Aceh

Two activists quizzed over graft criticism

Jakarta Post - November 5, 2004

Nani Afrida, Banda Aceh -- Two anti-corruption activists in Aceh were grilled on Tuesday by local authorities, two days after they made harsh comments over the allegedly rampant corruption in the war-torn province.

The two made the comments on Tuesday during a meeting between residents and a visiting ministerial team that included Coordinating Minister for Political, Legal and Security Affairs Adm. (ret) Widodo A.S. and high-ranking local officials, such as Aceh Governor Abdullah Puteh.

Puteh was named a suspect in an ongoing case by the Corruption Eradication Commission over an alleged mark-up in the purchase of a Russian-made helicopter that caused Rp 4 billion (US$440,000) in state losses. "To sum up, there must be something wrong in Aceh. The poverty and backwardness are apparently caused by the rampant corruption among officials in Aceh," said Akhirudin in the meeting with Teuku.

Emerging from the questioning on Thursday, activist Akhirudin, 29, described the session as normal and friendly. He and fellow activist Teuku Kamal showed up on Thursday at the Aceh civil emergency administration in accordance with a request for their presence it had filed the previous day.

"During an hour of questioning, we were asked about our earlier comment that some officials in Aceh had allegedly committed corruption. There was nothing unusual about the questioning," said Akhirudin, who was interrogated together with activist Teuku Kamal.

During the interrogation, investigators from the Aceh civil emergency administration also asked the activists about the evidence that led them to conclude upon the officials' involvement.

Aceh Civil Emergency Deputy Chief of Intelligence Sr. Comr. Rusli Saleh, who led the questioning, refused to talk to journalists afterwards. "I am not authorized to talk to the media," he said.

The activists made their comments in the context of speaking to the ministerial team on the poverty issue that prevails in Aceh, although the province is known for being rich in natural resources.

Poverty has been on a rising trend since 2001, said Akhirudin, when those living on the edge of the poverty line comprised 20 percent of the 4 million-strong population, the figure had increased to 33.8 percent by 2002. A year later, the figure rose to 40.39 percent.

Similarly, unemployed and underemployed numbered 363,398 people two years ago, but a year later, the figure had risen to 417,930.

Widodo calls on Aceh rebels to lay down weapons

Associated Press - November 2, 2004

Jakarta -- Indonesia's top security minister called on rebels in Aceh province Tuesday to disarm and "rejoin the nation," but didn't say whether fighters who surrendered would be given an amnesty, nor whether fresh peace talks were planned.

Local rebel commander Tjut Kafrawi said the insurgents would never give up their fight for independence in Aceh, an oil and gas-rich province on the northern tip of Sumatra island. "We still have strong support from the people, otherwise how could we survive," he said by phone from the province. "They still want us to fight for their freedom."

The war in Aceh is one of the biggest challenges facing new President Susilo Bambang Yudhoyono, who made vague campaign pledges to bring peace to the province. Successive military operations have failed to end the insurgency.

Foreign negotiators have predicted Yudhoyono may reopen peace talks with the rebels. The 55-year-old retired general was instrumental in arranging a short-lived truce with the Free Aceh Movement in December 2003 when he was security minister.

"The separatist problem in Aceh can be resolved if the leaders come down from the mountains and convince their men to disarm," top security minister Admiral Adi Sucipto Widodo told reporters after returning from a trip to Aceh. "I urge them to come down and rejoin the nation." He didn't elaborate.

Fighting in Aceh, a province of 4 million people, has been going on intermittently since 1870, when Dutch colonial troops occupied the independent sultanate.

The latest round of fighting began in 1976, which has left at least 13,000 people dead. The rebels are now demanding a UN- supervised independence referendum akin to the one that ended Indonesian rule in East Timor in 1999.

Almost 2,300 suspected rebels have been killed since Jakarta launched a new offensive in May 2003. Both sides have been accused of widespread human rights abuses, including kidnapping, rape and murder. Although the rebellion poses a threat to Indonesia's unity, the conflict has been dubbed "the Forgotten War" because it has never captured much international attention.

Soldiers kill 7 suspected rebels in Aceh

Associated Press - November 5, 2004

Jakarta -- Indonesian soldiers killed seven suspected rebels in two gun battles in restive Aceh province, a military spokesman said Friday.

Troops gunned down four alleged members of the Free Aceh Movement in the eastern Aceh district of Pidie late Thursday. Four others were killed near the provincial capital, Banda Aceh, said Ari Mulya Asnawi. Troops recovered several assault rifles and hundreds of rounds of ammunition from the victims, he said. Rebels couldn't be reached for comment.

Almost 2,300 suspected rebels have been killed since Jakarta launched a fresh Aceh offensive in May 2003. Both sides have been accused of widespread human rights abuses, including kidnapping, rape and murder.

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 in the conflict, most of them civilians.

NGOs wants civilian role to end war in Aceh

Jakarta Post - November 3, 2004

Muninggar Sri Saraswati and Fabiola Desy Unidjaja, Jakarta -- The government must abandon its security approach and open dialog with civilian figures to settle the Aceh conflict once and for all, a discussion has concluded.

A discussion held by non-governmental organizations under the Aceh Working Group (AWG) concluded on Tuesday that dialog involving civilian Acehnese would stop years of violence in the province.

"[The government] must change their mind-set. It has said that the operations in Aceh are aimed at winning the hearts and minds of the Acehnese people. They must not turn into merely a hunt for members of the Free Aceh Movement (GAM)," said Usman Hamid, chairman of the Commission for Missing Persons and Victims of Violence (Kontras) human rights group.

Usman said women, religious leaders, university students and the public in Aceh must be invited because of their capabilities and not because of their close ties with the government.

He also criticized the government for maintaining a large number of troops in the restive province despite its claim that GAM's strength had been reduced significantly.

Around 14,000 troops are deployed in Aceh, where GAM separatists have been fighting for independence for the resource-rich province.

Usman said the government must facilitate "a well-formulated dialog among civilian elements representing Aceh" in a bid to grasp the true aspirations of the Acehnese.

Acehnese legislator Farhan Hamid of the National Mandate Party faction and Zoemrotin K. Susilo of the National Commission on Human Rights (Komnas HAM) agreed that the government should conduct dialog with civilians in Aceh. "The government must understand the expectations of Acehnese," said Farhan, adding that it must also guarantee their security.

He suggested that a national commission consisting of independent figures be established to help settle the conflict. "The commission could gather input from the Acehnese or hold talks with GAM if necessary, but it must not be placed under any ministry ... we're afraid it would not perform well, as the government has many problems to face," Hamid said.

An ulema told a government delegation led by Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto last week to open dialog with the Acehnese to resolve the conflict, which has killed more than 15,000 people since GAM began its struggle for independence in 1976.

President Susilo Bambang Yudhoyono, who took his oath of office on October 20, has pledged to settle the conflict in Aceh during the first 100 days of his government.

Widodo said on Tuesday that the government was considering three options for Aceh. "We may extend the status of civil emergency, extend it in select regencies, or lift the status but maintain security and law enforcement operations," he said.

Speaking to reporters after accompanying President Susilo in a meeting at Merdeka Palace, Widodo said the final decision would be announced on November 18. "The potential for threat remain high in the province with the presence of the separatist movement ... we are going to evaluate the situation further," Widodo said.

The retired four-star general visited Aceh last week and held talks with various community and social groups on the latest conditions in the war-torn province.

No government deals with Aceh rebels

Agence France Presse - November 3, 2004

Jakarta -- Indonesia's top Security Minister said yesterday that the new government of President Susilo Bambang Yudhoyono would make no deals with separatist guerillas in troubled Aceh and urged the rebels to surrender.

Mr Widodo Adi Sucipto said that despite a major military operation against the rebels, they remained a potent force which required the government to maintain troops in the province. The minister insisted that the only acceptable solution was for the rebels to put down their arms.

Thousands of people have died in the violence in Aceh. In the latest clashes at the weekend, 18 rebels and a soldier were killed.

Ulema calls for TNI-GAM dialog

Jakarta Post - November 2, 2004

Nani Afrida, Banda Aceh -- With the six-month state of civil emergency in Aceh nearing an end, leading ulemas in the province suggested on Monday that the government of President Susilo Bambang Yudhoyono revive a dialog with Free Aceh Movement (GAM) rebels to settle decades of conflict there.

Chairman of the provincial ulemas council Muslim Ibrahim told a high-powered government delegation that people of Aceh were desperate for a normal life like their counterparts in the rest of the nation.

Muslim said the conflict in the province of 4.2 million people could not be solved through the use of arms, but deliberation and consensus, involving all groups in society that wish to see peace prevail in the territory.

"The government cannot seek a conflict settlement alone, but President Susilo Bambang Yudhoyono needs to form a special team, which he leads himself and involves as much public participation as possible without prejudice," Muslim said.

His advice came amid rumors that Susilo's administration was initiating an informal meeting with GAM leaders in exile in Malaysia. Minister of Justice and Human Rights Hamid Awaluddin, however, denied the reports.

Those who were in Aceh for the meetings included Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto, Coordinating Minister for People's Welfare Alwi Shihab, Minister of Social Services Bachtiar Chamsyah, Minister of Home Affairs M. Ma'aruf, Minister of Finance Yusuf Anwar, Minister of Energy and Mineral Resources Purnomo Yusgiantoro, National Police Chief Gen. Da'i Bachtiar and Attorney General Abdul Rahman Saleh.

The Cabinet members visited Aceh to get input from local government officials and community leaders about the implementation of the state of civil emergency, which was imposed on May 19 to replace martial law.

The government is evaluating the emergency status in the natural resource-rich province.

Contrary to Muslim's suggestion, Widodo said the operation to crush the rebels should go on in order to settle the conflict and restore peace.

"We have two agendas to push in order to solve the Aceh problem, namely enforcement of the special autonomy status for the province and to finish off the separatists," Widodo said after a three-hour, closed-door meeting with the civil emergency administration in Aceh.

He said the operation to stamp out rebellion would continue to restore security and order and put an end to the conflict. The target of the operation would include the capture of GAM leaders.

"Although generally the security condition in Aceh has improved, armed rebels are still present and their leaders remain at large," Widodo said.

Widodo, however, promised to convey all the input from the Acehnese, including the ulemas, to the president before deciding whether to extend or discontinue the state of civil emergency in the province.

The government and GAM had started unprecedented peace talks with mediation by the Swiss-based Henri Dunant Centre during the tenure of President Abdurrahman Wahid. A semblance of peace returned to Aceh for several months after the two sides signed the Cessation of Hostilities Agreement in December 2002.

The peace agreement broke down in May 2003, prompting then President Megawati Soekarnoputri to declare martial law.

Separately, Aceh anticorruption activist Akhiruddin called on the government during the dialog to strictly uphold law in the province, particularly with officials that were involved in corruption.

"To solve the problem in Aceh, the new administration should win the trust of the people. A clean government would boost people's confidence in the government," he said.

Aceh, a testing ground for Susilo's promises

Jakarta Post - November 1, 2004

Aguswandi, London -- Aceh will be the best place to judge whether the new government will be any different from previous regimes in Indonesia. One of the biggest challenges for Bambang Susilo Yudhoyono's government is to resolve the conflict in Aceh peacefully. The way in which Susilo approaches the resolution of the almost 30 years of conflict in Aceh will show whether he is indeed different.

Not long after the election, Susilo met with an audience of teachers. He promised he would work to settle the conflict by peaceful means, saying "let us not just go ahead with the military operation". However, he has shown considerable ambiguity. He also stated that the country must remain united, and that there could be no compromise on this.

However, Aceh is a place where actions are infinitely more important than words. In the past, many Indonesian politicians have made numerous promises about Aceh while rarely, if ever, doing anything to deliver on them. In Megawati Soekarnoputri's acceptance speech after her election to the presidency, the new leader wept in public and promised that no blood would fall in Aceh during her time in office. Contrary to these tears and promises, the situation in Aceh was allowed to deteriorate afresh until she declared martial law in May 2003.

As in most other places in Indonesia, Susilo won the second round of the presidential election in Aceh. The Acehnese vote for Susilo, however, was largely due to the population's desperation on a number of fronts. The Megawati administration's "solution" to the situation in Aceh not only led to bitter disappointment and more failed promises but to the worsening of daily existence on a scale not even seen under Soeharto. Under these circumstances, it is unsurprising that voters opted for the only change available and voted for Susilo.

Yet, Susilo was endorsed only reluctantly by the Acehnese. He did not win in the first round of the presidential election. That round saw the majority of votes go to Amien Rais, due in large part to his well-known criticism of the Megawati government's policy in the province. The vote for him was also stimulated by his close association with Muhammadiyah, whose local and national leaders have vigorously criticized military operations in Aceh.

The vote was an effort to send an indisputable message to Jakarta, showing an unequivocal majority rejection of the government's approach to Aceh. Once Amien was knocked out at the national level, Aceh lost their only reasonably representative candidate, and recognized that an overt rejection of Megawati was the best remaining option.

Susilo should immediately work to improve the situation in Aceh. His much touted legitimacy, as the country's first directly elected president, provides him with a powerful platform from which to pursue peace. Re-engaging in dialogue with GAM, and giving the non-partisan population space at the negotiating table, will always be hugely unpopular for nationalistic Indonesia, but Susilo's unique position may mean he can take this path to a peaceful solution.

Susilo needs to assess the current military approach immediately. The new government should stop and evaluate the administration of martial law from May 2003 to May 2004, as well as monitoring and reviewing the events of the civil emergency administration to date. It is imperative that an impartial assessment be made as to how these military operations were conducted. How many civilian have been killed? Susilo should also immediately respond to rampant human rights violations in Aceh, which were allegedly committed by government troops as reported by Komnas HAM, Amnesty International and the Human Rights Watch.

The government should show its commitment to a new and productive approach in Aceh by opening access to the province. Independent rights groups that are currently not allowed into the province can make clear and credible assessments of the human rights situation in Aceh. Aceh should also be accessible to national and international journalists.

The other critical way to move forward in Aceh requires the new government to lay out their strategy for a viable, credible peace process. Susilo has stated, on many occasions, that he would like to see the situation in Aceh improve. What is not clear yet is what actions he will be taking to bring about this improvement.

On the contrary, he continues to cling to ambiguity and abstract commitments. It is now imperative that Susilo shows the Acehnese that he really does want to bring about peace and positive changes in Aceh.

[The writer is an Acehnese Human Rights Activist and Researcher at Tapol, The Indonesia Human Rights Campaign, based in London.]

Integrated operation in Aceh to continue: Widodo

Kompas - November 3, 2004

Jakarta -- The Coordinating Minister for Politics, Law and Security Affairs, Widodo Adi Sutjipto, says that his office is in the process of putting together a recommendation on Aceh when the state of civil emergency ends on November 18.

"But, there will be one recommendation that we will [definitely] be putting forward, that the integrated operation should continue", said Widodo in announcing the results of a visit to the Regional Civil Emergency Authority (PDSP) in Aceh.

During his visit to Aceh, as well as meeting with the PDSP Widodo also met with the Regional Civil Emergency Administrator, religious leaders, public figures, academics and youth leaders to collect material in order to formulate the recommendation.

"What is clear is that a resolution to the Aceh question must use two points of reference, that is how to promote the formulation of a special law on Aceh autonomy and how to finish off the Free Aceh Movement (GAM)", said Widodo at the State Palace after accompanying President Susilo Bambang Yudhoyono to receive leaders of Regional Representative Councils on Tuesday November 2.

According to Widodo, at present the number of GAM members who have yet to surrender totals more than 2,500 people with an armed force of 850. Widodo admitted that there are still concentrations of GAM forces in some areas.

Widodo also raised a number of alternatives including extending the state of civil emergency, extending the state of civil emergency in areas were GAM is still a problem and reducing the status but continuing law enforcement and security restoration operations.

Peace process

A number of non-government organisations (NGOs) meanwhile, are urging the government to evaluate and repeal the state of civil emergency in Aceh. They believe that it is time for the government to promote conditions towards peace.

This was revealed in a discussion titled "Evaluating the State of Martial Law and Civil Emergency in Aceh to Promote Peace" which was held on Tuesday November 2. A number of NGOs including Indonesian Human Rights Watch (Imparsial), the Commission for Missing Persons and Victims of Violence (Kontras), the Institute for Press and Development Studies (LSPP), the Indonesian Legal Aid Foundation (YLBHI), the Association of Indonesian Women for Justice (LBH Apik), Kalyanamitra (a women's NGO) and the Indonesian NGO Coalition for International Human Rights Advocacy (HRWG) have issued a statement of concern calling for a peace process to be initiated in Aceh.

As well as repealing the state of civil emergency, the government is also being asked open up the broadest possible access to Aceh by all parties, foreign and domestic, as well as providing more space for civil society.

Kontras working coordinator Usman Hamid said that they hope that if the state of civil emergency is repealed the government will immediately initiate a consultative dialogue with all elements of society, public figures, women's groups, students and academics, in order to promote the peace process.

An Acehnese member of the People's Consultative Assembly, Ahmad Farhan Hamid, said that what ever the outcome is of the government's evaluation is, the most important thing is for the government to guarantee security for civil society. (SIE/INU)

[Translated by James Balowski.]

80% of mental disorders caused by the trauma of violence

Detik.com - November 3, 2004

Nur Raihan, Banda Aceh -- The raging armed conflict in Aceh has left behind a huge trauma for the Acehnese people. As a result, some 80 per cent of people suffering mental disorders are because they had witnessed incidents of violence first hand.

"In general the they usually experience [such] trauma after witnessing shootings or killings [which have occurred] right before their eyes. This is based on the results of a survey by the Aceh Health Department", explained the head of the agency, Dr Mulya A. Hasjimi, to journalists in Banda Aceh on Wednesday November 3.

Hasjimi added that some 25.7 per cent of these people were suffering from depression, 18.4 per cent from panic attacks, 16 per cent because they had consumed psychotropic drugs, 7.7 percent were suffering from stress related disorders and around 1.3 per cent had developed problems of alcohol or drug dependency.

The largest number of people suffering mental disorders was in the eastern region of Aceh, from the regencies of Pidie, Bireuen, North Aceh Utara, East Aceh through to Langsa City, which in general has experienced significant levels of violence. He also added that Banda Aceh, as the provincial capital, also has a high percentage of people suffering from mental disorders, if not the highest.

This data was obtained from the Aceh Health Department after it conducted a survey in 11 regencies/cities in Aceh.

In order to deal with the problem, Hasjimi said that the health department had been training medical staff, members of the public and religious leaders "To identify potential sufferers. An addition to this we are also conducting counseling for people who are suffering mental disorders", he said.

"We are also providing training to school teachers to recognise the early symptoms, mental disorders in young children", said Hasjimi.(mar)

[Slightly abridged translation by James Balowski.]

Ministers seek input on situation in Aceh

Tempo Interactive - November 1, 2004

Yuswardi A. Suud, Banda Aceh -- On November 1 a number of ministers from the Indonesian Cabinet of Unity arrived in Aceh to seek input before deciding on whether or not to extend the state of civil emergency in Aceh which will end on November 19.

The delegation included the Coordinating Minister for Political, Legal and Security Affairs, Widodo AS, the Coordinating Minister for Social Welfare, Alwi Shihab, the Minister of Home Affairs, M. Ma'ruf, Indonesian Police Chief General Da'i Bachtiar and Attorney General Abdul Rahman Saleh. Upon arriving in Aceh, the ministers immediately held a closed meeting with local government officials which lasted some two hours.

Following the meeting, Widodo told journalists that they had obtained a variety of inputs on the question of determining Aceh's status following the end of the state of civil emergency. He refused however to give details on what inputs they received.

According to Widodo, the conditions in Aceh are gradually improving. He said that the implementation of the security operation in Aceh had succeeded in reducing the forces of the armed Free Aceh Movement (GAM). On the economy, the government will be considering whether to reopen the Asean Aceh Fertilizer factory which was recently closed down.

With regard to extending the state of civil emergency in Aceh, Widodo said that it was part of the evaluation which they were conducting.

After meeting with members of the government, the ministers then held a dialogue with a number of social groups at the Aceh governor's residence.

The head of the Ulamas Consultative Council (council of religious leaders) Muslim Ibrahim asked the government to restart negotiations with GAM. According to Ibrahim, the Aceh conflict cannot be resolved by arms. As a reference he pointed to the experience in a number of countries where they have confronted a guerrilla war. "I have yet to hear of a guerrilla war which can be resolved by the use of arms", said Ibrahim to Tempo and the state news agency Antara.

According to Ibrahim, the Acehnese people don't care what kind of status is put into place in the province. What is important he said, was that people wanted peace and an end to hostilities so that they can pursue their livelihoods without the constant fear of armed clashes.

Ibrahim is therefore asking the government to give an opportunity to civil groups to play a greater role in resolving the Aceh problem. He suggested to the government that they form a team directly under the authority of the president to restart the dialogue with GAM which will involve all elements of Acehnese society. "Aceh is not the property of GAM, it is also not the sole property of the government, but something we own together", said Ibrahim.

With regard to the proposal that the government reopen the dialogue with GAM, Widodo declined to comment. He said only that to date the government had implemented the integrated operation as just one of the ways to resolve the problem Aceh.

Earlier, Aceh Governor Abdullah Puteh had asked the government to extend the state of civil emergency in Aceh. Puteh proposed three option, an extension of the civil emergency for six more months, an extension of three months or maintaining a civil emergency in those regencies which are still considered to be areas of conflict.

[Translated by James Balowski.]

Government asked to resolve conflict without resorting to arms

Detik.com - November 2, 2004

Nur Raihan, Banda Aceh -- The prolonged conflict in Aceh cannot be resolved by arms. It is hoped that the new government will seek a fresh alternative to resolve the Aceh question instead of the integrated operation which has been implemented to date.

This was announced by a number of Acehnese social leaders at a meeting with was held with the Coordinating Minister for Political, Legal and Security Affairs, Widodo AS, the Coordinating Minister for Social Welfare, Alwi Shihab, the Minister of Home Affairs, M. Ma'ruf, Indonesian Police Chief General Da'i Bachtiar and Attorney General Abdul Rahman Saleh at the Anjong Mon Mata Building at the governor's official housing complex in Banda Aceh on Monday November 1.

"I think, it's like, there are no issues in the world which can be resolved by arms. We also hope, that the team which is to be formed to deal with the Aceh [issue] will be [under the direct authority] of the President".

This was the view expressed by the chairperson of the Ulama's Consultative Council (council of religious leaders) Dr H. Muslim Ibrahim at a meeting attended by a number of religious leaders, students, youth representatives, non-government organisations (NGOs) and women's movement leaders.

In addition to this, Ibrahim suggested that the government provide more space to the social movements to resolve the problems that exist in Aceh. Basically, the Acehnese religious leaders said that in the past, many civilians who are close to the Free Aceh Movement (GAM) have been accused of being members of GAM.

"[We want] also to emphasise the spirit of consultation, because there lies the [true] test of spiritualism", he said.

Furthermore, the desperate situation in Aceh has also been caused by the lack of trust by the Acehnese people toward the central and provincial governments.

"Certainly Pak SBY [President Susilo Bambang Yudhoyono] won almost 77 per cent of the vote [in the recent presidential elections] here. This means that when the public had become apathetic, during the last election there was still some hope left over in the new future government. So please don't disappoint the people of Aceh [again]", added an Acehnese women's leader, Naimah Hasan.

Student groups and NGOs meanwhile, are calling on the new government to fully enforce the law in Aceh. "Basically, the flow of money into Aceh either from the local government's budget as well as the state budget has ballooned each year, but has [resulted in] no significant improvements to the quality of life and the level of unemployment in Aceh. This indicates that there has been mismanagement within the provincial government in Aceh". (ton)

[Translated by James Balowski.]

Civil emergency in Aceh could be extended: Widodo

Detik.com - November 2, 2004

Suwarjono, Jakarta -- The state of civil emergency in Aceh will end on November 18. Following this it could be extended for the entire province, part of the province or be reduced [to a state of civil authority].

"There are lots of alternatives. There is a possibility that the civil emergency may be extended. But it could also be extended [only] in some parts [of the province]. It could also be reduced by continuing to maintain law enforcement and security".

This was unveiled by the Coordinating Minister for Political, Legal and Security Affairs, Widodo AS, at the State Palace on Jalan Medan Merdeka in Jakarta on Tuesday November 2. He was answering questions by journalists about the yesterday's ministerial visit to Aceh.

With regard to the outcome of their visit, he explained that in essence the visit was to take a look at and compile material in order to make a recommendation on whether or not to extend the civil emergency in Aceh which is to soon end.

"We are seeking inputs. First from those who are tasked with implementing the daily management [of the civil emergency], the PDSD (Regional Civil Emergency Authority). Secondly from religious leaders (ulamas), public figures, intellectuals and others", explained Widodo.

According to Widodo, there are two essential issues which can provide a reference to resolving the Aceh question in the future. First, how to promote the creation of a civil administration based on special autonomy. Secondly, dealing with the Free Aceh Merdeka (GAM) separatist movement.

What about the state of GAM's forces? "There are a number of parts of the province where GAM is concentrated. Their forces are around 2,500 personnel or more, with an armed force of [some] 850", said Widodo. (sss)

[Translated by James Balowski.]

NGOs propose a 3 point plan to asses situation in Aceh

Tempo Interactive - November 2, 2004

Eworaswa, Jakarta -- The Aceh Working Group (AWG), a grouping of non-government organisations concerned about the Aceh question, have put forward a three point plan to evaluate [whether or not to extend] the state of civil emergency in Aceh.

First, before taking the next step, the government needs to evaluate the outcome of the state of civil emergency in Aceh in a careful and detailed manner and make the results openly available to the public.

Secondly, those parties who have committed wrongs must be brought to trial in order to demonstrate the governments seriousness. If it doesn't, it would mean that the government is giving a licence to commit crimes against humanity.

Thirdly, promote and create conditions to facilitate a peace process though a number of steps including providing more space to civilians to conduct their activities without being burdened by the need for official permission or identify checks, hold a dialogue between the government and Acehnese social organisations as well as giving greater access to all parties [to enter and monitor the situation in Aceh].

These proposals were put forward during a discussion which was held at the Hotel Cemara in Jakarta on Monday November 2.

[Translated by James Balowski.]

West Papua

Indonesia's Papua a time bomb

Melbourne Age - November 7, 2004

The restive Indonesian province of Papua was a ticking time bomb that could drag Australia into its wreckage, a prominent Papuan human rights campaigner has warned.

John Rumbiak, international advocacy coordinator for the human rights group Elsham, said increasing militarisation, coupled with human rights abuses and unmet demands for independence had turned Indonesia's easternmost province into a "time bomb waiting to go off".

"There's a whole series of triggers that you can pull and it's going to go off," he told AAP in Melbourne. "The tensions are already there."

As evidence of a worsening human rights situation, Mr Rumbiak cited a recent military operation in the central highlands region that had left six people dead, including a popular pastor, and forced 5,000 villagers to flee their homes.

Locals were losing patience with Jakarta after moderate independence leader Theys Eluay was assassinated in November 2001 and efforts to establish a "zone of peace" throughout the province by humans rights workers had failed.

An extra 25,000 troops had poured into the mineral and timber- rich province since 2000. And more than a million migrants have moved into the province from elsewhere in Indonesia, rapidly closing the gap on the 1.5 million native Papuans.

"People are frustrated, they could just pull the trigger and that's it," Mr Rumbiak said. "If they can't fight against the military, they will turn their anger on the migrants."

Militia groups added to the explosive mix and they had experienced a recruitment surge last December during a visit by Eurico Guterres, the notorious leader whose own militia wreaked havoc in East Timor.

Mr Rumbiak warned Australia and neighbouring countries would be affected if widescale violence broke out and refugees began fleeing over the border to Papua New Guinea.

More than 12,000 refugees have crossed the border since 1984 and more recently guns and drugs are also being ferried into PNG. A "failed state" crisis in Papua could also threaten security in the wider Pacific region, he said.

Mr Rumbiak said Indonesia's new President Susilo Bambang Yudhoyono had expressed a willingness to resolve the conflict in Papua. He called on the Australian government to "support and encourage" Mr Yudhoyono to establish the "necessary pre- conditions" for peaceful dialogue.

They included a withdrawal of the massive troop presence in Papua, dismantling the militias and dropping a decree that had redivided the province into three new provinces.

Papua is home to the world's largest gold and copper mine at Freeport, while British energy giant BP plans to start the construction of the Tangguh liquefied natural gas (LNG) next year, and BHP Billiton is hoping to go ahead with an open cut nickel mine.

But the province has also been wracked by sporadic clashes between the military and the independence fighters since Indonesia assumed control from the Dutch in the early 1960s.

Mr Rumbiak said human rights workers had estimated 100,000 Papuans had died at the hands of the military.

The activist himself fled his homeland two years ago after a series of death threats and has since lived out of a suitcase in the United States, Europe and Australia.

Most Papuans no longer sympathize with security forces

Jakarta Post - November 6, 2004

Like war-torn Aceh, Papua remains in the spotlight. Papua Governor Jaap Solossa talked with The Jakarta Post's Ridwan Max Sijabat on Friday after leading a Papuan delegation to meet with President Susilo Bambang Yudhoyono to discuss the situation in the province.

Question: Would you like to summarize your delegation's meeting with the President?"

Answer: The President and our delegation were of the same opinion that the special autonomy regulated by Law No. 21/2001 is the main pillar of a grand strategy to seek a comprehensive solution to the complex Papua issue.

The President promised to make a fundamental decision to prove his strong political commitment to settling the issue through peaceful dialog, and instructed his aides to take concrete measures to enforce the special autonomy law.

He was very glad to meet with us, and shared his intention to fully implement the special autonomy, which was left untouchable during former president Megawati Soekarnoputri's tenure, over the last three years.

Q: Would you like to explain that issue in detail?

A: During the meeting, the President instructed the coordinating minister for political, legal and security affairs (Widodo A.S.) and home minister (Moh. Ma'ruf) to discuss the draft regulation on the Papuan People's Assembly (MRP), and to make the necessary preparations for its establishment. The implementation was delayed because it was feared that it could pave the way for the province to separate from Indonesia in the future.

The establishment of the MRP has been included in the President's first 100-day program, and he pledged that the MRP's establishment would be his "Christmas gift" to the Papuan people.

The President also promised to set up a Papua desk at the Presidential Office to deal with Papua matters. The special desk, led by the President and consisting of Papuan figures, military officials and politicians would mainly be tasked with preparing necessary policies and development programs in Papua.

Q: What is your comment on the controversial draft regulation on the MRP?

A: It is not really controversial because it is based on the special autonomy law. And what makes Papua special, unique and different from other provinces is the MRP, which according to the law is the highest decision-making institution, representing all components in the province.

Megawati and her former government declined to approve it, and to set up the long-awaited MRP, because they feared that the institution would be used to assist the province's separation from Indonesia.

But, if Acehnese people are allowed to adopt the sharia according to Islam, why aren't we allowed to do the same thing? (The majority of Papuans are Christians.)

Q: How is the planned formation of the two new provinces progressing?

A: The President has agreed to review the controversial Presidential Instruction, No. 1/2003, which was issued to enforce Law No. 45/1999 on the development of North Maluku, West and Central Irian Jaya provinces, which is no longer effective since it is against the special autonomy law.

Papuan people are not against any idea to form four or five more provinces in Papua, which is 3.5 times the size of Java Island. However it should gain approval from the MRP.

The Papuan provincial legislature has filed a law suit against the presidential instruction, and the Constitutional Court is scheduled to make a decision on the case on November 11.

The Higher Administrative Court has annulled Presidential Decree No. 10/2003 on the extension of Octavianus Abram Atururi's one- year period as acting governor of West Irian Jaya.

Q: What other issues are most urgent in Papua?

A: Illegal logging, illegal fishing and HIV/AIDS. And the three issues correlate with one another.

Illegal logging and illegal fishing activities have been rampant in the province because the region is out of the close supervision of the public in Jakarta. The looting of Papua's rich resources involves timber and fishing companies from Malaysia and Thailand. They are backed by security personnel from local Navy units and police offices.

