday that each political party has its own platform and programs.

"The problem is whether regional administrations and legislators coming from other parties will be willing to follow the programs of the president-elect. There could be big problems in the state administration in the next five years," he said during a discussion here on Monday.

He said that Susilo, from the Democratic Party, would likely run into opposition to his policies from the House of Representatives, the majority of whose members are from the Golkar Party and the Indonesian Democratic Party of Struggle (PDI-P).

Golkar, PDI-P, the Prosperous Peace Party (PDS), the Reform Star Party (PBR) and the Concern for the Nation Functional Party (PKPB) have formed a loose coalition in the House and legislatures across the country.

At the provincial level, Riswandha said, Golkar and the PDI-P control local legislatures, while some local executives are from other political parties. Golkar and the PDI-P are the major political powers in local legislatures.

In North Sumatra, for example, Golkar and the PDI-P dominate the legislature with 20 percent and 15 percent of the seats, respectively. Susilo's Democratic Party controls only 7 percent of the seats.

The PDI-P and Golkar also dominate the Central Java provincial legislature, with 29 percent and 15 percent of the seats, respectively, while the Democratic Party has 6.6 percent of the seats.

Riswandha predicted that the state administration over the next five years would not be as smooth as it was under President Megawati. "Welcome to the complicated state administration," he said.

Analyst J. Kristiadi of the Centre for Strategic and International Studies raised similar concerns. He said the complicated situation was the result of the disharmony between the presidential election system and the political party system. "The direct presidential election system does not match the multiparty system. This must be revised in the future," he told The Jakarta Post.

Both Kristiadi and Riswandha suggested that Susilo improve his communication with political leaders and the people. "Susilo must be able to control issues in local administrations, otherwise his administration will not run effectively," Riswandha said.

He said Susilo had to accommodate the different platforms of various political parties to win their support for his administration.

Kristiadi said Susilo must be able to use public opinion to win the support of the people. He suggested that before issuing strategic decisions, Susilo first consult the public. Public input must be taken into account in Susilo's policies so legislators will not be so fast to oppose the policies, he said.

2004 elections

KPK told to speed up KPU graft probe

Jakarta Post - October 12, 2004

Muninggar Sri Saraswati, Jakarta -- A coalition of non- governmental organizations questioned Monday the Corruption Eradication Commission's (KPK) commitment to seriously investigate alleged corruption by the General Elections Commission (KPU) in the procurement of materials for the April 5 legislative election.

Hermawanto, the coalition's spokesman, said the group demanded greater commitment from the commission as it had yet to announce their stance over the issue despite their promise to the coalition on August 11.

The coalition consists of the Independent Committee for Election Monitoring (KIPP), the Indonesian Forum for Budget Transparency, the Jakarta Legal Aid Institute (LBH Jakarta), Indonesia Procurement Watch (IPW) and the Indonesian Forum for Parliamentary Concern (Formappi).

According to Hermawanto, KPK said that the probe had been postponed due to the presidential election. "The case must not be closed. Instead it must be completed soon," he said.

Hermawanto also said that KPK earlier claimed that they had already asked the State Audit Body (BPK) to do an audit of the KPU's accounts. "We've heard that BPK completed the audit in September, so why didn't the KPK announce the result?" he said.

Junino Yahya, the newly installed deputy chairman of internal monitoring and public complaints, said that the KPK had yet to obtain the results from BPK. "We must respect the code of ethics between state institutions, meaning we could not order BPK to submit their audit result. We can only wait," he told the coalition.

Junino added that the commission had yet to start probing the alleged graft case because they had to collect more data.

Hermawanto said that they had a number of reports, which could be used by KPK to probe the case.

The coalition accused the KPU of involvement in a markup over the procurement of election materials that inflicted some Rp 375 billion (US$41.6 million) in losses on the state.

It alleged that the KPU spent Rp 204.62 billion, or a 616 percent increase on its original budget of Rp 28.5 billion, on distribution of the materials. State losses were estimated at Rp 176.04 billion.

The elections commission incurred Rp 56.46 billion in state losses over the procurement of ballot papers, following its decision to increase the number of registered voters from 143.1 million to 147.6 million, and to raise the number of reserve ballots from 2.5 percent to 10 percent. The law on legislative elections set the figure at 2.5 percent.

KPU has said that the allegation was unsubstantiated. KPU's decision to hike the legislative election budget was a consequence of having such a short time in which to prepare for the election, it said.

Corruption/collusion/nepotism

14 councillors charged with graft

Jakarta Post - October 15, 2004

Andi Hajramurni and ID Nugroho, Makassar/Sidoarjo -- Police here named at least 14 of 75 South Sulawesi legislative council members as suspects on Thursday in a graft case, while East Java prosecutors sought a six-year jail term for Sidoarjo legislature speaker on similar charges.

The 14 suspects, reelected as new South Sulawesi councillors for the 2004-2009 period, are accused of embezzling some Rp 18.23 billion (US$2.02 million) from the province's 2003 budget.

Eleven of them are Golkar Party councillors -- Saldi Mansyur, Ichsan Yasin Limpo, Dachlan Maulana, Abdul Madjid Thahir, Hoist Bahtiar, Ajeip Padindang, Mapparessa Tutu, Aris Pangerang, La Kamawiyaka, Arfandi Idris and Pangerang Rahim.

The other suspects are Ramli Haba from the National Mandate Party (PAN) and Machmud Hajar and Hamzah H. Pati Hasan. Earlier, police had also declared council secretary Syamsuddin a suspect in the graft.

South Sulawesi Police chief Insp. Gen. Saleh Saaf said on Thursday the 14 new suspects had been charged following information collected during two days of questioning Syamsuddin.

"They are considered to know more about the irregularities in the 2003 budget because they were directly involved in drafting the allocations of funds when the budget was being revised," Saleh argued.

However, he could not say when the 14 legislators would be summoned for questioning.

Under Article 103 (3) of Government Regulation No. 25/2004, law enforcers can summon councillors for questioning in a corruption case without obtaining permission from the home affairs minister.

"We will discuss this matter. If the new regulation can be implemented now, we will soon summons the 14 councillors," Saleh said.

The previous ruling required police or prosecutors to get permission from the central government to question council members charged with any crime.

Meanwhile, prosecutors asked the Sidoarjo District Court on Thursday to sentence local council speaker Utsman Ikhsan to six years for allegedly misusing Rp 21 billion from the city's 2003 budget.

The defendant, from the National Awakening Party (PKB), was mostly responsible for corruption, prosecutor Soeprihanto told a hearing.

Utsman and his lawyer, however, denied any wrongdoing, saying all Sidoarjo council members should be responsible for a decree endorsing the allocation of the misused money.

Corruption is rampant in local legislatures across the country during the reform era since mid 1998, with many members convicted, standing trial or being questioned.

Police general faces bribe charge

Jakarta Post - October 15, 2004

Abdul Khalik, Jakarta -- Director of the National Police economic crimes division Brig. Gen. Samuel Ismoko will soon be questioned for allegedly taking a bribe worth US$20,000 to allow Adrian Waworuntu, one of key suspects in the Rp 1.7 trillion (US$185 million) Bank Negara Indonesia (BNI) scandal, to escape.

Chief of the internal affairs division Insp. Gen. Supriyadi said Thursday that Ismoko, who is also chief investigator in the Rp 1.7 trillion (US$185 million) scandal, must explain whether or not he took a bribe to help Adrian evade police arrest.

"We will question him after his we speak with his subordinates. We have already scheduled a time for it," said Supriyadi.

Seven of Ismoko's subordinates are undergoing questioning by the internal affairs division.

Quoting Petindo Group director Rudy Sutopo, also a suspect in the scandal, some media outlets reported on Thursday that Ismoko received $20,000 (Rp 183 million) from Adrian in December before the police officer made an official trip to Thailand.

Adrian was released from police detention in March and declared a fugitive on October 1.

Rudy, who is awaiting trial while in detention at Cipinang prison in East Jakarta, said Adrian, a director of the Gramarindo Group, borrowed money from him to give "pocket allowance" to Ismoko.

He also said that all investigators in the economic crimes division received between Rp 25 million and Rp 50 million each depending on their ranks.

The scandal centered around the issuance of letters of credits to withdraw money from BNI's Kebayoran Baru branch. The letters of credit turned out to be fake, causing the state bank to suffer losses worth Rp 1.7 trillion. The money went to several companies, including the Gramarindo and Petindo Groups.

Police named a total of 16 suspects in the case. The prime suspect, Indonesian-born Dutch woman Maria Lumowa, is still at large.

Ismoko, in a press conference held on Thursday evening, denied the allegation, saying that his office paid all of his expenses for his trip to Thailand.

Police spokesman Insp. Gen. Paiman said police would question Rudy and give him a chance to confirm his accusations.

"We will speak with him soon to verify his statement. He doesn't have to be afraid as we will protect him," said Paiman.

Adrian's escape has made headlines nationwide in the last several weeks and most people seem to believe that it would have been impossible for Adrian to escape if the police had not been abetting him. It is now incumbent upon the police to produce Adrian to the prosecutor's office as soon as possible for trial.

A police spokesman said earlier that Adrian "might have fled the country using different name" because the travel ban on him was still effective when he was released from detention in March.

The police have offered a Rp 1 billion reward for information leading to Adrian's arrest.

The alleged bribery and the escape of Adrian have added to police's negative reputation among the public.

Aside from the BNI case, the police have still not finished several dossiers for other major corruption cases over the last two years, including the Rp 20 trillion Account No. 502 scandal, the Rp 2 trillion BDB and Asiatic bank scandals and the Rp 900 billion Bulog corruption case.

Another case that further tarnished the police's image was the alleged partiality of top officers during the elections indicated by the VCD case involving Banyumas police chief Sr. Comr. Andi Mapparesa, who spoke in May in front of police family members urging them to vote for President Megawati Soekarnoputri in the election.

Graft found at every level of government

Jakarta Post - October 14, 2004

M. Taufiqurrahman, Jakarta -- A report on Wednesday confirmed post-reform suspicions that corruption in the country had spread from the central government in the Soeharto era to regional governments after reform and the regional autonomy drive.

The report, based on a survey conducted by top anti-corruption watchdog, Indonesian Corruption Watch (ICW), revealed that, between January and August this year, 314 cases of corruption were found in various tiers of the government, mostly in regental and municipal administrations. The corruption cost the state an estimated Rp 2.7 trillion (US$287 million).

The report, based on a survey conducted in 15 provinces nationwide, stated that 187 of the corruption cases were found in regental and municipal administrations. "The provincial administrations are just behind them with 88 cases, while the central government has the lowest figure of 30 cases," the report said.

The survey also found that most of the corruption in the regions was committed by regents, mayors and councillors.

"Our report found that there was evidence to suggest that 28 heads of regental and municipal administrations were involved in corruption," said Adnan Topan Husodo of the ICW.

According to him, three other groups who were held responsible were government employees, councillors and contractors. Corruption committed by government employees was found in 17 cases, while the involvement of local contractors hired for procurement projects was found in 13 cases, said Adnan. Meanwhile, councillors were found in 64 cases, he said.

Fellow activist Lucky Djani added that the ICW's latest finding could be used to support the widely held assumption that the autonomy law, which granted more authority to local governments, had made them more susceptible to corruption than they were before.

During Soeharto's 32 years in power until 1998, the government was highly centralized, and corruption was mostly confined to the central government.

The ICW report also found that Aceh province recorded the highest proportion of state losses. "Government money that was allegedly misused in Aceh between January and August, reached a staggering Rp 1.2 trillion," it said.

Adnan said that the absence of legal certainty due to the enactment of the state of emergency and martial law administration in the strife-torn province had contributed greatly to the swelling figure of state money being stolen.

The Indonesian government imposed martial law in Aceh in May last year in an attempt to wipe out armed separatism by the Free Aceh Movement (GAM). The martial law status was lifted in May this year and replaced by a state of civil emergency.

"There are also large sums of humanitarian relief money pouring into the province with little or no accountability," he added.

According to Lucky, of the 314 allegations nationwide, only 27 cases which were currently being prosecuted in court, while another 143 cases were still being investigated.

"It shows that law enforcers, especially the state prosecutors, which number at 6,000 nationwide, have not done enough to bring the unscrupulous officials to justice," Lucky said.

Anti-graft activist's home bombed again

Jakarta Post - October 13, 2004

Hasrul, Kendari -- An explosion police believe to be from a homemade bomb has damaged the house of outspoken anti-corruption activist Hidayatullah early on Tuesday in Kendari, Southeast Sulawesi, the second attack on the activist's house in 15 months.

Hidayatullah, his wife, Marni, and two-year old daughter Yayuk who were asleep in the house at the time were not injured in the attack at about 4 a.m. The blast shattered windows and destroyed a wall in his house.

Hidayatullah, who is the chairman of the People's Mandate Assembly (MARA) non-governmental organization, and his family were also in the house in July last year when a similar attack occurred. No one has been arrested for that crime.

Tuesday's blast created a 30-centimeter-wide crater 15 centimeters deep. Police officers arrived at the scene about 15 minutes after the incident.

Kendari Police chief Adj. Sr. Comr. Joko Mulyono said a preliminary investigation showed the explosion was caused by a homemade bomb. The police bomb squad found metal pieces at the crime scene, which were believed to be from a device used to detonate the bomb, he said. The pieces had been sent to a police forensic laboratory in Makassar, South Sulawesi, for a further investigation.

The attackers, who were believed to know the layout of Hidayatullah's house, had planted or thrown the bomb at the outside wall of his bedroom, Joko said.

Hidayatullah said he had heard nothing suspicious before the blast because he was asleep. "My daughter and wife have been extremely traumatized by the incident," he said.

Local residents said the explosion was audible up to seven kilometers from the scene. "At the time, I had just awoken to perform shubuh [dawn prayers] and I suddenly heard a strong explosion. But I didn't know if it was a bomb or not," said a neighbor, Halim.

Joko condemned the attack as "savage" and promised to thoroughly investigate the incident. Vowing to arrest the bombers, he asked the victims to remain patient. "We have questioned the victims but haven't yet determined the identity of the attackers," he said.

However, Joko said police suspected several people in relation to the attack. "For the time being, we cannot reveal the names." Under Joko, police failed to uncover those behind the July blast at the same house, which also took place when Hidayatullah and his family were sleeping.

Hidayatullah has spearheaded many campaigns against corruption involving officials in Southeast Sulawesi. On Monday, he led a demonstration to the province's legislative council to put pressure on local authorities to prosecute Muna Regent Ridwan Bae in a graft scandal over the auction of smuggled teak wood.

Hidayatullah has also persistently pressed ahead with calls for an investigation into alleged money politics during the election of Southeast Sulawesi Governor Ali Mazi by the previous legislature.

"I don't dare to speculate on those behind the attacks on me. It's the police's task to reveal it. It is surely related to my activities leading protests against numerous corruption cases in Southeast Sulawesi," Hidayatullah was quoted by Antara as saying.

KPK told to submit cases to Anti-corruption Court

Jakarta Post - October 13, 2004

Muninggar Sri Saraswati, Jakarta -- The Supreme Court reminded the Corruption Eradication Commission (KPK) on Tuesday to submit high-profile cases to the anti-corruption court, which is now operational.

Supreme Court deputy chief justice Marianna Sutadi said the court could start hearing cases as President Megawati Soekarnoputri inaugurated nine noncareer judges last week, in addition to the six career judges installed earlier.

"The KPK can submit cases anytime, because the court is ready," she said at her office.

The court will hear corruption cases at the Central Jakarta District Court in line with Law No. 30/2002 on the anti-graft commission.

"All the judges have undergone special training and the Central Jakarta District Court will handle the administration of cases, as it has done for cases heard by the commercial court and the ad hoc human rights tribunal," she said.

Marianna said there was no reason to delay the operation of the anti-corruption court. "No coordination [with the KPK] is needed. Just file the case with the court," she said.

KPK deputy chairman Tumpak Hatorangan Panggabean has said the commission is currently completing the prosecution of two graft cases, involving officials of the Ministry of Communications and Aceh Governor Abdullah Puteh. "We expect to submit at least two cases to the court this October," he said.

The KPK expects to submit the corruption case involving communications ministry officials Harun Letlet and Col. Tarsisius Walla. The two are charged with marking up the cost of constructing a seaport in Maluku, which caused the state some Rp 10 billion in losses. The second case involves Puteh, who is suspected of involvement in an alleged mark up in the purchase of a Russian helicopter. The graft caused an estimated Rp 4 billion in state losses.

Anti-corruption judges have been installed to hear cases at district, high and supreme court levels. A case will be heard by a panel of five judges.

