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Indonesia News Digest 33 - August 24-31, 2005
Jakarta Post - August 31, 2005
Muninggar Sri Saraswati, Jakarta -- President Susilo Bambang
Yudhoyono installed former justice minister Muladi as the
National Resilience Institute (Lemhannas) Governor on Tuesday,
replacing Ermaya Suradinata who had been critical of the
government's decision to hold peace talks with Aceh rebels.
In his address, Susilo asked Muladi, the second civilian to lead
the defense think tank after Ermaya, to bring about significant
changes to the institute. The President did not elaborate. Susilo
signed a decree naming Muladi Lemhannas governor on Aug. 24.
Cabinet Secretary Sudi Silalahi said earlier Ermaya had been
serving for some time and the institute needed "rejuvenation".
Ermaya was appointed by president Abdurrahman "Gus Dur" Wahid in
February 2001.
Muladi, who heads the legal division of the Golkar Party and is
one of party chairman Jusuf Kalla's closest aides, said he would
introduce several new policies to refresh the curricula of the
state institute. "The institute shall not only produce national
leaders but it must support the development of people as well,"
he said.
Ermaya expressed the hope that Lemhannas would remain critical of
government policies.
Ermaya made headlines early this year when he publicly opposed
the peace talks between the government and the Free Aceh Movement
(GAM). Vice President Jusuf Kalla reprimanded him for issuing a
statement that might harm the peace process which Kalla was
promoting to end three decades of bloodshed in the province.
Ermaya considered the negotiation with the Aceh rebels, who had
been seeking independence since 1976, unconstitutional and that
it would only help GAM internationalize the issue.
The government and GAM reached an agreement on Aug. 15 for a
peaceful settlement under the framework of the unitary state of
Indonesia.
During the ceremony, the President also installed Maj. Gen. (ret)
M. Yasin as the secretary-general of the National Resilience
Council (Wantannas), replacing Budi Santoso. Wantannas is
directly led by the president.
Present during the ceremony at the State Palace were Chief
Justice Bagir Manan, Constitutional Court President Jimly
Asshidiqie, House of Representatives Speaker Agung Laksono,
Regional Representatives Council Speaker Ginandjar Kartasasmita,
Coordinating Minister for Political, Legal and Security Affairs
Widodo Adi Sucipto and Coordinating Minister for People's Welfare
Alwi Shihab.
Kalla was absent as he had left for an overseas trip to China and
Japan.
Tempo Interactive - August 27, 2005
Syaiful Amin, Jakarta -- Former army chief General Ryamizard
Ryacudu says the potential for Aceh and Papua to succeed from the
Unitary State of the Republic of Indonesia (NKRI) is significant.
At the moment he says, the two regions already have a number of
prerequisites for them to become independent states.
"In order to become independent states, it only remains for Aceh
and Papua to be declared [independent] and acknowledged
internationally. We must respond to and plan seriously on this
matter for the sake of our love for NKRI", he said at a closed
informal discussion titled "60 Years of Indonesian Independence"
at the Gajah Mada University in Yogyakarta on Saturday August 27.
Ryacudu said a region that wishes to become independent must
fulfill a number of conditions. This includes having a system of
government, a state territory, a defense force, a national
anthem, a flag and international acknowledgment. In the case of
Aceh and Papua he said, they already have some of these
conditions and it only remains for them to declare independence
and obtain international acknowledgement.
If in the end Aceh and Papua succeeded said Ryacudu, it is
certain that other regions will demand independence. "The
consequence is that what will happen is civil war, ethnic
cleansing and mass killings as wells as gross human rights
violation as occurred in Rwanda, Somalia and the like", said
Ryacudu.
Ryacudu warned that what is happening now is a modern war which
does not use of armed force directly. Modern war he said is waged
through intelligence infiltration, education, economics,
ideology, policies and the like. The consequence however, will be
to weaken and control target states.
"We can [see] this in many states which then dissolve. The most
recent evidence is the situation in Iraq, the life of the state
has been totally destroyed, it has become a puppet state of
perpetual civil war", he said.
[Translated by James Balowski.]
Aceh
West Papua
Military ties
Human rights/law
War on terror
Government/civil service
Islam/religion
Armed forces/defense
Business & investment
Opinion & analysis
News & issues
Ex-minister replaces government critic as think-tank head
Ryacudu: Aceh, Papua have potential to become independent
Nine injured in latest Ambon bomb blast
Jakarta Post - August 26, 2005
M. Aziz Tunny and Muninggar Sri Saraswati, Ambon/Jakarta -- Nine people were injured on Thursday when a home-made bomb exploded at a market in Ambon, Maluku, the scene of widespread Christian- Muslim violence between 1999 and 2002.
The explosion took place at around 2:30 p.m. Ambon time, around the same time as Maluku Governor Karel A. Ralahalu was attending a gathering some 2,600 kilometers away in Jakarta at the Vice Presidential Office to report on positive developments in Ambon following the government-sponsored Malino peace accord that ended the clashes that claimed thousands of lives.
Shortly after the meeting, attended by Vice President Jusuf Kalla and other top government and security officials involved in brokering the 2002 peace agreement, Karel received a phone call. "There has been an explosion at the Mardika market in Ambon," a crestfallen governor told one of his colleagues.
The police said that the primitive bomb, which was packed in cardboard boxes, exploded while being transported by a pedicab at the Mardika market, injuring the driver and nearby passersby. Two cars, two motorcycles and two pedicabs were damaged in the blast.
The pedicab driver, identified as Bal Passal, said that an unidentified man had asked him to deliver two small cardboard boxes to the Mardika bus station. As he was driving his pedicab to the destination, Passal smelt what he believed was sulfur. Becoming suspicious that something was wrong, Passal decided he would try to find the man again.
However, the packages exploded before he could do so. "The man had dark skin, and was about 145 centimeters tall," Passal told reporters.
The Mardika market, which is also known as the Baku-Bae market, was set up to serve both Muslim and Christian communities in Ambon after the signing of the Malino peace agreement.
The police identified Kasim Wali, 20, as being the man who asked Passal to deliver the boxes, and quickly arrested him. The police have named Wali as the prime suspect in the case.
"We have arrested the prime suspect. We are now seeking other suspects. The bomb was a low explosive device but it was intended to explode in a public place," Adj. Comr. Leonidas Braksan, Ambon and Lease Islands Police chief told reporters.
He explained that the bombing shared similarities with other terrorism cases that had occurred in the past, all of which were aimed at disrupting security in the city.
"The prime suspect is not the mastermind. He was told to do this," Leonidas said, adding that the police were still analyzing the motive behind the bombing.
The Ambon Police were working hand in hand with the Maluku Police's antiterror unit to find the real masterminds, he said.
Karel called on the police to take resolute action against the perpetrators. "They must be punished to the full extent of the law," he said, adding that he was confident that Ambon people would not be provoked into violence by the incident.
Reuters - August 24, 2005
Tomi Soetjipto, Jakarta -- The outbreak of polio in Indonesia could spread to other countries in the region, but a plan to vaccinate 24 million children next week should halt its progress, the World Health Organisation (WHO) said on Wednesday.
The comments by WHO's polio eradication representative, David Heymann, came a day after another UN official warned a polio epidemic could hit Indonesia, the world's fourth most populous nation, after the wet season starts in September.
Polio returned in May to Indonesia, which had been free of the water-borne disease since 1995. A 25-year old man who had the virus has died but officials are still investigating whether the crippling illness was the cause of death.
The outbreak first hit villages near the West Java city of Sukabumi and spread to adjacent provinces. The number of cases has risen to 225, with the latest -- in the outer province of Lampung province on Sumatra island -- prompting the vaccination drive.
"Indonesia is very concerned not only because of the fact (polio) is paralysing children here but it could spread internationally," Heymann told a news conference.
"This virus spreads very easily and there is no reason this would respect Indonesian borders," he added.
Polio attacks the nervous system and can cause irreversible paralysis in hours. Children are most at risk.
Indonesia's government along with the WHO and the United Nations children's agency UNICEF plan to kick off the nationwide vaccination scheme on August 30, with the second round on September 27, involving some 750,000 vaccinators at 245,000 immunisation posts.
"If these two rounds reach every child targeted, that should stop the transmissions," Heymann said.
He said the vaccine was safe, following reports by local media of the death of three infants earlier this year after receiving polio vaccinations.
"The vaccine which is used here in Indonesia is the same vaccine that's been used throughout the world to vaccinate over 2 billion children, and this vaccine is one of the safest that is available," he said.
Two rounds of immunisations were carried out in late May and late June in West Java and Banten provinces and the capital Jakarta, reaching around six million children.
The global battle against polio has faced setbacks in the past two years since Nigeria's northern state of Kano banned immunisation out of fear it could cause sterility or spread HIV/AIDS. Vaccinations resumed after the 10-month ban.
But the virus spread across Africa, crossed the Red Sea into Saudi Arabia and Yemen, and reached Indonesia, infecting previously polio-free countries along the way.
"(Indonesia) is ultimately a victim of inadequate control of polio in Nigeria and this is not going to become another Nigeria... the world is rallying with Indonesia in making sure it is not becoming a source of virus spread internationally," Hamid S. Jafari, of the Atlanta, Georgia-based Centres For Disease Control and Prevention, told the same news conference.
| Aceh |
Reuters - August 31, 2005
Banda Aceh -- Hundreds of Acehnese rebels walked free from Indonesian jails on Wednesday under a sweeping amnesty that forms a vital plank of a landmark peace agreement signed in Helsinki this month.
Some 2,000 members of the Free Aceh Movement (GAM) are expected to be released after President Susilo Bambang Yudhoyono issued the amnesty late on Tuesday.
The peace deal was agreed after GAM gave up its demand for independence in tsunami-devastated Aceh province, effectively ending three decades of fighting that has killed 15,000 people.
Dozens of prisoners, many flashing broad smiles, walked free from Jantho prison in Aceh. They were given money, food, shoes and Muslim prayer mats by a United Nations agency.
"I heard from a visiting relative on December 28 last year that my son died in the tsunami. I will be living with my mother for a while and start my own business," said Kardiman Rusli, who was serving a sentence of nearly three years.
"I hope the situation out there is really safe," he said, adding that his wife was working in neighboring Malaysia.
The peace agreement was reached after a series of talks prompted by the giant earthquake and waves on December 26 that swept the Indian Ocean and hit Sumatra island particularly hard, leaving 170,000 Acehnese dead or missing.
In the West Java city of Bandung, where 74 people were released from jail, one ex-GAM negotiator pledged that the group would abide by the August 15 peace agreement.
"I think what needs to be done firstly is to maintain the peace process. This is important for us," Teuku Kamaruzaman told reporters outside the prison.
"We respect (the truce) and the two sides are committed to implement the agreed points." Hundreds of GAM members had been sent to jails on the main Indonesian island of Java.
Kamaruzaman was a senior GAM negotiator who took part in talks that led to a ceasefire in late 2002. That deal collapsed in May 2003 when the government declared martial law in Aceh. He was arrested soon after along with other negotiators. They were imprisoned for 12 to 15 years for treason.
The 74 GAM members freed in Bandung, south-east of Jakarta, were being transported on chartered buses to the capital and were scheduled fly to Aceh later on Wednesday.
By Wednesday afternoon some 167 GAM supporters who had been imprisoned in East Java province arrived in the provincial capital Banda Aceh on a chartered plane.
"Together, whether it's the Indonesian government, GAM members or the people of Indonesia, we will support peace in Aceh. We hope that there will no longer be efforts to sabotage this peace," said Muhammad Nazar, who once headed a non-governmental group promoting a referendum on independence.
Upon arrival, Nazar and other freed men kissed the ground at the airport's compound.
Some nationalist legislators in Jakarta, mostly from the opposition, have attacked the truce with GAM as being too soft on the rebels.
(Additional reporting by Pipit Prahara in Bandung)
Radio Australia - August 31, 2005
Hundreds of Acehnese rebels walked free from Indonesian jails today, under a sweeping amnesty that forms a vital plank of a landmark agreement signed in Helsinki.
Munawar: Most of them are members of the Free Aceh Movement and also civilian activists in Aceh arrested during military operations in Aceh in 2003 and also 2004, of course. And then, the government of Indonesia must release them unconditionally, not later than fifteen days after the signing of the MOU.
Lam: And of course, many of those released, were released on Java island. Does that mean that they'll be returned to Aceh province, on Sumatra island?
Munawar: Of course, most of them are from Aceh prisons, we can see 834 from Aceh and Bengkulu, and from West Java 74, and from central Java, 219. Altogether, 1424 political prisoners.
Lam: And is that the sum total of prisoners who will be released, or will there be more to come?
Munawar: Indonesia said they released 1,424... but surely, we got more than that in other prisons in Java and also in Aceh, because most of Acehnese arrested not only in Aceh, but also outside Aceh, for example in Medan, Bengkulu, Jambi. And there are also members of GAM and also civilian activists so the Indonesian government must release them as soon as possible.
Lam: I understand that four of the released detainees were separatist leaders who were arrested in 2003 when they were about to board a plane for Tokyo, for an emergency meeting during the talks two years ago. Does that mean the amnesty now also applies to separatist leaders in exile, that they're now free to return home to Indonesia?
Munawar: According to MOU, there is a point mentioned that any Acehnese they can regain their Indonesian nationality whenever they come back to Indonesia.
Lam: What is your understanding of the time frame for the Indonesian military to withdraw from Aceh, and also for GAM rebels to totally lay down their weapons?
Munawar: It will be started on the fifteenth of September, it will be withdrawal 25-percent of Indonesian troops, and also decommissioning 25-percent of GAM armoured arms. So it will be a four-month process, until the end of December. So, from our side, from GAM, we are ready to disarm and also, we are ready to follow the process of the MOU.
Lam: So you're confident that many of your rebels will be able to find jobs and be able to re-integrate into mainstream Acehnese society?
Munawar: Yes, sure. And also we need the full commitment of Indonesia to implement all the points of the MOU. Because you know, we also get some problem with the presence of the militias. Because the Indonesian military when they withdraw from Aceh, they train groups of militias which will be used as a tool by the military to terrorise the GAM families and also the GAM members. So we need also support from the international community, to monitor the situation very carefully.
Detik.com - August 30, 2005
Muhammad Nur Hayid, Jakarta -- Ex-Free Aceh Movement (GAM) members who are granted amnesties but persist in seeking independence must be destroyed by the government immediately. The articles in the Memorandum of Understanding (MoU) have been sign and the agreement represents the final deal to resolve the Aceh conflict with dignity.
"After obtaining amnesty if they persist in wanting independence, just destroy them yeah, because after the MoU was signed, GAM ceased to exist", said the deputy speaker of the House of Representatives (DPR) Zaenal Ma'arif at the national parliament in Senayan on Tuesday August 30.
Ma'arif also questioned the government's position on granting amnesty without an oath to Unitary State of the Republic of Indonesia (NKRI), although this was recommended by the DPR's Commission III. According to Ma'arif, the declaration of acceptance of NKRI in the MoU is sufficient and representative.
"The declaration is already in the MoU. They are loyal to the 1945 Constitution and NKRI", asserted Ma'arif while expressing the hope that all parties restrain themselves so that the Acehnese people are not disappointed.
Responding to the possibility of armed clashes occurring in parts of Aceh, Ma'arif said that is still a normal thing, because armed clashes also occur in other conflict areas such as Ambon and Poso.
Nevertheless asserted Ma'arif, the government must act decisively against GAM members who still carry arms, because according to the MoU GAM must surrender its weapons. (san)
[Translated by James Balowski.]
Associated Press - August 30, 2005
Chris Brummitt, Jantho -- Imprisoned Aceh rebel Idris walks free on Wednesday as part of a peace deal with the government, but the scars he claims he sustained at the hands of his captors will remain for life.
