News & issues

Ban urged on new loans for debtors

Jakarta Post - April 18, 2007

Tony Hotland, Jakarta – Highly troubled debtors that misused emergency liquidity support from Bank Indonesia during the 1998 regional financial crisis should be barred from new borrowing, a discussion here heard Tuesday.

Denny Kailimang, the chairman of the Indonesian Bar Association, which hosted the talks, said such debtors, who are believed to be unofficially running new banks, should not be allowed to apply for new loans.

"Those corrupters... should never be allowed to engage in credit applications or run banks. The central bank, as the key regulator, should be alert and firm over this," he said.

A number of troubled bankers who allegedly stole hundreds of trillions of rupiah from the Bank Indonesia liquidity assistance, and later fled the country to avoid prosecution, have been allowed to return to Indonesia, on the condition they pay back the lost funds.

Others who remain overseas, or those affiliated with them, are suspected of being behind new banks or financial consortiums without being officially listed.

The chairman of the Association of Young Indonesian Businessmen, Sandiaga Uno, said allowing these debtors to apply for and receive loans would be particularly unfair to small and medium businesses that might otherwise receive this money.

Small and medium enterprises, he said, account for 90 percent of businesses in the country and were significantly unaffected by the 1998 financial crisis.

"Many of these big-time debtors had their financial obligations reduced, while small businessmen were forced to pay their obligations in full," said Sandiaga.

The director of compliance at Bank Mega, Suwartini, said each bank had its own procedures for approving credit requests. However, he said banks were not allowed to accept credit requests from anyone who had been blacklisted by the central bank.

"I wouldn't say they should never be allowed again to apply for credits if they're already off the list. Each bank has its own scoring and evaluation process for processing credit requests," she said.

Vice President Jusuf Kalla has said that banks should be more aggressive in disbursing loans to help the country's real sector, which has not experienced significant growth since the economic crisis.

Kalla also said troubled debtors should be given the chance to receive new banks loans.

Pedicab drivers and Papernas demonstrate in Madiun

Metro TV News - April 23, 2007

Madiun – As many as 200 pedicab drivers together with members of the National Liberation Party of Unity (Papernas) held a demonstration in the East Java city of Madiun on Monday April 23.

They started the action with a convoy through the streets of the city then blockaded a bus route on the Madiun city ring road, which is the main inter-city highway between provinces.

The blockade was carried out because of the pedicab drivers' disappointment with the Madiun municipal government that has failed to respond to their demands in a timely manner. The drivers are opposing the establishment of new bus routes along the ring road that no longer go into the city.

After blockading the bus route, the demonstrators then went to the offices of the Madiun mayor on Jl. Pahlawan. In a symbolic protest, they overturned their pedicabs on the grounds of the mayor's office. (DOR)

[Translated by James Balowski.]

Indonesia's Jemaah Islamiah forms hit squad: paper

Reuters - April 16, 2007

Singapore – Southeast Asian militant network Jemaah Islamiah has formed an assassination squad to attack police, prosecutors and judges, a Singapore newspaper said on Monday, citing an Indonesian official.

Ansyaad Mbai, head of the anti-terrorism division at Indonesia's security ministry, said the group planned to target a list of "infidels" including the rector of a Christian University and an official at the Attorney-General's Office in central Java, the Straits Times reported.

Officials uncovered the assassination plans after a series of raids in Java last month, when investigators found charts detailing Jemaah Islamiah's new structure, as well as a large cache of arms including M-16 rifles, the paper said.

"This has never happened before. These M-16s are not hidden in the forests but are carried around. They are well-prepared to use the rifles in pursuit of a target," Mbai was quoted as saying, adding the group was targeting locals and foreigners.

The strength of the assassination squad was not known, but the paper said it might be part of a new military wing formed by Abu Dujana, a senior Jemaah Islamiah operative who officials have said has taken over as the group's leader.

Jemaah Islamiah has been blamed for several deadly attacks in Indonesia, including the 2002 Bali bombing that killed more than 200 people. Founded around 1993, Jemaah Islamiah has a goal of creating an Islamic 'superstate' across the region.

Politics & ideology

Papernas declaration in Medan cancelled after harassment

Sindo Newspaper - April 19, 2007

Medan – A declaration and inauguration by the National Liberation Party of Unity (Papernas) in the North Sumatra provincial capital of Medan has been canceled. The event was planned to be held on the grounds of the Merdeka Medan Square on Tuesday Afternoon.

The chairperson of Papernas North Sumatra, Johan Merdeka said that because the political situation in North Sumatra has been hotting up, in the end they decided to postpone the declaration and inauguration.

Johan said that they had initially planed to hold the event on Wednesday April 18 at the Merdeka Medan Square. "Why was it put off, firstly because the political situation in the North Sumatra is hotting up. Secondly because of the communist stigmatisation by the FPI (Islamic Defenders Front) and concerns that there would be an attack. Thirdly, comrades at the local level weren't ready yet", he explained.

Meanwhile the head of the North Sumatra FPI Indra Suheri rejected claims that people from former President Suharto's New Order dictatorship were using FPI for their own ends. According to Suheri, accusations such as this are slanderous. "These kinds of accusations are slanderous. During the administrations of [former presidents] Habibie, Gus Dur and Megawati, we were often slandered in this way. Whereas our aim is none other than uphold the law in this country", he said. (m syahyan rw)

Notes:

The Islamic Defenders Front (FPI) was founded in 1998 by Habib Muhammad Rizieq Shihab and had links with the then commander of the Jakarta police. It was initially set up along with other military-backed Muslim vigilantes groups such as Pamswakarsa to counter student demonstrations ahead of the 1999 Special Session of the People's Consultative Assembly, which was to hear the accountability speech of former President Suharto's hand picked successor President B.J. Habibie. The group later went on to adopt a conservative religious ideological platform and is best known for vandalising Jakarta nightspots. There have been numerous allegations that this is simply a camouflage to extort money from gambling and prostitution businesses.

[Translated by James Balowski.]

Police postpone Papernas conference 'for the sake of security'

Koran Sindo - April 19, 2007

Tuban – A planned regional conference of the National Liberation Party of Unity (Papernas) in Tuban, East Java on Wednesday April 18 has failed to take place. This was because some 150 members of the Islamic Defenders Front (FPI) held a demonstration opposing the conference in which they set fire to flags with the symbol of the hammer and sickle.

The hundreds of FPI members held a march along Jl. Wahidin Sudiro Husodo in the direction of a tennis court located alongside the Tuban police headquarters and the District Military Command (Kodim). During the action they shouted slogans against the Indonesian Communist Party (PKI) that they claim is the basis of Papernas' struggle.

"Be vigilant against the revival of the PKI, don't let Papernas grow", shouted KH Yahya Romli, the head of the Langitan Religious Pupils Association (Kesan) during the protest.

Aside from the FPI and Kesan, there were also demonstrators from Hiszbut Tahrir Indonesia (HTI), the Islamic mass organisation Muhammadiyah, the Anti-Communist Front (Gertak), the Indonesian National Movement of Patriots (GNPI) and a number of Islamic boarding school networks in Tuban and Lamongan. "Don't let the PKI grow again", said FPI Lamongan chairperson Zaenal Arifin.

Tuban district police chief Assistant Superintendent Bambang Priambadha confirmed that Papernas had notified them that they would be holding a meeting to establish a regional leadership board in Tuban. However for the sake of maintaining security the police have had it postponed. "For the sake of maintaining security, we have postponed the Papernas meeting", he said.

Speaking separately, the organiser of the Papernas conference, Surojo said they objected to it being said that the party has a communist ideology. Papernas' Three Banners of National Unity – the abolition of the foreign debt, the nationalisation of foreign mining companies and building the national industry for the welfare of the people – is a struggle to bring prosperity to the ordinary people. "We are well aware that there will be obstacles in this struggle", he said. (nanang fahrudin/SINDO/kem)

[Translated by James Balowski.]

Papernas declaration postponed due to threat

Kompas Cyber Media - April 19, 2007

Tuban – A planned declaration of the National Liberation Party of Unity (Papernas) in the Tuban regency of Central Java yesterday has been canceled. It is understood that this followed threats by a number of Islamic organisations in Tuban and Lamongan regency affiliated with the Anti-Communist Islamic Community Front (FUI-AK).

The organisations affiliated with FUI-AK include among others the Indonesian Council for Islamic Propagation (DDII), the Muhammadiyah Youth Force (AMM) and the Islamic Community Concern Forum for Islamic Law (FUI-PD). A number of kiai (religious teachers) and santri (religious pupils) from the Tenggulun Village Al Islam boarding school in the Solokuro sub-district of Lamongan and the Mambaul Ulum Tuban Islamic boarding school are also affiliated with the group. Among others they include KH Yahya Romli (the caretaker of the Mambaul Ulum Islamic boarding school), Ustad Zainal Arifin, Habib Muksin, Ustad Al Faruk, Idrus Al Jufri and Mujud M.Z.

Since early morning around 100 FUI-AK members, the majority of which wore religious clothing, robes, turbans and caps, had gathered on the terrace on the grounds of the Annur Mosque, around 200 meter to the east of the KSPKP Building on Jl. Wahidin Sudirohusodo in Tuban, where the Papernas declaration was to take place.

Apparently threats by FUI-AK had been received and read by those planning to declare Papernas and it was reported that on Tuesday night they decided to cancel the declaration.

Security personnel meanwhile were already anticipating the worst in relation to the "opposition" from FUI-AK and around 145 soldiers had been readied at the Tuban district police headquarters. This did not include intelligence personnel and officers from the criminal investigation division to provide undercover security.

Because by 10.10am there did not appear to be any activity at the KSPKP Building or that there had been a change in the venue for the declaration, FUI-AK members eventually held a rally to the western parade ground at the 0811 Tuban District Military Command Headquarters. During the rally they carried banners with the message, "Uphold Tap MPRS XXXV and UU 27/1999 on the Prohibition of Communist Teachings"(1) and shouted anti-communist slogans. "Crush communism, crush Papernas", yelled the demonstrators.

At the parade ground, FUI-AK figures took turns giving speeches. Muksin stated that communist ideology would destroy the nation. Because of this, all elements of the nation must be on guard against the rise of new forms of communism. According to Muksin, the birth of Papernas on January 18-20 in Yogyakarta, Central Java, is one of the forms of the revival of communist ideology in the Fatherland.

Romli meanwhile said that no matter how it is repackaged, this communist ideology remains visible. Because of this, he called on Indonesian society not to be apathetic. "We oppose communism", he shouted. After hearing the speech the demonstrators a noisy group set fire to flags with the symbol of the Indonesian Communist Party.

As of going to print, the person responsible for organising the Papernas declaration, Sutojo, who provided notification of the event to police was unable to be contacted to confirm whether the declaration had been cancelled as his cell phone was inactive. (ds)

Notes:

1. Tap MPRS XXV/1966 - MPRS Decree Number XXV/1966 on the Dissolution of the Indonesian Communist Party and Prohibitions on Marxist, Leninist and Communist Teachings.

2. Law No. 27/1999 is a revision to the Criminal Code that codifies the MPRS Decree.

[Translated by James Balowski.]

Papernas to lodge complaint over New Order style harassment

Jawa Pos - April 17, 2007

Kendal – In the aftermath of the forced adjournment of a regional conference of the National Liberation Party of Unity (Papernas), Papernas' Kendal regional leadership board (DPD) intends to report the incident to the Central Java regional police. They believe that the actions by police in creating difficulties over a permit and the adjournment of the event is evidence that the police are not acting independently and that there was interference by the TNI (Indonesian military) similar to that which used to occurred under New Order dictatorship of former President Suharto.

During a press conference yesterday, Kendal DPD Chairperson Azharudin said that police should not have made a problem over obtaining a permit for the event. How was it that there were problems when there were to be only 22 participants or less than 50 people at the event. "We will lodge a report with the Central Java regional police because in accordance with Law Number 9/1998 an event with less than 50 participants should not be obliged to obtain a permit", he said.

Moreover he said, three days before the event on Wednesday April 11, Papernas sent a letter of notification to the Kendal district police. However the officer who received it failed to provide a receipt of notification (STTP) and said that they had to consult with the Kendal district police over the matter.

"The police's lack of seriousness in the various procedure to obtaining a permit and security for Papernas is tangible evidence of TNI intervention in police affairs who are interfering in political and civil rights", added Azharudin.

Azharudin said that police had admitted that there was certain agency behind the forced adjournment up of the regional conference late last week, that is the District Military Command (Kodim) that wanted to obstruct the event by the party that has put forward the name of labour activist Dita Indah Sari as a candidate for the 2009 presidential elections. Officials from Kodim O715 Kendal as well as the Kendal district police have denied this however. The commander of Kodim O715 Kendal, Cavalry Lieutenant Colonel Widhioseno said that the forced adjournment of the Papernas conference was entirely under the authority of the police.