The anti-corruption court will only hear high-profile corruption cases submitted by the KPK. The KPK only deals with corruption cases that cost the state a minimum of Rp 1 billion and involve state officials. It is also obliged to monitor and deter corruption practices across the country.

Since its establishment in January of this year, the KPK has been investigating six graft cases.

Small bomb explodes in Sulawesi

Associated Press - October 12, 2004

Jakarta -- A small bomb exploded outside the house of anti- corruption activist on the Indonesian island of Sulawesi early on Tuesday, breaking windows but causing no injuries, police said.

The bomb -- the second attack on the home the activist Hidayatullah in the past year -- exploded at 3.30am in the town of Kendari, about 1,740km northeast of the capital Jakarta. "The explosion came from a rudimentary low explosive device, and we are investigating the motive," said local police.

No one has been arrested but some police officials believe the attack was in response to Hidayatullah's campaign against corruption in the local parliament. His group, the People's Mandate Assembly, have repeatedly held protests against authorities' failure to detain corrupt legislators.

Indonesia is considered one of the world's most corrupt countries and graft is widespread in most government institutions. But in recent months, prosecutors have begun charging dozens of local politicians with corruption in a campaign to clean up local and regional governments.

Local & community issues

Indonesia police defuse shopping mall bomb

Associated Press - October 13, 2004

Jakarta -- Police on Wednesday defused a small bomb left in a shopping centre in the central Indonesian town of Balikpapan, which is home to several international oil and mining companies, an officer said.

The bomb, described as a low-explosive device, was discovered late on Tuesday by employees at Mall Fantasi in the town on Kalimantan island, 1,215km northeast of Jakarta, said police.

Bomb squad officers defused the device, which was concealed in a plastic bag, early on Wednesday. The mall had been given no warning.

Police declined to speculate on who planted the bomb, but said anonymous callers had phoned in bomb threats that turned out to be false to other businesses in the town in recent weeks.

Indonesia has been hit by a series of bombings in recent years. The major attacks, including the 2002 Bali blasts, have been blamed on Islamic militants.

Balikpapan is home to several international companies with oil and mining operations close to the town, and off the coast of Kalimantan, including ExxonMobil and British Petroleum.

Councillors lambasted for 'wasteful' trip

Jakarta Post - October 12, 2004

Palu -- An activist with a governance watchdog lashed out on Monday against a plan by 11 councillors to visit Jakarta, saying the trip was a waste of money.

According to the itinerary of the Rp 99 million (US$10,532) official trip, the councillors will fly to Jakarta on Tuesday. The are to visit officials at the Ministry of Home Affairs to inquire into a government decree on the election of council leaders.

Sudirman Zuhdi, coordinator of the Parliament and Government Watch, said instead of taking a costly trip to Jakarta, it would be more efficient if the councillors invited an official or two from the home ministry to visit Palu to shed light over the matter.

Protesters, officials almost come to blows

Jakarta Post - October 12, 2004

Kendari -- A anti-illegal logging protest on Monday nearly turned into brawl in Kendari, capital of Southeast Sulawesi province.

Dozens of environmental activists had been staging a heated protest outside the Southeast Sulawesi Council, demanding the government to prosecute those people responsible for illegal logging in Muna regency.

A councillor, La Ode Halami, apparently became enraged and yelled at the protesters to leave the vicinity. This angered the activists, who punched the councillor, but the incident was prevented from degenerating into a fistfight by other councillors and council staff.

Thugs show red light to student protesters in Riau

Jakarta Post - October 12, 2004

Puji Santoso, Pekanbaru -- A protest against prostitution held by 500 students and residents in Riau province ahead of the Ramadhan fasting month, which starts this Friday, ended in a clash.

At least one student was injured in the attack, and a bus and a motorcycle were set ablaze during the violence that flared up at a brothel compound in Sawit Permai village, Dayun district, some 40 kilometers from Siak regency.

The protesters from the Siak-based Institute of Economic Sciences (STIE), the Syarif Hidayatullah State Islamic University (IAIN) and the University of Riau (Unri) marched into the red-light district at around 11:30 a.m., demanding that it stop business during the holy fasting month.

As they arrived in a caravan consisting of a bus, seven trucks and dozens of motorcycles, the demonstrators saw about 150 sex workers leaving the compound, which was surrounded by a tight guard of hundreds of Functional Youths Association (IPK) supporters.

Most of the group were armed with weapons, including firearms. The protesters held an hour-long free speech forum in front of the brothel complex, urging that it close for one month during Ramadhan. As they were about to disperse, a group of unidentified people set fire to a house inside the brothel compound.

The compound's residents were angered by the incident and were allegedly provoked to attack the student protesters, who fled for their safety.

According to witnesses, the IPK youths also burned the protesters' bus and one of their motorcycles. "We had never thought we'd be attacked, and we were not ready for a clash because we had planned a peaceful rally," said protester Budi Anjas from Unri.

STIE student Oki Saputra was injured in the clash, sustaining stab wounds in his right arm.

A number of fellow protesters were chased through the complex by suspected IPK members, but it was unclear whether the students evaded their attackers or were caught and are being held captive.

Siak Police chief Adj. Sr. Comr. Jaya Subianto could not be reached for comment on the incident.

The IPK, founded in the North Sumatra capital of Medan, has often been accused of backing gambling and prostitution rings in several areas across the country. Its members have been involved in conflicts with other youth organizations, such as the Pancasila Youths and the Indonesian Young Generation for Renewal.

Protests against entertainment centers are frequent ahead of and during Ramadhan. A similar demonstration was held on Monday in Pekanbaru, Riau, by a separate group of students, who demanded that local authorities shut down entertainment areas in observance of Ramadhan. The demonstrated ended without incident at the mayor's office.

Human rights/law

Intelligence law - BIN could become supporter of state

Kompas - October 16, 2004

Jakarta, Kompas -- In examining the Draft Law on the Fundamentals of Intelligence, the National Intelligence Agency (BIN) has the potential to became a body which will be inseparable from the state. The stipulations in the law could turn BIN into a super- body, with excessive powers and a tendency to take over judicial functions. The law will also turn BIN into secret police rather than a secret agency as can be seen from the authority it gives BIN to carry out arrests which should only he held by judicial bodies.

This statement was made by the head of the board of directors of the Indonesian Legal Aid Foundation (YLBHI), Munarman, and the coordinator for the Commission for Missing Persons and Victims of Violence (Kontras), Usman Hamid, at a press conference at the YLBHI offices in Jakarta on Friday October 15.

From studies of the Draft Intelligence Law as it stood on September 5, 2003, it can be seen that there are a number of extremely dangerous articles which conflict with the principles of human rights and clean democratic government. "We therefore urge the new president [elect] and the DPR [People's Representative Assembly] to take over the legal drafting [of the law] which is presently being done by BIN", said Munarman.

Munarman pointed out that the stipulations in the law are such that it places BIN in a role where it only focuses on handling issues of terrorism. BIN is "reduced" into little more than a secret police who are merely charged with the duty of pursuing criminals. In reality BIN's function should be to seek, find, manage and present information which is required by the political authorities to take decisions. With the limits which are setout in the draft law, BIN will become an agency which is inseparable from the regime and simply a supporter of state power.

Both YLBHI and Kontras are of the view if these articles get through it will be a huge catastrophe. The authority to arrest as given to BIN in the law clearly indicates that the intelligence body wants to take action on the information which it obtains and analyses when any action taken on the basis of intelligence information should be taken by the authorities with the appropriate jurisdiction.

Moreover, the stipulations that state that BIN's funding will come from the state budget, a special presidential budget as well being able to seek its own funds could even open up the possibility of BIN taking part in illegal arms trade. (dik)

[Translated by James Balowski.]

US Envoy disappointed by Indonesia's rights progress

Associated Press - October 11, 2004

Jakarta -- Departing US Ambassador Ralph Boyce said Monday he regretted that Indonesia hasn't improved its human rights record enough to allow the resumption of military relations with the US

Washington slapped a ban on the Indonesian military in 1999, after its soldiers and proxy militia killed up to 1,500 people and destroyed much of East Timor when it voted to break away from Indonesia.

The administration of US President George W. Bush wanted to normalize ties with the Indonesian military, which it sees as a key ally in the fight against terror, but Congress rejected the move.

During a briefing with foreign reporters, Boyce expressed disappointment that US-Indonesia military relations were still curtailed, saying he kept pushing Jakarta to prove that it had improved its human rights record.

"But we don't have the material with which to seriously go to Congress and do that. It's a regret on my part," said Boyce, who takes up the post of ambassador of Thailand later this month.

During his three years in Jakarta, Boyce chose low-key diplomacy over the confrontational style preferred by his predecessor Robert Gelbard. But human rights was still at the top of his agenda.

"When I arrived, a lot of Indonesians said that now that you're totally absorbed with the war on terror presumably you won't be all over us on human rights the way you have been," he recalled. "To which I said ... Are you planning on violating human rights? If you do, we'll say something."

Indonesia's military has long been accused of human rights violations throughout the country. Amnesty International recently accused soldiers of torture and extra-judicial killings in the insurgency-hit province of Aceh.

While Jakarta did hold rights trials for some of those accused in the East Timor violence, 16 of the 18 government and military officials involved were acquitted. That sparked outrage among Western governments and rights groups who labeled the rights court a failure.

Boyce also called on Indonesia to arrest Anthonius Wamang, an alleged separatist rebel accused of playing a role in the August 2002 killing of two American school teachers near an US-owned gold mine in Papua.

The failure to bring Wamang -- who has been indicted by a US grand jury -- to justice is another factor blocking the resumption of full military ties between the US and Indonesia, Western diplomats say.

Indonesia has no extradition agreement with the US and it is unclear whether Jakarta will hand Wamang over to Washington if he is arrested.

Focus on Jakarta

Over 300 families lose homes in forced evictions

Jakarta Post - October 13, 2004

Jakarta -- Just a few days before Ramadhan begins, hundreds of families living in Pinang Ranti subdistrict, East Jakarta and Srengseng Sawah in South Jakarta, were forced to leave their homes in separate evictions on Tuesday.

"We were just told to dismantle our houses last night at about 8 p.m.," a resident of Pinang Ranti, who requested anonymity, said, while witnessing his semi-permanent house being bulldozed by the city's public order officers.

At least 550 public order officers, the police and the military, as well as the subdistrict and Makasar district administrations arrived at 10 a.m. to vacate the state land of the more than 40 houses without building permits. The area housed around 450 people.

Angry evictees at first tried to deter the officers from getting in the area, but no clashes erupted.

The demolition of 200 houses in Srengseng Sawah, Jagakarsa district, also took place smoothly at 9 a.m., as the residents had been told on September 28 about the plan. "The subdistrict office had told us that the house owners would be compensated, up to Rp 500,000 (some US$54), from October 1 to October 8. We would also get an additional Rp 1 million if we dismantled the house ourselves," Miswardi said.

"Since I didn't have the money to dismantle the house, I had left one week ago and rented a room nearby ... I didn't want my two children witnessing the eviction," said the sidewalk vendor who works outside the Tanah Abang textile market in Central Jakarta.

The residents tried to delay the eviction by pleading with the National Commission on Human Rights, the Jakarta Legal Aid Institute and the City Council. The newly installed councillors had wrote to the South Jakarta administration for a delay at least until Idul Fitri, the end of the fasting month in November.

Many of the residents had lived on the site since 1991. "We asked the administration many times whether we could buy a land title, but the officials never told us whose land it was until now," Miswardi said.

The evictions contradicted Governor Sutiyoso's earlier promise that he would relax his eviction policy until next year, taking the sensitive election process over last six months into consideration.

His administration has been quite active in evicting squatters despite calls made by councillors, urban activists and the human rights body to provide the people with shelter and appropriate compensation beforehand.

The Urban Poor Indonesian Network (Uplink) just launched its five-year nationwide Zero Eviction campaign on Monday, in which they called on the new government and lawmakers to draw up a concept on city development, which offers a fair solution to overpopulation and poverty.

The campaign was launched in conjunction with World Habitat Day, which fell on October 4 and the World Poverty Alleviation Day on October 17.

Uplink recorded 700,000 people who have lost their homes and jobs in a string of evictions since 2003. That number is part of the 14 million people in the world who have become victims of eviction.

City prepares for possible floods

Jakarta Post - October 12, 2004

Damar Harsanto, Jakarta -- Ahead of the rainy season expected to begin next month, the Jakarta administration is getting busy in anticipation of possible flooding in the capital, dredging rivers and cleaning up garbage jamming sluice gates.

"We're also preparing bags of sand for emergency levees to anticipate overflowing sluiceways. In addition, we're also preparing rubber rafts," City Public Works Agency head Fodly Misbach said on Monday.

Fodly said the agency had allocated Rp 350 billion (US$38,500) for flood mitigation. "We have also teamed up with the City Public Order Agency to provide an early warning system for the public. We will step up our monitoring at seven sluice gate observation posts," he added.

Governor Sutiyoso warned that the heightened preparations would not guarantee that the city would be able to stave off flooding, which is an annual occurrence.

"What we can do now is to minimize the adverse impact of flooding, since we have yet to build the East Flood Canal and to reclaim the northern coast of Jakarta," Sutiyoso said.

Jakarta is prone to annual flooding with its 13 rivers, and because 40 percent of the city is below sea level.

The delay in the construction of the East Flood Canal, which is expected to ease floods by connecting five major rivers in eastern Jakarta to the West Flood Canal, has frustrated flood control efforts.

Meanwhile, the reclamation of the northern coast is expected to control the tide, another major contributor to the flooding.

In 2002, Jakarta experienced its worst flood, which affected most of its 36 districts, killing 30 people and leaving more than 300,000 people homeless. The floods also paralyzed the capital's infamous traffic for days.

"I also urge Jakartans not to build houses along riverbanks, as such structures will impede the flow of the rivers," Sutiyoso said.

City Public Order Agency head Soebagio, who is also secretary of the city's disaster mitigation agency, said the rainy season would reach its peak in December and January.

"We have identified at least 78 locations across the city that are vulnerable to flooding," he said.

The administration is organizing a week-long campaign from October 6 to October 12 to raise public awareness and participation in disaster management.

News & issues

FBR blocks ITC Cempaka Mas, demands jobs for locals

Jakarta Post - October 14, 2004

Jakarta -- Traffic along Jl. Letjen Suprapto in Central Jakarta was in complete chaos on Wednesday morning, as hundreds of members of the Betawi Brotherhood Forum (FBR) blocked off the entrance to the International Trade Center (ITC) Cempaka Mas.

Thousands of employees of the shopping center were left standing outside on the street for almost four hours, while motorists simply turned off their cars' engines and got out of their vehicles to watch the proceedings.

Dozens of police officers were also present at the scene, sitting on the sidewalk. None of the FBR members responsible for the chaos and inconvenience were arrested.

The FBR blocked off the shopping center to force the ITC's management into giving jobs to the group's members. "We wrote several letters to the management telling them to pay more attention to locals, but the letters were ignored. So we blocked off the building and, Alhamdullilah [praise Allah], the management was willing to speak with us," FBR leader Fadloli El Muhir said.

The ITC management invited FBR representatives to a meeting on Thursday to discuss the group's demands. "We have not calculated the losses we suffered as a result of this action, but certainly trading was halted for several hours," ITC Cempaka Mas spokesman AJ Sutaktanto was quoted as saying by Antara news agency.

He said he did not know if the shopping center's management had received any letters demanding jobs for FBR members.

In a brief meeting on Wednesday, the FBR renewed its demand that the group's members be given jobs in the parking, security and cleaning departments. The management said it would consider the demand, but also asked the FBR to keep in mind that employees had to meet certain standards.

One of the FBR representatives who attended the meeting on Wednesday, Hari, said that if the two sides failed to reach an agreement, the FBR would continue to "persuade" the shopping center's management. "We won't blockade the shopping center again. We will just send representatives for further dialog," Hari said.

ITC Cempaka Mas, generally regarded as the city's busiest trade center, has 5,700 shops selling all types of goods. The 25- hectare trade center also houses 620 shop-houses.

Next government must tackle economic woes: Survey

Jakarta Post - October 13, 2004

M. Taufiqurrahman, Jakarta -- The administration of president- elect Susilo Bambang Yudhoyono must make tackling the economic problems afflicting the country's most needy as its top priority if it wants to stay the course for the next five years, an independent survey revealed on Tuesday.

The Jakarta-based Indonesian Survey Institute (LSI) in its post- election survey revealed that over 60 percent of respondents wanted to see Susilo's administration tackle the economic problems that have plagued the country since 1997.

"Forty seven percent of respondents said that high prices of basic commodities concerned them most, while another 21 percent stated that unemployment was the most crucial issue," the survey said.

