News & issues

Crisis sets back payouts for Indonesian mud volcano victims

Agence France Presse - November 28, 2008

Alvin Darlanika, Jakarta – Just when they thought life could not get much worse, victims of Indonesia's mud volcano are now being buried under the global financial crisis as they await compensation for their lost homes.

The Lapindo Brantas energy firm blamed for the disaster is part of the business empire controlled by the family of Aburizal Bakrie, the country's billionaire welfare minister.

And times are tough for the mega-rich Bakries, with debts of 1.2 billion dollars due to be paid back next year and shares in their stable of companies collapsing as much as 90 percent in recent months.

Lapindo Brantas now admits it will have to delay paying the remainder of the compensation it has promised the victims to help rebuild their lives.

"There has been postponement in the compensation due to administration issues and the effect of the global financial crisis," Lapindo spokeswoman Yuniwati Teryana said.

The volcano, dubbed Lusi, has swamped 12 villages in east Java since it burst from a Lapindo gas exploration well two years ago, killing 13 people and displacing about 36,000. It continues to spew stinking sludge at a rate of dozens of Olympic swimming pools a day.

Bakrie blames an earthquake for the world's biggest mud geyser, but geologists from Durham University have published studies they say proves the well triggered the disaster.

Lapindo has said it will pay less than eight trillion rupiah (680 million dollars) for compensation and the clean-up, well short of the 4.6 billion dollars reportedly required for the clean-up alone.

More than two years since the birth of Lusi, it has only dispersed about 718 billion rupiah (60.3 million dollars) in cash to more than 12,000 families, or about 5,000 dollars per family, according to company figures.

The company acknowledges this is only about 20 percent of the value of the lost properties, and assures angry victims the rest of the compensation is "on the way." "Our target is to finish payments and housing schemes by 2010 or 2011," the spokeswoman said.

But that's just not good enough for the displaced families, most of whom have rejected Lapindo's offer of new housing in nearby villages.

"We're furious at Lapindo. They made a promise they couldn't keep," victim Suwito told AFP, accusing the government of trying to shield the influential Bakrie from responsibility.

"We know that despite the financial crisis, Bakrie still has sufficient funds to settle the problem. There is no excuse for them to delay this," said lawyer Taufik Basari, who represents some of the victims.

More homes were flooded this month when one of the dykes built to hold back the mud burst because of heavy rains and Lapindo's decision to cut the supply of materials needed to maintain the levee.

Holding company Bakrie & Brothers, which owns Lapindo through a subsidiary, has loans worth 1.2 billion dollars due next year and has started to default on short term loans.

To pay off its debts, it has been desperately trying to sell its 35-percent stake in coal giant Bumi Resources for about 1.3 billion dollars. That deal, with Texas Pacific Group affiliate Northstar Pacific Partners, is now on the ropes because of a 50- percent slump in Bumi's share price since October.

Until recently, Bakrie was considered the richest man in Indonesia with a family fortune estimated by Forbes Asia magazine at 5.4 billion dollars, from holdings that span palm oil to coal and construction.

He has escaped censure over the mud disaster, saying he has nothing to do with Lapindo's operations as he prefers to focus on poverty alleviation and his charity organisation.

Chalid Muhammad, of the Green Institute environment group, said prosecutors should use the Durham University studies to hold Lapindo to account.

At a conference of the American Association of Petroleum Geologists in South Africa in October, 42 out of 74 scientists voted in support of studies indicating Lapindo's gas well triggered the volcano.

Only three voted in support of the earthquake theory, and they were all Indonesians, Muhammad said.

New book sparks debate on CIA role in Indonesia

Jakarta Post - November 25, 2008

Adianto Simamora and Dian Kuswandini, Jakarta – The release of Tim Weiner's Pulitzer-winning book The Legacy of Ashes: The History of the CIA in Indonesia has sparked controversy over allegations former vice-president Adam Malik was involved in the US spy agency and the overthrow of Sukarno.

Although the book was released almost a year and a half ago in the US, debate has erupted here after Jakarta-based Gramedia Pustaka Utama published the Indonesian version of the book, titled Membongkar Kegagalan CIA (Uncover CIA Failures) recently. Like other sceptics, Vice President Jusuf Kalla expressed disbelief Monday at the content of the book, particularly its description of Adam as a former Marxist who was recruited under CIA top official Clyde McAvoy when they met in Jakarta in 1964.

Adam, allegedly acting as a spy for the CIA, recieved US$10,000 to spearhead a movement to cleanse communists following their abortive coup attempt on Sept. 30, 1965.

"I do not believe the allegations against Adam. He could never have carried out the actions stated in the book," Kalla said. "Adam's political orientation was not in line with the US ideology. As founder of the Murba Party, Adam held socialist views, so it was unlikely he would have joined the CIA."

Kalla said Adam was known as an easy-going person, which helped him make friends with many people, including US diplomats.

The book is based on more than 50,000 documents, primarily from the archives of the CIA itself, and hundreds of recorded interviews with CIA veterans, including 10 directors of the agency.

But Kalla regretted the publication of the book and asked its writer, a New York Times journalist, to take responsibility for the potential damage he had caused. A similar request came from the House of Representatives Speaker Agung Laksono, who asked the Attorney General's Office (AGO) to ban the book.

AGO spokesman Jasman Pandjaitan said his office could not implement a ban without investigating the book thoroughly. "We can order for the book to be withdrawn from shelves if our investigation suggests it will destabilize the country's politics, security, ideology, society or culture," he said.

He said Adam's family could file a complaint with the AGO against the book.

There are at least six texts highlighting the controversy surrounding the 1965 coup attempt and ensuing transfer of power from Sukarno to Soeharto. Since the fall of Soeharto the government has called on historians to collect the necessary facts to rewrite the dark chapter of the country's history.

Actions, demos, protests...

Nine demonstrations to open the first day of the working week

Detik.com - November 24, 2008

Taufiqqurrahman, Jakarta – Demonstrations are again set to enliven Jakarta and the nearby satellite city of Tangerang today. Not being half-hearted, nine separate protest actions will open the first working day of the week with traffic congestion along roads being used by residents to travel to work being a real possibility.

As reported on the Metro Jaya regional police Traffic Management Center website on Monday November 24, for the Jakarta area the demonstrations will start at 8am in the Cakung Clincing area of North Jakarta at the entrance to the Nusantara Bonded Zone (KBN).

Also at 8am, three separate demonstrations will take place at the central office of the General Elections Commission (KPU) on Jl. Imam Bonjol in Central Jakarta, the Ministry of Justice and Human Rights on Jl. Rasuna Said in South Jakarta and the House of Representatives building in Senayan, South Jakarta.

Following this at 10am, a protest action will take place at the State Place, the Hotel Indonesia roundabout and the KPU offices. The Capital Market Supervisory Agency on Jl. Dr Wahidin in Central Jakarta will also be the target of a demonstration.

The final protest will take place at 10am at the Jakarta Regional House of Representatives building on Jl. Kebon Sirih and the Jakarta City Hall on Jl. Medan Merdeka Selatan.

Tangerang meanwhile will face two protest actions at 9am at the Tangerang District Attorney's Office on Jl. TMP Taruna and in front of Tangerang regent's office. (mad/mad)

[Translated by James Balowski.]

Minivan drivers protest new buses

Jakarta Post - November 25, 2008

Nurni Sulaiman – Some 1,500 public minivan drivers staged a rally in front of the Balikpapan legislative council Monday in opposition to the municipality administration's plan to operate 20 buses as part of a mass public transportation service.

The 20 buses, which are scheduled to go into operation next month, were gifted by the central government to Balikpapan – which is known as the "Fuel City" of East Kalimantan – as a prize for it winning the 2008 Wahana Tata Nugraha Award.

The demonstrators urged the administration and the council to cancel the proposed bus service and to dissolve the Balikpapan Public Transportation Means Communication Forum.

"Currently, minivan drivers face difficulties in earning money. If the buses are operated, what will happen to our lives then," Jamal, one of the demonstrators said during the rally, which caused traffic congestion along Jl. Jenderal Sudirman for two hours.

The head of the Balikpapan Transportation Agency, Kadarsyah, said his office together with the administration and the council were still analyzing the feasibility of the proposed bus service.

"So, it's not a 100 percent sure thing," he said.

The council's chairman, Andi Burhanuddin Solong, said he had not yet received a draft for the bus service plan.

"The council has yet to receive the draft of the plan to operate the buses as mass transportation. So, we have not been assured yet when the program will go ahead," he added.

Aceh

Jobless rate alarming in Aceh as relief projects slow

Jakarta Post - November 24, 2008

Jakarta – Unemployment in Aceh Nangroe Darussalam has increased this year as rebuilding efforts following the deadly tsunami that hit the province in late 2004 have slowed.

A report arranged by the World Bank and Bank Indonesia (BI) under the Multi-Donor Fund for Aceh and Nias scheme put the unemployment rate as of the second half of this year at more than 9 percent, or close to the national rate.

Many jobs were created in the immediate aftermath of the disaster to serve the reconstruction effort, temporarily boosting employment, according to the deputy manager of the Multi-Donor Fund Safriza Sofyan.

"With a gradual exit of reconstruction players, there might be upward pressure on unemployment as the reconstruction comes to an end."

"Significant investment in the private sector, especially in agriculture and manufacturing related to agriculture is necessary to reverse this trend," Safriza said in a recent statement.

Aceh's population stood at 3.97 million as of 2005, 2.06 million of whom were employed, according to the Central Statistics Agency (BPS).

Agriculture continues to be the largest employer in Aceh, absorbing more than 50 percent of the work force, the report said.

Nevertheless, the sector had been shedding workers since before the tsunami and the trend is likely to continue so as productivity increases and more people find employment in other sectors.

At the national level, 41 percent of workers are employed in the agriculture sector; well below Aceh's percentage.

The report shows a significant increase in employment in the services and small industrial sectors, partly as a result of outside assistance for small and medium enterprises as part of the reconstruction effort.

The report says the high wages in the formal sector have constrained Aceh's competitiveness and its ability to attract investment – an issue that has been frequently bemoaned by potential investors.

Analysts believe a high unemployment rate will threaten Aceh's political stability as former combatants of the now disbanded Free Aceh Movement would use the issue as ammunition to challenge the effectiveness of the peace accord signed with the government in 2005.

This is because most of the former combatants are not only unemployed but also live in worse conditions compared to their former leaders. The discord was evidenced by a recent string of armed robberies linked to the former militants.

The jobless rate is expected to continue to rise as economic growth in the region slows.

According to the report, Aceh's preliminary gross domestic product for 2008 stood at 3.1 percent, far below the national growth rate of 6.9 percent.

The World Bank believes sectors linked to the reconstruction effort were showing low or negative growth rates, while other sectors, including agriculture and manufacturing, would need to compensate, although their current rate of expansion is insufficient to boost the economy.

Over the past few years, growth has mainly been fueled by the reconstruction effort and the availability of reconstruction funds.

Despite low growth, according to the World Bank, private consumption has been relatively unaffected as reflected by a large amount of funds being transferred to the province, as well as healthy vehicle sales and electricity consumption.

The agency also revealed inflation in Aceh had declined to below the national level for the first time since the tsunami.

The province's inflation rate has been easing since peaking in December 2005. As of August, 2008, the year-on-year rate had reached 8.2 percent, below the national level of 11.9 percent.

"A reduction in inflation was expected, as demand from the reconstruction effort is slowing down and supply chains are being restored in the province", said World Bank economist for Jakarta Enrique Blanco Armas.