FPI threats

Three days before the conference, Papernas also received an SMS from someone claiming to represent the Islamic Defenders Front (FPI). The message from cell phone number 081384555XXX said that the FPI had held a meeting and would an attack the Papernas' Kendal regional conference if it went ahead.

"The SMS was sent to the hotel management whose hotel was also threatened with attack if the regional conference still went ahead", said Azharudin. According to Azharudin, since then it was not members of the FPI that approached them but security personnel, either officials of the National Unity and Social Protection Agency, the district police or Kodim.

Since Papernas was established, the party's events have indeed come under frequent attack by groups who accuse Papernas of being a new form of communism Several events have been attacked including a regional conference in East Java, the party's founding congress in Kaliurang, Yogyakarta and a declaration in Jakarta on March 29. (sof/Jon)

[Translated by James Balowski.]

Aceh

Aceh governor warns government over draft regulation

Jakarta Post - April 21, 2007

Ridwan Max Sijabat, Jakarta – Aceh Governor Irwandi Yusuf warned the government Friday against issuing regulations that may contradict the 2006 Aceh Administration Law without consulting the Aceh provincial administration.

Irwandi was commenting on a draft regulation on the government's national policies in Aceh, which he believes is contradictory to the 2006 law and the 2005 Helsinki peace accord.

He said the draft, believed to have been prepared by the Home Ministry, has angered Acehnese people, who have accused Jakarta of trying to take back the authority given to Aceh.

"The draft is really a reflection of Jakarta's exaggerated fear of Aceh's secession from Indonesia following the Free Aceh Movement's major victory in the 2006 local elections," Irwandi told The Jakarta Post late Thursday.

"It may be part of a domestic attempt by a certain ultra- nationalist group to discredit the current administration in the eyes of the international community."

Irwandi, a former GAM leader sworn in as Aceh governor on Feb. 8 following his undisputed win in the December gubernatorial election, said he was suspicious the draft regulation was prepared based on misleading reports on GAM's post-election underground activities in the province.

"Following our victory in the local elections, numerous reports discrediting GAM have allegedly reached Jakarta. GAM was rumored to have supplied arms in a massive number and I was rumored to have fought for a referendum for Aceh," he said, adding all the reports and rumors were baseless.

Irwandi said the draft regulation was incompatible with the 2006 Aceh Administration Law, which stipulates that Jakarta has full authority only in foreign affairs, the finance and monetary fields, the courts, religion, defense and security.

Meanwhile, the Home Ministry defended the draft regulation, which it said was aimed maintaining Aceh as an integral part of Indonesia and Jakarta's authority in dealing with national policies in Aceh.

"The draft regulation divides the concurrent function or power sharing between the central government, the provincial and regency/municipal administrations in dealing with domestic affairs decentralized to Aceh," chief spokesman for the Home Ministry Saut Situmorang said.

He declined to explain in detail the contentious issues in the draft regulation or say when it would be issued officially.

Contentious issues in the draft regulation:

1. Jakarta has the authority to deal with national affairs in 31 fields including education, health, public works, housing, spatial planning, population administration and civil registration, statistics and libraries.

2. Ministers and chiefs of non-ministerial state agencies have the authority to set norms, standards and procedures of decentralized affairs.

3. The central government has the undisputable authority to liquidate provinces, regencies and municipalities.

4. Emphasize on Aceh as part of the Indonesian unitary state.

Sharia policeman caught with girl

Jakarta Post - April 20, 2007

Nani Afrida, Banda Aceh – A member of Aceh's sharia police was caught with a teenage girl in a Banda Aceh public bathroom on Thursday night.

Raihan, 33, and Magda, 17, were found by military personnel patrolling Ie Masen village in Ulee Kareng district. The two were handed to village officials. "They were caught at 1:30 a.m. inside a public bathroom," Jamaluddin, the village's secretary, told The Jakarta Post on Thursday.

The village residents decided that the two, who were alleged to be lovers, should get married in accordance with the local custom.

Raihan said he was wrong and had acted against sharia, which has been implemented in the province since 2001. "I confessed my wrongdoing and I'll marry her," he told journalists. He said the two were childhood friends and both had no living relatives.

The sharia police chief in Banda Aceh, Bahagia, said he could not decide what to do with Raihan. "I've no comment. No decision has been made on his punishment," he said.

Raihan's case adds to a long list of sharia violations by Aceh officials this month.

Sabang district court head Puji Wijayanto was recently caught with his girlfriend Rina, although the case is still being processed as he has claimed the two are relatives.

Meanwhile, police officer Darus was caught with a girl in a car in Kuala Batu airport's parking lot in Susoh district.

A large number of people founding guilty of gambling, drinking alcohol and "indecent acts" have been punished with public caning in the province.

Aceh province moves to exploit natural-resource potential

Jakarta Post - April 19, 2007

Andi Haswidi, Banda Aceh – Aceh is a province that is blessed by abundant natural resources and wealth that have long lain undeveloped due to a 32-year insurgency that only recently came to an end.

Now, in a new era of peace and development after the long years of civil unrest and the 2004 tsunami disaster, the opportunities for business appear almost endless in the country's westernmost province.

The region is blessed with bountiful mineral, energy, marine, agricultural and plantation resources that are now open to new investment.

According to a recent report from the Energy and Mineral Resources Ministry, the province holds an estimated 20 million tons of gold, 600 million tons of copper, 32 million tons of platinum, 32 million tons of mercury, 53,000 tons of lead, 350,000 tons of iron ore, 6.4 million tons of iron sand and 600 million tons of molybdenum. On top of all that, it also boasts some 114 billion tons of coal reserves.

"The mining and energy potentials described by the report illustrate just how big the opportunities are. And almost all of these resources have never been touched before due to the long years of conflict," Aceh Investor Outreach Office director Syafruddin Chan told The Jakarta Post in Banda Aceh on Wednesday.

The mining and energy sectors should serve as the locomotive to get the province's economic growth back on track. Things have already started to move thanks to the Rp 60 trillion (about US$6.6 billion) being invested in rehabilitation projects.

But there is a growing concern that the provincial economy could grind to a virtual halt again after the rehabilitation work by the Aceh and Nias Rehabilitation and Reconstruction Agency (BRR) is completed in 2009.

"We are currently focusing on agricultural and marine products as regards developing the province's economy. However, in the future, the most promising sector will be energy and minerals, such as coal," BRR economics and business deputy Said Faisal Baabud told the Post earlier this week.

Aceh Governor Irwandi Yusuf has acknowledged the importance of mineral resources in the provincial economic plan, despite their adverse consequences for the environment.

In order to minimize destructive environmental impacts, the provincial administration has introduced tight licensing procedures for mining operations.

"We have received a lot of mining exploration proposals, but so far have only licensed three companies," he said as quoted by the local Serambi daily in its Wednesday edition.

In the agricultural sector, key commodities grown in the province include rice, corn, soybeans, nuts, sweet potatoes and other edible tubers.

In 2005 alone, only a year after the tsunami disaster, the rice fields of Aceh produced 1.4 million tons of the national staple. In the same year, Aceh also produced 59,370 tons of Arabica and Robusta coffee, 250,000 tons of crude palm oil (CPO) and 78,031 tons of rubber.

The potential of the marine and fisheries industry in Aceh has yet to be developed. The province has a coastline extending to 1,600 square kilometers, and an exclusive economic zone (ZEE) of 534,520 square kilometers. In all, the province has the potential to produce 173,045 tons of fisheries products per year, excluding the ZEE.

With the help of the World Bank's private sector development firm, the International Finance Corporation (IFC), the province has begun to promote the farming of what are touted to be the world's best black tiger shrimps. Production currently amounts to about 8,000 tons per year, and the industry has the potential to generate annual foreign exchange earnings of up to $50 million.

Investment procedures in Aceh have also been simplified through the establishment of the Aceh One-Stop Investment Service (KPTSP). Business permits can now be processed in 7 working days under normal circumstances, and in one or two days in special cases if all the requirements have been satisfied.

"Aceh is now in need of foreign investors to bring in the capital and the technological know-how to help increase the value of our products. For those who invest a minimum of Rp 5 billion, we are ready to exempt them from paying local taxes," KPTSP director Said Yulizal promised.

For some early birds, the promise of more relaxed investment procedures has been too good to miss. Since it was set up two months ago, the KPTSP has issued more than 1,000 business permits to local and foreign investors.

West Papua

Workers end four-day strike at Freeport Indonesia

Reuters - April 21, 2007

John Pakage, Timika – Thousands of workers at Freeport-McMoRan's Grasberg mine in Indonesia have ended a four-day walkout over welfare that had sent copper prices to seven-month highs, the head of a workers' group said on Saturday.

The mine on the island of Papua produces more than 500,000 metric tons of copper annually and is Indonesia's biggest source of tax revenue.

Frans Pigome, chairman of Tongoi Papua, a group representing native Papuan workers, said they would go back to work on Sunday.

"We are going to ask all workers who have been rallying to return to work immediately," Pigome told a news conference after a meeting with company officials.

Freeport had agreed to increase the standard monthly salary to 3.1 million rupiah ($341) from 1.5 million rupiah, he said. Workers had initially asked for 3.6 million a month. The company had also agreed to set up a department to handle the welfare of native Papuan workers.

He said the firm had also promised to replace a number of senior managers, including Armando Mahler, president director of Freeport Indonesia, if it was found that they had failed to meet the company's commitment of improving the welfare of workers.

The Papuan workers had demanded more career opportunities for native workers, improved recruiting and better pensions. The protest coincided with talks over a new two-year collective labor agreement for Grasberg's 9,000 direct employees.

Mindo Pangaribuan, a spokesman for Freeport Indonesia, said that it had agreed to a feasibility study for the creation of a Papuan Affairs Department and remained committed to increasing the number of Papuans in senior posts.

"Tongoi Papua agreed to channel their aspirations through the authorized workers' union, SPSI, during the ongoing Collective Labor Agreement (CLA) negotiation, including an agreed framework for minimum wages," he said via email after the agreement.

Arizona-based Freeport said earlier on Saturday that mining and milling had been hit, but said stocks were being used for shipping. "We are mining and milling at reduced rates. We continue to ship concentrates per existing schedule from available production and inventories," a spokesman said via e- mail.

Freeport had branded the walk-out illegal but police in Papua had declined to take action against the strikers. It is unclear how many workers had walked off the job. Organizers of the protest put the total at 6,000, but that includes 2,000 with companies sub-contracted by Freeport.

With copper in short supply worldwide, traders have been watching developments closely at the mine.

The walk-out helped lift copper prices above $8,000 per metric ton on the London Metal Exchange on Friday, its highest level since September 7. The all-time high was $8,800, reached last May.

The Grasberg mine has long been controversial because of its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.

[Additional reporting by Mita Valina Liem and Fitra Wulandari in Jakarta.]

Protest, talks continue at Indonesian Freeport mine

Agence France Presse - April 20, 2007

Jakarta – Thousands of mine workers in Indonesia's remote Papua province protested for a third day Friday as marathon talks with US firm Freeport McMoRan over pay and benefits showed signs of progress.

"We have reached agreement on several of the main issues," said Betty Ibo from the West Papuan Workers Union involved in the discussions.

More than 2,000 workers from Freeport's giant gold and copper Grasberg mine started protesting peacefully Tuesday at the headquarters of PT Freeport Indonesia, which operates the mine, just outside the town of Timika.

The protracted dispute centres on demands for higher wages, improved welfare and boosted recruitment of Papuan workers as permanent employees and better advancement.

This week's rally has helped push world copper prices to 8,000 dollars a tonne amid concern disruptions could cause a drop in stockpiles of the metal.

Freeport has said the protest had not impacted on output but an Indonesian government minister said Thursday production had been slashed because of a lack of workers on site.

Ibo said a teleconference with Freeport executives in the United States, a consistent demand of the workers, was expected to take place early Saturday. She said declined to give details, saying she had to return to the talks which were ongoing late Friday.

Critics accuse Freeport of not giving enough to the people of Papua in return for the mine. They allege the mine causes pollution and that the military's protection of the site leads to human rights abuses. The firm disputes the claims.

Freeport operates concessions totalling 3.6 million hectares (8.9 million acres) stretching from the coast to the central mountain range at Timika, with its copper reserves estimated at 2.6 billion tonnes.

It runs its Grasberg mine in southwest Papua under a 30-year contract with the Indonesian government that began in 1992. The company owns 91 percent of PT Freeport Indonesia, with the rest in government hands.

Papua protest cuts Freeport production to 20 percent: minister

Agence France Presse - April 19, 2007

Jakarta – Production at a giant US-run mine in Indonesia's remote Papua province has been slashed to 20 percent due to a protest by thousands of workers, a government minister said Thursday.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said the ongoing protest, which started Wednesday over pay and welfare demands, had slowed operations at Freeport MacMoRan's Grasberg open-pit gold and copper mine.

The underground mine at Grasberg was also running at just 60 percent of normal capacity, he also said, according to the official Antara news agency.