Timber barons have paid police personnel to back the illegal logging activities, which have involved local loggers. It is also common for them to offer sex workers from Java as presents for local informal leaders, to keep their mouths closed. The timber barons also bribed local Navy units to escort their log vessels out of the province.

The number of people living with HIV/AIDS has reached around 15,000 at present, and most of them are living in the southern part of the province, particularly in Mimika and Merauke regencies, where illegal logging and fishing activities have been rampant.

Q: What are you doing to address these serious problems?

A: During the meeting with the President, we asked the government to lift the joint decree issued by the forestry minister, fisheries and maritime affairs minister, the Indonesian Military (TNI) commander and the National Police chief, concerning the supervision of forest and maritime resources (wanalaga and wanabahari) in the province.

Corrupt officials of the National Police and the Navy in the province abused their power and manipulated the joint decree to loot the province's resources.

Most Papuan people are no longer sympathetic toward the security authorities because many innocent people have been shot in military operations and their resources looted.

The provincial government will intensify the anti-HIV/AIDS campaign among youths and school students aged between ten years and 18 years to curb the spread of the virus.

Yudhoyono asks former governor to help resolve conflict

Tempo Interactive - November 5, 2004

Sapto Pradityo, Jakarta -- President Susilo Bambang Yudhoyono has asked the former governor of West Papua, Freddy Numberi, to assist in resolving the Papua question. Numberi, who is a native Papuan and holds the post of Minister for Fisheries and Marine Affairs in Yudhoyono's cabinet, has been asked to work with the Coordinating Minister for Political, Legal and Security Affairs, Widodo AS, who is leading up efforts to resolve the Papua question.

According to Numberi, the Law on Papuan Special Autonomy should become the basic pillar by which to resolve the Papua issue, from matters of security to the division of West Papua into three new provinces. He hopes therefore, that the government will soon issue a government regulation as an implementing regulation on the special autonomy law. "As former governor, perhaps I can help", said Numberi following a meeting with Yudhoyono at the presidential offices in Jakarta on Friday November 5.

Yesterday, a number of Papuan public figures met with Yudhoyono to discuss the problems in their province. The president told them that he would ensure that the operation to restore security in the Papuan regency of Puncak Jaya would not result in [more] civilian casualties. In a presidential instruction to Widodo and TNI (armed forces) Chief Endriartono Sutarto, the president has asked that the operation be conducted wisely and carefully. "Don't let the people suffer from excesses during the operation", said another former governor of West Papua, Barnabas Suebu, quoting from Yudhoyono.

The Trans Wamena-Puncak Jaya highway has been a trouble spot of late. On October 12 four drivers who usually operate the route were shot by unidentified assailants. The TNI has accused the Free Papua Organisation (OPM) of the shooting.

According to Suebu, the operation to restore security has been difficult to cary out because it is in the interior. He has asked the TNI to be careful in distinguishing between OPM members and ordinary civilians. Both the OPM and the TNI have repeatedly conducted operations in the area which have caused deep seated trauma among the people. "If they are pushed out then at some time return, they are thought to be OPM members, but sometimes civilians are also accused of assisting the TNI against the OPM. As a result there is a constant [atmosphere of mutual] suspicion", said Suebu.

In order to resolve the security problem, Suebu is proposing that the government involve traditional and religious leaders or local traditional institutions. They are the ones he said, who are most respected and listened to by local people. By involving them it can be hoped that the military operation will not bring with it even greater negative excesses. "Don't just [rely on] a security approach", he said.

[Translated by James Balowski.]

Public figures ask Yudhoyono to form People's Council

Detik.com - November 4, 2004

Suwarjono, Jakarta -- A number of West Papuan public figures have asked President Susilo Bambang Yudhoyono to immediately proceed with the formation of the Papua People's Council (MRP) which has been delayed for the last three years.

This was conveyed by the former governor of Papua, Barnabas Suebu, following a meeting with Yudhoyono at the presidential offices on Jalan Merdeka Utara in Jakarta on Thursday November 4.

In addition to the former governor, the meeting was attended by number of other Papuan public figures including J.P. Sallosa and members of the People's Representative Assembly originating form Papua. Allso present was TNI (armed forces) Chief General Endriartono Sutarto, the Coordinating Minister for Politics, Legal and Security Affairs former Admiral Widodo AS and the Minister for Home Affairs, former Lieutenant-General Mohammad Ma'ruf.

"The president responded well to [the request for] the formation of the Papuan People's Council and has ordered the relevant minister to carry it through because it has been discussed now for three years. The MRP is one of the keys to resolving the implementation of other regulations", said Suebu.

According to Suebu, the key to resolving the Papua questions is to do so in its entirety, based on and respecting the values articulated in Law Number 21/2001 on Special Autonomy for Papua.

"This is one of the best vehicles to build Papua's future and the president responded well to it saying that one of the ways to resolve the Papua questions is through special autonomy", said Suebu.

With regard to the conflict in Papua, Suebu said that the president has instructed his office to choose operational methods which do not disturb the local population.

"If the OPM [Free Papua Organisation] is like a thread intertwined within the local population, which is like a container of flour, how do you remove the thread without disturbing the flour", said Suebu.

"We hope that it does not reach the point where excesses are committed against innocent members of local population as a result of the security operations being conducted by the TNI", he continued. (aan)

[Translated by James Balowski.]

Military operation blocking investigation into shootings

Tempo Interactive - November 3, 2004

Eworaswa, Jakarta -- The fatal shooting on September 14 in Mulia, Puncak Jaya, in which four civilians were killed, has left behind feelings of deep fear. The Commission for Victims of Disappearances and Violence (Kontras) is urging the government and the National Human Rights Commission (Komnas HAM) to immediately conduct an independent investigation into the case.

Kontras working coordinator, Usman Hamid, says he regrets the attitude that has taken by the government and Komnas HAM who have failed to take the initiative even though [Komnas HAM] as an independent institution has a great deal of authority. "They have left it to the security forces to monopolize the response to the Mulia case" he said. As a consequence, this has created controversy and questions have been raised by the public about who the perpetrators are, the Free Papua Organisation (OPM) or the military?

According to Hamid, the pursuit of the OPM members by troops following the incident which occurred in the Village of Goradi, Tinggi Nambut, Illu District in the Puncak Jaya Regency, only increased the public's sense of fear. Furthermore, a document has been circulated written by Socrates Sofyan Yoman, the head of the local Baptist Church which claims that "The Puncak Jaya case is pure military manipulation".

The four page document describes the chronology of the incident and the reasons the TNI is conducting a military operation. According to Yoman, the Indonesian military is aiming to manipulate the Mulia case to: justify the presence of military posts along the length of the Trans Road between the regencies of Wamena and Puncak Jaya and the creation of a new battalion in the Central Highlands, to terrorise Papuan citizens and to get their hands on 2.52-5 billion rupiah in special autonomy funds along with creating public mistrust against the regent who holds the civilian post.

Hamid said that it is difficult to believe the statement. "So much of what is said by the military or the OPM is hard to believe, so their needs to be evidence, and the [best] way [to get this is to conduct] an independent investigation", he said.

Hamid suggested that for the duration of the investigation, which could be carried out by Komnas HAM, troops should be temporarily withdrawn. "Don't conduct military operations. The TNI must create conditions which are conducive to the investigation. So that people don't flee the highlands. What would happen if a key witness disappeared or died?", he asked.

[Translated by James Balowski.]

Papua students demonstrate for self-determination

Detik.com - November 1, 2004

Gunawan Mashar, Makassar The perpetual internal conflicts in West Papua has prompted students originating from Papua who are studying in the South Sulawesi provincial capital of Makassar to demonstrate on at the provincial parliament on Jalan Urip Sumohardjo.

Grouped under the Papua Students Democratic Forum (Forum Demokratik Mahasiswa Papua, FDMPP), the students held the action on the grounds of the parliament on November 1. They were demanding that the new government of President Susilo Bambang Yudhoyono and Vice-President Jusuf Kalla immediately resolved the frequent conflicts in West Papua.

The demonstrators said that the cause of the recent conflicts which have occurred in Papua are because of the government's policy to divide Papua in to three new provinces.

The students believe that it is time for the government to provide the right to the Papuan people to determine their own future democratically though dialogue with all components of Papuan society.

The demonstration started at 11.30 local time with students arriving at the parliament wearing traditional Papuan clothing. There were even some who came wearing palm leaves and carrying spears. As well as giving speeches the students also sung songs and danced to traditional Papuan music. (nrl)

[Translated by James Balowski.]

Labour issues

Malaysia extends amnesty deadline for migrant workers

Jakarta Post - November 6, 2004

Jakarta -- The Malaysian government has extended the amnesty period for undocumented Indonesian migrant workers to return home from November 14 to December, Indonesian Minister of Manpower and Transmigration Fahmi Idris said.

Fahmi said an agreement on the extension was reached during his meeting with Malaysian Prime Minister Abdullah Ahmad Badawi in Kuala Lumpur on Friday.

"I just met with Malaysian Prime Minister Ahmad Badawi and he agreed ... to extend the amnesty period. However, he said he needed to consult with his Cabinet first on the technicalities," Fahmi told Antara.

Kuala Lumpur earlier announced an amnesty program to allow undocumented Indonesian migrants working in Malaysia to leave the country without sanction between October 29 and November 14. The amnesty was called to coincide with Idul Fitri, which falls on November 15.

An estimated 400,000 Indonesian illegal migrant workers are expected to take advantage of the amnesty scheme, and several thousand returning workers have begun to arrive at designated entry points across the archipelago.

Fahmi said he and the Malaysian prime minister also discussed how to prevent Indonesians working illegally in Malaysia and improving the placement of Indonesian workers in Malaysia by employment agencies. Malaysia has enacted tough punishments for illegal workers, including jail sentences of up to five years, fines of up to US$2,632 and caning for men below the age of 50.

Malaysians found employing illegal workers will also face jail sentences, fines or caning.

Fahmi said Badawi agreed to amend a memorandum of understanding on the placement of Indonesian workers in Malaysia signed by the two governments earlier this year. A meeting to discuss revisions to the memorandum is scheduled to be held sometime after Idul Fitri. During meetings he held with migrant workers leaving Malaysia for Indonesia on Thursday, Fahmi received numerous complaints from the migrants who said they would not be able to afford to return to Malaysia.

One migrant told Fahmi he could not afford to pay the departure tax of Rp 1 million that Indonesian citizens are required to pay when leaving the country.

The chairman of the Indonesian Employee Agency Association, Djamal Aziz, who accompanied Fahmi during the meetings, told the migrants that his association was prepared to help them secure the necessary documents to work legally in Malaysia.

The government has set up shelters for returning workers at the seaports nearest the border with Malaysia.

About 22,000 of the returning workers are expected to be absorbed into the government's resettlement program and sent to less populated provinces in the country.

In Jakarta, State Minister for Women's Empowerment Meutia Hatta said her office would closely monitor the arrival of women migrant workers at Soekarno-Hatta airport, where extortion of returning migrant workers is common. Most Indonesian migrant workers are women.

Jakarta minimum wage to increase by 6 percent

Jakarta Post - November 5, 2004

Damar Harsanto, Jakarta -- Jakarta's provincial minimum wage increase is likely to be approved at 6 percent, a wage of Rp 711,843 (US$78.23), after the provincial wage council voted at a meeting on Thursday, minus all seven members of the Workers Association.

"We decided to walk out of the meeting because the council insisted on voting for the proposed increased wage while we insisted that the new wage met with the official minimum cost of living allowance (KHM) of Rp 759,953," Wajis A. Mangkonna, a workers representative, told The Jakarta Post after the meeting.

The KHM, which would have represented a 13 percent increase, was based on a survey in July conducted by a tripartite council comprising seven representatives each from the Jakarta administration and the employers and workers associations.

The council decided to put the wage to a vote after members failed to reach a consensus in meetings on Monday and last Friday. At Thursday's meeting, the council declared the seven representatives of the Workers Association had abstained from voting.

But the workers association rejected the result. In a statement signed by the seven members -- ARK Bellyonardi, Soeparman, Gibson Sihombing, Wajis A. Mangkonna, Syawal Harahap, Djarwadi Djenal and Haryono -- the association called on Jakarta Governor Sutiyoso to reject the increase.

"We call on the governor only to approve the proposed increase to a wage of Rp 759,963," they said.

Sutiyoso promised his administration would not approve the increase until the opposing parties reached a consensus. "I won't intervene in the bickering since the administration's role is only as a mediator. Let they [the council] solve their internal dispute first," he said.

However, Sutiyoso's subordinate, Jakarta Manpower Agency head Ali Zubeir, seemed to be in favor of the voting result. He said small firms would go bankrupt if the administration imposed a too-high minimum wage they could not afford. "Around 600,000 people in the city are still jobless. That's why we must accommodate the plea of the smaller companies [for a lower increase]," he said.

If approved, the proposed wage would be lower than the one mentioned in circular issued by then Manpower Minister Jacob Nuwa Wea on July 16. It called on governors nationwide to increase the respective minimum wage to at least KHM levels.

"That [letter] is only a reference. It is not a ruling to implement. We must use it in accordance with the real situation of companies here," Ali said.

Indonesian Employers Association chairman Sofjan Wanandi had said earlier employers would tolerate the increase as long as it did not exceed the inflation rate in Jakarta, which was predicted to be at 6.50 percent this year. He also said should there be no compromise, voting would be the only way to solve the debate.

The 2004 minimum wage is set at Rp 671,550 after a 6.3 percent increase from last year's Rp 631,000.

Officials 'lying' about returning workers

Jakarta Post - November 5, 2004

Jakarta -- A hearing at the South Sulawesi provincial legislature about the handling of illegal migrant workers returning from Malaysia turned ugly on Thursday, with councillors accusing government officials of lying.

During the hearing a member of council Commission E for the people's welfare, Adil Patu, said the Parepare head of the manpower and transmigration office, Nawasir Nawawi, had misled the public by claiming his office had taken care of more than 3,000 returning migrant workers.

Adil lost his temper when Nawasir failed to provide concrete data on how the money had been spent. "How could you say your office is taking care of thousands of migrant workers while in fact only a few have arrived at the Parepare seaport?" Adil said as quoted by Antara.

Visiting the port on Wednesday, Governor Amin Syam met only three illegal migrant workers who left Malaysia under an amnesty program. On the same day, President Susilo Bambang Yudhoyono greeted hundreds of returning migrant workers in two ports in Riau.

"I doubt the accountability of the provincial manpower office in using the emergency funds," Adil told the officials, who included provincial manpower office head Syahlan Solthan.

Another councillor, Andi Tja Tjambolang, said the office had also wasted Rp 140 billion (US$15.3 million) in central government funds allocated to tackle the likely increased unemployment resulting from the mass return. An estimated 400,000 migrants are expected to stream into the country following Malaysia's offer to grant them amnesty before the Idul Fitri holiday. The amnesty lasts until November 14.

In Kupang, the East Nusa Tenggara health office said it would require all returning migrant workers to undergo blood tests to prevent the possible spread of sexually transmitted diseases.

Separately, Director General of Labor Placement Overseas, I Gusti Made Arka, said as of Thursday the Indonesian Embassy in Malaysia had issued about 30,000 substitute passport documents and opened 20 more counters to serve illegal Indonesian migrants who wished to return home. The counters would stay open until 9 p.m. local time, said Arka, who is in Kuala Lumpur along with manpower minister Fahmi Idris to assist the migrants' exit.

Arka said the government was anticipating a boom in demand for the documents after Sunday, as most workers in Malaysia received their wages on the seventh day of the month.

He said the Malaysian Home Ministry had asked all employers to pay the wages of their Indonesian workers on time before their departure.

Fahmi is scheduled to hold talks with Malaysian Prime Minister Abdullah Ahmad Badawi on Friday about labor export issues.

Arka said many Malaysian employers had expressed concern that they would no longer be able to employ Indonesian workers.

Office data revealed 90 percent of Indonesian workers employed in Malaysia were using tourist visas, he said.

Next wages meeting delayed after deadlock

Jakarta Post - November 2, 2004

Damar Harsanto, Jakarta -- Jakarta's provincial tripartite wages council failed to reach a compromise on the planned increase of the 2005 provincial minimum wage (UMP) on Monday.

Seven representatives of the workers association threatened to walk out if the other 14 members of the council -- seven representatives of the employers association and seven from the city administration -- insisted on putting it to the vote.

"The meeting will be suspended for two or three days following our failure to reach a consensus," Wajis Mangkona, a member of the tripartite council representing the workers association, told The Jakarta Post.

It was the council's second failure to reach an agreement after Thursday's meeting, which went on until early Friday, ended with no decision being made. Wajis claimed that representatives of the employers association and the administration insisted on voting on their proposed wage hike of Rp 711,000 (US$78.13), which is 6 percent more than this year's minimum wage of Rp 671,550. In 2003, the minimum wage was Rp 631,000.

"We opposed their proposed increase because it is far below the minimum cost of living in Jakarta, which is Rp 759,000, as stated by the government. The wage increase must be equal or slightly above the minimum cost of living, not less. That's why we are insisting on a bigger raise," Wajis said.

The government-estimated minimum cost of living is, however, less than that calculated by the Indonesian Federation of Metal Industry Unions (FSPMI) after it surveyed the prices of 43 basic commodities at 14 traditional markets. The FSPMI estimates that a worker needs at least Rp 968,134 per month to survive.

The workers have been demanding an increase up to Rp 1.2 million per month.

Indonesian Employers Association chairman Sofjan Wanandi said earlier that employers would tolerate an increase as long as it did not exceed the inflation rate in Jakarta, which is predicted to be around 6.5 percent this year.

He advised the workers association that employers would not be able to meet the workers' demand.

The Jakarta minimum wage hike will be the yardstick by which industrial areas Tangerang and Bekasi decide their wage increases.

The city manpower agency also reminded the wages council that it must accommodate the interests of both workers and employers to ensure that companies survive and provide employment.

Data from the agency shows that around 25,000 private companies in the city employ about four million people.

Talks on minimum wages hit snag

Jakarta Post - November 1, 2004

Damar Harsanto, Jakarta -- What do people survive on a monthly wage of only Rp 671,550 (US$73.80) in Jakarta? It may be difficult for white-collar workers to answer but that is what some of their blue-collar counterparts have to get by on.

However, a recent survey of basic commodity prices in traditional markets by the Indonesian Federation of Metal Industry Unions (FSPMI) found that a worker needs at least Rp 968,134 per month to survive.

"The minimum cost of living allowance is usually 15 percent higher than the basic needs cost, or Rp 1,113,354," the union said in a statement. Therefore, the workers are demanding higher salaries of around Rp 1.2 million.

However, the negotiations between the workers' unions and the employers association have failed to reach agreement on the amount of the provincial minimum wage for next year.

"The talks have been very tough as neither the employers nor the workers are willing to submit to the other side's demands," the assistant to the city secretary for people's welfare, Rohana Manggala, told The Jakarta Post on Sunday.

She added that the employers would only agree to a 7 percent increase in the current minimum wage, which was previously raised by 6.3 percent from Rp 631,000.

Indonesian Employers Association chairman Sofjan Wanandi said that the employers hoped the raise would not exceed the rate of inflation in Jakarta, which is predicted to come in at around 6.5 percent this year.

"We are behind schedule as the talks should have finished last Friday. The employers will not be able to meet the workers' demand. It would still be too high even if they lowered their demand to Rp 1 million. If Monday's negotiations end in deadlock, we will have to have a vote," he told the Post.

A total of 21 representatives of employers, workers and Jakarta administration officials sit on the provincial wages council.

Bylaw No. 6/2004 on manpower provides that the council submits a recommendation to the Jakarta governor on the size of the minimum wage hike. The increase is based on the council's analysis of the prices of 43 basic commodities. Jakarta Manpower Agency director Ali Zubeir said the increase that is agreed upon must take into account the interests of all those involved.

"We must accommodate the interests of the workers and employers so that both can survive," he said, adding that an increase that was greater than the ability of companies to pay would only backfire in the end.

"We must ensure that companies survive and provide employment." Agency data shows that around 25,000 private firms operate in the city and employ around four million people. The data also shows that open unemployment in Jakarta is around 589,700.

Jakarta trade unions disagree with minimum wage decision

Tempo Interactive - November 4, 2004

Suryani Ika Sari, Jakarta -- The debate on the Jakarta provincial minimum wage (UMP) continues. In a meeting which was held by the Provincial Council for Wage Affairs this afternoon, Thursday November 11, employers and the Jakarta provincial government agreed to a UMP of 711,000 rupiah per month. As a result of this decision, trade unions walked out of the meeting and held a demonstration at the Jakarta Municipal Building.

The head of the labour division from the People's Democratic Party (PRD), Lukman Hakim, said he regretted the decision taken by employers and the government saying that an minimum wage of 711,000 per month is insufficient in a situation where the estimated minimum cost of living per month in Jakarta is 759,953 rupiah. He said that the decision is not in accordance with the decree by the minister for labour and transmigration Number B601/MEN/PHI/PJK/VII/2004 dated June 16, 2004, which states that the determination of the 2005 minimum wage must be in accordance with the cost of living. "We are asking the governor not to sign the UMP which has been put forward by employers and the government. It is not in accordance with the ministerial decree", said Hakim.

The PRD is also urging the Jakarta provincial government to immediately abolish "invisible" costs of 30 per cent. They believe that these invisible costs or illegal payments which are made each month by companies could be used instead to increase employee's wages.

When met by Tempo at the Jakarta Municipal Building earlier this afternoon, the head of the Jakarta Office for Labour and Transmigration, Ali Zubeir, denied that trade unions had walked out of the meeting. "They didn't walk-out, they're still there. They just haven't said yes or no [to the decision]", he said.

Zubeir also denied that the UMP is not based on the ministerial decree. "We have not contravened the decree. A [closer] examination is needed [which would show] that there is no obligation [for compliance], but [rather] a expectation that the 2005 minimum wage level is the same as the respective regional minimum cost of living. But we have not violated [the decree]", explained Zubeir.

According to Zubeir, the minimum wage they set is already in accordance with the Concept of a Reasonable Wage and the cost of living in Jakarta. "You need to know that by comparison the regional minimum wage in Jakarta is the highest in the country", said Zubeir. Furthermore he explained, the lowest UMP is set for workers who have worked for a period of less than one year. So he said, if they work for more than a year then it can be negotiated.

Zubeir said that the new UMP will come into force on January 2005. "We set it two months beforehand so that there is a grace period for companies who are unable to pay it", he said. At the moment they are waiting on the governor's signature. "We will be reporting it to the governor immediately, we are only waiting on his signature", said Zubeir.

The governor of Jakarta meanwhile, who Tempo met with at the City Municipal Building, said that he did not wish to intervene in the matter saying that in this case his only role is one of a facilitator. Governor Sutiyoso also said he hoped that in making a decision on the UMP that a compromise can be reached between the respective parties so that neither side feels they have lost or won. "Leave them to discuss it first, I can't intervene", explained Sutiyoso.

When asked about the calls by trade unions for him not to sign decision on the UMP, Sutiyoso said that he will first check with the office of labour affairs. "Yeah yeah, I can delay [signing] it, I'll check with the office of labour affairs first", he said.

[Translated by James Balowski.]

'War on terrorism'

Ba'asyir dismisses bombing charges as 'joke'

Jakarta Post - November 5, 2004

Sari P. Setiogi, Jakarta -- The elderly Muslim cleric who is on trial for the bombings in Bali and at the JW Mariott Hotel in Jakarta, Abu Bakar Ba'asyir, mocked the court on Thursday and challenged it to pile on the charges.

Ba'asyir said in his defense plea that the charges addressed to him was a mere joke, made only to satisfy the United States.

"To add to the thrill, why not add the bombing [in front of] the General Election Commission [July 26], the Kuningan bombing [in September] and the blast [in front of] the Indonesian Embassy in Paris [October 8] to my charges," Ba'asyir said, referring to a number of bombings this year.

He faces criminal charges for the bombings in Bali in 2002 which claimed 202 lives, for which the maximum penalty is life, and of violating the anti terrorism law for the US-chain JW Marriott hotel bombing in Jakarta in 2003 which killed 12 people.

Earlier the Constitutional Court ruled that the anti terrorism law which was passed early last year and for which the maximum penalty is death, could not apply retroactively.

"I was accused for being involved with the Marriott bombing while I had been under detention for about a year. I didn't even know that Marriott was a name of a hotel," the 66-year-old cleric said reading his statement. "Perhaps the police and the prosecutors believe I could go in and out of prison magically ... This is really a joke," he said.

He reiterated claims that his trial was part of a US scenario to pressure on Muslims. Referring to President George W. Bush, who has just been re-elected, he said, "He made things up, as if it was a fight against terrorism. Bush's definition of a terrorist is every Muslim who tries to establish Islamic law." Ba'asyir is also accused for attending a graduation ceremony of an Islamic militia training in Mindanao, the Philippines, in April 2000, an incident which the prosecution relates to his involvement in the bombings.

Graduates of the training included Malaysian nationals Azahari and Noordin M. Top, leading fugitives wanted for several bombing cases in Indonesia, including the latest, September 9 blast in front of the Australian Embassy in Jakarta which claimed 10 lives. The training is said to be held by the United Nations- listed terrorist organization Jemaah Islamiyah, which Ba'asyir is accused of leading.

"I was busy preparing the Congress of Majelis Mujahiddin Indonesia [MMI] in Yogyakarta at that time," said Ba'asyir of the organization which he chairs.

His lawyer Muhammad Assegaff said that the prosecutor "had connected several entirely unrelated events." Also citing the interest of the US and its allies including Australia in the war on terrorism, Assegaff questioned why his client was prosecuted for the Bali bombing only two years after the event.

After the trial, Ba'asyir asked for a suspended detention to celebrate the coming Idul Fitri with his family at home. The judges said they would consider the request.

Thursday trial's was attended by dozens of Ba'asyir's supporters, his wife and two sons. The trial was adjourned until November 11 to hear the prosecutor's response to the defense statement.

Ba'asyir trial: Wrong war, wrong place

Asia Times - November 2, 2004

Gary LaMoshi, Denpasar -- As he faces a second trial on terrorism charges, Muslim cleric Abu Bakar Ba'asyir has taken on symbolic value far beyond his real importance. To the West, Indonesia's handling of Ba'asyir, the alleged head of the Jemaah Islamiah (JI) terror group, is a crucial indicator of Indonesia's commitment to fighting terrorism. But putting Ba'asyir on trial at the West's insistence makes it harder for Indonesia to confront more important facets of its terrorism problem.

Ba'asyir went back on trial last week on terrorism and conspiracy charges in connection with the October 2002 Bali bombings and the September 2003 JW Marriott Hotel blast in Jakarta, both blamed on the JI. The prosecution's indictment claims Ba'asyir visited a JI training camp in the southern Philippines in 2000, where he passed along an order to fighters from al-Qaeda chief Osama bin Laden inciting "waging of war against, and the killing of, Americans and their allies," according to the 65-page document read in court last Thursday.

Ba'asyir also allegedly gave his blessing to the Bali bombings that killed 202 people, most of them Western tourists. He is the co-founder of the Pondok Ngruki Islamic boarding school that sports numerous links to the Bali bombers. Ba'asyir could face the death penalty if convicted.

Wirawan Adnan, an attorney for Ba'asyir, calls the prosecution's charges "ridiculous", dismissing them as "repeated circumstances, repeated conditions of [Ba'asyir's] previous trial".

Cushy custody?

Despite criticism that Indonesia has been soft on Ba'asyir, the 66-year-old cleric has been in custody since the week after the Bali bombings. Last year, he was acquitted of terrorism charges -- prosecutors reportedly presented a laughably weak case -- but found guilty of plotting to overthrow the government. That conviction was overturned on appeal, and Ba'asyir's prison term for immigration violations was sliced in half. When that sentence expired on May 1, Ba'asyir enjoyed seconds of freedom before police rearrested him for questioning in connection with these latest charges.

But that's not enough for some. Singapore's minister mentor and founding father, former prime minister Lee Kuan Yew, wrote in his column for Forbes magazine discussing presidential elections in Indonesia: The feared electoral strength of the Muslim extremist group Jemaah Islamiah (responsible for the bombings in Bali) did not warrant the government's kid-glove handling of Abu Bakar Baasyir [sic], the group's spiritual leader. In Indonesia only those terrorists directly involved in bombings are prosecuted; their religious mentors are left untouched, even though they are the most crucial part of the terror chain. Because of this, madrassas (religious schools) that teach and promulgate extremist Islam continue to spawn new generations of suicide bombers.

Little, old knife maker

Ba'asyir admits proudly, "I've made a lot of knives" with his teachings of the Koran, which as he interprets it, includes sharply anti-American, anti-Israeli views. But Ba'asyir claims he has never stabbed anyone, and no one has presented credible evidence directly linking him to violence. (He blames the US Central Intelligence Agency and Israeli intelligence for the World Trade Center and Bali attacks).

Many of the allegations against Ba'asyir arise from Western intelligence interrogation of captured al-Qaeda operatives. Cheerleaders for Ba'asyir's conviction tend to uncritically accept the word of terror suspects in custody telling captors what they want to hear while disregarding uncoerced statements to the contrary.

It's no surprise that Singapore's Lee wants Ba'asyir convicted of thought crimes for his preaching. By Lee's way of thinking, if a rapist reads Playboy magazine, then Hugh Hefner deserves caning (and, perhaps, those naughty playmates, too). Singapore didn't get where it is by valuing free speech, an independent judiciary or disabusing its founding father of his Confucian conviction of infallibility.

That concept of justice may fly in Singapore, but it is ironic to see the United States and its allies applying pressure to punish Ba'asyir while insisting freedom and democratic values need to be nurtured around the world as the real antidote to terror. In Indonesia, it's particularly troubling for Westerners to endorse the habit of political interference in the judiciary. One of the few places where the interests of Indonesian democracy advocates and foreign investors converge is the promotion of independent courts. However, when Westerners think it's in their interest, as in the case of Ba'asyir -- and the alleged pollution of Buyat Bay -- they're quick to call for politicians to overrule judges.

"I asked the panel of judges and prosecutors to beware of efforts by the two enemies of Allah -- America and Australia -- to interfere in this courtroom," Ba'asyir said at his trial's opening session on Thursday. This public pressure from the West regarding Ba'asyir is a bigger issue in Indonesia than his alleged ties to terrorism. After all, the Marriott Hotel attack and September's bombing of the Australian Embassy in Jakarta took place while Ba'asyir was already behind bars.

The West's fixation on Ba'asyir reinforces Indonesian impressions that terrorism is a Western problem and that the West's so-called "war on terrorism" is a war on Islam. It creates sympathy for a figure whose views are not widely held among the Indonesian public at large, and boosts his popularity, making Ba'asyir an underdog who defies the West. That popular acceptance, in turn, makes it harder for responsible Indonesian leaders to denounce the Islamic radical fringe without seeming to pander to the West.

Test cases, true and false

Media, such as Lee Kuan Yew's state-controlled hometown paper, compound the error by characterizing Ba'asyir's trial as a test case for Indonesia's new President Susilo Bambang Yudhoyono. Yet Ba'asyir's indictment predates the two-week-old administration, so it's not responsible for whatever happens. If the West would stop talking, it would make it easier for Yudhoyono to placate Muslim parties, which largely support him, and their followers if the court convicts Ba'asyir.

If the West wants a test case for Yudhoyono, it need look no further than his appointment to the coordinating minister for political, legal and security affairs portfolio he held until March. Yudhoyono's successor as Indonesia's point man on terrorism is former admiral Widodo A S. In the three years after Suharto's fall, Widodo was the first chief of Indonesia's armed forces drawn from a service other than the army.

Widodo's otherwise undistinguished tenure was marked by the growth of military-supported religious violence. In defiance of presidential orders, the armed forces provided weapons and other assistance to thousands of Muslim fighters in conflicts with Christians around the archipelago. This support for religious radicals gave a mainstream platform to the likes of Ba'asyir. Amid other military efforts to promote political destabilization under former president Abdurrahman Wahid, support of jihad contributed to the spread of lawlessness, encouraging bolder terror attacks.