For the survey, the LSI interviewed 1,200 respondents in the country's 32 provinces, including strife-torn Nanggroe Aceh Darussalam and Maluku, between October 2 and October 4. The margin of error is 2.9 percent.

The survey also found that 48.1 percent of respondents considered the country's economic situation as being very bad, against 37.3 percent who said that conditions were normal.

The Susilo administration will likely have to work hard to justify any move to cut fuel subsidy spending, which has reached an astronomical Rp 62 trillion (US$6.8 billion), as 25.5 percent of respondents wanted the government to maintain fuel price stability as part of its main economic priorities during its first 100 days in office.

The chronic corruption that has plagued the country for decades did not seem to bother the respondents, however, with only 5.7 percent of the respondents saying they considered it the most pressing problem facing the new government.

The public also showed little interest in seeing Susilo's government put terrorism at the top of its list. "Only 1.3 percent considered that terrorism is the most crucial issue the country has currently to deal with," the survey said.

LSI chief researcher Sjaiful Mujani said that Susilo did not have to listen to everything the public said. "Raising the fuel price would be a difficult decision as the public will surely oppose it, but on the other hand the amount of subsidy spending is already too burdensome for the state budget. However, he could compensate for the fuel price hike with a stepped up drive against corruption," he said.

He said that public resentment against fuel price hikes could be allayed by taking legal action against suspected corruptors. "He needs to apply shock therapy," Sjaiful said.

Economist Rizal Ramli said that Susilo's administration should concentrate its efforts on mitigating the economic woes that afflict the most needy if it wanted to see out its 2004-2009 term.

"President Megawati Soekarnoputri lost the election because her administration only focused on fiscal stability, which in fact has little to do with the ordinary people's well-being," he said.

Susilo, who won the September 20 election in a landslide victory, will assume the national leadership on October 20.

Children face tight competition for space

Jakarta Post - October 13, 2004

Leony Aurora, Jakarta -- One afternoon, a bunch of children were kicking around a ball in an empty field when suddenly a woman -- clad in training pants and clutching a cassette of dance music -- arrived.

The young football players fled. "Women keep on using this place for aerobics," they told architect John Fredy Bobby Saragih, who was conducting research in the area. "And they're not getting any thinner."

Sidelined as they were, these children are luckier than most as places to play in the city are scarce. Another park that Saragih visited had a "children's playground" sign, but had gradually been taken over by becak drivers as a place of rest and relaxation.

"City kids of poor families tend to play on the roads and river banks," said Saragih at a seminar on child-friendly cities, organized by the Indonesian Children's Welfare Foundation (YKAI), Pelangi Foundation, and Bina Nusantara University, on Tuesday.

United Nations Children's Fund (Unicef) data shows that at present, 43 percent of Indonesians under the age of 18 live in cities. This figure is predicted to rise to 60 percent by 2025.

Unicef says a "child-friendly" city allows children to express their opinions and thus help to influence the administration's decisions. They should receive proper health, education and sanitation services, and be safe to walk in the streets.

They also have the rights to open green areas, to meet and play with friends, and live in an unpolluted environment. "We don't have to actualize all these things at once," said Hamid Patilima of YKAI.

The concept of child-friendly cities was first acknowledged at the City Summit in Istanbul, Turkey, in 1996. It has been introduced in Indonesia by YKAI since May 2004. Calcutta in India adopted the concept by focusing on street and working children and introduced "child-friendly police".

Andi Rahmah, a researcher with Pelangi, suggested the government provide bicycle lanes for children to ride to school. Communities could also commit to driving slowly in housing complexes. "The probability of an accident being fatal, if a vehicle is moving slower than 15 kilometers/hour, is only 5 percent," she said.

Saragih asserted that when playgrounds are combined for other purposes, "the law of the jungle applies. The weakest will lose, and kids usually do." Parks should be near children's homes, which would also help ease parents' anxiety, as they could easily monitor their loved ones.

Outdoor activities develop children's motor skills, as well as promote self-confidence and social interaction, said psychologist Fitriani Syahrul. But youngsters from mid- and high-income families usually spend their time at home playing computer games, or go to malls, which could encourage consumerism, she added.

Jakarta, says Agung Sukaton of the City Parks Agency, "is just not suitable for children." With at least 10 million inhabitants, the standards for a "child-friendly" city are too high, he said, adding that the capital's ideal population would be more like 5 million.

Environment

Haze disrupts flights in Central Kalimantan

Jakarta Post - October 17, 2004

Jakarta -- Thick haze began disrupting flights in Central Kalimantan province on Saturday, with an airplane from PT Dirgantara Air Service (DAS) reportedly rerouted after it was unable to land at Beringin Airport, North Barito regency, due to dangerous visibility levels.

Meanwhile, thick haze also was still blanketing other areas in Kalimantan and Sumatra islands, disrupting schools and forcing local residents to stay at home.

The DAS plane departed from Banjarmasin airport in South Kalimantan in the morning, but the pilot canceled his plan to land at Beringin Airport after visibility near the airport was only 700 meters.

A minimum safe level of visibility for pilots is generally 2,000 meters. When there is no haze visibility can exceed 10,000 meters.

The pilot of the Casa 212 aircraft, with a 21-seat capacity, flew over the airport twice to seek an opportunity to land, before finally aborting the landing.

The pilot decided to turn around and flew back to Banjarmasin, about an hour from Beringin Airport, Antara news agency reported.

Erny, an employee with DAS in Banjarmasin, said that there were 12 passengers on board, and due to the problems, they were offered to fly for free on the DAS flight on Monday.

The Beringin Airport authorities later announced that the haze had lightened to a relatively save level of visibility in the afternoon, and other flights were able to land.

Separately in Barito Kuala regency, South Kalimantan province, many residents chose to cancel outdoor activities due to the choking haze. Only a few motorists were seen on the streets of Marabahan, a usually bustling suburb of Banjarmasin.

Meanwhile in Palembang, South Sumatra, the thick haze began disrupting teaching activities in many universities and schools, including Tridinanti University. Memeng, a student at the university, complained that haze had permeated the classrooms, causing breathing and eye irritation problems all day long. Forest fires, both natural and intentional, have been blamed as the main cause of the debilitating haze emanating from Indonesian Borneo and Sumatra.

It has also become an international problem as the smoke from Indonesia has created dangerous levels of air pollution in Brunei, Singapore and Malaysia.

Thick fumes in West Kalimantan as haze worsens

Agence France Presse - October 16, 2004

Jakarta -- Parts of Indonesia have been enveloped in one of the worst days of haze this year, officials said, as residents donned face masks to ward off thick, choking fumes.

The haze, caused by forest and ground fires across the country, descended on the province of South Kalimantan on Wednesday, reducing visibility and filling the air with noxious burning smells.

"We have had visibility problems because of the thick smoke since early in September, and today is one of the worst smoke attacks," a spokesman for the South Kalimantan airport in Banjarmasin said on Wednesday.

He said that no flights had been affected as the smoke had closed in after morning plane departures, but there had been 20 recorded disruptions to air traffic at the airport since September 1.

Mr Trija of the meteorology station in South Kalimantan said that visibility was reduced to 600m at one point. He said that face masks or wet scarves and handkerchiefs were being worn by people both outside and inside their houses.

Officials blame the haze on fires set by large forest and plantation concession holders, as well as by small farmers, to clear land for cultivation. The practice is illegal but officials find it difficult to enforce the law.

In 1997, and to a lesser extent in 1998, haze from forest fires in Indonesia enveloped parts of South-east Asia for months, causing serious health problems and traffic hazards.

Children demand cleaner city air

Jakarta Post - October 15, 2004

Urip Hudiono, Jakarta -- Wearing face masks and unfurling banners, some 100 students from 21 elementary schools throughout Jakarta made an impassioned plea for cleaner air in the metropolis at the Hotel Indonesia traffic circle on Wednesday.

"A blue sky, fresh air, these are the wishes of the children of this nation!" they chanted enthusiastically under the scorching sun despite passing motorists who did not seem to take notice of them.

As part of the campaign to build people's awareness on air pollution, the students, accompanied by their teachers, started the rally by inspecting the City Environmental Management Agency (BPLHD) air pollution monitoring station located at the traffic circle that showed a high level of pollutants.

The campaign was organized by Clean Air Partnership (MEB) -- a forum of local environmental organizations -- in cooperation with the Jakarta Elementary Education Agency, BPLHD, and international environmental organizations Swisscontact and Transmedia.

Audrey, 10, a fourth grade student of SD Regina Pacis, said that she enjoyed taking part in the campaign and hoped that Jakartans will eventually hear their call.

"I hope I can use all that I've learned from the program to teach others about the importance of clean air for all of us," she said.

MEB chairman P. Soeseno explained that Wednesday's event was the culmination of a series of campaign programs on promoting clean air that the group had been conducting since September.

"We have to start raising awareness among the public now, especially children, because air pollution has a long-term effect," he said. During the campaign program, MEB held presentations on clean air to the students and took them to an automobile plant to learn about proper vehicle maintenance to reduce emission levels.

A questionnaire by MEB revealed that 80 percent of the students and their parents were concerned about Jakarta's worsening air pollution. Some 50 percent pointed out that motorized vehicles were the main cause of pollution, while 72 percent agreed that the public was responsible.

Soeseno further explained that in continuation of the program, MEB will ask several high school students to go out on the streets and act as representatives of promoting clean air.

"Whenever they see a [polluted bus emission], for example, they will put a sticker on it asking its driver to regularly maintain the buses," he said.

Face masks broken out for 'worst' day of haze

Agence France Presse - October 14, 2004

Parts of Indonesia have been enveloped in the worst haze yet this year, officials said as residents donned face masks to ward off thick, choking fumes.

The haze, caused by forest and ground fires across Indonesia, descended on the province of South Kalimantan on Borneo island, reducing visibility and filling the air with noxious burning smells.

"We have had visibility problems because of the thick smoke since early in September, and today is one of the worst smoke attacks," said a spokesman for the South Kalimantan airport in Banjarmasin.

He said that no flights had been affected so far as the smoke had closed in after morning plane departures, but there had been 20 recorded disruptions to air traffic at the airport since September 1.

Officials blame fires set by large forest and plantation concession-holders, as well as by small farmers, to clear land for cultivation. The practice is illegal but officials find it difficult to enforce the law.

In 1997 and to a lesser extent in 1998, haze from forest fires in Indonesia enveloped parts of Southeast Asia for months, causing serious health problems and traffic hazards.

Trija of the meteorology station in South Kalimantan said that visibility was at 1.5 kilometres at midnight GMT, but had dropped to 3,000 metres one hour later and to 600 metres by 0300 GMT.

"There is no doubt that this is from burning activities. You can smell the burning and it is prickly to the eyes," said Trija. He said that face masks or wettened scarves or handkerchiefs were being worn people both outside and inside their houses.

Sumatra and Borneo islands -- which border Singapore and Malaysia -- are the areas usually hardest hit by the choking haze, an annual dry-season hazard in parts of Indonesia.

Health & education

Protest mars UIN inauguration

Jakarta Post - October 15, 2004

Yogyakarta -- A student protest marred the inauguration of the Sunan Kalijaga Islamic State University on Thursday in Yogyakarta, with students calling on the government to prevent education from being commercialized by "irresponsible parties".

The protest was held as Minister of National Education Malik Fadjar was presiding over a ceremony at the university.

In the ceremony, the minister officiated the change of status of Sunan Kalijaga Islam State Institute to Sunan Kalijaga Islamic State University.

With its change of status, the university has two new secular faculties, the school of humanities and science.

HIV/AIDS: A developing crisis in Indonesia

Jakarta Post - October 13, 2004

Meiwita Budiharsana, Ford Foundation David & Joyce Djaelani Gordon, YaKita -- HIV/AIDS is growing at an alarming rate in Indonesia. One of the main ways in which it is spread is through the sharing of infected syringes by injecting drug users (IDUs).

In these three related articles the spread of HIV/AIDS is examined, as well as the role of the police and of corrupt officials in the distribution and circulation of illegal drugs in the country.

HIV/AIDS now infects one new person every 15 minutes, of every day, somewhere in Indonesia. This means there are some 96 new cases per day, 672 per week, 34,944 per year. These figures are growing daily. New infections are documented daily in Jabotabek, Bandung, Yogyakarta, Surabaya, Bali, Makassar, Medan, Bantam, Papua, from Sabang to Merauke.

HIV/AIDS has crashed through the entire governmental protective structure, the defense line of health, welfare, medical institutions and organizations has breached the security of both the police and military, and casts aside beliefs and values of the religious community.

It now threatens the social system from palace to kampung, a foreseeable portion of economic development and stability is in jeopardy, has given rise to another meaning for malu -- a destructive attitude of guilt and shame within the Indonesian culture, and has witnessed "damage" to the heart of many families.

The main "target" of HIV/AIDS is young males and females, sex workers and those having random and unprotected sex, drug abusers and addicts, those in jail and large quantities of those employed in large-scale industrialized businesses and migrants/transients.

That means millions are in jeopardy, as they are open and vulnerable targets to HIV/AIDS. And from those who are highly at risk, and become infected, they are the ones that most often pass the virus to the unsuspecting multitudes of others. These include wives and lovers, boyfriends and girlfriends, and those in casual and sexual relationships.

If the government is unprepared to produce a workable defense against HIV/AIDS, it means the entire medical community is unprepared to meet the needs and treatment of those stricken with HIV and AIDS, and related illnesses and problems. In turn, that means the entire "school system" is without proper or adequate educational instruction, data, materials and instruction.

Taking all this into account, it means "much" of the entire Indonesian population is wide open, nearly defenseless, against the spreading HIV/AIDS pandemic.

In the mid-1990s only a few thousand were recorded as infected with the virus; by 2000 it was tens of thousands; today, hundreds of thousands.

"Education" must be targeted at the general population, families, the most reasonable and responsible lines of defense. Fathers and mothers must lay aside their embarrassment and fear of the unknown, stop stigmatizing and discriminating, learn the truth between fact and fiction, and realize that HIV/AIDS must be declared a family and community issue.

Putaw (low-grade heroin) and shabu-shabu (methamphetamine) are presently the two main choices for drug abusers and addicts, throughout most populated areas, across the nation. Both are injectable. Injecting is the most efficient way to transfer the virus. Unprotected sexual intercourse is the second-most effective way to transmit the virus. Young people are attracted to drugs and drug culture because of fun and the thrills.

Sex is part of the fun, excitement and thrill, and is in large part why the young are attracted to drugs.

Only a few short years ago, we, as a nation, ignored the possibility of HIV/AIDS being harmful to our population. Then, as we began counting the infected, we thought it would only infect and affect "gays, the unclean and outsiders". Then, as it spiraled rapidly upward, we thought it would mostly infect drug addicts, prostitutes and those at the bottom of the economic ladder.

Today, as a horrible homage to the reality we are praying that we lose only one generation of young people, not two (or more).

The discovery of students, young women and men in the universities infected with HIV/AIDS has been shocking and has brought rapid attention to parents and the parental community -- parents who only a few years ago did not even know what HIV/AIDS was.

Parents, multitudes of parents, from Sabang to Merauke, are now seeking help and advice on HIV/AIDS. Yet reliable and definitive advice remains elusive for most of the nation; doctors, hospitals, specialists, experts and medication are all still haphazardly scarce.

Parents and those in authority, religions, educators and the War on Drugs all say "Don't use drugs!" yet multitudes of people around the world still use drugs, while the War on Drugs lost position and respect a decade ago.

The supply reduction approach says "stop trafficking, dealers and production, destroy crops and laboratories that produce the drugs, and put the dealers in prison or execute them, enact more reliable legislation".

Demand reduction says "produce more information, education, communication, hotlines, peer programs, counseling, outreach, treatment, 12-step programs, advocacy".

Harm reduction says, "teach people about the effects of drug abuse and people will be more sensible about how they use them, what they use, and with whom they use them.

"They will adopt a common sense attitude ... Establish more risk reduction programs, testing & counseling, treatment & clinics, hospitalization, therapeutic communities, HIV/AIDS education, hospices, family aftercare".

All the reduction programs are sensible, well-structured, wizened by time and experience, and well-known worldwide, yet ... while each "reduction" approach has achieved some success, in reality the success is found to be minimal.

Afghanistan and Myanmar (and Colombia and Mexico) are growing more heroin-producing poppies than ever before. Putaw is easily located and purchased (because of well-developed trafficking routes and systems) in most densely populated areas of Indonesia.

Use of ecstasy and shabu-shabu is rapidly increasing with young people. (Both ecstasy and shabu-shabu are now being produced, in large quantities in Indonesia.) More and more (mostly young) people are becoming drug users, as growing numbers of young people, from junior high school age, are turning to drugs for fun and excitement.