"Even though this is a corporate matter, I call that this be quickly settled in a peaceful manner so that the activities can return to normal," Yusgiantoro said. Freeport has said production has not been disrupted.

The protracted dispute, which centres on demands for higher wages, welfare and increased recruitment of Papuan workers as permanent employees, has helped push world copper prices to seven-month highs.

The minister's comments came as the two sides were locked in talks after failing to reach agreement Wednesday. Thousands of striking workers, mostly native Papuans, continued their peaceful protest.

"They (protesting workers) are now in Kuala Kencana, numbering just as much as yesterday (Wednesday)," said local police officer Yudiantara. Kuala Kencana is the site of the headquarters of PT Freeport Indonesia, which operates the mine, just outside the town of Timika.

Betty Ibo, from the West Papuan Workers Union, said talks were continuing into the evening. It was unclear if a breakthrough was in sight.

Critics accuse Freeport of not giving enough to the people of Papua in return for the mine. They allege the mine causes pollution and that the military's protection of the site leads to human rights abuses. The firm has disputed the claims.

Freeport operates concessions totalling 3.6 million hectares (8.9 million acres) stretching from the coast to the central mountain range at Timika, with its copper reserves estimated at 2.6 billion tonnes.

It runs its Grasberg mine in southwest Papua under a 30-year contract with the Indonesian government that began in 1992. The company owns 91 percent of PT Freeport Indonesia, with the rest in government hands.

Munir case

Police protect key witnesses in Munir case

Jakarta Post - April 21, 2007

Jakarta – The National Police confirmed Friday that it is protecting key witnesses to the 2004 murder of human rights activist Munir Said Thalib.

"We are protecting all the witnesses that we regard as being important as is mandated by the law on witness protection. Even though there has been no request to do so from the witnesses, the police will still proportionally decide whether a witness needs protection," National Police spokesman Comr. Gen. Sisno Adiwinoto told reporters Friday.

Sisno said that police have so far questioned two suspects and 39 witnesses.

"Just be patient with the investigation. We need time for this. An investigation usually takes time because of the need for objectivity. We need more evidence. The Criminal Code does not allow the police to present lone evidence," Sisno said.

"We are still investigating the case and until now have named only two suspects, IS and N. The information we gather from witnesses and suspects is not for public consumption, as it might paralyze further investigations."

The police detained last Saturday former Garuda Indonesia president director Indra Setiawan and Rohainil Aini, the secretary to Garuda's chief pilot.

Meanwhile, National Police chief Gen. Sutanto acknowledged that police were experiencing difficulties in solving the case not only because of the length of time between Munir's poisoning and the current phase of the investigation, but also because the crime scene was outside National Police jurisdiction.

"We are still collecting evidence and questioning witnesses in order to proceed with the case. We will not give up," he told reporters at National Police headquarters. "Anything could happen, even the 39 witnesses could become suspects."

Asked whether several prominent figures from the State Intelligence Agency (BIN) would be questioned, Sutanto said that the naming of any new suspects would be based on solid evidence and not on assumption.

Former BIN chief Hendropriyono and a BIN officer, Muchdi P.R., who have long been implicated in Munir's murder, both announced Monday they are ready to be questioned by police.

Munir was a critic of the Indonesian Military, accusing it of rights violations in the troubled provinces of Aceh and Papua and of running a network involved in illegal logging and drug smuggling.

Munir was found dead Sept. 7, 2004, on the GA 974 Garuda flight to Amsterdam which included a stopover in Singapore. Pollycarpus Budihari Priyanto is the only person ever to have been charged for the murder of Munir, although the verdict was later overruled by the Supreme Court.

Authorities now believe Munir and Pollycarpus were seen talking during a stopover at Changi Airport in Singapore, before both continued their flight to Amsterdam, the Netherlands, on Sept. 7, 2004.

It is now suspected that Munir, who died aboard the GA 972 Garuda flight before it landed in Amsterdam, was unknowingly given arsenic at Changi Airport, not during the flight as was earlier believed.

Skepticism over 'new' suspects in Indonesian activist's murder

Green Left Weekly - April 18, 2007

James Balowski, Jakarta – Indonesian police have named two new suspects in the murder of human rights activist Munir, who died of arsenic poisoning on a Garuda flight from Jakarta to Amsterdam on September 7, 2004.

Following an April 10 cabinet meeting, police chief General Sutanto said that the two were former Garuda Indonesia officials. "They are officials from Garuda with initials IS and R", Sutanto told reporters at the presidential palace.

The initials match those of Garuda's former director Indra Setiawan and corporate security vice-president Ramelgia Anwar. Sutanto said that R had issued an assignment letter to pilot Pollycarpus Budihari Priyanto, the only person ever to be charged in the murder case. "The document was issued on orders from his superior, IS", said Sutanto.

Munir was a stanch critic of Indonesia's military, accusing it of rights violations in Aceh and Papua and of running a network involved in illegal logging and drug smuggling. His work earned him many enemies among Indonesia's military and political elite.

In December 2005 a court sentenced Priyanto to 14 years for the murder, noting that he had not acted alone. Priyanto claims to have been recruited by the National Intelligence Agency (BIN) in 2002. The court heard that prior to the murder he made numerous phone calls to the former deputy head of the agency, Muchdi PR. Muchdi – a former elite special forces commander – was sacked following Munir's investigation into the 1998 abductions of student activists.

In October last year, a Supreme Court verdict cleared Pollycarpus of murder charges, leaving no-one held accountable the murder.

Shortly after being elected president in 2004, Susilo Bambang Yudhoyono promised the public – and Munir's widow, Suciwati – that he would personally ensure a thorough investigation into the case. He even described the murder as a "test case for the nation" and established an officially sanctioned fact finding team (TPF).

In its final report submitted to Yudhoyono in June 2005, the team found evidence that Munir's death was a "well-planned conspiracy" and named a number of Garuda executives and BIN officials who should be investigated. These recommendations were never used by police or at Priyanto's trial and Yudhoyono has refused to make them public – even though the investigation's terms of reference requires this.

Questions have also been raised about whether the "new suspects" are actually new at all, as well as the timing of the announcement.

Legislator Lukman Hakim Syaefuddin, for example, said that while it should become an "entry point" to crack the case, both suspects had already been recommended for further investigation. "This isn't something new, it has long been recommended by the TPF. These people should have been followed up, but it was not done by the police", Syaefuddin told Detik.com.

Responding to rumours a day before the announcement, Rafendi Djamin from the Human Right Working Group said that the Munir case had become a "pebble in the shoe" for Indonesia's attempts to be re-elected as a member of the UN Human Rights Commission next May. Djamin, who headed an Indonesian delegation to the commission on March 12-30, said that several parties raised the Munir case during the commission's last session.

"UN special rapporteur Philips Alston, in an official report on the Munir case to the UN Human Rights Commission made the evaluation that the Indonesian government has shown a cooperative attitude but it was incomplete", Djamin told the Kompas newspaper. Djamin also suggested that the government should invite Alston to come to Indonesia to review the case.

Speaking with Detik.com on April 11, Suciwati said that while the announcement offers some assurance that the case will be solved, she hoped it was not just another public relations stunt. "I hope that this is not just courtesy. Not just merely to entertain us because up until now it has been as if the investigation has stagnated", said Suciwati.

Dispute this Suciwati said she remains optimistic and will continue to fight for justice until the perpetrators are found. "I must remain optimistic and pressure the police to uncover the mastermind", she said.

Ex-BIN officers ready for Munir investigation

Jakarta Post - April 17, 2007

Ridwan Max Sijabat, Jakarta – Two former senior intelligence officers alleged to be connected with the death of rights activist Munir Said Thalib have expressed their support for the investigation into the activist's murder, but only if the investigation heeds to professional and justice norms.

Former chief of the State Intelligence Agency (BIN) A.M. Hendropriyono and former deputy to the BIN chief Muchdi P.R. agreed that the police investigation had to proceed until all those involved in the case were brought to justice.

"The police must go on with their investigation into the case to avoid any war of opinion and unprecedented suspicion. They must carry out the inquiry professionally to prevent them from going beyond the truth," Hendropriyono said after attending the 55th anniversary celebration of the Army's Special Forces (Kopassus) here Monday.

Hendropriyono was the head of BIN when Munir was killed on Sept. 7, 2004. Based on the results of a forensic examination, Munir died of arsenic poisoning, believed to have been administered on a Garuda Indonesia flight from Jakarta to Amsterdam through Singapore's Changi Airport.

It was the second investigation carried out by the police after the Supreme Court acquitted Garuda pilot Pollycarpus Budihari Priyanto of assassination charges. The police have recently declared former Garuda president Iwan Setyawan and secretary to the airline's chief pilot Rohainil Aini as suspects and have handed over new evidence to the Attorney General's Office for further investigation and prosecution.

A fact-finding team established by President Susilo Bambang Yudhoyono has recommended further investigation into several former BIN officers, such as Muchdi and Bambang Irawan, over their telephone conversations with Pollycarpus before Munir flew to the Netherlands.

Hendropriyono said he was not involved in the murder and that the police should speed up their investigation to show the public who the mastermind was. He said it was unfortunate that the public still believed him responsible despite the police investigation.

Asked whether he was ready for questioning, Hendropriyono said: "Citizens should comply with the law and all are equal before the law."

Meanwhile, Muchdi said that the police investigation into BIN's alleged involvement in the murder was over and the police should now concentrate on their latest findings. "The investigation is over and the killing should no longer be connected to me," he said, while adding that he was also prepared to be questioned if the police wanted to do so.

Muchdi, also a former chief of Kopassus, underwent police questioning in 2005, but no evidence has been found to hold him as a suspect.

A special rapporteur to the UN High Commissioner of Human Rights (UNHCHR) submitted a report to a UNHCHR meeting late last month, urging President Yudhoyono to publicize the results of the fact- finding team's report.

The report could be a hurdle for Indonesia's renomination for membership in the UN human rights body, which will end this May.

Former Garuda chief linked to murder

Sydney Morning Herald - April 16, 2007

Mark Forbes – The former head of Garuda, Indonesia's national airline, has been arrested over the poisoning of the country's leading human rights activist, Munir Said Thalib, on a flight to Amsterdam.

Police arrested Indra Setiawan on Saturday and also took into custody Rohainil Aini, the secretary to Garuda's chief pilot. The pair allegedly falsified documents allowing another pilot blamed for the arsenic poisoning of Mr Munir to travel on the flight.

The off-duty pilot, Pollycarpus Priyanto, who changed seats with Mr Munir during the September 2004 flight, has been linked to Indonesia's intelligence agency.

Pollycarpus was sentenced to 14 years for his role in the murder, but the Supreme Court overturned the verdict last year. Following Pollycarpus's release, the President, Susilo Bambang Yudhoyono, promised a new investigation would get to the bottom of the case.

Human rights groups remain sceptical, questioning the investigation's failure to pursue senior intelligence officials. Phone records show Pollycarpus made numerous calls to a deputy director of the agency in the days before and after Mr Munir's death.

Garuda's lawyer, M. Assegaf, said the Garuda officials were "suspected of aiding Pollycarpus in the murder of a person, in this case, Munir". He insisted there was no evidence connecting the pair to the murder, saying they were "just linked to the issuance of the documents", and complained that his clients were being treated like terrorists.

He also questioned the validity of the police case in the light of the acquittal of Pollycarpus – who was subsequently given a two-year sentence for forging his assignment letter to travel on the flight by the Supreme Court.

The National Police chief detective, General Bambang Hendarso Danuri, said the investigation into the controversial murder had unearthed new evidence implicating Pollycarpus, who was likely to face new charges of premeditated murder.

Mr Munir had made powerful enemies with his outspoken criticism of military and intelligence agencies. He gained international recognition accusing the military of human rights violations in the provinces of Aceh and Papua and of running a network involved in illegal logging and drug smuggling.

Mr Munir died during the flight from Jakarta to Amsterdam, which included a stopover in Singapore.

Ms Aini and Mr Setiawan are being held in custody for continued questioning.

The arrests are the latest in a series of scandals to rock Garuda. The airline's safety record, procedures and training practices are being questioned after a flight to Yogyakarta crashed last month, killing 21 people, including five Australians.

Human rights/law

NGOs to seek court review of Investment Law

Jakarta Post - April 19, 2007

Jakarta – A legal aid institution and a number of non- governmental organizations are to challenge the constitutionality of the recently enacted Investment Law, which they claim will prejudice the interests of the people.

"We will ask the Constitutional Court to review five articles of the neo-liberal Law No. 1/2007 on Investment," Indonesian Legal Aid Institute Foundation (YLBHI) chairman Patra M. Zen said Wednesday during a public discussion on the new legislation at the headquarters of the Institute for Global Justice, a Jakarta NGO.

A number of NGOs have also thrown their support behind the challenge to the law, which supersedes the 1967 Foreign Investment Law and the 1968 Domestic Investment Law.