Western governments, however, remain far more active and vocal in calling for the scalps of those who wrap violence in Muslim robes and have killed hundreds than those who wear military fatigues and have killed tens of thousands. No wonder Indonesians think the war on terror is just a guise for a war on Islam.

The focus on Ba'asyir reflects the decision to attack Iraq: the West chose the wrong target, then labeled it a central front in the war on terror, making that region and the world at large more dangerous, and giving terrorists more fertile ground in which to grow.

[Gary LaMoshi, a longtime editor of investor rights advocate eRaider.com, has also contributed to Slate and Salon.com. He's 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.]

Bashir denies Bali, Marriott role

Australian Associated Press - November 4, 2004

Abu Bakar Bashir has rejected as a joke, charges that he masterminded the Bali and Marriott hotel bombings, turning his latest court appearance into a political soapbox.

Appearing before judges in Jakarta under heavy guard, the militant Muslim cleric ridiculed claims he instigated the Marriott bombing in which 12 people died while he was in prison, saying the charges were a plot by supporters of US President George W Bush. "Surely these charges are a joke," the 66-year-old said.

In a trial that started a week ago, Bashir faces criminal charges of inciting his supporters to carry out the October 2002 Bali bombings in which 202 people were killed, including 88 Australians. He is also charged under new anti-terror laws of plotting the Marriott attack in August last year. If found guilty of the second charge, he could be sentenced to death by firing squad.

The cleric was arrested a month after the Bali blasts and has been in jail since even though an appeals court last year cleared him of allegations that he heads Jemaah Islamiah, the terror network blamed for a series of the bombings and other attacks in South-East Asia.

He declared he had done nothing wrong. "Many charges that were cleared in the previous trial are again being repeated with reckless abandon. Legal boundaries are being crossed and trampled for the sake of accommodating God's enemy, the Bush regime," Bashir said. Bush's re-election was "a catastrophe," he lamented as he read from an eight-page statement in court entitled, Fighting the Despotism and Brutal Plot.

At the start of the trial last week, prosecutors said Bashir played a key role in the Marriott bombing, which killed 12 people. "I am convinced that the prosecution's accusations are a sin and I therefore reject these accusations," Bashir said to shouts of "God is Great" by around 50 supporters.

Prosecutors have also accused Bashir of visiting a JI training camp in the southern Philippines in 2000. There he is alleged to have passed along an order to fighters from al-Qaeda mastermind Osama bin Laden calling for the "war against, and the killing of, Americans and their allies".

Bashir also gave his blessing to the Bali attacks, holding meetings with two now convicted death-row Bali bombers in his house in Solo, prosecutors said.

Bashir arriving amid heavy security at the court in south Jakarta. He looked healthy and wore a cap, scarf and black jacket. He said the US election result was a disaster that would fuel more Islamic militancy.

"In essence, Bush's regime and his allies are fighting us and we are not terrorists, but Islamic fighters who are fighting for [strict Islamic] Sharia law in Indonesia," he said. "If president Bush is re-elected there will be a catastrophe, because he keeps doing evil things. Unless he wants to change, as God wills, there will be a catastrophe."

Bashir said it was impossible for him to have had a hand in the Marriott attack because he was already in jail, while during the alleged Philippines visit in April 2000 he had been preparing for a meeting of supporters in Indonesia. He said prosecutors had drawn up an even more draconian charge sheet that the one used for his failed treason trial last year and suggested they may want to boost it even more.

"To make this joke even more humorous, I suggest that the election headquarters bombing, the [Australian embassy] bombing and the bombing of the Indonesian embassy in Paris to be included ... to make the scary picture even more complete," he said.

Bashir read out the document calmly and later handed copies to the five judges, as well as the defence and prosecution teams. He shook hands with the officials and raised his hands in greeting while smiling to supporters and watching media.

Presenting the formal defence case, his lawyer Mohamad Assegaf said Bashir had been tried before over the same charges. He was in court again only because of pressure from the US and Australia.

Bush was probably "smiling over his coffee" at news of Bashir's re-arrest, Assegaf said. The trial is due to run for five months.

Bashir says Bush victory spells 'disaster' for US

Agence France Presse - November 4, 2004

A militant Islamic cleric on trial in Indonesia on terrorist charges including over the Bali bombings warned President George W. Bush's reelection victory spelled "disaster" for the United States.

Abu Bakar Bashir, who is accused of being a figurehead for the Al-Qaeda-linked Jemaah Islamiyah regional group accused Bush of meddling in Indonesian affairs and warned of retribution unless he stopped.

"Bush's victory will bring another disaster for America unless he changes his actions," Bashir told reporters as he arrived for a second day of his trial in which he faces a possible death penalty if convicted. "America is intervening on many issues in Indonesia, they are the master in this country," he said.

Bashir denies charges of inciting militants to carry out the October 2002 Bali attacks in which 202 people killed and of involvement in the bombing of the US-franchised Marriott hotel in Jakarta last year in which 12 died.

Last year he was cleared of leading Jemaah Islamiyah, blamed for a series of deadly attacks in Indonesia, but was rearrested in April 2004 by police who said they had fresh evidence against him.

The 66-year-old firebrand cleric is a harsh critic of Washington, and regularly delivers tirades accusing the US and Australian governments of conspiring to place him behind bars.

He said Bush feared the introduction of hardline Islamic sharia law in the world's largest Muslim-populated country, which currently practises a moderate strain of the faith.

Although he made no specific threats, Bashir said he anticipated major problems for the United States during Bush's next term. "God willing, there will be a lot of disasters," he said.

Government & politics

Government to sell more shares to plug deficit

Jakarta Post - November 6, 2004

Urip Hudiono, Jakarta -- The government is in a hurry to sell its remaining shares in several publicly listed banks this year to help plug the state budget deficit amid a shortfall in revenue from the privatization program.

"We will sell more of our minority stakes in the banks in an effort to cover the deficit," Minister of Finance Yusuf Anwar said on Friday.

"We will try to accomplish this by the end of the year -- within the remaining 60 days we have left." The government has set itself a deficit target of Rp 26.6 trillion (US$2.9 billion), or 1.3 percent of gross domestic product, for this year. This deficit is supposed to be financed by proceeds from the privatization of state enterprises, the sale of government assets (primarily shares in a number of publicly listed banks) under the PPA, the Ministry of Finance's asset management company, and foreign loans.

But State Minister for State Enterprises Sugiharto said on Friday that the government would not be able to meet the Rp 5 trillion (US$550 million) privatization proceeds target. So far it had only managed to raise Rp 3.4 trillion from the privatization program. With only a couple of months before the current fiscal year ends, it would be impossible for the government to continue the privatization program particularly with the ongoing internal conflict in the House of Representatives. The government would need to obtain the House's approval for the sale of stakes in state enterprises.

"The government does not have enough time to formulate new privatization plans, and so will have to push ahead with those that have been approved by the House of Representatives for this year," he said, referring to the planned sale of stakes in state-controlled Bank Mandiri and Bank Negara Indonesia (BNI).

The government on Thursday managed to raise Rp 1.74 trillion from the sale of a 10 percent stake in publicly listed Bank Danamon.

PPA president director Mohammad Syahrial said on Friday that his office was ready to sell another 20 percent of government shares in Bank Permata in the middle of December. "It [the selling price] is, however, still being calculated by the finance ministry," he said.

The Standard Chartered and PT Astra International consortium recently won a bid to buy the government's 51 percent stake in Permata, which was valued at Rp 2.77 trillion.

The government currently holds 5 percent of the shares in Bank Central Asia (BCA), 20.8 percent in Bank Internasional Indonesia (BII), and 21.5 percent in Bank Niaga. The government obtained stakes in these private banks after bailing them out in the wake of the late 1990s financial crisis.

The government expects to be able to earn a total of Rp 12.9 trillion in cash from the sale of assets vested in the PPA this year. This figure is more than double the initial target of Rp 5 trillion.

While some analysts said that the plan to sell more of the government's shares in publicly listed banks was timely considering the current rally in the stock market, others said that the pressure to carry out the sales quickly could result in investors making lower than expected offers.

Minister to get tough on errant civil servants

Jakarta Post - November 6, 2004

M. Taufiqurrahman and Fabiola Desy Unidjaja, Jakarta -- Civil servants still have two months to mess up before the performance contracts they signed with the Office of the State Minister of Administrative Reforms take effect in January 2005.

State Minister of Administrative Reforms Taufiq Effendi said on Friday that starting early next year, government agencies that provide direct services to the public would be given one month to improve their performance or face punishment.

"Government agencies have to improve their services during that period. There will be rewards for those who improve their performance. On the other hand, errant agencies will be punished," Taufiq announced. The contracts require all civil servants and government officials to fight corruption, collusion and nepotism and improve their services.

There are about five million civil servants, half of whom are teachers.

He said that errant civil servants would face the law if found to be in breach of regulations or involved in corruption.

The office of the state minister signed an agreement with the Corruption Eradication Commission (KPK) on assessing the performance of government agencies. The agreement gives the minister's office authority to pursue litigation against errant civil servants according to prevailing regulations sanctioning the agencies.

Taufiq said the first government institution to work according to the performance contract was the Jakarta Police. "We have given the Jakarta Police one month to improve their services," he said, adding that public service in the Jakarta Police was among the worst.

Motorists face bureaucratic red-tape in obtaining driver's licenses and vehicle ownerships documents and out of frustration they opt to use the services of the ever-present middlemen.

Taufiq said that other government agencies that had signed contracts were immigration offices around the country under the Ministry of Justice and Human Rights' Directorate General for Immigration. "Soon, the performance improvement drive will target offices of regional administrations and hospitals throughout the country," he said.

He said the contracts would be more effective than raids against errant officials or frequent impromptu visits made by high- ranking state officials. "Such methods only humiliate civil servants, but they don't dissuade them from repeating the same bad behavior," he said.

In a related development, President Susilo Bambang Yudhoyono reiterated his commitment to fighting corruption and other irregularities. "I declare war against corruption, collusion, nepotism, inefficiency, leakages and other irregularities ... and the law will be upheld in the case of those who continue to engage in the various bad practices of the past," Susilo said.

House commissions start work, finally

Jakarta Post - November 4, 2004

Jakarta -- Amid the ongoing internal scuffle and criticism of their idleness after a month in office, members of the House of Representatives made official visits and met with the public.

A 17-strong House delegation linked to the People's Coalition and representing Commission V on transportation and public works visited Senen station in Central Jakarta.

Leader of the delegation, Azrul Azwar of the United Development Party (PPP) faction, said the legislators were there to check on preparations by state railway company PT KAI to accommodate the thousands of holiday revelers who will travel to their hometowns this month.

In a similar move, 16 House members from the People's Coalition grouped under Commission VII on energy traveled to several locations across Jakarta and West Java province to inspect power lines operated by the state electricity company PLN.

Commission leader Idris Lutfi said they were checking the power supply in anticipation of a peak in demand over Idul Fitri holiday, which falls on November 15.

After stopping by PLN facilities, the lawmakers headed toward storage facilities belonging to state oil and gas company Pertamina in Kramat Raya, Central Jakarta.

Commission member Irwan Prayitno of the Prosperous Justice Party (PKS) faction said Pertamina should take severe measures against employees and suppliers who stockpiled fuel for their own gains and at the expense of consumers.

Separately, lawmakers of the rival Nationhood Coalition representing Commission VI on trade and industry paid a visit to gift hamper/parcel vendors in Pasar Minggu, South Jakarta, who said they were facing a slump in sales following a call from the Corruption Eradication Commission (KPK) that state officials should not receive gifts in a professional capacity.

Delegation leader Khofifah Indar Parawansa of the National Awakening Party (PKB) said the commission would write to Governor Sutiyoso and the KPK to heed the vendors' plight.

At the House, Commission III for law, autonomy and human rights held a hearing with the Indonesian Corruption Watch (ICW), Transparency International Indonesia (TII) and ProPatria research group.

Presided over by commission chairman Agustin Teras Narang, the hearing discussed efforts to curb corruption in the bureaucracy.

Anung Karyadi of TII called on lawmakers to begin deliberating bills on the right to information and witness protection, as they would boost transparency, which was a major factor in the fight against corruption.

ICW deputy director Luky Djani suggested that legislators quickly follow up all feedback from the public, as most public input on alleged corruption involving state officials fell on a deaf ear.

At the end of his presentation, ProPatria's Hari Prihatono suggested that legislators sit down and settle the internal conflict.

Since their induction on October 1, House members have been deeply divided over the electoral mechanism for the chairmanship of its commissions and five auxiliary bodies. The conflict has raised concerns and criticisms that the House is headed toward virtual paralysis.

House in war for political supremacy

Jakarta Post - November 3, 2004

Ridwan Max Sijabat & Meidyatama Suryodiningrat, Jakarta -- We all knew this would happen. A political impasse pitting the majority opposition coalition against the minority coalition aligned with the President. But few would have predicted it would happen this soon. Even fewer thought it would erupt over an issue so seemingly trivial.

Apart from the immediate policy paralysis, the deadlock in the House of Representatives is marking the battle lines between the House and the executive body. Whoever blinks first in this standoff is likely to have the psychological initiative in the power struggle over the next five years.

The crisis revolves around a subject that at the outset seemed inconsequential -- the election of the chairs of the House's 11 commissions and five other auxiliary bodies. The House's standing orders, particularly articles 36 and 37, are ambiguous on the selection of commission heads.

No institutional or constitutional recourse is on the horizon to resolve this impasse.

In an apparent desire not to get caught in the cross fire, the Constitutional Court has avoided becoming embroiled in the controversy, saying it has no right to intervene in the internal matters of another state institution. But underneath the surface tension of a fight over commission heads, the impasse signifies a bigger power struggle over domination of the now powerful House. What's at stake is a battle to shape the balance of power in the House.

The Nationhood Coalition's 275 seats, combined with the National Awakening Party (PKB)'s 52 seats, have a clear advantage over the 233 seats of the People's Coalition. A vote on commission heads would favor the former. An earlier agreement to divide the commission heads based on the proportion of the parties' seats was scrubbed, causing an uproar from the People's Coalition.

The People's Coalition recognizes that if it gives in easily at this juncture it will only reinforce the domination of the Nationhood Coalition, which is already in the majority.

It also knows that by determining the agenda of commission meetings, the more experienced parties in the Nationhood Coalition -- Golkar and the Indonesian Democratic Party of Struggle (PDI-P) -- could easily outmaneuver the few People's Coalition legislators in key commission decisions. Relatively inexperienced People's Coalition legislators are more susceptible to being picked off and swayed one at a time.

A "victory" for the Nationhood Coalition would affirm the combative nature of the House that President Susilo Bambang Yudhoyono will have to face. Furthermore, it would help dent the spirit of the novice politicians in the People's Coalition.

Susilo -- who draws support from the People's Coalition -- would be left with two uncomfortable options: Either prepare for a permanent joust over crucial bills or begin a conciliatory approach toward the Nationhood Coalition, which would only lead to more presidential compromise.

The People's Coalition has been growing in confidence since it surprisingly won the speakership of the People's Consultative Assembly in late October. The coalition has since been on an emotional high, which encouraged them to face off directly against the more experienced Golkar and PDI-P.

If the People's Coalition can stare down Golkar and the PDI-P, the balance of power in the House in the coming year will be tipped more evenly despite the disparity of seats. In other words, victory now would provide the momentum for future success.

While he officially remains neutral, Susilo would welcome a more evenly balanced House. He would not have to acquiesce as much in pursuing initiatives through the House if the Nationhood Coalition was less politically strong.

The President's latest decision "suggesting" that ministers not attend House commission briefings is a gamble. Though he has to in some way show support for the People's Coalition, he also risks the political ire of the Nationhood Coalition.

The most immediate and practical consequence of the legislative inertia is a backlog of bills and delays in the House's approval of urgent policy matters.

A number of long-awaited draft laws, including on human trafficking and on health, will remain in limbo while newly endorsed contentious bills -- on regional administrations, on the protection of migrant workers, on the Indonesian Military and on the Criminal Code -- cannot be reviewed.

Most notable is the inability of President Susilo Bambang Yudhoyono to revise the 2005 state budget amid soaring oil prices. No less important, albeit a lesser priority, is the delay in consultations for new envoys.

Having been directly elected by the people, Susilo can still exercise power despite the impasse without loss of legitimacy. However, how effective can the executive branch be when the second branch of government is dysfunctional? One way past the deadlock would be for the President himself to engage in mediation. Such open diplomacy would increase the President's standing in the eye's of the general public, and would force the conflicting coalitions to respond with some show of positivity. Failure to do so would weaken the reputation of the coalition regarded as intractable in the face of the President's good offices.

Rival coalitions disagree on how to end deadlock

Jakarta Post - November 4, 2004

Jakarta -- While the two opposing camps in the House of Representatives have opened a line of communication with each other, they are still at loggerheads on how to resolve their weeks-old deadlock.

The Nationhood Coalition along with the National Awakening Party (PKB) said on Wednesday that they were willing to give up some commission chairmanship posts, but the rival People's Coalition insisted that the election of current commission leaders violated the House's standing orders and thus must be declared invalid.

Several legislators said the Nationhood Coalition-PKB axis was ready to relinquish three commission chairmanship posts and 12 posts of deputy chairman for the People's Coalition.

Gayus Lumbuun of the Indonesian Democratic Party of Struggle (PDI-P) said his faction was intensifying discussions on giving up a commission chairmanship to the rival group.

"We will offer rival factions one post of commission chairman and four posts of deputy chairman," Gayus told The Jakarta Post here on Wednesday.

Aside from PDI-P, the Nationhood Coalition members are Golkar, the Reform Star Party (PBR) and the Prosperous Peace Party (PDS). The PKB has thrown its support behind the coalition.

While welcoming the "power sharing", the People's Coalition said that the Nationhood Coalition and PKB violated the House's standing orders and that the violation had to be settled before any meaningful discussion on chairmanship posts could start.

"We welcome the call for a reconciliation, but we have to settle fundamental problems before discussing the power sharing. There was a violation of the House's standing orders that must be settled," said Arief Mudatsir Mandan of the United Development Party (PPP). Beside PPP, the People's Coalition includes the Democratic Party (PD), the National Mandate Party (PAN), the Prosperous Justice Party (PKS) and some small parties grouped under the Democratic Pioneer Star (BPD) faction.

The People's Coalition had boycotted plenary meetings in the House due to disagreements over election mechanisms for leaders of 11 House commissions and five auxiliary bodies.

Although the meetings were attended by more than 300 of the House's 547 members, the sessions were attended by five factions only and thus legally invalid. According to the House's standing orders, a meeting is valid only if it is attended by more than half of the House members and more than half of the House factions.

The Nationhood Coalition and PKB, however, had agreed to change the House's rules so that a meeting attended by more than half of the House members could be declared valid.

The conflict between the two blocs has resulted in dualism in the House, with each holding separate meetings.

In a bid to resolve the deadlock, President Susilo Bambang Yudhoyono made an unscheduled meeting with House leaders on Tuesday.

Deputy House speaker Muhaimin Iskandar of the PKB said on Wednesday that House leaders were communicating with leaders of the opposing factions about possible negotiations.

"We have offered a solution to them. We've given the factions time to think about the solution before sitting together for a talk," he told the press without giving any details.

Meanwhile, several students from universities in the Greater Jakarta urged the legislators on Wednesday to settle their problems in the next two days or the students would hold large demonstrations.

Student activist Ramadoni said he and fellow student activists had discussions with leaders of the two opposing groups and found that neither group was willing to budge.

Over 100 lawmakers yet to declare wealth

Jakarta Post - November 3, 2004

Jakarta -- The Corruption Eradication Commission (KPK) announced on Tuesday it was still waiting for more than 100 legislators to submit reports declaring their personal wealth.

As of Tuesday, the commission had received 409 reports filled by members of the 550-strong House of Representatives. Others who had fulfilled their responsibilities included all members of the 128-seat Regional Representatives Council and 7,462 of a total of 7,771 regional councillors.

KPK deputy chairman Sjahruddin Rasul said the General Elections Commission (KPU) had submitted the reports to the KPK on Monday. The commission had set a Nov. 1 deadline for legislative members to submit their wealth reports, but did not spell out the penalties for those who missed the deadline.

Indonesia's parliament in deadlock

Associated Press - November 2, 2004

A month after being sworn in, Indonesian lawmakers have yet to begin work amid a bitter dispute that could threaten efforts by President Susilo Bambang Yudhoyono to improve security and cure the country's economic ills.

Legislators who supported Yudhoyono's election bid and those loyal to former President Megawati Sukarnoputri are unable to agree over which lawmakers should head parliament's nine commissions.

The two factions -- which each control around 50 per cent of the seats in the house -- are refusing to meet, and are planning to name their own commission heads, media reports said Tuesday. There appeared to be no solution in sight.

"This could become a constitutional crisis if things don't change soon," said Arbi Sanit, a political science professor at the University of Indonesia. "In Indonesia's history, all political crises have begun in the parliament."

A protracted deadlock will harden divisions in the house and hamper Yudhoyono's ability to push through legislation needed to make good on campaign promises to battle endemic graft, fix the economy and fight Islamist militants in the world's most populous Muslim nation.

Yudhoyono has reportedly told his ministers not to attend any functions in the parliament until an agreement is reached, presumably out of fear that the dispute could spread to his Cabinet, which contains ministers from parties on both sides of the dispute.

Yudhoyono won September's direct vote for president by a landslide, but he does not have a clear majority in the parliament, whose 550 legislators were elected separately in April. His own newly formed Democratic Party holds only 10 per cent of the seats.

"This is ... a warning to the government that the going might be tough," wrote Harry Bhaskara in The Jakarta Post. "It seems likely that more heated political wrangling is in store."

The dispute is likely to add to the poor reputation of Indonesian lawmakers, who have long been criticised as lazy and in many cases more interested in using their position to enrich themselves than serving the electorate. The parliament's commission posts are influential, and those dealing with mining, trade and finance have the reputation of being "wet" -- a local term meaning they are laden with opportunities for corruption.

However, some analysts said it was too soon to say the dispute signalled the start of a long battle between the president and the parliament.

The country's largest political party, Golkar, is expected to change its leadership in December, and could well throw its weight behind Yudhoyono. Two of its senior members are in his Cabinet.

Moreover, Indonesian lawmakers have no tradition of working as a formal opposition body to block legislation. Political parties have no ideological basis or specific polices -- something that makes steady opposition hard to sustain.

Worrisome signals from new House legislators

Jakarta Post - November 2, 2004

Harry Bhaskara -- The new members of the House of Representatives have become embroiled in a power struggle less than a month after taking their seats. The People's Coalition in the 550-strong House urged government officials over the weekend to ignore invitations from its rival Nationhood Coalition. The week before that, the People's Coalition, which supports President Susilo Bambang Yudhoyono, boycotted the House plenary meeting that was supposed to elect the chairs of the House's 11 commissions and five other auxiliary bodies.

The House is divided almost evenly between the two coalitions, with the Nationhood Coalition, which supported Megawati Soekarnoputri in her failed bid in the September 20 presidential election, having only a few more seats.

Outside of the coalitions, the faction of the Nation Awakening Party (PKB) -- which is usually allied with the Nationhood Coalition -- often swings between the rival coalitions as the occasion dictates.

This is bad news for people who long for decent representatives in the House, and a warning to the new government that the going might be tough. The expectation that the new House members would exude a fresh and clean image, especially with so many new faces, is now in limbo.

The People's Coalition blamed its rival faction for changing the rules in the race for the commissions chairs when it boycotted the October 20 plenary session. With 10 factions in total, the House has only 547 members, three short of 550 because three legislators have yet to be installed due to some legal troubles.

The Nationhood Coalition comprises the factions of the Golkar Party, the Indonesian Democratic Party of Struggle (PDI-P), the Prosperous Peace Party (PDS) and the Star Reform Party (PBR), with a total seats of 275. Megawati Soekarnoputri lost her bid for reelection in the September 20 presidential election despite the support of these parties.

The People's Coalition comprises five factions, including the United Development Party (PPP), the Democratic Party, the Prosperous Justice Party (PKS), the National Mandate Party (PAN) and the Democratic Pioneer Star (BPD), with a total of 233 seats. Apart from the PPP, which initially belonged to the Nationhood Coalition, these parties supported Susilo in the presidential election.

The PKB faction decided to tilt toward the Nationhood Coalition on the commission leadership issue.

The tussle in the House began in the third week of October, after the election of the House leaders. Initially, all of the factions agreed to pick the leaders of the commissions and five other auxiliary bodies based on the proportion of the parties' seats in the House. With the most seats in the House, Golkar would get four commission chairmanships and 11 deputy chairmanships. The second biggest faction, PDI-P, would get three chairmanships and nine deputy chairmanships, while the PPP, Democratic Party and PAN would get two chairmanship posts each, and the PKB one.

The PKB rejected this scheme, saying the division of the posts was unfair. Holding 52 seats it demanded two commission chairmanship posts, the same as PAN which has 53 seats. Some of the smaller factions also wanted more leadership posts.

When the suggestion was tabled that the posts be voted on, the Nationhood Coalition agreed as the voting would favor them. But with only 232 members in the 550-strong House, the People's Coalition could smell defeat and refused to attend the session.

Interestingly, during the October 20 boycotted plenary session, the Nationhood Coalition and the PKB faction unilaterally endorsed the members of the House's 11 commissions and its five auxiliary bodies.

The boycott by the People's Coalition continued on October 21 and October 22, when only the Nationhood Coalition and the PKB faction showed up to select the chairs and deputy chairs of the House commissions.

Pundits are debating the legality of the selections, as there is a ruling in the House requiring more than half of the House members from more than half of the factions be present for a decision to be considered legal.

The rivalry between the Nationhood Coalition and the People's Coalition dates back to the September 20 presidential election. The pro-Susilo People's Coalition was set up in response to the establishment of the Nationhood Coalition by heavyweight parties like Golkar and PDI-P to support Megawati. It is a rivalry that is not going to go away very soon.

The pendulum-like position of the PKB in the House is attributable to the failure of Susilo to win the support of the party. Susilo succeeded in winning many allies for his party, the small and little-known Democratic Party, but the PKB, which is closely associated with the Nahdlatul Ulama, the nation's biggest Islam organization, rejected his approaches. True that two PKB leaders, Alwi Shihab and Saifullah Yusuf, are now in Susilo's Cabinet, but former president Abdurrahman "Gus Dur" Wahid, the prominent Muslim scholar and PKB co-founder, still holds clout in the party.

Sad as it may be, the House saga is not a surprise. The previous House members, who ended their terms on September 31, 2004, like their predecessors were always seen in an unsavory light. Among the reasons for this were the ever-persistent rumors of money politics. It is widely believed that certain commissions are perceived as more "lucrative" than others, hence the wrangling over leadership for those commissions, forgetting the fact that the leaders' main function is merely as the commissions' spokesmen.

What is surprising is the fact that this internal tussle occurred so early and over such apparently trivial matters. If serving the people was high on the members' agenda, why this wrangling for the leadership of the commissions? The boycotts and all the other games have stalled House activities and delayed some urgent matters, such as the replacement of the Indonesian Military (TNI) chief, which must still be discussed.

It seems likely that more heated political wrangling is in store. The early days of Susilo's government will likely be anything but smooth sailing.

SBY's 100-day program gets thumbs-up

Jakarta Post - November 1, 2004

Jakarta -- While details remain sketchy, the newly unveiled 100- day national economic program has apparently met the expectations many people have, by showing that the government literally means business when it comes to improving the country's investment climate and economy.

Economist Pande Radja Silalahi of the Centre for Strategic and International Studies (CSIS) and Indonesian Employers Association (APINDO) chairman Sofyan Wanandi expressed their optimism that the program provided a sound basis for developing policies that could cure the country's economic ills.

"The direction is there, be it on tax reform, fiscal and macroeconomics consolidation, and others. There's still a long way to go, but at least [the program] shows clear signs as to where the new government and its policies are headed," Pande said on Sunday.

The government announced last week its to-do list for its first 100 days in office that highlights the need for further tax reform -- among others -- in annulling certain regulations that are deemed detrimental to the nation's business climate.

The revocation of luxury tax imposed on non-alcoholic carbonated drinks and value-added tax (VAT) on heavy machinery or equipment for the mining industry, for example, are high on the list.

Additional plans to introduce tax amnesty for long-time tax evaders are also being considered, under which the government would throw out all criminal charges in return for a calculated fine in a kind of bail-out scheme.

Pande said in principle, the measures in the program reflected the business community's needs and requests, and thus indicated the government's commitment to improving the business climate and so boosting economic activities.

Still, the program was lacking in details, he added. "As regards tax amnesty, for instance, how is the government going to do this? It requires a massive, coordinated effort among state institutions ... Not to mention it will need a law on the issue, which means it would be impossible for the government to accomplish in its first 100 days," Pande said, adding there was no guarantee such a legislation would be passed within such a short time.

APINDO chairman Sofyan, who also heads the powerful business lobby the National Economic Recovery Committee (KPEN), also hailed the planned revocation of rulings that discouraged business.

"Amending the decrees and bylaws alone would help solve 60 to 70 percent of the problems faced by businesses here, and would eventually attract investment," Sofyan said, adding that some parts of the economic program followed the recommendations made in the trade and investment road map prepared by the Indonesian Chamber of Commerce and Industry (Kadin) and the KPEN.

"In short, I don't believe that the government would not implement our recommendations, as among SBY's aides are men and women who were involved directly in drawing up the road map," said Sofyan, referring to former Kadin chairman Aburizal Bakrie, Mari Elka Pangestu and Fahmi Idris, who now sit in President Susilo Bambang Yudhoyono's Cabinet as Coordinating Minister for the Economy, Minister of Trade and Minister of Manpower and Transmigration, respectively.

Sofyan said the business community had recognized the need for a control mechanism and were forming a team to monitor the implementation of the 100-day program, comprising local business players and representatives of foreign trade chambers, as well as noted economists such as Hadi Soesastro and Faisal Basri.

Experts scold House for internal quarrels

Jakarta Post - November 1, 2004

Kurniawan Hari, Jakarta -- Noted observers have criticized the two opposing coalitions in the House of Representatives on Sunday for placing short-term, party gain over and above the public's interest in the election of leaders of House commissions and auxiliary bodies.

They argued that as public representatives, the legislators should reflect the aspirations of the people rather than those of their respective political parties.

"This is disappointing and embarrassing. The legislators must start thinking about the aspirations of the people, not those of their respective parties," J. Kristiadi from the Centre for Strategic and International Studies (CSIS) said on Sunday.

Legal expert Sri Soemantri from Padjadjaran University (Unpad) expressed concern over the fact that the legislators were still quarreling about posts one month after taking their seats. "The legislators must end their bickering and start work soon," he said.

The majority Nationhood Coalition has been at loggerheads with the pro-government People's Coalition after they failed to reach agreement on the election mechanisms for commission posts.

The Nationhood Coalition -- comprising Golkar, the Indonesian Democratic Party of Struggle (PDI-P), the Reform Star Party (PBR) and the Prosperous Peace Party (PDS) -- wanted House commission and auxiliary posts to be put to vote, while the People's Coalition -- consisting of the United Development Party (PPP), the Democratic Party, the National Mandate Party (PAN), the Prosperous Justice Party and several small parties grouped under the Democratic Pioneer Reform faction -- have been insisting that the posts be allocated proportionally.

If a vote were to be taken, the Nationhood Coalition would probably take all the commission chairmanships, while distributing the posts proportionally would ensure that members of the People's Coalition also got chairmanship posts.

The only non-coalition member of the House, the National Awakening Party (PKB), has thrown its support behind the Nationhood Coalition.

Members of the People's Coalition have been boycotting House meetings since Tuesday of last week, prompting the rival coalition and the PKB to proceed with the election of the chairmen of the House commissions and auxiliary bodies.

The People's Coalition and some analysts have said the meetings were invalid as they were not attended by more than half of the factions as required by the House standing orders.

According to the standing others, a meeting is valid and may thus take legally binding decisions if it is attended by more than half of the legislators and half of the factions.

While the meetings held since Tuesday were attended by more than 300 of the House's 547 members, they still lacked legitimacy as they were attended by only five factions.

On Sunday, leaders of the People's Coalition stressed that they would not attend commission meetings unless the composition of commission chairmanships was changed.