More marijuana and alcohol is being used than ever before across the nation.

More outreach, recovery, treatment and aftercare programs are available than ever before, yet residencies are declining in many treatment centers and facilities due to high costs, relapse and lack of aftercare plans & programs.

More individuals are being convicted of crimes, directly related to drugs and being sentenced to prison than ever before.

Low awareness among medical professionals is obviously shown by their limited knowledge of the meaning of terms like "user", "abuser", "junkie", "IDU", "CD 4 count", "anti-retrovirals", "detoxification", etc. All these are "words" that need definition, education and training to realize and understand when confronting HIV/AIDS and issues related to the virus.

Many opportunities are missed when some clients and/or IDUs who are HIV-positive, are not informed of their status and are sent home without any counseling or adequate information regarding testing and treatment alternatives.

A few weeks ago a 28-year-old man died of cancer, caused by AIDS-related complications. A few weeks ago a 24-year-old woman, who was six months pregnant, died of AIDS, so did the unborn child. A couple days ago a young man of 21 years died of AIDS. A month ago, a couple, both with HIV, and both taking anti- retrovirals, gave birth to a child. Now is the waiting time to see if the baby will be infected with the virus.

Young people with HIV and AIDS are getting married ... Some of the partners know their partner is infected with HIV, and marry for love and wanting to be with the partner under any and all circumstances. Others marry, yet do not know their partner is infected with the virus (often the parent knows, but ... does not say anything to the partner or the partner's parents).

At present there is no hospital in Indonesia directly devoted to work with those infected with HIV/AIDS (or Hepatitis). Testing sites for HIV/AIDS remain limited across the nation. Confidentially remains an issue of anxiety and significance.

The spread of tuberculosis (TB), as a result of AIDS is increasing rapidly. TB is airborne, which means anyone can become infected. TB is transmitted like a cold or flu.

Each of us must do our part, learn about HIV/AIDS, confront the issue and related issues at home, and in our own communities. Yayasan Harapan Permata Hati (Yakita) is a non-governmental organization involved in drug prevention and the rehabilitation of drug addicts.

Bali/tourism

Foreign and local tourists flock back to Bali island

Jakarta Post - October 17, 2004

Rita A.Widiadana, Denpasar -- The number of foreign tourists visiting Bali has continued to increase over the past few months, thanks to the improved security situation.

The deadly terrorist attack that hit the resort island in October, 2002, scared away not only foreign tourists, but also local visitors. The number of foreign tourists started to increase in January this year, and continued to rise in the following months.

"We see some light at the end of the tunnel. We are now starting to receive more booking and inquiries from travel agents around the world, who had previously excluded Bali as a major destination for their clients," explained I Gede Adhita, Sanur Beach Hotel's marketing and communications manager.

Soon after the Bali bombings, travel agents from Europe and the United States, particularly, excluded Bali as a prime holiday destination.

"Things are getting better. With a conducive political and security condition, we expect that the hotel and tourist industry in Bali, and other parts of Indonesia, will enter its recovering period smoothly," he said.

Regardless of the security condition over the last two years, Bali is still regarded as one of the world's favorite destinations, as stated by a recent survey conducted by Time Asia.

It is encouraging to see European and American travelers returning to Bali. Although Japan, Australia and Taiwan still dominate Bali's tourism market, tourists from other countries, including from Southeast Asia -- such as Singapore and Malaysia -- have begun to flock back to Bali.

The tragedy dramatically changed the island's tourist industry, which had focused on the traditional market, like Europe, the United States, Australia and Japan.

In recent years, the market shifted to regional countries, as well as the new emerging market, including Russia, China, the Middle East and South America. The domestic market, which was previously ignored by many star-rated hotels on the island, also became a target of campaigns to promote Bali.

Renata Hutasoit, director of business development at the Grand Hyatt in Nusa Dua Bali, said that the number of local guests continued to increase. "We received more guests from Jakarta, Surabaya and other big cities in Indonesia, in addition to our overseas clientele," said Renata.

She said the Grand Hyatt was increasingly receiving bookings for corporate meetings (MICE). "Even after the bombing in Kuningan, Jakarta, we still get inquires from overseas tour groups," she said.

Similarly, The Westin Resort, also in Nusa Dua, experienced better business this year. Today (Sunday), the Westin is hosting more than 800 employees of Japan-based Teraoka Seisakusho, Co.Ltd., as part of the company's 70th anniversary celebrations.

The strengthening of the hotel industry here is evident in the surge in occupancy rates over the past nine months. The majority of star-rated hotels in Kuta, Nusa Dua, Ubud, Sanur areas reported an occupancy rate of between 60 percent to 90 percent since last June, as compared to 30 percent to 60 percent in the same period of last year.

Wiwin Ong, director of sales and marketing at Hotel Padma Bali in Kuta, said that the hotel's occupancy rate was now more than 90 percent. "We anticipated the flood of customers, especially domestic clientele in the coming Idul Fitri holiday and year-end holiday," she said.

Deddy Sasmita, marketing and communications manager at the Hard Rock Hotel in Kuta, shared this optimism. "Hotels in Kuta are usually fully booked in the holiday season. Hard Rock Hotel is popular with young executives as well as families who are young at heart," he said.

Visitors to Bali have plenty of choices when it comes to hotels. The island provides abundant accommodation to suit everyone, from backpackers to wealthier tourists. Kuta is the best place for those looking for nightlife, while Nusa Dua and Jimbaran areas are good choices for honeymooners.

Tanjung Benoa now has a number of luxury hotels, like The Conrad Bali. "We have been doing tremendous business since the opening of the hotel early this year. Our average occupancy rate reaches 80 percent, but we are still offering interesting packages for Idul Fitri, Christmas and New Year holidays," said Anastasia Lijadi, director of communications at The Conrad.

In addition to these favorite spots, Ubud is a must-see place in Bali, particularly for art lovers. Ririn Setyowati, executive secretary of Alila Ubud in Payangan, Gianyar said business had been steady in 2004. "We mostly serve European guests and only a few domestic ones," she added.

Hoteliers in Bali are confident that tourists are no longer afraid to mark the island as the top location on their travel itineraries.

Two years on, Bali revival defies doomsayers

Asia Times - October 13, 2004

Gary LaMoshi, Denpasar -- On October 12, 2002, bombs targeting nightclub revelers along Jalan Legian in the heart of Bali's Kuta Beach resort killed 202 people, mainly Western tourists. At the time, experts predicted that Indonesia's US$5.4 billion tourism industry would need a decade to recover.

Sure, Bali has gentle tropical weather, a varied landscape of beaches, volcanoes and verdant rice paddies, plus a unique ancient Hindu culture that makes it the island of a thousand temples. But after terrorists attacked visitors at the pyramids of Luxor -- also a good drawing card for sightseers -- it took 10 years for Egypt's tourism numbers to recover. Experts said Bali, facing a host of nearby competing destinations, would be lucky to match that rebound.

Two years later, Bali tourism is setting new records, with nearly 150,000 direct foreign arrivals in July alone. "The volume of tourists returning certainly has surprised the industry," Bali Hotels Association chairman Robert Kelsall admits. "Everyone is achieving above their expectations for 2004."

Dramatically defiant

Bali's recovery has defied expectations in many ways. For one, the visitor mix behind the record arrival numbers has changed dramatically. Security has improved, but even new threats that have emerged over the past two years haven't deterred visitors. Moreover, Bali hasn't changed the character of its tourism, which wins acclaim as the world's top island destination, despite post-bomb talk of scaling back growth and giving Balinese a bigger say in how their island is exploited. Instead, the Conrad and Westin hotel brands have come to the island, bringing hundreds of new rooms to fill and employees to support.

The record rebound relies on regional visitors coming to Bali to spend several days in place of tourists from Europe or North America spending several weeks. Japan retains its traditional spot as Bali's top source of tourists, with Taiwan and South Korea following this Japanese fashion, as they do so many others.

The other major contributor to the rebound is the most likely suspect, and also the biggest surprise: Australia. Record numbers of Australians streamed into Bali during July and August.

More than the Western esthetes of the 1930s who admired Bali's arts and culture, it was Australian surfers who put the island on the tourism map. Bali holds the same place in Australian travel culture as Florida or the Caribbean in the eastern US and the Spanish or Greek islands in Europe. An estimated one out of 10 Australians has visited Bali. "Australians see Bali as their own back yard and have a close affinity for Bali," says Kelsall, an Australian who likely shares that sentiment.

Australia's September 11

Kelsall is also general manager of the Bali Dynasty Resort in Kuta, located not far from the site of the October 12, 2002, attack by Indonesians that cost the lives of 88 Australian tourists and has become part of the political culture the way September 11, 2001, has become ingrained among Americans. Even though the bombings took place in a foreign country, Kuta is physically closer to the Australian cities of Darwin or Perth than New York or Washington is to Los Angeles or Denver.

Since the Bali bombs, Indonesia has been the site of two further terrorist attacks against Western targets, most recently last month's bombing at the Australian Embassy in Jakarta. Yet Australians seem undeterred from visiting. "There has been very little from the Jakarta bomb and next to no cancellations," Kelsall reports. "The travel warnings are regarded by Australians as political, and they feel they could be at risk in Australia just as much as in Bali."

Those Australian government warnings urge avoiding non-essential travel to Indonesia. But the government concedes that attending Tuesday's dedication ceremony of the new Kuta memorial, a blackstone wall engraved in gold with the 202 names of those killed, may be essential travel to some. Local officials are preparing for hundreds of survivors plus family and friends of victims to attend the dedication.

Since the bombings, police, the hospitality industry and the Balinese community have all taken steps to improve security. Cracking the bombing case helped restore confidence in the police. They've become a much more visible and welcome presence, overcoming their poor reputation as bribe-hungry parasites.

Immediately after the 2002 blasts, hotels instituted gate checks, searching vehicles with mirrors and other devices. Vigilance has tended to wane over the past two years, with revivals whenever a new blast occurs or threat levels are raised. Local Balinese councils, known as banjar, keep closer tabs on outsiders living in their areas, while avoiding backlash against Muslims that seemed likely in the bombing aftermath. (Balinese are almost exclusively Hindu, while other Indonesians, including many tourism-industry workers, are overwhelmingly Muslim.)

Safer than Jakarta

"Security is a bright spot," observes the author of Jakarta Jive, Jeremy Allan, who moved to Bali weeks after the bombings to write a book about them. "I feel much safer here than in Jakarta, which is one of the reasons I have not moved back," he says.

Kelsall takes a different approach. "I don't think security is the main issue any longer," he says. "People have come to accept that wherever they are in the world, there is a risk from terrorism." That seems to be evident by several recent events. The annual visit of the women's pro tennis tour last month, just days after the Australian Embassy attack, featured current Grand Slam champions Anastasia Myskina and Svetlana Kuznetsova, a coup for a lower-rung tournament. Top players come for Bali, not the prize money and points on offer. This week, international literati gather at the Ubud Writers and Readers Festival, where the biggest security concern is protecting elderly novelist Pramoedya Toer from overenthusiastic admirers.

Nevertheless, security issues are one reason behind the sluggish recovery among Western visitors, Bali's biggest spenders. Government travel warnings remain in place from the United States, and Britain only recently removed its advisory on Bali. Those warnings may not scare individual tourists, but they can deter conventions and business meetings as well as group tours because of insurance issues.

But the biggest government roadblocks to bringing back Western tourists come from Indonesia. In February, the government revised visa rules for tourists. Previously, visitors from all but a handful of countries could get a 60-day visa upon arrival in Indonesia for no fee. Now, none of Bali's major sources of tourists enjoy that privilege. Lucky visitors can pay $25 for a 30-day visa when they reach Indonesia. But prospective tourists from countries including the Netherlands, Sweden and Spain need to obtain a visa in advance from an Indonesian embassy or consulate, a distinct disincentive (see Visa changes darken Bali's happy holiday recovery, January 17). In addition, Indonesia's state airline Garuda has underscored the move away from Europe by ending flight services to that continent.

Nevertheless, Bali's recovery seems to getting along quite well without Europe and the Americas. Improved security helps, but that's not the real reason. Days after the Kuta bombs, renowned landscape architect Made Widjaya, who came to Bali from Australia as Michael White three decades ago and stayed, summed up why his adopted island would bounce back: "Next to L-O-V-E, the four most magical letters in the world are B-A-L-I."

[Gary LaMoshi, a longtime editor of investor rights advocate eRaider.com, has also contributed to Slate and Salon.com. He has worked as a broadcast producer and as a print writer and editor in the United States and Asia. He moved to Hong Kong in 1995 and now splits his time between there and Indonesia.]

Islam/religion

Indonesia's nightspots to close for Ramadan

Associated Press - October 16, 2004

Jakarta -- The Islamic fasting month of Ramadan started yesterday and the Indonesian entertainment industry is grumbling over local edicts to close nightclubs, massage parlours and amusement centres for the entire period.

Jakarta masseur Rini Widowati said she would observe the fast, but grumbled about a city order that shut down her establishment. "It sucks," Ms Widowati said, adding that although she would continue to get her basic salary, she would not earn any of the tips that make up most of her pay.

During Ramadan, observant Muslims refrain from eating, drinking, smoking and sex from dawn to dusk. Indonesia -- the world's most populous Muslim nation -- maintains a secular tradition. Most of its 180 million Muslims are moderate and tolerant of other faiths.

Observance of the fast here is less widespread than in the Middle East. Restaurants can open during the day, though most hang thick curtains over their windows.

But that secular tradition has come under pressure from conservative Muslim groups since the downfall of former president Suharto, and some see moves to stop nightspots opening during Ramadan as part of this trend.

Under Jakarta's decree, issued in 2002, all of the city's thousands of massage parlours, freestanding nightclubs, bars and karaoke rooms have to close for the month. Discos in five-star hotels can stay open but with limited hours. The same curb applies to restaurants featuring live bands so long as they serve alcohol "discreetly". Administrations around the country have issued similar edicts.

Some have taken the enforcement of the ban into their own hands. In 2001, Islamic militants launched nightly raids on clubs that flouted the ban during Ramadan. But since the 2002 Bali bombings, those groups have disbanded amid a crackdown on extremists.

It is unclear how effective this year's ban will be. City officials and police, who are responsible for its enforcement, are notorious for taking bribes in exchange for turning a blind eye.

In the seedy Blora nightclub district of central Jakarta, a handwritten notice hanging on the door of one bar announces it will be closed for just three days. Aphrodite Bar and Restaurant, which is popular with foreigners, has covered up its trademark statue of the nude Greek goddess of love with a silk cloth -- but plans to open as normal.

But some bar and restaurant owners say they are undaunted by the government restrictions, or the possibility of threats by militant groups. "It's a nuisance," said a cafe owner on Jaksa Street, a popular haunt of foreign backpackers. "But I refuse to change my business. Everyone has a right to his freedom."

Life gets slower on first day of fast Jakarta

Jakarta Post - October 16, 2004

Semarang/Medan/Banda Aceh/Indramayu -- Millions of Indonesian Muslims, who account for some 85 percent of the total 220 million population in the country, began fasting dawn-to-dusk on Friday, the first day of Ramadhan.

As usual, schools were closed and government offices were largely empty at the beginning of the fasting month, while activities on streets slowed down, with little traffic congestion.

The ritual went peacefully despite mounting demands earlier from Muslim activists nationwide that government and businessmen shut down amusement centers, nightspots and red-light areas during Ramadhan and the Idul Fitri holiday.

In Semarang, the capital of Central Java province, almost all schools were closed from Friday to Saturday, including Christian and Catholic schools. The schools were closed from order by the Semarang municipal education office.

Ah Lun, an elementary school student at Don Bosco Catholic elementary school here, however, had no idea about the holiday. "Our teacher simply told us that we had to study at home from Friday to Saturday," he said.

Government offices in Semarang, Banda Aceh and Medan were empty at 9 a.m, with few government employees to be seen.

High ranking government officials were apparently indifferent over the attitude of their subordinates that may cost public services. The leaders understood that their subordinates had to get up at dawn to break the fast meal, or sahur, so that slow activities were allowed on the first day of Ramadhan.

"They were late probably because they had to do a lot of preparations during Ramadhan, as in attending the evening prayer tarawih, reciting the Koran or the morning prayer, subuh.

"We understand that the activities have slowed down on the first day of Ramadhan," said Abdillah, the Mayor of Medan municipality, in the capital of North Sumatra province.

He added that he would not immediately impose sanctions to those Muslim civil servants who came late or even skipped the office on the first day of Ramadhan. He only called on them that fasting should not dampen their productivities. "It is acceptable for the first day, but after that, they have to resume work at the usual pace," he said.