The 36-year-old fighter is one of 1,500 insurgents from the tsunami-ravaged region who will receive the amnesty -- seen as the first test of the willingness on both sides to comply with the terms of the accord.
Late Tuesday, President Susilo Bambang Yudhoyono signed a decree granting the amnesty for the jailed rebels. "It is a general amnesty for all members of GAM either at home or abroad except those who are involved in criminal cases and armed violence after the signing of the peace deal," State Secretary Yusril Ihza Mahendra announced at the palace. GAM refers to Free Aceh Movement rebels.
The deal, signed in Finland earlier this month, is seen as the best chance Acehnese have had in years to end almost three decades of fighting that has killed nearly 15,000 people in the oil and gas-rich region on Sumatra Island.
Mistrust and bitterness at years of human rights abuses runs deep, however.
Idris, who goes by a single name, recounted how he pleaded to be shot when laughing soldiers attached electrodes to his genitals and beat him with sticks after he was arrested last year.
"Most all of us here have been tortured," he said, showing an Associated Press reporter who visited his prison Tuesday scars on his back and missing teeth that he said were the result of army beatings. "How are we supposed to trust the army?"
Lt. Col. Ery Sudiko, a military spokesman in Aceh, denied the torture, saying such allegation is typical in such a situation. "That is not true. That never happened because the prison was regularly inspected by officials," Sudiko said. "That is clearly a distortion of facts aimed at discrediting the army." Asked about the scars showed by prisoners, Sudiko said: "That is not an accurate evidence."
Despite their allegations of torture, Idris and other rebels said the Helsinki peace deal had a better chance of holding than an internationally mediated truce in 2003, which quickly broke down amid violations on both sides.
Rebels at Jantho prison said Tuesday they would follow the orders of their exiled political wing, but dodged questions as to whether they agreed with its historic decision to drop the movement's independence demand.
"Our leaders' commitment to the people of Aceh is solid and we intend to obey them," said Kardimas Rusli, the most senior rebel in the jail in a hill town some 60 kilometers (40 miles) inland from the capital, Banda Aceh.
In two weeks time, the rebels are scheduled to hand over their weapons and Indonesian troops are to begin a gradual withdrawal. The process is being overseen by monitors from the European Union and Southeast Asian countries.
Aceh lost more than 130,000 people in the Dec. 26 earthquake and tsunami, the highest death toll in the 11 countries affected by the disaster. But the joint suffering endured by its 4.3 million people was a factor in bringing the two sides back to the negotiating table.
Local and international human rights groups have long accused the military of torture, rape and arbitrary killings in Aceh. The military has denied the allegations. The insurgents, who number around 5,000, have also been accused of abuses during the war.
The rebels in Jantho said they were well treated in prison, but were tortured and beaten by officers at police stations and army barracks after their arrests to extract confessions. Most are low-ranking insurgents serving between one and five-year sentences for treason.
The peace accord calls for the creation of a human rights tribunal to bring to justice soldiers accused of abuses. But there is widespread skepticism that the military -- still a powerful force in Indonesian politics -- will allow any troops to stand trial.
Failure to successfully reintegrate the former rebels, most of whom have lived in jungle camps for many years, into society could lead to a surge in criminality or see them return to rebellion. The government, with the help of international aid groups already in the province helping in tsunami reconstruction projects, plan to provide education and job training schemes for those former insurgents who want to take part.
"It is very important to take care of them," said Hanif Asmara, the head of the region's social affairs department. "They have been away from their families for so long."
Jakarta Post - August 30, 2005
Tiarma Siboro and Zakki P. Hakim, Jakarta -- The Indonesian Military (TNI) has called on the Aceh foreign peace monitoring team to take anticipatory measures to prevent the current peace process between the government and the Free Aceh Movement (GAM) from faltering, including banning former rebels from bearing weapons in public.
TNI chief Gen. Endriartono Sutarto said on Monday that the Aceh Monitoring Mission (AMM) should be responsible for ensuring that there were no GAM weapons being used until after they were all surrendered, as was agreed in the recently signed Memorandum of Understanding (MOU) between GAM and the government.
"The AMM also must clearly detail the implementation of all items in the MOU to avoid confrontations in the field, particularly on the use and carrying of weapons by GAM members," he said at TNI headquarters in Cilangkap.
Endriartono was responding to the first confirmed exchange of fire involving members of GAM and TNI on Sunday in the hills near a village in Indrapuri district, Aceh Besar.
"Some incidents that have taken place since the signing of the MOU were triggered by misunderstandings on the part of GAM members who are opposed to the policies of their leaders to end the conflict," he said.
Endriartono said GAM members should no longer be allowed to carry weapons unless they were taking them in for collection at TNI or police posts, or to the local administration.
He added that the TNI would be taking defensive rather than offensive postures during the disarmament period, but quickly added that retaliating to attacks by rebels remained a likely option to minimize casualties.
The MOU rules that GAM will demobilize its 3,000 guerrillas and decommission of all kinds of armament in four stages, starting from Sept. 15 through Dec. 31 with the assistance of AMM.
"It needs to be emphasized that there should no longer be any weapons in the community after the whole decommissioning process ends. Besides surrendering 840 standard arms, GAM must also surrender all hand-made arms that they have also used," Endriartono said.
Meanwhile, State Minister of Communications and Information Sofyan Djalil said Sunday's incident was still within the bounds of toleration, especially after almost 30 years of armed conflict in Aceh.
"It's understandable... there's no way that this MOU can work out in just one night. The MOU is only 15 days old. Besides, the incident wasn't significant because they were firing upward and there were no casualties," he said on the sidelines of the sixth Asian-European Editors Forum here.
However, Sofyan added, the government and GAM had agreed to try to reduce tensions between themselves, especially after the signing of the MOU and during the transition period.
"So that all the small snags are eliminated and the big ones are reduced in order to create a conducive situation in the field," he said, adding that AMM was not yet in full swing in carrying out its task in monitoring the situation and the implementation of the peace deal.
Jakarta Post - August 29, 2005
Nani Afrida, Banda Aceh -- The first confirmed cross-fire involving Indonesian Military (TNI) soldiers and Free Aceh Movement (GAM) guerrillas broke out on Sunday, putting a peace deal in the province to a serious test.
No injuries or casualties were reported during the brief gunfight, which occurred in hills near a village in Indrapuri district, Aceh Besar. The incident come a few days before hundreds of GAM prisoners are set to return home after receiving an amnesty from prosecution.
Later on Sunday, a team comprising representatives from the military, the police and the Initial Monitoring Presence -- a precursor to the international Aceh Monitoring Mission (AMM) which is to begin operating on Sept. 15 -- went to the site of the incident to investigate.
The team reportedly found a number of bullet shells and three huts up in the hill. It has yet to file a report on the matter.
Both sides immediately accused each other of violating the peace accord signed on Aug. 15 in Helsinki.
Iskandar Muda Military Commander overseeing Aceh Maj. Gen. Supiadin alleged GAM members had breached the peace agreement by carrying weapons in public and firing at government soldiers.
Supiadin said the incident happened when a group of 16 soldiers from the Army's Special Forces (Kopassus) were ambushed by the guerrillas while patrolling near Muereu village at around 8:30 a.m.
A military source said the rebels started to open fire from their hideout on the hill.
"We had no option but to retaliate. It took about 10 minutes for our soldiers to regain control. The rebels stopped shooting at us and moved away," the commander of the military's strike force overseeing Aceh Besar, Lt. Col. Irlan Suryadi, said.
Meureu is located about 25 kilometers from the provincial capital of Banda Aceh and is known as a GAM stronghold.
GAM spokesman overseeing Aceh Besar, Tgk. Muchsalmina, confirmed the incident had occurred. However, he accused the TNI of ambushing the soldiers and violating an item in the peace deal that bans patrols beyond a radius of 750 meters from a military post.
Under the peace pact, guerrillas are banned from traveling outside their bases carrying weapons, while troops are to patrol no further than 750 meters from their posts.
"They (the soldiers) violated the clause. They ambushed us and we had no choice but to open fire at them," Muchsalmina said. He called on the AMM to investigate the case fairly.
AMM chairman Pieter Feith urged TNI and GAM leaders to order their troops to comply with the peace agreement and said commanders from both sides must take the necessary measures to prevent their troops from attacking the other.
The Acehnese Civil Society Task Force (ACSTF) said both parties should also refrain from making statements that could hamper the peace process.
"The peace agreement between the Indonesian government and the GAM is still in its infancy and it requires all of our efforts to hold to it," said Imam Suja, a House of Representatives lawmaker. "We should learn a lesson from the previous Cessation of Hostilities Agreement (CoHA) that collapsed within months after both parties committed violations in the field."
That peace agreement signed in December 2002 lasted only five months before the government imposed martial law in Aceh. Under the Helsinki peace pact, GAM has agreed to surrender 840 firearms between Sept. 15 and the end of the year, while during the same period the military is required to pull out troops in proportion to the surrendered weapons.
Agence France Presse - August 28, 2005
Jakarta -- Indonesian Vice President Yusuf Kalla has dismissed calls by parliamentarians for Aceh rebels to swear an oath of allegiance to the government as a precondition for an amnesty, state media said.
Parliament, still smarting from not having been consulted by the government during the six-month negotiations with the Free Aceh Movement (GAM) that led to the historic August 15 peace deal, insists the rebels take the oath.
However, the Antara news agency quoted Kalla as saying Saturday that such an oath was "unimportant".
Kalla, a key player in the Aceh peace efforts, said that any former rebel who breaks the law would be punished like any other citizen, making the swearing of such an oath of allegiance irrelevant.
Meanwhile, Antara also reported that the Aceh Monitoring Mission (AMM), GAM representatives and the military agreed on Saturday that the rebels would surrender their weapons to the foreign monitors rather than the army.
"The process of the destruction of weapons surrendered by the GAM to the AMM will be very transparent and there should be no worry about any manipulation," AMM Deputy Chief for Security Affairs Jaakkoo Oksanen was quoted as saying.
As part of the peace agreement signed in Helsinki, the government has agreed to gradually withdraw its troops from Aceh in line with the surrender of weapons by the rebels.
The peace deal is aimed at ending 29 years of bloody separatist conflict in Aceh which has already left around 15,000 people dead -- mostly civilians.
Dawn/Interpress - August 27, 2005
Fabio Scarpello, Jakarta -- As the historic Aceh peace deal, signed two weeks ago in Helsinki, enters the delicate, implementation phase analysts worry that the wording is vague and that mounting political opposition could yet derail the accord. When the accord was signed on Aug.15, by Indonesia's Minister of Justice and Human Rights Hamid Awaludin and the Free Aceh Movement (Gerakan Aceh Merdeka or GAM) leader Malik Mahmud, everybody thought, in Aceh, peace is easier signed than done.
"I am neither optimist nor defeatist, I am realistic and I say that the agreement is too vague and difficult to implement," J. Kristiadi, deputy director of the independent, Jakarta Centre for Strategic and International Studies (CSIS), said in an IPS interview. The Aug 15 agreement, which followed seven months of consultations, mediated by former Finnish President Martti Ahtisaari, ended a 29-year- war that left 15,000 people-mostly civilians-dead. Ironically, the push for peace was provided by the Dec. 26 tsunami that, in Aceh, killed over 130,000 and left 400,000 homeless.
The magnitude of the tsunami dwarfed the meaning of the war itself and forced the two warring parties to compromise.
Under the agreement, GAM dropped a long-held demand for independence and will disarm its 3,000 fighters. In return, Jakarta granted a host of financial and political incentives besides promising to withdraw some 30,000 of its 45,000 troops stationed in the province on the northern tip of Sumatra island. In a nutshell, the deal has human features and grants former rebels full amnesty and also provides for money and land to facilitate their rehabilitation in society.
The Aceh Special Autonomy takes in virtually every facet of government except foreign affairs, defence, national security, monetary and fiscal matters and freedom of religion. Further, the agreement allows Aceh to keep 70 per cent of the revenue generated from its oil and gas resources. The daunting task of checking that everything runs smoothly falls on the shoulders of 200 or so international observers of the Aceh Monitoring Mission (AMM). The AMM will act as prosecutor and judge on any disputed cases concerning amnesty, the changing of the law or the implementation of the deal. According to most analysts, the observers will have their hands full.
"The agreement can be read differently. It is unclear and open to the possibility of multiple interpretations. There will be a lot of disputes," said Kristiadi. Added the CSIS analyst: "The powers granted to the Aceh local parliament should have been better defined and should have been granted only after full consultation with the House of Representatives. As it stands, who can say that in the future, that these powers will be interpreted in the same way by Jakarta and Banda Aceh?"
In truth, the agreement has already come under attack here by some legislators who have doubted its legality and voiced anger at the extent of concessions granted to Aceh. Anhar (one name), an Acehnese legislator from the Star Reform Party, has gone on record warning that the autonomy granted to Aceh could, in time, lead to a second Timor Leste. Timor Leste, once East Timor, is the former Portuguese colony and Indonesian province which voted for independence through a United Nations-brokered referendum in 1999.
In the last few days, a cross-party group, led by the Democratic Party of Struggle (PDI-P), has raised the stakes, and started procedures to summon the government to the House of Representatives to explain the 'ins and outs' of the peace deal.
Jakarta Post - August 26, 2005
Veena Siddharth, New York -- When the Indonesian government and the armed separatists of the Free Aceh Movement (GAM) signed their peace agreement this week, they demonstrated that even the darkest cloud may have a silver lining after all. Last December's devastating tsunami killed or injured hundreds of thousands of Acehnese, but the response brought an enormous amount of international goodwill and assistance for the reconstruction and development of the province, and restarted previously unsuccessful peace talks.
As a result, the Acehnese could finally get a real chance to develop and prosper in a safe and peaceful environment. Failure, however, could plunge an already devastated province into renewed conflict with little likelihood of overcoming the twin disasters of deluge and war.
Of course we have been here before. In December 2002, after thirty years of fighting marked by human rights abuses, thousands of deaths, and total impunity for those responsible for war crimes, the Indonesian government and GAM signed a cessation of hostilities agreement. But after just a few months, the agreement fell apart and full scale hostilities began anew in the province.
For today's agreement to be sustainable, success rests on two elements: First, both sides must abide by the agreement in good faith. Second, there must be focused attention to human rights. Both elements require an active commitment from both sides and close, objective, monitoring with strong international involvement.
Indonesian President Susilo Bambang Yudhoyono has made securing peace for Aceh a priority, but the Indonesian military's enthusiasm and support for the peace agreement has been less clear. The military has major financial interests in the province that will be curtailed by this agreement, as well as a longstanding antipathy to its autonomy. The history of Indonesia's armed forces in East Timor, West Papua, and the Maluku islands, together with a general lack of reform of the military, mean that their actions during the next few months must be scrutinized.
Pointing out the military's poor record in Aceh is not to ignore GAM's own sad history of abusive behavior. The human rights abuses perpetrated by both sides to the conflict have fueled the conflict in Aceh. The promotion and protection of human rights were conspicuously absent from the 2002 cease-fire agreement; this time around, such protection will be key to making this new peace deal work and ending the cycle of violence.
To their credit the Indonesian government is allowing monitors from the EU and ASEAN member states to monitor the implementation of the agreement on the ground. However, for their efforts to be as effective as possible the following areas will be critical:
There is much at stake with this new agreement. The people of Aceh have suffered through years of conflict and the devastating ferocity of last December's tsunami was an added blow. This may be Indonesia's last chance to reach a viable long-term solution to the conflict, and tap into this international support.
[Veena Siddharth is the Asia Advocacy director for Human Rights Watch.]
Associated Press - August 24, 2005
Jakarta -- The military may be held accountable for alleged atrocities committed during a three-decade separatist war in Aceh province, Indonesia's justice minister said Wednesday, denying that troops would escape rights tribunals.