"The commissions and their chairmen are not legitimate. We hope the government will not send officials to attend their meetings," said Dradjad H. Wibowo, deputy chairman of the National Mandate Party (PAN) faction here on Sunday. Dradjad, however, did not offer any concrete proposals for breaking the deadlock.

The tug-of-war among House's factions is a continuation of the political rivalry between the Nationhood Coalition and the People's Coalition.

The Nationhood Coalition supported the reelection of former president Megawati Soekarnoputri in the country's first direct presidential election, while the People's Coalition backed Susilo Bambang Yudhoyono, who took the presidency in a landslide victory.

Indonesia's thinking general urges action

Asia Times - November 1, 2004

Bill Guerin -- Indonesia's new president, Susilo Bambang Yudhoyono, dubbed the "the thinking general", has been hard at work making the rounds of key ministries to lay down the law, as it were. Since taking office on October 20, Yudhoyono -- or SBY, as he is commonly known -- has, at least by his words and actions, conjured up an apparent sense of urgency, one conspicuously lacking in the previous administration.

The president needs to prove very quickly that the confidence with which the public voted him in to power is not misplaced. His administration is expected to adopt liberal economic policies to boost the economy, create employment and reduce poverty as well as undertake measures to attract foreign direct investment and increase non-oil exports.

Critics have claimed that despite being a former military commander, Yudhoyono can be indecisive, preferring to consider all perspectives and opinions before making up his mind. But during his first week in office, Yudhoyono proceeded to act in line with his campaign promises. Key issues include achieving stability, growth levels sufficient to alleviate poverty and transparency that will encourage foreign investors to put money back into Indonesia. Investment has long been held back by a poor political, regulatory and legal climate.

"Corruption and injustice are everywhere. Our legal framework is weak, law enforcement does not work well," the president said last Tuesday, adding that the country was "being ridiculed" abroad because of its poor image and that rampant corruption and poor law enforcement were scaring off foreign investors.

He wants politicians and officials found guilty of graft, Indonesia's most common crime, to be sent to the country's own "Devil's Island", the infamous high-security jail on Nusakambangan Island in Central Java, whose most famous inmate is Tommy Suharto, youngest son of the former president. Attorney General Abdul Rahman Saleh, a Supreme Court judge with a reputation for honesty handpicked by Yudhoyono, is reviewing all outstanding corruption cases as a matter of priority.

Foreign and domestic businesses as well as the International Monetary Fund (IMF) have long called for tax reforms to improve Indonesia's investment climate. Though not commenting on reforms, the president last week ordered a major hike in tax revenues over the next five years. He wants the tax ratio to be increased by 5% now and is targeting a ratio at 19% of economic output by 2009.

Analysts blame the corrupt tax administration system for the low level of tax collection. The government is targeting tax revenue of Rp272.17 trillion (US$29.9 billion) this year, increasing to Rp297.51 trillion in the 2005 state budget. But tax officials have claimed the government could lose up to Rp676.5 trillion in potential tax revenue this year alone.

Indonesia's decision to leave the IMF means the country is no longer eligible for the debt-rescheduling facility from the Paris Club of sovereign creditors. From the outset of the 2004 fiscal year, it has cost the government almost one-third of the state revenue to service both domestic and foreign debts.

The most diligent corporate taxpayers are foreign multinationals, who fear that the new administration, squeezed by larger than expected budget shortfalls and continuing high levels of debt, could make up the shortfall by raising already high corporate taxes. The top corporate tax rate is 30%, higher than those imposed in neighboring countries such as Thailand and Malaysia.

Last year's new labor laws have made it too costly for businesses to compete with countries such as China. A World Bank study estimates the cost of firing a worker in Indonesia averages 157 weeks of pay, a fact that ensures businesses take a long, hard look before recruiting employees at a time when unemployment is soaring out of control. The lack of new jobs and economic opportunities has highlighted weak institutions, bureaucratic obstacles and limited government effectiveness, but the Indonesian Chamber of Commerce and Industry (Kadin) by has come up with a master plan geared to help businesses. Kadin, led for years by Coordinating Minister for the Economy Aburizal Bakrie, presented Yudhoyono last Wednesday with a roadmap, "Revitalizing Industry and Investment".

The document has a strategy, concepts and recommendations on how to improve competitiveness of local industries and boost investment over the next five years. It focuses on five issues -- law enforcement, taxation, labor, infrastructure and regional autonomy. Elsewhere, Bakrie said the new government would continue the privatization programs of state-owned enterprises (SOEs) launched by the previous government, but with "new ideas and a new style". He declined to elaborate.

Among the key policies set out in the White Paper are measures aimed at achieving and maintaining fiscal and monetary stability. But a series of debts and liabilities incurred by SOEs remain the government's liability and threaten fiscal sustainability. Two of the most outstanding and urgent of such issues are the interminable dispute between state oil and gas company Pertamina and US-based energy company Karaha Bodas Company (KBC), and the lengthy spat between the government and Mexico-based cement giant Cemex SA. Cemex has taken the government, the largest shareholder in Semen Gresik, to international arbitration. The case could result in a liability for the government as large as $500 million.

The private sector also drew interest and attention last week with the arrival of Peter Woicke, vice president of the International Finance Corporation (IFC). On Thursday he started a two-day scheduled official visit to meet Yudhoyono, Minister of Finance Yusuf Anwar and other members of Indonesia's economic team. The IFC is the World Bank's investment arm, and Woicke's visit is likely to lead to a commitment and support by the IFC for the new government, particularly for sustainable development of the private sector.

Just as the president was proving his word was as good as his bond, Bakrie chose to announce that though still in hock to the IMF to the tune of some $9 billion, the new government would not work to meet the series of economic reform programs and targets laid out in a September 2003 White Paper already agreed to with the IMF.

Indonesia's weak legal system and a political culture steeped in corruption and bad governance had been laid wide open by the regional crisis in the late 1990s when the IMF made its policy recommendations. The lack of transparency in government and corporate sectors had then obscured the true state of the economy. The White Paper was meant to change all that and act as a policy anchor for international creditors and investors to base their perceptions and calculations of the country's economic outlook and investment risks after it left the IMF at the end of last year.

On Wednesday Bakrie said a "Government Working Plan" would replace the post-IMF program monitoring. Still, his announcement was a clear and positive signal of intent, unlike that of former President Megawati Sukarnoputri, who managed to confuse markets and even her own ministers in August. During her presidential State of the Nation Address, Megawati referred to the IMF's "honest and open admission of past mistakes" before dropping her bombshell. The least the IMF could do, Megawati said, apparently without tongue in cheek, would be to initiate debt-rescheduling initiatives to ease the government's fiscal burden.

Megawati's plea seemed to be a well-aimed shot in the foot. Given that most agree her government deserved credit for curbing inflation and reducing government debt to a manageable level, projecting an image of a weak administration unable to handle debt without outside help seemed the height of folly so close to the September run-off between herself and Yudhoyono.

Though an anti-IMF stance during an election year might have seemed a good tactic, laying most of the blame for the sluggish growth and stalled reforms under her administration at the door of the IMF backfired for Megawati. Yudhoyono soundly trounced her in Indonesia's first-ever direct presidential elections.

The pressure on Yudhoyono to make swift progress is severe, but all in all his first week in office was a lively one, encouraging for Indonesians and Indonesia watchers alike. Though political honeymoons are, by their nature, very short, the new president has given cause for some optimism that years of weak leadership may soon come to an end.

It remains to be seen whether or not Yudhoyono's popular mandate will give him the authority to overcome obstacles in parliament -- which his predecessor could not. But as Andrew Steer, the World Bank's country director for Indonesia, puts it, "There are grounds for confidence."

Bill Guerin has worked for 19 years in Indonesia as a journalist and editor. He specializes in business/economy issues and political analysis related to Indonesia. He has been a Jakarta correspondent for Asia Times Online since 2000 and has also been published by the BBC on East Timor.

NGO coalition for clean and effective parliament launched

Detik.com - November 5, 2004

Melly Febrida, Jakarta -- The poor performance of the People's Representative Assembly (DPR) has provoked four non-government organisations (NGOs) to launch the NGO Coalition for Clean and Effective Parliament (Koalisi LSM untuk Parlemen Bersih dan Efektif).

The coalition is made up of the Indonesian Forum for Budgetary Transparency (Fitra), the Indonesian Parliamentary Social Concern Forum (Formappi), Indonesia Procurement Watch (IPW) and the Jakarta chapter of the Indonesian Legal Aid Foundation (LBH).

The launch was held earlier today on Friday November 5 at the parliamentary press room in Senayan, South Jakarta, and attended by four speakers, Arif Nur Alam from Fitra, Erna Ratnaningsih from LBH, Ibet and Sebastian from Formappi.

In a press release they said that the coalition was formed to control the performance of the parliament, promote public participation, promote transparency in public institutions and promote change within the parliament.

The background to the formation of the commission was the performance and behaviour of DPR members during the period 1999- 2004 which was less than satisfactory and failed to fulfil the public's expectations.

In terms of their functioning, the coalition said that the 1999- 2004 parliament was unable to finish the enactment of new legislation and had been incapable properly carrying out the function of checks and controls, was not transparent in terms of its budgetary functions and became an arena for corruption (individual enrichment).

They said that the behaviour of the parliament during the last period was also of concern, that is formally of factually members often failed to or pretended to attend sessions. The code of ethics was not enforced and the issue of corruption by legislators damaged the image of the DPR as a people's representative body.

In terms of fulfilling society's aspirations meanwhile, it is not clear at the moment if the DPR will act in the public's interests. In institutional terms it is also unclear who will do this as access to information this matter is difficult to obtain.

Now, because the members of the DPR for the period 2004-2009 is made up of many new faces, it has created a new hope within society. The public has high hopes that the parliament can be the key to the future development of democracy.

Unfortunately, they have started their term of office by fighting over leadership positions in the DPR's Commission I. This said Sebastian, could create public mistrust and even an allergy to politics. (gtp)

[Translated by James Balowski.]

PRD proposes DPR commissions be temporarily frozen

Tempo Interactive - November 2, 2004

Suliyanti, Jakarta -- The deputy chairperson of the People's Democratic Party (PRD), Lukman Halim, has proposed that the People's Representative Assembly (DPR) commissions be temporarily frozen in order to cool down the increasingly sharp dispute developing between the parliament and the government.

Furthermore said the party, who's head office is located in Tebet, South Jakarta, they are proposing the formation of a flexible and democratic working group as the emergence of two camps, the People's Coalition and the Nationalist Coalition, has only served sharpened the dispute.

The People's Coalition is a grouping of parliamentary fractions including the United Development Party, the Democratic Party, the National Mandate Party, the Justice and Prosperity Party and the Democratic Pioneer Star Party. The Nationalist Coalition meanwhile is made up of the Indonesian Democratic Party of Struggle, the Golkar Party, the Star Reform Party and the Peace and Prosperity Party.

The dispute between the two camps was triggered by the pro- and contra-positions taken over the replacement of TNI (armed forces) Chief General Endiartono Sutarto. PRD general secretary Zelly Ariane says that they will soon be holding a meeting with a number of social organisations over the issue.

On Human Rights Day which falls on December 10, the party will take to the streets to articulate its demands. Their aim is to try to gauge the reaction of the legislator to see if they still preoccupied with their own interests or are working for the benefit of the people.

According to Ariane, the proposal for the formation of a working group represents the most neutral way to show the people that the DPR still cares [about their welfare].

This week they will be sending a letter to the Justice and Prosperity Party (PKS) calling on them to end the dispute and to fight for amendments to the newly enacted law on the TNI, the Anti-Terrorist Law and other legislation which needs to be discussed urgently. The PRD chose the PKS as a bridge with the DPR because according to the PKS themselves they have a high level of support among the people.

[Translated by James Balowski.]

Corruption/collusion/nepotism

Governor must resign: NGOs

Jakarta Post - November 6, 2004

Padang -- A group of 16 non-governmental organizations (NGOs) demanded on Friday that West Sumatra Governor Zainal Bakar step down following charges that he is involved in a corruption case.

The governor needed to resign to expedite the investigation into his case, said the group of NGOs in a statement that was made available to the media. The governor was earlier named a suspect for his alleged role in the misuse of Rp 6.4 billion (US$680,851) out of the local budget by the West Sumatra provincial council.

Besides the governor, 43 councillors on the provincial council were earlier named suspects in the case. The councillors have been convicted, but remain free pending an appeal to the Supreme Court.

This is the war on corruption, Mr. President!

Jakarta Post - November 3, 2004

Nadirsyah Hosen, Jakarta -- Corruption is closely linked to the way in which governments conduct their affairs, and, therefore, also to the growth of governments' economic activities. It is unlikely that corruption can be substantially reduced without modifying the way in which governments operate. The fight against corruption is, thus, intimately linked with the reform of the state.

Reform becomes the top priority of our new president, Susilo Bambang Yudhoyono. It is worth considering that reform does not mean simply change; reform is change for the better. This suggests that the Indonesian people expect the government, not only to build a government free of the practices of collusion, corruption and nepotism, but also to bring an end to these problems. In other words, this is a war against corruption.

At the start of this war, President Susilo visited the Attorney General's Office (AGO) early last week, to show his commitment to the fight against corruption, collusion and nepotism. Although this is a good start, the President should be aware of the systemic and systematic corruption in the AGO itself. For instance, it is notable that the AGO has never applied the burden of proof -- or Article 2 (2) of Law No. 31 of 1999 -- to suspects or defendants.

I asked an AGO official why. He replied: "Have you visited the AGO car park? When you see luxurious cars there, you might understand why we never use the provision on the burden of proof. Since it is impossible to buy such luxurious cars based on our salaries, the first victims of the enforcement of this burden of proof article would be ourselves."

It is also interesting to consider a story from Prof. Bruce Markell of the University of Nevada, Las Vegas: "At one point, during my first travels to Indonesia, I was having a meal with several prominent attorneys. The discussion drifted toward nepotism, which I would classify as a form of corruption. They did not see it that way, however.

When I demurred that power should not be used to promote one's friends and relatives, I was met with a puzzled silence. Finally, one attorney, in complete sincerity, said 'Well, what else is power good for?'".

These conversations suggest that the unwillingness of the attorneys to eradicate systemic and systematic corruption is the biggest obstacle to combating corruption. This explains why Transparency International (TI), and the Political & Economic Risk Consultancy (PERC) have consistently indicated an increase in corruption in Indonesia, in terms of both quantity and quality. To date, there is no significant improvement in combating corruption.

Under this circumstance, what should the President do? First, all decision-makers in government should be accountable to the public. This means that any program must be audited. Furthermore, processes, institutions and information must be directly accessible to those concerned with them, and enough information provided to understand and monitor them.

It is well known that rules are often confusing, documents specifying them are not publicly available, and, at times, the rules are changed without adequately publicized announcements. Unclear information can be used as an opportunity to ask for "fees", "rewards" or "a commission".

Second, since the probability of detecting corruption decreases as the corruption becomes increasingly systemic, the traditional methods of detection and enforcement become less effective. Under these circumstances, Buscaglia and Ratliff (2000) argue, such preventative measures as organizational change (the reform of the civil service by, for example, reducing procedural complexities in the provision of public services) and salary increases are more effective.

Third, effective anticorruption strategies should be based on good governance and the rule of law. This means that anticorruption reform should promote transparency, accountability, effective decision making, both preventative measures (including the audit and disclosure of public servant's wealth), and repressive measures (including "frying the big fish"), strong political will to combat corruption, and the strengthening of law-enforcement agencies, including the AGO.

Law-enforcement institutions are crucial in the struggle against public and private corruption and, at the same time, the integrity of these institutions is essential for the credibility of that struggle.

Fourth, the Susilo government should also encourage public participation in order to combat corruption, through the establishment of a witness-protection scheme. Witness-protection legislation would encourage testimony, by protecting material witnesses and improving the prosecution and conviction of corrupt people. The failure to provide witness protection has seriously hampered the effective implementation of the anticorruption drive.

Last, the President should be reminded that the failure of his government in fighting corruption would undermine his political legitimacy.

[The writer is a lecturer at the Faculty of Shari'a and Law, UIN Syarif Hidayatullah Jakarta.]

No-gift policy hits parcel business hard

Jakarta Post - November 3, 2004

Jakarta -- Parcel vendors who for years enjoyed a thriving business are feeling the heat of a new political reality that frowns on the giving and receiving of holiday gifts.

Dozens of parcel vendors from Greater Jakarta staged a protest on Tuesday at the House of Representatives and the office of the Corruption Eradication Commission (KPK), to demand that the KPK retract an earlier statement calling for state officials to treat holiday gifts as bribes.

"That statement has killed our business," said Boil, who runs a parcel business on Jl. Haji Samali in Pasar Minggu, South Jakarta. He said that in past years his shop had sold 40 percent of its prepared parcels 10 days before Idul Fitri, which this year falls on Nov. 14. "So far this year we have not sold a single parcel."

In response to the vendors' demand, a group of House legislators said they would ask the KPK to soften its stance on holiday gifts. "We will do our best to help find a solution to the problem facing these vendors, hopefully within 24 hours," said Khofifah Indar Parawansa, a member of House Commission VI for industry and trade.

KPK chairman Erry Riyana Hardjapamekas last week asked President Susilo Bambang Yudhoyono, who during the election campaign portrayed himself as the anticorruption candidate, to prohibit state officials from receiving gifts in connection with their positions. He said those officials who had already accepted Idul Fitri gifts should donate them to the needy.

Gift parcels also are given at Christmas and other major holidays, usually by subordinates to their superiors, a custom that can be traced back to the kingdom era of the country when vassals paid tribute to their king in return for certain privileges.

Another parcel vendor, Oding, said his shop had a customer from a state enterprise cancel an order for about 1,000 packages. The vendors said customers from banks, private companies and state enterprises were the backbone of their business, comprising as much as 60 percent of total orders.

The traders said they had already invested from Rp 30 million (US$3,260) up to billions of rupiah to prepare their Idul Fitri parcels. Gift packages containing food sell for about Rp 500,000, while parcels containing ceramic or glassware can cost up to Rp 6 million.

There does seem to be one positive outcome of this new aversion to gift parcels: It has brought together for the first time vendors from Cikini and Manggarai in Central Jakarta, and Tebet, Cilandak, Pondok Indah and Pasar Minggu in South Jakarta.

"Because of this we now know each other. We will form an association next year," one of the vendors, Irwan, said.

Probe into corruption in steel mills sought

Jakarta Post - November 3, 2004

Jakarta -- Around 200 students and activists staged a demonstration at National Police Headquarters on Tuesday, demanding the police investigate an alleged financial scandal involving three steel mills of the Gunawan Steel Group in the East Java capital of Surabaya, believed to have caused more than Rp 1.2 trillion in state losses.

"The police must look into the financial scandal, which is similar to the one that involved businessman Eddy Tanzil, who is still at large. Beforehand, the police should bar the steel group's head Gwie Gunawan alias Gwie Sie An from leaving the country so that he is available for questioning immediately," said M. Arief who led the demonstration.

The students and activists aired similar demands to the Attorney General's Office and the House of Representatives in a rally here over the weekend.

Arief, also coordinator of the Committee to Monitor State Assets, said the police had to reopen an investigation into the scandal as the steel group had apparently retaken control of three steel mills seized in 1998 by the Indonesian Bank Restructuring Agency (IBRA) as collateral against the Rp 1.45 trillion (US$159.70 million) it owed to Bank Mandiri and the now-liquidated Bank Bali. He said the Gunawan Steel Group bought the three mills for Rp 185 billion via three companies that are believed to be owned by the Gwie family, with the help of allegedly corrupt members of the East Java legislature and former IBRA employees.

He said the three steel mills were seized by IBRA over the steel group's inability to repay its huge debt to the two banks, but were later sold under the agency's asset-sales program to two companies believed to be owned by the same group.

PT Gunawan Dian Steel Pipe (GDSP), with Rp 453 billion credit, was sold for Rp 27 billion to PT Bina Kreasi Prima Niagatama, while PT Gunawan Iron Steel (GIS), with Rp 234 billion credit, was sold for Rp 14 billion to (Bina Kreasi). PT Gunawan Dianjaya Steel (GDS), with Rp 762 billion in defaulted loans, was sold for Rp 144.8 billion to PT Parma Iriando Perkasa.

Arief added that the two firms that bought the three troubled companies belonged to the Gunawan Steel Group, "and this violates regulations on asset sales conducted by the government."

Councillors return cash, motorcycle

Jakarta Post - November 2, 2004

Palu -- Fearing corruption charges, former Donggala councillors returned some of what they had taken on Monday to the Central Sulawesi Prosecutor's Office.

Former councillor Hafip Ponulele handed over a motorcycle last Friday, while former councillor Peterson Tampusu handed over a Yamaha motorcycle and Rp 5 million (US$532) cash to provincial councillors on Monday.

The cash and the motorcycle came from the regency's 2003 budget that prosecutors claim was corrupted by the former councillors. The total amount allegedly embezzled by the former Donggala councillors reached Rp 7.8 billion.

Local chiefs now top graft suspect list

Jakarta Post - November 1, 2004

Abdul Khalik and Syofiardi Bachyul Jb, Jakarta/Padang -- After several dozen local legislators across the country were convicted for corruption, police and prosecutors were currently targeting local administration heads in their fight against endemic corruption.

Those on the graft hit list include several governors, including Zainal Bakar of West Sumatra, at least one mayor and three regents with pledges of more to be named in the next few weeks.

Prosecutors have declared Zainal a suspect for his alleged involvement in the same collective Rp 6.4 billion (US$680,851) embezzlement case that saw 43 councillors imprisoned recently.

Forty-three councillors were prosecuted in that case back in July, with the Padang District Court sentencing them to between 24 and 27 months for their roles in embezzling the money from the 2002 provincial budget. West Sumatra Prosecutor's Office chief Antasari Azhar said on Saturday his office had filed a request on Oct. 25 with President Susilo Bambang Yudhoyono to question the governor.

Presidential permission is required for police and prosecutors to summon a senior state official for questioning.

"Hopefully, the President will give us the green light to question Zainal after Ramadhan. It is already the policy of the new government to complete the handling of all cases in prosecutors' offices," Antasari said in Padang, the capital city of West Sumatra.

He said the governor was allegedly implicated by the councillors' testimony during their trial. They were convicted of overstating their telephone charges, house rental costs and insurance.

Separately, presidential spokesman Andi Mallarangeng announced on Saturday that Susilo had signed letters approving police requests to question Badrul Kamal, the mayor of Depok in West Java, Syamsul Hadi, the regent of Banyuwangi in East Java, and Ansel Petru Youw, the regent of Nabire in Papua.

Badrul is accused of embezzling Rp 9.4 billion from Depok's budgets from 1999 to 2004, and Rp 34.9 billion from its regional development funds.

Syamsul allegedly transferred Rp 251 million to his personal account from Banyuwangi's budget, while Ansel is charged with abusing his position as a regent and getting involved in corruption during his previous job as the Nabire education and culture office head.

Also, Attorney General's Office (AGO) spokesman RJ Soehandojo said West Kalimantan prosecutors were now investigating Pontianak Regent Cornelius Kimha for his alleged involvement in a Rp 2.2 billion graft case. "We are now dealing with several cases involving regents, including Pontianak Regent Cornelius Kimha, and governors," said Soehandojo.

National Police chief of detectives Comr. Gen. Suyitno Landung Sudjono confirmed on Saturday that his office had received permission from President Susilo and that they would soon deliver them to the provincial police offices that would be handling the graft cases of Badrul Kamal, Syamsul Hadi and Ansel Petru Youw.

"The provincial police will summon them immediately after receiving the permission letters. We hope that they will question them this week," added Suyitno.

National Police director of the corruption crimes division, Brig. Gen. Indarto said that apart from the mayor and the two regents, the police were also waiting for permission from the President to question several more regents and governors across the country.

"Based on requests from provincial police, we have submitted letters to the President asking for approval to summon several more regents and governors. We hope we can have them as soon as possible," said Indarto.

He declined to reveal any names, saying only that there were too many to remember. However, he hinted that one of them was a senior official from North Maluku province.

Several governors, regents and mayors have joined a growing list of accused officials, mostly local councillors, as Indonesia, named by watchdog Transparency International as one of the world's most corrupt countries, attempts to root out graft.

President Susilo recently announced he would lead the national drive against corruption.

Students demand corrupt cabinet members be arrested, tried

Detik.com - November 4, 2004

Arin Widiyanti, Jakarta -- Around 100 students from the Anti- Corruption Student Network (Jaringan Mahasiswa Anti-Korupsi, Jamak) held a demonstration at the Attorney General's office in South Jakarta on Thursday November 4 demanding the arrest of a number of cabinet ministers.

The action was held at around 2.30pm and as of going to press people were still arriving. The demonstrators brought posters and banners which were hung on main gate of the Attorney General's office which remained closed.

They were demanding that the new cabinet of President Susilo Bambang Yudhoyono be cleansed of corrupters. They noted a number of ministers who should be arrested and brought to trial.

The first is the Coordinating Minister for the Economy, Aburizal Bakrie, who has been accused of being involved in the Bank Indonesia Liquidity Support Fund (BLBI) embezzlement case and who has sold government posts in the state owned insurance company Jamsostek for as much as 250 billion rupiah in the name of Green View Officer Finance.

The second is the State Minister for Small and Medium Enterprises, Suryadharma Ali, also for his involvement in corruption, collusion and nepotism.

Third is State Secretary Yusril Ihza Mahendra because of his involvement in the legal Mafia within the Department of Justice and Human Rights, for bribing judges who are trying corruption cases and corruption involving various projects such as legal training and printing within the department.

Fourth is the Minister for State Enterprises, Sugiharto, because of his involvement in the falsification of documents in the Singapore justice department.

Fifth is Finance Minister Jusuf Anwar, who has been involved in bribery cases and the sale of government posts in the Department of Finance.

The demonstrators, who said they were from a number of different universities in Jakarta, are also calling for the cabinet to be cleansed of International Monetary Fund lackeys. The lackeys they were referring to are the Minister of National Development Planning/Chairperson of the National Planning Agency (Bappenas), Sri Mulyani Indrawati, and the Minister of Trade, Mari Elka Pangestu. (nrl)

[Translated by James Balowski.]

Local & community issues

Police link local elite to Mamasa conflict

Jakarta Post - November 6, 2004

Andi Hajramurni, Parepare -- Police said on Friday they believed that local politicians masterminded the latest violence in Mamasa regency, West Sulawesi, in which three villagers were killed.

South Sulawesi Police chief Insp. Gen. Saleh Saaf said a total of 36 suspects, being held by the police over the Oct. 15 attack in the town, were merely victims of local politicians' machinations, who wanted to grab or retain power.

He appealed to the suspects to reveal the names of those who ordered them to launch the attack on residents in North Aralle village, Aralle district, who opposed a 2002 law splitting Mamasa Polewali (Polmas) into two regencies -- Polmas and Mamasa.

"I know, you [the suspects] are only political victims of the elitists with interest in political power. So, please tell the truth about who ordered you all to do this -- be they a district head, his secretary or a regent -- so we will know if they were really involved," said Saaf, who oversees security in West Sulawesi.

He was speaking to the 36 suspects, comprising 22 people opposed to the split and their 14 opponents, who reached a peace deal on Friday to end hostilities in Mamasa.

The accord was signed by representatives from each of the two rival groups during talks brokered by the provincial police in Parepare, some 150 kilometers north of Makassar, South Sulawesi.

Andi Jalilu and Berdnan represented the group that supported the split of Polmas and the incorporation of the three mainly Muslim migrant districts of Aralle, Tabulahan and Mambi into Mamasa regency.

Their opponents, who wanted the three districts excluded from Mamasa, an indigenous Christian district, were represented by Sudarmin and Rajihu alias Ratihu.

The three-point deal included an agreement that anyone involved in a further attack in Mamasa would face harsh actions by police, which could include being shot on sight.

Before signing the peace pact, the two rival groups of detainees met in the Parepare police station. They shook hands and hugged each other.

The suspects, mostly relatives of each other, appeared to have regretted their role in the conflict.

Saaf said the conflict should not have broken out among these people because they were all brothers. "This agreement must be respected. I hope you (the detainees) sincerely fulfill this peace agreement to sustain a peaceful life in the future and make sure there are no more victims," the provincial police chief said.

The Mamasa conflict has simmered for over two years, since a law was passed in 2002 to split Polewali Mamasa into two regencies.

At least three people were killed when a clash first erupted in Mamasa in September 2003. It continued in July and August of 2004.

The latest spate of violence took place last month from Oct. 15 to Oct. 18, when opponents of the regency's creation attacked pro-split residents in North Aralle village. The riot spread to nearby villages, killing three people in three days.

Muslim residents, who are mostly grouped in the three districts of Aralle, Mambi and Tabulahan, protested the split, on the grounds that they would be the minority in the new regency of Mamasa, which is predominantly Christian. The protest fell on deaf ears at the central government level, which enacted the controversial law.

Situation tense in Donggala after clash

Jakarta Post - November 5, 2004

Donggala -- The situation in Sidondo subdistrict, Donggala regency, was still tense on Thursday, one day after an ethnic clash that killed two people.

People stood in groups in their respective neighborhoods, while the police continued their search for the remains of Sabri, a member of the Kaili community, who has been missing since Sunday and was reportedly killed by members of the Bugis ethnic group.

Clashes between the members of the two groups broke out on Wednesday after the Kaili community accused the Bugis of abducting and killing Sabri. Two residents were shot dead by the police after the clash.

However, Central Sulawesi Police chief Brig. Gen. Aryanto denied that the police had shot the two victims, saying that the bullets extracted from their bodies were not from standard police-issue weapons, but were rather homemade.

Ethnic clash hits Donggala, two shot dead

Jakarta Post - November 4, 2004

Ruslan Sangadji, Donggala -- A clash between two ethnic groups broke out in Donggala regency, Central Sulawesi province, on Wednesday, leaving two people dead and dozens of others severely injured, including two police personnel. The two fatalities were local residents Asdin, 28 and Asdar, 30, who were shot dead by police personnel after the clash.

The clash began when Sabri, 38, a resident in Sidondo subdistrict in Donggala went missing on Sunday. The last time fellow residents saw him was when he was working on his plantation.

Sabri's family, from the Kaili tribe, searched intensively for Sabri, but efforts proved fruitless until Wednesday morning.

The family only discovered a hat believed to belong to Sabri in a cacao plantation belonging to a resident from an ethnic Bugis, the Kaili's nemesis. Traces of blood were found on the hat, prompting them to conclude that Sabri had been murdered. Without a second thought, Sabri's family quickly blamed Bugis residents for Sabri's apparent abduction and murder.

The report quickly spread to Sidondo subdistrict, some 40 kilometers south of Palu, the capital of Central Sulawesi province. After hearing of the incident, subdistrict officials approached the Kaili leaders to calm them down and promised them that the perpetrators would be hunted down and prosecuted in line with the law. But, their appeal fell on deaf ears.

After the finding, Sabri's family and fellow members of the Kaili community prepared a major onslaught on the Bugis neighborhood.

Carrying sharp weapons, dozens of Kaili people stormed the Bugis neighborhood at 12 noon, but on their way there, they were greeted by dozens of Bugis residents armed with sharp weapons. A clash broke out, but was quickly put down by several police personnel, who rushed to the scene.

Two hours later, the heavily armed police personnel left the scene, after the two groups of residents dispersed and went home. But, on their way to the police station in Donggala regency capital, a group of unidentified residents attacked and stabbed two policemen. Others fought back, prompting the residents to flee. Police shot dead two of them, Asdin and Asdar.

Asdar was shot in the back, while Asdin was shot in the chest. Police are still unsure whether the two were Bugis or Kaili residents.

The situation in the Sidondong subdistrict was still tense until 7 p.m, with local residents, carrying sharp weapons, staying outside their houses in groups. Some 150 police personnel were deployed to prevent further clashes.

Central Sulawesi Governor Aminudin Ponulele has instructed the chief of Central Sulawesi Police Brig. Gen. Aryanto Sutadi to beef up security in the subdistrict to prevent the clash from escalating.