In Aceh province, thousands of fishermen took a holiday on the first day of Ramadhan. This has been a tradition that they did not go to sea on the first day of fasting, moreover people mostly chose to buy meat rather than fish for sahur. In the meantime, they chose to repair their nets and boats.

Slow activities were also seen in traditional markets in the city of Semarang, including the Jatingaleh market, where traders began opening their stalls at 9 a.m and immediately left the markets some four hours later.

In stark contrast, offices of private companies were seen bustling on Friday, which seemed like a normal working day.

While government leaders in Medan and other cities were indifferent over the attitude of their subordinates, the case was different in Indramayu regency, West Java province. Here, officials at Public Order Agency in Indramayu apprehended on Friday, 112 civil servants with the regental government administration for playing truant on the first day of Ramadhan. They were nabbed in shopping malls, amusement centers and other public places during the day.

Safrudin, the chief of the Indramayu Public Order Agency, said that the strict measure was aimed at cleaning the image of civil servants in the regency. The random raid was carried out between 10 a.m to 3 p.m. During the raid, officials at the agency recorded the identity of the arrested civil servants and units where they worked.

The agency would then report the civil servants to their direct superiors, who would later impose some form of punishment to delinquent civil servants.

Muslim groups up pressure to close clubs for Ramadhan

Jakarta Post - October 14, 2004

Sjofiardi Bachyul and Ruslan Sangadji, Padang/Palu -- Thousands of Muslim students and activists held protest demonstrations in various cities nationwide on Wednesday in a bid to pressure the government and businesspeople to close all nightspots and gambling dens during Ramadhan.

The protesters said the closure must be done out of respect for Muslims, who are required to fast during the daylight hours for a month beginning on Friday. The protest in the West Sumatra capital of Padang nearly turned into brawl when a group of some 150 Muslim protesters faced off with another group of people who support an alleged local gambling den baron, Rudy Iskandar, during the protest on Wednesday.

A similar protest was also held in the Central Sulawesi capital of Palu, where dozens of Muslims rallied in front of the office of the Central Sulawesi provincial council.

Calling themselves the Ramadhan Care Movement, the activists demanded the Central Sulawesi governor to close down all nightspots and gambling houses during Ramadhan.

In Palembang, South Sumatra, dozens of students again hit the streets on Wednesday, pressing their demand for the government to crack down hard on entertainment center operators, who planned to stay open during Ramadhan.

According to a central government decree in 1974, gambling dens are prohibited in the country, but in reality, a very large number of gambling dens exist in almost all cities in Indonesia, reportedly because they are backed by powerful security authorities. Brothels and prostitution rings also exist in abundance and allegedly receive similar backing.

Group threatens to raid nightclubs

Jakarta Post - October 12, 2004

Depok -- The Depok chapter of the Islam Defenders Front (FPI) threatened to raid nightclubs if the administration did not close them down during Ramadhan.

In a rally on Monday at the Depok City Hall, the group demanded the administration issue a bylaw banning nightclubs from operating during the fasting month.

They said Ramadhan should be used for religious activities only, and claimed that they had community support for their actions.

The group also demanded that the owners of closed nightclubs continue to pay their employees during Ramadhan.

Armed forces/police

Military's role still haunts public: Research

Jakarta Post - October 15, 2004

M. Taufiqurrahman, Jakarta -- Despite the growing democracy over the last six years, the people still harbor deep concerns over the role of the military in public life, which they say has spurred the prevalence of violence, a study has found.

In the preliminary report of a study presented on Thursday by human rights watchdog Demos, 83.3 percent of respondents said the Indonesian Military (TNI) and the National Police were not accountable enough to the civilian government and the greater public.

The study also found that 88.9 percent of respondents were of the opinion that the government was susceptible to outside interference from paramilitary units, militias and groups of thugs, all of which they claimed were linked to elements in the military. "As a result, 75.5 percent of respondents said they were vulnerable to violence," it said.

The study interviewed 400 respondents consisting of non- governmental organization (NGO) activists, members of political parties and other politically conscious community figures across the country's 32 provinces as part of an ongoing project to gauge the extent of democratic development.

The study also found that the concept of security was "still defined as a state- or territorial security that takes precedence over human security, which covers universal human rights," the report said. The House of Representatives recently endorsed the controversial military bill, which it said would help transform the TNI into a professional military. However, the enacted bill did not address the abolition of the TNI's territorial role.

Asmara Nababan of Demos said no significant changes had been made in the relationship between the TNI and the civilian government, as the political stage was still dominated by the political elite, who were reluctant to implement sweeping reforms.

"Instead, those from the old regimes, including the military, were able to secure strategic positions in government without counterbalancing measures from the pro-democracy movement," he said.

Asmara said as the existing political system could not diminish the role of the military overnight, the public needed to be given a role in the decision-making process on the use of military force.

"People must be involved in the decision-making process at all levels. Such a role must be played the whole time, not just once every five years," Asmara said, referring to the span of time until the next election year. He said the people should be consulted at every step during the decision-making process.

Analyst Andi Widjajanto of the University of Indonesia concurred with Asmara and said the civilian government must impose intricate procedures on the use of the military force. "Such procedures would obstruct the arbitrary use of military force," he said, adding that they would also prevent the military from accumulating greater power.

Convicted police to walk free

Jakarta Post - October 14, 2004

Urip Hudiono, Jakarta -- The Central Jakarta District Court sentenced on Wednesday eight officers from the Central Jakarta Police's riot squad to three months and 12 days in prison for assaulting student protesters in February.

However, the convicted officers will walk free as the sentence is exactly the same as the amount of time they have already spent in detention. The officers are expected to return to the squad.

The defendants -- first privates Joko Prasetyo and Siswanto, and second privates Ahmad Juli Nasution, Amin Septadi, Dedi Yanto, Didik Kuncoro Kusno, Samri Simamora and Teguh Sukamto -- were arrested in February following the assaults. They have been detained by the prosecutor's office since July.

Prosecutor Jeffri H. said after the trial that he was considering appealing the verdict. Prosecutors had asked for four-month prison sentences for the defendants for violating Article 170 of the Criminal Code on the excessive use of force.

Reading the verdict, presiding judge Suripto said the witness testimony and forensic evidence, including the officers' batons and medical exams of the victims, were sufficient to find the defendants guilty as charged. "The defendants are guilty of collectively and overtly using excessive force against others," he said.

The panel of judges rejected the defendants' argument that their actions were in accordance with articles 49 and 51 of the Criminal Code on the unavoidable use of force to uphold the law.

In the incident outside the Supreme Court, student protesters clashed with police after the court let then House of Representatives speaker Akbar Tandjung walk free on graft charges. "The defendants disobeyed orders to practice restraint and not use violence against the students. Obviously, they did not do their duty," Suripto said.

The judges, however, took into consideration that the defendants pled guilty and had never before been convicted of a crime. The defendants said they would accept the sentence, as well as the requirement that they pay a trial fee of Rp 1,000 (11 US cents) each.

Police dishonorably discharge seven junior officers

Jakarta Post - October 12, 2004

Evi Mariani, Jakarta -- The newly installed Jakarta Police chief, Insp. Gen. Firman Gani, dismissed seven low-ranking officers during a ceremony on Monday, the first mass dishonorable discharge ceremony this year. The police chief's orders for the dismissals were issued on October 5.

Spokesman Sr. Comr. Tjiptono revealed that five of the seven were dismissed from the force for involvement in extortion and "arresting" suspects without warrants.

The five were now serving time in various prisons for violating Article 368 of the Criminal Code on extortion and Article 126 of the Military Justice Code on acting in contravention of procedures.

The five were identified as First Brig. Muharyanto from the North Jakarta Police, First Brig. Indra Utama the from Jakarta Traffic Police, Second Brig. Dedi Asnadi from the South Jakarta Police, First Brig. Efriliziar from the Central Jakarta Police and First Brig. Fauzi from Jakarta Police Headquarters Detachment. First Brig. Agus Pranoto Karya from the South Jakarta Police was dismissed for possessing an unlicensed firearm, while Second Brig. Bernard Yunior Sapulete from the North Jakarta Police was dismissed for drug abuse.

During the discharge ceremony, the dismissed officers handed over their police uniforms and badges, and chang into civilian clothing. The police dismissed 80 low-ranking officers in 2003.

"The ceremony shows that we are committed to a better police force, and that every violation conducted by police officers will be punished," Tjiptono said.

As regards sanctions against police officers, the internal affairs department have a range of options ranging from dismissal without a pension to demotion.

Ryamizard move bad example: Experts

Jakarta Post - October 12, 2004

Muninggar Sri Saraswati and Kurniawan Hari, Jakarta -- The question of Army chief Gen. Ryamizard Ryacudu's appointment as acting Indonesian Military (TNI) chief must be resolved immediately as it sets a bad precedent for the institution, analysts say.

Outgoing President Megawati Soekarnoputri appointed Ryamizard as acting TNI chief after Gen. Endriartono Sutarto resigned from the post.

The appointment of Ryamizard as acting TNI chief has raised concerns among the public as the four-star general already holds two other positions -- commander of the Army and commander of the Army Strategic Reserves Command (Kostrad).

Analysts Edy Prasetyono of the Centre for Strategic and International Studies (CSIS) and Yahya Muhaimin of Gadjah Mada University said that the situation demonstrated poor management both in the military and the government. "It's an abnormal situation. How can a person hold three important positions?" Edy told The Jakarta Post on Monday.

According to Edy, the arrangement would put the military in a difficult situation as the three positions have different duties. "The function of a chief of staff is to train soldiers, while the function of Kostrad commander is to lead military operations under the TNI chief. It is clear that the TNI chief, who must lead all three services, should not be the same person. Otherwise it will confuse the chain of command within the military," he said.

Edy also said that the appointment of the TNI chief was a political matter as it needed the approval of the House, unlike a chief of staff, who could be appointed by the president, or the Kostrad commander, who was appointed by TNI headquarters. Under the prevailing regulations, the TNI chief is appointed by the president with the approval of the House.

According to Edy, the holding of three different positions by a single person shows that the TNI leadership had failed to groom leaders and promote outstanding officers.

Yahya concurred with Edy that the appointment of Ryamizard as Kostrad commander and acting TNI chief reflected poor management within the military. He suggested the TNI headquarters appoint another military officers to take the helm of Kostrad and the Army immediately should the House endorse Ryamizard's appointment as TNI chief. "This is an unusual situation [where a military officer holds three strategic positions]. The issue should be resolved soon," Yahya told the Post.

The House agreed on Monday to bring Endriartono's resignation and the appointment of his successor to a plenary meeting this coming Friday (October 5).

Both Edy and Yahya suggested that the government and the President keep on track in developing a truly professional military by removing it from politics. "This situation teaches us one important lesson. That is, any decision involving the military must be made based on national defense considerations," Edy said without elaborating.

Endriartono, who reached the mandatory retirement age of 55 two years ago, had reportedly tendered his resignation to Megawati just weeks before her administration officially came to the end of its term on October 20.

Neither Megawati nor TNI headquarters explained publicly the reasons behind Endriartono's resignation, which came days after the conferring of the rank of full four-star general on acting coordinating minister for political and security affairs Hari Sabarno and National Intelligence Agency chief A.M. Hendropriyono by Megawati.

Analysts call for TNI chief from Air Force

Jakarta Post - October 12, 2004

Kurniawan Hari and Tiarma Siboro, Jakarta -- Several analysts are calling for the appointment of an Air Force officer as the Indonesian Military (TNI) chief to replace Gen. Endriartono Sutarto, the Army general who resigned from his post last week.

Salim Said of the University of Indonesia and Indria Samego of the Indonesian Institute of Sciences (LIPI) argued on Monday that the Army, Navy and Air Force were supposed to be equal and therefore they should also be given the chance to lead the TNI on a rotating basis.

Prior to Endriartono's appointment by President Megawati Soekarnoputri in 2001, the TNI chief post was occupied by Widodo A.S., a Navy admiral, who became the first Navy chief to get the top post in more than three decades. However, Megawati appointed last week Army chief Gen. Ryamizard Ryacudu as acting TNI head.

During former president Soeharto's iron-fisted leadership -- he was also an Army man -- from 1966 to 1998, the TNI post, then called the Indonesian Armed Forces chief, was reserved exclusively for the Army.

Most people in the country expected that Megawati, who became president after the People's Consultative Assembly ousted Abdurrahman "Gus Dur" Wahid in 2001, would appoint an Air Force officer as her military commander, but she appointed Endriartono instead.

"An equal rotation among the three military branches would be fair because technically each of the three is equal," Salim Said told The Jakarta Post Monday.

Indria suggested that a fair leadership rotation among the Army, Air Force, and Navy should begin now, before legislation that requires such a rotation goes into effect. In the new military bill the House of Representatives (DPR) endorsed on September 30, lawmakers agreed to insert a clause saying that the post of TNI chief be may be rotated among the Army, Navy and Air Force.

The bill will come into effect 30 days after its endorsement, with or without the President's signature.

Discussions on who should get the military's top post surfaced late last week following the decision by Megawati, whose term ends in eight days, to appoint Ryamizard as the TNI chief following the resignation of Endriartono.

Ryamizard's appointment has raised questions on whether Megawati should have left such an important decision to president-elect Susilo Bambang Yudhoyono.

Under the Constitution, the president, who also serves as the supreme commander of the country's military, has the authority to appoint the TNI chief pending House approval.

House and party leaders held a consultation meeting on Monday to discuss Ryamizard's appointment as acting TNI chief. At the end of the meeting, the leaders agreed to bring up the resignation of Endriartono and the appointment of Ryamizard at a plenary meeting on Friday, October 15. House Speaker Agung Laksono said that Endriartono technically was still the TNI chief until the House made its decision.

Separately, Susilo and vice president-elect Jusuf Kalla discussed Endriartono's resignation on Monday. The closed-door meeting was also attended by current Minister of Justice and Human Rights Yusril Ihza Mahendra and former TNI commander Adm. (ret) Widodo A.S. Speaking to the press after the meeting, Yusril said that the resignation of Endriartono was still being discussed at the House, and therefore Endriartono remained the TNI chief.

Meanwhile, TNI spokesman Maj. Gen. Sjafrie Sjamsoeddin said on Monday that his office had sent out telegrams declaring that Endriartono was still the TNI chief. "As long as the discussion in the House is still in the process, the chain of command of TNI remains in the control of Endriartono until the appointment of the new TNI chief," he said.

Military ties

Australia considering new security treaty with Indonesia

Associated Press - October 17, 2004

Australia is considering talks on a new security treaty with Indonesia to replace a pact abandoned during the bloody fallout from East Timor's independence ballot in 1999, Foreign Minister Alexander Downer said Sunday.

The previous treaty, which Downer described as "a fairly meaningless document" was abandoned along with joint military training exercises after Australia led United Nations peacekeepers into East Timor to end a rampage by Indonesian military-sponsored militias, angered by the former Indonesian province's vote for independence.

Australia was weighing a new treaty that would build on a memorandum of understanding on counter-terrorism signed by Prime Minister John Howard and former Indonesian President Megawati Sukarnoputri in 2002, in response to the September 11 attacks on the United States, Downer said.

"If you were to negotiate a new treaty with Indonesia, I think you'd want to incorporate those counter-terrorism provisions currently in the MOU," he told the Nine Network. "We haven't made any commitment yet to negotiating such a treaty, but it's something that we are giving consideration to." Howard will attend the inauguration of Susilo Bambang Yudhoyono, Indonesia's newly elected president, in Jakarta on Wednesday.

Downer said it was unlikely Howard and Yudhoyono would discuss in detail a new security treaty, or the government's plan to base Australian counter-terrorism police in Indonesia and elsewhere in Southeast Asia. Yudhoyono said during a visit to Australia last year the two countries should revive the previous treaty in the interests of counter-terrorism.

Downer said he thought the Australian government would have a good relationship with Yudhoyono during his presidency. "He's committed to taking a strong stand against terrorism, against [Southeast Asian terrorist group] Jemaah Islamiyah," Downer said. "He's committed to having a very productive, a very constructive relationship with Australia."

Opportunity missed to restore military ties: Boyce

Agence France Presse - October 11, 2004

Jakarta -- Indonesia missed an opportunity to restore military ties with the United States by failing to make its soldiers accountable for abuses in East Timor, the outgoing US ambassador said Monday.

"I consider it a misgiving on my part that I'm leaving without having normalized mil-mil relations because it was there to have," Ambassador Ralph Boyce told reporters.

"So that's a regret on my part but it's not a regret because we didn't do something. It's a regret because the Indonesians didn't take the opportunity," said Boyce, who ends a three-year term here on October 22 before taking up a new posting in Bangkok.