"We hope the Indonesian Democratic Party of Struggle (PDI-P), the National Awakening Party (PKB), labor unions and farmers' unions will join us in court," he added.

According to Patra, the five articles to be challenged are article 1, which allows foreign investors to set up 100 percent self-owned companies; article 8, which allows foreign investors to repatriate their profits; article 12, which increases the number of sectors in which foreign investors can operate; article 15 on the responsibilities of investors; and article 19 (in conjunction with article 22), which permits foreign investors to use land for up to 95 years.

Economist Revrisond Baswir from Yogyakarta's Gadjah Mada University argued the new investment legislation gave away too much to foreign investors.

He said foreign investors should not be allowed to operate in areas that directly affected the livelihoods of the majority of the people, such as those related to telecommunications services, electricity and drinking-water supplies.

The 1967 Foreign Investment Law restricted non-nationals from investing in sectors such as telecommunications, nuclear energy, drinking water and electricity as they were crucial to the people's livelihoods, he said.

"But one violation after another against the 1967 legislation was allowed. For instance, state-owned telecommunications firm Indosat sold nearly half of its shares to a Singaporean company. The government now wants to use the 2007 Investment Law (which was enacted later) to legitimize such violations," he said.

Revrisond claimed that the new Investment Law would do more harm than good, despite the fact that the government argued foreign investment was essential for creating jobs.

"Empirical studies show that foreign investment only results in employment rationalization, which will, in turn, cause an increase in unemployment, rather than creating more jobs as promised by the government," he claimed.

Meanwhile, Bonnie Setiawan, an executive of the Institute for Global Justice, said that his organization and 45 other NGOs supported the foundation's legal challenge to the legislation.

He expressed the hope that the PDI-P and PKB, which staged a walkout during the House plenary session that enacted the law on March 29, would also join in the challenge.

The PDIP's head of legal affairs, Firman Jaya Daeli, told The Jakarta Post separately that the party would be prepared to support the constitutional challenge to the new legislation.

"We are ready, if asked, to join the people in challenging this law as it represents a major political threat," he said.

Children's civil rights

Jakarta Post - April 21, 2007

Many Indonesian citizens, especially those who were born in the 1950s and 1960s, have no birth certificate. Instead, they hold a birth acknowledgment letter, or surat kenal lahir, issued by village or subdistrict heads. The latter only recognizes when and where the holders were born.

Only a few individuals and institutions have been concerned about the low possession rate of birth certificates among children in this country. UNICEF, through its representative in Indonesia, Steven Allen, announced in 2004 that Indonesia ranked among the countries with the lowest ownership of birth certificates.

According to UNICEF, less than half of Indonesia's children under five years old were legally registered by the state at that time. Allen said that the Philippines, Thailand and Malaysia were much better in this matter.

Unfortunately, there have been no significant changes since Steven revealed this gloomy finding. The registration of new-born babies and the provision of birth certificates remains poor.

The latest data issued by the Indonesian Child Protection Commission (KPAI) indicates that at least 11 million children under five have no birth certificates. According to the KPAI, of the 85 million children aged under 18 years in the country, only 34 million or 40 percent of them have birth certificates. In the teeming capital of Jakarta alone, one in five children has no birth certificate.

The situation exists despite the fact that the 2002 Child Protection Law stipulates that the state is responsible for registering all new babies. Meanwhile, the civil administration law, which was issued only last year, stipulates that birth certificates are to be issued for free. The law also rules that the government should actively collect data on citizens vulnerable to being missed by the civil administration system.

Things are clear on the matter. Still, the number of children possessing birth certificates remains small. Many parents have obviously been reluctant to register their babies for birth certificates, because applying for such a certificate means extra expenses, despite the fact that the civil administration law says the birth certificates are free.

For decades midwives have helped parents obtain birth certificates for their babies. Parents must then report the birth to their neighborhood chief and go to the subdistrict office to apply for the certificate. Money matters in the process, starting at the neighborhood chief's desk. The amount varies, but the process is certainly not free.

Big private hospitals in Jakarta also usually help parents obtain birth certificates. The hospital's maternity department gives the parents a letter of acknowledgement and it is the hospital that arranges the birth certificate with the relevant government institutions. The parents usually have to do nothing and simply pay around Rp 100,000 for each certificate.

Many subdistrict offices in Jakarta charge parents Rp 150,000 for a birth certificate.

Poorer parents are more likely to spend the money on their daily needs than a birth certificate. From that moment, the child's civil rights are being denied by both the parents and the state.

Receiving a birth certificate is the first right a citizen deserves to enjoy for free. It is time the state ran a public awareness campaign on the importance of birth certificates and their role in ensuring children's rights are protected.

The government must make sure that parents are able to easily and officially apply for birth certificates for their children, as guaranteed by law. Parents should also have means to report any officials who attempt to charge them in the course of obtaining a birth certificate. And the government must take prompt and proper action against any officials caught abusing their power.

When the implementation of the child protection law and the civil administration law is guaranteed, the public can acknowledge the importance of birth certificates.

The state's failure to provide birth certificates for children for free is a great denial of citizens' basic rights.

The government must realize that is has long denied millions of silent citizens their right to education, health and welfare, which they are guaranteed by the Constitution.

Journalists protest over recurring violence

Jakarta Post - April 17, 2007

Apriadi Gunawan, Medan – Journalists from different media organizations in North Sumatra rallied Monday at the provincial legislative council in Medan to draw attention to the fate of one of their colleagues, who has been in police detention for nearly a month.

Medan Bisnis daily reporter Samsudin Harahap, 45, has been detained by police in the city of Pematang Siantar, about 80 kilometers from Medan, since March 22, after allegedly being physically assaulted by military soldiers and public order officers.

The protesters accused authorities of assaulting and locking up Samsudin because they objected to his coverage of their policies. Samsudin's wife, Siti Hawa, 42, who took part in the protest, said her husband went to the official residence of Pematang Siantar Mayor RE Siahaan at 11:30 a.m. on March 21, to confirm a story he was writing.

Siti said her husband avoided security guards and entered the house without permission, because he was having trouble pinning the mayor down for confirmation.

She said Samsudin was able to meet the mayor, after which he apologized for entering the house without permission. Samsudin reportedly left the house, but a short time later was contacted and asked to return to meet the mayor again.

However, when he arrived at the mayor's house this second time, Siti said her husband was seized and held at the security post. She claims several plainclothes military personnel and public order officers arrived at the house and assaulted Samsudin.

Siti said when the incident occurred there were three other journalists at the scene, but police only arrested Samsudin.

"I demand my husband be freed. This is not fair because he is the victim of a conspiracy between state officials in Pematang Siantar," Siti told The Jakarta Post.

Edrin Adriansyah, from the Legal Aid Institute for the Media, said what was happening to Samsudin was an attempt by local officials in Pematang Siantar to silence the press.

Managing editor of Medan Bisnis, Erwinsyah, said Samsudin was a sharp journalist who often wrote critically of the policies of the mayor, including reporting on a 21 percent cut in project funds, a policy that upset contractors in Pematang Siantar.

The newspaper also reported on an alleged conspiracy surrounding the tender for the renovation of the Pematang Siantar General Hospital, with the mayor's name coming up in connection with the case.

Labour issues

Labor exports ease domestic jobless burden

Jakarta Post - April 18, 2007

B. Nicodemus, Jakarta – I was at Abu Dhabi airport few months ago, waiting for my flight to Jakarta. I was chatting with friends when we saw a group of women rush to a small restaurant at the airport. Their faces and language were familiar to us. They were Indonesian women, on their way to work in Arab countries.

Working abroad, and in Arab countries in particular, has long been a dream for jobless Indonesians. Even before the darkest days of the 1997 financial crisis, many Indonesians were already eagerly flying off to Gulf countries to find jobs. I would not be surprised if the number has increased in the hard times that have followed the crisis.

Unemployment is still the biggest problem in this country. The government recently said one million jobless Indonesians would join the job market in 2007, adding to the total number of unemployed, which is already above 10 million. In response to this, the government has highlighted a five-step employment program. The steps are: granting financial and technical aid to poor families; providing training and placement for skilled workers in the service sector; improving the investment climate to create more jobs; accelerating the export of labor; and resettling poor families.

After the economic crisis, the unemployment trend was as follows: 6.4 percent in 1999, 8.1 percent in 2001, nearly 10 percent in 2004 and slightly over 10 percent in 2005 and 2006.

It has been argued that the main reason for such terrible figures is the slow growth, of around five to 5.6 percent, that followed the crisis.

This is the reason why the government wants to accelerate economic growth by focusing on attracting investment, particularly from overseas. It is believed that high investment will create more jobs. As a result, the government is working hard to improve the investment climate by reforming the bureaucracy, revising labor laws and improving infrastructure, among other measures.

Focusing on providing jobs through foreign investment has been the mainstream view in Indonesia. Unfortunately, there are still numerous problems.

Firstly, attracting more investors requires structural reforms, and such reforms take time. As job seekers really cannot wait, time is not on our side.

Secondly, under current conditions, the economy will only grow at around 6 percent in the coming years. As a result, there will be no dramatic drop in the unemployment rate.

While structural reform remains in progress, the economy will probably not provide enough jobs for the jobless.

Another issue to look at is who exactly Indonesia's job seekers are. Based on data from Central Statistics Agency, of the 10 million or so unemployed, around 3.9 million (36 percent) finished senior high school, 2.6 million (24 percent) junior high school, and nearly 2.5 million (23 percent) had only primary education. University graduates accounted for only 6 percent of total job seekers.

Based on this, we should be careful of the assumption that foreign investment would benefit the majority of job seekers. For Indonesia, labor intensive investments, such for the production of garments and shoes, would create many jobs. But most foreign investors have so far entered the oil, gas, mining or high-tech industries. These industries are not labor intensive and mostly require university graduates or highly skilled workers.

Moreover, the bad news is that many investors in labor intensive industries have already left Indonesia and moved to other countries. Therefore, the issue is not just attracting new investors but also maintaining existing ones. Unfortunately, we have not heard much about this from the government.

In our rush for overseas money, we also seem to miss out on using our own capabilities. We have a huge pool of small and medium enterprises (SMEs) right here in Indonesia.

SMEs' employment performance has been very impressive. And this has increased, even after the crisis. Official data shows that SMEs employed around 67 million people in 1999, 70 million in 2000, and 72 million in 2001. In 2004, the figure was more than 75 million.

It is essential that the government develop SMEs. But this has not been included in the government's five-step program.

We should also diversify job opportunities by taking advantage of our increasingly borderless world. In this regard, the policy of increasing the export of labor should be welcomed. In some countries, there are jobs for foreigners that local people do not want to fill. These include nurses, construction workers, shop attendants and housekeepers. The government should actively seek out these work opportunities and prepare our workers for them.

Jobs abroad also have an advantage local jobs do not – income in foreign currencies. This is the reason why, for instance, our neighbor the Philippines pays serious attention to its workers abroad, providing them with assistance and facilities. It is no surprise the country is enjoying strong capital inflows from remittances as the demand for Filipino workers increases. The government should follow similar steps by training, assisting and safeguarding our overseas workers. It should be realized that overseas workers help reduce the number of job seekers at home, as well as support our foreign reserves.

[The writer is a graduate from the Institute of Social Studies in the Netherlands. He works for a Jakarta-based multilateral institution dealing with economic, agriculture, science and technology issues. ]

Reebok maker owes billions to employees

Jakarta Post - April 17, 2007

Tangerang – More than 6,500 employees from Reebok shoe producer PT Dong Joe Indonesia staged a rally at the company's Tangerang factory Monday in demand of close to RP 100 billion in unpaid salaries and severance pay.

The employees were suspended and have not been paid since September because of the company's apparent financial constraints, Ismail, chairman of the Indonesian National Workers Union (SPN), said.

Manpower agency head, Hasdanil, said company operators, known only as Cheon and Kim, suddenly halted factory operations last year and left for their homes in South Korea.

"Based on a previous agreement signed at the Jakarta Commercial Court, company management and workers agreed to terminate employee relations starting (Monday)," Ismail said.

The court declared the company bankrupt on December 7 last year and Bank Rakyat Indonesia has been appointed to auction company assets between March 21 and May 21 this year. The company owes the workers Rp 26.2 billion in unpaid salaries and Rp 69 billion in severance pay.

Factory manager Harold Kussler said remaining assets on the site included the company's land, buildings and machinery.

"The shoes produced until September are too damaged to be sold," Kussler said. "Based on the explanations given by several managers at the factory, there were no signs that the company would go bankrupt – but the two bosses suddenly halted the production and left the country," Hasdanil said.

Nine thousand bank workers at risk

Tempo Interactive - April 16, 2007

Suryani Ika Sari, Jakarta – The All-Indonesia Organization of Workers (previously the Association of Financial Workers Union) has estimated that around 9,000 bank workers are threatened with being laid-off this year.

This means that there could be an 800 percent increase in the number of laid-off bank workers, compared to last year's figure of 1,000 persons. The firing is line with the issuance of Bank Indonesia policy on a single presence policy.