Wednesday's clash followed another clash early last year. In the earlier clash, a local resident was stabbed to death. It was not clear whether he was from the Kaili or the Bugis ethnic group.

Donggala regency is some hundreds of kilometers from the riot- torn regency of Poso, where sectarian conflict that killed over 2,000 Muslims and Christians broke out in 2000.

Following the riot, mysterious armed attacks continued to occur in Poso and Palu city until recently. Authorities have expressed concern that Wednesday's clash in Donggala could escalate into a major conflict in the province.

Workers clash with tribe members in Riau

Jakarta Post - November 1, 2004

Pekanbaru -- Plantation workers and tribe members clashed on Saturday at an oil palm plantation in Balam Jaya subdistrict, Rokan Hilir regency, Riau province.

No fatalities were reported in the incident, Riau Police chief Brig. Gen. Deddy Komaruddin said on Saturday.

The clash occurred after some 1,000 Hamba Radja tribe members blocked access to the plantation, claiming the land the plantation was built on belonged to them.

About 4,000 employees of the plantation company, PT Ivomas, attempted to force the tribe members off the land on Saturday, leading to the clash. The situation is now under police control.

Human rights/law

Foreign water firm 'abused rights'

Jakarta Post - November 6, 2004

Jakarta -- The Community of Tap Water Customers (Komparta) and an individual consumer, Suta Widhya, reported tap water operator PD PAM Jaya and its foreign partner Thames PAM Jaya (TPJ) to the National Commission for Human Rights (Komnas HAM) on Friday due to their poor service to customers.

Komparta's Executive Director Amstrong Sembiring and Suta also reported the city administration and the City Council for their alleged involvement in depriving the rights of consumers to a good water supply.

Komparta and Suta accused the two companies of violating human rights. They demanded that Komnas HAM push tap water operators to improve their service and push the administration and the council to comply with the rulings issued by the Central Jakarta District Court to freeze the water price hike.

AGO told to also focus on human rights cases

Jakarta Post - November 4, 2004

Muninggar Sri Saraswati, Jakarta -- A human rights watchdog urged the Attorney General's Office (AGO) on Wednesday to prioritize the investigation of rights cases submitted to the office by the National Commission on Human Rights (Komnas HAM).

The Institute for Policy Research and Advocacy (ELSAM) said the Attorney General's Office should investigate alleged rights violations and restore public confidence in the country's ad hoc rights tribunal, which lost much of its credibility in the East Timor and Tanjung Priok trials.

"The AGO must follow up on the investigation results of rights violation cases by Komnas HAM," Amiruddin, the head of the information and cooperation division at ELSAM, said.

Amiruddin specifically pointed to the Trisakti, Semanggi I and Semanggi II shootings and the May 1998 riots. The commission has submitted the results of its own investigations into these cases to the Attorney General's Office, but it remains unclear whether the office will prosecute the cases.

Komnas HAM also has investigated bloody raids against civilians in Wasior and Wamena, both in Papua, in 2001 and 2003 respectively, and has submitted the results to the Attorney General's Office.

ELSAM said there was no reason for the Attorney General to ignore the Trisakti, Semanggi I and Semanggi II cases, or the attacks in Wasior and Wamena, as they did not need approval from the House of Representatives to prosecute the cases. "They only need to talk to the Supreme Court about the trials," Amiruddin said, adding that the cases were considered rights violations.

For the case of the May 1998 riots, which is considered a gross rights violation, ELSAM called on the Attorney General to ask the House to establish an ad hoc rights tribunal to hear the case.

"The AGO must make a decision on it soon in a bid to give legal certainty both to the suspects and the victims. They have been waiting for justice for so long," Amiruddin said.

Also for the sake of legal certainty, the Attorney General's Office must set a schedule to settle all rights violation cases it is currently handling, he added.

"By making a schedule, both the suspects and the victims know that they are not being ignored. Prosecutors, too, will not be lazy in handling the cases," Amiruddin said.

Zainal Abidin, a fellow researcher, said the Attorney General must assign special prosecutors to handle these cases. He said the performance of the Attorney General's Office in handling these rights cases would affect the credibility of the country in enforcing human rights protection.

"The failure to address the issue, however, will likely close the opportunity for the AGO to improve its image," Zainal said.

The AGO has often been criticized for dragging its feet in investigating rights cases and large corruption cases.

In line with the policy of new President Susilo Bambang Yudhoyono, Attorney General Abdul Rahman Saleh has said that he will focus on the settlement of corruption cases.

He also has promised to examine the possible reasons behind his office's slow response to rights violation cases.

Revisions to anti-terrorist law a step backwards

Kompas - November 2, 2004

Jakarta -- As well as having the potential to violate human rights, the revisions being made to Law Number 15/2003 on Eliminating Criminal Acts of Terrorism which are being considered by the Department of Law and Human Rights are far more repressive and are a step backwards in terms of efforts to respect and uphold values of human rights in Indonesia.

This was the view expressed separately by two legal practitioners, Todung Mulya Lubis and Mohammad Assegaf on Monday November 1, in response to the revisions being made to the law.

Lubis said that although terrorism represents an extraordinary crime which must be combated, this does not mean that in revising the anti-terrorist law it should negate the indications or symbols which are linked to terrorism such as the difference between assisting and actually carrying out acts of terrorism or being an intellectual actor in terrorism.

"This is a fundamental violation against human rights. Essentially, merely on the basis of a suspicion there are grounds to arrest and investigate a person. This revision is extraordinary because it is far more repressive compared to the previously existing law", he explained.

In terms of human rights, Lubis believes the revisions to the anti-terrorist law are truly a step backwards because what should have been done, with the Constitutional Court's decision to annul Law Number 16/2003 on the Enactment of Government Regulation Number 2/2003 in the Bali bombings case, was for the government and the People's Representative Assembly (DPR) to have been more careful in conducting the revisions. "The revisions should have further prioritised human rights, not the reverse", he said.

Lubis explained that it may be that these revisions were being made because of the trauma of seeing the many bombings which have occurred in different places which have caused so many casualties while at the same time the perpetrators have yet to be arrested. The revisions to the law may also be intended to demonstrate to the international community that Indonesia is serious about the war against terrorism.

In fact what should be done by the government is to improve the institutional capacity of the police force and the State Intelligence Agency. "Don't let the institutional weaknesses be compensated for by formulating a repressive law", he said.

To the DPR and government, Lubis said that while the war against terrorism is of course necessary it must be subordinate to human rights. These revisions therefore must be reviewed and not be allowed to pass into law. The general public must be given an opportunity to participate in the deliberations over the revisions to the legislation.

Imitating Malaysia

Assegaf also says that the revisions are a step back and that the government should be struggling to uphold human rights not the reverse by giving a licence to security forces to violate human rights.

"We have consistently criticised the Internal State Security Law in Malaysia and Singapore and believe these laws violate human rights, why all of a sudden then is Indonesia now following suit. What's behind all this?", he asked.

According to Assegaf, Law Number 15/2003 is still creating a controversy because the law needs to be improved, particularly with regard to protecting human rights. During its revision however, it has instead created the potential for human rights violations. Moreover, the revision gives a licence to the security forces to arrests a person for an unspecified period of time. "[That is] what I really don't understand. For example, I am a member of an organisations which has done nothing, [yet] I can be arrested. That's just not right", said Assegaf. (son)

[Translated by James Balowski.]

Focus on Jakarta

Developers flout planning rules

Jakarta Post - November 2, 2004

Jakarta -- Very few property developers in Jakarta have built public and community facilities in accordance with a requisite for obtaining land-use permits, an official of the City Asset Management Agency revealed on Monday.

The agency's supervision head, Latief Lubis, told a hearing with City Council Commission D that from 1972 to 2004, only 15 percent of developers had met the requirement to build a low-cost apartments, parks, roads and/or houses of worship. Commission D oversees development affairs.

"Of the 2,490 permits we issued over this period, 2,189 are still active. However, only 307 developers have contributed a small portion of their assets toward public facilities," Lubis said. He added the combined value of the developers' assets reached up to Rp 2.28 trillion (US$248.58 million).

According to Lubis, the asset management agency was unable to impose any sanctions against developers who did not meet the requirement, "because no article exists that dictates a specific time frame for them to provide the public facilities and what kind of public facilities, while sanctions against offenders are not regulated".

Councillor Yusuf Hamdani of the Reform Star Party (PBR), however, questioned the agency's seriousness in carrying out their duties.

"This has been taking place for a long time -- since 1972 -- but still no effort has been made by the administration to rectify the legalities. Moreover, members of previous councils have often asked the City Asset Management Agency to reveal the developers' identities, but (received) no reply," Yusuf said.

He also pointed out as an example of the agency's poor credibility that the agency had certified only 2,532 of 8,392 assets, of which most were idle property and state schools given to the city in 2000 by the central government as part of its regional autonomy policy.

News & issues

Chinese Indonesians fear discrimination

Straits Times - November 6, 2004

Devi Asmarani, Jakarta -- Despite attempts to allay their fears, Chinese Indonesians remain concerned about President Susilo Bambang Yudhoyono's commitment to fighting discrimination.

Many are worried that his deputy, Mr Jusuf Kalla, could push for economic policies that discriminate against them.

Although the new government has not unveiled such policies, ethnic Chinese communities here are watching for signals that indicate they might be on the cards.

This anxiety stems from Mr Jusuf's stance during campaigns early this year on the need for an affirmative-action policy to benefit small and medium-scale entrepreneurs, who are mostly indigenous Indonesians, and bridge the wide income gap in the country.

He lauded the Malaysian model for giving a headstart to indigenous Malaysians but maintained that any affirmative policy here would not be imposed on the basis of race but rather on the scale of the businesses.

His remark, in an interview with the Sinar Harapan daily last month, has sparked another flurry of concern and nervousness among the Chinese.

Mr Jusuf told the daily he was considering changing lending policies to favour small and medium businesses which, he claimed, are 95 per cent owned by indigenous Indonesians, to ease anti- Chinese tension in the country that could lead to unrest like the May 1998 riots.

When asked if such a policy would be discriminatory, he retorted: "Would you [Chinese Indonesians] prefer being discriminated against or would you prefer to be burned out and hunted down? It is easy for you because you can run away from the country with your money anytime there is trouble here."

Such remarks have not helped soften his image among the ethnic Chinese communities. Topping their concern is the fact that Mr Jusuf, himself a successful businessman, is seen as an influential person in the Yudhoyono administration.

While Dr Yudhoyono has been criticised for indecisiveness, many perceive Mr Jusuf as the person behind the appointment of tycoon Aburizal Bakrie to the post of Coordinating Minister for the Economy.

"The Vice-President is a very influential person -- our concerns that he would influence public policies are not an over- reaction," said the chairman of the Association of Indonesians of Chinese Origins, Mr Eddy Lembong.

Local journalist Angie Tresnasari said Mr Jusuf's statement showed that Indonesians still saw their ethnic Chinese compatriots as outsiders.

"His statement seems like he wants the indigenous Indonesians to take over control of the economy," she said. "Not all Chinese are well-connected tycoons, there are many of us who are dirt-poor, they should be entitled to incentives just like their indigenous Indonesian compatriots."

Ethnic Chinese comprise about 3 per cent of the population but are believed to be in control of about 75 per cent of the economy.

Ex-rivals SBY, Wiranto have 'small talk' at palace

Jakarta Post - November 6, 2004

Fabiola Desy Unidjaja, Jakarta -- Long-time comrades President Gen. (ret) Susilo Bambang Yudhoyono and former presidential rival Gen. (ret) Wiranto held a brief reunion on Friday.

The two former generals met for 20 minutes at the presidential office to reminisce and chat, said Wiranto, a former commander of the Indonesian Military (TNI), in response to questions as to whether the TNI leadership issue was raised.

The issue of who is the legitimate TNI chief -- incumbent TNI chief Gen. Endriartono Sutarto, who tendered his resignation during the final days of Megawati Soekarnoputri's term, or Army chief of staff Gen. Ryamizard Ryacudu -- is yet to be resolved, with the House of Representatives divided over the matter.

"We were just sharing stories, as we used to be colleagues. I merely expressed my hope that he could be a good leader who lived up to the people's aspirations," Wiranto said after the meeting.

Wiranto stressed that, although the two were rivals in the presidential race, he now had a moral obligation to support Susilo.

The two have a shared history in the armed forces and in politics.

A video footage of the 1998 May riots in Jakarta shows Gen. Wiranto as then-TNI commander appealing to a crowd to calm down. Standing behind him is Susilo, then a lieutenant general and the TNI chief of social and political affairs, and among Wiranto's close aides at the time.

The two also held Cabinet positions in 1999 under former president Abdurrahman "Gus Dur" Wahid, until Wiranto was dismissed by Gus Dur for his alleged involvement in human rights abuses during that year's referendum in East Timor.

Susilo was then named Wiranto's successor as coordinating minister for political and security affairs, relinquishing his post as minister of energy.

Their paths crossed once again when the two raced against each other and three other candidates in the first direct presidential election this year: Wiranto under the Golkar Party banner after a surprise victory in the first party convention; and Susilo as the sole candidate of the new Democratic Party, which he founded.

Their paths diverged as Wiranto, along with Amien Rais and former vice president Hamzah Haz, was eliminated in the first round in July, while Susilo went on to the runoff and defeated Megawati Soekarnoputri on Sept. 20.

The two generals were observed embracing each other in greeting as Wiranto stepped into Susilo's office, where they talked at a table in front of the President's desk.

Both were smiling broadly as Susilo escorted Wiranto out of the office. Wiranto refused to say whether he was invited by the President, and sped off in a waiting golf cart to the parking lot outside the presidential compound.

Poll watchdog calls for revision of election rules

Jakarta Post - November 2, 2004

M. Taufiqurrahman, Jakarta -- An international election monitoring team suggested on Monday that election regulations deemed discriminatory should be amended to ensure greater public participation in future polls.

The European Union Election Observation Mission (EU-EOM) said in its final report on the legislative and presidential elections that a number of regulations had hampered voters and candidates from exercising their constitutional rights to the fullest.

EU-EOM chief observer Glyn Ford said during a press briefing that the restrictive measures ranged from education and health requirements, as well as prohibitions on "certain groups", could be considered as infringing the principle of universal suffrage.

"The current level of educational requirements for candidates excludes a large portion of the population and effectively discriminates against women and indigenous minorities. No education requirements should be necessary for candidates in regental and municipal elections," Ford said, adding that consideration should be given to lowering the requirements for other elections, outside of the presidential election.

Ford also said another stumbling block to wider participation was the health requirements imposed on presidential candidates, which had cost former president Abdurrahman "Gus Dur" Wahid a second shot at the presidency.

"Provisions related to the health condition of candidates like the ones contained in the General Elections Commission (KPU)'s Decree No. 31/2004 are unusual in international practice," the EU-EOM said in its final report.

The EU-EOM, however, recommended that the health status of candidates should be independently assessed and made public.

Gus Dur and his running mate Marwah Daud Ibrahim were prevented from running in the July 5 presidential race after an independent team of doctors commissioned by the KPU declared that the cleric failed to meet the eyesight requirement.

In its report, the EU-EOM also recommended that the right to stand should be extended to former members of the Indonesian Communist Party (PKI) and its affiliates.

It further recommended that all political parties should be allowed to contest seats again in electoral districts where they won seats in the previous election.

As for the role of the KPU, the EU-EOM said that it should be accorded more leverage in the direct elections for local government chief executives, which are scheduled for June 2005.

The amended version of Law No. 22/1999 on local government is silent about the role of the KPU in organizing local elections, saying only that local election commissions (KPUDs) are responsible for organizing these elections.

"We find it very strange that the central KPU is not going to be involved in organizing the local elections. We hope that the regulation can be reversed soon," EU-EOM election analyst Domenico Tuccinardi said.

The EU-EOM mission consists of 65 long-term observers, 125 short-term members and 18 officials assigned by the embassies of EU member countries in Jakarta, as well as a team of experts, making it the biggest foreign election monitoring team in Indonesia.

Observers from the team were deployed in all of the country's 32 provinces, including the strife-torn provinces of Nanggroe Aceh Darussalam and Maluku.

Government's anti-discrimination commitment questioned

Jakarta Post - November 1, 2004

Muninggar Sri Saraswati, Jakarta -- For Chinese-Indonesians, albeit a minority, the government of President Susilo Bambang Yudhoyono's pledge to fight discrimination is not convincing.

During a discussion held by the Chinese-Indonesian Association (INTI) on Saturday, a number of participants recalled the controversial remarks made by Vice President Jusuf Kalla on the government's plan to help native Indonesians in the economic sector.

"Honestly, we're cautious about JK's statement that the government will introduce a policy to help small-scale enterprise businesses, which is likely to sideline us," a businessman, Budy, said, referring to Kalla by his initials. Kalla was a renowned businessman from South Sulawesi.

Another participant, Sunarti, said Chinese-Indonesians were not "100 percent sure" the president could take firm decisions regarding all forms of discrimination following his failure to meet his promise to announce his Cabinet lineup on October 20.

"Some say he [Susilo] is indecisive. We're afraid he could not do anything to protect the rights of minority groups like us here," she said.

Susilo unveiled his United Indonesian Cabinet on October 21, which many have seen more as a compromise.

Under founding president Sukarno, Indonesia once adopted an economic system which protected indigenous entrepreneurs called Politik Benteng (Fort Politics). But when his successor Soeharto took office, Chinese-Indonesian businesspeople ruled the roost.

Chinese-Indonesians account for about 4 percent of the country's population of 215 million.

Melly G. Tan, a Chinese-Indonesian sociologist, confirmed the anxiety among the non-indigenous community. "There is distrust among Chinese-Indonesians, that's the major challenge the new government has to deal with," she said.

Political expert J. Kristiadi of the Centre for Strategic and International Studies (CSIS) acknowledged concern about discrimination which remains unabated. "Most Chinese-Indonesians are still traumatized by state-endorsed discrimination which has been in place for years," he said.

Kristiadi suggested that Susilo be firm in protecting the rights of all citizens, including minority groups, in a bid to win popular support. "Susilo could start with revocation of all regulations deemed discriminatory against the minority groups," Kristiadi said. He pointed at the citizenship certificate required in obtaining immigration documents for Chinese- Indonesians called SBKRI, which remains effective in practice despite the central government's decision to scrap it.

Economist Faisal Basri said Chinese-Indonesians, who cast their votes in the legislative and presidential elections, could press the government and the House of Representatives to live up to their expectations. "They are now sitting on their respective chairs thanks to your votes. Don't be afraid to push them to end discrimination against you," he suggested.

Kristiadi also asked Chinese-Indonesians not to be easily satisfied by the previous governments which allowed them to celebrate Chinese New Year and declared it a national holiday. "The government has scrapped discriminatory policies. You still have to fight against other forms of discrimination which infringe on your rights as citizens," he said.

Environment

President pledges 'strong action' on illegal loggers

Agence France Presse - November 5, 2004

Newly-installed Indonesian President Susilo Bambang Yudhoyono pledged to take "strong action" against illegal loggers decimating his country's forests, promising they will be severely punished.

Yudhoyono described widespread deforestation -- much of it done with the complicity of corrupt government officials -- the hunting of protected wildlife and maritime pollution as "serious" problems.

"The government will take strong action on the perpetrators and will take them to court where they will receive the most severe punishment," he said. "We will not let this greed continue," he told guests attending a ceremony marking the national wildlife and animals day.

Yudhoyono, who took office on October 20, pledging broad reforms to clean up government, also said the use of dynamite for fishing in many remote provinces was damaging Indonesia's famed coral reefs.

Widespread deforestation has been blamed for causing deadly floods and landslides in many parts of the Southeast Asian country, as well as killing wildlife. Forest fires started by loggers also contribute to air pollution.

The involvement of army and police officials in illegal logging is common across much of the huge archipelago.

A 2002 report by the World Resources Institute, Global Forest Watch, and Forest Watch Indonesia Reports said Indonesia was losing nearly two million hectares of forest annually -- an area half the size of Switzerland. Forest cover fell from 162 million hectares in 1950 to 98 million hectares in 2000, they said.

Villagers protest pollution

Jakarta Post - November 3, 2004

Bogor -- Hundreds of villagers in Jonggol district, Bogor regency, protested on Tuesday against frozen and dry food producer PT Belfoods Indonesia for polluting Cibodas River.

The protesters demanded that the company clean the river and stop releasing liquid waste into the river. One of the villagers, Ucung, said that they have faced a water shortage since the company was established a few years ago. "We can't use the river water because it smells terrible, maybe it's from the company's liquid waste." The company was also alleged to have caused air pollution. "The putrid smell from the company can be sensed from dusk to sunset," said another resident Suwito.

Belfoods legal officer, Yuke Ardian, admitted that the company's waste treatment facility had been broken since early 2003 but the company tried to speed up repairs in the last two months.

"We plan to upgrade our waste treatment facility because the existing one could not perfectly process the waste. We regret this incident. We understand that the river water is also used by the locals for their daily needs. We will try to pump the liquid waste from the river," he said. "We will make a groundwater well in three kampongs to meet their needs."

Oil spill inquiry still going nowhere

Jakarta Post - November 1, 2004

Evi Mariani, Jakarta -- As the environment on several islands in Kepulauan Seribu regency continues to deteriorate, the Jakarta Police have yet to show significant progress in their ongoing 10-month investigation of a serious oil spill in the regency.

Police investigators collected another set of samples on Oct. 23, but the results will not be known until late November, according to the police laboratory. In addition, they have said they need more time to collect samples from oil rigs belonging to the China National Offshore Oil Corp. (CNOOC) and Beyond Petroleum Plc. (BP) as well as from the oil tankers that regularly ply the waters in the regency.

"If the laboratory results show evidence that the samples contain raw oil, we will take more samples from CNOOC and BP oil rigs," the city police environmental division chief Adj. Sr. Comr. Ahmad Haydar said over the weekend. "If they contained large amounts of processed oil, most likely they came from passing tankers." The extraordinarily slow pace in investigating the pollution case has been criticized by Sumarto, head of the Kepulauan Seribu National Marine Park.

"Oil pollution has been an issue here for decades. But, the latest ones have spread into wider areas even reaching Pramuka Island (over 30 kilometers off the coast of Jakarta)," he said.

Sumarto cited deteriorating condition of the sea turtles as a key indicator of the worsening environment. "There has been a sharp drop in the number of sea turtle eggs from 4,363 eggs per year on average to only 2,620 this year." He said there had also been a larger than normal number of problems with the eggs.

"From the 2,620 eggs, 905 did not have embryos, 110 eggs had dead embryos inside and four of them were abnormal. The four died within a week after hatching," he said, adding that he had never seen such a phenomenon.

Sumarto also lamented the fact that the CNOOC and BP oil rigs did not have suitable equipment to clean oil spills in the shallow sea.

"They only have deep sea cleaning equipment. If they had suitable equipment, the cleansing process would have been faster," he said.

However, the oil and gas upstream regulatory agency (BP Migas) spokesman Amir Hamzah said that the agency regulations did not stipulate that CNOOC or BP had to have shallow sea equipment.

"The companies' area of operation is in the deep sea. It was unfortunate that the pollution occurred. But it is uncertain whether the oil spills originated from their operations," he said.

Amir said the agency's laboratory tests revealed that the oil spills in October had different characteristics from the samples taken from the CNOOC and BP platforms.

"The oil spills probably came from passing oil tankers, so it was not our responsibility." To pursue the responsible party, the Ministry of Transportation's Directorate General of Sea Transportation is looking for possible suspects.

"We have been investigating the pollution case. We are looking into the possibility that it was caused by passing tankers," director general Tjuk Sukardiman said.

He said a division under his directorate had been collecting facts and reports from their monitoring posts on the islands. "We do not have any leads so far, but we're working on it." Tjuk said if the responsible tanker was found, the directorate general would arrest the tanker operator and hold them accountable.

NGOs hope new investigation will end confusion over Buyat

Tempo Interactive - November 1, 2004

RR Ariyani, Jakarta -- A grouping of non-government organisations (NGOs) who are handling the Buyat Bay pollution case including the Indonesian Environmental Forum (Walhi) and the Mining Advocacy Network (Jatam) hope that an integrated technical team will be able to act independently. "We hope that the tem will work seriously and independently, so that today [we] can get a final conclusion", said Jatam national coordinator, Siti Maimunah, at a break during a meeting of the technical team at the Kalpataru Rooms on Monday November 1.

Maimunah said that the technical team which has already finished the difficult aspects of the investigation into the charges of pollution in the Buyat Bay case has been quite productive. "We hope that their results will put an end to the public's confusion as a result of PT Newmont's publication and the one sided report by the minister of the environment, Nabiel Makarim, [which was published] on its web site dated October 19", she said.

Raja Siregar, also from Walhi, concurred with Maimunah saying that the investigation by the integrated team is different from the investigations conducted by the World Health Organisation (WHO), the Minamata Insitute and the Australian Research Agency CSIRO. "Our investigation is the most comprehensive and thorough", he said. The reason said Siregar is that the NGO's investigation includes all of the physical, chemical and biological aspects which are related to the quality of the environment in the Buyat Bay waters as well as the potential impact on marine life and people's health.

According to Siregar, what differentiates the integrated team's study from previous ones is that it looks at the actual conditions of the bay and local people as well as the source of the pollution. The press release which was released by Walhi and Jatam on October 31 included a rebuttal against a number of international experts from the CSIRO and WHO.

The press statement quoted Dr Alan Tingay, an environmental expert with experience as a consultant in the field of mining who said, "CSIRO's data clearly shows that millions of tons of tailings from Newmont in the Buyat Bay are the source of the toxic metals which are continuing [to accumulate]". He explained that although it is still unclear if Newmont is the source of the health problems because of the waste it is dumping, for now Newmont must end the release of toxic chemicals into the bay which is forms the basis of the local people's livelihood.

In order to strengthen their argument, the press statement also quoted David Silver MD, an assistant clinical professor from the Department of Preventative Medicines and Biometrics from the Colorado University in the United States, who visited Buyat Bay not long ago. According to Silver, "Newmont has been too hasty in announcing that they are not at fault".

He explained that there is no need to continue debating about the local people who are suffering from a range of chronic health problems. "We should not eliminate the long term possibilities of the chemicals which are found in the tailings such as: arsenic, ammonia, cadmium, cyanide, zinc, lead, copper and nickel, although in low quantities it can contribute to the health problems of the local people", he said.

[Translated by James Balowski.]

Health & education

Cheap drugs fuel epidemic

Straits Times - November 3, 2004

Devi Asmarani, Jakarta -- Santo looks much older than 21. His emaciated body, attacked by the HIV virus, rotting teeth and patchy skin testify to years of drug abuse.

His dream of working in the hotel industry is shattered and he has become just another alarming statistic in Indonesia's creeping nightmare -- an illegal drugs epidemic the Indonesian government has declared is a major nationwide threat.

A survey this year by the national narcotics body found that the number of drug abusers has jumped from 1 per cent to 3.9 per cent of Indonesia's 220 million inhabitants, compared with a year ago.

Officials attribute the escalation to soaring supplies which have pushed prices down and made the drugs affordable for youngsters and the less privileged.

At 5,000 rupiah (90 Singapore cents) a milligram, the price of low-grade heroin, is on a par with the cost of a meal in a decent restaurant. The price is a third of what it was eight years ago.

The Ministry of Health estimates the number of intravenous drugs users at 169,000, with more than one third HIV-positive. Other studies show that one out of every 50 Indonesians are drug users and two in 10 are involved in trafficking. Most users are aged between 15 and 30 but children as young as 12 have been caught using or trafficking.

The grim figures all add up to a drastic need for action but while trafficking is a capital offence -- more than 30 people are on death row -- the big syndicates remain out of reach.

Indeed, Indonesia's war against drugs has been criticised for being "half- baked" and rife with irregularities. Drug offences abound in inner city slums like Kampung Bali in Jakarta, where the unemployment rate is about 60 per cent, but drug distribution has expanded well beyond city centres into far-flung towns, leafy suburbs, schools and even prisons.

With drug-related cases accounting for 50 per cent of convicts behind bars, prisons are a hotbed for business. Jailed dealers stay in touch on their cell phones and drugs are smuggled in cookies or other food while corrupt guards turn a blind eye.

Although many drug traffickers are nabbed at airports, the scores of shipping ports are neglected. Said a narcotics police officer: "Drugs transported by air at the most account for 3 to 5 per cent of the narcotics distribution, the remaining 97 per cent is transported by sea." He estimated that a total of 60 tonnes of illegal substances hidden inside furniture products, tyres and other container goods are smuggled in every month through more than a hundred official entry points.

Deputy Director of the Narcotics Division in the National Police Senior Commissioner Adang Rohjana told The Straits Times: "It is nearly impossible to check all the containers. They are too big and just too many." And with notoriously corrupt Customs officials and police at shipping ports, observers said drug smuggling had continued unhindered for a long time.

Compounding the problem, some of the materials used to make psychotropic substances such as Ecstasy or methamphetamine are legally imported. Known as precursors, these chemicals are legally used for pharmaceutical and cosmetics products. Currently, 23 precursors of illegal drugs can enter Indonesia freely, making the country one of the world's biggest producers of Ecstasy. The authorities predict that between one and two million pills are produced each day.

Police units are also suspected of backing crime gangs, and few have been arrested. Worse still, the police or military are thought to often run the business themselves. Several addicts told The Straits Times that the residential compounds of the Military Regional Command across the country are notorious for being a "one-stop drugs store".

Liberalization threatens local universities

Jakarta Post - November 1, 2004

Fabiola Desy Unidjaja and Sri Wahyuni, Jakarta/Yogyakarta -- An education expert warned on Sunday that extensive liberalization of education would threaten the existence of local universities.

Mochtar Buchori, a doctor in education from Harvard University in the US, said that allowing foreign universities to set up shop here would deprive local universities of top students and lecturers.

"People with money and intellectual ability will choose to go to the foreign universities, leaving only second-grade students for local universities," Mochtar told The Jakarta Post on Sunday.

He further said that with their limited ability to compete with foreign universities, liberalization would in the end only sideline local colleges.

"Some of the reasons these local universities give for rejecting liberalization are acceptable. So, the entry of foreign universities needs to be regulated," Mochtar said.

He was commenting on a recent statement by Minister of Trade Mari Elka Pangestu that the government was committed to liberalizing the education sector in line with World Trade Organization (WTO) policies, but promised this would take the condition of local colleges into account.

The Forum of Indonesian Rectors (FRI) and the State Universities Rectors' Council (MR-PTN) are preparing a statement rejecting liberalization of the education sector.

Education is one of the global services sectors covered by the General Agreement of Trade in Services (GATS) under the WTO plan, which would allow overseas based universities to open branches in Indonesia, and allow foreign lecturers to teach in Indonesian universities.

Mari contended that should the country remain closed to foreign- based universities, more Indonesian students would go abroad for their education.

Gadjah Mada University (UGM) rector Sofian Effendi said the rejection on liberalization on the part of the local education sector was based on the argument that education also served as a means of transferring the country's values and principles, and of ensuring that students developed a proper sense of "national identity".

He underlined that imparting skills and knowledge were not the only responsibilities of educational institutions.

"We will continue to internationalize our education under the UNESCO program. However, this should not involve the WTO as education is not the same as other tradable services," Sofian said.

He was referring to the United Nations Educational, Scientific and Cultural Organization (UNESCO).

The rector underlined that this was not because local universities were afraid to compete, but rather it was a matter of national identity.

"Internationalization should mean improving the quality of the education sector, not opening up foreign-based universities here," Sofian said.

Mochtar agreed, saying that the government needed to regulate the entry of foreign universities into the country so as to ensure that local universities continued to survive.

Bali/tourism

Visa policy survey reveals dissatisfaction

Jakarta Post - November 4, 2004

Denpasar -- Bali is the first province in Indonesia to have carried out a comprehensive survey on the implementation of the new visa-on-arrival (VoA) policy as a quick response to government requests for the island's tourist industry to provide "real data" on the impact of the policy, which has been effective since Feb. 2004.

The survey was carried out jointly by the Bali Hotels Association, comprising 55 star-rated hotels and resorts on Bali, in cooperation with the Bali Tourism Board, five months after the enforcement of the new VoA policy.