United States officials have repeatedly expressed their disappointment at the outcome of Jakarta's human rights tribunals set up to try military, police and civilian officials accused of abuses in connection with East Timor's bloody 1999 separation from Indonesia.

In August, the Indonesian supreme court overturned the ad hoc tribunal's conviction of four Indonesian security officers, meaning that no members of the security forces were found guilty of rights abuses in East Timor.

Only two of the 18 original defendants stand convicted, and both are East Timorese civilians. Adam Ereli, deputy spokesman of the State Department, has said the process "was seriously flawed and lacked credibility."

Military cooperation with the United States was sharply reduced in 1999 when Congress in Washington passed the so-called Leahy Amendment during the East Timor turmoil.

Under the Leahy Amendment, assistance is suspended until certain conditions are met, including effective measures to bring to justice members of the armed forces and militia groups suspected of rights abuses.

"After three years we have not in fact substantively changed our relationship with [the Indonesian Armed Forces] all that much because the much-touted East Timor ad hoc trials on human rights violations didn't produce anything," Boyce said.

The United Nations alleges that the Indonesian military and militias it created murdered at least 1,400 people before and after East Timorese voted in August 1999 for independence. They also deported about 200,000 people to Indonesian West Timor and destroyed close to 70 percent of all buildings in the territory, according to UN prosecutors.

Restoration of military equipment assistance depends on accountability over the East Timor abuses while funds for military education have hinged on another case, the ambush killing of two Americans in Papua province two years ago.

Indonesia expressed hope in June that the Papua case was no longer an obstacle after the US decided to charge Anthonius Wamang, a Papuan separatist rebel, with the killings.

The decision vindicated the Indonesian military following allegations they were involved, the Indonesian foreign ministry said.

Bush favors aid for Indonesia, critics balk

Scripps Howard News - October 12, 2004

Lance Gay, Washington -- Two years after a terrorist explosion killed 202 people at a resort in Bali, the Bush administration is weighing increased support for Indonesia in the war against terrorism. The moves have brought objections from both liberal and conservative groups concerned that the archipelago's corrupt military has not been reformed and is guilty of notorious human rights abuses including murders and rapes on some of the 13,000 islands that make up the nation.

On Tuesday, 45 members of Congress -- including Reps. Christopher Smith, R-N.J., and Patrick Kennedy, D-R.I. -- said that although Indonesia has made significant progress in adopting political reforms that resulted in the election this month of a new president Susilo Bambang Yudhoyono, the human rights record of Indonesia's military is so bad they cannot support any new military assistance to the country.

"We have grave concerns over the prospects for real military reforms," the lawmakers said in a letter to Secretary of State Colin Powell, urging the administration to hold back plans to ask Congress for an expansion of military assistance to Indonesia.

The Bush administration has not yet officially unveiled its proposal for Indonesia, to be included in the 2006 budget that will be sent to Capitol Hill next February. But Gen. Richard Myers, chairman of the Joint Chiefs of Staff and a former commander of the US Air Force in the Pacific, said he favors restoring American military relations with Indonesia.

Myers argues that rebuilding a relationship with Indonesia's military would help build stability in the region and assist the United States in the fight against terrorism.

Initially, Indonesia denied that it was being used as a base by Jemmah Islamiya terrorists with connections to al Qaeda in Afghanistan. But that all changed October 12, 2002, when an explosion at a Bali nightclub killed 202 people, followed by terrorist attacks on the Australian Embassy in Jakarta and attacks on Western businesses on other islands.

With the help of American, Australian and international police organizations, the Indonesian government increased the powers of its civilian police to crack down on terrorists and last year adopted emergency decrees. The United States funneled $17 million into programs to train police and establish an Indonesian counter-terrorism unit responsible for rounding up 109 terrorists blamed for the violence.

Congress has blocked Bush administration proposals to expand that funding to include Indonesia's military forces. The Clinton administration stopped all direct US military assistance, including spare parts for Indonesia's F-16 jets, after the military led a crackdown against the independence movement in East Timor in 1999.

Terrorist analysts with the Center for Defense Information in Washington estimate there are more than 10,000 members of the militant Muslim group Laskar Jihad operating in Indonesia.

Karen Orenstein, Washington coordinator for the East Timor Action Network, a group composed of human rights groups lobbying against any new military aid, said reforms of the Indonesian military needs to be in place before America commits to giving the country any new weaponry.

She said people responsible for violations of human rights in East Timor and other human rights violations remain in control of the country's military.

Despite political reforms in Indonesia, the military raises much of its income from a range of illegal and semi-legal means, including prostitution, drug dealing, logging and trafficking in people, she said.

"All military assistance should be withheld until there is justice for human rights," she said.

Dana Dillon, an analyst with the conservative Heritage Foundation, said there has been "an extraordinary transition" in Indonesia's politics in the last six years. Since Indonesia deposed the dictator Suharto in 1997, it has adopted dramatic political reforms that produced the third free election held since Indonesia declared independence from the Netherlands in 1945. The new government takes office October 20.

Dillon said the United States should link any resumption of direct military aid to continued success with the reform program, and ensure that any assistance is withheld if there is backsliding.

Business & investment

Rupiah to strengthen, keep inflation in check

Jakarta Post - October 16, 2004

Jakarta -- The central bank expects the rupiah to strengthen against the US dollar leading up to the year-end on the back of a better economic outlook and high hopes for the new government of Susilo Bambang Yudhoyono.

Bank Indonesia deputy governor Aslim Tadjudin said on Friday that the stronger rupiah would help keep inflationary pressure in check at a time when demand for food items and goods is on the rise during the year-end festive period.

"There is a positive perception of the new government that it will be able to boost the economy," he said, adding that the market was now awaiting the announcement of the Cabinet lineup.

"Hopefully the new president will form a Cabinet that is acceptable to the market." Susilo, to be sworn as president on October 20, has pledged to boost economic growth and stamp out flourishing graft -- all needed to help tackle the problems of chronic unemployment and poverty.

Another factor that would help the local currency to strengthen is the US' whooping trade and budget deficit deficits, he added. On Thursday, the US government announced its 2004 budget deficit at US$413 billion, a record high -- which would eventually affect the performance of the greenback, Aslim added.

He said both internal and external factors would help keep the pressure off the rupiah, which has fallen by more than 7 percent so far this year. Last week, Aslim also said the local currency would strengthen to below 9,000 per dollar by the end of the year. The rupiah closed on Friday at 9,100 a dollar, unchanged from the previous closing.

Aslim added that the stable rupiah would help contain the inflation level in the next three months, during which demand for goods would rise in line with religious festivities -- including the fasting month of Ramadhan, Idul Fitri and Christmas.

"It has to be supported by the government's decisive moves to secure the supply of all goods so as not to put extra pressure on the prices," said Aslim.

Assuming there are no disruptions in supply and distribution of goods, coupled with a relatively stable rupiah, Aslim expects inflation in the last three months of the year will be limited to 2.2 percent.

If it materializes, it would mean that the full-year inflation would stand at 6 percent, lower than the 7 percent target as set out earlier by the government and the central bank. The Central Statistics Bureau (BPS) reported inflation at 3.8 percent in September.

The country would need a low inflation rate to soften the strain on the central bank in increasing the interest rate on its benchmark promissory notes -- which may otherwise hurt growth prospects as loans for economic activities would become less affordable for businesses.

The huge fuel subsidies: How to bite the bullet

Jakarta Post - October 15, 2004

Martin Jenkins, Jakarta -- In Indonesia, much debate has recently centered on how the government should tackle the problem of rising fuel subsidies as the price of crude oil on the international market moves ever higher.

At first glance, one may wonder how the government will cope. After all, fuel subsidies are now set at Rp 63 trillion (US$7 billion) for 2004, far higher than the initial target of Rp 14.5 trillion. This increase is based on a higher oil price assumption of $36 per barrel vis-a-vis $22 per barrel previously to reflect the latest price movements on the international oil markets. Yet even this assumption may prove to be too optimistic given the rising price of oil, which has even exceeded the psychologically significant level of $50 per barrel in recent weeks.

However, the higher fuel subsidies only give rise to a much more modest increase in the budget deficit (to Rp 26.3 trillion compared to the Rp 24.4 trillion previously estimated. As a percentage of gross domestic product (GDP), this is only an increase from 1.2 percent to 1.3 percent. After all, the modestly higher deficit can easily be plugged -- either through foreign or domestic financing. And the size of the deficit is unremarkable: it is well below the 3 percent maximum budget deficit limit imposed on European Union countries, for example.

But is it really good policymaking to continue to heavily subsidize fuel? From a social and environmental perspective it is not. The fact is that just as consumers of yesteryear puffed on cigarettes unaware of the health risks involved, the general public today is deluded into believing that these subsidies are good for them. They could not be more wrong.

Firstly, fuel subsidies are largely enjoyed by the rich -- especially car owners of course. The unfairness of the fuel subsidy policy can be seen in the fact that the more gas thirsty your car is, the more you benefit from fuel subsidies! If you are fortunate enough to own a large SUV or luxury saloon you will be benefiting considerably from the fuel subsidies.

At the current gasoline selling price of Rp 1,810 rupiah per liter, each motorist is probably being subsidized around Rp 2,600 rupiah for each liter of fuel they consume (assuming that premium gasoline if unsubsidized would sell at Rp 4,400/liter). If a Jakarta motorist consumes say 200 liters of gasoline in a month, then they are being subsidized to the tune of Rp 520,000 rupiah/month, or more than the national monthly minimum wage in most provinces of Indonesia!

In addition, fuel subsidies do not encourage conservation of what is ultimately a scarce and nonrenewable resource. When a liter of fuel costs less than a liter of mineral water from the local supermarket what is the incentive to use fuel in a frugal manner? It should also not be forgotten that the burning of fossil fuels causes massive damage to the environment. Take a look at Jakarta. The huge number of vehicles on the city's increasingly congested roads has made the nation's capital city one of the most polluted cities in the world. Ultimately we all suffer through health problems such as respiratory ailments not to mention the stress from sitting in soul-destroying traffic jams day after day.

Is this what we want for our children? As such, many governments around the world take the decision to tax fuel, and to tax it heavily. The substantial proceeds that can be raised through these taxes can then be used to develop a decent, clean and efficient public transportation system -- something that Jakarta's long-suffering residents would certainly benefit from.

Another concern is that higher fuel subsidies provide an even greater incentive to smugglers who stand to make handsome profits by illegally exporting fuel products to neighboring countries such as Singapore. Given Indonesia's vast coastline and poor law enforcement it is likely that a lot of subsidized fuel leaves the country this way.

But even though fuel subsidies are misdirected, unfair, costly and lead to the misuse of a scarce resource, the government still has to be very careful in how it goes about eliminating them. To simply discontinue the policy of subsidizing fuel would most likely lead to disaster. Why would this be so?

Firstly, inflation would soar. According to economists at Danareksa Research Institute (dRI), inflation would rise by 0.70 percent for every 10 percent increase in the price of fuel. If then, the fuel subsidies were immediately eliminated and say the price of gasoline doubled (a conservative assumption given that premium gasoline is sold at Rp 1,810/liter, or way below its current estimated market price of around Rp 4,400), Indonesia's annual inflation rate could conceivably rise from between 6 percent and 7 percent to an astonishing 13 percent to 14 percent.

Higher inflation -- especially in transportation prices -- could have devastating consequences. Strikes, public protests and even riots could easily ensue, as was the case when the IMF advised former president Soeharto to hike fuel prices sharply as the financial crisis unraveled in 1998.

The decision to hike fuel prices contributed significantly to the social and political unrest that brought about his downfall. Nigeria is another good case study: That country saw widespread chaos when its government tried to end subsidies on refined oil products in 2003.

And with the higher inflation, it should also be realized that the cost of financing government floating rate bonds (which total around Rp 225 trillion) would also increase dramatically. As such, the government might not save as much as it had at first expected by taking the decision to end the fuel subsidies.

Besides surging inflation, such a severe shock on the economy -- arising from hiked fuel prices -- would likely hammer investor confidence. This could lead to plummeting share prices on the Jakarta Stock Exchange and a run on the rupiah as capital flows out of the country. All in all, the economy would be badly hit and the current upward growth momentum could be lost.

Given these considerations the government appears to be stuck between a rock and a hard place: Lifting the oil subsidies at once would likely lead to social unrest and economic catastrophe whereas maintaining the subsidies is inappropriate given they are misdirected, costly and ultimately unsustainable.

As such, the best solution may be to take the middle way: That is to lift subsidies gradually and in phases, but not too quickly, so as to avoid a large shock on the Indonesian economy but also to ensure fiscal sustainability. dRI's model shows that a 20 percent cut in the size of fuel subsidies each year for five years would mean that the nation's budget would be in good shape in the coming years.

In addition, better targeting of subsidies and educating the general public to appreciate that fuel needs to be used frugally are also very important.

But even though higher fuel prices are inevitable, people have little reason to complain. After all, it does not make much sense if fuel is cheaper than water, does it? The writer is Market Analyst at the Danareksa Research Institute.

Number of big spenders increases: AC Nielsen

Jakarta Post - October 14, 2004

Zakki P. Hakim, Jakarta -- More Indonesian consumers enjoyed a higher purchasing power this year, spending money on various household goods despite rising political tension during the recent seven-month-long general election, according to AC Nielsen's latest survey released on Wednesday.

The consulting firm said that the number of people categorized as "A" spenders (highest category) increased to 12 million, or 15 percent of the population, compared to 12 percent last year, in nine major cities.

"The 'A' consumers in Indonesia is four times that of Singapore's population," said AC Nielsen Southeast Asia managing director Farquhar Stirling at a forum attended by the company's corporate clients. Singapore has a total population of approximately 2.8 million.

Stirling said this group spent more than Rp 1.75 million (about US$192) each month on various fast-moving goods such as food items, washing and cleansing products, and fuel products, but excluded car and house purchases.

Analysts have said that the relatively mild inflation and low interest rate environment have improved consumers' purchasing power, creating robust domestic consumption, which has been the main engine of the country's economic growth during the past few years as investment and export performances remain weak.

Higher economic growth this year, projected to reach 4.8 percent from 4.1 percent last year, also bodes well for consumers' purchasing power.

The strong domestic consumption has allowed consumer goods producers and retailers in the country to enjoy strong sales growth.

AC Nielsen director of retail and business development Yongky Surya Susilo said that retailers were now projecting double-digit sales growth from an estimated 9 percent average growth this year.

AC Nielsen said the percentage of "B" spenders, that spent between Rp 1.25 million and Rp 1.75 million on household items monthly, had also increased to 15 percent of the combined population in the areas surveyed, from 13 percent last year.

"The 'B' spenders still represent people with a considerably high purchasing power," Stirling said.

The survey showed that the number of people spending below Rp 800,000 per month generally decreased over the year, he said.

"Under the current environment [meager economic growth rate], consumers are still increasing their spending. Imagine, how much more they could spend if the government improved our gross domestic product [GDP] per capita to the average level in the region," he said.

Yongky said that consumers' purchasing power this year would be affected if the new incoming government decides to increase fuel prices later this year as suggested by lawmakers to help reduce soaring the costly fuel subsidy spending.

He said that the government should wait until January. "Nevertheless, Indonesians are fast in adapting with price increase. They usually need three months at the most to adapt, and then business as usual," said Yongky.

Tax uncollected

Jakarta Post - October 14, 2004

Taxation Director General Hadi Purnomo's estimate of Rp 676.5 trillion (US$74.34 billion) in potential tax revenue lost annually during the past three years seems to be too high -- a sum 240 percent larger than the Rp 272.17 trillion tax receipt target set for this year.

This is not, however, to deny the blunt truth that tax evasion has always been pervasive in this country, as can be noted from its tax ratio (tax receipts as a percentage against gross domestic product) of only less than 13 percent, compared to between 17 and 20 percent in other ASEAN countries.

Most analysts and tax auditors have estimated that tax collections in Indonesia have remained small in proportion to the potential revenue, or only around 50 percent of corporate and personal income tax and 55 percent of value-added tax.

The main reasons behind the high incidence of tax non-compliance have often been cited. Among them are the small chance and low cost of being caught, collusion with corrupt tax officials and the inadequate number of competent tax auditors.

However, Purnomo, speaking at a seminar on Tuesday, cited another major factor behind the pervasive tax evasion. He said many laws and regulations severely restricted the access of tax officials to records of financial transactions, which had enormous potential tax revenues.

He said the government could in theory collect annually Rp 252 trillion in tax receipts from bank deposits, Rp 243 trillion from foreign exchange transactions, Rp 180 trillion from bad loans and Rp 1.5 trillion from credit cards. But these potential tax revenues cannot be collected because tax officials are unable to check the records of financial transactions.