According to Yanuar Rizky, the President of the All-Indonesia Organization of Workers, the number of 9,000 persons was based on the calculation of operational costs and performance operational revenues of banks during 2006.

"With the coming into force of the policy, banks cannot help but, especially those owned by foreigners, have to reduce the number of workers," Yanuar told Tempo on Saturday (04/14).

However, he said he considered that the single presence policy had been slightly delayed because many banks in Indonesia are owned by foreigners.

So that the lay-offs will mainly occur in private banks owned by foreigners. "In particular those whose shares are owned by Singapore (Temasek)," said Yanuar.

Some private foreign banks operating in Indonesia and having the same owners include PT Bank Danamon and PT Bank Internasional Indonesia-owned by Temasek Holding, Singapore-and PT Bank Niaga and PT bank Lippo-owned by Khazanah Berhard, Malaysia.

According to Yanuar, of the private foreign banks, Bank Danamon is estimated as having to lay-off the most.

"Around 4,000 persons will be laid-off gradually. This already had started last year with 450 people," he said. "BII has also planned to reduce its workers by 3,000 people."

Irawati Koswara, Corporate Secretary of Bank Danamon, denied that the bank will carry out lay-offs on such a large scale. On the contrary, the company will recruit a large amount of workers.

Director of BII Sukatmo Padmosukarso has also denied the information that the company will lay-off thousands of its employees. "We have no plans to reduce the number of our employees, especially not 3,000 people," said Sukatmo.

Environment

Group rallies for conservation

Jakarta Post - April 23, 2007

Alvin Darlanika Soedarjo, Jakarta – A leading environmental group asked the government Sunday to temporarily halt logging operations in the country, insisting that if measures are not taken to curb logging activities, Indonesia's forests could be gone within 15 years.

Indonesian Forum for the Environment (Walhi) chairman Chalid Muhammad said the government should formulate new policies to extinguish forests fires, reduce the haze and halt the conversion of peatland.

"We demand that the government enacts a moratorium on logging and restores (Indonesia's) forests within the next 15 years before depletion becomes unstoppable," Chalid told The Jakarta Post.

The restoration effort should be interdepartmental, involve local communities and be written into national policy, he said.

"The government should stop the exportation of logs and count how many logs Indonesia needs for the industry. There should also be incentives, such as tax incentives, for those importing logs," Chalid said.

About 400 Walhi demonstrators staged a rally near the Hotel Indonesia traffic circle in Central Jakarta on Sunday morning, calling for the cessation of logging activities.

Chalid said that over the last decade, Indonesia had assumed a place among the world's leading forest destroyers. In 2004, 3.4 million hectares of forest were cleared, compared with 2.8 million ha in 2005 and 2.7 million ha in 2006.

"The figure is getting smaller over the years not because there have been effective laws or policies, but because the forest itself is diminishing," Chalid said.

Walhi predicts that if effective measures are not taken by the government to curb logging activities, forests in Sumatra will be gone within five years, while those in Kalimantan will be gone within 10 years and those in Papua within 15 years.

The group also estimates that by 2022, all forests in Indonesia, a country already under threat from serious ecological damage, could become history.

"Internationally, Indonesia is the world's third largest contributor of carbon emissions due to forest haze and peatland conversions for industry, such as for palm oil plantations," he said.

While calling for immediate action from the government, a number of environmental groups and companies also expressed their commitment to forest conservation activities in the country.

Accor Group Indonesia, state-owned forest management company Perum Perhutani and community forest group Karya Lestari pledged Sunday to create more green space in the country.

Under the supervision of the Center for International Forestry Research (Cifor) and the Centre de Cooperation Internationale en Research Agronomie pour le Developpement (Cirad), the group aims to plant 74,120 sengon trees (Paraserienthes faicataria) and jatropha plants in Indonesia.

Sengon trees are considered easily cultivatable and can be harvested after only five years for logging purposes, while jatrophas can be used as an alternate source of energy, or biofuel. The group will plant the trees on 43.2 ha of land owned by Perum Perhutani in the village of Glandang in Pemalang, Central Java.

"Our mission is to protect our land and support global goals through realistic efforts. Local communities are also involved in forest management and restoration," said Accor Indonesia president director Gerard Guillouet.

He said that environment-based education, which focuses on sustainable growth, is important for Indonesia if it is to maximize its forest protection capabilities.

Activists send letters to trees in protest

Jakarta Post - April 20, 2007

Wahyoe Boediwardhana, Malang – Malang residents took a different approach to protesting against the declining amount of green space in the East Java city on Thursday – they wrote letters to the trees themselves.

The letters were sent to a mahogany tree and a banyan tree in the city ahead of Earth Day on April 22. The protest was conducted by members of the Environmental Awareness Community Alliance in Malang.

"...Trees, my brothers, as long as our hearts are still beating, we will continue trying to protect you, fighting for you. We cannot share the pain that you have to go through, but we can see your suffering...," one letter says.

The activists placed the letters on the trees' trunks. The activists also held theatrical performances in nine different parts of the city to illustrate the trees' suffering.

"The two trees are witnesses to how other trees have been illegally felled for the sake of development," said Purnawan Dwikora Negara, the head of the East Java chapter of the Indonesian Forum for the Environment (Walhi), speaking at the protest.

He said the protest was part of a series of events marking Earth Day and was aimed at encouraging all people to be aware of the decline of green space in Malang. He said green spaces were a part of the ecosystem and needed to be preserved.

There are now just 3,000 hectares of green space in Malang city, 2.89 percent of its area. According to a 2002 government regulation, the city's green space should actually amount to at least 10 percent of the area.

The city's green space consists of 12 hectares of parkland, 80 hectares of riverbanks, 150 hectares of private gardens and plantations and 2,940 hectares of rice field.

The activists, which included representatives of the Widaya Gama University School of Law, Malang Corruption Watch, Walhi, the Surabaya Legal Aid Institute in Malang and the Green Student Environment, also visited Malang Town Square shopping complex, where their protest was shut down by security guards.

Purnawan said the shopping complex had been built without a permit on green space that was mean to be a water catchment area, increasing floods during heavy rains. The shopping center's management did not comment on the accusation.

Purnawan urged all Malang officials and policymakers to put a stop to the conversion of green spaces as it would cause problems in the future.

"We've started to feel the impacts now. Geographically, Malang is located on high ground but it now floods during the rainy season. This never happened before. This is real evidence that we can't maintain the balance in the ecosystem," he said

A series of activities marking Earth Day will continue with a prayer of Saturday night. The activists also plan to send out a petition, including to Lapindo Brantas Inc., the company blamed for the East Java mudflow, and the Malang administration.

Earth Day events will end Wednesday with a film screening and concert.

Gender issues

'Nyai' Ontosoroh struggles against repression

Jakarta Post - April 21, 2007

Oyos Saroso HN, Bandarlampung – "We fought back, child, as well and as honorably as possible."

This is the final line uttered by Nyai Ontosoroh, the female protagonist in Nyai Ontosoroh, a play staged by the leading local theater troupe, Teater Satu, at the Lampung cultural park on April 13-14. It concludes an Indonesian woman's struggle for her honor and dignity against the hegemony of Dutch colonial laws.

Set in 19th-century Tulangan, East Java, the play was adapted by Faidza Mardzoeki from senior writer Pramoedya Ananta Toer's Bumi Manusia (This Earth of Mankind), and portrays rather vividly the emancipation of a Javanese woman ahead of her time.

Pramoedya's original character of Nyai Ontosoroh deconstructs the image of a nyai – a local mistress of a Dutch man during the East Indies era, defined as a woman of low morals.

In the 1800s, when Indonesia was a Dutch colony and women were deprived of their self-esteem, Nyai Ontosoroh (a strong performance by Ruth Marini) resisted not only the culture of her birth, which looked down upon women, but also her own ill fate and colonists' domination.

Unlike Indonesian heroines of noble birth such as Raden Ajeng Kartini and Dewi Sartika, Nyai Ontosoroh is an uneducated villager. But despite her limitations, she fights against the subservience of the native people as well as the European value system and Dutch law.

The drama is important not only because it is about nationalism with a woman as its lead character, but also because it was written by a former political prisoner. Bumi Manusia is the first volume of Pramoedya's Buru Island Quartet, written at the prison camp where he was incarcerated without trial for a decade. The other three are: Anak Semua Bangsa (Child of All Nations), Jejak Langkah (Footsteps) and Rumah Kaca (House of Glass). The late Pramoedya's remarkable works made him a candidate for the Nobel Prize several times, though he never won.

Only after its first theatrical rendering did many in Indonesia begin to realize the nationalist and feminist spirit Pramoedya advocated in the story. It is therefore ironic that the tetralogy glorifying such lofty values was banned during the New Order regime under Soeharto.

Nyai Ontosoroh, or Sanikem, is the daughter of Sastrotomo, a clerk at a sugar mill in Tulangan. Sanikem is sold by her opportunistic father to a wealthy Dutchman, Herman Mellema (a fair performance by Rendy Dadang), and becomes his mistress. She is thus called Mrs. Herman Mellema, but is better known as Nyai Ontosoroh.

In the Dutch colonial era, life as a mistress was equal to being a slave, who could be abandoned if her master tired of her.

The more refined Javanese term nyai originally meant a lady of some status, but it later became frequently associated with a prostitute or a woman of loose morals. The Dutch East Indies government did not recognize marriages with a native nor the offspring of such a union.

Nonetheless, Nyai Ontosoroh was different. Conscious of her position as mistress, she strived hard to learn European customs and read many books, and eventually came to control her husband's company and give their children a European upbringing.

Nyai Ontosoroh cultivated herself into a blend of attractive Eastern looks and European diligence, courage and intellect.

Her great skill in managing Boerderij Buitenzorg, Herman's company, made her very famous in the areas of Wonokromo and Surabaya.

"Een Buitengewoon Gewoone Nyai die Ik ken (An extraordinary ordinary nyai that I knew)," said Nyai Ontosoroh of herself as described in a newspaper story. "I have to prove to them that whatever they have done to me, I will be more worthy of respect, though only a nyai."

In the Mellema family, she became a strong central figure amid the weak. Annelies Mellema, Nyai's daughter, is a pretty girl who becomes traumatized after she is raped by her older brother Robert, and she finds it hard to mingle with her peers, instead seeking her mother's protection.

Herman and Robert become mentally frail through debauchery, indulging themselves every night at a brothel owned by Babah ("boss" in Chinese) Acong, which leads to Herman's death there.

This is a disastrous turning point for Nyai Ontosoroh, who then loses everything: Annelies, whom she wished would become as tough as herself, Herman's company, which had thrived under her management, while Robert has gone missing.

Under Dutch colonial laws, Nyai Ontosoroh loses her custody battle for Annelies, who had been formally recognized by Herman. The girl is thus "repatriated" to the Netherlands according to a district court decision.

Despite her loss and tragic fate as she is separated from her beloved daughter, Nyai Ontosoroh had struggled with all her might, fighting back – as she said – "as well and as honorably as possible". This is her triumph; resisting as well she could against her fate and the colonists' hegemony of power.

Featuring around 30 actors, the 2.5-hour production put the creativity of its director to the test. Over the two days playing to a full house – consisting mostly of students – Lampung-born woman director Imas Sobariah presented a gripping drama.

Conflicts were staged by its juxtaposition with attractive details. For example, Herman's death scene at the brothel was off-set by a garish Chinatown with its Chinese houses, colorful lanterns and sex workers in Chinese dress, enhanced by Chinese dances, songs and dialog.

When Nyai goes to court to fight for custody over her daughter, the stage was converted into a courtroom with prosecutors and judges wearing European garb. Such features amplified the different roles and evoked an air of olden days.

Imas exposed the elegance of Javanese, Dutch and Chinese cultures – even the Madura tradition through Nyai's bodyguard Darsam – at the same time, although against a backdrop of tragedy.

Following its success in Lampung, Teater Satu is to tour its Nyai Ontosoroh to Surabaya, East Java, and to Kuala Lumpur, Malaysia, this year.

Those who are concerned with women's rights and the ideal of fighting for one's self-worth will identify with this highly commendable production.

Nyai Ontosoroh commemorates Kartini Day in Jakarta

Detik.com - April 20, 2007

Irwan Nugroho, Jakarta – Some 25 artists from the Nyai Ontosoroh(1) Theater held a peaceful action at the Hotel Indonesia roundabout in Central Jakarta today. The action was held in conjunction with the commemoration of Hari Kartini(2) that falls on Saturday April 21.

Throughout the action, the demonstrators who wore red T-shirts repeatedly shouted "Viva women, viva women". "We want to articulated justice and the war against women's ignorance that persists to this day", said one of the participants, Tita, when speaking with Detik.com on Friday April 20.

Tita said that the peaceful action by the theater group was to make the public realise that women are still repressed. According to Tita, the various kinds of discrimination that Kartini herself fought against such as domestic violence and polygamy still beset women.