The World Bank and BI forecast economic growth this year is likely to be lower than the 7.4 percent level recorded last year and 7.7 percent in 2006, while reconstruction projects will continue to help fuel the economy into next year. (hwa)

West Papua

Papuan asylum seekers return to Indonesia

Sun Herald - November 30, 2008

Tom Allard – Yunus Wainggai and his daughter Anike – two of the 43 Papuans granted asylum in Australia in 2006 – returned to Jakarta last night, ending a two week saga which followed the disappearance of the independence activist and his seven-year old child from their Melbourne home.

Looking uncomfortable and tired after the journey from Australia, Mr Wanggai told reporters at Jakarta's airport that he had decided to return to Indonesia because "I miss my family. I want to be together with my family again."

"I want to go back fishing again," Mr Wainggai said, adding he was not given any financial inducement to go back home.

The return of Mr Wainggai and Anike represents a propaganda coup of sorts for Indonesia, which was so angered by the Australian government granting refugee status to the 43 asylum-seekers that it recalled its ambassador from Canberra. Two other asylum- seekers returned to Indonesia earlier this year.

Mr Wainggai and Anike made the perilous journey to Cape York by boat from the Indonesian town of Merauke in January 2006, a trip organised by separatists who claimed they were being persecuted by the Indonesian government.

But Mr Wainggai's wife, Siti, who is also Anike's mother, didn't make the trip, fleeing to Papua New Guinea instead before going to Vanuatu. Following the diplomatic protests by Indonesia, the Australian government has yet to grant Siti Wainggai refugee status in Australia.

In a letter written from Vanuatu, Ms Wainggai said the slow processing of her refugee claim and her desire to see a sick older daughter who remained in Papua was behind the decision for her and her husband to go back to Indonesia.

Papua is a predominantly Melanesian region of Indonesia that has been the subject of a simmering but low-level independence movement for decades.

While mystery remains about Mr Wainggai's disappearance from Melbourne two weeks ago and his emergence in Canberra in the care of Indonesian officials, the Indonesia government denies there was any kind of intelligence operation to encourage them to return to Indonesia.

Nick Chesterfield, a Melbourne-based Papuan activist said: "We wish them all the best for the future and we hope Indonesia stands by its obligation to protect them and ensure their safety.

"We still have concerns about the manner which they were repatriated, the secrecy surrounding it, and that there was pressure brought to brought to bear on them."

Indonesia's vast Papua in the grip of Asia's worst AIDS crisis

Agence France Presse - November 28, 2008

Aubrey Belford, Wamena – Gaunt and covered in sores, 20-year-old Christina Mabele is a rarity in the ballooning AIDS crisis that has hit the remote Papua region in eastern Indonesia: she knows why she is sick.

Sitting in a hospice in this highlands town, which much of the time is only accessible to the outside world by plane, Mabele might get treatment in time.

But her friend Juliana Halo did not. "She was a friend of mine, we sat together in school, but yesterday she died. She was the same age as me," Mabele said.

Papua, a vast territory of tropical jungles and jagged mountain peaks on the western edge of New Guinea island, has seen an explosion in HIV/AIDS cases among a population that is the poorest in Indonesia. Its infection rate, estimated at 2.4 out of every 100 people, is one of the highest outside Africa. And it is set to rise.

Foreign journalists are usually barred from visiting Papua, which has been under Indonesian control since the 1960s and is home to a low-level independence insurgency. AFP was granted access under escort by an officer of Indonesia's state intelligence agency.

While HIV/AIDS rates in the rest of Indonesia are low, a combination of poverty, distance, lack of education and plenty of sex is driving infections in Papua, according to the government AIDS commission.

The disease is hitting hardest in remote regions like the Baliem Valley, which was untouched by the outside world until after World War II and where many men go naked except for long, pointed gourds over their penises.

Amos Alua, a worker with the Yukemdi independent organisation that tries to educate highlanders about the disease, indicates the scale of the problem by sweeping his hand toward the jungled peaks that rise around the valley.

In those vast mountains, accessible only by light planes or days of walking on tracks that rise precipitously from the valley floor, people are dying but do not know why, Alua said. "Behind the mountains, they still don't know about HIV/AIDS. They're infected but they don't know it," he said.

What makes Papua's HIV/AIDS problem so bad, in short, is sex, according to health experts. Injecting drug use, which is a major source of transmission elsewhere, is not a serious factor here.

Despite widespread poverty, the sex industry is booming in towns across Papua as money rolls in from natural resources under a new system of "special autonomy" with Indonesia, said Jack Morin, the head of population research at Papua's Cendrawasih University.

A sizeable minority of Papuan men are travelling vast distances -- often by foot – for work or to go to markets, having sex with prostitutes in towns, and then bringing infections back to their villages, Morin said.

This is then compounded by high-risk sex in the villages. Papuans know little of condoms and in many places tradition – and in other places encroaching modernity – mean a significant minority are having unprotected sex with multiple partners.

"A number of tribes believe that if semen is thrown away outside of the vagina it can wreck plants, their gardens won't be fertile, people can get sick, or it can be used for black magic," he said.

A recent conference of non-governmental organisations, government and international donors in the provincial capital Jayapura showed the world is waking up to the crisis, with tens of millions of dollars set to roll in for treatment and prevention.

Governor Barnabas Suebu has also thrown his support behind some questionable plans, such as a scheme to microchip some HIV/AIDS victims and, he told AFP, encouraging the infected to drink pandanus palm fruit juice.

Some local leaders are prickly about Papuans being stigmatised as immoral or primitive, said Helena Picarina, who heads the Papua HIV/AIDS programme of Family Health International non- governmental organisation.

"It's a very sensitive issue. If you talk about it, some of them, church people and politicians, will reject it and say it's not our behaviour'," she said. Education also remains desperately inadequate. Baliem villagers are largely unaware of the virus or attribute its spread to flies, or sharing food or cigarette butts.

Parti, a 40-year-old prostitute from far-off Java island who has sex with men behind a tumbledown roadside shack selling soft drinks, said she knew condoms stopped HIV but often let men go ahead without them.

"If we take a look at their appearance, see if they're clean, we can tell if they're infected," she said, adding that she takes antibiotics as a precaution.

With thousands of Indonesian soldiers and a history of human rights abuses towards indigenous Papuans, mistrust of the government also poisons much of the HIV/AIDS fight.

Some prominent Papuan leaders have denounced HIV/AIDS as a "genocide" plot by the government, pointing to the growing number of migrants from other parts of Indonesia who already outnumber Papuans in major coastal cities.

They also point to prostitutes such as Parti, who come to Papua in their hundreds in search of higher wages, as deliberate weapons in this alleged conspiracy.

The belief is pervasive. During a visit to Wamena's hospital, a Papuan man lingered until AFP's intelligence minder was out of earshot before furtively saying: "This is happening on purpose".

Joram Yogobi, an indigenous Papuan who heads the Yukemdi NGO in Wamena, said such conspiracy theories get in the way of efforts to promote condoms and other preventative measures, by shifting the blame on to a resented government. "What we say is: Whether genocide is real or not, we're already dying'," he said.

Indonesian AIDS commission head Nafsiah Mboi said the government hopes its efforts to tackle HIV/AIDS will dispel the Papuans' fears. "Every single Papuan is valuable to this nation and that is why we are supporting them," she said.

Papua Police reiterate stance on separatist flag

Jakarta Post - November 27, 2008

Jakarta – Papua Police has reiterated warnings over any attempt to raise the morning star flag, a symbol of the Free Papua Organization (OPM) separatist movement, to commemorate the movement's anniversary which falls on Dec. 1.

Papua Police chief Insp. Gen. Bagus Eko Danto said police would not tolerate the raising of the flag anywhere in the province, Antara news agency reported Thursday.

"I will not allow any group of people to raise the bintang kejora (morning star) flag on December 1," Bagus said in Jayapura on Thursday.

He said police had rejected a permission request from a group in Puncak Jaya to hoist the flag on Dec. 1, adding that local authorities had taken down flags that were seen flying in the district.

"Police and military officers have gone to the area where the flags were reportedly flying, but learned they had already been taken down," he said.

The morning star flag represented the territory of West New Guinea, where West Papua province now stands, from Dec. 1, 1961, until Oct. 1, 1962, when the territory came under the administration of the United Nations Temporary Executive Authority (UNTEA).

The territory was later internationally recognized as an Indonesian province following the controversial 1969 UN- supervised "Act of Free Choice" which resulted in the territory joining Indonesia. (dre)

Special autonomy fails to help native Papuans: Seminar

Jakarta Post - November 27, 2008

Erwida Maulia, Jakarta – The special autonomy law has been in force for seven years in resource-rich Papua, but has made little difference to the socio-economic and political conditions of its indigenous people, a seminar concluded here Wednesday.

The forum cited the influx of migrants from outside the country's most eastern province as a factor which keeps the indigenous people marginalized.

Quoting a 2007 study by an Australian researcher, Lea Kanisia Mekiuw, of the Merauke Archbishop's Justice and Peace Secretariat, said the growth of the native Papuan population has fallen compared to that of the newcomers, sparking concerns that the indigenous people could lose their homeland to the latter.

The study, conducted by Sydney University's Center for Peace and Conflict studies research fellow Jim Elmslie, said that the annual growth rate of native Papuans is only 1.67 percent, much slower than that of the non-native Papuans, which is 10.5 percent.

In 1971, the indigenous Papuans constituted 96 percent of the province's total population of 923,000 people. But in 2005, the proportion changed significantly to 59 percent of 2.65 million people.

If the growth rates of the two groups continue at the same pace, Elmslie projected that in 2020, the ratio of native to non-native Papuans would stand at 30:70, and in 2030 the gap could be at 15:85.

Frederika Korain of Jayapura Bishopric's Justice and Peace Secretariat, speaking at the same event, said there was no official data on the proportion of native to non-native Papuans. This could be an attempt by the local and central governments to conceal the real conditions of the native Papuans, she added.

She said the special autonomy law, enacted in 2001, also had failed to improve the social and cultural lives of indigenous Papuans. Eighty percent of native Papuans are living below the poverty line, with most local jobs granted to migrants instead of the typically poorly educated indigenous people, Frederika said.

"Freeport (the US-based copper and gold mine company operating in Papua) has been the country's biggest taxpayer since 1967, but 80 percent of native Papuans still live in absolute poverty. Poverty pockets are evenly spread throughout almost all Papua regencies," she said at the seminar, which was titled, Building a National Support Constituency for the Fulfillment of Papuan Women's Rights, and organized by the National Commission on Violence Against Women.

Lea warned that millions of hectares of forests have been and more would soon be destroyed due to the operations of large mining, forestry and plantation firms.

She also said that the 2007 split of the region into Papua and West Papua provinces had brought more negative impacts than benefits to the native Papuans, with many locals being forced to compete with one another to find food to eat instead of sharing an area.

Other speakers in the seminar, all who came from Papua, also spoke of the poor education and health services in the province, as well as the conditions of the local women. Many cases of physical and sexual abuses were reported against native Papuan women, they added.

They urged both the central and local governments to be serious in implementing the 2001 special autonomy law on Papua, including giving the indigenous people the right to earn a better living.

Commission rejects Papuan AIDS microchip bylaw

Jakarta Post - November 26, 2008

Nethy Dharma Somba, Jayapura – The Papua AIDS Commission (KPA) on Tuesday submitted a letter rejecting a controversial draft bylaw that would require people living with HIV/AIDS to be implanted with a microchip.

The letter, sent to the governor, stated the proposal was against the nature of HIV/AIDS prevention and human rights.

"The draft bylaw has not yet been deliberated with the health office, the KPA, religious institutions or other levels of society, such as non-governmental organizations," Papua KPA head Constan Karma said.