Ten thousand questionnaires were distributed to 55 member hotels and a response rate of 21 percent was achieved, with 2,119 returned. Some 99.6 percent of respondents needed a tourist visa.

The nationalities of respondents ranged from visitors coming from Southeast Asian (ASEAN) countries to Japan, Taiwan, China, Korea, Iran, India, Saudi Arabia, Turkey, Latin America, the United States, European countries and African countries.

The survey indicates a 30 percent decrease in the arrival of foreign visitors to Bali. Around 65 percent of respondents from the Netherlands -- one of Bali's major markets -- felt they were inconvenienced, 33 percent thought that the visa application process was unclear and inefficient.

Around 60 percent of Japanese respondents said they felt unwelcome and only five percent felt they would return to Bali, while 95 percent would go to other holiday destinations.

Japan and Australia have been Bali's largest sources of overseas tourists for the last 10 years.

Despite the government's insistence that the visa policy benefits Indonesia in generating income from tourists, the entire tourist industry, particularly in Bali, has suffered a severe blow.

Some policies, such as the enforcement of the new VoA policy, are considered to have significantly damaged Bali's ailing tourist industry, which has not yet fully recovered from the bombing tragedy in 2002 and the SARS scare in 2003.

The policy also appears to indicate central government inconsistency in supporting the country's tourist industry. The policy restricts visa-on-arrival entry to tourists from 21 countries, down from the previous list of 60. It exempts nationals from Brunei, Malaysia, Singapore, Thailand, Vietnam, the Philippines, Macau, Hong Kong, Morocco, Peru and Chile from having to pay for a visa.

The three-day visa for US$10 and 30-day visa for $25 are issued on arrival to nationals from countries that include Australia, Argentina, Brazil, Britain, Canada, Denmark, France, Hungary, Italy, Japan, Norway, Poland, South Africa, Switzerland, Taiwan, the United Arab Emirates and the United States.

Citizens of countries not listed above must apply for visas at the Indonesian Embassies in their respective countries.

Previous surveys In a survey carried out in May 2003, prior to the visa policy's implementation, 62 percent of visitors to the island claimed they would not return if the policy went into effect, 3 percent said they were unsure and just 35 percent indicated that they would return, even if the policy was implemented.

In an online industry survey conducted by the travel industry, over 54 percent or respondents indicated that the visa fee had a direct impact on bookings to Bali, and 57 percent indicated that they were dealing with disgruntled clients following the implementation of the policy.

This survey represents the opinions of people who were in Bali and chose to come to Bali despite the implementation of the policy. Bali has been the icon of national tourism. Every year, except 2003, more than 1 million foreigners have vacationed on the island.

Due to this controversial policy, Indonesia has lost many tourism opportunities.

In Malaysia, visitors do not have to stand in a long queue in order to get an entry permit and to pay the visa fee. The airport is efficiently run, as is its infrastructure. Visitors are made to feel welcome with such excellent services.

Despite the fact that Bali's tourist industry is beginning to regain the trust of international visitors, with an increasing number of tourists coming back to the island, there is still some cause for concern. Market shifts, decreased tourist spending power and a weak position in the international airline network are among the problems identified.

In 2003, Malaysia and Thailand received 10 million visitors and Singapore 6 million, while only 4.2 million tourists arrived in Indonesia.

What is more disturbing is the decrease in revenue from tourism because visitors reduced the length of their stay in Bali.

Package tourism

In 1994, every overseas visitor spent an average of $123.66 per day, as compared to only $73.38 in 2001, and $60.95 in 2003. But, the duration of their visit dropped from 9.48 and 10.97 days in 2001, to only six days in 2003.

Data revealed by Australian tourist agencies shows a disparity in package tour prices between Bali and other destinations in Asia and the Pacific islands.

Bali tour packages for four days -- staying at low-cost hotels -- are priced at A$1299, excluding visa fees and other additional costs. A Fiji four-day package at a luxury beach resort costs only A$919, visa-free. A Thailand-Phuket four-day package costs $999 visa-free, Malaysia $899 visa-free.

According to the survey, the results indicate that Bali is an expensive holiday destination with a complicated, inefficient immigration system and additional costs. Security concerns have deterred visitors from Australia and other countries from coming to Bali and other places in Indonesia.

The survey suggests that the government ought to revise the visa policy. Competition within international tourism has become stiffer over the years.

The emergence of alternative destinations in neighboring countries, including Malaysia, Thailand, Vietnam and Cambodia, should be considered by those involved in Indonesian tourist agencies.

Bali's tourist industry must act immediately to create innovative packages and to improve its services to lure back visitors to the island.

It is hoped that the new tourism minister will revise the visa policy, enhance promotional activities in targeted sectors and improve infrastructure, otherwise, Bali and other places in Indonesia will soon be forgotten.

[Data analysis by Rita. A. Widiadana.]

Survey conclusions and findings

• A significant proportion of respondents encountered delays in processing their visa at the airport or the Indonesian Embassy in their country of origin.
• There was a higher level of dissatisfaction for nationals that had to apply for a visa before departing their country.
• Initial indications are that the queuing-time target of 10 minutes for visas on arrival has not been met.
• Group handling procedures at the airport have to be reviewed to ensure more efficient and speedy processing times.
• The reduction in visitors of certain markets is directly related to the difficulty within that market of obtaining a visa. Europe has registered a 30 percent decline in arrivals in 2004 in comparison with 2001.
• The recent arrival statistics indicate that the current situation is severely limiting Bali's source markets, with the average length of stay and, consequently, spending per stay reduced.
• Competitor destinations, such as Thailand, have seen an increase in visitors that corresponds with Bali's decrease.
• Key markets, such as Japan and Taiwan, are registering higher levels of dissatisfaction with the current process.
• The current Ministry of Foreign Affairs website is misleading as it makes no mention of the new visa policy and still mentions a "visa-free, short-term visit" of up to 60 days on arrival.
• The key principle of issuing free visas to nationals of reciprocating countries is acceptable; however, it is unclear as to how the decision came about to discriminate between those entitled to a visa on arrival and those that need to apply through their embassy before departure.

Foreign tourist arrivals up despite terror bomb

Jakarta Post - November 2, 2004

Jakarta -- Foreign tourist arrivals in the first nine months of this year increased by around 28 percent over the same period last year, despite the terrorist bombing incident in front of the Australian Embassy here in September, the Central Statistics Agency (BPS) reported on Monday.

In its latest report on the country's economic indicators, the agency said that 3.41 million foreign tourists entered the country through 13 entry points from January to September this year -- 28.06 percent more than the 2.66 million foreign tourists who entered in the same period last year.

In September alone, the number of foreign tourists visiting Indonesia reached 403,400, 16.53 percent higher than the number of arrivals in September of last year, although the figure was down 10.31 percent from the 449,804 who arrived in the previous month.

"The drop is because September is usually the start of the low season, after the peak season in August," the agency said.

The government is targeting 5 million foreign tourist arrivals this year.

The number of arrivals through Soekarno-Hatta International Airport rose by 12.69 percent from 683,631 to 770,370 year-on- year. Meanwhile, arrivals at Ngurah Rai Airport in Denpasar, Bali, were also up by 49.84 percent to 1,143,214.

The agency also reported that the average length of stay in star-rated hotels in 10 tourist cities increased from 2.00 days in August to 2.12 days in September. The hotels' average occupancy rate of 48.18 in August, however, was down slightly from 49.21 percent in July.

In its October report, the agency predicted that the deadly bomb attack on the Australian Embassy on September 9, which killed 11 people, would severely affect the number of tourist arrivals in that month. Monday's report, however, would appear to be good news for the country's key tourism sector, which has been in the doldrums over the last two years following the Severe Acute Respiratory Syndrome (SARS) outbreak and the Marriott bombing in 2003, as well as the Bali bombings in 2002.

Both bombings had severely affected the sector, especially after a number of nations imposed travel advisories against Indonesia.

Islam/religion

Religious harmony remains an elusive dream

Straits Times - November 4, 2004

Devi Asmarani, Jakarta -- At the end of his sermon, a Muslim preacher in South Jakarta switched to a favourite subject: Kristenisasi, or the Christianisation of fellow believers.

Pointing to a private secular school owned by a Christian family nearby, he started on his offensive, which would later stir up a storm in the otherwise peaceful neighbourhood on the fringe of the capital.

"That school is a breeding ground for Christianisation, and it is US-funded," the cleric said. "It is our responsibility to reject its presence in this community." Recalled to me by a first-hand witness -- the school's Islamic studies teacher attending the event who immediately objected to the cleric's accusation -- this episode took place a year ago in a neighbourhood I once lived in.

Memories flooded back when I read reports of the plight of a Catholic school in another part of the sprawling city. Last month, thousands of students, teachers and staff of Sang Timur School were barred from entering the school after a local Muslim youth group erected a 2m-high concrete wall at its entrance.

Twelve years after the school was built, residents of the neighbourhood in West Jakarta now reject its presence because it had been used for church services on weekends. The school was also accused of converting some residents to Catholicism. Never mind that many of its students, from elementary to high school level as well as children with disabilities, are Muslims.

Although the walls were knocked down by the local authorities three weeks later, and even with the new government of President Susilo Bambang Yudhoyono stepping in to try to solve the dispute, the community remains unhappy about the school's presence.

An effort to diffuse tension by former President Abdurrahman Wahid, who heads the 30-million-strong Nahdlatul Ulama Islamic group, received a humiliating response. The blind cleric was booed during talks with community members there when he said Indonesia was not an Islamic state and criticised them for denying a child's right to education and religious freedom.

While it is a stretch to say these two unconnected incidents represent a nationwide trend, they reinforce the fear of minority religious groups in the country, particularly the Christians, of growing intolerance within some Muslim communities.

While Christians comprise only 10 per cent of the country's population of 215 million people, they are often perceived as more affluent and also Western-oriented. This is partly because many of the Christians are ethnic Chinese, apart from some distinctive ethnic groups from North Sumatra, North Sulawesi, Flores and the Malukus.

During the past two years, there have been reports of churches being stormed by Muslim groups or large service gatherings being banned at the last minute.

Unreported stories of hostilities against the minority groups also abound. The cleric's accusation of the private school in my old neighbourhood had been preceded by attacks from unknown perpetrators, who threw firecrackers into the classrooms.

Some Islamic Internet sites and publications widely available at news-stands carry stories of "forced conversions" by Christians, some through kidnapping, in addition to "United States and Zionist-led conspiracies" against the religion.

Regardless of their accuracy, these reports can be a very effective means to inflame those who are inclined to intolerance towards other faiths.

The degree of intolerance ranges from subtle gestures such as refusing to shake hands with a non-Muslim to extreme measures by groups with violent reputations.

The Islamic Defenders Front (FPI), after lying low for a year, has returned to targeting "places of vices", including cafes, nightclubs and pool halls. It recently smashed up a restaurant in the predominantly expatriate district of Kemang in South Jakarta. FPI leader Habib Riziq Shihab was freed last year from a seven- month jail term for organising attacks in the city.

During the authoritarian regime of former President Suharto, people who incited destruction were called "provocateurs" and jailed. But police inaction against the FPI -- four people were named suspects but none has been arrested -- is fuelling another suspicion, that official reluctance to deal with religion-related issues is encouraging even more hostilities against minority groups.

Yet, what is worrying moderate Muslims and non-Muslims in Indonesia are not hardline groups like the FPI -- it is the fear that the beliefs they advocate have permeated more segments of society, from kampongs to university campuses.

The high rate of unemployment and poverty, as well as the growing number of educated middle-class Muslims unhappy with the domination of Western-influenced culture, can breed religious zealotry.

Indonesian law requires that the government and other religious groups be consulted before a place of worship is built. But Christian groups say they are running into opposition from some Muslim leaders. As a result, some church services are held in unlikely places such as shophouses, hotel meeting rooms and school buildings, often creating another set of problems when local residents are upset by the "misuse" of a site for worship.

Although most of Indonesia's 160 million Muslims remain moderate, this could change unless the government and mainstream Islamic groups start paying more attention to the problem.

President Yudhoyono has considered becoming an advocate for moderate Islam, promoting peace in hot spots like the Middle East. Before he takes on such a role, perhaps he ought to take a closer look at the state of religious harmony at home.

Sex workers to lose hair during Ramadhan

Jakarta Post - November 3, 2004

Pekanbaru -- The Pekanbaru municipal government warned on Tuesday that government officials would shave sex workers' heads, if they were found operating during Ramadhan. The statement was made following the arrest of 17 sex workers in various places in the city in the past week.

Sex workers are normally released after they sign an agreement not to operate again, but in most cases, they return to the streets a few weeks after.

The presence of sex workers during Ramadhan, is offensive to Muslims who are fasting, said Ida Triani, the chief of Pekanbaru Social Affairs Office.

Armed forces/defense

House approves Ryamizard nomination

Jakarta Post - November 6, 2004

Jakarta/Bandung -- In a move that could worsen its relationship with President Susilo Bambang Yudhoyono, the House of Representatives' defense commission said it had endorsed Army chief Gen. Ryamizard Ryacudu's nomination as new Indonesian Military (TNI) chief.

House Commission I chairman Theo L. Sambuaga told the press that the decision would be put before a plenary meeting for approval next week. "We have endorsed the nomination of Ryamizard [as TNI chief]. We hope the President will install him soon," Theo said.

House Commission I had been assigned to discuss former president Megawati Soekarnoputri's letter on the appointment of Ryamizard as acting TNI chief following the resignation of Gen. Endriartono Sutarto.

Susilo sent a letter to House leaders last week to withdraw Megawati's letter, but they ignored his letter, arguing that Megawati was the legitimate president when she submitted the letter.

"Legally, Gen. Ryamizard has become the new TNI chief, but the inauguration will depend on President Susilo," commission member Happy Bone Zulkarnaen said.

Susilo had said earlier that he still wanted Endriartono, who had reached his mandatory retirement age of 55 in 2002, to remain for the time being as TNI chief.

By law, the President has the sole authority to appoint the TNI chief, but he/she is obliged to get House approval.

Endriartono said in Bandung on Friday that the replacement of the TNI chief was legitimate only if done through a presidential decree.

Meanwhile, dozens of legislators submitted on Friday a petition to summon Susilo over his decision to revoke Megawati's letter. The proposal was received by House Speaker Agung Laksono, who was accompanied by deputy speaker Soetardjo Soerjogoeritno. The petition will be taken up at a plenary meeting some time next week.

Although the proposal was initiated by legislators from the anti-Susilo Nationhood Coalition, Djoko Edhi Soetjipto of the National Mandate Party (PAN), and a Susilo supporter, also signed the letter.

Djoko said that, as a legislator, he had the right to seek an explanation from the President over his decision to revoke the letter of his predecessor.

PAN faction chairman Abdillah Toha, however, said that the move made by Djoko was not the policy of his faction. "I will have a chat with him about it," Abdillah said.

State Secretary Yusril Ihza Mahendra said that the government was ready to meet them. "Let the people judge whose argument is stronger. As the head of state, the President has the authority to arrange the leadership of TNI," Yusril said.

"Only the President has the authority to replace the TNI chief, not the House and they have to stop dragging the military into the political feud," he added.

He contended that the House no longer had the authority to decide on the TNI chief's replacement as mandated by the People's Consultative Assembly decree No. 6/2000, because that decree was no longer valid.

"They are not actually authorized to discuss the letter that has been withdrawn, so who has actually started the conflict?" Yusril asked.

Meanwhile, the Indonesian Democratic Party of Struggle (PDI-P) faction chairman Sutjipto said that the weeks-long deadlock should be resolved in a plenary meeting.

"We will reach a final solution at the plenary meeting. We will see then who has good intentions and who does not," he told the press after an internal meeting here on Friday.

TNI polemic shows military's political clout

Laksamana.Net - November 6, 2004

The ongoing feud between parliament and President Susilo Bambang Yudhoyono over the leadership of the Indonesian Defense Forces (TNI) demonstrates the enduring political power of the military, which was supposed to have ended after former dictator Suharto was ousted back in 1998.

The House of Representatives, which is dominated by parties that oppose Yudhoyono, is insisting that Army chief General Ryamizard Ryacudu -- well known for his xenophobic comments and criticism of human rights groups -- be appointed as the next TNI commander.

But Yudhoyono wants to retain incumbent TNI commander General Endriartono Sutarto until he consolidates his administration and launches a thorough overhaul of the armed forces' leadership.

Under the law, the president has the right to appoint and dismiss the TNI commander, provided he has the approval of the House.

Unfortunately for Yudhoyono, just days before he assumed office on October 20, his predecessor Megawati Sukarnoputri announced that Sutarto had resigned and proposed that parliament to replace him with Ryacudu.

Yudhoyono subsequently withdrew Megawati's letter of request, which parliament had yet to approve. But legislators ignored the new president's move and this week endorsed Ryacudu's nomination as the TNI commander.

Analysts say the fact that legislators are trying to undermine Yudhoyono by determining the leadership of the military indicates that parliament feels the TNI commander plays a strategic political role -- even though Indonesia is supposed to have developed civilian supremacy over the armed forces.

Military observer Edy Prasetyono from the Center for Strategic and International Studies (CSIS) says the ongoing debate over the TNI succession issue also shows that legislators and the government don't seem to understand that the Defense Ministry is responsible for all policies related to the armed forces.

"This debate has emerged because both sides assume the TNI commander has a strategic political influence that will come into play in powerful political struggles," he was quoted as saying Saturday by detikcom online news portal.

He said separate laws on defense and TNI make it abundantly clear that the TNI commander cannot make strategic policies. "It's a total mistake to think the TNI commander has political influence because all TNI policies have to be determined by the defense minister," he said. "So whoever becomes TNI commander, it won't matter because there won't be many changes to TNI. And TNI is under the supervision of civilian authority," he asserted.

Prasetyono warned that if the debate over the TNI succession issue continues, the military commander will become a politically powerful figure and feel encouraged to indulge in political ambitions -- rather than serve as a professional soldier under civilian control. "It's imperative that precedence be given to how we control TNI," said the University of Indonesia lecturer.

He said it's therefore necessary to review the appropriateness of the mechanism under which the TNI commander is appointed and dismissed.

"If we are convinced that TNI is being supervised by civilian authority, then it again becomes irrelevant as to whether or not there's agreement concerning the appointment of the TNI commander," he said. "What's clear is that we must be on our guard lest the position of TNI commander has a significant political role," he added.

The armed forces played a dominant socio-political role throughout the repressive regime of Suharto, who was forced to resign in May 1998 amid financial turmoil and deadly rioting.

Until 1997, the military and police were always allocated 100 seats in parliament. After the fall of Suharto, the security forces' representation was reduced from 75 to 38 seats in 1999. After this year's historic direct elections, active generals were last month completely removed from parliament, though analysts say the military's real power was never really in its legislative seats -- but instead came from its ability to create or quell security problems, as well as its far-reaching presence in legal and illegal businesses.

Who's the boss?

Yudhoyono on Thursday compounded his already tense relationship with parliament by prohibiting Ryacudu from attending a selection hearing with legislators for the post of TNI commander. Unperturbed by the ban, parliament's Commission I on defense affairs on Friday promptly endorsed Ryacudu to become the next military chief.

Although some legislators conceded the final decision is in the hands of the Yudhoyono, others demanded the president be summoned to explain why he had withdrawn Megawati's letter nominating Ryacudu as TNI commander.

Commission I chairman Theo L. Sambuaga, a member of Golkar Party, said the endorsement of Ryacudu would be put before a plenary House meeting for approval next week. But he said the meeting would not touch on Yudhoyono's October 25 decision to revoke Megawati's letter.

He said that in line with the law on TNI, the House had 20 working days in which to approve Megawati's letter -- dated October 8 -- proposing that Ryacudu become military chief. If the House had failed to reach an agreement within that time, the president would be able to nominate another candidate for the leadership of TNI.

"We decided that the 20 days would be counted since the date the law on TNI came into effect, that is, October 16, 2004. This means that the 20 days are up today [Friday], November 5. Because we have had not had any spare time, we will recommend that it [Ryacudu's endorsement] be put before a plenary House meeting for approval," he said.

Nevertheless, Sambuaga acknowledged that the law gives the president the right to propose and appoint the TNI commander. "In accordance with the provisions of the law, the president is authorized to appoint a candidate as TNI commander. But whether there is agreement or not, that's in the hands of the president," he said. "The ball is currently in the president's hands. But we assume the president will appoint an appropriate candidate as commander, in line with the provisions of the law," he added.

Fellow Commission I member Happy Bone Zulkarnaen, who is also from Golkar, said Ryacudu has already legally become the de jure TNI commander, but the timing of his inauguration will depend on Yudhoyono.

Zulkarnaen and 55 other House members on Friday submitted a petition to House speaker Agung Laksono (another Golkar member), requesting that the House exercise its right to question the president over the appointment of a new TNI chief. The petition was initiated by members of parliament's dominant Nationhood Coalition, which has vowed to serve as an opposition force against Yudhoyono.

The signatories included Yorrys Raweyai and Yudi Krisnadi of Golkar, Permadi of the Indonesian Democratic Party of Struggle (PDI-P), and Commission I deputy chairman Effendi Choirie of the National Awakening Party (PKB). Another signatory was Djoko Edhi Sutjipto of the National Mandate Party (PAN), which is not a member of the Nationhood Coalition and had supported Yudhoyono for the presidency. PAN executive Abdillah Toha said he would talk to Sutjipto because the petition was not in line with the party's policy.

And the nominees are?

Presidential spokesman Andi Mallarangeng interpreted the House commission's stance on the TNI succession issue by saying legislators had acknowledged Yudhoyono's right to choose the next military chief. "That happened naturally. The matter of the appointment of the TNI commander is the president's prerogative. We appreciate parliament's decision," he was quoted as saying by detikcom.

Asked the vital question of who Yudhoyono would nominate as the new TNI commander, Mallarangeng said the president had not yet selected anyone to replace Sutarto. "For example, it could be Ryamizard Ryacudu or another candidate. We don't know yet. That will be the authority of the president after he consolidates his government. In my opinion, it won't be too long until there's a handover," he said.

Asked precisely when the new TNI commander might be appointed, Mallarangeng replied: "We don't know yet. But the president appreciates the commission's decisions and rights. And we welcome it if commission also appreciates the president's rights. We hoped the House and the president appreciate each other."

United in limbo

Amid the ongoing debate over the succession issue, Sutarto and Ryacudu both attended separate military ceremonies in the West Java capital of Bandung on Friday.

Ryacudu presided over an event in which Lieutenant General Hadi Waluyo was replaced by Major General Kornel Simbolon as commander of the Military Education and Training Command Academy. Waluyo has been promoted to chief of the Army's Strategic Reserve Command. Ryacudu also visited Military Police Education Unit in Cimahi, west of Bandung.

Meanwhile, Sutarto led the closing of a graduation ceremony for 83 cadets at the Military Staff and Command School (Sesko). "TNI is still solid. It's not affected by political matters and we continue to carry out our tasks as usual," Sutarto was quoted as saying by detikcom.

He denied there were any problems in his relationship with Ryacudu. "Earlier we spoke on the telephone, arranging that he would go the Education and Training Academy and I would go to Sesko here." Sutarto said he and Ryacudu would together visit the Military Academy in Tidar, Magelang, Central Java, on Saturday.

Defense minister told to restructure office

Jakarta Post - November 6, 2004

Tiarma Siboro, Jakarta -- While welcoming defense minister Juwono Sudarsono's plan to eradicate corruption and markup practices in arms-purchase procedures, an expert has urged for the restructuring of the ministry and the introduction of a special bureau to deal with the procurement of jobs.

Military observer Andi Widjajanto of the University of Indonesia said the bureau should comprise officials who are familiar with the defense industry at both a domestic and international level.

"So far, there is no defense ministry official who is capable of dealing with international companies that produce defense equipment. This has prompted each official to develop a network with their own partners or brokers in procuring military arms. Of course, fees are part of the deals," Andi said on Thursday.

He suggested that officials from state ship builder PT PAL in Surabaya, state arms producer PT Pindad in Bandung and the now defunct aircraft maker PT Dirgantara Indonesia in Bandung be recruited to the new bureau, saying that they more or less have the required knowledge. The bureau should fall under the directorate general of procurement.

In the first move to promote good governance, Juwono said he and the military's leadership were streamlining the procedures for procuring arms, which would no longer involve Indonesian Military (TNI) Headquarters. An initial meeting was held on Wednesday involving the minister, TNI chief Gen. Endriartono Sutarto and all three chiefs of staff.

The purchase of military equipment has, for the last few decades, involved contractors in line with a presidential decree on public procurement that was issued in the 1970s.

Andi said the presence of contractors would remain a necessity, but asserted that during the procurement process the ministry and the TNI headquarters had to comply with the Defense Law which promotes a top-down policy. The current practice follows a bottom-up pattern.

"Apart from markup practices in the ministry, the military has so far ignored the role of civilian supremacy when it comes to the design of the defense program. The military has opted to directly approach the President, as the TNI's supreme commander, to consult its needs," Andi said.

Sharing Andi's view, Danang Widoyoko of the Indonesian Corruption Watch (ICW) suggested that the defense minister review the budget allocation for the military and cut down the procedure to channel the budget.

Danang also asked the minister to dissolve military territorial commands that oversee certain areas that risk security disturbances for the sake of efficiency.

"No less than Rp 9 trillion [US$980,000] out of Rp 22 trillion of the military's budget in the current fiscal year was allocated to the Army with the omnipresence of its territorial commands. While, on the other hand, the Navy and the Air Force lack the equipment to maintain the country's sovereignty," Danang said.

Also, for the sake of efficiency and practicality, Andi suggested that the defense ministry maintain three directorate generals dealing with procurement, finance and defense capabilities, but scrap the other two directorate generals.

TNI chief issue widens Susilo-House divide

Jakarta Post - November 5, 2004

Fabiola Desy Unidjaja and Kurniawan Hari, Jakarta -- President Susilo Bambang Yudhoyono banned Army Chief of Staff Gen. Ryamizard Ryacudu on Thursday from responding to a House invitation to a selection hearing for the post of Indonesian Military (TNI) chief.

Fueling the already tense relations between the House and the government, Susilo said that he had revoked the letter issued by the previous president on the replacement of the TNI chief so that the House had no longer any legal grounds for continuing to process his replacement.

"The President has revoked the letter on the TNI chief's replacement, and so selection hearings can only begin if there is a request from the President to do so," Indonesian Military (TNI) chief Gen. Endriartono Sutarto said after meeting with the President on Thursday.

"Given this situation, there is no need for Pak Ryamizard to respond to the invitation," he added. The TNI law stipulates that the appointment and removal of the TNI chief requires the approval of the House.

Respecting the President's decision, Ryamizard did not turn up for the meeting with the House defense commission affiliated to the Nationhood Coalition which opposes to Susilo's administration. Instead, Ryamizard sent a letter to the House saying that he had not put in an appearance as he had not been ordered to do so by the President.

Defense commission chairman Theo L. Sambuaga confirmed on Thursday that he had received the letter. Another legislator, Hajrianto Tohari of Golkar Party, vowed that the House would continue the process. "It is not prudent for the President to interrupt an ongoing process in the House," he said.

Endriartono tendered his resignation one month before former president Megawati Soekarnoputri stepped down on October 20. She approved the request and sent a letter to the House to start the process for Ryamizard to be appointed as the new TNI chief. The House then set a date for the selection hearing.

On October 25, however, Susilo sent a letter to the House speaker, saying that he had revoked his predecessor's letter as he preferred to keep Endriartono in his post until he had consolidated his new administration.

The letter infuriated the House leaders, but during a meeting at Merdeka Palace on October 29, Susilo said that he could understand why the House wanted to push ahead with the process. State Secretary Yusril Ihza Mahendra added that there should be no problem as Susilo might recommend the same person for the post.

However, on Thursday Yusril said that by sending his letter to the House, Susilo had in effect rendered Megawati's letter invalid. "Because [Megawati's] letter has been withdrawn, there is no need for legislators to discuss it," Yusril said after meeting House Speaker Agung Laksono.

Separately, Nationhood Coalition legislators continued with their plan to summon Susilo over Susilo's decision to revoke Megawati's letter and put the replacement process on hold.

Golkar's Yudi Chrisnandi said on Thursday that the plan was supported by 43 legislators from various factions grouped in the Nationhood Coalition and would be submitted to House leaders on Friday.

Based on the House's standing orders, the plan to summon the President via an interpellation motion requires the support of at least 13 legislators. Legislators need the approval of a plenary meeting to push the motion forward.

For the interpellation motion to continue, the request needs to be approved by the plenary meeting, the holding of which is scheduled by the House steering committee, before it is given to the President.

Almost two-thirds of the House's 550 members are from parties opposed to Susilo's administration.

A win for Indonesia's military

Asia Times - November 4, 2004

Gary LaMoshi, Denpasar -- Indonesia's military scored a major victory this week without firing a shot. The re-election of US President George W Bush ensures restoration of full military ties between the US and Indonesia, including millions of dollars in aid, and also ensures that US demands for military reform will remain muted. That's bad news for democracy in Indonesia and the United States' standing in Indonesia in the long run.

In addition to its symbolic value as the world's largest predominantly Muslim country, Indonesia also lies along the strategically vital Strait of Malacca shipping lanes. But the Bush administration has seen Indonesia largely through the prism of its "war on terror", and despite a brief presidential fly-in last year, the administration's policy has mainly been one of neglect.

The administration of president Bill Clinton cut off aid to the Indonesian military, known by its Indonesian abbreviation TNI (Tentara Nasional Indonesia), in 1999 after TNI-backed militias, if not army units, killed hundreds in East Timor. However, as part of its declared "war on terrorism", the Bush administration wants to get back into bed with TNI.

Indonesia's then-president Megawati Sukarnoputri's lucky star made her the first foreign leader to visit the White House after September 11, 2001. She secured a promise of increased aid, including funding for the police force that, until 1999, was part of the military. After the Bali bombings of October 2002, the US, its ally Australia, and other countries have stepped up cooperation with the police.

Help, police

While the police gained stature for cracking the Bali case, the increased engagement with the West hasn't encouraged deep reform. Endemic corruption has not eased; a police job in Bali requires a gratuity of Rp20 million (US$2,200) despite a salary of Rp500,000 per month. Last month, police stood by as Muslim vigilantes sacked a bar in Jakarta for serving alcohol during the Islamic holy month of Ramadan. While the attackers wore the robes of Islam, these attacks are often associated with payoffs or failure to make them.

In his valedictory address at the end of his tenure in Jakarta, US ambassador to Indonesia Ralph Boyce called the failure to reinstitute full military ties as his biggest disappointment. Boyce laid the blame on TNI for failing to reform. The carrot of restored US aid hasn't encouraged TNI to change meaningfully.

It's been a very good four years for the Indonesian military during Bush's watch. TNI remains dominated by henchmen of deposed president Suharto and his autocratic regime. No military officers have been convicted for the atrocities in East Timor, or the murder of Theys Eluay, leader of a peaceful separatist movement in Papua. The war against separatists in resource-rich Aceh in the far western corner of the archipelago grinds on with widespread reports of abuses against civilians, lucrative shakedown opportunities, and no prospect of a political settlement.

Despite giving up its appointed seats in parliament, TNI remains deeply enmeshed in politics. TNI has not scrapped its regional command system of troops posed in the provinces, a remnant of its "dwi fungsi" (dual function) doctrine that put it in charge of internal security. Suharto's last chief of staff, Wiranto, under United Nations indictment for his role in the East Timor killings, won the former ruling party's nomination for the presidency and nearly made it to a runoff against another former general, newly elected President Susilo Bambang Yudhoyono, who appointed Wiranto's successor, retired admiral Widodo A S, as his top minister for political, security and legal affairs.

Play ball

Rather than push for reform, the Bush administration has shown it's willing to play ball with the brass in the name of fighting terrorism. Ironically, TNI bears a great deal of the responsibility for unleashing the forces of radical Islam behind Indonesia's most recent terror attacks. The military's support of jihad against Christians in Ambon and central Sulawesi gave Muslim militants legitimacy and a fertile breeding ground. That was part of generals' campaign to destabilize the regime of then-president Abdurrahman Wahid, who threatened real military reform, a campaign that included the 1999 bombing of the Jakarta Stock Exchange Building.