The peace pact signed last week paves the way for the creation of a human rights court and a truth and reconciliation commission, but the government has given mixed signals about whether past crimes by the military or separatist rebels would be investigated.
On Tuesday, Information Minister Sofyan Djalil said the two bodies would only hear cases carried out after the accord's Aug. 15 signing date.
But hours later, Justice and Human Rights Minister Hamid Awaluddin told reporters the proposed Commission for Truth and Reconciliation, like the one that examined apartheid-era brutality in South Africa, would probe past crimes.
"It will consider violations carried out not just by the Indonesian military, but also by GAM," he said, referring to Free Aceh Movement rebels.
The 29-year war in the oil- and gas-rich province on Sumatra Island's northern tip claimed 15,000 lives, many of them civilians caught up in army sweeps of isolated villages.
The military, and to a lesser extent the rebels, have been accused by human rights groups of killings, tortures, rapes and disappearances.
Analysts say the government is playing a delicate balancing act aimed at appeasing conservative members of the military who fear the peace accord gives too much autonomy to Aceh. Some soldiers and police allegedly benefited from the war through illegal tolls, extortion and drug trafficking and are unhappy about the deal.
Sidney Jones, Southeast Asia project director for the International Crisis Group, noted that the last peace accord collapsed in part because the military did not withdraw its troops as demanded by the rebels. "Clearly there's a difference of interpretation" within the government, she said. "Everybody is treading on eggshells in order to keep the army on board."
Despite the conflicting signals, exiled rebel leaders who signed the pact say they are confident those who carried out major atrocities would be held accountable. "I think both parties agreed that there should be some accountability for human rights abuses," said rebel spokesman Bakhtiar Abdullah.
Jakarta Post - August 24, 2005
Desra Percaya, New York -- Following seven months of talks mediated by former Finnish President Martti Ahtisaari, a memorandum of understanding (MoU) was signed in Helsinki on Aug. 15 between the Government of Indonesia and the Free Aceh Movement (GAM).
Few other troubled areas of the world could have witnessed more joy than the towns and cities of Aceh, where people have longed for the return of peace and normalcy for too long. The signing of the agreement points the way to a solution to the province's 30 years of conflict.
The MoU has brought both opportunities and challenges. It is a significant step toward peace that has no comparison in modern Indonesia. To begin with, this accord is the first time that the Indonesian government has ever concluded a peace accord with a separatist movement. It is also significant that, as a sign of good faith and seriousness, the government also agreed to an international monitoring mission in Aceh, and to allow GAM to establish a local political party in the province.
Learning from the failure of previous peace deals in Aceh, it may be said that while the negotiation of an agreement is a delicate process, the implementation of the agreement is far more challenging. The devil is in the details of the agreement, and both parties need to embark on serious follow-up. What is certain, for now, is that a solid foundation has been laid for the construction of peace in Aceh. Success -- that is, peace -- depends now on how well the two sides work together in compliance with the provisions of the deal, particularly in cases where it is violated.
It is worth observing that the road towards this agreement has been quite bumpy. There were, for example, the proponents of the militaristic approach in Jakarta, who failed to take account of the long-term benefits of achieving peace through dialog. In the end, however, they all ended up supporting the search for peace in Aceh.
Indeed, the agreement serves the paramount interest of the state, namely, maintaining the territorial integrity of the Republic. As a result, it will also send out a message to the nation that a demand for independence will not necessarily lead to the creation of a new state. The government will, therefore, be better able to channel its energies into development and the unfinished reform agenda of democratization.
Certainly, the readiness of the government to accept international monitors from three ASEAN countries and European Union is an unprecedented phenomenon. Although some nationalists have gripes about the overall deal, this brave decision by the government should be praised and regarded as evidence of its determination and genuine commitment to a peaceful settlement in Aceh, and the maturity of democracy in Indonesia.
For GAM, it is understandable that as a loose separatist movement whose leaders live in Stockholm, the movement lacks a strong grip and solid influence over its followers in the field, especially the armed elements. The fact that its leadership was out of touch with reality in the field was a key factor in the group's failure to successfully implement previous agreements.
It is therefore the responsibility of the leaders of the group to show greater commitment and involvement, and convince their followers in the field to fully implement the accord. Of particular interest here is the need for the leadership to ensure that the hard-liners do not stray from the terms of the accord.
While recognizing the importance of the agreement, one should not lose sight of the fact that the transformation of GAM from an armed separatist group into a political party will take some time. This will be one of the biggest challenges for GAM's leadership, which claims to be the sole representative of the Acehnese and also maintains that it has their full support.
In the end, both parties to the agreement should accept the challenge of the accord and commit to its sincere implementation. In view of the fact that both leaderships speak on behalf of the people, it is time to put the betterment of the lives of the Acehnese at the very core of the issue.
The return of peace to Aceh would certainly contribute to the recovery and rebuilding of the province after last year's earthquake and tsunami disaster. The Acehnese need a long and uninterrupted peace to forge their future.
In this regard, and with a view to offering the necessary assurances to both sides and the people of Aceh, a meeting between President Susilo Bambang Yudhoyono and GAM leader Hasan di Tiro would certainly boost confidence about the attainment of lasting peace in the province.
Today, the path towards a lasting peace in Aceh has been clearly marked out.
[The writer works with the Indonesian Mission to the United Nations, New York. The views expressed are his own and do not necessarily reflect the position of the Government of Indonesia.]
Jakarta Post - August 24, 2005
Nani Afrida, Banda Aceh -- Criticism is gathering against the powerful Aceh Rehabilitation and Reconstruction Agency (BRR) two months after it began the massive project of rebuilding the tsunami-affected province.
The Anti-Corruption Movement (GeRAK) said on Tuesday the agency spent too much money on salaries for its 100 executives and staff members, while allocating very little to help those people affected by the disaster.
The agency's budget has been set at Rp 1.1 trillion (US$110 million), with Rp 371.65 billion earmarked to pay the agency's employees.
That is more than double the Rp 145.83 billion set aside as allowances for about 574,000 people displaced by the Dec. 26 tsunami.
"This means inefficiency in the agency's spending. The agency should have a sense of crisis and show its concern for the people's suffering," GeRAK chairman Akhiruddin Mahyuddin said on Tuesday.
Akhiruddin expressed doubt the government's efforts to help the people of Aceh overcome the impact of the tsunami would be successful because of the privileges enjoyed by the agency, coupled with programs that failed to benefit the people directly.
"I know the BRR has organized vocational training, sports competitions, a course for coaches, but these do not help the people enough.
"The BRR controls an excessive amount of fund, although it is just a new agency. The way it spends the money is in stark contrast to the fact that many people here are still in need of assistance to survive," Akhiruddin said.
He also called on the agency to make public its expenditures, including the salaries of its employees.
A spokesman for the agency, Widjajanto, denied the agency was spending too much on salaries.
He said the agency was only managing Rp 74 billion of the budget for routine expenditures. The bulk of the money will go to regional agencies involved in reconstruction projects.
"We control less than Rp 74 billion because the money is subject to a 15 percent value added tax," Widjajanto said.
| West Papua |
Courier-Mail (Queensland) - August 27, 2005
Marianne Kearney, Jakarta -- Indonesia's military will be looking to reap even more riches from rebellious Papua province now that it has been forced to withdraw thousands of troops from Aceh, observers say.
Indonesians once joked that a tour of duty in war torn Aceh was a windfall for soldiers. "Go with an M16, but return with 16 million," goes the joke referring to the rupiah currency they brought home.
But under the peace accord signed last week, ordinary soldiers from across Indonesia will no longer be posted to the oil and gas rich province. Some 15,000 troops are due to be withdrawn from Aceh by December.
Not surprisingly the military plans to bring the same number of troops to Papua, once known as Irian Jaya, by 2009, creating a new special new strategic command force to be based in Sorong.
"From the military perspective, the only possibility is to relocate troops from the conflict in Aceh to other conflict area -- Papua. Just as before troops were deployed from East Timor to Aceh," says military analyst Kusnanto Anggoro.
Officially the military leadership says it is happy to abide by the terms of the Aceh peace accord. But privately many commanders will miss the profits made through the province's protection rackets and illegal timber and drugs trades. Deploying troops to Papua will allow the generals to recoup some of their Aceh losses.
Indonesia's easternmost province is home to the massive Freeport mine at Timika, natural gas fields, and millions of hectares of virgin forests.
The $US1 billion illegal trade in Papua's timber, is already heavily dominated by the military, says the London based Environmental Investigation Agency, which earlier this year released a report, accusing corrupt military, police and officials of fuelling lucrative export of logs to China and other parts of Asia. Shocked by the extent of the illegal trade, President Susilo Bambang Yudhoyono, vowed to crack down on security officials involved in the timber smuggling trade.
And two days after signing the peace deal with the Acehnese rebels, Mr Yudhoyono promised that Jakarta would focus on Papua, where a small guerilla group has for decades fought for independence. But emboldened by the US Congress's recent call for an investigation into how the region was integrated into Indonesia, Papuans are already on a collision cause with Jakarta and the military. Sofyan Yoman, the secretary general of Papua's Baptist Church said this week that a meeting of influential Papuan church leaders, MPs and independence activists had decided to lobby for internationally sponsored negotiations on Papua.
"Until now Indonesia just plays with the Papuans -- but we won't allow it anymore," he said.
Papua was incorporated into Indonesia in 1969 after a UN sponsored ballot. But with just 1000 tribal chiefs allowed to vote, the Act of Free Choice, has been criticised as a sham.
The demand for a review of the vote, using international negotiators, was given an unexpected boost when 40 US congressmen last month moved a motion calling for another UN ballot and for investigation into rights abuses.
Koran Tempo - August 25, 2005
Jakarta -- The Indonesian army will send an additional three battalions of troops to Papua. "The reason being, to provide security on the border," army spokesman Brig-Gen Hotma Ngaraja Panjaitan, told Tempo yesterday.
According to Hotma, when and where the additional three battalions would be deployed had not been confirmed because it depended on the TNI [Indonesian National Military Force] budget. Besides that, he said, there were still dissenting voices which considered that additional troops were excessive.
Yet, said Hotma, the ideal number of troops in Papua was nine battalions or one division of organic troops. "Currently, there are four battalions on duty in Papua which are integrated into the XVII Trikora Military Area Command and two battalions under operational command," said Hotma. These four organic battalions were with four Military Provincial Commands, namely Jayapura, Biak, Sorong and Merauke Military Provincial Commands, which each had one battalion consisting of 700 personnel.
Separately, the chairman of the West Irian Jaya Provincial People's Representative Council (DPRD), Jimmy Demianus Ijie, asked for an additional Military Provincial Command in his region, because, said Jimmy, the Papua region was expansive and rife with crime. "Illegal logging, fishing and mining, if not monitored, would cause losses to the state," said Jimmy. Besides that, he said, additional TNI troops were needed in Papua particularly to guard the borders with the Republic of Palau and Papua New Guinea.
According to military observer from the University of Indonesia, Andi Widjajanto, an additional three battalions in Papua was a normal matter, if based on the criteria of guarding borders and regions which were prone to conflict.
[BBC Monitoring Asia Pacific]
Jakarta Post - August 24, 2005
Nethy Dharma Somba and Muninggar Sri Saraswati, Jakarta -- A member of the Regional Representatives Council (DPD) has raised her concern over the alleged arrival of troops in the troubled province of Papua, saying that local people are feeling ill at ease.
Ferdinanda Ibo Yatipay, the DPD representative from Papua, said here on Tuesday that the soldiers arrived in Manokwari regency on Aug. 12 and that their number continued to grow.
"People feel intimidated by their presence. We know it as we have experienced it for years," she said, adding that she was certain of the deployment of troops aboard five ships arriving in Manokwari.
According to a local military official, Ferdinanda said, the soldiers were sent to secure the celebrations of Indonesia's Independence Day on Aug. 17 in Papua. "But, why are they still there now? There is no war in Papua unlike Aceh. We fight for something peacefully," Ferdinanda said.
She said Papuans were feeling intimidated by the reported presence of the troops as they could be branded as separatists if they expressed their concern over human rights abuses in the resource-rich province.
The DPD member demanded that the Indonesian Military withdraw its troops from Papua, where rebels have been fighting for independence from the country.
"That's not the way it is. People must be invited for a dialog (to resolve the separatist problem in Papua)," she said.
However, Maj. G.T. Situmorang, spokesman of the Trikora Military Command overseeing security in Papua, denied the report on the recent deployment of soldiers to Papua.
"The information is not reliable," he said. Meanwhile, Merauke Military Commander Col. Joy K. Sihotang said local residents and others in surrounding regencies had been living in peace and without fear. "There are no activities threatening people here," he said.
Sihotang said the TNI's reinforcement personnel had been in Papua since early this year, adding that the number under his command was only 400 soldiers, or only 40 percent of one military battalion.
TNI chief Gen. Endriartono Sutarto recently announced the establishment of a new division of the Army's Strategic Reserves Command (Kostrad) in Papua this year.
The new Kostrad division would be based in Sorong. The military said the location was chosen to facilitate its ability to deploy or mobilize troops in Papua at short notice.
The TNI will also set up a number of district military commands (Kodim) in several new regencies across Papua. The new commands would result in a 50 percent increase in the number of troops stationed in Papua, from the current 30,000.
Papua has been embroiled in a new conflict over the issuance of a law that split Papua into three provinces -- Papua, West Irian Jaya and Central Irian Jaya.
The Papuan administration and many local people rejected the partition of the province, saying it had to be approved by the Papua People's Assembly (MRP), which was not yet inaugurated.
The central government took away the political role of the MRP when it issued a regulation on the assembly.
Recently, thousands of Papuans staged a rally in Jayapura to express their dissatisfaction over the implementation of the special autonomy law for Papua, which they said was inconsistent.
The protest came just days after US Congress passed a bill calling for unfettered access to investigate how Jakarta gained control of Papua and highlighted human rights abuses in the province.
| Military ties |
Christian Science Monitor - August 29, 2005
Simon Montlake, Jakarta -- Nearly six years after its troops and civilian militia laid waste to tiny East Timor, triggering worldwide outrage, Indonesia has begun to repair its military ties with the US.
But the violent 1999 pullout by Indonesia from the now independent half-island state continues to shadow relations between the two former cold war allies. Although President Bush has restored partial ties and pushed for normalization, Congress has refused to restart the training of Indonesian Army officers and the sale of lethal weapons while past abuses go unpunished.
The tussle over how to handle Indonesia's powerful military mirrors a wider debate over the building of alliances in the war on terror, as well as the US security footprint in Southeast Asia. Administration officials argue that Indonesian support in counterterrorism is crucial and that its armed forces are adapting to democratic rule and deserve US support for further reforms.
"We continue to focus on the role the [Indonesian] military have in terms of democracy and respect for human rights. That's not a focus of ours that has gone away," says a US official in Indonesia. Critics, though, contend that pandering to abusive allies undercuts the push for greater democracy and the rule of law.
"The US has failed to keep its position to protect human rights in Indonesia," says Usman Hamid, coordinator of Kontras, a campaign group in Jakarta that investigates missing persons. "As long as there's no accountability for military officers in human rights cases it's very difficult for us to build the rule of law." Indonesian troops are accused of extrajudicial killings, beatings, torture, and forced disappearances of civilians in East Timor, Aceh, and Papua.
Hamstrung by congressional limits on military aid, the administration has spent $12 million training Indonesia's police in combating terrorism. Even that program has run into controversy, though. The congressional Government Accountability Office recently claimed that 32 trainees should have been excluded because of their unit's poor human rights record.
Beyond the privileges of combat training and up-to-date hardware, the restoration of full ties with the US would spell a wider rehabilitation for the military, known by the acronym TNI. Officers rankle at their depiction by critics as a pariah force, say analysts and retired generals.