"The Provider Initiated Concealing and Testing method totally contradicts what has been stated in Article 15 of the bylaw, which requires that all people be tested," Karma said, adding that he also opposed the establishment of the AIDS Inquiry Agency, citing that funding the agency would be burdened on the province.

Head of the Communications Forum for Indonesian Veterans' Children, Yan Ayomi – also chairman of Papua legislature's Commission C – said the legislature fully supported the proposal.

"I am in favor of the bylaw to protect the basic rights of native Papuans, whose numbers are very small. Of the 4,114 HIV/AIDS cases in Papua, 60 percent involve native Papuans, so the tackling of the issue must also be harsh," Ayomi said.

He said the alarming rate of HIV/AIDS cases was threatening the population of Papua, which he said was growing at a slow rate, and that an effective bylaw was needed to resolve the issue. "HIV/AIDS has been present in Papua for the last 16 years. We no longer need a grand design but a specific design," he said.

Head of the Fajar Timur theological academy in Jayapura, Neles Tebay, said he opposed the passage of the bill. "The use of microchips violates human dignity. If it's passed, we will submit our rejection because the bylaw has not gone through an open and public debate," he said.

The bylaw on HIV/AIDS prevention has entered deliberation and is set to be passed at the end of next week. NGOs and a number of other rights groups have voiced their opposition to the bill.

Papuan asylum seekers to return to Indonesia

ABC News Online - November 26, 2008

Two more Papuans from a group who landed in Cape York two years ago are said to be seeking to return to Indonesia.

In January 2006, 43 Papuans landed a boat in Cape York and claimed asylum. All were eventually granted temporary protection visas. The incident sparked an intense diplomatic stoush, peaking with Indonesia's recall of its ambassador to Canberra.

In late September, two of the asylum seekers suddenly returned to Papua, and Indonesia claimed this as evidence of the improving situation there. Others close to the couple claim their return had more to do with their avoiding legal issues in Australia.

Now another two of the 43 are also understood to be negotiating repatriation with the Indonesian Embassy in Canberra.

Anger at tagging plan to fight HIV in Indonesia

The Guardian (UK) - November 25, 2008

Sarah Boseley, health editor – People with HIV in Papua, Indonesia, who are deemed to be "sexually aggressive" may be microchipped to enable the authorities to identify, track and punish those who deliberately infect others under a plan which has the backing of the provincial parliament.

Human rights campaigners and support groups yesterday condemned the plan as an intrusion into privacy as well as being unworkable. It would further stigmatise those with HIV and push the epidemic underground, they said.

The detail of the scheme has not yet been worked out, but if it gets the vote of the majority in Papua's parliament, it will be enacted next month, said an MP, John Manangsang. Anybody found guilty of deliberately infecting another person would be liable to a six-month jail sentence or a fine of about #3,300.

Indonesia has one of the fastest growing HIV rates in Asia, but Papua, the poorest and easternmost province, has been worst hit, with almost 61 infections per 100,000 people – 15 times the national average.

"The health situation is extraordinary, so we have to take extraordinary action," said an MP, Weynand Watari.

A committee would be created to determine who should be fitted with chips and to monitor patients' behaviour, but it remains unclear who would be on it. It is also unclear what level of proof of deliberate infection the microchips would provide.

Nancy Fee, country coordinator for UNAids, said she had "grave concerns" about the effect it might have on human rights and public health.

John Howson, associate director of the International HIV/Aids Alliance, said: "The majority of new infections come from people who don't know they are HIV positive. It is not going to be effective and you are treating people as criminals. It will increase stigma and promote a feeling of complacency."

Labour issues

Pay us what it costs to live: Workers

Jakarta Post - November 29, 2008

Fadli, Batam – About 200 members of the All-Indonesia Federation of Workers Union in Batam demonstrated outside the Batam municipal office Thursday, demanding the city's minimum wage be equivalent to the standard costs of living.

The workers, coming from 12 companies operating in Batam, demanded a tripartite meeting between government, workers and employers to end the deadlock in labor talks and find a way for the mayor to set the minimum wage in line with the cost of living.

Batam's monthly minimum wage is currently set at Rp 960,000 (US$87). Based on a survey by several institutions, including the municipality and the Riau Islands Remuneration Council, an acceptable wage level would be Rp 1,350,000 a month.

Deputy chief of the union's electronic and metal division Irham Chairunnas told The Jakarta Post the rally was held because employers had failed to offer the wage rise expected by workers.

"The dialogue between workers and employers has reached a stalemate. We demand the mayor take a stance in setting the minimum wage to be on par with the standard costs of living," Irham said.

According to Irham, the minimum wage needs to be at that level so workers can survive, given the cost of accommodation, meals and transportation, and a lesser amount could have an impact on workers' productivity. "We will continue to protest until our demands are met," said Irham.

Separately, head of the Batam Manpower Office, Rudy Syakyakirti, said his office would convey the workers' demands to employers, but asked for workers' understanding of the current tough economic times.

He said the demand for a higher raise was unrealistic. "We ask workers to understand the current condition of the employers. However, we will convey their demands in order to reach a settlement," said Rudy.

Secretary of the Riau Islands chapter of the Indonesian Employers Association, Abdullah Gosse, said employers had limited capacity to raise the minimum wage next year, and any raise could be no more than around Rp 20,000.

"The government and businesspeople should pay attention to the current global situation. Many orders can't be met, or have been canceled. How can employers meet workers' demands in this kind of environment?" Abdullah said.

He has said the governor should decide on the minimum wage, should talks between workers and employers fail, because of the governor's wider perspective.

House wants new joint wage decree scrapped

Jakarta Post - November 26, 2008

Jakarta – Under mounting pressure from workers, the House of Representatives demanded Tuesday the government revoke a joint ministerial decree limiting minimum wage rises, citing it could lead to conflict.

House Speaker Agung Laksono said legislators had agreed to demand the revocation of the decree because it would disadvantage workers and had incited harsh reactions nationwide.

"The country does not need such a decree as it has no benefit at all," he was quoted by Antara news agency as saying after a meeting with House faction leaders to discuss the issue.

"We should avoid things that could threaten the state's stability. We have witnessed increasing protests against the decree in many provinces," Agung added.

The decree was signed last month by four ministers – Manpower and Transmigration Minister Erman Suparno, Trade Minister Mari Elka Pangestu, Industry Minister Fahmi Idris and Home Affairs Minister Mardiyanto.

The government argued the decree was designed to empower the local economy against fallout from the global economic crisis and to anticipate ensuing mass layoffs.

The decree requires provincial governors not to impose wage rises exceeding the growth of the national economy. The decree also stipulates that monthly minimum wages are set by each company in a bipartite meeting of employers and workers, and fixed based on regional economic growth.

Existing regulations emphasize the role of local administrations in determining adjustments to the minimum wages, meaning firms are not at liberty to set the threshold based on their financial capabilities.

The decree also highlights the involvement of local administrations in supporting business sustainability by taking into account business capabilities, especially in the labor- intensive sector.

Labor unions across the country have protested the rally, citing that the government allowing employers to determine minimum wages would encourage unfair practices.

The decree was reportedly prompted by fears among business communities that certain local administrations were planning to increase their minimum wages by up to 30 percent.

The Bekasi administration planned to increase its minimum wage by 30 percent next year, while the Semarang administration proposed a 15 percent increase and Balikpapan a 20 percent rise.

On Tuesday, demonstrations continued in several parts of the country, including Mojokerto, East Java, where hundreds of workers rallied in front of the local administration office to demand the decree be scrapped.

"The joint decree has shown that the Susilo Bambang Yudhoyono- Jusuf Kalla administration is siding with the capitalists, not common people. This proves that the government is opposed to the poor," said rally coordinator Afik Irwanto as quoted by Antara.

He said the decree would disadvantage workers "because it legalizes the low standard of wages, nullifies social subsidies and supports the implementation of the contract-based system and outsourcing recruitment in companies."

Overseas demand for Indonesian workers stays high

Jakarta Post - November 26, 2008

Astrid Wijaya, Jakarta – The ongoing global financial crisis will not reap havoc on the demand for Indonesian migrant workers, particularly in Kuwait, the United States and Canada, an official said.

According to the promotion director of Manpower Replacement and Protection (BNP2TKI) Endang Sulistyaningsih, opportunity for Indonesian laborers to work abroad remains high, with the US and Canada in need of about one million nurses and care-givers.

"I just came back from the US, and they said they are seeking up to one million nurses before 2020," Endang told Antara. Endang added that the demand for care-givers in the US and Canada was on the rise due to the huge population of elderly citizens.

"Opportunities for our citizens to work abroad remain high, but the biggest challenge comes from language proficiency. We still lag behind the Philippines, India, and Bangladesh, but only because English is an official language in those countries," she said.

On its official website (www.Bnptki2.go.id), BNP2TKI said that, through a private manpower recruitment company, Kuwait had requested 12,000 nurses from Indonesia for 2009.

"This is a hard work to deal with in 2009," BNP2TKI head Muh. Jumhur Hidayat said, after a meeting with the company's chief executive in Kuwait on Monday.

According to the latest data from the Central Statistics Bureau there are 5 million Indonesian migrant workers across the world. The bureau has predicted the number will grow by 700,000 to 1 million next year.

BNP2TKI data showed that the total combined remittance of migrant workers increased from US$3.42 billion in 2006 to $5.84 billion last year. In the first four months of 2008, the figure already stood at $2.23 billion.

Canada is deemed the best potential market for Indonesian workers. Yonas Karyanto, the general manager of labor supplier PT Yonasindo Intra Pratama, said Tuesday that, at the end of the year, the North American country had requested 500 skilled Indonesian workers. The company has managed to send just 15 people so far, as the rest failed to meet the Canadian Embassy's qualifications.

Yonas said Canadian employers would pay their Indonesian employees salary equal to that given to local workers. (iwp)

Thousands of workers stage rally against minimum wage

Jakarta Post - November 25, 2008

Yuli Tri Suwarni, Bandung – Thousands of workers in West Java took to the streets again Monday in protest over the fixed city and regency minimum wage schemes.

Workers from the West Bandung industrial area blockaded the Padalarang highway causing congestion and back-ups for up to 10 kilometers which lasted four hours.

Hundreds of police personnel were kept busy directing the clogged up Padalarang traffic while other protesters assembled in front of the West Bandung regency offices.

West Bandung is one of the province's five cities and regencies which has delayed submitting its minimum-wage proposal for the governor's approval by Nov. 20 due to the deadlock at the Remuneration Council, made up of workers, academics and government officials with the approval of the Indonesian Employers' Association (Apindo). The stalemate set in after a difference of Rp 17,500 (US$1.50) in the monthly rate could not be resolved.

Apindo demanded West Bandung's monthly minimum wage next year be set at Rp 1,002,500, while members of the Remuneration Council demanded it be fixed higher at Rp 1,020,000.

Spokesperson for West Bandung's chapter of the National Workers Union (SPN) Ahmad Yahya said workers favored neither option, perferring the minimum wage be set to match the cost of living as estimated by the West Bandung Remuneration Council, Rp 1,166,000.

"If they just want to hit the gavel, why conduct expensive surveys to determine workers' cost of living? Just rate our work according to the wishes of employers and officials," Yahya said.

Separately, hundreds of workers in Bekasi municipality and regency staged rallies opposing the minimum wage scheme approved by West Java Governor Ahmad Heryawan on Friday, calling it unfair because it failed to categorize workers according to the industries which employed them.

They rallied before the governor's offices on Jl. Diponegoro in Bandung, to protest the gubernatorial decree setting minimum wages in 21 cities and regencies scheduled to go into effect Jan. 1, 2009.