None of that seems to matter to the Bush administration. The US Justice Department has endorsed the indictment of a petty crook for the attack on a convoy of Americans and Indonesians working at the Freeport MacMoRan mine in Papua in 2001, when all signs point to military involvement. That incident has been the latest roadblock to resumed military aid. Expect the second Bush administration to fight to sweep this attack under the rug and sweep aside congressional opposition.

Embracing TNI distances the US from the forces of reform and democracy in Indonesia, and carries a double or triple whammy for long-term US interests. The most successful reform party in Indonesia's new parliament is the Prosperous Justice Party (PKS), and former president Wahid, a Muslim cleric, remains the leading figure of reform and moderate Islam. Despite its use of Muslim militants to do its dirty work as far back as the mass killing after the 1965 coup that deposed founding president Sukarno in favor of Suharto, TNI is seen as an enemy of Islam in Indonesia.

Low ratings

Under Bush, specifically since the invasion of Iraq, favorable impressions of the United States plummeted from 61% to 15%. Even though it has been a victim of Muslim terrorists, Indonesians largely see the "war on terror" as a war on Islam, and the Bush administration's policies in the Middle East, featuring unwavering support for Israeli Prime Minister Ariel Sharon and opposition to Palestinian leader Yasser Arafat, as well as the occupation of Iraq, are red meat for radical Islam and push Muslim reformers toward anti-Americanism.

Despite Indonesia's strategic and symbolic importance, the Bush administration hasn't made Indonesia a priority. The country's 220 million people in need of economic and political help are likely to continue to take a back seat to Thailand and its Prime Minister Thaksin Shinawatra, with his free-market rhetoric and authoritarian streak, as well as Singapore and even Malaysia, among US favorites in the Association of Southeast Asian Nations group.

The second Bush term may feature a larger role for Paul Wolfowitz, the current deputy secretary of defense. Wolfowitz was a respected ambassador to Indonesia in the 1980s, though that may have had to do with his then-wife, a student of Javanese culture. Despite its lip service to building bridges to the Islamic world and the vital plank Indonesia could play in it, Wolfowitz has never traveled to Indonesia as an emissary of goodwill. In fact, he's one of the architects of the Iraq invasion that has destroyed US standing in Indonesia. The Bush administration's neglect of the past four years could wind up looking good compared with the four years ahead.

[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.]

Government to revise arms purchase procedure

Jakarta Post - November 4, 2004

Tiarma Siboro and Imanuddin Razak, Jakarta -- The government is streamlining the procedures for procuring arms and will exclude the Indonesian Military (TNI) from the process in a bid to avoid corruption and mark-ups.

Minister of Defense Juwono Sudarsono met with TNI commander Gen. Endriartono Sutarto and all three chiefs of staff on Wednesday for initial talks on the plan, which will only take effect three or four years down the line.

Juwono said the first step he would take would be to identify all suppliers and contractors of the military before starting an investigation into allegations of mark-ups in the purchase of military equipment in the past.

Military equipment purchases have for the last few decades involved contractors in line with a presidential decree on public procurements that was issued in the 1970s.

"The government has pledged to continue promoting accountability, transparency and efficiency as part of the effort to create good governance. I'm now reviewing the long-standing procedures for procuring military equipment in response to suspicions that they are prone to corruption and mark-ups," Juwono told The Jakarta Post .

Currently dozens of contractors have personal access to certain officials either in the defense ministry or TNI headquarters, and use these contacts to lobby for procurement projects without going through a bidding process, Juwono said.

He added he had asked the ministry's secretary-general and inspectorate general to produce the names of both domestic and foreign contractors and find out whether or not they had good reputations.

"Only after we have their names will we be able to continue with the investigation into alleged mark-ups, which it is believed have been going on for decades," Juwono said. Juwono, however, would not elaborate on whether the military officers or state officials involved would also be investigated.

The TNI has been persistently demanding an increase in government spending on defense to help improve the welfare of soldiers and modernize its largely outdated equipment.

The latest example of a controversial arms procurement was the purchase of four Russian-made Sukhoi fighters and two Mi-35 assault helicopters in 2002, which excluded the defense ministry even though this is required by the Defense Law.

"We are going to build a clean system in which the purchase of military equipment should be discussed here," Juwono said, referring to his ministry.

Kostrad gets new chief

Jakarta Post - November 4, 2004

Army Chief of Staff Gen. Ryamizard Ryacudu (left) relinquishes the command baton to the new chief of the Army Strategic Reserves Command (Kostrad), Lt. Gen. Hadi Waluyo. in a ceremony held on Wednesday at the Kostrad headquarters, Central Jakarta.

Hadi, a 1972 graduate of the Armed Forces Academy (Akabri) and a classmate of predecessor Lt. Gen. Bibit Waluyo, was inducted into his new post in the ceremony. Hadi has also served as the Military Education and Training Command (Kodiklat) chief in Bandung, West Java.

Bibit retired on August 5 upon reaching the mandatory retirement age of 55, and Ryamizard took charge of the Army's elite force pending the appointment of Bibit's successor.

The hand-over ceremony came amid a dispute between Susilo Bambang Yudhoyono, the supreme commander of the Indonesian Military (TNI) in his capacity as president, and lawmakers over who should replace TNI chief Gen. Endriartono Sutarto.

Susilo recently revoked a letter issued by Megawati Soekarnoputri in her final days in office that endorsed Ryamizard as the new TNI chief.

However, legislators -- mostly those affiliated with the Golkar- led Nationhood Coalition -- ignored Susilo's move and has pushed for a discussion over the military leadership.

"I have been summoned by the House of Representatives to face a fit-and-proper-test [on Thursday] that will determine whether I am qualified for the top TNI post or not. But I have left the matter to my superiors, namely the current TNI chief and the President," said Ryamizard.

Kostrad has a 29,000-strong force and is thus the largest military unit in the armed forces. Previous Kostrad chiefs include former authoritarian leader Soeharto and former presidential candidate Gen. (ret) Wiranto.

TNI sides with Susilo in chief dispute

Jakarta Post - November 2, 2004

Tiarma Siboro, Jakarta -- Leaders of the Indonesian Military (TNI) stressed on Monday that regardless of what the House of Representatives (DPR) said about the leadership change, they would only obey President Susilo Bambang Yudhoyono's decision on the issue.

"The President has yet to issue a decree on the reshuffle [of top TNI commanders], which will allow us to hold a ceremony to hand over the leadership," TNI chief Gen. Endriartono Sutarto announced during a press conference here on Monday.

Also present at the media briefing were Navy chief Adm. Bernard Kent Sondakh, Air Force chief Marshall Chappy Hakim, Army chief Gen. Ryamizard Ryacudu and other top military officers.

Endriartono's statement came just days after Susilo appeared to have lost the battle with the House over the military leadership change.

The President, who had made known his desire to retain Endriartono as TNI chief, sent a letter to the House to withdraw former president Megawati Soekarnoputri's letter on the appointment of Gen. Ryamizard as acting TNI chief following the resignation of Sutarto from the post.

According to the law, the president, as the commander-in-chief of the military, has the authority to appoint the TNI chief, with a stipulation that there should be House approval also.

However, House leaders, all from parties that supported Megawati in the September 20 election, ignored Susilo's letter and planned to summon Ryamizard on November 8 to explain his vision as TNI chief.

State Secretary Yusril Ihza Mahendra hinted last week that Susilo could nominate Ryamizard as the new TNI chief. "There is no change in the TNI leadership nor in its three forces. I'm still the TNI commander," Endriartono.

Endriartono also urged civilian politicians on Monday to refrain from treating the TNI as a political object. He also denied tendering a resignation letter to Megawati, saying that he submitted a letter about the "regeneration process" in the TNI.

"She asked me to officially send a letter regarding the regeneration issue and I did. But we both agreed to be more careful in deciding the time of the replacement," he said.

Endriartono said he was surprised when Megawati sent a letter to House leaders on October 8 informing the lawmakers about his departure and appointing Ryamizard as acting TNI chief. "Indeed, it was her right to replace me. But it is also the right of the new President [Susilo] to defend me," he said.

House tells Susilo to give top TNI post to Air Force

Jakarta Post - November 1, 2004

Jakarta -- President Susilo Bambang Yudhoyono has been urged to reconsider his idea to appoint an Army chief as the new Indonesian Military (TNI) chief, and instead choose the Air Force chief.

A military source said Susilo would likely appoint Army chief Gen. Ryamizard Ryacudu as the new TNI commander, replacing Army Gen. Endriartono Sutarto, 57, who has passed the mandatory retirement age of 55 years old.

The recommendation was apparently aimed at putting an end to the standoff between the President and the House of Representatives over the TNI leadership, which ensued when the House ignored a letter Susilo sent on October 25.

The letter communicated Susilo's intention to revoke former president Megawati Soekarnoputri's decision to accept the resignation of Endriartono and to nominate Ryamizard as the new TNI chief.

The pro-Megawati Nationhood Coalition, led by the Golkar Party, holds majority seats in the House.

Calls have been mounting for Susilo to annul Ryamizard's nomination to ensure that the military leadership is passed among leaders of all forces in rotation.

The Indonesian Human Rights Watch (Imparsial) said over the weekend that Susilo must replace all chiefs of staff and select one as the new military commander, while Susilo needed to confer the position of TNI chief to the Air Force chief in all fairness. "The military leadership must be rotated among leaders of all forces to ensure that the institution is revitalized. The rotation is also necessary to curb rivalry that might lead to an internal conflict within the armed forces," said acting executive director of Imparsial Rachland Nashidik.

Like Endriartono, Navy chief Adm. Bernard Kent Sondakh, 56, and Air Force chief Marshal Chappy Hakim, 57, are beyond the mandatory retirement age, while Ryamizard will reach retirement age in April 2005.

Rachland said Susilo and his administration would be credited with promoting genuine military reform, if he picked the Air Force chief as the TNI leader.

Article 14 of the recently endorsed Military Law stipulates that the position of TNI chief should be appointed in rotation to the Army, Air Force and Navy.

The president is authorized constitutionally in their capacity as the TNI supreme commander to appoint a TNI chief pending House approval.

Rachland said, however, that the President and the House were both reluctant to implement the rotation scheme, as they had assumed Ryamizard would be nominated as TNI chief upon Endriartono's resignation.

House Speaker Agung Laksono said on Friday after a meeting with the President that Susilo had agreed to the House's intention to push through Ryamizard's nomination.

"Both Susilo and civilian House legislators still have a tendency to invite the military to the center stage of politics," Rachland said.

Endriartono's appointment by Megawati in 2001 halted the rotation scheme introduced by her predecessor Abdurrahman Wahid, who had named Navy chief Adm. Widodo Adisucipto to the top TNI post in 1999.

Constitutional law experts said Susilo's acceptance of the House's plan to press ahead with installing Ryamizard showed the House was fulfilling its supervisory role.

"This indicates effective supervision by the House. If it plays its supervisory role properly, there will be a better system of checks and balances," Maria Farida Indrati from the University of Indonesia said on Sunday.

Fellow expert Sri Soemantri said the House's increasing supervisory authority was a result of constitutional amendments that began in 1999.

Under the amended Constitution, the appointment of certain state officials, including the TNI and National Police chiefs, requires House approval.

However, Soemantri said the issue of the TNI chief appointment had changed from a legal into a political one.

Meanwhile, Endriartono is slated to announce a military reshuffle during a news conference on Monday at TNI headquarters in Cilangkap, East Jakarta, accompanied by all three chiefs of staff.

The reshuffle is to include the replacement of all chiefs of staffs as part of a revitalization effort, a source said.

TNI top job, a strategic post sets politicians bickering

Jakarta Post - November 1, 2004

Imanuddin Razak -- President Susilo Bambang Yudhoyono's request to annul his predecessor's request for lawmakers to discuss the replacement of the Indonesian Military (TNI) chief, which was announced during a plenary meeting of the House of Representatives last Wednesday, was a controversial move by the new president.

It is controversial because logically it is TNI chief Gen. Endriartono Sutarto himself who should withdraw his letter of resignation, which was tendered to then president Megawati Soekarnoputri on September 24, 2004.

Megawati appointed Army Chief of Staff Gen. Ryamizard Ryacudu as acting TNI chief and at the same time sent a letter endorsing Endriartono's resignation to the House for its approval a few days before her tenure ended on October 20, but the House could not respond to it as the commission mandated to discuss it had not yet been formed.

The Constitution requires the president to seek the approval of the House in the selection of the TNI and National Police chief.

Meanwhile, Susilo said his request for the withdrawal of Megawati's letter "was nothing personal" either in connection with Endriartono or Ryamizard.

And the way Susilo treated the case, which was later included in the agenda of the new House despite disagreement whether or not to accommodate his request, gave the impression that the President wanted Endriartono to retain his post.

Cabinet secretary Sudi Silalahi confirmed that the President had talked to Endriartono, who agreed to stay on as the TNI chief. Meanwhile, Endriartono himself had briefed all chiefs of staff and told them that he had decided to retain his post as TNI chief upon the request of the President, who is also the TNI Supreme Commander.

The question would then be why the President chose to maintain Endriartono and not to pick another candidate, Ryamizard, for example. To answer the question, it would be good to flash back to the period when Endriartono submitted his resignation to Megawati in late September.

National media have widely reported that Endriartono's decision to quit his post was triggered by Megawati's move to grant the four-star general status to State Intelligence Agency (BIN) chief A.M. Hendropriyono and then Minister of Home Affairs Hari Sabarno, who were both previously retired Army lieutenant generals.

Although granting a rank promotion to TNI generals is not a new practice for a president in this republic, Megawati's decision was indeed controversial as she granted the status to the generals, who in the eyes of many had not made such an extraordinary contribution during their term in office to warrant a promotion to four-star general.

However, Endriartono's move to submit his resignation letter before the end of Megawati's term and at the time when then president-elect Susilo was putting together his Cabinet was equally controversial.

Many in political and military circles have expressed the belief that Endriartono's move was part and parcel of the selection process being carried out by Susilo to fill in the Cabinet posts.

It was also mentioned that Endriartono was once offered the post of coordinating minister for political, legal and security Affairs, but he had to let it go as Susilo was in favor of Adm. (ret) Widodo A.S., who is more senior than Endriartono. Widodo is a 1968 graduate of the Naval Academy and the TNI chief during the presidency of Abdurrahman "Gus Dur" Wahid, while Endriartono is a 1971 graduate of the National Military Academy. And it was not possible for Endriartono, a four-star general, to accept the offer of the post of home minister, a Cabinet post which has traditionally been held by officers from the TNI headquarters, because the post is intended for three-star generals only.

After it was clear that Endriartono could not get a Cabinet post, the idea emerged of asking for the annulment of Megawati's request to the House. And constitutionally speaking, Endriartono could get his post back as the House had yet to make any decision on his resignation letter. The decision whether to elect a new TNI chief or retain Endriartono would then be in the hands of the House.

Pro-Susilo factions are pressing for the annulment of Megawati's letter on the dismissal of Endriartono and the appointment of Ryamizard as acting TNI chief.

Factions affiliated to the Nationhood Coalition plus the National Awakening Party (PKB) instead insisted on responding to the letter sent by Megawati. The Nationhood Coalition comprises the Golkar Party, the Indonesian Democratic Party, the Prosperous Peace Party and the Reform Star Party.

Some of the House members mulled exercising their right to summon the President to seek an explanation for his letter. They also suggested an alternative candidate for the post, Deputy Army Chief of Staff Lt. Gen. Djoko Santoso.

However, in terms of strategy, it will be more appropriate for Susilo to keep Endriartono as TNI chief rather than appointing Ryamizard or Djoko as the new chief. By keeping Endriartono in command, it will be easier for Susilo to gain support from the TNI headquarters, although he himself is a TNI general. And by keeping Endriartono, it will also reduce potential resistance from the Navy and the Air Force.

There was an agreement made during the presidency of Abdurrahman Wahid that the post of TNI chief would be rotated among the three TNI forces. But after the ouster of Abdurrahman in October 2001, Megawati appointed Endriartono to replace Widodo, instead of granting the post to an Air Force officer.

And if Susilo appoints Ryamizard, a 1973 graduate of the National Military Academy, or Djoko, a 1975 graduate of the academy, it will be difficult to deal with the Navy and the Air Force, as the Navy Chief of Staff Vice Adm. Bernard Kent Sondakh is a 1970 graduate of the Naval Academy and the Air Force Chief of Staff Vice Marshal Chappy Hakim is a 1971 graduate of the Air Force Academy.

NGOs concerned about plans to increase defense funding

Tempo Interactive - November 1, 2004

Eworaswa, Jakarta -- Indonesian Corruption Watch (ICW), the Commission for Missing Persons and Victims of Violence (Kontras) and Indonesian Human Rights Watch (Imparsial) are questioning plans by the defense minister to increase the defense budget by 5.59 per cent (26 trillion rupiah). These concerns were raised in a statement which was issued in a joint press release titled "Questioning Plans to Increase the Defense Budget" at the Kontras' offices in Jakarta on Monday November 1.

The three non-government organisations disagree with the defense minister's plan for five basic reasons. Firstly the state's limited financial situation, bearing in mind the 2005 current account deficit of 0.8 per cent which has yet to calculate in the price of oil which has reached US$54 per barrel.

Secondly, because it is counter productive with the government's program to increase economic growth. Increasing the budget through tax hikes will reduce the level of public savings and private investment while the alternative of seeking loans is not the solution.

Thirdly, Indonesia is different to the United States which though a war can increase investment in arms industries which absorbs large numbers of workers.

Fourthly, the government has not yet been able to realise the budget needs for other sectors such as education (which should be 20 per cent), healthcare (only at 2.5 per cent) and law enforcement and human rights (only at 1.3 per cent).

Fifth, the level of security threat in Indonesia does not warrant an increase in the defense budget.

They also put forward a number of solutions including increasing defense budget efficiency, reducing spending levels on the TNI AD (army) through progressively abolishing the territorial military commands(1) and improving security by clearly separating the duties and powers of the TNI (armed forces) and the police along with trimming the bureaucracy to reduce budget leaks.

Notes:

1. The TNI's territorial command structure mandates the deployment of military command posts and detachments at all levels of the civil administration: provincial, district, sub- district and village. This structure provides the organisational framework for the TNI to act as a political security force at all levels of society. The five respective commands are: Kodam - Komando Daerah Militer, Regional Military Command; Korem - Komando Resort Militer, Military Command at a level below the residency; Kodim - Komando Distrik Militer, District Military Command; Koramil - Komando Rayon Militer, Sub-District Military Command (Kecamatan) level and; Babinsa - Bintara Pembina Desa, Noncommissioned military officer posted in villages and wards and affiliated with the civilian administration.

[Translated by James Balowski.]

International relations

President vows to boost relations with US

Laksamana.Net - November 6, 2004

President Susilo Bambang Yudhoyono on Saturday (6/11/04) vowed to take strong measures to combat corruption and terrorism, as well as boost democracy, in order to attract US investment to improve Indonesia's economic growth.

"My intention is real, practical anti-corruption measures and not just cosmetic ones," he was quoted as saying by Agence France- Presse.

The former general, who on October 20 became Indonesia's first democratically elected president, was speaking to American officials, legislators and business leaders at the US Chamber of Commerce in Washington via a live video conference from Jakarta.

He said the US-Indonesian relationship has great potential growth, but warned the US not to be complacent in its relationship with Indonesia. "I think that the best way for either party to enter this relationship is to never take it for granted, and to always try to earn each other's trust, respect and confidence," he was quoted as saying by Voice of America News.

The US is Indonesia's second-largest trading partner, second only to Japan, with annual bilateral trade of about $12 billion. Although Indonesia exports a wide range of commodities to the US, security threats, rampant corruption and poor law enforcement have deterred many investors. US investments in Indonesia amount to about $9 billion annually, mostly in the oil, gas and mining sectors.

Yudhoyono said he would take action to curb poverty and unemployment, and deal with corruption and terrorism. "I have told my ministers in the first cabinet meeting that this will be a performance-driven team, no matter if one is a professional or a party appointee, one will ultimately be judged by the strength of his or her performance to deliver," he was quoted as saying by VOA News.

But he warned not to expect immediate results, saying it would take a long time to implement thorough changes. "I know the list of to-dos will get longer and longer. But it is worth remembering that this is not a sprint. It is a marathon. It is a test of stamina, a test of endurance, a test of political will and we are not just aiming for 100 days, but the next five years."

Yudhoyono answered questions from the participants, saying he was developing a political system "which is genuinely accountable to the people and based on rule of law and not on personalities".

"With this new effort and endeavor, the time has come for our friends in the United States to come to Indonesia and to invest more in our economy," he was quoted as saying by AFP.

Emphasizing his commitment to stamping out corruption, he mentioned that in his first week in office, he conducted surprise visits to the police, taxation and customs offices, "all of which are vital to the business community".

Commenting on terrorism, he said security was being tightened throughout the country to hunt down key members of regional terror network Jemaah Islamiyah.

"I will establish a surveillance system around the country that will work 24 hours a day to detect and deal with possible terrorist threats and I will enhance international cooperation to fight terrorist networks," he was quoted as saying by AFP.

Asked by Assistant Secretary of State James Kelly about his efforts to end conflict in rebellious Aceh and Papua provinces, Yudhoyono said his administration would hold talks with Free Aceh Movement rebels to implement "special autonomy".

He further said he had met with a group of Papuan leaders at his office on Thursday and agreed to hold talks to tackle various problems and strengthen special autonomy.

Indonesia hopes for better relations with US

Jakarta Post - November 5, 2004

Fabiola Desy Unidjaja and M. Taufiqurrahman, Jakarta -- The government congratulated President George W. Bush on Thursday over his reelection and expressed a hope for stronger ties with the world's only superpower country.

"The government of Indonesia congratulates President George W. Bush and Vice President Richard B. Cheney on their re-election and wish them success in their second term in dealing with the various challenges facing both the United States and the world," the Ministry of Foreign Affairs said in a statement.

President Susilo Bambang Yudhoyono himself was expected to call Bush on Friday to congratulate him.

Analysts, however, doubted on Thursday whether Bush's reelection would bring about any change in bilateral ties between Indonesia and the United States.

Bantarto Bandoro of the Centre for Strategic and International Studies (CSIS) said that the support for Bush in Tuesday's election indicated that the incumbent won the approval of US citizens to continue his war on terrorism.

"The Bush administration will continue to pursue the war on terrorism and Indonesia will therefore be affected by this," Bantarto told The Jakarta Post.

He said terrorism would remain a global threat and cooperation between countries would be indispensable to ward off the menace. "Cooperation in the fight against terrorism will bring Indonesia, the US and Australia closer together," he said, adding that the war on terror would receive wider support if the Bush administration took a more benign approach in its implementation.

Dewi Fortuna Anwar of the Indonesian Institute for Sciences (LIPI) said that the government could not expect a speedy resumption of the military relationship between the two countries.

The US imposed a military embargo on the Indonesian Military (TNI), following allegations that gross human rights abuses had taken place after East Timor separated from Indonesia in 1999.

"The problem does not lie with the Bush administration, but with the US Congress, which wants to maintain the embargo. In fact, President Bush wanted to resume the military ties early in his first administration," she told the Post.

When asked about the resistance from groups that resent the Bush antiterror drive, which they perceive as targeting Muslims around the world, Dewi said: "It depends on whether the Indonesian government manages to dispel the suspicion that it merely bows down to US interests." She also said that such resistance would not materialize if the Bush administration pursued its antiterror drive prudently.

Indonesia will not allow Australian troops on its soil

Agence France Presse - November 2, 2004

Indonesian President Susilo Bambang Yudhoyono has ruled out allowing Australian troops to be stationed on its soil or letting them carry out pre-emptive strikes against extremists on its territory.

In an interview with The Bulletin magazine, the newly elected Yudhoyono said relations with Australia would be a priority for his government but an excessive Australian security presence could be seen as intervention.

"With good cooperation, there will be no need for the presence of the Australian military or police in Indonesia," he said. "That would only create problems for Indonesian people, who could wrongly perceive that as a form of intervention."

Relations between the two countries have been prickly since Australia led international intervention in East Timor in 1999 to stop a bloodbath by Indonesian troops and their militia proxies. However, police and other cooperation against Islamic extremists was stepped up after the 2002 Bali bombings. It was further increased after September's bombing of the Australian embassy in Jakarta.

Prime Minister John Howard's government has stirred controversy by raising the possibility of pre-emptive strikes in the territory of unspecified neighbours to stop terrorist attacks. Those statements have been widely interpreted to mean Indonesia despite government denials.

Since Howard's re-election last month, which coincided with that of Yudhoyono, the Australian government has talked of a new security pact with its giant neighbour in a bid to mend ties.

Yudhoyono told The Bulletin a discussion forum was more important. "We don't need to create security or defence pacts because even in Southeast Asia we've never thought to create such pacts," he said. "What we need is a forum for dialogue between Indonesia and Australia to initiate talk on how regional security can be managed. I will push strongly to create such a forum."

The former general also promised to take stern action against terrorists operating out of Indonesia. The Al-Qaeda-linked Jemaah Islamiyah, which is blamed for numerous attacks including the Bali blasts, is based in Indonesia.

Military ties

China, Indonesia look for ways to boost military ties

Agence France Presse - November 5, 2004

Indonesia and China discussed defence cooperation, exploring ways for Jakarta to obtain new arms supplies as the Southeast Asian country struggles to rebuild military ties with Washington.

Visiting Chinese State Councillor Tang Jiaxuan said he had met with new Indonesian President Susilo Bambang Yudhoyono, discussing broad bilateral issues including defence cooperation. "We held talks on defence cooperation and we have agreed to increase cooperation and consultation on security," he told reporters.

The United States halted most military-to-military contacts with Indonesia after Jakarta's troops ran riot in East Timor during a 1999 independence vote. US legislators say abuses must be accounted for before ties can resume.

US officials have repeatedly expressed disappointment at the outcome of Indonesian tribunals to try military, police and civilian officials accused of atrocities linked to East Timor's violent separation from Indonesia.

Separately, Foreign Minister Wirayuda said Jakarta hoped from the talks China could "provide ways to help [us] rejuvenate our weaponry." Tang, who is due to hold separate talks later with Vice President Yusuf Kalla, top security minister Widodo Adisucipto and foreign minister Hassan Wirayuda, said he was "satisfied" with his meeting with Yudhoyono.

President Hu Jintao's also extended an invitation for Yudhoyono to visit China, Tang said, adding that the two leaders could possibly hold separate bilateral talks at the November 22 to December 1 ASEAN summit in Laos.

Indonesia's relations with Beijing were put on ice after Jakarta accused the Chinese Communist Party of backing an abortive coup blamed on the Indonesian Communist Party in 1965.

In a sign of dramatically improved relations, former president Suharto, who rose to power after the coup attempt and outlawed communism in Indonesia, visited Beijing in 1991. Suharto stood down in 1998.

Resume military ties with US: Expert

Jakarta Post - November 6, 2004

M. Taufiqurrahman, Jakarta -- The reelection of President George W. Bush is expected to offer a greater opportunity for the resumption of Indonesian military ties with the United States and to clear the way for more aid to help in the domestic fight against terrorism.

Bara Hasibuan, a former congressional fellow and the National Mandate Party (PAN)'s director of international relations, said that for the sake of his global campaign against terror, President Bush would persuade the US Congress to lift its embargo on the Indonesian Military.

"The Bush administration considers Southeast Asia as a breeding ground for terrorism and Indonesia will continue to be its partner in fighting terrorism," Bara told a discussion here on Friday.

According to Bara, Bush had in fact sought to end the military embargo on Indonesia after he took power for his first four-year term.

Bara said that the new Bush administration would also keep disbursing aid to the Indonesian government to help it with the antiterror drive. "But the Indonesian government must be proactive in reaching out for it and leave its passive approach behind," he added.

The United States imposed the embargo on the Indonesian Military (TNI) following widespread allegations that gross human rights abuses took place when East Timor voted for independence from Indonesia in 1999.

The arms embargo was exacerbated by the killing of two American teachers in Timika, Papua province, in August 2002. The US had alleged that there were rogue elements in the powerful TNI that played a role in the ambush.

New Indonesian Minister of Defense Juwono Sudarsono plans to visit the US to step up the lobbying of the US government so as to have the arms embargo lifted and military ties between the two countries improved. Analysts have expressed skepticism that the visit would bear fruit as the TNI has steadfastly refused to acknowledge its poor human rights record.

Speaking during the same discussion, which was hosted by the Indonesian Survey Institute, political communications expert Effendi Gazali of the University of Indonesia, who is familiar with US politics, said the overwhelming vote for Bush in Tuesday's polls showed that he had won unprecedented support for his war against terrorism.

He said that the US would pursue a more aggressive approach in international politics.

"The US government will constantly tell the world that President Bush has never done wrong, although his administration has failed to discover weapons of mass destruction," Effendi said, referring to one of the principal arguments used by Bush to justify the military campaign in Iraq.

Effendi also said that Bush would no longer care so much about his image as he would be barred from contesting another term in 2008. "The US will portray a fiercer look to the outside world," he claimed.

Government hopes for better military cooperation with US

Tempo Interactive - November 5, 2004

Jakarta -- The Indonesian government has said it hopes that the re-election of George Walker Bush as the new US president would help in normalizing military cooperation between the two countries.

According to Indonesian foreign minister Nur Hassan Wirajuda, the US government has actually wished to normalize the military cooperation between the two countries, which was suspended due to human rights violations in East Timor following the 1999 ballot.

"The problem is not with the US government, but with the US Congress and human rights activists. They only see us from one point of view, that is from the human rights perspective," Wirajuda told reporters at the State Palace in Jakarta on Thursday (04/11).

Indonesian Minister of Defense Juwono Sudarsono also revealed his hope that Indonesian and US military cooperation could be normalized, not long after he was inaugurated as a minister.

According to Sudarsono, one of the main problems in normalizing military cooperation between the two countries is the US Congress's stance, which is very critical as regards various human rights violations in Indonesia.

According to Wirajuda, the Indonesian government welcomed the result of the presidential election in the USA.

Indonesian President Susilo Bambang Yudhoyono has personally congratulated President Bush for his victory. (Sapto P -- Tempo News Room)

Australia should avoid ties with military: Study

Reuters - November 5, 2004

Canberra -- The Australian government should not make any move to strengthen military ties with Indonesia's elite Kopassus army special forces on Thursday, an Australian think tank said on Thursday.

A new report from the Australian National University's Strategic and Defence Studies Centre said Kopassus had not changed from its history of illegal operations and human rights abuses.

"Based on evidence since 1998, it appears that Kopassus has not altered its methods of operation to bring them more into line with wider [if sometimes failed] political reform processes," said the report by Indonesian military expert Damien Kingsbury.

Australia strongly pushed for closer military ties with Indonesia during the Suharto regime in the late 1980s and early 1990s. But Australia cut military links with Indonesia in 1999 in response to the Kopassus role in the destabilization of East Timor after the former Indonesian province voted to become an independent nation.

In August 2003, Prime Minister John Howard announced the return of training links between Australia's special forces and the Kopassus counter-terror unit.

At the time, Australia said Kopassus could help if Australians were taken hostage by militant groups. But the closer ties collapsed due to restrictions on the training imposed by Australia.

Kopassus and Indonesian intelligence agencies were aware of the rise of organizations linked to the October 2002 Bali bombings that killed 202 people including 88 Australians, but they did nothing to thwart them, the report said.

ADF should avoid Kopassus ties: report

Australian Associated Press - November 5, 2004

Indonesia's controversial special forces, known as Kopassus, have not reformed their evil ways and the Australian Defence Force (ADF) should not renew ties, a new study says.

The paper from the Strategic and Defence Studies Centre at the Australian National University (ANU), said much of Kopassus' role would continue to be viewed in Australia and elsewhere as profoundly inappropriate, and morally and legally unacceptable.

Author, Dr Damien Kingsbury, head of political studies at Deakin University, said it could be argued that Kopassus was the purest expression of the Indonesian military, known as TNI, which was the most important element of an incoherent, corrupt, exploitative, fractured and often predatory state.