Last year's tsunami in the Indonesian province of Aceh offered a chance to soften that reputation as Indonesian soldiers joined an international aid effort. President Bush and other leaders were quick to praise Indonesian forces for their cooperation in Aceh. Indonesia used the opportunity to press for the sale of spare parts for their ageing cargo planes.
But the divisions of the past were also present: One of the Army officers overseeing relief operations was Maj. Gen. Adam Damiri, who was convicted in 2003 by a human rights tribunal in Jakarta over East Timor violence. General Damiri was later acquitted on appeal, as were all but one of 18 defendants in a widely criticized judicial process that the US called "seriously flawed." Indonesia and East Timor recently formed a truth-finding joint reconciliation commission to investigate the 1999 events, but it will have no judicial remit.
"The TNI can exert enormous pressure on the government to prevent tribunals looking at its past abuses. That's what we're seeing in the case of East Timor," says Damien Kingsbury, author of "Power Politics and the Indonesian Military." Indonesian generals have long held a privileged position here. In recent years, though, Indonesia has laid the groundwork for civilian democracy and loosened the TNI's hold on politics. Government officials say US military aid would speed this process by instilling greater professionalism in the ranks and helping to turn Indonesia's 320,000-strong military into a modern force, albeit still focused on domestic threats.
"For the next 15 years, we still need a measured and calibrated role for the army, even in internal security. Civil competence is still weak," says Defense Minister Yuwono Sudarsono.
One obstacle to military reform is Jakarta's shaky finances: A significant chunk of military funds -- perhaps as much as two- thirds -- come from their own private businesses and pension funds, not government coffers. A recent budget request from the Defense Ministry was slashed in half, says Mr. Yuwono.
Analysts say this self-reliance weakens the hand of civilian reformers who seek to reorganize the TNI's murky finances. Under pressure, the military has begun rationalizing its sprawling assets and opening its books. Yuwono says many companies will be closed and others merged into a holding company by October.
Tempo Interactive - August 30, 2005
Jakarta -- The Indonesian Military (TNI) and the United States Pacific Command are holding a joint military training operation in the waters off Tanjung Priok.
The training will last for 16 days, from August 29 until September 12, and is the sixth such joint training operation between the TNI and the US Pacific Command.
According to the Commander of the Indonesian Navy Western Fleet Rear Admiral Tedjoedhy Purdijatno, the training operation is aimed at increasing the knowledge and capability of TNI personnel in conducting military mission planning to secure and defend important installations, including handling problems of terrorism.
Around 90 TNI personnel from three forces and 14 US soldiers from the Asia-Pacific region are taking part in the training operation.
The US Defense Attachi to Indonesia Colonel Joe Judge said that this cooperation was very important for both countries.
During the training, several subjects will be covered, including principles of target analysis, target processing, exchange of information and techniques and tactics in securing important sites from disturbances, including terrorist disturbances.
To intensify the training, the TNI has deployed Cassa 212 Indonesian Navy planes, one Indonesian Army Hellybell and an Indonesian Navy Sea Raider.
During the operation, participants will also be trained in medical evacuation techniques in order to provide treatment to any personnel who suffer injuries during the training. (Sunariah-Tempo News Room)
| Human rights/law |
Jakarta Post - August 24, 2005
Ridwan Max Sijabat, Jakarta -- A working group of military, legal and political analysts has completed the draft of a new bill on intelligence aimed at restoring the badly tarnished image of state intelligence agencies.
Andi Widjajanto, spokesman for the Working Group for Reform of State Intelligence, said the bill would soon be proposed to the House of Representatives after being discussed further with the relevant non-governmental organizations.
"We are working hard to include the bill in one package with two other bills -- one on witness protection and another on state secrets -- which are being deliberated at the House," he told a media conference here on Tuesday.
The working group was supported by the Pacivis Research Agency at the University of Indonesia and financed by UNDP and the Partnership in Governance Reform.
Andi called on the House to use its right to propose the bill for deliberation with the government as a new legal basis for the functioning of intelligence agencies in the country.
The draft stipulates that state intelligence agencies have three core tasks of gathering information and analyzing it as well as forecasting before issuing an early warning on anything that could jeopardize the state and national security.
"All state institutions that have a role in state intelligence are no longer allowed to use force, intelligence agents are unarmed and they are not law enforcers," said Andi, also a lecturer with the University of Indonesia.
The bill also recommends the establishment of a state intelligence coordinating institute (LKIN) with the main task of coordinating all state institutions playing intelligence roles. These institutions include the Indonesian Military, the National Police, the Attorney General's Office and the Ministry of Home Affairs.
"LKIN is a civilian body and is subordinate to the president as the head of state. Its operation is covered by the state budget and its activities supervised by the House," Andi said.
Cornelis Lay, a political analyst from Gadjah Mada University in Yogyakarta, said the bill aimed to correct the state policy that puts national security above all else, including democracy and human rights.
"The current concept of state intelligence was produced by president Soeharto's authoritarian regime and is no longer relevant. National security is as important as democracy and human rights. We can no longer abandon everything for the sake of national security," he said.
The bill also aims to correct the National Intelligence Agency (BIN)'s failure to coordinate with other relevant state institutions.
"BIN is extremely powerful but it lacks coordination with the police, military and other institutions in detecting terror threats. Its failure lies not in the absence of authority to arrest those whose activities harm the state but in the absence of coordination with the police authorized to arrest people," he said, adding it was very risky to allow intelligence agents to arrest suspects.
Cornelis said the bill's content was far better than the one which was dropped by the House.
"Before designing the bill, the working group read a lot of literature on intelligence and intelligence laws of Boznia, South Africa, the United States, Canada and Israel," he said.
Ikrar Nusa Bhakti, a political researcher from the Indonesian Institute of Sciences (LIPI), criticized BIN's performance, saying it had functioned like Antara national news agency. He did not elaborate.
"In collecting information, BIN should be able to provide complex but accurate reports from various sources," he said. Eyebox: Code of ethics for intelligence agents proposed in the bill Agents shall: 1. Comply with the state, Constitution and state institutions 2. Comply with the law and other regulations 3. Respect human rights 4. Carry out their tasks as a public service 5. Maintain secrecy 6. Maintain political neutrality 7. Not use force and repression 8. Not belong to any organization outside the intelligence agency 9. Not work on the basis of race, religion or ideological sentiments 10. Be punished if they abuse their position
Jakarta Post - August 31, 2005
Jakarta -- The Central Jakarta District Court on Tuesday turned down a request by a key suspect in the murder of rights activist Munir for the case to be dismissed.
The panel of judges said the indictment against Garuda pilot Pollycarpus Budihari Priyanto was clear and convincing and in accordance with the law.
"We order the prosecutors to continue the prosecution," presiding judge Cicut Sutiarso told the court. The judges adjourned the trial until next Tuesday to hear witnesses' testimony.
A team of lawyers for Pollycarpus had said that the indictment was neither accurate nor comprehensive and was difficult to understand. The pilot, they said, was just a scapegoat in the murder case because the police could not capture the true killers of Munir.
Mohammad Assegaf, who leads the team of lawyers, said on Tuesday he would challenge the court's ruling in a higher court.
Pollycarpus is being charged with killing Munir by putting arsenic into orange drink offered to Munir during a Garuda flight from Jakarta to Amsterdam almost a year ago. Prosecutors claimed that the defendant's "nationalistic passion" had driven him to murder Munir, whose campaigns for human rights were deemed detrimental to the unitary republic of Indonesia.
Munir died two hours before the plane landed at Schiphol International Airport. An autopsy conducted by Dutch authorities found lethal quantities of arsenic in his body.
The police have also named Garuda flight attendants Oedi Irianto and Yeti Susmiarti as suspects and put them under city arrest for assisting Pollycarpus in the murder.
Pollycarpus is being charged under Article 55 of the Criminal Code on premeditated murder, which carries a possible death sentence.
Assegaf said it would not be possible for the trial to unravel the truth surrounding Munir's death. "It is strange that according to the indictment Pollycarpus is representing nobody in the murder, and that he committed the murder for no reason," Assegaf said.
He was skeptical that the five witnesses who would testify would be able to tell the court how Munir was poisoned and who was behind the poisoning.
Also attending the court hearing on Tuesday were Pollycarpus' wife Herawati and Munir's wife Suciwati.
Outside the courtroom, Suciwati called on prosecutors to be more careful in making the indictments because she believed that Pollycarpus was not the mastermind of the murder.
"I'm certain that Pollycarpus was not the mastermind. He was just an operative," Suciwati said. She asked the prosecutors to take into account the recommendations of the government-sanctioned fact-finding team assigned to help the police investigate the case. The team had linked the murder to high-ranking individuals within the National Intelligence Agency (BIN), with Pollycarpus making numerous contacts with certain BIN officials before and after Munir's death.
State prosecutor Domu P. Sihite said the prosecutors would present five witnesses, including Suciwati, Garuda flight attendant Yeti Susmiarti and former Garuda president director Indra Setiawan in the coming hearings.
Associated Press - August 28, 2005
Jakarta -- A leading human rights group on Sunday condemned as "insane" an Islamic court's caning of two unmarried couples in Aceh province for drinking alcohol and being alone together after dark.
They were the latest Aceh residents to fall foul of new regulations that give the staunchly Muslim province the right to impose a version of Islamic Shariah law.
The women fainted after being beaten 40 times on Friday outside a mosque in central Aceh, witnesses said. They were taken to a hospital, but had no serious injuries.
"We protest this insane sentence, and it should be reviewed by the Supreme Court," said Ifdhal Kasim of the rights organization ELSHAM. "It violates Indonesia's constitution that outlaws corporal punishment, torture and humiliation (of prisoners)."
The four were arrested late at night last month and found guilty by an Islamic court of violating laws prohibiting the consumption of alcohol and unmarried couples being together in private places. It was not clear where they were detained. The latter law is aimed at preventing premarital sex, seen as sin in Islam.
Aceh is the only province Indonesia that has implemented Shariah. The first caning in Aceh occurred in June, with the flogging of 15 men convicted of gambling.
Jakarta Post - August 30, 2005
Harry Bhaskara, Jakarta -- One of life's ironies is the incongruity between what a man works for and what he gets. Munir fought for justice throughout his life, yet, almost a year after his death, his killers have not been found.
As the news spotlight turns to Aceh with its renewed hope for peace after three decades of violence, one great friend of the Acehnese has long gone. Munir Thalib Said, who was poisoned aboard an airplane on his way to Amsterdam on Sept. 7, 2004, had been a source of strength for many victims of human rights abuses during their times of difficulty.
"I am very sad. Nobody like Munir will fight for the fate of the Acehnese anymore," an Acehnese villager told The Jakarta Post two days after Munir's death.
Netherlands authorities found over 460 milligrams of arsenic or more than twice the lethal dose in his body.
"Even though he was Javanese, his fight for justice in Aceh far surpassed the efforts of most Achenese," said Syarifah Nurhayati. It is commonly known that the Acehnese have a grudge against the Javanese whom they believe siphoned off the wealth of the resource-rich province.
A landmark peace deal was signed in Helsinki on Aug. 15 between representatives of the Indonesian government and members of the Free Aceh Movement (GAM). Even if peace materializes in Aceh, Munir will remain in the hearts of many Acehnese.
Munir, who died at the young age of 38, was the foremost, and most outspoken human rights campaigner of Aceh and many other hot spots in the country as well. At the time of his death, people never imagined that one year later, barely any light would be shed on the case.
The murder has added to the list of unresolved cases of human rights abuses in the country, including the 1984 Tanjung Priok incident in Jakarta, the 1993 murder of labor activist Marsinah, the May 1998 riots in Jakarta, the Trisakti and the Semanggi student shootings in Jakarta in 1998 and 1999, and the mysterious death in 2001 of former chief justice Baharuddin Lopa as he disembarked from a plane in Saudi Arabia.
Munir not only fought against impunity for human rights abuses in Aceh, but also in East Timor -- until it seceded from Indonesia in 1999 -- and Papua in the easternmost part of the country.
His work embraced virtually the full spectrum of human rights concerns in Indonesia, from abuses by the military and police to attacks on labor activists. During the final months of Soeharto's reign in 1998 he took up the cause of 24 activists who had disappeared in suspicious circumstances. Eleven of them were later released, the rest have not been accounted for until this day.
Munir was also active in seeking a solution to the sectarian conflicts in Maluku. In 1999 he became a key member of the Commission of Inquiry into Human Rights Violations (KPP-HAM) whose initial findings made it possible for Indonesia to defer international pressure to face the international tribunal for its human rights abuses in East Timor.
Weeks before he left for the Netherlands, he confided to a friend that he had been exhausted by the endless demands on his energy that came with endless rights violations and that he was looking forward to a rest in the Netherlands.
With a scholarship under his belt, Munir had wanted to continue his human rights studies at Utrecht University. On that fateful day Munir boarded a Garuda Indonesia airplane bound for Amsterdam from Jakarta with a stopover in Singapore.
He fell sick three hours after the plane left Singapore and vomited violently. He was then asked to move to a seat besides a medical doctor. Munir died in agony in his final moments two hours before he landed in Amsterdam. Munir is survived by his wife Suciwati and his two school-age children.
This month, a Jakarta district court is trying a Garuda pilot charged with the murder but the pilot's lawyer says he believes Pollycarpus Budihari Priyanto did not work alone. A government- sanctioned fact finding team found that Pollycarpus had made several phone calls to officials from the state intelligence agency (BIN) prior to the murder. The team submitted its final report to the government in June but it has not been made public.
His family terrorized Two days after Munir's death, his family in Malang received a disturbing letter "congratulating" them for Munir's death, branding him a traitor and hoping that the spirits of national heroes would pardon him.
It is a sad episode when a defender of violence becomes a victim of violence but sadder still is to learn that instead of finding justice, the surviving members of his family have been threatened.
Two months later, Suciwati received a package of mutilated chicken carcasses with a note saying: "Don't link Munir's death with the TNI. Want to end up like this?" TNI is the acronym for the Indonesian Military. The military has denied sending the package.
"Who in Indonesia can feel safe? We can be hurt anywhere and by any means without the state protecting us at all," she told the Post when asked whether or not she lived in fear following the threat on her life in November.
Facing threats and intimidation is nothing new for Suciwati. Since the beginning of her activities as a labor and women's rights activist until the death of her husband, she has confronted violence and continues to do so.
Her attempt to uphold justice brought her to all corners, including a meeting with the President. It is heartbreaking to listen to her regular pleas on the radio for justice.
Obstacles to the investigation have been apparent from the start. Dutch prosecutors said they did not have the jurisdiction to investigate a crime committed aboard an Indonesian airplane. At times, the obstacles edged on absurdity, such as when a team of police was sent to the Netherlands after the murder but none of the team members could speak Dutch or English.
The team was sent to obtain the original copy of Munir's autopsy results, which is a requirement under Indonesian law for any investigation. When the results were finally obtained, the police announced that they wanted to perform another autopsy on Munir. This did not materialize but Suciwati only received the autopsy report two months later.
In November, the House of Representatives appeared reluctant to lend its support to a thorough probe of the murder of Munir. When it was at last ready to support it, the President issued decree no. 11 in December for the establishment of a government- sanctioned fact-finding team. But the decree did not include a mandate to force anyone implicated in wrongdoings to appear for questioning.
The most substantial revelation came in June 2005 when the fact- finding team announced that it had found documents setting out methods and plans to kill Munir.
The first method was to kill Munir while in a car, presumably through a road accident. The second method was through black magic by employing the services of a witch doctor or dukun. The third plan was to poison Munir in his office through his food. All three plans failed.
"Let the public conclude for themselves who should be held responsible for the murder of Munir because law enforcers appear unable to bring untouchables from a feared intelligence agency to justice," a member of the team, Asmara Nababan, told the Post in July.