The tax chief seemed to be frustrated about the acute lack of cooperation on the part of other government institutions with regards to the tax officials' access to verify taxpayers' financial records.

Although access to records of financial transactions may sometimes be meaningless in a country where documents or records can so easily be falsified, Purnomo did have a legitimate point.

Large sums of additional tax revenues, whether from income, value-added or property taxes, could have been collected had tax officials had a broad authority to corroborate or cross-check records on taxpayers.

For example, taxpayers may understate their taxable income with fake documents. However tax officials can still uncover tax underpayment by verifying the taxpayer's records of electricity or phone bills, car ownership and other assets. But this verification is possible only when tax officials have access to taxpayers' records.

Tax officials' inability to cross-check taxpayers' income data with their records of expenditure and current (financial) and fixed assets is indeed one of the main reasons behind the pervasive tax evasion or tax underpayment.

However, instead of only blaming conflicting rulings in several laws and regulations and the uncooperative attitude on the part of other government agencies, officials in the taxation directorate general should ask themselves why the government has not yet vested tax officials with so broad an authority to open records on various financial transactions.

The reason is an extreme lack of trust. International and national opinion polls have always placed the taxation directorate general, along with the customs directorate general, among the most corrupt public institution in the country.

As long as the taxation directorate general has not improved its integrity through a more efficient, transparent administration tax system, there will always be strong political opposition to providing tax officials with wider access to taxpayers' records, fearing that such power would be abused.

In fact, the business community has been complaining of what they consider is too much discretionary power in the hands of tax officials to interpret and enforce the tax laws.

Certainly, these issues should be among the problems to be addressed by the proposed amendments of the 2000 tax laws that are slated to be enacted later this year. This should not, however, mean the law amendments should provide tax officials with automatic, unlimited access to taxpayers' financial records and transactions.

Tax officers do need bigger authority to open taxpayers' financial data, to detain tax evaders and to foreclose on the assets of tax evaders but only in relation to investigation of tax crimes and selective tax audits.

But a broader and stronger authority should be accompanied by higher standards of accountability and should be supervised with clear-cut rules that stipulate stringent requirements tax officials have to meet to be able to open taxpayers' records on income, spending and assets. This means that the authority to open data on taxpayers should be used only sparingly and only when there were strong suspicions of tax evasion or other forms of tax crimes.

Democracy on a high, but tough choices loom

Jakarta Post - October 14, 2004

Satish Mishra, Jakarta -- In a country in the midst of record open unemployment, partially brought about by sharp declines in development spending, it would be surprising if the economy did not figure prominently in the new President's inaugural speech.

The fact that he recently completed his doctoral dissertation on the economics and politics of fiscal policy in the alleviation of poverty and unemployment, may lead one to suppose that he may take more than a passing personal interest in economic issues.

What would all this mean for the economy? This is one of those rare instances when the question is more complicated than the answer. The reason is that many who show such keen interest in posing such questions to future policy makers already presume to know the right answer. High on the list of such persons is the common garden variety of macroeconomist, brought up on a diet of monetarism, fiscal rectitude and above all an unshakeable belief in the virtues of macroeconomic stability.

Concern from this quarter about the economic trajectory of post October 20 Indonesia, when the new President is sworn in, reflects a fear of populism, of political pressures on economic decision making, of election promises, that if implemented, might blow a hole in the budget. Macroeconomic stability would be threatened. The careful work of the last seven years might be put back. If taken too far, Indonesia might even find itself at the edge of another financial precipice.

But questions about the country's economic future do not just come from trained macroeconomists. They come from the army of vendors lining the streets of Indonesia's cities, from the women flocking to the pasars for bargains, from teachers in pesantrens and madrasahs, from lowly paid urban workers, from government civil servants, from junior soldiers and policemen, from farmers cultivating tiny scattered plots of land, from fishermen and boatmen, from the unemployed young seeking to fight boredom and despair. In fact, the most searching questions about Indonesias economic future come not so much from trained economists but from precisely those who gave the future president his overwhelming political mandate.

Here is, therefore, the policy dilemma. Not keeping promises made to the public risks a deep-seated disenchantment with democracy. Taken to the limit it may risk political chaos or retreat into autocracy. Keeping election promises, on the other hand, might unleash the specter of angry markets, fleeing foreign investors and distraught macroeconomists. If translated into low investment and growth, the state may be deprived of the very resources it might need to expand public services and win support for sustained institutional reforms.

This seems to be a no win situation for any new administration. The choice seems to be between macroeconomic stability, bought by fiscal and monetary restraint and low levels of public expenditure, or between higher budget deficits and consequent inflationary pressures. The only way out of the trap is to either increase domestic revenue or borrowing through government bonds or to attract larger levels of foreign investment or aid.

The prospects for higher levels of foreign aid are slim. This is not just because of the already record increase in the levels of foreign official loans and grants at the outbreak of the crisis. It is also because of latent resistance against more foreign aid. Insensitive policy conditionalities are partially to blame. But so is the impression that foreign aid's greatest contribution has been to bail out Indonesia's richest banks and organized businesses.

Foreign investment and commercial borrowing abroad is a possibility but is mired in the mysteries of what constitutes an effective strategy of raising investor confidence. Road shows advertising Indonesian reform successes might be an obvious way of drawing the attention of potential investors. It will do little to answer more searching questions relating to political stability, social violence, legal uncertainty and bureaucratic red tape.

It seems as if we are in an impasse. If popular expectations are unmet we risk political disillusionment and the politics of intolerance. If they are, we risk budgetary insolvency and economic decline. Muddling through might mean unleashing both of the above dangers at the same time. It may simply accelerate the advent of Indonesia's next economic and political unraveling.

What is the appropriate policy response in such circumstances? What can a president brought to power on the crest of a new wave of public hope and expectation do in the face of such difficult policy choices? How this question is answered might well set the tone of his entire presidency.

The fuel subsidy can be cut, but perhaps by not too much, the airport passenger tax can be abolished, identity cards might become easier to obtain, a national anti-corruption day announced, high profile foreign dignitaries might be invited to the Presidential palace. All this will serve to distract the public. It is unlikely to win its confidence and prepare it to stand by its president in the difficult days to come.

A second possible response is to use the political honeymoon period to push through a series of organized "unpopular" reform measures. Poland's Balcerowicz did. Why not Indonesia's Susilo? The answer is stark in its simplicity. Poland had a dissident movement, a government in waiting, a clear set of alternative programs. This is something still missing in Indonesia which has a patchwork quilt of political reforms, high levels of public frustration and little more than a fragile macroeconomic stability on which to build a robust economic recovery. Unlike Balcerowicz's Poland, Indonesia is already in the seventh year of its transition.

The right response is that which comes naturally to the president elect. That is to trust and empower the people, to explain the policy choices facing the country, to present a vision and a road map for the future. In short, he must find a way of managing expectations by opening transparent and honest lines of communication and public dialog.

Only then will he be in a position to tackle two of the most critical challenges facing his administration; the construction of a strong democratic state, one that can govern as well as liberate, and the building of a national consensus on the preferred pattern of income distribution compatible with popular notions of social justice. Democratic consolidation and laying down the structural foundations of social justice and peace remain the most critical tasks of the Indonesian transition.

These national objectives must be set by the democratic political process. The door is then open for technical specialists to find out the best way of achieving them. That will enable the president elect to do what has eluded Indonesian policy makers so far: Find a way of putting the horse before the cart.

[The writer is Head/Chief Adviser of UNSFIR (a joint project of Government of Indonesia and UNDP). The views expressed here are strictly personal.]

Top CEOs change their spots to bite Mega from behind

Jakarta Post - October 14, 2004

Rendi A. Witular, Jakarta -- A recent remark by outgoing President Megawati Soekarnoputri that she has been deserted by most of her close circle following her defeat in the presidential election to her former security chief Susilo Bambang Yudhoyono may not be far from the truth.

A number of chief executive officers (CEOs) of prominent, publicly listed state-owned enterprises (SOEs), who had been installed by the Megawati administration, have criticized her administration's policies to improve the performance of the country's SOEs.

During a seminar held by the Blora Center, a think tank that supports president-elect Susilo, Bank Mandiri president director E.C.W. Neloe criticized the Megawati administration for what he termed its recklessness in selling stakes in some state- controlled banks.

"To help spur economic growth of between 6 percent and 7 percent, the role of the state banks will be crucial. Thus, it is unwise to disrupt or sell them as the state will have no tools left to support financing," said Neloe.

Neloe also questioned the aims of the current government in selling shares in SOEs, a program that he said only benefited foreign institutions and reduced the opportunities for domestic institutions to participate in the economy.

"There is policy inconsistency here. State banks are forced to privatize, but at the same time the government wants us to increase our capital so that we can become international player," he said.

Neloe's critics opposed his stance when he supported the government's sale of some 20 percent of the government's stake in Bank Mandiri via an initial public offering in July, 2003, in which 69 percent of the offered shares were purchased by foreign institutions.

Neloe did not complain when the proceeds of the privatization only contributed some Rp 2.7 trillion to the state, lower than many had expected.

Neloe was not the only state sector bigwig at the seminar. He was accompanied by the president director of state-owned telecommunications firm PT Telekomunikasi Indonesia (Telkom), Kristiono, and the president director of PT Pos Indonesia, Alinafiah.

The three CEOs, who are normally more accustomed to attending seminars in luxury hotels, came down to earth somewhat by deigning to accept an invitation from the Blora Center to discuss the problems of SOEs at its headquarters, a small, cramped house on Jl. Blora.

During the seminar, Kristiono said the government as the controlling shareholder of SOEs had failed to strictly supervise and control the operations of SOEs, thus leading to a lack of responsibility on the part of SOE managements.

"The performance of the SOEs is poor because the controlling shareholder is not strict enough in supervising their managements. This is different from the private sector where there is a rigid policy of reward and punishment," said Kristiono, who refused to accept responsibility when Telkom was hit by an accounting scandal late last year.

Kristiono suggested the next government keep those SOEs that were strategic for the public and state in public ownership, and to entirely sell off those that were not strategic, such as SOEs engaged in the construction and hotel businesses, to investors.

He also urged the government to dissolve the Office of the State Minister for State Enterprises within the next five years as it was ineffective in managing the country's SOEs, and to replaced it with a holding company like Temasek in Singapore.

Several analysts attending the seminar said that the criticism voiced by the CEOs, who were formerly close confidants of Megawati and her inner circle, showed that they were now trying to curry favor with Susilo so as to be left undisturbed in their posts.

"They are opportunists who have abandoned their ousted patron to seek favor from the incoming powerholder in order to maintain their current positions, or secure better ones," said an analyst on condition of anonymity.

Donors to help SBY govt boost investment

Jakarta Post - October 14, 2004

Tiarma Siboro, Bogor -- Representatives of the Consultative Group on Indonesia (CGI) met with president-elect Susilo Bambang Yudhoyono on Wednesday in an apparent show of support for the incoming government.

Susilo's spokesman, Dino Pati Djalal, said the closed-door talks centered on, among other things, programs to boost foreign investment in the country.

Representing the country's main foreign donor institution were US Ambassador Ralph L. Boyce, Japanese Ambassador Yutaka Iimura and World Bank Country Director for Indonesia Andrew Steer.

"We all believe that the programs will eventually help the country deal with increasing unemployment," Dino told a media conference attended also by the CGI figures.

Dino, who is also the Ministry of Foreign Affairs' director for North and Central America, refused to go into detail about the programs, saying further talks would be held after Susilo officially took office on October 20.

Susilo will have to tackle open unemployment that has surpassed more than nine million people, partly because of a lack of foreign investment.

However, foreign direct investment approvals rose by 22 percent in the January-September period to US$7.9 billion from a year earlier.

The World Bank has said that investment in Indonesia accounts for only 20 percent of its Gross Domestic Product, which is 10 percent lower than expected.

Security problems, a lack of legal certainty and a corrupt bureaucracy have been billed as the major obstacles to attracting foreign investment to Indonesia.

The CGI is Indonesia's main donor. Last year, it disbursed about US$3 billion to the country.

Earlier in the day, Susilo also received a delegation from the Chinese Communist Party, which was led by a member of the party's politburo, Wu Guangzheng. Accompanying the delegation was Chinese Ambassador to Indonesia Lu Shumin.

Dino said the Chinese delegation proposed programs to enhance bilateral relations in the economic field, but "the president- elect also offered closer relations in the education, culture and technology fields." Susilo and his team continued their discussions on Wednesday regarding the structure of his Cabinet.

Another spokesman for the president-elect, Andi Mallarangeng, said the Cabinet structure would be based on the principles of efficiency and cost-benefit.

Vice president-elect Jusuf Kalla had said earlier that the Cabinet would comprise 34 ministers, including three coordinating ministers.

Mallarangeng said Susilo would take pluralism into account when it came to the selection of his ministers, as well as integrity, capability and acceptability.

"Pluralism will be an important consideration for the president- elect as he wants to confirm his commitment to the national motto, Bhineka Tunggal Ika [unity in diversity]," said Mallarangeng, who is also a political science expert.

Like the previous Cabinets of post-New Order administrations, Susilo is likely to combine politicians (40 percent) and professionals (60 percent). Mallarangeng said Susilo had put back the interviewing of his prospective ministers from Wednesday to Friday.

He also clarified earlier reports that the presidential office under Susilo would not undermine the existing State Secretariat. The office, instead, would strengthen the State Secretariat to help the president run the government.

Earlier another Susilo aide, Denny JA, said the presidential office would deal with various issues ranging from promoting the president's image to evaluating the performance of his ministers.

Cement prices soar in provinces

Jakarta Post - October 13, 2004

Oyos Saroso H.N., Bandarlampung -- The cement shortage in Lampung and Banten provinces, triggered by mechanical problems at the PT Semen Baturaja cement factory in South Sumatra, has propelled the price of the commodity upward.

A sack of cement, which usually sells for Rp 27,000 (US$3), now costs Rp 36,000, or even as much as Rp 40,000 in several areas in Lampung.

Technical problems at Semen Baturaja halted production for 10 days, but the machines were fixed and have been running normally since Saturday.

However, distributors had run out of cement stock and market prices remain high, due to the time it takes to deliver new stock from the Baturaja factory in Panjang district, Bandarlampung.

Baturaja cement is more easily found compared to other brands in Lampung and Banten because of the factory's proximity, but the shortage continues in the two provinces. Baturaja cement is the leading brand in the two provinces.

A Baturaja cement distributor in Telukbetung, Bandarlampung, A Ling, said he still had no cement stock in his warehouse as of Monday. He said his company trucks had been queuing for three days at the factory, but were yet to receive their supply quota.

A Ling also said he was confused about how much he should charge for the new stock, as the wholesale price listed on the delivery order had surged to Rp 33,000 per sack.

A cement distributor in West Lampung, Syarifudin, 40, said he had to buy cement at Rp 33,000 a sack, and was thus forced to sell it for Rp 36,000 to Rp 38,000 to make a reasonable profit.

He said the high manufacturer's price had pushed up cement prices to between Rp 39,000 and Rp 40,000 per sack in remote areas. Meanwhile, a number of construction shops in Tanjungkarang and Telukbetung are selling cement at Rp 35,000 to Rp 37,000 per sack.

The shops' owners said they had to raise prices because their warehouses had emptied of stock, and because they had to queue for a longer time and pay a higher price for cement supplies.

"If we didn't raise our prices, we would suffer a bigger loss if the price of cement suddenly dropped," said Along, 50, owner of Along Jaya hardware store in Telukbetung.

A director of a cement distributor, Sony Aswan, said her company had completely run out of cement stock. "We usually get 10 truckloads of 320 sacks each. Our stock of cement has been completely exhausted for the past 10 days," she said.

She added that customers were constantly angry and accused distributors of hoarding cement to raise the prices. "Actually, we are facing difficulties in obtaining cement," she said.

The construction sector has also been affected by the shortage. For example, construction on a housing estate in Beringin Raya, West Tanjungkarang, was halted two days ago due to the cement shortage.

"We will wait until supplies and prices are normal. If we buy cement at a high price, we are afraid the price of the houses will be higher and the products less saleable," said Aminudin, a housing contractor.

The concern was echoed by Antony, 46, a contractor of a number of shop-houses in Bandarlampung, who said he was forced to stop construction activities temporarily in Central Lampung and Metro.

"The availability of cement is hard to assess right now. Even if there is a supply, the price will be very high. We have to stop the project indefinitely. We feel sorry for the construction workers because the Ramadhan fasting month is just around the corner, and then the Idul Fitri holiday. Where will they get the money to celebrate Idul Fitri?" he said.