Rahmat, spokesperson for the Indonesian Metal Workers Federation at the Toshiba factory in Bekasi, said the governor's decision ignored existing Group 1 and Group 2 wage categories.

In Bekasi city, Group 1 includes workers involved in metal, automotive, paper, cooking oil, chemical, rubber and plastic industries; Group 2 includes workers involved in electronics, wood and banking services.

"If the description is unclear, our fate will also be unclear," Rahmat said.

Worker representatives at the Bekasi Remuneration Council Mahmud said the gubernatorial decree had failed to thoroughly consider the minimum wage set by the previous governor in 2007 who had defined the worker categories.

"You just have to look at the drafts which set the minimum wage last year, especially those submitted by the mayor and regent of Bekasi. Those were clearly defined and met workers' expectations," Mahmud said.

They demanded the governor immediately revise the decree in order to appease more than 1 million workers in both areas and prevent social unrest. The crowd from Bekasi dispersed after Bekasi's regent Sadudin, attending meetings at the governor's offices in Bandung, told them he had sent revision letters to all the workers' unions in Bekasi on Monday.

"The information was late, but I guarantee there won't be any protests once they've received and reviewed the explanations," Sadudin said.

West Bandung Regent Abubakar, who also attended the meeting, declined to comment on the protests in his area.

Governor Heryawan said he was still waiting for the minimum wage proposals from the five regencies and municipalities so they could be immediately approved.

Indonesia bracing for mass layoffs

Jakarta Post - November 25, 2008

Mustaqim Adamrah, Jakarta – Compounding a bleak financial situation that has experts forecasting Indonesia's economy has nowhere to hide from the global financial crisis, the Manpower and Transmigration Ministry has said it expects 40,000 workers to be laid off.

Registered companies employing workers are required to report any plans to the ministry that could result in layoffs, especially of permanent employees.

Myra Maria Hanartani, a director general at the ministry, said the figure for planned layoffs would see roughly half of the number fired and the other half temporarily dismissed.

Temporarily dismissed workers will still receive their basic monthly salary and could be summoned back to work once the company's condition improves.

"The workers the firms said they intended to dismiss so far number 40,486. Around half of them will be permanently dismissed," Myra said. She said only 2,000 of that number had already been layed off.

With the global financial crisis dragging the world's economies into an recession estimated to be the worst in a decade, economists and business associations have said Indonesia's economy will not be left untouched and that the inherited negative impacts could be long lasting.

While the government in its 2009 state budget forecasts the economy will grow next year by 6 percent, economists have put the figure far lower.

The Economist Intelligence Unit (EIU), a respected global think tank, forecast the country's economy to grow 3.7 percent next year. UBS Securities has put the figure at 2.5 percent – which would be a nine-year low.

Separately, the Indonesian Rattan Furniture and Craft Producers Association (AMKRI), supported the gloomy outlook Monday when it announced the industry could have to lay off some 35,000 workers before the end of the year.

AMKRI chairman Hatta Sinatra said the industry was facing tough challenges due to a raw rattan shortage, in part caused by the implementation of a quotas system regulating rattan exports.

"(Because) of the raw rattan supply shortage, up to 144 rattan craft companies have so far been forced to cease their business operations since the implementation of the 2005 regulation," he said after a meeting with Trade Ministry and Industry Ministry officials.

Secretary-general Abdul Sobur said the closures of the 144 enterprises, all in West Java's town of Cirebon, had resulted in thousands of workers being laid off.

Rattan craft enterprises in Cirebon made up 90 percent of the total number of enterprises in the country, he said.

"With remaining rattan craft enterprises experiencing a 45 percent to 50 percent drop in revenues, more enterprises are expected to fold this year," he said.

The 2005 regulation allows a maximum of 25,000 tons of raw rattan to be exported per year, a maximum of 16,000 tons of semifinished rattan products to be exported from sega and irit plants per year, and a maximum of 36,000 tons of semifinished rattan products from other plants to be shipped overseas per year.

Indonesian Textile Association (API) deputy chairman and head of API's West Java branch, Ade Sudrajat, said the country's textile industry had temporarily laid off over 14,000 workers due to weakening demand for export.

"Almost 700 textile manufacturers have temporarily laid off a total of 14,000 workers as of today (Monday)," he told The Jakarta Post. (hwa)

Women & gender

Female breadwinners call for funds, social justice

Jakarta Post - November 29, 2008

Yuli Tri Suwarni, Bandung – Activists from the Women Head the Family (Pekka) group in West Java have urged the legislature and provincial administration to allocate more funds and provide greater access to facilities for female heads of households.

More than 5 million women in the province are the main breadwinners in their households.

The activists, from 10 regencies – Sukabumi, Karawang, Cianjur, Subang, Garut, Indramayu, Cirebon, Ciamis, Majalengka and Sumedang – presented their requests to the legislature on Thursday.

The group represents around 1,300 women who head their family, 90 percent of whom are widows. The group is part of the Women Heads of Household empowerment program sponsored by the Japanese government since 2000.

Mintarsih, 54, a widow with three children from Sukasirna in Cibadak, Sukabumi, said village and district officials discriminated against female household heads. This occurs when women go through registration procedures for cash assistance and applications for soft loans from banks to set up small businesses, as authorities tend to have greater trust in male household heads when disbursing the assistance, she said.

"The registration procedure is unfair. I've been neglected and subject to social jealousy. The government seldom pays attention to widows," said Mintarsih, who became active in her village after joining the group 18 months ago. Mintarsih, who sells tempeh, said she felt boosted after joining the group, made up of a number of widows in Cibadak district.

Sumini, 45, a widow from Telagasari in Cadas Kertajaya, Karawang, said the government should pay greater attention to female heads of households who faced great difficulty in getting work they could do from home.

"We have to raise our children. So we have to find work that allows us to also take care of our children," said the mother of four.

Field counselor of the Pekka Cianjur chapter, Oemi Faezathi, said the provincial administration had begun to address the issue by rolling out the empowerment program to six new regencies in addition to those in Sukabumi, Karawang, Cianjur and Subang.

"However, the program is reaching only a small proportion of widows or female heads of households in West Java," Oemi said.

National data show that more than 40 million women are widows, about 13 percent of whom are living in poverty. In West Java alone, there are more than 5 million widows in areas including Subang, Karawang, Indramayu and Cirebon.

"That's why I urge the provincial legislature and administration to strengthen their commitment to equal opportunity and rights for every citizen," Oemi said.

West Java provincial assistant secretary Feri Suparman said the province had set aside 5 percent of the budget for women's empowerment. He added that the administration would seek to raise it to 5.5 percent of the total 2009 provincial budget of around Rp 7.9 trillion.

"The issue is still being discussed during debate of the draft budget by the budget commission. Hopefully, they are sensitive to the issue and will approve the budget allocation," Feri said.

Election contestants urged to address women's issues

Jakarta Post - November 25, 2008

Desy Nurhayati, Jakarta – The National Women's Commission has called on political parties contesting the 2009 legislative elections to address women's rights issues, citing the high number of discriminative policies and recent incidences of violence against women.

The commission made the call Monday at the launch of a 16-day campaign opposing violence against women. The campaign will start Tuesday in conjunction with International Day for the Elimination of Violence against Women, and will end Dec. 10 on Human Rights Day.

Commission deputy head Sylvana Maria Apituley said the campaign sought to encourage female voters to cast their ballots next year, but only for political parties and legislative candidates promoting women's issues.

"Women voters should not miss the chance to elect their representatives in the election. They should use their right carefully. Through this campaign, we are urging political commitment from the candidates to fulfill women's rights," she said.

"Women will contribute a lot to the elections since 51 percent of the population is female, meaning they have the potential to be the majority with about 172 million voters."

Sylvana said the commission had recorded 25,522 reported cases of women's rights abuses so far in the year, including domestic violence, migrant worker exploitation, women trafficking and sexual abuse.

She said the campaign was also expected to abolish laws and bylaws discriminating against women.

"Such regulations use religion and moral and political motives just to criminalize women," she said, adding that the commission had noted the existence of 28 such bylaws.

To push legislative candidates to accommodate women in their policies, the commission also urged women groups to ink "political contracts" with election candidates, commissioner Ninik Rahayu said.

She said the campaign had drawn up a contract agreed to by the candidates that would be disseminated to voters throughout the country.

"This contract will ensure the candidates' commitment to not neglecting women's issues in their policies once they are elected. And it is the duty of women groups and other civil society organizations to monitor the implementation of the policies."

Ninik said a similar political contract had been submitted with and signed by candidates in the East Java gubernatorial election. The contract was drafted by the commission and 35 local NGOs.

During the anti-violence campaign, the commission and 38 state and private institutions nationwide will hold various events, including peaceful rallies, seminars, dialogues and surveys.

Agriculture & food security

Frustrated farmers cut down own plants

Jakarta Post - November 27, 2008

Oyos Saroso H.N., Bandarlampung – A number of coffee farmers in Lampung province have cut down their coffee plants in frustration, saying they would not be able to sell their harvests.

Indonesian coffee farmers also cut down their plants in 2001 when the price of the commodity on the local market plummeted to Rp 3,000 (US$1.10) per kilogram.

Although the current price has not dropped so low, traders are unwilling to buy the beans from farmers in North and West Lampung regencies because of low international demand due to the global financial crisis.

"I have chopped down several trees. I would lose more if I sold (the beans on the trees) as I would have to spend more on plucking and transportation. As of today, none of the traders want to buy coffee," said Suparmo, 45, a farmer in Sumberjaya, West Lampung, on Wednesday.

Suparmo said a number of other coffee farmers in West Lampung had also cut down their trees out of frustration. Traders have stopped placing orders with the farmers because of the impacts of the global financial crisis.

Data at the Lampung chapter of the Indonesian Coffee Exporters Association (AEKI) shows the price of the commodity on the global market has dropped to $1,670 per ton from $2,200 two months ago.

During the Asian financial crisis in 1998, Indonesia's coffee farmers reaped windfall profits from exports as the price of the commodity rocketed on the international market.

AEKI chairman Suherman Harsono said the losses suffered by exporters due to the financial crisis could not be recovered in the short term.

"Coffee exports are no longer determined by supply and demand, but more by market sentiment. Coffee exporters who have not yet reached price agreements are at a loss to do anything. That's why they postpone their consignments," Suherman said.

Head of the Lampung office of the Development Planning Agency, Suryono S.W., said he regretted the farmers' action of cutting down their trees.

He said the AEKI and the Lampung Plantation Office should act immediately to prevent further plantations from suffering the same fate.

"The move has instead worsened the condition. Coffee farmers should have continued to harvest their coffee so they could sell it once the condition improves. Coffee farms are long-term assets, so they shouldn't have damaged them," Suryono said.

Based on data at the Lampung AEKI, the volume of coffee exports to various countries as of August this year amounted to 34,016 tons – a value of $69.764 million.

Germany is the biggest buyer of exported Lampung coffee, grabbing 24.29 percent of the total export, followed by Japan at 9.5 percent, Belgium at 9.2 percent and the United States at 9.05 percent.

Trade Ministry data shows the volume of coffee exports in 2007 totaled 312,086 tons, 135,373 tons of which was arabica coffee.

The average export price of coffee in 2007 was set at between $3.20 and $3.50 per kilogram, compared to $2.80 per kilogram in 2006.

The arabica variety of coffee makes up 70 percent of global coffee trade, while the robusta variety makes up the rest. Ten percent of Indonesia's plantations are arabica and 90 percent robusta.