"The trafficking of women is becoming more widespread. Women's levels of education are still low", added Tita.

A red-and-white banner measuring 1x5 meters with the words "Fighting spirit" was visible among the protesters. The action that had been going on since 10am proceeded in an orderly fashion and without police escort.

In addition to giving speeches, they also handed out red stickers with the words "Fighting spirit" to passing drivers. As a result of the action, there was a slight disruption to traffic in the vicinity of the Hotel Indonesia roundabout. (rmd/nrl)

Notes:

1. Nyai Ontosoroh - A central character in Pramoedya Ananta Toer's Buru Quartet that tells the story of a 14-year-old Javanese girl, Sanikem, sold by her money-grubbing father to a Dutch plantation owner as a concubine and how this young girl transformed herself into a women of strength and capacity, Nyai Ontosoroh – far superior to that of her coloniser – and how she educated the first generation of Indonesian revolutionaries.

2. Hari Kartini - Kartini was an Indonesian regent's daughter during the Dutch colonial period who, through her letters home, outlined her dreams for better education. She died aged 25 a few days after giving birth to her first child. A variety of myths have made the original Kartini a nationalist hero and feminist symbol. Hari Kartini (Kartini Day) is a public holiday dedicated to the memory of the turn-of-the-century hero.

[Translated by James Balowski.]

Health & education

Residents hinder fights against dengue

Jakarta Post - April 21, 2007

Jakarta – The city's dengue fever prevention program is progressing slowly, with East Jakarta residents reportedly preventing dengue fever prevention teams, which monitor mosquito larvae, from entering their homes. Plans to have schools students inform residents of the need to keep a dengue-free neighborhood are also yet to be realized.

"We are facing difficulties monitoring each house because most of the residents do not let us enter their homes even though we've already worn uniforms as identification," Rosita, a member of a community unit team in North Utan Kayu subdistrict, said Friday. She said that sometimes house owners treated the volunteers badly. "We often been suspected (of fraud)."

Nirma, another volunteer added that most of the residents were stubborn. "If we find any mosquito larvae in their houses this week, we're going to find some again next week," she said.

She said that most of the residents had not heard that the subdistrict was a "red zone", meaning it had recorded six cases of dengue fever in the last two weeks. As of April 20 the city's health agency had recorded 13,107 cases of dengue fever and 45 deaths from the disease.

The administration carries out a regular Friday program requiring residents to allocate 30 minutes to clean their homes of the larvae of the Aedes aegypti mosquito, the carrier of the dengue virus. But the program does not seem to work, with even Governor Sutiyoso acknowledging that it is just a "ceremony".

He said recently that officers and residents did not carry out the program seriously but the disease could only be eradicated through cooperation among community members at all levels.

Deputy Governor Fauzi Bowo has also said that he would ask schools to give students a 30-minute break every Friday to remind nearby residents to destroy mosquito larvae in and around their homes.

When asked about the deputy governor's plan to involve students in the program, Rosita said that she did not know about it. "I just heard about it from you," she said.

At primary school SD Rukun Istri in Utan Kayu Utara, teachers had spoken to some of their students about the virus, but not to surrounding residents. "We have given information about the dengue fever to the fourth graders only so far," said Ada, one of the teachers.

She added that teachers in the school were trying to educate the students to clean their neighborhood once a week. "Most of the students here have a high awareness already about the importance of cleanliness," she said.

According to Vira, a third grader, the students have to voluntarily clean their school every Tuesday. "Teachers also ask us to clean our seats and our tables every day because mosquitoes often use the space underneath as nests," she said while cleaning up her classroom with her peers.

Students angered by teacher-supported cheating

Jakarta Post - April 20, 2007

Syofiardi Bachyul Jb and Khairul Saleh, Padang/Palembang – At least 78 students in Padang, West Sumatra, walked out of the national exams in a protest against cheating practices.

The students of Dhuafa Vocational School say that teachers from state vocational school SMK Negeri 5, where the three-day exams were being held, gave answers to their students.

The students, who come from poor families, walked out of the classrooms at SMK Negeri 5 during the mathematics exam on Wednesday and reported the case to the Padang Education Office.

Unsatisfied with the office's response, the students went on Thursday to the West Sumatra Education Office, where they met its deputy chairman, Jasrial.

Nurafni, one of the students, said that on Tuesday, the first day of the exams, she saw SMK Negeri 5 teachers approach their students 10 minutes before the start of the Bahasa Indonesia exam. "I just thought the teachers neatened the students' shirts, but they actually handed over answer handouts to the students," she said.

On the second day of the exams, Nurafni said, the teachers again gave the answers to the students 10 minutes before the exam started. "As other students struggled to remember the answers in the school's toilets, I stood up and was followed by other students from my school. We left the classroom and the exam," Nurafni said.

Nofirman, another student from SMK Dhuafa, said he witnessed SMK Negeri 5 students copying the answers from a sheet attached to the toilet's walls. "I was prevented from entering the toilet, I could see at a glance the SMK Negeri 5 students jotting down the answers," he said.

Nurafni said she was not afraid of failing the exams because she could not stand cheating. "We're aware that we're the children of poor families and passing the exams means everything for us... but we cannot see injustice and cheating be left unheeded," she said.

A similar situation was reported in Palembang, South Sumatra, with widespread claims of students receiving answers on their cell phones. The students are alleged to have received assistance from their teachers, who worked in a group. The teachers are alleged to have signed a letter promising not to tell anyone.

"I actually did not agree with the idea, but I was forced to (sign the agreement). All my colleagues forced me to accept it," said a teacher, identified only by his initials MN, on Thursday.

"Such a practice has taken place for years. The school management does not want its students to fail in the exams. That's why various effort are made, including giving the answers before the exams start," he said.

Free education sought for poor students

Jakarta Post - April 19, 2007

Jakarta – The National Commission for Human Rights called Wednesday for the government to provide free elementary education to the children of poor families.

"The policy currently applied is merely free school fees in public elementary schools. It has yet to open wider schooling opportunities due to other expenses, including admission fees, books, uniforms, as well as transportation," the commission's deputy chairman, Zumrotin K. Susilo, said Wednesday.

The commission stated in a recent report that most poor families are still burdened with 50 to 70 percent of their children's education, although since last year the government has provided a school operational assistance fund.

"The government and society need to realize that education is a long-term means for eradicating poverty," said Zumrotin. She said education programs could go hand in hand with other programs, such as capital facilitation to empower poor families.

"Capital facilitation is better than the government handing direct cash assistance," said Zumrotin. "However, the government still prefers instant means of poverty elimination rather than long-term solutions. The direct cash assistance is ineffective because of its instant nature."

Zumrotin also called on the government to simplify the formal requirements for such programs "so that poor people can really access them".

The number of poor families in Indonesia is estimated 18 million, or some 54 million people, with the assumption that every family consists of three people.

The rights commission reported that money went missing from school operational assistance funds in 30 of the country's 33 provinces.

Deputy chairman of the House of Representatives' Commission X overseeing education issues, Heri Ahmadi, said this year the government had allocated Rp 52 trillion (US$5.7 billion) for national education, Rp 44 trillion for the Education Ministry and Rp 8 trillion for the Religious Affairs Ministry.

According to the House commission's evaluation, there Rp 4.6 trillion went missing from last year's total education budget.

Zumrotin said that Malaysia had managed to overcome poverty by making education a priority for the last 20 years.

"Indonesia, however, prefers economic to human development," she said. "The government needs to meet its target of allocating 20 percent of the state budget for education by 2008."

However, Heri said: "I don't believe the target can be fulfilled. This year, the government failed to meet the education budget of at least 16.7 percent from the state budget."

Government/civil service

Cabinet needs professionals, say observers

Jakarta Post - April 23, 2007

Adisti Sukma Sawitri and Tony Hotland, Jakarta – Calls for the President to replace incompetent ministers in his cabinet rose over the weekend after he announced that a reshuffle would occur in May.

Political communications analyst Effendi Gazali said President Susilo Bambang Yudhoyono would likely have a minor shake-up in his Cabinet and replace ministers with representatives of certain parties.

"I don't think it will be a radical reshuffle because he's the kind of person who makes a decision with much consideration," he was quoted as saying by detik.com news portal.

Effendi said the public was expecting quality ministers, showing that little thought should be given to bowing to pressure from political parties that wish to be represented in the executive branch. "It's always about using professional people, although it doesn't mean they shouldn't be a member of a party," he said.

The selection of ministers is a right of the President, although political pressure is a major factor because Yudhoyono's Democratic Party has only a few seats in the House of Representatives.

A reshuffle has been called for by politicians and analysts who believe the current cabinet line up has failed to make much progress. Some of the ministers are also entangled in legal scandals and others are ill.

Chairman of the Prosperous Justice Party (PKS) Tifatul Sembiring said his party would leave any decisions to reshuffle the cabinet to the President himself.

However he suggested ministers in the economic posts, such as Coordinating Minister for the Economy Boediono and Finance Minister Sri Mulyani Indrawati, be removed for their failure to bring down the poverty rate.

"The country's main problems are poverty and unemployment. I have yet to see any good policies that could deal with these problems," Tifatul said on the sidelines of a PKS gathering in Jakarta on Sunday.

Sharing Effendi's views, Tifatul called for an objective review of the ministers' performances rather than simply replacing them on the basis of political requests by major parties.

The Golkar Party, the country's largest party, which is chaired by Vice President Jusuf Kalla, is reported to have submitted a number of names for cabinet seats. "If (the reshuffle) is carried out only to bow to the requests of parties, it wouldn't do any good to his administration in the future," he said.

Meanwhile, President Yudhoyono has shrugged off accusations he is bowing down to political demands or is afraid of making a critical decision.

At a gathering at a Jakarta mosque, Yudhoyono said Sunday he could not afford to act hastily in making key decisions such as a cabinet reshuffle as it would affect the country's direction in the future.

"I'm afraid, I'll admit that. But I'm afraid of God, breaching the Constitution and making unjust decisions," he said, as quoted by detik.com. Yudhoyono also reiterated his determination to improve the people's welfare and law enforcement.

Cabinet reshuffle set for May

Jakarta Post - April 21, 2007

M. Taufiqurrahman, Jakarta – President Susilo Bambang Yudhoyono announced Friday that he would reshuffle his United Indonesia Cabinet in early May, ending months of speculation on the topic. He said the reshuffle would be limited to a few positions.

"God willing, I will announce the limited cabinet reshuffle in early May. So it will be about two weeks from now," Yudhoyono said in a snap press briefing organized after Friday prayers at the Baitur Rahman mosque inside the Presidential Palace compound.

Yudhoyono said the planned cabinet reshuffle was aimed at improving the performance of his administration. "My government faces a daunting task to improve the people's welfare," he said.

Yudhoyono has been under a tremendous pressure to decide on a cabinet shake-up following the lackluster performance of his administration in the first half of its term.

Yudhoyono's administration has also been bogged down by a number of problematic ministers, including Coordinating Minister for Social Welfare Aburizal Bakrie, who has been mired in the Lapindo mudflow problem, Justice and Human Rights Minister Hamid Awaluddin and State Secretary Yusril Ihza Mahendra, who were implicated in a plot to collect money belonging to former president Soeharto's son Hutomo "Tommy" Mandala Putra from a British bank, and Transportation Minister Hatta Radjasa, who has felt the heat from a string of transportation disasters.

Health problems have also hampered Yudhoyono's cabinet. A total of 13 ministers are reported to be ill, with Home Affairs Minister M. Ma'ruf currently being treated at a Singaporean hospital.

Among the ministers reported to be suffering from health problems are Religious Affairs Minister Maftuh Basyuni, State Minister for the Environment Rachmat Witoelar, State Minister for Administrative Reform Taufik Effendi, Public Works Minister Djoko Kirmanto and State Minister for State-owned Enterprises Sugiharto. All are believed to be suffering from heart problems.

It has also been rumored that some senior ministers, including Coordinating Minister for Security and Political Affairs Widodo A.S., Coordinating Minister for the Economy Boediono and Defense Minister Juwono Soedarsono, have tendered their resignation letters.

In spite of the shabby form of his cabinet, Yudhoyono said Sunday during a trip to a fruit farm in Bogor, West Java, that he would not have a cabinet shake-up and that he would not bow to pressure from the political parties that had submitted the resumes of candidates they wanted to place in his new cabinet.

The statement, however, did not end the public speculation that a cabinet shuffle was imminent, with April 21 regarded as a likely date.

Responding to Yudhoyono's statement, Vice President Jusuf Kalla said that Golkar Party never proposed names of candidates for ministerial posts. "But if we are asked, we have hundreds of party members who will be ready to fill in the positions," Kalla told reporters after a Golkar Party function.

SBY 'squandered' first half of term

Jakarta Post - April 20, 2007

M. Taufiqurrahman, Jakarta – President Susilo Bambang Yudhoyono has squandered opportunities that could have made him an effective leader during his two-and-a-half years in office, political observers say.