The team said it had been denied access to BIN despite a presidential order to the agency and the National Police to cooperate with them.
Pollycarpus was the initial and main suspect in the case and officials from Garuda Indonesia or BIN appeared to be inaccessible. The team's summonses to BIN officials were ignored.
Instead of answering the summonses, former BIN chief A.M. Hendropriyono, who headed BIN at the time of Munir's murder, invited the team members to his office. The members turned down the invitation. In May 2005, the four-star Army general reported two of the team members to the police for alleged defamation.
The police did succeed in questioning Hendropriyono on June 11 but there was no official announcement made about the questioning. Only three suspects were named by the police, Pollycarpus and two Garuda flight attendants.
"I never ordered the murder. If it is the work of the institution, I should know. (But) if it is the work of individuals at BIN, then let the legal process proceed," Hendropriyono told the Post in June. Munir Courage Award Munir was not only known in Indonesia. His bravery and persistency gained him international recognition in his short life time.
This year, a new award will be established in honor of Munir's work. Called the Munir Courage Award it is offered to a human rights activists who is exemplary in fighting against government abuses of human rights. The award will be presented in December.
Suciwati said, the end of the struggle in defending human rights was not when an award was presented, but when freedom from abuse and violations was finally achieved.
"Some people may not see the purpose of what we're fighting for now, but I truly believe that they will see it one day. This is all for our children, who will live in a civilization where human rights are respected," she said during the promulgation of the award in December.
Munir's murder came only a month before Army General Susilo Bambang Yudhoyono was installed as the sixth Indonesian President and the first to be directly elected. Although authoritarianism gave way to democracy in 1998, the habit of stifling critics seems to have stayed.
The mystery surrounding Munir's death is not a good omen for the new government, which has vowed to uphold the rule of law.
Part of the stumbling block may lie in culture. Both the police and even the President appear reluctant to face the kind of resistance posed by their seniors at BIN, although unveiling the mystery will work in favor of the credibility of Susilo's government.
Munir closely personified those freedom fighters who preceded him by 60 years. They fought with equal bravery and honesty. The freedom fighters certainly did not envisage a time when one of the nation's finest sons would be murdered aboard a flight of the country's national flag carrier. What they and Munir fought for was to bring this nation closer to the civilized world.
As Suciwati once told the Post: "Human rights is not something from the West, it is attached to every individual. I can't express much about these things but surely a nation that wants to progress should be one that respects the rights of its citizens."
Who is Munir?
Awards won by Munir
| War on terror |
Sydney Morning Herald - August 30, 2005
Mark Forbes, Jakarta -- Another big terrorist attack is imminent in Indonesia, its President, Susilo Bambang Yudhoyono, has warned. The bombing was likely to happen in Jakarta over the next two months, Dr Yudhoyono told a conference of newspaper editors yesterday.
A spokeswoman for the Australian embassy confirmed intelligence indicated an attack was looming, and restated warnings that Australians should not travel to Indonesia. Anyone concerned for their security should leave. "We believe terrorists are planning an attack at this very moment," the spokeswoman said.
The British embassy in Jakarta was evacuated yesterday after it received a suspicious package. But police later revealed it contained prawn crackers and a Walkman.
Dr Yudhoyono said he had instructed intelligence and police chiefs on Sunday night "to conduct more active operations into the detection and prevention of acts of terrorism that may happen this year". The attack would probably be aimed at a high-profile Western target.
"We know the terrorists cells are still active, they are still hiding, recruiting, networking, trying to find new funding and even planning... for another strike." Indonesia had been fortunate to escape a big terrorist attack so far this year, he said. Last September a suicide bombing attack on the Australian embassy killed 11 people and wounded 160.
Authorities were "actively looking for dangerous bomb makers", Dr Yudhoyono said. The two most senior operatives of the terrorist network Jemaah Islamiah are believed to be hiding near Jakarta, with enough explosives to launch at least one large-scale attack.
The pair, Azahari Husin and Nordin Mohamed Top, are believed to have masterminded the embassy bombing and the 2002 Bali bombing. They have evaded a police hunt.
The Australian embassy spokeswoman urged citizens to exercise extreme caution. "Our travel advice notes terrorists are already in the very advanced stages of planning attacks, and attacks could occur anytime and at any place in Indonesia," she said. Locations know to be frequented by foreigners were targets.
The embassy's travel warning states that international hotels in Jakarta are being targeted in current terrorist planning. Other potential targets include embassies, international schools, office buildings and shopping malls, the warning states. (Agence France-Presse)
Jakarta Post - August 31, 2005
Tony Hotland, Jakarta -- Future terror attacks in Indonesia may be less professional and even less well-executed than in the past, with Jamaah Islamiyah (JI) facing dissension over how to achieve its objectives, says Sidney Jones, a leading authority on the terror group.
She said that most followers of JI, blamed for a series of devastating blasts in Indonesia over the past years, had abandoned the strategy of launching bomb attacks, particularly on Western targets, as it was diverting the regional terror network away from its major objective of setting up an Islamic state in Southeast Asia.
Jones, the Southeast Asia project director of the International Crisis Group (ICG), said JI's leadership realized that the strategy had cost the network too much, with the arrest of over 200 of its members and outrage among the public.
"There won't be another attack that's as big as the Bali bombings. JI's alive, consolidating, actively recruiting, but most of its leadership is no longer interested in bombing Western targets as it's wasting time, funds and human resources," she told the sixth Asian-European Editors Forum in Jakarta on Tuesday.
However, she stressed that JI still posed a significant threat as it was building up a secure base in which an Islamic fundamentalist community could flourish, while simultaneously upgrading its military capacity to fight for the creation of a regional Islamic state in the future.
"And there's still a small faction within JI that endorses bombing, including (fugitive Malaysian bomb-makers) Azahari and Noordin Moh. Top," said Jones, who in June last year was forced by the Megawati Soekarnoputri government to leave Indonesia due to her "disruptive" work and reports.
The Brussels-based ICG is known for its authoritative, and frequently critical, reports on various security issues here, ranging from Aceh to JI.
"This marginalized faction is still seriously dangerous as they can still recruit through family and school ties, joint military training and shared combat experience," explained Jones, who said her review was based on a combination of interviews, interrogation depositions and sources close to radical networks.
She said such networks would likely form a new organization to continue their global war on the West, although they would face greater difficulties in recruiting people, including suicide bombers, from outside the JI due to a reduction in funding availability.
"There are smaller groups in Poso (Central Sulawesi) and Ambon (Maluku) who terrorize through bombs. There are still 18 known JI schools in Indonesia, which the government can't just close, although we know the addresses and the curriculum, because there's no criminal activity going on in there and it's politically impossible," said Jones.
Putting hurdles in the way of the recruitment process, according to Sidney, was one of the keys to the success of counterterrorism efforts, and this involved identifying persons vulnerable to being recruited.
"Looking at previous experiences, those who are recruited, for example, have family connections with former Darul Islam rebels. Or in Poso, they are former thugs or people whose families lost fortunes and relatives during the conflict there," she said.
While commending efforts to stamp out terrorism, Sidney said the government still needed to improve its intelligence while at the same time avoiding arbitrary legislation and abuses of power.
"I don't think that the danger is over nor that terrorism can ever be fully eradicated, but I think in this region we are in much better shape than three years ago," she said.
| Government/civil service |
Australian Associated Press - August 31, 2005
Indonesian President Susilo Bambang Yudhoyono remains popular after 10 months in office despite some disappointment over the performance of his economic team, a poll showed.
Almost 65 per cent of 1,000 people polled by the Indonesian Survey Institute from August 13-16 said they were satisfied with the performance of the ex-army general who became the country's first directly elected president last year.
But barely 40 per cent of respondents were satisfied with the performance of his economic ministers, while 43.7 per cent said they were unhappy.
Some 36 per cent said economic conditions had been improving under Yudhoyono's administration. A quarter of the respondents said conditions had become worse.
The survey, conducted face-to-face, found more people in rural areas felt economic conditions had improved than those living in urban areas.
The public also applauded Yudhoyono for his efforts to combat corruption, with almost 68 per cent of respondents satisfied with the government's performance against graft.
Green Left Weekly - August 31, 2005
[Dita Sari, president of the Indonesian People's Democratic Party (PRD), and a leader of the militant Indonesian National Front for Workers' Struggle (FNPBI) union federation, was a special guest speaker at the fourth Brisbane Social Forum on July 29-31. She spoke to Green Left Weekly's Mel Barnes and Jim McIlroy.]
What is the current state of Indonesian politics?
There is an effort being made by the government to hide, to manipulate or to mislead people about the failure of this government after it has been in power for nine or 10 months.
For years, the anti-corruption sentiment among the people has been very high because corruption is everywhere, and right now one of the most outspoken people about anti-corruption is the president [Susilo Bambang Yudhoyono] himself. So the government is trying to convince the people that they finally have a government that is very serious about smashing corruption. Small players are being arrested now -- people who stole a little of other people's money, but whose arrest has no impact on the economy.
We say that if the government is serious about cleaning up corruption they should go after the major players who have been robbing billions from the people. They have to go after the cronies of [former president General] Suharto. With this corruption issue the government is trying to hide its failure on two issues: education and health. In these areas the years of crisis are now having an impact, especially for the poor. For instance, now we have 5 million children suffering from malnutrition and 11 million cannot go to school and there are thousands of cases of polio because the nutrition of pregnant women is so bad. We cannot let ourselves be manipulated by the government.
What is the PRD and other progressive groups concentrating on at the moment?
At the moment we are participating in local elections. We try to put up our own independent candidates, but if that is not possible, we support the other parties' programs on education and health, and also anti-corruption. If there is no good candidate or the candidates refuse to campaign around these issues, we will mobilise the people to force a postponement of the local elections, in order to give ourselves time to get a better candidate.
The second thing we are trying to do is to consolidate the opposition on the national level, from the left up to the centre opposition. First, we are trying to consolidate around issues of local elections. But then we found out that many of the national leaders really do not care about the local elections, so there is a division between what's happening on the local level and the national level. We are campaigning for an anti-corrupt and democratic government, focussing on health, education and [getting rid of] corruption. Because this is the area where people felt most betrayed and angry. Most of the national opposition agreed with this program.
We are trying to build a strategic alliance with some of the opposition groups on a national level, which also very interestingly includes some of the religious leaders. This is new, because previously the PRD orientated itself to students, union leaders, NGOs and politicians. But now we are trying to expand by also approaching religious leaders from various religions, and economists who are against neoliberalism.
Together we say the government should not follow the global [neoliberal] policy when it is clear the people suffer from it. We understand that religious leaders have limitations, but people are angry with the president and cabinet and some people still trust the religious leaders. Many of the religious leaders have a good view of the people and we are trying to work with them and have them speak out for our party's program of health and education.
The economic crisis is worsening: 75% of Indonesia's economy lies in the informal economy, such as street vendors. Almost 45 million people are unemployed and that number is growing. The value of the rupiah is becoming weaker against the US and Australian dollars. The government has just signed an agreement with China to lift the tariff on 8000 items of agricultural and manufacturing goods, so this will destroy domestic production.
Every day the media presents us with stories, and people started to think that we need a forum to talk and meet. This creates a good way to consolidate people.
We set up a political party in 2003, but because we set it up so close to the 2004 elections, our time was limited and we could not fulfill the requirements of the government to [participate in the] election. Based on that experience there was [a discussion within the PRD about getting the coalition to] organise for the next election in 2009.
What is the current situation with the trade unions?
They organise around economic issues, like the increase in fuel prices. Trade unions do not get involved very much in Jakarta. When the government raised the fuel price, at that time there was also a raise in the minimum wage. The trade unions preferred to respond to the minimum wage rise rather than to combine these two things.
Around the issue of local elections they do not want to participate... they say this is politics, we do not engage in politics, even though the mayor or the governor may set the minimum wage in their area. It is very important to participate, so that they get a good mayor who sets a decent wage. But they don't feel it's part of their work.
The police and the military don't need to smash up trade unions because they've already been smashed from the economic crisis. Thousands of workers from different companies have been sacked. The neoliberal economy is destroying trade unions, and their leaders are not helping those workers. We actually hope this whole misery will bring workers into action, because most of the bureaucrats from these trade unions are the same people as under Suharto -- they haven't changed, so their policies are the same.
How is the FNPBI going?
We are trying to build from the local level, starting in the factories. Because that's where the most genuine leaders are. But the problem is because of the betrayal of the big trade unions, many local trade unions have declared themselves independent. So they are not affiliating with any national trade union.
What about the recent Aceh agreement signed in Helsinki?
Whatever efforts are being made for peace should be supported. But the problem is that first, we're not really sure [about this agreement]. The government said they would withdraw their "non- organic" [non-Acehnese] troops from Aceh, while at the same time the Free Aceh Movement will be disarmed. We know that even if the government withdraws the non-organic troops, the government has already said they will add more military police in Aceh carrying machine guns.
Secondly, we are trying to find out whether the people of Aceh still want independence. It probably isn't their priority right now. They want to rebuild their houses and their lives... as far as we can tell most people are happy with the Helsinki agreement. It is a new situation -- national liberation may not be a priority right now, and maybe people just want peace, so we will keep trying to find out.
What is the role of the TNI in Indonesia and the role of the Australian government in pushing to completely re-establish support for the Indonesian military?
From the beginning we knew that the Australian government were the ones who supported the East Timor invasion in 1975, we know they are the ones who supported the yellow trade unions, they supported the dictatorship, they trained Kopassus -- the special forces -- for years in Australia. They have also campaigned against Muslims, and Indonesia is the most Muslim-populated country in the world. So neither a Labor party government or a Liberal government has misled us -- they are actually the ally of the United States and of Britain and could not be trusted at all. So if they now start to help the TNI, to fund them and train them again, well this has happened before so if they do it again it will only strengthen our belief that they cannot be trusted at all in whatever they say. Also Australia has appointed an extremely right-wing and racist person as ambassador to Indonesia.
Jakarta Post - August 30, 2005
Zakki P. Hakim, Jakarta -- Fighting corruption remains the government's top priority, although it is now realizing that it might not be able to completely eradicate it, President Susilo Bambang Yudhoyono says.
"I am realistic in accepting that we will probably not be able to completely eradicate corruption from Indonesia. But I am also realistic in expecting that corruption in this country will become the exception rather than the rule," the President said on Monday.
Speaking at a seminar attended by leading editors from Asia and Europe in Jakarta, Susilo said that corruption was the most important issue for the voters, and this would still be true four years from now.
When Susilo assumed office last year, he vowed to curb rampant corruption in the country, which was said to be the main cause of Indonesia's high-cost economy that hampered the nation's competitiveness.
Among the efforts in fighting corruption was bringing persons involved in embezzling Bank Indonesia liquidity support funds (BLBI) to court in order to recover state money.
Dozens of former bankers and bank owners have been accused of misusing billions of dollars worth of funds channeled to salvage ailing banks in the wake of the 1997 financial crisis. According to one estimate the scandal caused state losses amounting to around Rp 137 trillion (US$14.4 billion).
Previous governments have been strongly criticized for failing to take firm action against the corrupt bankers -- who are mostly politically well-connected people -- and for not taking action to recover state losses, thus leaving taxpayers to foot the bill.
"I have formed a Special Team to Fight Corruption (Tipikor), consisting of 45 dedicated professionals, to uncover 'big fish' corruption cases," he said in the seminar organized by the Singapore-based Konrad-Adenauer Foundation in cooperation with The Jakarta Post.
Since becoming President, he added, he had given the police and the attorney general permission to investigate 59 high officials throughout the country, including governors, legislators, regents and mayors.
He also launched a campaign against illegal loggers, that resulted in hundreds of them being put in jail.
Moreover, Susilo said that he had signed a Presidential Decree ordering that all ministers and government agencies undertake systematic efforts to clean up corruption in their respective departments, and to periodically report their efforts to the President personally.