South Sulawesi self-sufficient for food, yet poverty prevails

Jakarta Post - November 26, 2008

Andi Hajramurni, Makassar – Despite South Sulawesi being one of the country's rice production centers with bumper harvests each year, a significant portion of the population, both in rural and urban areas, still live below the poverty line.

The latest data released by Governor Syahrul Yasin Limpo in early November showed the number of people living in poverty had reached 2.4 million, or around 30 percent of the province's total population, despite producing an annual rice surplus of around 1.5 million tons.

The figure is much higher than that released by the South Sulawesi Statistics Bureau, which suggested that as of March this year just over one million people were living in poverty.

The high poverty rate certainly has an impact on the health conditions of the population, especially children below the age of five.

A 2007 survey conducted by the South Sulawesi Health Office on nutrition levels showed the province is home to around 72,000 malnourished children, meaning nearly one in 10 suffer from the condition.

The number of undernourished children accounted for 34 percent of the total 800,000 children in the province, a figure that is far above the national average of only 5 percent for malnutrition and 20 percent for undernourishment.

By October this year, the provincial health office recorded 10 cases of death related to malnutrition.

The office also found almost 100 cases of acute malnutrition, or marasmus kwashiorkor, which causes serious health problems and requires intensive care.

In terms of malnutrition, South Sulawesi is ranked 18th highest in the world. The administration has now classified the province as an emergency area for the condition.

This situation is causing grave concern for administrators, who are seeing the local proverb "a dead mouse in a rice barn" materialize before them. Despite their massive surplus of rice, there is no guarantee the people will not go hungry.

Head of the office's nutrition division Astati Made Amin said in Makassar recently that treating malnutrition had become even more challenging because of a shortage of vital medical supplements used for accelerating a patient's path to recovery.

Each year the provincial health office only receives 30,000 kilograms of medical supplements from the Health Ministry, enough to meet around 30 percent of patients. Medical officers have been forced to prioritize patients based on the seriousness of their condition, with undernourished children first in line to prevent their illness from worsening.

In an attempt to curb the growing problem, regency and municipality administrations have promised to set aside funds for the necessary supplements from their respective budgets.

The provincial administration has only allocated Rp 113 million from its annual budget for the treatment of 110 children suffering from acute malnutrition.

"We are concerned that the limited supplies of food supplements could further worsen their conditions, especially considering 187 nutrition counselors, spread across the villages, ended their contracts and work last April," said Astati.

Besides poverty, malnutrition is also attributed to parents' lack of knowledge about the importance of sufficient nutritional intake for children, regular visits to the integrated health posts and knowing the symptoms and immediate treatments of the condition.

"If it is malnutrition or protein deficiency, recovery can be as simple as administering food supplements, but many suffering the condition are afflicted with other diseases, such as pneumonia and diarrhea. This is serious as medication must be administered simultaneously for both conditions," she said.

South Sulawesi Health Office head Muhammad Saad Bustan said treatment should be carried out in an integrated manner by including relevant agencies, because malnutrition not only concerned health issues but involved social, economic and educational factors.

In South Sulawesi children are generally prevented from consuming large quantities of fish because locals believe they cause intestinal worms. Through education, that myth is now being dispersed as people learn the benefits of consuming fish, a high source of protein.

"We must conduct campaigns and provide information to the people about the importance of consuming nutritious food, maintaining hygiene and the most important thing, increasing families' income," said Saad.

The South Sulawesi provincial administration – led since April by Syahrul Yasin Limpo and Agus Arifin Nu'mang – has resolved to address poverty by initiating free healthcare services at every community health center and free third class in-patient treatment at all state-run hospitals.

It will also exempt students from school fees from elementary to junior high school levels and boost production in the agricultural and fishery sectors.

Syahrul believed the programs would be able to resolve poverty issues faced by the people because they were entitled to their basic rights.

"Healthcare and education are the basic rights of people that must be fulfilled. If the people are healthy and smart, they will be creative in their work, thus overcoming poverty issues," said Syahrul.

Health & education

Doctors, schools blamed for poor services

Jakarta Post - November 29, 2008

Erwida Maulia, Jakarta – Inconsistent standards and unethical recruitment methods in the health industry are to blame for Indonesia's costly yet ineffective medical services, a study says.

The study, jointly conducted by Indonesian and Australian researchers between March and September this year, found that doctors' "uncontrolled freedom" in setting prices and employment standards has led to the cost blowout and poor quality in services across the country.

"Doctors can charge unreasonably high prices for their services without patients' having any idea what is reasonable. The price of medical treatment in a Jakarta state hospital could be significantly higher than in a private hospital in Malaysia," the study coordinator, Hasbullah Thabrany from the University of Indonesia, told press in Jakarta on Thursday.

He said measures ensuring the quality of medical services were very weak, with audits rarely carried out into hospitals' performance.

Hasbullah said doctors should also just focus on one practise, instead of multiple areas, because it was leading to discriminative practices based on a patient's financial status.

"The current system is seeing doctors treat wealthier patients above all others. This is a threat to the quality of medical services, which should be equal for all," he said. An increase in government remuneration has been suggested as a way of enticing doctors to stay in one just area.

Civil servant doctors are paid the same salary as other civil servants in Indonesia, while a fresh-graduate state doctor may receive as little as Rp 1.2 million (US$100) per month. Low incomes have forced doctors to expand their services to multiple areas, though under the 2004 Medical Practices Act one doctor is limited to working in three places.

Hasbullah said a lack of standards also plagued the recruitment and education process of would-be doctors. Medical schools, he argued, where becoming "liberal" and selecting students based on their financial status instead of abilities.

The study recommended the government immediately reform its overall medical workforce management policy.

Secretary general of the Indonesian Doctors Association (IDI), Zaenal Abidin, said there were no standards for medical services in the country and the Health Ministry had not yet developed a regulation for the industry.

He said doctors should obey ethical standards set by the Indonesian Medical Council.

Concerns have been raised over the growing trend in medical schools to recruit students based on financial capacities and said the IDI had been urging lawmakers and the government to fix the situation.

"Such a selection process will produce graduates who only care about money. It will create problems because doctors are directly involved in people's wellbeing," he said.

The study into the quality of medical services is among nine other research projects being developed this year under the Australia-Indonesia Governance Research Partnership (AIGRP) program. The results of the studies will be presented before industry experts on Dec. 1.

HIV/AIDS spreading at 'alarming' rate

Jakarta Post - November 27, 2008

Agus Maryono, Purwokerto – The number of HIV/AIDS cases in Banyumas, Central Java, has been growing steadily every month, sparking public concern, while local authorities have done little except set up Voluntary Counseling and Testing (VCT) clinics to make blood tests accessible.

Concern mounted lately following the Banyumas chapter Indonesian Red Cross (PMI) disclosure in the past week that 72 bags of plasma from donors were positively contaminated with the HIV virus.

"We are very concerned. The Banyumas regency administration should take immediate steps to overcome the problem. Innocent people must be protected from this deadly disease," Banyumas legislative vice speaker Musaddad Bikri Noer told The Jakarta Post on Wednesday.

Besides the 72 infected bags, the PMI also found hundreds of bags contaminated by viral and bacterial diseases, such as syphilis and hepatitis B and C.

Head of the Banyumas PMI blood transfusion unit Agus Zulianto told the media 604 bags of contaminated plasma were in safe hands and would be immediately destroyed.

He said of the 604 bags, 72 were infected with the HIV virus, 156 with syphilis, 276 with hepatitis B and 100 with hepatitis C.

Agus said the blood had come from walk-in donors who donated at the PMI offices. It was not announced when the blood had been collected.

"From test results, we are 90 percent certain of the contamination. We will destroy them on Thursday to prevent infection," said Agus.

Legislator Musaddad urged the local health office to take required measures to prevent the spread of AIDS in Banyumas.

"HIV/AIDS cases are on the rise by the month. What has the health office been doing? This is a matter of grave concern and an embarrassment," said Musaddad.

Musaddad said the brothels in Baturaden, which openly employ about 200 sex workers, was encouraging the spread of HIV/AIDS in Banyumas.

Banyumas is ranked second highest in HIV/AIDS infection cases in Central Java after the provincial capital Semarang.

"I urge the health office to conduct blood tests on sex workers in the Gang Sadar red-light district in Baturaden. If need be, close the brothels. We don't want Banyumas to become a breeding ground for AIDS," Musaddad said.

Separately, head of the Infectious Disease Prevention agency at the provincial health office Ani Pratiwi confirmed a monthly increase of on average 10 HIV/AIDS new cases in Banyumas.

Looking at the data on the newly infected, Ani said, seven people were infected in June, eight in July and 12 in August this year. The agency has not yet tallied the number of new infections in September and October.

She said 333 HIV/AIDS cases in all were recorded as of August this year in Banyumas, comprising 228 with HIV, 69 who have tested positive for AIDS, and 36 deaths.

"We have provided two VCT clinics for HIV/AIDS tests but most people are too embarrassed to go for a check-up. What else can we do?" Ani told the Post.

Thousands of teachers mark anniversary, rally for wage

Jakarta Post - November 26, 2008

Yuli Tri Suwarni and Rizal Harahap, Bandung, Medan – To commemorate the 63rd anniversary of the Indonesian Teachers Union (PGRI) on Tuesday, thousands of teachers across the country staged rallies demanding improvement in their working conditions.

In Bandung more than 20,000 teachers working on contract at private schools across West Java urged the National Education Minister to require all foundations to pay educators the minimum wage as set for each regency and municipality.

The coordinator of the Private Teachers Forum in West Java, Dede Permana, said Tuesday most private teachers across the province were paid between Rp 250,000 (US$19.53) and Rp 300,000 a month.

"Only a few contract teachers receive an additional Rp 200,000 in allowances, so they are earning below the minimum wage set for laborers."

He said private teachers' salary levels were inhumane and denigrated the teaching profession, an honorable career. Their compensation was far below public teachers' salaries which reached up to Rp 2 million or Rp 3.5 million, he said.

"It's discrimination. We're doing the same job as those teachers," Dede said, adding contract teachers also lacked insurance benefits and job security public teachers depended on.

Separately, hundreds of teachers from the Indonesian Private Teachers Union (PGSI) in Medan staged a rally in front of the legislative council building, demanding the city pay more attention to their welfare.

The Medan PGSI leader, Partomuan Silitonga, said the living standard of most of the 21,860 private teachers in Medan did not meet standards set out in the human needs index. "Many private teachers are still paid between Rp 200,000 and Rp 300,000."

To make a decent living, Partomuan added, private teachers had to work outside teaching hours, driving pedicabs or working as day laborers.

"It seems the government closes its eyes and lets the teachers' commitment to educate their students weaken," the union leader said, adding the demonstrators also demanded the Medan administration set private teachers' minimum pay to match the minimum wage for laborers.

"Teachers working for private institutions currently earn less than factory workers with no more than a junior high school degree. They are entitled to earn not less than Rp 918,000 a month. Why doesn't the government care about us, who have higher degrees but receive less compensation? If we're prosperous enough, we can assure the students will achieve more," Partomuan said, adding some 400 teachers who had passed the certification test more than a year ago had yet to receive the higher compensation they were entitled to. PGSI Medan urged the city to increase private teachers' income from Rp 200,000 to between Rp 700,000 and Rp 1 million per month.

Private teachers were also asking for allowances which match those of public school teachers, including an annual 13th salary, meals allowance, leave dispensation and insurance.

Separately in Semarang, about 100 contract teachers and officials from several regions in Central Java staged a rally in front of the governor's offices, demanding the provincial administration put them on the civil servant rolls because they had already work for 10, some 15, years at a monthly salary of Rp 200,000.

In Central Java alone, 27,000 teachers and education administrators officers work as temporary or contract employees.