The Jakarta Post spoke to several political analysts on Thursday. They concurred that the performance of the country's first directly elected president has been mediocre at best. Today marks the mid-way point of his term.

"I give him six out of a maximum 10 points, which means he's average, as the President could have in fact done so many things with a direct mandate from the people... but he has failed to do so," said political analyst Sukardi Rinakit of the Soegeng Sarjadi Syndicate.

Sukardi said that in almost every quarter, Yudhoyono had achieved little compared to his predecessor, Megawati Soekarnoputri.

"Poverty and unemployment is on the rise, on the issue of Iran's nuclear disarmament Indonesia has been accused of kow-towing to the US government, the Lapindo mudflow continues unabated and the fight against graft is yielding only diminishing returns," he said. Sukardi said the sluggish situation was due to Yudhoyono's "chronic indecisiveness".

"The most glaring example of that indecisiveness concerns the handling of the Lapindo mudflow. He should have decided that the problem would be taken over by the government and seized all the assets of Lapindo as a guarantee," he said.

He said that should Yudhoyono fail to improve his record in the next year, he would face a difficult time seeking reelection.

Political analyst Saiful Mujani of the Indonesian Survey Institute (LSI) agreed with Sukardi, saying that although Yudhoyono had an impressive record in resolving the conflicts in Nanggroe Aceh Darussalam and Papua, he had achieved little in the economy. "Investors still have to go through bureaucratic red tape before they can invest here. Little has changed," Saiful told the Post.

He also said that midway through his term, Yudhoyono's government had failed to achieve an annual growth rate above 6 percent, the figure he aimed to achieve during his campaign. "I give him a four as his score for the economy," Saiful said.

In its latest opinion poll, the LSI found that the job approval rating for Yudhoyono had dropped to 49 percent, the lowest in his entire time in office. Another survey from the Indonesian Survey Circle found that if an election was held today, the Indonesian Democratic Party of Struggle (PDI-P) would come first.

Saiful also blamed the government's poor showing on Yudhoyono's lack of resolve in managing state affairs. "On the cabinet shake-up issue for instance, there's just too much politicking. He should just go for it, it's his prerogative," Saiful said.

Analyst Syamsuddin Harris of the Indonesian Institute of Sciences said that Yudhoyono could risk of becoming a failed president if he did not change his way of handling problems. "He needs to shift gears to work faster and the most important thing is he must return to promises that he made during the election campaign," Syamsuddin was quoted by Antara as saying.

TNI/Defense

China opens door to military and other cooperation

Jakarta Post - April 20, 2007

Jakarta – The Chinese ambassador to Jakarta says the door is wide open for Indonesia to establish a security and defense cooperation without any hidden political agenda.

"Within recent years we have seen an increase in military-to- military cooperation between the two sides. China is ready to offer Indonesia military hardware without any political strings," Chinese ambassador Lan Lijun said Thursday.

"It is up to Indonesia to make a proposal. We have no problem because we feel that the Chinese military hardware, in terms of quality and price, is in a better competitive condition."

Talking to more than a hundred business persons, academics and journalists at the Aryaduta Hotel in Central Jakarta, Lan said that it was up to the two sides to discuss the kind of military cooperation, but a request by the Indonesian government would be very important.

"We have made a proposal to the Indonesian side. It is up to the Indonesian government to follow it up," he told reporters at the event.

Lan said in a prepared speech that since 2005, the two countries had established a strategic partnership, the first China has ever had with any single Southeast Asian country in the political, economics, cultural, educational, scientific, technological and military sectors.

He also emphasized the two countries should focus on several areas, such as enhancing high-level strategic dialogs as well as inter-departmental exchanges at all levels, accommodating each other's concerns, integrating the political and economic fronts of relations, and exchanges between parliaments, local governments and social establishments.

"China will continue to support the efforts of the Indonesian government in combating separatist forces and safeguarding national unification, and appreciates the Indonesian government for taking a One China policy as a political basis for developing bilateral relations," Lan said.

Since 2005, China and Indonesia have cooperated in strategic industries, such as the aircraft, steel and military hardware industries.

The secretary general of the Indonesian Defense Ministry, Lt. Gen. Sjafrie Sjamsoeddin, and the general chief of staff of the People's Liberation Army, Lt. Gen. Zhang Qinsheng, signed a memorandum of understanding on defense and security matters on April 3 in Beijing, China.

The agreement will be officially signed by both countries' defense ministers in September.

"We had agreed to bilaterally develop military technology and industry, and in turn we are not only aiming at the transfer of technology and technical assistance, but also at joint production of military equipment," said Sjafrie, as reported by Kompas daily newspaper on April 4.

Kopassus asked to remain alert

Jakarta Post - April 17, 2007

Ridwan Max Sijabat, Jakarta – The Army's Special Forces, or Kopassus, was warned against complacency during this time of peace and stability, being reminded to remain vigilant against security threats that could arise from inside or outside the country.

"As an elite force designed for strategic special missions, Kopassus needs to continue improving its professionalism, sensitivity and alertness in facing security threats and disturbances that could destroy national unity," Army Chief of Staff Gen. Djoko Santoso said during a ceremony here Monday to mark the 55th anniversary of the force.

He stressed the soldiers of Kopassus always had to be ready to act quickly and successfully.

"All units in the elite force must be prepared for any deployment in special operations, and soldiers must continuously improve their knowledge and participate in regular exercises to improve their skills," he said.

Djoko told the elite force's chief and unit commanders to continue their hard work not only to maintain the readiness of soldiers, but to make the soldiers more approachable by civilians.

"Kopassus must come down closer to the people at large, local governments and the police, and cooperate with them in handling any problems in the country," he said.

Special Forces chief, Maj. Gen. Rasyid Q.A., said homegrown terrorism remained a serious threat for the country, but the force would allow the police to take the lead in dealing with domestic militant groups.

"The most important thing is the police should cooperate closely with the people and the military to get information in their efforts to keep track of the militant groups. The military will enter the field once terror acts are considered to have jeopardized national security," he said.

Asked to comment on the elite force's budget, Rasyid said Kopassus understood the government could not allocate it more funding, giving the economic situation in the country.

"The elite force is not running short of financial support and we will spend the allocated budget as efficiently as possible, to carry out our regular education and training programs and to pay soldiers and their families," he said. He did not say exactly how much annual funding the force received from the government.

Economy & investment

Modern markets no threat: Survey

Jakarta Post - April 23, 2007

Ika Krismantari, Jakarta – Modern retail outlets in the country such as hypermarkets and minimarkets do not pose any threat to wet markets and traditional grocery stores despite their massive expansion during the past two years, a survey shows.

The latest survey by Nielsen shows a "strong indication" that the presence of hypermarkets or other modern groceries did not affect the existence of wet markets and traditional grocery stores.

Nielsen director for retailer services Yongky Surya Susilo said during the presentation of the survey last week the competition between hypermarkets and traditional markets was nothing to worry about as the two retailing channels served different market segments.

"The surviving wet market traders prefer to cater to food sellers or small restaurants, which buy the goods on a daily and massive bulk basis. They are also focusing on medium-income house wives, while hypermarkets are focused on high-income and young and practical or image-seeker moms," he said.

He rebuffed the general assumption that hypermarkets were growing rapidly in the country at the expense of traditional markets, saying that existing traditional grocery stores were still dominant and growing, reaching almost 1.7 million in 2005 as compared to modern retail stores, which had only reached about 8,000 stores in the same period.

"Even in Jakarta, the number of the outlets of supermarkets or hypermarkets decreased to 196 stores in 2006, as compared to 233 in the previous year, while the traditional stores increased to 91,221 stores from 88,974 during the same period," Yongky said.

He also cited another survey that gave surprising results, indicating that the majority of urban Indonesians did their in traditional outlets even though the data did not include how much money was spent in each type of outlet.

The 2006 survey, which covered a sample of 1,385 respondents in four major cities – Jakarta, Surabaya, Bandung and Makassar – , revealed that people visited traditional outlets 25 times on average per month, while they only visited modern outlets two times per month.

The respondents also said that they tended to visit wet markets on average 12 times per month, while the frequency of visits to supermarkets and minimarkets only averaged three times and five times per month.

The survey comes amid growing criticism of the rise of modern retail outlets, particularly hypermarkets and minimarkets.

The government is expected to issue a new retail regulation in the middle of this year to curb the rapid spread of modern retailers in the country by imposing a zoning system.

Earlier in March, the Alliance of Traders Associations, representing traditional retailers, urged the Jakarta administration to issue a gubernatorial decree on market regulations, saying the existing 2002 city ordinance on modern retail restrictions was not effective.

The alliance claimed that traditional markets throughout the city had suffered financial losses of up to 75 percent, and some of the traders made less than Rp 50,000 daily last year.

In response to this, Yongky said that some efforts could be made to empower the wet markets in order to go head-to-head with modern retailers, including revitalizing markets in line with the changes in the geographical surroundings and focusing on business generators.

Investors want clarification on laws

Jakarta Post - April 21, 2007

Andi Haswidi, Jakarta – Both local and foreign investors are seeking clarification from the government on its commitment to providing a more conducive investment climate amid growing demands for the expansion of the business sectors that are closed to foreign investors.

"Investors are puzzled as regards the government's commitment to promoting investment, given that some departments are lobbying for the negative list to be expanded," Indonesian Employers Association chairman Sofyan Wanandi told The Jakarta Post on Friday, referring to the list of sectors that are closed to foreign investment.

"There are some people who seek to promote a narrow-minded view of nationalism and the instituting of counterproductive protectionist measures," he said.

Sofyan, together with a group of foreign investors, met Trade Minister Mari Elka Pangestu on Thursday and Investment Coordinating Board chairman Muhammad Lutfi on Friday to seek clarifications.

Also present at the meetings were representatives of various overseas business associations and chambers of commerce from countries such as Japan, the United States, South Korea and the Netherlands.

After meeting with Lutfi, Sofyan said the investors were satisfied by Lutfi's clarifications, which basically reaffirmed the government's commitment to pressing ahead with the implementation of the new Investment Law, which has been drawn the ire of left-wing and ultra-nationalist circles.

According to Sofyan, the BKPM chairman said any restrictions on foreign investment would be in line with the spirit of the legislation, which is designed to ensure equal treatment for both local and foreign investors.

"Lutfi also said the negative list had not been finalized, but promised that it would be ready within the next one to two months," Sofyan said.

Earlier, Minister Mari had said that a series of interministerial meetings, chaired by the coordinating minister for economy, would be held in the near future to determine which sectors would remain out-of-bounds to overseas investors.

A number of populist economists have been loudly demanding that the government increase the number of business sectors that are closed to foreign investment. They argue that the expansion of the negative list is necessary in order to protect local firms.

A number of ministers have also called for the expansion of the list. Industry Minister Fahmi Idris, for example, said the tobacco and sugar refining industries should remain off-limits to foreign investment.

The government has come under pressure to delay the introduction of the legislation, which left-wing and nationalist groups claim is too liberal.

A number of civil society groups, including the Institute for Global Justice, recently announced plans to challenge the constitutionality of the legislation in June, arguing that it fails to protect the interests of the majority of the Indonesian people, and was specifically framed to placate foreign investors.

Legislator Hasto Kristianto of the Indonesian Democratic Party of Struggle, which staged a walkout during the House plenary session that passed the new legislation, said the negative list was a tool that could be used by government to help local industry and improve the country's industrial capabilities.

Consumer banking remains prima donna

Jakarta Post - April 17, 2007

B. Gunawan, Jakarta – Believe it or not, although the monetary authority has continued to lower the interest rate, loans for the real sector have not increased. On the other hand, many banks are busy offering consumer loans to the public. They are even luring customers with all manner of offers.

Take Mega Refund, for example, a product that Bank Mega is now offering customers. This product is really attractive, as after a certain period of time the bank will refund the entire loan principal to the loan receiver.

This product is indeed not purely a banking product, tending to resemble an insurance product. Installments are needed as the premiums, and then Bank Mega pays these premiums to Mega Life, an insurance company. So, the refund of the installment principal, plus the premium, will not be borne by the bank as it is the insurance company that will invest the funds in a number of investment baskets.

"So, after a certain period of time, the customer can get back his money plus the premium," said Bank Mega's vice president of the consumer business division, Jopie Jusup.

Bankers are certainly very good at packaging their consumer loan products, and they usually find no difficulties selling their products given that consumerism runs deep in the veins of many members of the public. These people are eager to get loans for the purchase of houses, motorized vehicles, electronic goods and household appliances.

Is consumerism running high in society? The following data compiled by Bank Indonesia may help answer the question. According to the data, total consumer loans stood at Rp 58.598 trillion in 2001, and it increased to Rp 111.216 trillion the following year. In 2004, consumer loans jumped to Rp 151.081 trillion in value.