"What I intend to demonstrate is that no-one is untouchable. No- one can escape the arms of justice forever," he said.
The President said that Indonesia had now transformed itself into the world's third largest democracy, which gave him an overwhelming political and moral mandate for change, and he intended to emanate the change very clearly from the top and radiate outward from the center throughout the whole system.
"Indonesia's history has taught us this important lesson: Once you lose the people's trust, you lose credibility -- and authority to govern -- in a way that would be extremely hard to recover from," he said.
Jakarta Post - August 25, 2005
Ridwan Max Sijabat, Jakarta -- Independent legislative watchdog Teliti said the House of Representatives continued to disappoint despite being filled with younger and better educated members.
The watchdog said legislators continued to focus on the interests of their respective political parties rather than of the people. It also said many lawmakers were distracted from their work in the House because they moonlighted.
Celebrating its first anniversary in a gathering here on Wednesday, Teliti said people were disappointed in the behavior and work of lawmakers, who have almost completed the first year of their five-year terms.
"The drama began with the emergence of the so-called Nationhood Coalition and the People's Coalition, which deadlocked the election of the House leadership. The drama reached its peak with the recently proposed raise for legislators amid the current economic difficulties," the chairman of Teliti's steering committee, Amir Karamoy, said during the anniversary ceremony.
He said the House's code of conduct prohibited House members from moonlighting, but according to Teliti's recent survey a majority of legislators remained active in work outside the legislature.
Teliti, which was set up on Aug. 24, 2004, includes political analysts, legal experts, economists and environmentalists. The group conducts studies and examines the actions of the House.
Amir said that after the 2004 legislative election, more than 70 percent of the current 550 legislators were new faces, and almost 50 percent of them between the ages of 25 and 49. However, this infusion of fresh blood was unable to repair the legislative body's badly tarnished image, according to Teliti.
"People have high expectations because besides being new and fresh, 49 percent of the legislators are university graduates and 33 percent have master's or PhDs, but in reality many legislators have no idealism or professionalism," he said.
"A majority of legislators are just fighting for their personal interests and their parties' interests, instead of the interests of the people," he said.
The current House has only passed two laws, one on the state budget and one on industrial relations, out of a target of endorsing 55 bills.
Teliti member Pande Radja Silalahi said new members of the House found it difficult to make changes because of the entrenched system, backed up by law, which "forced" lawmakers to be fully devoted to the interests of their parties or risk being recalled.
He said a special session of the People's Consultative Assembly was needed to review the 1945 Constitution to change the situation. Pande said legislators would have trouble winning over the public in the 2009 legislative election if they did not improve their performances over the next four years.
Teliti chairman Nanda Hasibuan questioned the Constitution, which defines political parties as the only gate through which to enter the political stage.
He said the Constitution should be amended and relevant laws revised to allow independent candidates to contest the presidential election.
He said the 2004 election victory of President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla, who were not backed by any of the major political parties, was a lesson that independent candidates could triumph in a direct presidential election.
| Islam/religion |
Jakarta Post - August 31, 2005
ID Nugroho, Surabaya -- The Malang District Court handed down a two-year prison sentence for a Muslim cleric who was charged with despoiling Islam, by leading prayers both in Bahasa Indonesia and Arabic.
The cleric, Yusman Roy, escaped the main charge, namely that his teachings deviated from Islamic tenets, but was found guilty of the secondary charge, circulating video compact discs (VCD) that sparked public hatred. Besides sparking public hatred, the VCDs have also insulted Muslim clerics who have been teaching people for years to pray in Arabic only, according to the judges.
"The defendant was acquitted of the main charge because experts on Islam differ on whether his teaching has deviated from or tarnished Islamic tenets," said presiding judge Soedarmadji.
The sentence was one year less than the term sought by the prosecutors in an earlier court hearing.
Police officers arrested Roy on May 7 this year after local residents reported him to the police for conducting prayers in Arabic and Bahasa Indonesia at his Islamic boarding school in Malang, East Java. Roy, who has some 300 followers, led the prayers and provided Indonesian translations for the Arabic verses used in the prayers. Ritual prayers are carried out five times a day as prescribed in the Koran.
Roy, a former boxer and convert from Christianity, was also found to have distributed pamphlets and VCDs that encouraged people to pray in Arabic and Bahasa Indonesia, which fueled people's anger. The Indonesian Ulema Council's (MUI) Malang branch swiftly issued an edict that banned the recital of prayers held in any language other than Arabic.
Tuesday's trial attracted attention from locals especially students from Malang Islamic boarding schools. The students packed the courtroom and shouted Allahu Akbar! (Allah the Great) when they heard that the judge had decided to hand down a two- year jail term.
After the court session, Roy reiterated that he was innocent. He said that, in providing Indonesian translations of Arabic verses during prayers, he was helping people understand the meaning behind the Arabic verses.
Jakarta Post - August 30, 2005
Jakarta -- Contradicting earlier comments by a Cabinet minister, the Vice President promised on Monday that firm action would be taken against Muslim hard-liners who forcibly closed down Christian places of worship as they were damaging religious harmony and taking the law into their own hands.
"We have talked to the police. We must be firm now. If we have a problem, we must not resort to violence in order to solve it. Instead, we must resolve it together as the nation belongs to all of us," Vice President Jusuf Kalla told leaders of Islamic organizations gathered at the Muhammadiyah headquarters in Central Jakarta.
Only on Saturday, Minister of Religious Affairs Maftuh Basyuni joined the police in saying that the hard-liners would not be punished, arguing that they were only acting against "illegal congregations".
The anti-Christian attacks continued on Saturday, with a hard- line Muslim group calling itself the Anti-Apostasy Alliance Movement (AGAP), closing one unofficial place of worship in Margahayu Raya. AGAP leader Muhammad Mu'min Al Mubarak claimed that local residents had asked the group to close the prayer house as it was unlicensed.
Also on Saturday, a mob of around 100 people shut down a Christian prayer house located in Larangan subdistrict, Kebayoran Lama, South Jakarta, demanding that its congregation move to a church in Pesanggrahan subdistrict nearby. No violence occurred as the clergyman agreed under pressure to the demand.
Monday's meeting between Kalla and the Muslim leaders had originally been planned to brief them about the Memorandum of Understanding signed by the government and the Free Aceh Movement (GAM) in Helsinki on Aug. 15.
According to Kalla, Indonesian people of different religious persuasions should refrain from using violence when settling disputes. "We must be able to exercise restraint so that this sort of thing does not happen again. It is our responsibility to stop the violence now," he said.
Kalla mediated peace agreements to end bloodshed between Christians and Muslims in Maluku and the Central Sulawesi regency of Poso a few years ago.
Meanwhile, Muslim figures called for interfaith talks to settle the matter. "A dialog is necessary. But the dialog must be conducted in a give-and-take manner," chairman of the 30-million strong Muhammadiyah, Din Syamsuddin, said.
Din said the government had to do its part by upholding the regulations requiring permits for the establishment of houses of worship. "Violence is not the way. Muslim people must not be easily provoked into violence that will only serve to destroy religious harmony," he told reporters.
According to Din, a Muslim community would not oppose the establishment of a church as long as the necessary permits were obtained and respect shown to the local people. "But a problem of social ethics arises if a church is set up in an area where Muslims are in the majority," he said.
Tarmizi Taher, the chairman of the Indonesia Tablig Council, called on the Ministry of Religious Affairs to initiate interfaith talks to settle the issue. However, he asserted that people must respect the joint ministerial decree that requires a Christian congregation to secure approval from the local community before setting up a place of worship -- something that is normally extremely difficult or impossible in practice.
Separately, National Police spokesman Insp. Gen. Aryanto Boedihardjo said that police chief Gen. Sutanto had ordered local police forces to take action against anyone who violated the law.
The police would also encourage the public to report any violations to the local police instead of taking the law into their own hands.
Asia Times - August 27, 2005
Kalinga Seneviratne, Jakarta -- Ever since Indonesia's highest Islamic authority, the Indonesian Ulama Council (MUI), issued 11 fatwas or edicts against liberal Islam, a fierce debate has begun raging in the world's most populous Muslim nation on what constitutes an Islamic society.
Though Indonesia is the world's largest Muslim nation, in these once-Hindu and Buddhist societies the practice of Islam is colored by the liberalism of the older faiths. Many urban middle-class Indonesians define their liberal interpretation of Islam as "secular". But, MUI's fatwas have thrown a direct challenge to both the government and to liberal Muslims in this country of 200 million people, of which 88% follow the Islamic faith while 8% is Christian and 3% Hindu or Buddhist.
The 11 edicts, issued in late July, include one that states that Islamic interpretations based on liberalism, secularism and pluralism "contradict Islamic teachings".
Also banned are inter-faith prayers performed with people of other religions and the intonation of amen to prayers that are led by a non-Muslim, a ritual deemed to be haram (forbidden under Islamic law) as also are interfaith marriages.
Analysts say that MUI's stance is a reaction to the aggressive proselytizing by foreign-funded Christian evangelical sects in the country in recent years and the onslaught of globalize Western culture coming in through media channels and non- governmental organizations (NGOs).
"Challenges for the Muslims do not come from Christian evangelism only, but also others, such as the proliferation of pornography, gambling, the spread of religious liberalism, pluralism and secularism," argues Mustofa Kamil Ridwan, a researcher at the Islamic think-tank, the Habibie Center in Jakarta.
In an Inter Press Service interview, Ridwan said suspicions were being created by the activities of some Western-funded NGOs that were "using Islam as their basis but with questionable implementation that is contradictory to the true teachings of Islam -- and sometimes too radical".
One such NGO is the Jaringan Islam Liberal (Liberal Islamic Network) an organization that is located within Institut Studi Arus Informasi (Center for Studies on Information Flows) and plays an important role in spreading ideas on democratic reformation in Indonesia.
Like other NGOs, funded by Western donors, this one, too, is in the forefront of campaigns against attempts by the government to enact laws to restrict the spread of pornography, gambling and night clubs.
"Most progressive Muslim thinkers would not be very happy to be portrayed as liberals," suggested Ade Armando, a member of the Association of Indonesian Moslem Scholars.
"I think the term reformist will be more appropriate to refer to progressive groups that try to reinterpret the Islamic teaching in a more contextual approach, that unfortunately challenges the traditional Islamic teachings by the ulamas [clerics]," Armando said.
Ridwan explained that from the "conservative point of view liberalism is really a challenge" because of the fear "liberalism will make their children and the Muslim community leave Islamic values they uphold highly".
MUI has asked non-Muslims not to be upset with the July edicts as they are only aimed at Muslims, and are not the law of the land.
But MUI is gearing up to promote its edicts in regions where people are more religious, conservative and impoverished. It is these poor communities that have become the target of Christian evangelical groups for proselytizing and some ulamas have reacted by including the MUI edicts in their sermons.
Armando argues that it is wrong to portray those who support the ulamas as radicals who believe in using violence to achieve their aims. "They believe it is their sacred duty to create a new Indonesia as a respectable Islamic country," he explained.
"Many [MUI] groups are working in the institution-building level. They introduce alternative models of schools -- modern Islamic schools which differ from the madrassas -- new Islamic banking system, special novels for Islamic youth, and they also publish magazines, new media -- such as CD, CD-ROM, VCD -- that teaches Islamic values," Armando said.
Yet, Hasyim Muzadi, chairman of Nahdhatul Ulama (NU), which has about 40 million members and is considered the world's largest Muslim organization, has warned the MUI that its edicts may have a detrimental impact of the development of a civil society in Indonesia.
Muzadi has asked the ulamas to define precisely what they mean by interfaith relations and nationhood, as "we live in a diverse society and this country is not an Islamic state".
Muslim scholar Ahmad Syafii Maarif, a former chairman of Indonesia's second largest Muslim organization, Muhammadiyah, also warned that the edicts may encourage radical groups to take the law into their own hands.
"Although fatwas are not binding, radical groups who have a thirst for power will make use of them for their own interests. It is as if they have been given religious justification," he told the Jakarta Post.
But, Ridwan argues that the "edict functions as a provision for the ummah [Muslim community] to decide what they would do" and the ummah itself has the "the last say for themselves".
Thus, the MUI's fatwas play a very important role in the ummah decision-making process. "With the fatwa the ummah feel they have strong hands and are more certain of overcoming the challenges in the midst of very uncertain situation and full of upheaval," he told IPS.
Armando blamed the regimes of former presidents Abdurrahman Wahid (a liberal Islamic thinker) and Megawati Sukarnoputri (a woman) for allowing reformists within the Muslim community in Indonesia to gain in popularity.
"Very progressive books were being published in these past several years and progressive radio talk shows were launched. And in these movements, the forbidden organizations [during the Suharto era] dared to also openly surface," he noted.
"These developments, I believe, provoked reactions from the conservative groups. And now, they see SBY [President Yudoyuano] as a new president that they can perceive of as an ally or godfather.
"They [conservatives] also see these movements as being provoked by the activities of [Christian] evangelists."
(Inter Press Service)
Jakarta Post - August 26, 2005
Yuli Tri Suwarni, Bandung -- Despite laws banning people from taking the law into their own hands and recognizing freedom of religion, police in West Java have admitted to helping Muslim hard-liners close dozens of churches in Bandung.
West Java Police spokesman Sr. Comr. Muryan Faisal said here on Thursday his force backed the move to close more than 30 "illegal" churches, which according to him had caused anxiety among local residents.
The churches were established illegally in private houses, which resulted in resistance from local people mostly Muslims, he argued.
"Our investigation showed that they were not churches but private houses that were made into places of worship without permits from local authorities and approval of residents... So, there were violations of regulations," Muryan told The Jakarta Post in Bandung.
He cited a joint ministerial decree signed in 1969 by then religious minister Moh. Dahlan and home minister Amir Machmud, which requires permission from local administrations for the establishment of houses of worship.
Muryan said the police would not arrest people or groups involved in the closure of the churches, despite mounting demands from moderate Muslim figures and legislators. Such arrests were not necessary because the closures were not carried out with violence, he argued.
"They (those involved in the closures) asked for a police escort when holding talks with church worshipers and halting their activities. There was never any anarchy, so what is there to worry about?" Muryan said.
Earlier on Tuesday, Indonesian Communion of Churches (PGI) leader Andreas A. Yewangoe complained to President Susilo Bambang Yudhoyono about the closure of 23 churches in Bandung by hard- line groups, including the Islam Defenders Front (FPI), from September 2004 to date.
However, Communication Forum of West Java Churches chairman John Simon Timorason said that 35 churches had been closed by the hard-line groups over the past year.
He admitted that the closed churches did not have permits as required in the joint ministerial decree, but had indeed obtained operational licenses from the West Java Religious Affairs Office.
The FPI is part of the Anti-Apostasy Movement Alliance (AGAP) that has aggressively been campaigning for the closure of churches in West Java. It also often raided and attacked nightspots during Ramadhan.
Prominent moderate Muslim figures, including Azyumardi Azra and former president Abdurrahman "Gus Dur" Wahid, had urged the National Police to take firm action against FPI and other extremist groups who took the law into their own hands by closing the churches.
Only the government is authorized to close houses of worship, argued Azyumardi, the rector of the Syarif Hidayatullah State Islamic University.
Gus Dur had specifically told President Susilo to take harsh action against the FPI for forcibly closing the churches in Bandung.
Should the authorities fail to deal with the hard-line group, he warned, members of the Banser youth group affiliated Gus Dur's Nahdlatul Ulama (NU) would move to take over the case. "To top FPI leaders, I warn them to heed this appeal," Gus Dur said.
House of Representatives members also made a similar call for the government to arrest those involved in closing the churches in West Java. "The government must be firm against those creating anarchy. Police must arrest them," lawmaker Agung Sasongko of House Commission III on social and religious affairs said as quoted by Antara.