[Suherdjoko contributed to the article from Semarang.]

War on corruption

AGO drops bribery case against Urip's bosses

Jakarta Post - November 30, 2008

Abdul Khalik, Jakarta – Attorney General Hendarman Supandji announced Saturday that prosecutor Urip Tri Gunawan, who was jailed for 20 years for taking bribes, was acting alone in the scandal and that a criminal probe into the bribery roles of his superiors lacked evidence.

The decision quickly sparked strong criticisms from anti-graft activists and legal experts, who said it had offended the public's sense of justice.

The Attorney General's Office (AGO) has ignored a lot of evidence uncovered during Urip's trial which had pointed to the involvement of many high-ranking officials from the office, they said.

"The examination by the AGO's internal affairs has found that Urip was acting alone," Hendarman was quoted as saying by Antara news agency after addressing a seminar at Diponegoro University in Semarang, Central Java.

The dismissal of Kemas Yahya Rahman as assistant attorney general for special crimes and Muhammad Salim as director of investigation were only intended to defend the AGO's credibility to the public following the bribery scandal, he said. "They have nothing to do with the case," Hendarman said.

He claimed there had been no material evidence showing a transfer of funds to other parties in relation to the Urip case. "So the probe cannot be expanded to other prosecutors," he added.

Hendarman also cited the court's verdict against Urip that no other officials had shared the bribes.

But Andi Bachtiar, one of the judges handling the Urip case, said the evidence that had been presented at the trial had clearly shown Kemas' and Salim's involvement. "That's why in the court ruling I opened up the possibility for KPK to charge other prosecutors besides Urip," he said.

Prominent legal expert Frans Hendra Winarta slammed the AGO for the announcement, saying Hendarman only wanted to clear his office's image after the humiliating scandal that had destroyed its credibility.

"It's really an offense to the sense of justice. The public must have known from the trial that other high-ranking prosecutors were involved in the case because Urip couldn't have acted alone," he told The Jakarta Post.

Frans said he had anticipated such a decision since the AGO simply could not make a fair investigation of itself.

The probe, he added, should have been carried out independently by a team comprised of members from the Corruption Eradication Commission (KPK) and representatives from civil society groups in addition to those from the AGO. "Only then can we say it is a fair examination," Frans said.

The Corruption Court sentenced Urip to 20 years in prison in September for taking a US$660,000 bribe from businesswoman Artalyta Suryani to drop a major embezzlement case against fugitive tycoon Sjamsul Nursalim. The verdict was upheld Thursday by the High Corruption Court.

Urip had led an AGO team to investigate the embezzlement of Rp 28.4 trillion (US$2,2 billion) disbursed under Bank Indonesia's liquidity support (BLBI) scheme to Sjamsul, former owner of liquidated Bank Dagang Nasional Indonesia (BDNI).

On Feb. 29, 2008, the AGO dropped two BLBI cases against Sjamsul and tycoon Anthony Salim, citing a lack of evidence. Two days later, the KPK arrested Urip for accepting the bribe from Artalyta who had been linked to Sjamsul.

During the Urip trial, it was heard from a taped conversation that Artalyta had talked to a woman believed to be Sjamsul's wife. Artalyta had said: "Please Bu, we've got a shortage as we need more for all the attorney general deputies and their secretaries because we haven't given them anything". Sjamsul's wife replied that she had the money available.

In another taped conversation, Kemas Yahya spoke with Artalyta, informing her of the AGO's decision to drop the Sjamsul case. Artalyta said she had made the money available.

Land papers forgery case just the tip of the iceberg

Jakarta Post - November 29, 2008

Abdul Khalik, Jakarta – Police have arrested a National Land Agency (BPN) director on charges he forged a land certificate, a case analysts say is the first of many more to come involving the state agency.

Elfachri Budiman, BPN director for land disputes, was officially detained Thursday evening, National Police deputy chief of detectives Insp. Gen. Paulus Purwoko said Friday.

He said the suspect was being held responsible for duplicating a valid land certificate that had been given as collateral to the now-defunct Indonesian Bank Restructuring Agency (BPPN).

"The suspect issued a fake certificate which was a duplicate of the original one at the BPPN. So, there are no longer two certificates now for the same plot of land," Paulus said.

The forgery scandal began when Sudarto, an executive of Pesona Bank – which was being placed under the auspices of the BPPN at the height of the 1998 financial crisis – made a copy of the original certificate – for two plots of land in Medan, North Sumatra – before handing them over to the BPPN.

Sudarto, who was sentenced to 16 months' imprisonment in 2005, asked Elfachri, the then North Sumatra land agency chairman, to issue fake certificates for the two plots of land, which were 682 and 542 square meters in size, respectively.

Sudarto planned to use the duplicate certificates as collateral to obtain bank loans. Paulus said Elfachri then received bribes worth millions of rupiah from Sudarto for the same service. "He could face seven years in jail based on the prevailing law," he said.

Observers were quick to suspect the scandal was just the tip of the iceberg in land certificate fabrication cases involving the BPN.

"It is a dark side of our land management. The case underscores common practices of certificate counterfeiting, in which BPN officials took bribes to issue fake land documents for businesspeople and other individuals or groups," legal expert Irman Putra Sidin said.

He urged the government to use the arrest of the BPN high-ranking official as "momentum" to clean up the institution, saying land problems concerned all citizens.

"This is the highest (ranked) official ever arrested. Land certificate fabrication (cases) never get attention as many feel they are issues that concern individuals. But the fact is they concern all of us," Irman said.

The BPN revealed recently it was handling thousands of certificate fabrication cases. By the end of 2007, the agency was struggling to sort out more than 7,000 public complaints about land certificate fabrications, leading to 99 criminal cases handled by the police.

Officials in almost every province have been arrested by the police in the last five years for similar charges.

In 2003, Bandung land agency head Iwa Ruhiwa was arrested by West Java police for counterfeiting certificates for a number of plots of land, while in the following year, Jakarta land agency head Robert Lumampouw was detained for issuing fake certificates for 4.9 hectares of land in Ulujami, South Jakarta.

The police also arrested Surabaya's BPN head I Gde Ariyuda for a similar crime. Despite the arrests, land document forgeries have continued to plague the BPN.

SBY in-law arrested in Bank Indonesia scandal

Jakarta Post - November 28, 2008

Abdul Khalik, Jakarta – An in-law of President Susilo Bambang Yudhoyono was arrested Thursday, almost a month after the Corruption Eradication Commission (KPK) named him a suspect in a graft scandal involving lawmakers.

The KPK arrested Aulia Pohan – whose daughter, Annisa Pohan, is married to Yudhoyono's eldest son Agus Harimurti – along with three other former deputy Bank Indonesia governors: Maman Sumantri, Bun Bunan Hutapea and Aslim Tadjuddin.

Yudhoyono has drawn praise from many activists and analysts for taking a hands-off approach to the scandal in which Rp 100 billion (US$9 million) was embezzled from the central bank.

The scandal centers on the disbursement of Rp 100 billion from the central bank to finance legal defense for five former BI senior officials implicated in a Bank Indonesia liquidity support graft case and to bribe legislators to expedite an amendment to the BI law.

Upon naming Aulia a suspect, the KPK came under immediate pressure to arrest him and all others implicated in the case. The arrests came after the anti-graft body questioned the suspects for more than eight hours starting 9 a.m. Thursday.

Aulia and Maman were brought to the Police Mobile Brigade's detention center in Kelapa Dua in Depok, West Java, while Bun Bunan and Aslim were taken to the National Police headquarters in South Jakarta.

"We are detaining them to make the investigation process easier," KPK chairman Antasari Azhar told The Jakarta Post immediately after Aulia had been brought to the detention center.

Aulia smiled for reporters upon his arrival at the KPK office, saying he was ready to face the worst. "How can I say I am not ready (for detention)?," he said.

Lawyers for all the suspects said they would file a request for their clients' detentions to be suspended.

Antasari said the KPK had sent officials to all the suspects' residences to inform their families about the arrests, but vowed there would be no special treatment for the four suspects.

"It's normal if they request their detentions be suspended but we have our own considerations. Remember, this is not the end of the case. There is the possibility that others are involved," he said without elaborating.

The disbursement of the central bank funds was decided in a meeting of the then BI board of governors, chaired by Burhanuddin Abdullah.

Burhanuddin, a former BI chief, was sentenced to five years' imprisonment by the Corruption Court late last month, while two other former BI officials – former BI legal bureau chief Oey Hoey Tiong and former BI governor bureau chief Rusli Simanjuntak – were jailed for four years each for the same charges.

Many anti-graft activists have criticized the KPK for procrastinating naming Aulia a suspect and detaining him, pointing out that other suspects in the case were detained long ago and some have already been convicted.

AGO seizes cash, papers from government

Jakarta Post - November 25, 2008

Dian Kuswandini and Irawaty Wardany, Jakarta – The Attorney General's Office (AGO) seized Rp 20 billion (US$1.7 million) in cash from the Justice and Human Rights Ministry office in relation to an alleged corruption case at the ministry.

AGO spokesman Jasman Pandjaitan said in Jakarta on Monday the money was confiscated in two raids carried out Monday and last Thursday, and added to hundreds of documents recently seized in relation to the alleged crime.

"Prosecutors confiscated Rp 2.4 billion cash from the office of the director general of public legal administration (Syamsuddin Manan Sinaga) on Monday and around Rp 18 billion last Thursday," he said.

"The money will be deposited into one of the AGO's bank accounts, pending legal processes to transfer it to state coffers."

Prosecutors suspect the cash was generated through an online administration system currently at the center of a graft scandal, which is estimated to have cost the state Rp 400 billion in losses.

"The Rp 2.4 billion seized was the equivalent of the annual budget for the directorate general's activities," a financial staffer at the ministry's directorate general, Erwantoro, said.

The raid occurred at 2 p.m. and was conducted by three AGO officials. The head of the AGO investigating team, Faried Hariyanto, said prosecutors had amassed 700 documents related to the case.

The case centers around the distribution of funds allegedly embezzled from a legal administration website, www.sisminbakum.com, run by the directorate general.

Since 2001, the website allowed legal entities to register for permits and nominate notaries, and charged fees ranging from Rp 250,000 to Rp 1 million.

Attracting around 200 applicants per day, the system was able to generate up to Rp 9 billion per month, of which 90 percent went to the system provider PT Sarana Rekatama Dinamika (SRD) and the remaining 10 percent was split between cooperatives and senior officials at the directorate general.

Prosecutors have alleged a director general received on average Rp 10 million per month while a secretary took around Rp 5 million. The AGO says money generated from the system should had gone to state coffers as non-tax revenue because the system offered public services.

The AGO has already named three suspects in the case: Former director general Romli Atmasasmita and his successors Syamsuddin and Zulkarnain Yunus.

Romli, a legal expert from Bandung-based Padjadjaran University, filed a pretrial motion Monday against the AGO at the South Jakarta District Court.

His lawyer Firman Wijaya said his client was dissatisfied over his arrest by the AGO over two weeks ago and was launching subsequent action.

"The AGO discriminated against Romli by naming him as a suspect when there was no legal basis or sufficient evidence," he said.

The AGO denied the accusation, saying it had carried out a series of detailed investigations beforehand.

"We have been investigating this case since August. We already questioned 20 witnesses and studied hundreds of documents before naming any suspects," said the assistant attorney general for special crimes Marwan Effendi.

Islam/religion

'Moderate Muslim' image doubted

Jakarta Post - November 28, 2008

Abdul Khalik, Jakarta – With radicalism and conservatism appearing to take root across Indonesia without significant public opposition, scholars are questioning just how moderate the silent majority of Indonesian Muslims really is.