In 2005, despite the worsening macroeconomic conditions, the growth of consumer loans remained high throughout the year. The growth rate was even faster compared with the loans channeled in 2004. The growth rate for consumer loans throughout 2005 stood at 36.73 percent, with a credit position of Rp 206.691 trillion, while in 2006 the figure rose to some Rp 203 trillion.

Banks, which are highly sensitive to such developments, realize this tendency. Don't be surprised, therefore, if in 2007 many banks rely on the consumer sector as their loan targets. Indeed, the consumer banking business seems to remain the prima donna in Indonesia. The increase in fuel prices twice in 2005 did worry banking circles. However, their worries have not proven correct. In other words, the consumer banking business continues to develop well.

According to Bank Mandiri senior vice president Pardi Sudradjat, there are several reasons why the consumer banking business continues to flourish. First, national banks are still too traumatized to augment the corporate sector. The experiences that the banking circles went through during the economic crisis made them realize that the corporate sector, which looks glamorous and lucrative, can easily collapse in a very short time during a crisis.

As referred to earlier, consumerism runs deep in the veins of many Indonesians. It comes as no surprise, therefore, that the growth of the credit card business, which is one of the spearheads of consumer banking, has never slackened. The total number of credit cards issued by 21 banks now reaches 8.5 million. Meanwhile, there are about 4 million credit card holders in Indonesia. This means that every cardholder in Indonesia owns an average of two credit cards.

The jump in the use of credit cards can be seen from the fact that about 30 credit card transactions are conducted per second. The growth of credit cards has become increasingly faster, reaching about 20 to 30 percent a year. Meanwhile, the total value of credits reaches almost Rp 19 trillion a year.

Obviously, the flourishing consumer banking has led to competition in the business. Up to the end of 2006, consumer loans continued to increase, although the interest rates on consumer loans also went up. As is known, Bank Indonesia has continued to lower its BI rate, and this rate is expected to continue to go down to 8.5 percent. However, a high interest rate on loans has not discouraged customers from taking consumer loans. Loans without collateral (KTA) for individual customers, for example, have now become very popular.

As for the banks themselves, they are competing with one another to offer KTAs to the extent that sometimes they neglect the real financial capacity of customers. Although the interest rate is relatively high, many people are interested. Another reason for the great popularity of KTAs is that the loan application procedure takes only a short time, making this type of loan very helpful to those needing to get money quickly. In short, consumer loans for individual customers remain promising for banks.

The consumer sector is considered a bonanza not only for private banks but also government-owned banks. BI data say consumer loans channeled by private banks in January 2007 amounted to Rp 5.49 trillion, up from Rp 3.40 trillion in the same month last year. Meanwhile, for January 2007, consumer loans distributed by government banks stood at Rp 3.22 trillion in the first month of the year, up from Rp 2.33 trillion in the same period last year.

As the customers will use the loans for consumer purposes, the risk that they will be unable to repay their loans is bigger. That's why the interest rate on these loans is usually higher than loans given for business purposes. As the country's central bank, BI was once worried about the development of these consumer loans. In fact, however, non-performing loans (NPL) in the consumer loan sector is still relatively low, at an average of 3 to 4 percent.

That's why the tough competition among banks in distributing their consumer loans will not lessen in 2007, especially because the consumer banking business is temptingly lucrative. It has come as no surprise, then, that in its 2007 corporate budget work plan (RKAP), for example, Bank BNI, which usually channels more corporate and commercial loans, will not forget to work on consumer loans, the portion of which, according to one of the bank's directors, Achmad Baiquni, stands at 15 to 16 percent.

Meanwhile, Bank Rakyat Indonesia (BRI), which has for years been concentrating on small and middle-sized enterprises, has also been tempted by the consumer banking business. According to Sofyan Basir, president director of BRI, the bank is eying the funds of the urban community in 2007.

"We are ready to collect cheap funds from the consumers' banking. This is something new," he said as quoted in InfoBank magazine.

According to Sofyan, in the past BRI only maneuvered among rural people through its Simpedes (Rural People's Savings), for example. Today, however, BRI has begun to explore urban customers. The determination of BRI to intensify its collection of third-party funds will be realized by improving the quality of its services.

Service is indeed the main key in every type of business, not only, of course, in the consumer banking business. This means that BRI will also be ready to challenge BNI and Bank Mandiri in the consumer banking market, in addition to also challenging private banks, which are surely more aggressive.

Opinion & analysis

Indonesia's banks pushed to lend

Asia Times - April 21, 2007

Bill Guerin, Jakarta – After heavy government lobbying, Indonesia's central bank (BI) has agreed to roll back lending restrictions imposed on the banking sector in the wake of the 1997-98 Asian financial crisis and promote new bank lending targets for small and medium-sized enterprises (SMEs).

Ten years since Indonesia's spectacular financial implosion, the country's banks have by and large recovered, with improved capital adequacy, loan-to-deposit and nonperforming loan ratios, which now account for 7% of total outstanding credits. That's still a high ratio by international banking standards, but a significant improvement on the over 60% to 70% witnessed at the height of the country's financial collapse.

Indonesian Vice President Jusuf Kalla has frequently and openly carped that over-cautious banks are holding back the economy. In recent months he has publicly lobbied for them to lend more aggressively – even to former big corporate defaulters – to spur growth. He has been particularly critical of banks parking their funds in government-guaranteed short-term Bank Indonesia Certificates (SBIs) rather than extending new loans. SBIs generate relatively risk-free yields of up to 12%, slightly less than the current average bank lending rate of 14%. Estimates of the total amount of funds Indonesian banks now have wrapped up in SBIs range anywhere from Rp230 (US$25.2 billion) to Rp280 trillion.

The business-minded Kalla has championed the cause of SMEs, which constitute the bulk of Indonesia's corporate sector, representing 90% of the country's total 44 million registered companies, according to the Ministry for Cooperatives and Small and Medium Enterprises. Last year SMEs accounted for nearly 55% of gross domestic product (GDP), pumping Rp1,480 trillion into the local economy and providing 96% of the country's estimated 80 million jobs.

As of December 2006, an estimated Rp428 trillion ($47 billion) was out on loan to SMEs, a sum that equates to more than half of the total outstanding loans in the banking sector. But lending restrictions to the sector have arguably held back the expansions and upgrades Indonesia's SMEs require to stay competitive, particularly in light of China's emergence as the world's factory floor.

Since 2005, BI has severely restricted lending to business sectors with higher than average rates of non-performing loans (NPL), defined as loans where monthly repayments have not been made for more than three months. A case in point is the textile industry, which as of 2004, had an NPL ratio of 8%-9%, and where capacity expansion has slowed to a trickle because of companies' inability to secure new loans.

Amid an export boom propelled by the anti-dumping tariffs imposed by Western countries on Vietnam and China, domestic manufacturers have since increased total textile and garment exports by almost 10% last year, totaling $9.7 billion in overseas revenues. Sector exports are expected to increase to $10.5 billion this year and to $14 billion by 2010, industry analysts say.

Benny Soetrisno, head of the Indonesia Textile Association, is upbeat about these short-term prospects but contends that the industry will need more than $5.19 billion in new capital outlays to maximize the increased export opportunities. But high interest rates and BI restrictions on new lending to red-flagged business sectors like textiles has hindered expansions.

Policy lending

That may soon change, however. Kalla has recently persuaded the central bank to ease its regulations and encouraged commercial banks to lend more – even to borrowers with a history of non- repayment. Under the new rules, banks will be able to evaluate new potential loans on a project-by-project cashflow basis, including those in so-called "sunset" industries like textiles and for other long-term development projects.

BI governor Burhanuddin Abdullah recently said in a statement that the revised rules were designed to help the banking industry cope with the challenge of providing financing to the "real sector". He made the announcement directly after a closed-door meeting with Kalla, several senior ministers, Indonesian Chamber of Trade and Industry (Kadin) chairman M S Hidayat and top executives from several state-owned and private banks.

Abdullah also said 3.5 million different SMEs would be offered a total of Rp87.2 trillion ($9.6 billion) in loans over the course of this year, a move toward policy-directed lending. Average bank lending rates are now up around 14%, and chairman of the Indonesian Association of National Banks Agus Martowardojo predicts rates could drop to 12.9% in 2007 from last year's average of 14.9% due to a softening economy.

The macroeconomic environment is improving for borrowers, which in recent years have faced prohibitively high interest rates on loans due to runaway inflation rates. The authorities have effectively reined in inflation, which was down around 6.6% last year after spiraling to over 17% in 2005. In March, it dropped to an 11-month low of just 0.24%.

On the back of these softer inflation figures and a strong trade surplus, consensus forecasts were for the BI to cut its benchmark interest rate by a quarter point to 8.75%. The BI held the rate steady at 9% due to lingering concerns about inflation in consumer goods, but the governor told reporters he expects the rate to fall to 8.5% by year-end.

With unemployment running at near all-time highs, Kalla's desire to pump more liquidity through the financial system to the grassroots economy makes political sense. The government's five- year development plan announced in 2005 targets an annual average GDP growth rate of 6.6% by 2009, which if achieved is expected to slash current poverty and unemployment rates by half to 8.2% and 5.1% respectively.

Most of the 5.8% GDP growth accomplished last year stemmed from a boom in global commodity prices rather than ramped-up industrial production – indicating the Indonesian economy is heading down rather than up the global value-added chain. And current economic growth levels are not enough to absorb the estimated 2.5 million new entrants to the national labor force.

The risk, of course, is that Kalla's bid to pump up the economy through more bank lending could amplify the non-performing loan problems Indonesia's banks have only recently brought under control. So, too, could the politicians' bid undermine the more prudential risk-return lending systems many banks have adopted since the 1997 crisis. Indeed, history shows that politics and finance often mix to volatile effect in Southeast Asia in general and Indonesia in particular.

[Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has been in Indonesia for more than 20 years, mostly in journalism and editorial positions. He specializes in Indonesian political, business and economic analysis, and hosts a weekly television political talk show, Face to Face, broadcast on two Indonesia-based satellite channels. He can be reached at softsell@prima.net.id.]

Reshuffle needed

Jakarta Post Editorial - April 17, 2007

The ongoing debate over whether President Susilo Bambang Yudhoyono will reshuffle his cabinet seems to have missed the point. And the President himself, as well as Vice President Jusuf Kalla, has contributed to the prolonged confusion.

On a visit to a fruit farm in the West Java town of Bogor on Sunday, Yudhoyono said he would not bow to pressure from political parties to shake up his two-and-a-half-year-old Cabinet. He added, however, that he would consult the parties whose representatives at the Cabinet would be replaced.

Some 500 kilometers away in Yogyakarta, Vice President Jusuf Kalla said another limited reshuffle was imminent and the Golkar Party, which he chairs, would be ready to sit in the cabinet.

Both the President and his deputy have not only sent conflicting signals on the reshuffle, but have reduced it to political chit- chat.

Going into the second half of his tenure, Yudhoyono looks to have lost his touch with the millions of voters who helped him win the presidency in 2004 with their faith in his ability to bring change to the country.

There is indeed an urgent need for a cabinet reshuffle as some ministers have failed to perform or have lost public trust due to their blatant conflict of interests. A reshuffle is not about Kalla or pressure from political parties that make up the president's rainbow United Indonesia Cabinet.

Whether the political pressure exists or not, replacement of a certain cabinet member is warranted when he or she can no longer perform or has spoiled the public's trust in the government. Even Yudhoyono should have substituted or asked Coordinating Minister for People's Welfare Aburizal Bakrie to resign over his links to the mudflow in the East Java town of Sidoarjo. The presence of Aburizal, whose family owns PT Lapindo Brantas, which has been blamed for the disaster, in the cabinet has possibly slowed the solution to problem through the obvious conflict of interest.

The public's sense of justice has been humiliated by the recent confession of Justice and Human Rights Minister Hamid Awaluddin and Cabinet Secretary Yusril Ihza Mahendra of their role in the transfer of money belonging to Hutomo "Tommy" Mandala Putra back to Indonesia when the son of former president Soeharto was an inmate. Kalla has defended the two cabinet members, and worse, Yudhoyono has taken no action against them, at least visibly.

The replacement of Transportation Minister Hatta Radjasa was a much-vaunted issue following a recent series of accidents involving airplanes and ships. But nothing happened. It is business as usual.

In his defense of his refusal to reshuffle his cabinet, Yudhoyono said Sunday that he gave priority to the continuity of his government.

With less than one year of his effective period left, President Yudhoyono cannot wait for more reasons to shake up his cabinet. He cannot let some ministers undermine his government's programs and credibility.

Next year all political parties, including the President, Vice President and political figures who hold posts in the cabinet, will start gearing up for the elections. Yudhoyono knows well how difficult the situation next year will be, as he experienced it when he served as a minister under President Megawati Soekarnoputri.

A cabinet reshuffle maybe a bit late for Yudhoyono to conduct, but it's better late than never. A reshuffle means better teamwork among cabinet members to deliver on promises the Yudhoyono administration has been unable to materialize in the first half of its term. More than just a want, a reshuffle is a need.