He said the House would hold a hearing with Christian leaders from Bandung soon and present the results to Minister of Religious Affairs M. Maftuh Basyuni.
| Armed forces/defense |
Detik.com - August 30, 2005
Fitraya Ramadhanny, Jakarta -- After recent calls that President Susilo Bambang Yudhoyono reshuffle his economic ministers, these calls are now being directed towards the chief of the TNI (armed forces).
The call has came from members of the Golkar Party Fraction in the House of Representatives (DPR). There are two people who are considered appropriate to be chosen by the government as the TNI chief, General Ryamizard Ryacudu and airforce chief of staff Air-Marshal Djoko Suyanto.
"The situation urgently needs this at the moment. There are two people who are most appropriate", said a member of the DPR's Commission I from the Golkar faction, Yudi Chrisnandi, at a press conference during a break in the launch of his book titled "TNI Reform: A New Perspective on the Civilian Military Relationship in Indonesia", at the Hotel Sahid ballroom on Jalan Sudirman in Central Jakarta on Tuesday August 30.
According to Chrisnandi, the regeneration of the TNI leadership is necessary in order not to obstruct organisational development and the professionalism of the TNI itself. Article 12 of Law Number 34/2004 on the TNI states that chiefs of staff and active former chiefs of staff can have an opportunity to be TNI chief.
"In terms of seniority, Ryacudu could be the priority. However if [we] look at the modernisation and rotation of the leadership, then Suyanto could be given an opportunity like the previous chief of staff", explained Chrisnandi.
Chrisnandi also explained that the candidate that is nominated must still obtain agreement from the DPR and can be rejected if inappropriate. Whoever is nominated by the president and agreed to by the DPR however, must be loyal to the president as is fitting with a professional military.
"Certainly there is no problem about the replacement of the TNI chief. [Military] officers will not make an issue out of the replacement as long as it is in accordance with procedures and professionalism", he asserted with confidence. (atq)
[Translated by James Balowski.]
Tempo Interactive - August 31, 2005
Jakarta -- Out of so many companies, foundations and cooperative enterprises managed by the Indonesian Military (TNI), only a few meet the requirements for being taken over by the government.
Defense Minister Juwono Sudarsono said that seen from current assumptions, no more than 10 companies within TNI businesses meet corporate standards.
"According to the State Ministry for State-Owned Enterprises, the number is perhaps less than ten. This means that companies should have a strong legal base, statutes, cash flow in and out plus proper financial data from a corporate point of view," said Sudarsono following the inauguration of Muladi as the governor of the National Resilience Institute at the State Palace on Tuesday (30/08).
However, the Defense Minister acknowledged that he was as yet unable to identify the total assets owned by these 10 TNI businesses. "My estimate is that the assets are worth somewhere between Rp15 billion and Rp20 billion, whatever is required from a corporate point of view," said Sudarsono.
TNI businesses that have such huge assets, the minister continued, must be more accountable. Once taken over by the government, profits from these businesses will be targeted for the welfare of low-ranking TNI personnel.
Meanwhile, businesses that have assets below the said amount would not be taken over by the government as they already involve the welfare of low-ranking TNI personnel. "Businesses such as chicken farms, fishing and simple savings and loans cooperatives will not be taken over," stated Sudarsono.
Currently, according to the Defense Minister, there is still data collection and verification being carried out as regards all businesses within the TNI environment by an inter-department team from the defense department, the department of law and human rights, the state-owned enterprises department and the finance department. (Dimas Adityo-Tempo News Room)
| Business & investment |
Jakarta Post - August 31, 2005
Jakarta -- The government must work hard to provide legal certainty -- particularly in the area of tax regulations -- if it wants investment in the country's oil and gas sector, which has lately been on a declining trend, to pick up, an industry player says.
President of the Indonesian Petroleum Association (IPA) Christopher B. Newton said there at least were four main issues the government needed to address immediately in its efforts to accelerate investment in the sector.
"First, the government should seek the complete resolution of the value-added tax (VAT) issue that investors are facing, while (second) taking the opportunity presented in the new tax law to enhance fiscal certainty," he said during the first day of the association's annual convention on Tuesday.
Newton was referring to the tax incentive that the government has been giving to production-sharing oil and gas contractors in the country, which enables them to reimburse the VATs imposed on the equipment they use for exploration and production.
On a day-to-day basis however, the reimbursements are often delayed, creating uncertainty, Newton added.
His third and fourth points respectively were that,"the government should continue improving the coordination between related ministries and local administrations, as well as the partnership between investors and the sector's regulators." The IPA is holding a three-day convention and exhibition here in Jakarta, which President Susilo Bambang Yudhoyono officially opened. Some 1,700 participants are expected to attend the event, which will showcase 96 exhibitors and include a series of discussions on the latest developments in the oil and gas sector.
Among the exhibitors are state oil and gas firm PT Pertamina, local energy firm PT Energi Mega Persada, as well as major foreign oil companies such as BP Indonesia, PT Caltex Pacific Indonesia, Chevron and ConocoPhillips. Speakers include Minister of Energy and Mineral Resources Purnomo Yusgiantoro and Chevron president David J. O'Reilly.
Newton further said that recent high oil prices alone would not be enough to attract investors to Indonesia as other countries had also increased their efforts to do so.
"The drive to attract foreign direct investment is significantly more competitive today," he said.
Newton said Indonesia's share of global upstream capital allocation had declined from 8 percent to 3 percent over the last five years, indicating its eroding competitiveness.
The IPA estimates that Indonesia's oil and condensate production will average this year some 1.06 million barrels per day (mbpd), a 2.5 percent decline from last year's output. Its gas production is still high at 8 billion cubic feet (bcf) per day, but below 1996's peak of 8.7 bcf. Without significant investments in production optimization, production from existing discoveries will decline by 50 percent in the next decade.
Speaking after Newton, President Susilo Bambang Yudhoyono said that the government was committed to providing a favorable investment climate in its efforts to boost the country's current 1 mbpd oil production to 1.3 mbpd by 2009.
Jakarta Post - August 30, 2005
Jakarta -- The rupiah's recent slide was attributed in part to declining market confidence in the prospects for the economy, with persistent conflicting signals from the government exacerbating uncertainty, a minister said on Monday.
State Minister for National Development Planning Sri Mulyani Indrawati said the government had come to realize that it was not going to be easy to achieve all the economic targets it had pledged it would achieve, given the complexity of the problems being confronted by Indonesia.
"From day one, the government has given the strong impression that we are aiming for very strong growth," she told a seminar attended by leading newspaper editors from Asia and Europe and organized by Singapore-based Konrad Adenauer Foundation in cooperation with The Jakarta Post.
She went on to say that the government had said that it needed to first work on improving the investment climate.
However, the government realized that it was much easier said that done to overcome the long-chains of bureaucracy, rampant corruption, ailing infrastructure and so on, she said.
The government has laid out ambitious economic targets for this year and the next four -- and all depend heavily on the revival of foreign investment lured by expected fast improvement in the country's business and investment climate.
However, with investment yet to fully pick up, the country has to weather a storm caused by a rapid surge in oil prices, currently hovering at above US$70 a barrel. This has put pressure on the already cash-strapped state budget as it has to allocate more funds for the fuel subsidy. Having been a net oil importer for the past several months, the country has to find huge sums of American greenbacks to finance its oil imports. State oil and gas firm PT Pertamina admitted recently that at current oil price levels, it had to spend about US$1.6 billion per month to import oil, both crude and refined.
Last week alone, the rupiah lost close to 5 percent of its value. On Monday it closed at 10,840 to the dollar -- the lowest level since September 2001. Riding the downward momentum was the Jakarta Composite Index, which fell by a staggering 5.16 percent on the day to close at 994.77 -- the first time this year that it has closed below the 1,000 point level.
In spite of all the negative sentiments, Sri Mulyani said the government intended to restore market confidence by strengthening the country's fundamentals.
"Indonesia will work on the fundamentals, rather than taking shortcuts, which will just create more problems," she said.
Jakarta Post - August 29, 2005
After years of slumping, foreign direct investment in Indonesia has started to gain ground amid an improved confidence in doing business in the country.
Business activities have begun to increase, as seen in the sharp increase in the amount of money spent to set up new businesses during the first seven months of the year.
According to data from the Investment Coordinating Board (BKPM), the value of realized foreign investment from January to July nearly doubled to US$4.9 billion from $2.49 billion in the same period last year, exceeding the $4.57 billion recorded in all of 2004.
In terms of the number of projects, realized foreign investment during the January to July period rose 90 percent to 566 projects from 300 projects in the same period the previous year.
Foreign investors seem to be more enthusiastic about investing here, as indicated in the amount of money they spent during the first seven months of the year. The value of realized domestic investment in the same period was almost unchanged.
Although in terms of the number of projects, domestic investment rose more than 100 percent to 137 projects from 65 projects in the previous period, their total value only rose slightly to Rp 9.69 trillion from Rp 9.39 trillion.
The majority of the foreign investment projects were located in West Java, with a total value of $1.79 billion and 124 projects, Greater Jakarta ($1.23 billion, 209 projects), East Java ($552.2 million, 30 projects), Banten ($511.5 million, 47 projects) and South Sumatra ($123 million, three projects).
A similar trend was seen in the approval of fresh investment projects. According to data from the BKPM, foreign investment approvals rose 80 percent to $6.63 billion (949 projects) from January to July of this year, from $3.71 billion (713 projects) in the same period last year.
Domestic investment approvals surged to Rp 31.51 trillion (136 projects) from Rp 28.71 trillion (120 projects).
With Indonesia still struggling to lure back investment, the BKPM data should provide fresh hope of a return of foreign investment, which is badly needed to quicken the pace of economic growth.
Asia Times - August 27, 2005
Bill Guerin, Jakarta -- A week after investors were promised a better deal, including lower taxes, surging world oil prices are dealing Indonesia's economy a double whammy, battering the currency and blowing out the domestic budget.
A week ago, the rupiah closed at 9,985/9,995 to the dollar after briefly hitting the psychologically important level of 10,000. This week, despite intervention from Bank Indonesia, the central bank, the beleaguered currency dropped to fresh lows. Traders sold off the currency amid thin dollar supplies and fears the central bank would not keep up its earlier aggressive defense of the rupiah. So far it has lost 9.7% of its value this year and efforts to support it have cost at least US$5 billion since April.
Panic buying of dollars by local businesses to pay for imports, and, in many cases, service dollar-denominated debts, extended the rupiah's two-week slide to 10,300 per dollar, the currency's lowest point since February 2002. At least one local analyst was prompted to say the situation could prove to be "very dangerous". Arguing that the current scenario is similar to that during the run-up to the 1997-1998 financial crisis, Kahlil Rowter, head of research at Mandiri Securities, said any further slide of the rupiah would no longer depend on technical factors.
Economists warn that the central bank needs to take drastic moves to signal a full-blooded commitment to defend the rupiah. On Wednesday, it raised a key interest rate by a quarter of a point, to 7.5%, to encourage rupiah buyers, but further rate increases could push up government borrowing costs and impact on economic growth. Overall, the economy grew 5.54% in the second quarter, down from 6.19% in the first. The government forecasts GDP growth of 6% in 2005 and 6.2% in 2006, the fastest pace since 1996.
However, Burhanuddin Abdullah, the central bank governor, says that although the bank will continue to try "to reduce volatility", what is important is not the level of the rupiah but stability, so that businesses can "make their plans". These sentiments are at odds with the perception of the business community.
Mohamad Hidayat, chairman of the Indonesian Chamber of Commerce and Industry (KADIN), was quoted as saying: "It is true that businessmen are panicky. It happened after they realized that the rupiah is moving out of control." Industry is now facing a serious risk of foreign exchange losses and rising costs for raw material imports, he said.
The Coordinating Minister for the Economy, Aburizal Bakrie, who was KADIN chairman for 10 years before being appointed to the cabinet, has warned the central bank's intervention would only be "temporarily" effective in curbing the rupiah's fall and what is needed to ease pressure on the currency is a change in the fuel subsidy policy.
Bakrie said one factor that has caused the rupiah's depreciation is the public perception that the country is facing a huge budget deficit, even though the current account and capital account are expected to post a surplus of $4.7 billion this year. He blamed poor market sentiment over the potential impact of subsidies on the budget deficit, though conceding that the main pressure on the currency was due to the need to spend dollars for oil imports and then subsidize fuel at the same time.
The central bank has bought around Rp13 trillion in the last four months while, conversely, the government has been buying dollars to finance subsidies. Indonesia is the only OPEC member that is a net importer of oil. State oil giant Pertamina needs on average $1 billion every month to import crude oil and refined petroleum to meet a rapidly growing domestic demand. The 2005 budget assumes Rp76.5 trillion will be spent on selling fuel at below- market prices. Yet at current fuel-consumption levels, and with oil prices above $60 dollars a barrel, subsidies would need to be almost doubled to Rp150 trillion ($15.3 billion).
Rolling back the costly subsidies, however, and forcing consumers to bear more of the brunt of record-high costs, could lead to a social and economic backlash. Bakrie said the government needed to shift to a more targeted subsidy system as the current policy has often led to illegal sales of subsidized fuels to industrial customers. By Wednesday, President Susilo Bambang Yudhyono had entered the fray, promising the government and the central bank would act quickly to bolster the rupiah, and urging currency speculators to stop selling the rupiah.
"We have agreed that we'll take concerted efforts to overcome the rupiah's weakness," Yudhoyono told journalists after an unprecedented late-night meeting with senior officials of Bank Indonesia. "We will continue to reduce the deficit and [fuel] subsidies, without sacrificing the lower-income people whom we have to protect," he said.
Plugging the gap
The state budget has been a constantly moving target for months. The Megawati administration had set a 2005 budget deficit target of 0.8% of GDP but in March the new government revised this to 1.07% to reflect the impact of higher oil prices. The draft 2006 budget outlined in the president's first "state of the nation" speech to the House of Representatives assumes a reduced deficit of 0.7% of GDP. Yudhoyono warned that the financing challenge of the budget "is not less menacing" given the need to repay maturing foreign debts of Rp60.4 trillion and domestic debts of Rp30.4 trillion. Interest payments of Rp73.5 trillion are also due this year.
There are limited options to increase revenues. The government plans to increase the sale of bank assets to help achieve the budget deficit target. Funds are expected from privatization and disposal of banking assets held by state asset management firm PT Perusahaan Pengelola Aset (PPA). The full-year asset sales target for these assets, taken over by the government during the financial crisis, has been raised to Rp5 trillion from Rp4 trillion.
Overall, state revenue is estimated at Rp539.4 trillion in 2006, up from Rp491.59 trillion for this year. This will come from tax revenues of Rp402.1 trillion, non-tax revenues ofRp132.6 trillion and grants of Rp4.7 trillion. Another Rp19.6 trillion will come from government investment account and treasury bonds sales and Rp29.9 trillion in foreign loans.
The show must go on
Despite the growing uncertainty, the government is moving on with its commitment to create a business-friendly regulatory environment and push for more inward investment. Draft revisions of the tax legislation based on Ministry of Finance proposals have been hailed as they offer relatively low tax rates while encouraging better compliance among taxpayers. The president has promised to cut taxes for listed companies and said he would triple the minimum threshold for personal taxation in a bid to attract support from lower-paid workers.
The drafts propose a reduction in the corporate income tax rate to 28% in 2007 and 25% in 2010, down from the current 30%. Personal income tax rates would be reduced to 33% in 2007 and 30% in 2010 from a current rate of 35%. The ceiling on luxury taxes, targeted in particular at luxury cars, is to be raised to 200% from 75%. However, the draft laws have still to be debated and approved by parliament. Hidayat said the draft laws offered incentives that would not only stimulate the economy but also help expand the tax base through the introduction of a simpler taxation regime.