They said the recent passage of the pornography bill and the government's ban on the Jamaah Ahmadiyah minority sect, coupled with the enactment of sharia-inspired bylaws in many regions, was evidence the of rising conservatism.

A discussion, hosted by the Maarif Institute on Thursday, concluded that conservatism is growing in Indonesia – widely considered a moderate Muslim nation – with many Muslims ranking their devotion to their religion higher than their commitment to their country.

Visiting political and Islamic expert Mark Woodward said a number of expanding radical Islamic groups had claimed there was nothing more they needed in their lives than Islam.

"Members of the groups, who wear Pakistani dress, covering all their body, and even wear gloves, claim that they are wearing Islamic dress while in fact they are not," said the professor of Arizona State University in the United States.

Maarif Institute executive director Raja Juli Antoni said the enactment of the pornography law and the ban on followers of Ahmadiyah, which many Muslim groups consider a heretical sect, from disseminating their religion, were evidence of the growing conservative sentiment.

The passing of the porn law and the Ahmadiyah ban received wide support from community members, including of Nahdlatul Ulama and Muhammadiyah – the country's two biggest Muslim organizations, both of which are considered moderate.

Raja said he was not convinced the most Indonesians were moderate as they had not voiced any opposition to the rising radicalism.

Another scholar, Amali, who is studying for his PhD at New York University, said most observers had thought Indonesian Muslims embraced a moderate brand of Islam. "But now, we need to rethink the notion of whether it is true that the majority of Indonesians are moderate," he told the same forum.

A recent survey by the Center for Islamic and Society Studies at Syarif Hidayatullah State Islamic University in Jakarta found that most Islamic studies teachers in Java, which is a stronghold for the NU and Muhammadiyah, opposed pluralism, tending toward radicalism and conservatism.

Some 68.6 percent of the teachers are opposed to non-Muslims becoming their school principal and 33.8 percent are opposed to having non-Muslims as teachers at their schools.

Some 85.6 percent of the respondents forbid their students from celebrating big events perceived as Western traditions, while 87 percent ask their students not to learn about other religions.

Woodward said conservative Islam had not yet been adopted into politics, citing the low popularity of Islamic parties campaigning for Islamism.

"Muslims are still very pragmatic in general elections. They will vote for parties they believe can bring prosperity. But we are yet to see whether conservatism can be translated into politics," he said.

Woodward said the Islamic-based political groups were playing a smart game by pushing conservative agendas. "They managed to easily equate those who reject the porn bill as supporters of pornography, and those backing Ahmadiyah as supporters of heresy," he said.

Indonesia's top Islamic body considers yoga ban

Agence France Presse - November 27, 2008

Jakarta – Indonesia's top Islamic body says it will consider banning Muslims from practicing yoga.

Cleric Ma'ruf Amin said Thursday the Ulema Council was trying to determine if the ancient Indian exercise could corrupt the faith of believers. If the answer is yes, a nonbinding edict prohibiting the practice could be passed next month.

The discussions follow a decision by the Islamic body in neighboring Malaysia to issue a ban – though Muslims there have been told they can perform yoga as long as they refrain from chanting religious mantras.

Amin said investigators will interview practitioners across Indonesia, the world's most populous Muslim nation, to see if restrictions need to be passed. They will also visit yoga clubs and gyms.

Indonesian clerics take child brides, back anti porn bill

Agence France Presse - November 26, 2008

Arlina Arshad, Jakarta – Indonesian Muslim clerics who claim to be protecting vulnerable women by backing a new anti-pornography law have come out in defence of a fellow preacher who has married a 12-year-old village girl.

The issue of child brides for religious men in the mainly Muslim country has became a subject of national debate since little- known cleric Pujianto Cahyo Widiyanto, 43, married junior high school student Lutfiana Ulfa in August.

His case went virtually unnoticed until Muslim conservatives started lobbying parliament to pass a new anti-pornography bill which was opposed by a broad spectrum of civil society groups and non-Muslims.

Passed in October with the backing of the very clerics who are now defending Widiyanto, the law criminalises all movements and works, including poetry and music, deemed obscene and capable of violating public morality.

"These clerics are hypocrites," lawmaker Said Abdullah, from the Democratic Party of Struggle of former president Megawati Sukarnoputri, told AFP. "They say the anti-porn law will protect young women, but yet they dehumanise them by marrying underage girls and supporting child marriage."

Under Indonesian pedophilia laws, Widiyanto could face 15 years' jail for having sex with a minor. He is under investigation but openly talks about his love of pubescent girls and his plans to marry more.

"There is no coercion. The girls like me and their parents have given their blessings," Widiyanto was quoted as telling Detikcom news website.

And no one should interfere because child brides are allowed under Islam, according to Muslims such as Hilman Rosyad Syihab, the deputy head of the Islam-based Prosperous Justice Party which backed the pornography law.

He said Islam allowed marriage regardless of whether a girl had reached sexual maturity. "But the husband can only have sex with her once she reaches puberty," he explained, in contravention of the law which sets 16 as the minimum marriage age for women and 18 as the age of consent.

The issue highlights the ongoing battle in Indonesia between the law of the land, debated and passed in a democratic parliament, and the law of God as defined by a tiny minority of Islamic leaders.

"Indonesia is not an Islamic state so why is Syihab citing Islamic laws? By supporting Widiyanto, he is breaking state law," Abdullah said.

Child Protection Commission head Seto Mulyadi said there were "thousands of cases like Widiyanto's" in Indonesia. "Islamic laws may have positive values, but state laws must be followed. There must be stronger law enforcement to stop these cases," he said.

But Syarifuddin Abdul Gani, a senior member of the country's highest Islamic body, the Indonesian Council of Ulemas, said he saw no problem with Widiyanto's marriage. "This man has not broken any Islamic rule. The couple's marriage is still valid," he said.

Widiyanto, the principal of a Muslim boarding school in Semarang, central Java, isn't happy with only one child bride. He reportedly plans to marry two other girls aged nine and seven.

Forced to act only after his case hit the headlines, the police are now investigating him for possible breaches of the 2002 child protection law, which covers forcing or trading a child into sex and marrying a minor.

Care Foundation Indonesia director Saiful Hadi said child marriages were typically rural affairs, sealed in unofficial religious ceremonies not recognised by the state.

The groom is "almost always someone religious" and old enough to be the girl's father, he said. "Often they manage or teach at religious boarding schools and find wives from their pool of female students. These men are considered gurus, respectable people, so the girls' parents can't say no to their proposals," Hadi said.

The girls usually have no say in the matter. Most are sold by their impoverished parents or given away to ease the economic burden on their families. "The girls' families are usually poor," Hadi said.

Tackling the problem should be simple, said lawmaker Abdullah. "Every sub-district has a religious affairs department that oversees marriages. Simply demote or sack officials who allow child marriages to take place," he said.

Most Islamic studies teachers oppose pluralism, survey finds

Jakarta Post - November 26, 2008

Abdul Khalik, Jakarta – Most Islamic studies teachers in public and private schools in Java oppose pluralism, tending toward radicalism and conservatism, according to a survey released in Jakarta on Tuesday.

The study shows 62.4 percent of the surveyed Islamic teachers, including those from Nahdlatul Ulama and Muhammadiyah – the country's two largest Muslim organizations – reject the notion of having non-Muslim leaders.

The survey was conducted last month by the Center for Islamic and Society Studies (PPIM) at Syarif Hidayatullah State Islamic University in Jakarta, involving some 500 Islamic studies teachers throughout Java.

It reveals 68.6 percent of the respondents are opposed to non- Muslims becoming their school principle and 33.8 percent are opposed to having non-Muslim teachers at their schools.

Some 73.1 percent of the teachers don't want followers of other religions to build their houses of worship in their neighborhoods, it found.

Some 85.6 percent of the teachers prohibit their students from celebrating big events perceived as Western traditions, while 87 percent tell their students not to learn about other religions.

Some 48 percent of the teachers would prefer for female and male students to be separated into different classrooms.

PPIM director Jajat Burhanudin said the teachers' anti-pluralist views would be reflected in their lessons and contribute to growing conservatism and radicalism among Muslims in the country.

"I think they play a key role in promoting conservatism and radicalism among Muslims nowadays. You can't say now that conservatism and radicalism only develop on the streets like what has been campaigned by the FPI (the Islam Defenders Front), but rather deep within the education (system)," he said, referring to a radical Islamic group.

Jajat said such intolerance threatened the civil and political rights of citizens of other religions. The survey also shows 75.4 percent of the respondents ask their students to call on non- Muslim teachers to convert to Islam, while 61.1 percent reject a new Islamic sect.

In line with their strict beliefs, 67.4 percent said they felt more Muslim than Indonesian. The majority of the respondents also support the adoption of sharia law in the country to help fight crime.

According to the survey, 58.9 percent of the respondents back rajam (stoning) as a punishment for all kinds of criminal and 47.5 percent said the punishment for theft should be having one hand cut off, while 21.3 percent want the death sentence for those who convert from Islam. Only 3 percent of the teachers said they felt it was their duty to produce tolerant students.

With 44.9 percent of the respondents claiming themselves members of Nahdlatul Ulama and 23.8 percent supporters of Muhammadiyah, Jajat said the two moderate organizations had failed to establish their values at the grassroots.

"Moderation and pluralism are only embraced by their elites. I am afraid that this kind of phenomenon has contributed to increasing radicalism and even terrorism in our country," he said.

Elections/political parties

Election contestants urged to address women's issues

Jakarta Post - November 25, 2008

Desy Nurhayati, Jakarta – The National Women's Commission has called on political parties contesting the 2009 legislative elections to address women's rights issues, citing the high number of discriminative policies and recent incidences of violence against women.

The commission made the call Monday at the launch of a 16-day campaign opposing violence against women. The campaign will start Tuesday in conjunction with International Day for the Elimination of Violence against Women, and will end Dec. 10 on Human Rights Day.

Commission deputy head Sylvana Maria Apituley said the campaign sought to encourage female voters to cast their ballots next year, but only for political parties and legislative candidates promoting women's issues.

"Women voters should not miss the chance to elect their representatives in the election. They should use their right carefully. Through this campaign, we are urging political commitment from the candidates to fulfill women's rights," she said.

"Women will contribute a lot to the elections since 51 percent of the population is female, meaning they have the potential to be the majority with about 172 million voters."

Sylvana said the commission had recorded 25,522 reported cases of women's rights abuses so far in the year, including domestic violence, migrant worker exploitation, women trafficking and sexual abuse.

She said the campaign was also expected to abolish laws and bylaws discriminating against women.

"Such regulations use religion and moral and political motives just to criminalize women," she said, adding that the commission had noted the existence of 28 such bylaws.

To push legislative candidates to accommodate women in their policies, the commission also urged women groups to ink "political contracts" with election candidates, commissioner Ninik Rahayu said.

She said the campaign had drawn up a contract agreed to by the candidates that would be disseminated to voters throughout the country.

"This contract will ensure the candidates' commitment to not neglecting women's issues in their policies once they are elected. And it is the duty of women groups and other civil society organizations to monitor the implementation of the policies."

Ninik said a similar political contract had been submitted with and signed by candidates in the East Java gubernatorial election. The contract was drafted by the commission and 35 local NGOs.

During the anti-violence campaign, the commission and 38 state and private institutions nationwide will hold various events, including peaceful rallies, seminars, dialogues and surveys.

Voting paper too troublesome say simulation participants

Jakarta Post - November 29, 2008

The size of paper used for voting in the election simulation in Jakarta on Saturday was troubling simulation participants, said a member of Center for General Election Reform.