Major challenges ahead, reduced oil revenues: IMF

Lusa - October 13, 2004

Dili -- The International Monetary Fund says that East Timor faces "significant economic challenges" and cautions that the new nation's future oil and gas revenues will initially be "substantially less than predicted".

In its annual assessment of Timor released Tuesday and drawn up after consultations with senior Dili officials last month, the IMF notes that Timor continues to experience serious unemployment over two years after its independence from Indonesia.

The world's newest nation, also Asia's poorest, will continue to rely on international donor aid to balance its budget, says the IMF report, which also recognizes that Dili will have to use some of its oil wealth to "meet pressing investment needs for infrastructure and human capital development".

Some of Timor's hydrocarbon earnings, however, will need to be put aside for future non-energy sector investment and Dili's non-oil tax base will have to be broadened over the long term to prevent over reliance on hydrocarbon revenues, says the world financial body.

"Deep-rooted structural problems" including weak infrastructures, low productivity and a judicial system unsuited to the needs of business activity also pose serious obstacles to Timor's development and breaking of its aid dependency, says the IMF.

Meanwhile, Prime Minister Mari Alkatiri has said that details of Timor's petroleum fund will be will be presented for public consultation in coming days days ahead of its expected approval by the Dili National Assembly in mid-2005.

Timor's oil fund plan was announced in November, 2003 and the concept has been borrowed from Norway, which has created a similar body to manage its oil revenues from the North Sea.

In comments to Lusa Wednesday, Alkatiri said Dili's petroleum fund would ensure that Timor's state budgets were subject to "rigorous control mechanisms".

The Timorese leader also commented on last month's negotiations with Australia on disputed maritime borders in the Timor Sea and his government's efforts to get a larger slice of future hydrocarbon revenues from its larger neighbor.

"There is no deadlock. Negotiations have been productive. There has been progress in each round of talks, but we are still a long way from reaching a solution".

A first round of talks on the contentious Timor Sea oil carve up between Dili and Canberra took place in April, resulting in an impasse as Timor pushed for a redrawing of sea borders to a midpoint between the countries as a basis negotiations.

Oil companies involved in Timor Sea gas and oil developments threatened to pull out of projects if Dili and Canberra's dispute dragged on into 2005.

After a second round of talks in September, both governments said they were more optimistic of mutually satisfactory resolution of their dispute.

Susilo told to fix investment climate

Jakarta Post - October 12, 2004

Zakki P. Hakim, Singapore -- Singapore is hopeful that Indonesia's business climate will improve following its successful presidential election, Prime Minister Lee Hsie Loong said here on Monday.

"In Indonesia, a new president is elected. The markets have reacted positively to the election of Dr. Susilo Bambang Yudhoyono as president, and investors are looking forward to an improvement in the business climate," Lee said in part of a speech to open the annual investment and trade forum, the Global Entrepolis @ Singapore (GES) 2004. The five-day event involves some 10,000 participants from 30 countries, including a delegation from the Indonesian Chamber of Commerce and Industry (Kadin).

In a brief meeting later in the day with Kadin chairman M.S. Hidayat and other officials, Lee said he also expected Indonesia would recover from its economic problems under Susilo, who has so far received a positive response from financial markets.

"Next month, the Prime Minister will visit Jakarta to congratulate the new president," Hidayat said, adding that Singapore would soon urge a meeting with senior officials and business players from the private sector of both countries.

Susilo will be sworn in on October 20, when he is also expected to announce his Cabinet. Analysts have said Susilo needed to form a credible and business-friendly Cabinet to indicate to the investment community that he was determined to resolve the various uncertainties that have discouraged investors from entering the country.

Singapore is a major source of foreign investment, which is crucial for accelerating economic growth, but which has been weakening over the past few years.

According to the Investment Coordinating Board, foreign direct investment from the city-state reached US$692.4 million last year through 5,000 companies, making it the fifth largest investor to Indonesia. For the past couple of years, Singaporean firms have been aggressive in buying key local assets. Recent acquisitions include: 42 percent shares in telecommunications company PT Indosat by Singapore Technologies Telemedia; 62 percent shares in Bank Danamon by a consortium led by Temasek Holdings; ownership of Bank International Indonesia by a consortium comprising Temasek and South Korea's Kookmin Bank; and 34.3 percent shares in automotive giant PT Astra International by Singaporean auto firm Cycle & Carriage.

Meanwhile, Singaporean Foreign Minister George Yeo urged in an earlier meeting with Kadin officials that the next government resolve legal uncertainties, complex investment regulations and unfavorable labor laws to attract new investment to the country.

"Investment regulations have been confusing businesses," Hidayat quoted Yeo. Yeo also promised that Singapore would encourage its businesses and their partners to invest in Indonesia if the new government simplified regulations and ensured fair competition.

GES expects to attract more than 3,000 leading executives, entrepreneurs and venture capitalists from across the globe, with high participation from India and China, as well as the US, Japan, Russia, Korea and regional groups from Southeast Asia, the Middle East and the European Union.

Opinion & analysis

Susilo Bambang Yudhoyono: More of the Same

Source Unknown - October 14, 2004

Ben Terrall -- Shortly after being declared victor over Megawati Sukarnoputri, Indonesian President-elect Susilo Bambang Yudhoyono told reporters, Our big theme will be reconciliation and working together within democracy for the country's future. He didn't clarify which social groupings he was referring to.

As Yudhoyono begins selecting his cabinet ministers, Western elites eagerly anticipate a regime that will prioritize business interests and encourage investment along the lines of Washington Consensus IMF/World Bank economic dictates. The Wall Street Journal editorialised about the importance of reformist-minded economic ministers, capable of overhauling labor laws and other restrictive regulations that have done so much to discourage foreign investment. Time Asia elaborated, According to a study by the World Bank, the cost of firing a worker in Indonesia averages 157 weeks of pay, higher than in any other East Asian country except communist Laos. This alleged problem will likely be treated with a sympathetic eye on the bottom line by new Finance Ministry head Sri Mulyani, who spent a year in the International Monetary Fund in charge of Southeast Asian affairs.

Though US mainstream news sources have been recycling tired clichis about blossoming democracy, Jakarta-based Tempo Magazine observed, There will not be many visible changes at the policy level. Susilo Bambang Yudhoyono and Jusuf Kalla are both former coordinating ministers in President Megawati's cabinet who were never heard to disagree with her over policy. The battle in the second round of the presidential election was over differing perceptions of who between the two would be able to implement the same policies-better.

The campaign echoed the US presidential contest in one obvious sense: Yudhoyono s closest advisor admitted, This election is not about policy. This is a popularity contest, so we sell (him) like a brand image. His official campaign website reads: With straight and dignified posture, polite and well mannered with sharp eye sight, that is the profile of Susilo Bambang Yudhoyono (SBY).

As business forecasters Stratfor Global Intelligence noted, Yudhoyono will attempt to retain the appearance if not the reality of full democracy in Indonesia, but his relationship with the military and intelligence communities -- along with the international interest in stability and aggressive counterterrorism actions -- will push Indonesia on a path toward more centralized control and an integrated security apparatus.

Though often described as a military reformer, Yudhoyono, who received training at Fort Benning, GA and the Command and General Staff College at Fort Leavenworth, Kansas, has retained command responsibility during some of the Indonesian military s most brutal operations of the past three decades. He took part in the invasion of East Timor and was a batallion commander there, and during the September 1999 Indonesian military destruction of the soon to be independent territory, he told reporters, "I am worried of opinion being formed in the international community that what happened in East Timor is a great human tragedy, ethnic cleansing or a large-scale crime, when in reality it is not.

Yudhoyono became Megawati's Coordinating Minister for Politics and Security Affairs in August 2000. In that role he advanced her repressive policies in West Papua. In Aceh, despite an official cease-fire, he oversaw the deployment of tens of thousands of troops. As martial law was declared in Aceh in May 2003, Indonesia launched its largest military occupation since the invasion of East Timor in 1975. More than 2000 have been killed since then, most of them civilians.

John Roosa, Assistant Professor of History at the University of British Columbia in Vancouver, Canada, and co-editor of The Year that Never Ended: Understanding the Experiences of the Victims of 1965: Oral History Essays (Jakarta: Elsam, 2004), told me, I don't think the election means much at all. SBY isn't going to do something substantially different than Megawati.

That's the problem. Indonesia is a country going up in flames, literally. It's an extreme situation all around: poverty, ecological devastation, warfare. And the campaign promises from both were empty.

Al Jazeera describes Yudhoyono as staunchly pro-US; the new Indonesian leader was quoted last year as saying I love the United States, with all its faults. I consider it my second country.

It's unclear whether Yudhoyono considers what citizen access is still allowed in Washington one of those faults. But, despite the Indonesian government having procured the lobbying talents of former Viagra pitchman Bob Dole, activists in the US were able to exert sufficient pressure on Congress to achieve the September 23 renewal of existing bans on International Military Education and Training (IMET) and foreign military financing (FMF) for Jakarta.

In a report accompanying the bill which preserves those bans, the US Senate Appropriations Committee expressed dismay and disappointment with the acquittal of Indonesian military officers in connection with the 1999 atrocities in East Timor and the performance and record of the ad hoc tribunal. It also called on the State Department to use its influence with the Government of Indonesia to ensure that international relief, media and human rights organizations have unimpeded access to Aceh, and expressed concern about widespread illegal logging condoned and encouraged by the Indonesian military.

As the US approaches its own Presidential election, it s worth noting some other recent words of censure from Washington. And in the aftermath of Abu Ghraib, the opening of the US State Department's Bureau of Democracy, Human Rights and Labor 2002- 2003 report, while certainly true enough, also applies a bit closer to home: The promotion of democracy and human rights in East Asia and the Pacific has been complicated by the efforts of several Asian nations to legitimize human rights abuses under the rubric of fighting terrorism.

The ASEAN Urea Plant

Jakarta Post Editorial - October 13, 2004

"A mouse dying in a rice barn" is perhaps the most suitable adage to describe the dire condition of PT Asean Aceh Fertilizer (AAF), after the decision early this week by the outgoing administration of President Megawati Soekarnoputri to close down the 570,000-ton capacity urea factory due to an acute shortage of natural gas feedstock.

The Cabinet's decision is not yet a death sentence for the fertilizer plant, as the government must first consult all of the AAF shareholders -- the Indonesian government has a 60 percent share of the company, with the other founding members of ASEAN (Malaysia, Singapore, Thailand and the Philippines) holding the remaining 40 percent.

The condition of AAF is nevertheless absurd as it is located near the Arun gas field in Aceh, one of the world's single largest reservoirs of natural gas, the main feedstock for making urea fertilizer. ExxonMobil, the government-appointed operator of the Arun gas field, has stopped supplying gas to AAF due to dwindling gas production.

The government apparently decided to give top priority to two state-owned urea fertilizer plants (PT Iskandar Muda I and II) located near AAF, and PT Arun NGL, the government-controlled producer of LNG for export to Japan and South Korea.

The decision might make economic sense, because the two Iskandar Muda plants are much newer than AAF, which is already more than 23 years old. More importantly, Indonesia's reputation as one of the world's largest and most reliable exporters of LNG since the late 1970s must be protected. Hence, gas supplies to the Arun NGL plant must receive top priority to enable it to honor its long- term contracts with power companies in Japan and South Korea.

Some may also argue that shutting down the AAF plant will not cause big losses because the shareholders have likely already recouped their investment. At the least, after more than 23 years of operation, in terms of capital costs AAF should have been written off by now.

However, AAF is not an ordinary factory. It was the largest and the first of only two joint industrial projects ever undertaken by the governments of ASEAN member countries.

Simply closing down the plant would be damaging to the spirit of ASEAN cooperation, even more so because the condition of AAF could be partly blamed on the Indonesian government's natural-gas policy of focusing on exports of raw gas at the expense of domestic industries such as AAF, which create added value and jobs.

The proven reserves in the Arun field have been known since as far back as 1971, when the reservoir was discovered by Mobil Oil. Hence, the development of natural gas-based industries such as the NGL plant and urea factories near Arun should have been designed according to the supply capacity of the feedstock.

However, the government allowed the further expansion of the gas liquefaction and urea plants, accelerating the depletion of reserves in the Arun field. In fact, the establishment of the Iskandar Muda II urea plant, which was completed only this year, shows that the government, as the majority shareholder, is no longer interested in maintaining AAF's operations.

The protracted negotiations between ExxonMobil and AAF over the pricing of gas for their new sale and purchase agreement last year, and the subsequent deadlock that led to the abrupt stoppage of the gas supply to AAF, further hinted at the government's intention to simply let AAF die off naturally. The government should have intervened in the negotiations if it was serious about sustaining the company.

The government should have realized that pricing and long-term contracts are the most vital factors in completing gas supply agreements, because gas is not a freely traded commodity. Different from crude oil, natural gas cannot be stored for long periods. Once it is produced and transported it must immediately be delivered to buyers or users. Both buyers and sellers need to make long-term commitments to justify the investment needed to realize the benefits of gas utilization.

Not much information is available as to the financial performance of AAF and the market competitiveness of its urea. However, recommending AAF's closure without first conducting a technology audit of the factory and without exploring alternative gas supplies from other fields in the country such as the Natuna islands, or even from Malaysia, also a major gas producer, is an utterly ill-advised move, especially when it was made by an outgoing government.

Hopefully, ASEAN governments will do their best to resolve the AAF debacle. The plant is much more than a symbol of ASEAN cooperation. Most ASEAN countries need fertilizer for their agricultural development, and building a green-field urea plant certainly would require more time and need a much larger investment than rejuvenating AAF.

What now, Megawati?

Jakarta Post Editorial - October 12, 2004

After all the praise that has been heaped by the public and the media on President Megawati Soekarnoputri for the contribution she made in smoothing the path towards democracy in Indonesia, news of the unexpected resignation of the chief of the Indonesian military (TNI), Gen. Endriartono Sutarto, and his proposed replacement by the Army chief, Gen. Ryamizard Ryacudu, came like a bombshell, crashing down and ready to spoil the post-election mood of mutual goodwill and trust that seems only just to be on the point of blossoming among the Indonesian public.

Of course, at issue is not that unforeseen shifts in leadership are taboo in the armed services. The problem is that Gen. Endriartono's resignation, and his proposed replacement by Gen. Ryamizard Ryacudu, occurs at the very moment of transition between two administrations -- from that of the incumbent president, Megawati, to that of the president-elect, Susilo Bambang Yudhoyono. The point is that although no clear-cut ruling or legislation exists that prohibits an outgoing president from doing so, political ethics dictate that an outgoing president not make any policy decisions that are of a strategic nature. To make matters worse -- and to further add to the public's suspicions of some hidden political agenda being unrolled by the pro-Megawati camp -- Gen. Endriartono has so far given no explanation whatsoever of the reasons for his resignation. Analysts are merely left to assume that his reason for doing so was in protest to the much-criticized presidential decision to grant the title of full general to two of Megawati's close assistants, the Coordinating Minister ad interim of Political and Security Affairs, Hari Sabarno, and the head of the National Intelligence Agency, A.M. Hendropriyono.

Pro-Megawati politicians have pointed out that there is "nothing strange" about Gen. Endriartono's retirement, since he is already two years past his official retirement age. However, one point that further strengthens the public's suspicions of foul play is the fact that a convention exists in the Indonesian armed services to rotate the top leadership among the three armed services: the Army, the Navy and the Air Force. If Gen. Endriarto is to be replaced, military observers say, it should be the turn of the Air Force to assume the top command post.

Whatever the case, and whatever one may say about the whole affair, one thing is clear: This highly irregular manner of leadership change within the armed services, the TNI, is certain to place the incoming president, Susilo Bambang Yudhoyono -- whose privilege it should have been to make the appointments -- in a difficult position, even though, technically, the final word on the subject has not been spoken. House of Representatives Speaker Agung Laksono, who as a member of the Golkar Party also belongs to the pro-Megawati Nationhood Coalition, said the other day that the appointment of a TNI chief must be done with the approval of the House of Representatives. Ryamizard, according to Agung, would only serve as acting TNI chief, pending the appointment of a new commander. With his appointment as TNI chief, Ryamizard now holds three key leadership posts within the military: Army Chief of Staff, acting chief of the TNI, and chief of the Army's Strategic Reserves Command (Kostrad).

In the meantime, it would be sad for the Indonesian people to see Megawati fail to take this opportunity to bow out gracefully. Not only has she so far refused to reconcile her differences with the president-elect and ensure a smooth transition, she has yet to concede to her election defeat and congratulate the president- elect and former rival, Susilo Bambang Yudhoyono. For the sake of not only her own personal esteem, but for the future of her party, the Indonesian Democratic Party of Struggle (PDI-P), we hope she will as yet see the light and act as befits a true leader; with grace and elegance.