Approved foreign direct investment jumped 79% to $6.64 billion from $3.71 billion in the same period last year. The Investment Coordinating Board (BKPM) and the Coordinating Ministry for the Economic Affairs will co-host the Indonesian Global Investment Forum in September. This will promote investment opportunities in SE Asia's largest economy to exclusively invited audiences of institutional and foreign direct investors in London and New York. Bakrie will head up the forum in London and the president will join key government ministers and corporate leaders in New York.
Some comfort came from the IMF whose managing director Rodrigo Rato emphasized that despite the "inflationary problem", Indonesia's economy was on a "strong footing". The sting in the tail was his reminder that though subsidies may be politically very popular, they are not efficient. The Indonesian government must accept that "masquerading the reality of oil prices is not a sustainable policy".
[Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 20 years as a journalist. He has been published by the BBC on East Timor and specializes in business/economic and political analysis in Indonesia.]
Jakarta Post - August 25, 2005
Dadan Wijaksana, Jakarta -- While at first it was attributed mainly to a run-of-the-mill supply and demand imbalance, the rupiah's continued slump has now been blamed on another factor that is much tougher to handle -- eroding market confidence.
The breaching of the psychologically sensitive threshold of 10,000 this week indeed has dealt the latest blow to the already weak market perception toward the domestic fiscal authorities, over whether they can weather the storm of negative sentiment that is pounding the rupiah, thereby stemming its dive against the US dollar.
After living dangerously last week -- when the local currency twice pipped the 10,000 level temporarily during midday trading before retreating after suspected heavy intervention from the central bank -- the rupiah on Monday failed to hold its ground and closed at 10,030, the weakest since March 2002.
Having witnessed the rupiah's plunge go largely unchallenged in the past several months, and coupled with little, if any, positive factors for the currency, it is hard to see it strengthening in the near future -- which will keep a market confidence revival further at bay.
Over the course of the year, it has lost more than 8 percent of its value. Fears are already looming that the rupiah, now well over the 10,000 level, could snowball even further, edging farther and farther away from a desired level of about 9,000.
The dollar's renewed strength against other major currencies recently, particularly on the back of the continuing hikes of the key US interest rates, has also been blamed for the rupiah's fall on the external front.
The bigger problem however, lies on the domestic front, namely the constant high demand for dollars -- both for imports and dollar-dominated debt payment needs.
This already frail condition for the rupiah has been severely worsened by the stubborn crude oil prices in the global markets, dangling currently at record-breaking levels of above US$60 a barrel -- at a time when a lack of investment in the sector has now made the country a net oil importer.
The government, through state and oil firm PT Pertamina, needs a large sum of dollars to import petroleum products, both crude and refined, to meet the rapidly growing domestic fuel consumption demand. Roughly, about $1 billion per month is needed to be spent to secure fuel supplies domestically.
The situation is equally disheartening on the supply side, where the absence of capital inflows from the government's privatization program has further deteriorated the prevailing dollar imbalance in terms of supply and demand.
Economic fundamentals and policies too, should share a fair amount of the blame. Take the country's current account for example, it has reached a deficit in the second quarter faster than the central bank's expectations, as the country's imports have risen by some 30 percent as compared to export increases of 14 percent.
The market is also far from impressed by the government's newly proposed 2006 state budget, which contains assumptions deemed entirely unrealistic, most notably those of the rupiah and the oil price, which have been forecast at Rp 9,400 and $40 a barrel, respectively.
On the part of the central bank, its relatively slow moves to adjust domestic interest rates in parallel to US interest rates has made the rupiah even less attractive vis-a-vis the dollar.
Against this backdrop, the rupiah seems to have fallen victim to all the negative factors directed against it, which in the end, helps provide bargain-hunters room to speculate against the local currency, pushing it to the edge of a further plunge.
Not that there have not been efforts put in place to try to prop up the rupiah; indeed the central bank has set out a number of measures, mostly to curb speculators.
In July, it tightened rules on foreign exchange transactions, to make sure that they would be conducted with genuine underlying need.
It also sets the maximum foreign exchange derivative transaction against the rupiah, which has been reduced from $3 million to $1 million per day, while swaps are also limited to $1 million.
Still, the rupiah slide is showing little signs of abating, even as the central bank has reportedly been active in the market, using its intervention tools to help keep the rupiah in check.
Apart from continuing to selectively utilize its market intervention tools, the central bank should also work harder to provide more space for a further hike in benchmark interest rates, but at calculated paces, so as not to push the lending rates drastically up and put a brake on business activities.
For the government, tougher measures should be put in place for exporters who opt to stash their proceeds in offshore banks, which could instead make available more dollars for the domestic market.
Minister of Finance Jusuf Anwar said of the rupiah's recent slide; "Don't worry.. be happy..." -- in an apparent move to comfort to the market.
Well, not too many people will be happy if the rupiah continues to dive in such a precipitous manner.
| Opinion & analysis |
Jakarta Post - August 28, 2005
M. Taufiqurrahman, Jakarta -- Shopping malls are booming. Developers vie to build new malls on optimism that consumption, which has become the main driver of the economy over the past several years, will remain strong. But, how many malls do Jakartans really need? This week's cover story highlights the issue.
Aside from its perennial traffic congestion, Jakarta now -- or at least since its recovery from the economic crisis of the late 1990s -- has a new feature; the aggressive construction of new shopping malls.
As if the existing malls were not enough to appease Jakartans' hunger for frittering away their money, in almost every corner of the crowded metropolitan area one can find heavy machinery working around the clock to build what is going to be the steel- and-class construction called a mall.
Along with the construction frenzy, developers are looking for new ways to hype their products by creating brands such as World Trade Center (WTC), International Trade Center (ITC), Plaza, Piazza, Shopping Junction and other names that come to mind, when in fact there is nothing to indicate that one is all that different from the other.
If one mall succeeds in finding new ways of luring leisure- seeking Jakartans, other developers soon make a carbon copy of the concept in other locations.
Drive around the city and many parts of greater Jakarta and you can easily spot dozens of malls currently under construction -- including some in the most improbable of locations, such as Cibubur and Bumi Serpong Damai -- that took their template from the first "town square" mall in Cilandak, South Jakarta.
While there has not yet been a comprehensive study about exactly how many malls are actually needed for the twelve-million odd Jakartans, developers always base their ventures on the assumption that the capital is still in need of shopping space.
The construction of new malls was at full-throttle in the wake of the economic crisis that hit the country in the late 1990s.
The intensified construction of malls is now capitalizing on the consumption-driven economy, in which lenders believe that injecting their money into the financing of new malls would quickly generate profits, rather than engaging in more risky production-side activities such as the construction of new factories.
The construction frenzy also relies on the rise in consumption by the public. Statistics produced by Bank Indonesia (BI) show that retail sales increased by 18 percent in July this year from the same period last year.
Statistics also show that the construction of new malls in the capital and its surrounding regions has reached an alarming pace.
The supply of shopping space over the past five years in Jakarta and its surrounding regions in fact surpassed the combined figure of shopping space constructed between 1975 and 2000.
Between 1975 and 2000, the total amount of shopping space constructed was 3.2 million square meters with a market value of Rp 46 trillion (US$4.5 billion). The figure doubled only in a five-year period between 2001 and 2005 and is projected to reach 5.2 million square meters with a market value of Rp 90 trillion.
From a business point of view, a property expert warned in late 2004 that although the supply of shopping space was still at a healthy level, an oversupply would materialize in 2005 or 2006.
Meanwhile, an urban planner balked at developers' arguments that the ultimate objective for the construction of new malls was to turn Jakarta into a city of commerce or service just like Singapore.
Architect Yayat Supriatna of Trisakti University said that the argument was baseless that served as a subterfuge for their rent-seeking motives.
"The fact is that it is only traders from countries in Africa who are willing to shop here. And they don't go to those plush shopping malls, but to the less glamorous Tanah Abang market," he told The Jakarta Post.
He also said that the argument that Jakarta was still in need of new malls was implausible as according to a healthy ratio between the population and the available shopping spaces, the metropolitan area would only need one or two new malls.
"My estimation is that Pondok Indah Mall in South Jakarta at six hectares can accommodate 1.5 million people. The figure is equal to the 20 percent of middle to upper class residents who are targeted by such a mall," he said.
Most plush shopping malls in Jakarta sell foreign branded items or are franchises of foreign companies whose price tags are beyond the reach of ordinary Jakartans.
Yayat also warned that the unchecked construction of new malls has taken its toll and is degrading the quality of Jakarta as a livable metropolitan city.
He said that apart from encroaching on the city's green areas, the construction of new malls would also sap future fuel reserves.
"Shopping malls need a huge quantity of energy to keep their air conditioning machines running, which in turn will also produce more gasses that contribute to the greenhouse effect," he said.
Jakarta Post Editorial - August 30, 2005
The attacks and forced closures of churches throughout the country in the last four years have reached an alarming level for Indonesian Christians, both Protestant and Catholic. They see no sign that the government has the capability -- and more importantly -- the political will to prevent, or at least to minimize, the blatant betrayal of the 1945 Constitution, which guarantees freedom of religion for all of the country's citizens.
In most cases, the government has rarely been serious about punishing those who use violence to close down churches or silence moderate Muslims who have different views from the extremist groups.
The government's attitude of not creating "unnecessary" problems with the hard-liners that take matters into their own hands, was reflected by the statement of Minister of Religious Affairs M. Maftuh Basyuni last week. He said that the government would not prosecute the Muslim groups that closed down at least 23 churches over the past year in West Java alone, but instead asserted that the churches were built by "illegal congregations."
Many Protestants -- with a dozen or so denominations -- feel helpless because it is nearly impossible to build a church, while still meeting all the regulations required, even those that have been waiting for years to get authorization. So in lieu of full authorization, many have decided to plant churches without the official licenses because they were nearly certain that they would never be granted such permits.
On the other hand, as reflected in the statements of the regional branches of the Indonesian Ulema Council (MUI) during the MUI national congress last month, more Muslims seem to be alarmed by the threat of conversion from Islam to Christianity and have vowed to take all necessary measures to stop such conversions, including a clampdown on the aggressive construction of churches in many places. Perhaps not many Muslims realize there are over a dozen Protestant denominations, and each group wants to set up their own churches no matter how small their number is.
There are general sentiments among many Muslims that the number of churches are not equal to the number of Christians living in a particular area where the churches are located. They suspect that is a result of conversions to Christianity becoming the prime source of the construction of more churches in many places in Indonesia.
"The phenomenon of the construction of churches in this province is most disturbing," said a Jambi delegate at the MUI congress. While a delegate from Cilegon in Banten province, expressed his pride at the achievement that "there is not a single church in Cilegon to this day." The minority groups often feel discriminated against by the state, while the majority of Muslims often perceive that the minority groups -- non-Muslims -- control the country's economy, and that they are the majority only in terms of quantity and not quality.
Many Christian denominations, however, have often fueled the fire that threatens to burn them, as they openly proselytize to Muslims telling them that Jesus is the only way to heaven. Learning how to behave ourselves among our majority compatriots is also important to prevent conflicts.
We can no longer hide this bitter fact. It is ridiculous to conclude that freedom of religion is becoming extinct in this country, but it is also absurd to say that there are no interfaith problems here.
It is time now to stop pretending that Indonesia is a perfect model for religious tolerance and that, "Indonesians are very tolerant against those who have different faiths and that there is no problem of religious freedom here." It is time to concede honestly that the people of this nation are less tolerant now toward differences in religion. Only by opening the wounds and diseases, together we can cure the illness. Let us honestly concede that we have trouble in religious relations, because only with an honest, open-minded attitude can we rid ourselves of the problems.
It is not enough just to involve prominent religious leaders in inter-religion dialogs, because often an agreement will be reached on paper. But the full and effective involvement of the grassroots people in the dialog process is the only way to get more real exchanges of views. Let them talk each other openly to find possible solutions, but still in the constructive spirit of the citizens of Indonesia.
The people can be proud to be the world's third largest democracy after India and the United States, as well as the nation with the world's largest Muslim population, in which Islam is regarded as a model for tolerance and moderation. Hopefully, we will not tarnish those things due to impatience and a lack of respect for others who have different beliefs and opinions.
Jakarta Post Editorial - August 24, 2005
Remember early January 1998 when the rupiah crashed through the 10,000-to-the-dollar barrier two days after then president Soeharto unveiled his draft 1998-1999 budget? The four-fold fall of the rupiah was then precipitated by what the market perceived to be unrealistic budget proposals, which defied the urgent imperatives for drastic reform and belt-tightening measures.
What happened on Monday was by and large a similar phenomenon, though on a much smaller scale. The rupiah depreciated from Rp 9,985 on Friday to Rp 10,030 -- its lowest level in the past 41 months -- and the stock market fell 1.1 percent.
However, the development here bucked the regional trend as most currencies and stock prices in other Asian markets firmed up. The main cause of the bearish sentiment in Jakarta is the market distrust in the draft 2006 budget that President Susilo Bambang Yudhoyono proposed to the House of Representatives last Tuesday as well as the uncertainty over policy direction.
Chief economics minister Aburizal Bakrie has tended to downplay the rupiah decline, as he considers it simply the work of market mechanisms. Since the rupiah is floated against a basket of currencies it is supposed to fluctuate.
However, such a laid-back attitude is damaging the credibility of the government because this negative sentiment, if allowed to escalate, could turn into a self-fulfilling prophecy.
Worse still, the new set of measures launched last month to prevent speculative attacks on the rupiah has seemingly been unable to beef up the rupiah. The government and Bank Indonesia last month launched joint arrangements whereby the central bank directly supplies the foreign exchange needs of state oil and gas company Pertamina for importing crude oil and oil products and other state-owned companies to purchase dollars from designated state banks.
But the rupiah has declined steadily this month even though foreign exchange derivative transactions with foreign counterparts against the rupiah have been limited to a maximum US$1 million, down from a previous $3 million and dollar purchases in outright forward transactions, swaps have been capped at $1 million and a three-month minimum investment hedging period has been imposed on foreign exchange transactions.
The key assumptions used by the government to construct its 2006 budget plan have been seen by most analysts and market players as utterly unrealistic, causing market distrust in the government's fiscal management.
The government's assumption of $40/barrel as the average price of oil for the whole of next year, compared to at least $55 as foreseen by most analysts, has put the national budget at the mercy of international oil-price volatility, thereby causing uncertainty about the budget's fiscal sustainability and the prospect of the country's balance of payments.
The market is nervous that the government does not have much leeway in managing its budget deficit, which will most likely be much larger than the Rp 19.8 trillion envisaged in the draft budget, because the fuel subsidy expenditures will be much larger than the Rp 68.5 trillion as budgeted for next year.
Even with such a low oil price projected for next year, the budget plan already requires the government to dip into its savings balance at Bank Indonesia, currently estimated at Rp 22 trillion, and to raise another Rp 60 trillion through new bond issues, divestment and asset sales. Where else can the government get additional revenues to plug the big budget hole? The market is apprehensive that another bout of fuel-price increases is only a matter of time and stronger inflationary pressures will further push down the rupiah and force the central bank to tighten the credit crunch. This is a lethal combination for the manufacturing industry as most factories still rely on imported materials and components. But businesspeople are in the dark about when and how these painful measures should be taken.
This vicious cycle will surely increase the government's burdens of servicing its foreign and domestic debts and this, in turn, could cause the fiscal deficit to explode to an unsustainable level, thereby raising the sovereign risks. Higher sovereign risks would consequently increase the government bond yields as investors, instead of buying new bond issues, would decrease their government bond portfolio.
The government could be correct in its conclusion that the current rupiah rate developments were not truly reflective of the economic fundamentals. But it is entirely misguided for the government not to act immediately and firmly to address the market apprehension because the steady fall in the rupiah rate and its negative repercussions are affecting macroeconomic stability and will eventually damage the economic fundamentals