"It is clear that Kopassus has been an organisation that has frequently, if not exclusively, operated in an illegal manner and that it has a substantial and serious history of human rights abuses, even by Indonesia's own somewhat flexible human rights standards," he said.

"Based on evidence since 1998, it appears that Kopassus has not altered its methods of operation to bring them more into line with wider, if sometimes failed, political reform processes."

Dr Kingsbury said the very reasons which brought Australia to end ties with TNI generally, and Kopassus, had not abated and had actually been reconfirmed by recent events.

He said even a supporter of renewed ties, Dr Alan Dupont had conceded Kopassus had been accused of banditry and warlordism, as well as numerous criminal activities including illicit logging, contract killing and drug running.

Australian defence ties with Indonesia grew through the 1980s and 1990s, mainly between Kopassus and the Perth-based Special Air Service Regiment (SASR). But they ended abruptly in 1999 when Australia led the international mission to East Timor.

There's now talk of renewing links, prompted by terrorist attacks in Indonesia and the premise that Kopassus and its counter- terrorism arm -- Detachment 81 -- would have the job of rescuing Australians caught up in a hijack on Indonesian territory.

But Dr Kingsbury said Kopassus' counter-terrorism record was patchy at best. It had only mounted three hostage rescue missions -- and two of them failed. There also were questions about Kopassus' links to Indonesian intelligence agencies, and about their links to terrorist groups Laskar Jihad and Jemaah Islamiah.

"Regional terrorism has only on one occasion affected Australian citizens and on this occasion the Indonesian government, and in particular its intelligence agencies including Kopassus, were well aware of the development of organisations both directly and indirectly linked to that event, yet did not act to thwart them," he said.

Dr Kingsbury said where a need to develop further security cooperation existed it should be done with Indonesian police with whom Australia worked closely and successfully after the Bali bombing.

Business & investment

Government to revive investment in Aceh, Maluku, Poso

Jakarta Post - November 6, 2004

Jakarta -- In an attempt to boost investment, the government plans to revive business and investment activities in some conflict-torn areas in the country, such as Central Sulawesi's town of Poso as well as the provinces of Aceh and Ambon.

At the top of the agenda is to seek ways to improve local businesses' access to financing from banks, Bank Indonesia governor Burhanuddin Abdullah said on Friday following a meeting with Vice President Jusuf Kalla.

"A memorandum of understanding between the central bank and the government will be signed, which will then be followed by the setting up of a team assigned to draw up steps and policies," Burhanuddin told a press briefing.

On his part, Burhanuddin added, the central bank would provide a formula that could revive lending from the banking sector to local enterprises in the conflict areas.

The team will comprise officials from the central bank, Ministry of Finance, the office of the State Minister of State Enterprises and the Indonesian Credit Insurance (Askrindo) -- all to be coordinated by the office of the Coordinating Minister for the Economy.

In the first phase, however, the plan would focus only on the plantation industry, Burhanuddin added, which had been largely abandoned and even damaged after years of bloody conflict.

Decades ago, the government had opened plantations in several post-conflict areas with the support of Bank Indonesia, banks and the private sector, he said.

"And for those plantation businesses to get back on track, they need fresh capital," he said.

As to what obstacles the government might face in carrying out the plan, he said most would stem from the fact that many plantations had "yet to settle their old debts from the previous projects".

"For example, the National Private Plantation in Aceh ... have unpaid debts of Rp 250 billion (US$27.53 million), so how are we going to resolve that? That's why there is going to be a team to assess all these (aspects)," he said.

The government of President Susilo Bambang Yudhoyono has pledged to prioritize improving the business climate on its must-do list.

In order for economic growth to attain the level necessary to reduce the country's chronic unemployment and poverty problems, a boost in investment was vital, analysts have said. But during the past couple of years, investment particularly foreign direct investment has been scarce due to a host of problems including security, labor conflict, poor implementation of regional autonomy, and unfavorable tax policy.

The country can no longer rely merely on robust domestic consumption as the main driver of growth, as this is deemed unsustainable.

Government to write off bad loans owed by SMEs

Jakarta Post - November 5, 2004

Rendi A. Witular, Jakarta -- The Ministry of Finance is preparing a government regulation that will enable state-owned banks to write off bad loans owed by small-and-medium enterprises (SMEs) in an effort to accelerate the recovery of their businesses, a government official said.

Director General of State Auction and Credit at the ministry Machfud Sidik said the government would wrap up the regulation within the first 100 days of the new government, with a possible disposal of the loan collateral assets to start early next year.

"The regulation will outline guidelines for the government in writing off the debts. There will be a strict criteria imposed on the facility in a bid to avoid misuse," said Machfud on Thursday.

Machfud explained that the write-off measure would only be eligible for individual debts of up to Rp 10 billion (about US$1.09 million), and the SME debtors could no longer service the debts despite an earlier discount facility from the government.

Machfud said the debts owed by the SMEs were part of the total bad loans at state-owned banks that amount to Rp 30 trillion. However, Machfud refused to disclose the amount of the debt owed by the SMEs.

The bad loans are mostly a legacy of the Asian financial crisis in late 1997 that have left thousands of large and small corporations bankrupt or in serious trouble.

Based on existing regulations, the Minister of Finance is authorized to approve the disposal of bad loans of less than Rp 10 billion per entity.

As for loans worth between Rp 11 billion and Rp 100 billion, the authority to dispose of them is in the hands of the President. Disposal of loans above Rp 100 billion should be approved both by the President and the House of Representatives.

Machfud said after the regulation had been issued, state-owned banks should propose the amount of the bad loans owed by the SMEs that were eligible for the write-off measure.

The collateral for the bad loans will be taken over by the Directorate General of State Auction and Credit for an open auction to the public.

Machfud said the government expected a recovery rate of up to 50 percent from the sale of the assets.

Indonesia courts the Dragon

Asia Times - November 6, 2004

Bill Guerin, Jakarta -- While the Indonesian economy is expected to expand by 4.8% this year, the new government has targeted annual growth at an average 6.6% during the next five years. Export-oriented growth is expected to power the development. In pursuit of this, trade liberalization and a push toward enhancing trade and economic cooperation between the 10-nation Association of Southeast Asian Nations (ASEAN) and China are high on the agenda of the new administration of President Susilo Bambang Yudhoyono.

Indonesia is the largest and most important economy in ASEAN, and a top-level delegation led by Aburizal Bakrie, coordinating minister for the economy, was this week sent to fly the flag and promote Indonesian goods at the first ever China-ASEAN exhibition held in Nanning in southwest China.

When completed, a planned free-trade area (FTA) between China and ASEAN will represent a combined regional market of more than 1.7 billion people, dwarfing the trade bloc of the European Union, with barely 350 million people. In November 2001, Chinese economic and trade ministers agreed to establish the FTA by 2010 with the six founding members of ASEAN -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- and by 2015, with the four newer members. ASEAN leaders are due to strengthen this commitment at a summit in Vientiane, Laos, this month.

Indonesian Trade Minister Mari E Pangestu was with the delegation in China. Though Pangestu, whose Chinese name is Feng Huilan, has committed to support exporters, formalize more trade regulations and raise competitiveness, she has made it clear to domestic manufacturers that improving their productivity and efficiency is a must. The country steadily lost competitiveness in labor- intensive exports under former president Megawati Sukarnoputri. Many export-oriented garment and footwear companies, which had been the lifeblood of Suharto's industrial export success from the mid-1980s, closed down, resulting in widespread job losses and rapidly rising unemployment.

Political uncertainties, together with rising wages, massive reductions on subsidies for water, telephones, electricity and fuel, resulted in a poor investment climate. Before the regional financial crisis, investment accounted for 30% of Indonesia's gross domestic product (GDP). Last year, it accounted for only 16%.

A dearth of investment in export manufacturing and populist labor-market policies led to intense competition from Chinese exporters, who gained market share at Indonesia's expense. After the drop in global demand in 2001, Indonesia's exports saw only moderate growth, failing to match the stout export recovery seen by its neighbors, particularly Malaysia, Singapore, Thailand and the Philippines. In 2003, export growth in Thailand and Malaysia were 9% and 16% respectively, while Indonesia's exports grew by only 3.5%.

In terms of actual value, Malaysia almost tripled the value of its exports from US$5.48 billion to $14 billion over the past three years, while Singapore's exports doubled from $5.06 billion to $10.49 billion and Thailand's from $4.38 billion to $8.83 billion. In the same period, the Philippines boosted exports by 276% to reach $6.31 billion last year. A similar parallel can be seen in annual average GDP growth between 1999 and 2003. In Thailand, it was 4.7%, in Malaysia 4.8% and in the Philippines 4%. Indonesia's growth of 3.4% over the same period was fueled almost exclusively by private consumption.

This year, however, the figures are more encouraging. The new government has targeted non-oil-and-gas (NOG) exports to reach about $46.37 billion for 2004, up 7% from last year. The Central Statistic Agency (BPS) reported last week that exports grew by 10.77% from January to September to reach $50.74 billion from $45.81 billion in the same period last year. Oil and gas exports rose by 10.14% to $11.45 billion.

Exports to China increased by 30.68%, from $4.40 billion in 2000 to $5.75 billion last year, though this represents only 1.39% of the total value of China's $413.10 billion imports that year. Though trade between the two countries is expected to top $15 billion this year, Indonesia's weakened long-term competitiveness has been exacerbated by major challenges from China for investment and trade.

China is a direct competitor with several of Indonesia's important exports such as textiles and apparel. The Agreement on Textiles and Clothing (ATC), the so-called "quota" system signed by World Trade Organization (WTO) members to set limits on the amount of apparel and textiles developing countries export to the developed world, and all quantity restrictions on these commodities, will expire on January 1. Though some WTO countries are expected to continue imposing protectionist measures, China's textile industry may flood world markets with cheap goods, further damaging recovery prospects for Indonesia's textile producers.

Elsewhere in China, top officials of the Indonesian Chamber of Commerce and Industry (Kadin) were in Shanghai this week on an official visit also aimed at boosting trade and investment between the two nations. Kadin delegates also met with leaders of the China Council for Promotion of International Trade (CCPIT). Kadin chairman Mohamad S Hidayat said afterward that Kadin would encourage Shanghai investment in Indonesia's infrastructure sector, one of the priority areas designated by President Yudhoyono and his cabinet.

The political dimensions to this week's push by Jakarta reflect that Asia's long-dormant giant looks set to become the dominant political force in the region. Looking north toward China gives Indonesia more independence from Western influence. Moving closer to China as a major business partner would stem the simmering resentment among many of the political elite in Indonesia who say the country has for too long been hamstrung by the dictates of the United States and the International Monetary Fund (IMF) and the major donor countries they control.

The economists among them argue that despite weak levels of investment, the IMF in the late 1990s, instead of urging Jakarta to use fiscal policy to spur investment and create the conditions for sustainable economic growth, prescribed fiscal austerity for the sake of major multinational investors, thereby undermining economic growth and laying the foundation for an economic downturn, declining foreign-exchange reserves and capital flight.

Jakarta's foreign-policy stance in the region under the Suharto regime since 1965 was a major reason Indonesia lagged behind other ASEAN countries in building trade relationships with China. In the aftermath of what the Suharto regime said was an attempted communist coup d'itat, China was accused of shipping arms to Indonesian communists plotting to take power by undermining the Indonesian military. And all diplomatic and trade relations between the two countries were severed.

The confidence of the ethnic-Chinese community in Indonesia, especially those with close business ties in China itself, was badly damaged in the violence of May 1998 when Suharto stepped down. Vast amounts of dollars were shifted to safety in Singapore. The eventual renewal of diplomatic ties under president Abdurrahman Wahid in 1990 heralded in a gradual improvement in bilateral relations between Beijing and Jakarta that continued under Megawati's watch. Both former leaders visited Beijing, and Chinese prime minister Zhu Rongji made an official visit to Indonesia in November 2001.

The US is the largest NOG export market for Indonesia, just topping Japan in 2003. It bought $6.8 billion worth of NOG goods in 2003. But wrapped up in its fixation with the "war on terror", unlike China, the US failed to show interest in Indonesia's importance as the largest economy in the region, preferring instead to sign trade pacts with Singapore and Australia.

China was the only major economy in Asia to avoid any serious impact from the Asian economic crisis but, after annual GDP expansion averaging more than 9% over the past 15 years, Beijing decided this year to cool its red-hot economy by tightening monetary policy and curbing domestic investment. Though strong domestic growth in China has been a boon for Southeast Asia's export economies, the World Bank has forecast that the country's economic growth will fall from 9.1% in 2003 to 7.7% this year, and 7.2% in 2005.

Yet, with an abundance of the raw materials that China needs to import if it is to sustain even these lower rates of growth, Indonesia could become a major supplier of China's future raw- material needs. China is Indonesia's fourth-largest export market, after the US, the EU and Japan. It is already one of China's primary suppliers of oil and gas, coal, rubber, timber, pulp and paper, palm oil, organic chemicals, fish, electronics, and steel.

Trade between Indonesia and China steadily increased from 4.5% of total exports in 2001 to 7.4% last year, when total trade with China was about $10.2 billion, giving Indonesia a tidy $1.27 billion trade surplus on the year's trading. Top five exports were oil-and-gas commodities, wood, pulp and paper, organic chemicals, and machinery. China's top three exports to Indonesia were machinery, electronic goods and chemical goods.

Accelerating the changes for the better in the Jakarta-Beijing relationship will have positive implications for the domestic business environment in Indonesia and can help meet the country's desperate need for foreign direct investment (FDI), especially in the oil-and-gas sector, which would, in turn, square well with China's energy needs. China is short of energy to fuel its boom and started buying into the Indonesian oil-and-gas sector assets in 2002. With further planned investment from Chinese state-owned enterprises in the cards, the ensuing further exploration of Indonesia's oil and gas reserves will boost national revenue and bring the two nations even closer.

ICC to revise guidelines on L/Cs

Jakarta Post - November 4, 2004

Leony Aurora , Jakarta -- In a bid to keep standards for customs and practices in issuing and using letters of credit (L/Cs) up-to-date with current developments, the International Chamber of Commerce (ICC) is preparing to revise the existing standards.

The ICC Indonesian chapter invited the country's import and export players, including banks, on Wednesday to gather input for the new draft of the internationally recognized Uniform Customs and Practice for Documentary Credits, more commonly known as the UCP 500.

"The main point is for us to secure our national interests," said Saul Daniel Rumeser, who represented Indonesia in the ICC consulting group. "For example, we can try to speed up the settlement of payment," he added.

An L/C is issued by a bank to guarantee that its customer -- the buyer, or importer -- can pay the seller, or exporter. The instrument is commonly used in trade between firms in different countries.

To receive payment, the exporter must provide the product documents listed on the L/C, which must be checked by the issuing bank. Rules and language of the L/C are spelled out in the UCP 500. The UCP 500 is by itself not legally binding. However, as it is included in the L/C, it becomes part of the contract.

"Based on experience in court [when disputes occur], judges rule based on the UCP," said JB Kendarto, managing director of Bank Mandiri, which hosted the meeting.

The ICC will welcome input for the draft until the end of this week. Comments and suggestions, however, can only be admitted via the country's national committee.

The practices on L/Cs were first standardized by ICC in 1933 and have been revised every 10 to 15 years. The last revision was in 1993. The current draft, which will be called UCP 600, is expected to be finalized by the end of next year.

JSX hits record high

Jakarta Post - November 3, 2004

Urip Hudiono, Jakarta -- The Jakarta Stock Exchange (JSX) rose to a record high on Tuesday as investors scrambled to buy telecommunications, banking and cigarette blue chips following strong third quarter profit reports and easing oil prices.

The oil-price factor has triggered a rally in regional bourses, which had also created positive sentiment in the local market. The Jakarta Composite Index surged by 2.1 percent, or 17.807 points, to an all-time high of 881.396 points from Monday's 863.589. A total of 2.1 billion shares worth Rp 1.7 trillion (US$187 million) were traded.

Among the stocks traded, gainers led decliners by more than three to one, with 107 stocks higher than their previous closing, and only 31 lower. A total of 76 stocks, meanwhile, remain unchanged.

"Investors are seeing a clear improvement in corporate performance, especially in the banking and telecommunications sector," said analyst David Ferdinandus from Anugerah Securities Indah.

Shares of telecom giant PT Telekomunikasi Indonesia led Tuesday's market rise, as they jumped by 5.2 percent to Rp 4,575, after the company reported a 14 percent rise in nine-month profit to Rp 5 trillion due to higher cellular and fixed-line revenues.

Shares of rival Indosat also rose by 3 percent to Rp 5,000, following the company's announcement of its nine-month profit that more than doubled to Rp 1.38 trillion.

The country's two largest banks also gained in their shares -- Bank Central Asia went up 3 percent to Rp 2,550, while Bank Mandiri was 3.1 percent higher at Rp 1,675.

Shares of cigarette titan H.M. Sampoerna ended up 2.5 percent at Rp 6,150, while Gudang Garam shares gained 0.8 percent to Rp 12,850.

"A drop in oil price has cranked up global stock markets, and consequently ours," David said. "It will affect cost production of companies, further improving their performance." Analyst Jasso Winarto of the Sigma Research Institute said President Susilo Bambang Yudhoyono's new government had encouraged positive sentiment in the market.

The analysts, however, said the market rise would likely be temporarily, as investors continued to monitor company performances and the impact of the US presidential election.

"The outcome of the US presidential election, which will surely affect stock markets and the price of oil, is still unknown," Jasso said. "We will just have to wait and see."

Fuel hike of 10-15% limits impact on economy: Expert

Jakarta Post - November 3, 2004

Leony Aurora, Jakarta -- With the new government holding marathon meetings to resolve the problem of ballooning fuel subsidy spending, an economist has presented a scenario in which a 10 percent to 15 percent hike in domestic fuel prices next year would reduce subsidy spending and limit the adverse effects on the economy.

Bank Mandiri economist Martin Panggabean forecasts that such a measure would only push up inflation by around 1.5 percent to between 7 percent and 7.5 percent next year compared to between 6 percent and 7 percent this year.

To enable such a limited rise in domestic fuel prices, the government would have to provide Rp 30 trillion (US$3.33 billion) in fuel subsidy spending, around half of the Rp 63 trillion allocated for this year, Martin explained.

He said that this scenario was based on the assumption that international oil prices would average $35 per barrel next year, while the exchange rate of the rupiah would average Rp 9,000 per US dollar. "Personally, I think this is the most feasible scenario for the government," he told The Jakarta Post.

Based on the same assumptions, his analysis shows that if the government wished to avoid an increase of domestic fuel prices altogether, it would have to allocate another Rp 63 trillion on subsidy spending next year. "Where will the government get the money from?" said Martin.

Tackling the increasingly expensive cost of fuel subsidies is seen as one of the toughest economic challenges that the new government of President Susilo Bambang Yudhoyono has to tackle. Although the government has said it will not raise fuel prices at home during the remainder of this year, the cash-strapped administration may have to take such a difficult step next year.

Critics have said that the Rp 63 trillion that will be spent on fuel subsidies this year is too much considering that only Rp 71 trillion has been allocated for development spending. In addition, the fuel subsidies mostly benefit rich car owners, not the poor, while cheap fuel at home has triggered smuggling to neighboring countries. If the subsidy can be reduced, more funds will be available for other much needed economic programs.

Elsewhere, Martin said that the limited impact on inflation of a between 10 percent and 15 percent fuel price hike would also help ensure a stable interest rate environment. He forecast that the Bank Indonesia benchmark interest rate would stand at between 8 percent and 8.5 percent next year.

"With a 10 percent to 15 percent fuel price hike, the benchmark interest rate will stay at between 8 percent and 8.5 percent next year." Bank Indonesia has maintained relatively stable interest rates of around 7.41 percent this year. Low interest rates are essential to making bank loans affordable and thereby help finance corporate activities and accelerate economic growth.

Martin further suggested that the government increase prices in stages to help minimize the social and political impacts.

The price of premium gasoline -- the fuel used by private car owners and thus the well-off -- should be increased the most, followed by industrial diesel oil. The lowest increase should be for kerosene, which is used by low-income families. "A rise in the price of kerosene is inevitable as the difference between its price here in Indonesia and on the international market is too big," he said.

IMF gives Jakarta the thumbs-up

Reuters - November 3, 2004

Jakarta -- Indonesia should sort out its legal system and aim to reduce fuel subsidies to free up spending for other areas, but it has been doing well in fiscal policy and financial-sector reform, the IMF said yesterday.

Mr Stephen Schwartz, the International Monetary Fund's top representative in Indonesia, said the government had been slicing away at its debt load and the central bank had done a good job of implementing a prudent monetary policy.

"The government has made very substantial progress in financial- sector reforms," he told Reuters. But he said to attract the new investment that would boost growth significantly, President Susilo Bambang Yudhoyono's administration should act in other areas.

He said: "To reach the 6 or 7 per cent growth that would cut poverty and boost jobs, the government needs to follow through on pledges in such areas as reforming the legal system." Indonesia's courts have been criticised for corruption and inconsistency in rulings, scaring away investors.

Mr Schwartz praised the new government for its emphasis on cutting unemployment and poverty and fighting corruption.

"Expectations in the market and among the population are very high and so there's a real need to deliver to meet those expectations," he said.

On the fiscal side, he said cuts in state spending on energy subsidies could provide needed funds for social programmes and development.

The subsidies are a sensitive issue and while Dr Yudhoyono has said he wants them cut, he has been coy about when and how.

"I would say it should be high on the list of things to do for the new government. But again, it's up to the government to choose the appropriate time," Mr Schwartz said.

His carefully worded advice contrasts sharply with the heavy- handed approach Indonesian critics say the IMF took in the late 1990s. Back then, critics said the IMF effectively dictated economic policy in exchange for putting together a US$43 billion rescue package for the country.

Some IMF policies were attacked as doing more harm than good and sparking unrest and violence. Indonesia did not ask for an extension of the IMF programme when it ran out at the end of last year.

Indonesia was hit hard by the Asian financial crisis and is still struggling to recover. The government's external debt alone was US$79 billion as of July. Mr Schwartz said Jakarta was whittling away at the problem.

"We, however, are very confident of the government's ability to continue servicing its debts," he said, noting the overall debt to gross domestic product level has been cut from over 100 per cent in 2001 to less than 70 per cent.

Future may not be so hot for banks: Experts

Jakarta Post - November 1, 2004

Tony Hotland, Jakarta -- The country's commercial banks have booked strong third quarter profits, thanks mainly to low cost of funds that allowed them to enjoy fat net interest margins.

But analysts warned that as pressure on the central bank to increase interest rates intensifies, banks may no longer enjoy this kind of good fortune next year without working hard to revive lending to the corporate sector. "I think this kind of profit growth will not be sustainable," said banking analyst Fendi Susiyanto.

He said that current economic developments, such as rising oil prices, rising interest rates in the US and elsewhere, and inflationary pressures at home, indicated that Bank Indonesia would likely increase interest rates, a move that would increase the interest expenses paid by banks to depositors, and eat into their profit margins. He said that this would erode the profits of banks if they continued to solely depend on lower cost of funds.

The strong third quarter profits earned by publicly listed banks, in some cases reporting a doubling of profits compared to the same period last year, was not caused by hard work on the part of the highly paid bankers, but rather the effects of the aggressive cutting of central bank benchmark interest rates, which in May fell to a record low of 7.32 percent compared to over 13 percent in 2003.

The lower benchmark rates forced interest rates on time deposits and savings to fall as well, but interest rates on loans remain high as the banks are still reluctant to channel their excess funds to the corporate sector due to lingering risks as reflected in a relatively low loan to deposit ratio (LDR) of around 50 percent, compared to 80 percent prior to the late 1997 financial crisis. This situation had allowed banks to enjoy net interest margins (NIM) of as high as 8.5 percent. "The current (interest rate) spread is still too wide (about 8.5 percent), and should be narrowed to at least 4 percent," said Fendi.

Seconding Fendi, economist Faisal Basri said the situation here was different from neighboring countries such as Malaysia, Thailand, the Philippines and Korea, where NIMs were below 5 percent.

Ideally, banks should be charging much lower interest rates on loans than they are doing now, and could still make good profits though increased lending activity.

Fendi, however, said that major banks would not immediately pump up their lending rates even if the Bank Indonesia benchmark interest rate started to climb as these banks had better sources of funding compared to smaller ones.

"Only around 15 large banks control up to 70 percent of our banking industry. They won't have critical problems in offsetting losses in NIMs unlike dozens of smaller banks, and possibly won't raise lending rates, at least as long as the SBI rate remains below 8.5 percent," said Fendi, referring to the interest rate on Bank Indonesia SBI promissory notes.

Given these considerations, one of the biggest challenges ahead will be how to preserve profit levels, whether or not the SBI rate moves up, based on more sustainable sources.

"Banks can maintain profits by accelerating lending and maximizing their fee-based income, which is even more essential in improving their profitability. For example, by being an investment advisor or upgrading their service sector. Banks need to increase the contribution of fee-based income to profits from the current average of 7 percent to about 16 percent," Fendi said.

Inflation in October slowed to 6.22%

Jakarta Post - November 2, 2004

Jakarta -- Prices rose at a slower rate in October mainly because of an abundant supply of rice that helped ease inflationary pressures caused by the soaring oil price and weaker rupiah. The Central Statistics Agency (BPS) reported on Monday that the annualized inflation rate in October declined slightly to 6.22 percent, from 6.27 percent in September, and that year-on-year inflation has been on a declining trend over the past three months.

Inflation had been expected to accelerate to 6.4 percent last month, a median forecast of nine economists surveyed by Bloomberg showed.

However, inflation in the coming months may rise again as demand for goods and services increase during Idul Fitri and the year- end festivities, and some economists are concerned that the country might pass its full-year inflation target of 7 percent.

Central bank officials have played down the concern, and said recently it was optimistic that inflation this year would be less than 7 percent on the back of the rice harvest and because of the dollar's weaker global trend, which would keep down costs for imported raw materials.

Meanwhile, the high global price of oil is deemed to have a limited impact on the prices of local goods, as the government has provided a fuel subsidy for the transportation sector.

Some government officials recently said the new administration would not raise domestic fuel prices until the end of the year.

Bank Indonesia has maintained a relatively stable benchmark interest rate at around 7.41 percent, largely due to the mild inflation.

Keeping a mild inflationary environment is vital to the central bank's maintaining a low interest rate, which would in turn help accelerate economic growth.

Elsewhere, the BPS said month-on-month inflation in October increased by 0.56 percent from the previous month. "All prices were up in October," BPS chief Choiril Maksum said.

The cost of basic foods rose 1.31 percent, while processed foods were up 0.29 percent and clothing rose by 0.59 percent. In addition, the cost of education increased by 1.27 percent, health by 0.13 percent and real estate by 0.29 percent.

The Agency also said a rise in local telephone charges and high crude oil prices throughout the month pushed up the cost of telecommunications and transportation by 0.04 percent.

Opinion & analysis

The season ahead

Jakarta Post Editorial - November 6, 2004

The end of Ramadhan is the time of year when Indonesia's transportation system, its bureaucracy and network is the most severely tested. For as long as can be recalled, mudik -- the trek home by millions of people from cities back into rural areas -- has been a tradition that few Indonesians who can afford it want to pass over.

In the past, before overpopulation and urbanization made life so much more complicated for millions of Indonesians, this sentimental journey home posed few problems.

Though year-by-year the growing stream of mudik travelers grew more and more intense and put growing pressure on the country's infrastructure, the system continued to work.

It was only in the past several decades that this annual exodus began to reach proportions that far outstripped the bearing capacity of not only Indonesia's transportation system and network, but the organizational capabilities of the country's inept bureaucracy.

The situation is further aggravated, no doubt, by a combination of increased mobility and the poor condition of much infrastructure in the wake of the late 1990s economic crisis.

This year promises little respite. As the Idul Fitri end-of- Ramadhan holidays move nearer, government officials project a considerable growth in the number of both travelers and the vehicles that they will be using on the roads. At least 30 million Indonesians are expected to join the exodus this year -- some 14 million by bus, some four million on motorbikes and more than five million by private cars. The number of air travelers too is expected to sharply increase.

Anticipating snags in traditional problem areas such as along parts of Java's north coast and on the island of Sumatra, and apparently not leaving anything to chance, the authorities have already started issuing strict instructions to officials all down the line to ensure order. Central Java Police chief Insp. Gen. Chaerul Rasjid has even instructed his men to shoot highway robbers on sight. The Navy also is doing its part, ordering five of its warships to remain on standby to transport traveling Indonesians in case of a ferry shortage.

The Air Force has issued similar orders. If all this sounds like overkill, a quick reminder of the disorder that normally reigns in many of the country's transportation hubs, especially in big cities such as Jakarta, may convince the skeptic that such crisis measures may indeed be needed. Ticket scalpers, for example, are a common sight at Indonesian railway stations and bus terminals. Their presence is especially prominent during major holidays such as Idul Fitri. Little wonder that the newly installed minister of transportation, Hatta Rajasa, found it necessary on one occasion to visit these places incognito to personally catch a scalper red-handed.

Whatever one may think of the measures and actions which the authorities have so far taken, it is good to know that something is being done for Idul Fitri holidaymakers this year. For the large majority of Indonesian Muslims, the annual holiday is a big event for which they must spend with their families in their hometowns.

One thing is for certain. If these holidays go ahead without significant disruptions they will further boost the new government's credibility.

Acehnese want peace

Jakarta Post Editorial - November 5, 2004

The country has been through an enormous political transformation in the last few weeks. On October 20, a new president was sworn in and, on October 1, a new batch of House members were installed. But rather than immediately buckling down to their jobs, House members quickly became embroiled in a power struggle that has paralyzed the House for weeks now.

As high-profile political events unfold, it would be easy to overlook the nation's pressing problems. But, that does not seem to be the case with the new government of Susilo Bambang Yudhoyono, as it has sent a high-caliber delegation to Aceh to assess the six-month state of civil emergency in the province, which will end on November 19. The new government should be commended for its move to solve Aceh's long-standing problems, which shows that it has its priorities straight.

The Acehnese, whose province of 4.2 million people has been ravaged by intermittent clashes between government troops and the Free Aceh Movement (GAM) for decades, have only one humble wish for their province: Peace.

There are ample reasons why violence in Aceh should be stopped. In 1989, the Soeharto government declared the province a Military Operation Area. When Soeharto was toppled in 1998, GAM's strength, which was estimated to be 500 at the beginning of the operation, had increased to 3,000 men and women. An estimated 10,000 Acehnese civilians were killed and thousands of others were displaced in that period. That is evidence that a military operation in Aceh will never be effective.

Following the collapse of peace talks sponsored by the Swiss- based Henri Dunant Centre, Megawati Soekarnoputri introduced martial law on May 19, 2003. Since then, daily killings have continued unabated. Initially, it was intended that martial law be imposed for a six-month period, but it was later extended to a year. In May of this year, Megawati lifted martial law and declared a state of civil emergency in Aceh -- combining military operations with humanitarian assistance -- but the killings have continued.

It is a sad reality, yet one that the public has become desensitized to, while deaths in the province are reported daily. Many people don't seem to care about what is happening in Aceh. Even the media appears to be fed up with the news, perhaps finding continuous coverage of the province taxing.

It is certainly unfair to expect the new government to turn Aceh into a peaceful province overnight. But we believe that Susilo and his team, including Vice President Jusuf Kalla, have a good track record in bringing peace to conflict areas. As a Cabinet minister during Megawati's tenure, Kalla was instrumental in cooling down sectarian conflicts between Christians and Muslims in Maluku and Poso.

We would like to emphasize the seriousness and the urgency of bringing peace to Aceh. In this context, it is worth repeating the words of some leading Acehnese ulemas in a discussion in Jakarta on Tuesday. Their message to the government is loud and clear: Abandon the security approach.

With the six-month state of civil emergency in Aceh drawing to a close, it is time to start anew in the province. It is time for the Acehnese, who have been fighting for an independent province since 1976, to look up and see the sun emerging from behind the clouds. It is time for the government to consider ceasing military operations, once and for all.