A member of the NGO, Erika Widyaningsih, said that participants had found it hard to fold the paper pack. The size of the voting booth was also too small for the paper, she said.

"So far, the main concern of the participants was the size of the voting paper," Erika said during the simulation at the General Election Commission.

She also added that the size of the paper was not in scale with the name of the political parties and the candidates for the legislative council. "The name of the parties and candidates are too small, making it hard for voters to read," she said.

A first time voter, 17-year old Retno, agreed that the size of the paper was too big and that it was hard for her to unfold. "There are a lot of parties. So, it was hard opening the paper," she said. (and)

PKS no longer seen as the most Islamic political party - Survey

Detik.com - November 28, 2008

Hery Winarno, Jakarta – The image of the Justice and Prosperity Party (PKS) appears to be starting to fade. At least this what can be read from the results of a survey conducted by the National Survey Institute (LSN), which found that the PKS occupies fourth place among the political parties considered to be most Islamic.

Above the PKS, perched at number one place is the Ulama National Awakening Party (PKNU), then the United Development Party (PPP) at number two, and the National Awakening Party (PKB) in third place.

"The largest percentage of respondents (76.9 percent) perceives the PKNU as the most Islamic party. The PPP which actually is Islamic based is in second position (75.9 percent). In third place is the PKB (67.3 percent), followed by the PKS (63.9 percent)", said LSN Executive Director Umar S. Bakry in a press release received by Detik.com on Thursday November 27.

Underneath the PKS, is the Star Crescent Party (PBB) at number five (61.5 percent), then the National Mandate Party (PAN, 55.3 percent), the Star Reform Party (PBR, 42.9 percent) and the National Sun Party (PMB, 20.4 percent). "The PKS, which initially installed itself as a proselytizing party, is only considered to be an Islamic party by just 63.9 percent of respondents", explained Bakry.

A similar fate has been experienced by the PBB. A party that has incessantly touted its Islamic law program is only considered as an Islamic party by 61.5 percent of respondents. "It can be said that the PKS and the PBB have failed to project their images as a party that represents the aspirations of the Islamic religious community", added Bakry.

The survey was conducted on October 21-31, 2008 in 33 provinces in Indonesia. The survey involved 1,230 respondents who were interviewed face-to-face. The survey used a multistage random sampling technique with a margin of error of above or below 2.8 percent and a confidence level of 95 percent. (sho/sho)

[Translated by James Balowski.]

Hungry parties may take 'dirty' cash

Jakarta Post - November 24, 2008

Abdul Khalik, Jakarta – With the financial crisis set to drain political parties' coffers, it seems contenders in the 2009 elections could happily welcome any donations, no matter who they come from.

Political campaign funds could end up coming from businesspeople who absconded abroad with a fortune in state money to evade justice, experts warned on Sunday.

Elections observers said that, because donor contributions remained nontransparent, such donations might violate the 2008 election law, which caps donations at Rp 1 billion for an individual and Rp 5 billion for a legal entity.

A move by the Prosperous Justice Party (PKS) to honor former president Soeharto as a hero and teacher of the nation in its recent TV advertisements has been seen as a matter of finance, given the fortune of the former first family.

"The ads are really just an attempt to seek an alliance with the Cendana family to strengthen the party's financial position. We know that the PKS is not a party with much money," said Bima Arya Sugiarto, a political analyst from Paramadina University.

"Cendana" is the name of the street on which Soeharto's family lives.

But PKS chairman Tifatul Sembiring denied any financial help from Soeharto's family. "No, they didn't finance our latest ads," he said. "We have never received money from them."

The PKS has built its image on its fight against corruption, which plagued the Soeharto administration. Even since the former president's demise last January, the government has not halted its pursuit of the state money he allegedly embezzled.

"Dirty" businesspeople may have channeled billions of rupiah to parties so they can use their political connections for investment purposes or to have themselves cleared of any charges, Indonesian Institute of Sciences (LIPI) researcher Siti Zuhro said.

"Political parties will grab any funds given to them. These businesspeople give hard cash inside suitcases instead of transferring the money through the banks. This way, they can bury their trail, and the parties can avoid being accused of breaking the law," she said.

The current downturn in the markets has dragged many political parties into financial trouble, forcing them to scale back their television advertising.

Young figure Rizal Mallarangeng, widely known for his connection to Coordinating Minister for the People's Welfare Aburizal Bakrie, forfeited his presidential bid citing a "lack of electability".

National Mandate Party (PAN) chairman Soetrisno Bachir has reportedly lost Rp 3 trillion (US$300 million) on the stock market while Golkar politicians have also admitted that problems in the Bakrie family businesses have reduced donations to the party from Aburizal.

Quick-counts pose threat

Jakarta Post - November 24, 2008

Adianto P. Simamora, Jakarta – Quick counts by pollsters and low voter registration could be the factors most likely to provoke clashes among supporters of rival candidates in next year's presidential election, a seminar warned Saturday.

The warning was based on analysis of 345 regional direct elections held in the past four years, at least 174 of which ended in conflict.

"Some of the conflicts were due to quick count results. It is a serious warning for the government to respond to the booming presence of pollsters conducting election quick counts," Siti Zuhro, a senior researcher from the Indonesian Institute of Sciences (LIPI), told the seminar hosted by the People's Voters Education Network (JPPR).

She gave examples of disputes over the results of gubernatorial elections in East Java and South Sumatra after the outcome of quick counts contradicted the official results.

The quick counts by five prominent pollsters showed Khofifah Indar Parawansa and Mudjiono won the East Java election, but the provincial elections commission later declared rival candidates Soekarwo and Saifullah Yusuf the winners.

The defeated team reported the case to the Constitutional Court, demanding it overturn the official election result.

A similar case took place in South Sumatra, when the local elections commission announced that Alex Noerdin and Edy Yusuf had won the gubernatorial election, although a quick count by a pollster showed otherwise.

Siti questioned the independence of institutions running election quick counts, accusing them of receiving funding from certain figures contesting polls.

"Just look at the poll surveyors. They are very rich. Where does the money come from?" she said.

She said the country needed to set up an official quick count center to announce the results of elections a day after the polls.

General Elections Commission (KPU) official Syamsul Bahri warned pollsters to be careful in selecting methodologies for quick counts because one ballot could affect the result.

"If poll surveyors use the wrong statistical data, the result could be misleading," he said at the same forum.

Syamsul said many people assumed the quick count result was the final election result, prompting disputes once the official KPU data contradicted that of the pollsters.

The 2008 law on presidential elections requires all pollsters to register with the KPU before conducting a quick count. They must also report their methodologies or sampling system to be implemented in election surveys or quick counts, the law says.

It is not clear whether the KPU will enforce these stipulations.

The JPPR warned that the poor registration of eligible voters could also be a source of conflict during the presidential election scheduled for July next year.

"Many voters remain unaware of whether they are already listed for the election. The problem could appear on election day," JPPR director Jerry Sumampow told the seminar.

The forum also warned of a possible conspiracy between business and political players in the presidential election.

Siti said certain businesspeople could pump in huge amounts of money to help certain candidates win for the sake of their own businesses.

"This kind of conspiracy has already taken place in several local elections," she added.

For example, Siti said, none of the governor candidates in East Java had criticized PT Lapindo Brantas for its failure to deal with the mudflow disaster that displaced thousands of people in Sidoarjo regency.

Lapindo, a gas company partly owned by the family of chief welfare minister Aburizal Bakrie, has been widely blamed for triggering the mudflow.

Armed forces/defense

TNI to obey law on war to prevent violations

Jakarta Post - November 26, 2008

Jakarta – The Indonesian Military (TNI) has pledged to embrace international humanitarian law to prevent human rights violations from occurring during its operations.

"We don't want to repeat our past mistakes. Every TNI soldier sent into conflict areas in Indonesia or anywhere in the world is taught proper conduct during war before being deployed to the field," First Admiral Marsetio said at a joint seminar organized by the International Committee of the Red Cross (ICRC) and TNI here Tuesday.

The first of its kind to be held in the Asia-Pacific region, the seminar on the use of force in internal security and counterinsurgency operations was attended by senior military and police officers from Brunei Darussalam, Indonesia, Japan, Malaysia, the Philippines, Singapore and Thailand.

Over the past few decades, TNI has been accused of violating international law during its counterinsurgency operations. For instance, TNI reportedly used the Red Cross emblem for cover in a dramatic hostage rescue in Papua in 1996, in which many Papuans -- both insurgents and civilians – were killed.

"TNI is committed to involving the ICRC in every action it takes in conflict areas. TNI used to execute military operations on its own. However, since 2003, we have followed guidelines formulated in cooperation with the ICRC about applying the law in conflict situations," Marsetio, who is Vice Operations Assistant to the TNI Chief Commander, said.

"In the future, TNI soldiers will be more professional in their actions by adhering to the present law."

The international humanitarian law on warfare, is derived from the 1949 Geneva Convention which stipulates principles of behavior for disputing parties in armed conflict, particularly in connection with settling humanitarian problems emerging from armed conflicts.

The law was meant to protect people not directly involved in fighting: civilians, medical personnel, injured combatants as well as prisoners of war. "Since we have ratified the Convention, we must base every military operation on the regulations the Convention mandates,"Marsetio added.

The head of the ICRC delegation in Indonesia, Vincent Nicod, said the ICRC and TNI had been cooperating for a long time. Since Indonesia was an important country in the region, it was an excellent location for a regional gathering to talk about security operations in light of current international humanitarian law.

"Our choice to organize this here is also due to Indonesia's important role as peacekeeper in UN efforts in many regions in the world. We find Indonesian troops are almost everywhere where there are difficult situations in terms of security, conflicts as well as humanitarian operations,"Nicod said.

"We have to study the effects of armed conflicts and the way military troops respond to them while respecting the law. We have to exchange experiences on the realities in the field today," he added. (pmf)

Economy & investment

Indonesia's rupiah strengthens most in two years; bonds gain

Bloomberg - November 27, 2008

Lilian Karunungan and Arijit Ghosh – Indonesia's rupiah strengthened the most since May 2006 on speculation the central bank sold foreign exchange to boost the local currency, which last week sank to a decade-low.

The rupiah led regional gains as China's biggest interest-rate cut in 11 years bolstered demand for emerging-market assets. The Jakarta Composite Index of shares rose0.8 percent today and MSCI's Asia-Pacific Index climbed 1.8 percent.

"Bank Indonesia is reducing demand for the dollar by offering them cheap," said Muhammad Fauzi Halim, a currency trader at PT Bank Resona Perdania in Jakarta. "The China rate cut helped boost sentiment for the currency and stocks."

The rupiah rose 4.2 percent to 12,050 per dollar as of 4:41 p.m. in Jakarta, from 12,550 late yesterday, according to data compiled by Bloomberg. The currency, which fell as low as 13,150 last week, pared its loss since the end of June to 23 percent.

Bank Indonesia will defend the rupiah, Governor Boediono said Nov. 25. The central bank offered dollars for sale at 12,150 rupiah this morning, Halim said. The nation's foreign-exchange reserves dropped some $10 billion in the three months through October as policy makers tried to check the local currency's slide.

Inflation slowing

Indonesia's three-year government bonds advanced for a third day on speculation the central bank will reduce its benchmark interest rate next week as inflation cools.

Inflation may have slowed to between 11 percent and 11.5 percent this month, from 11.8 percent in October, Finance Minister Sri Mulyani Indrawati said in Jakarta today.

"Investors expect the central bank will cut the BI rate next week," said Juniman, a senior economist at Bank Internasional Indonesia, who uses only one name. "Investors are entering the bond market again."

The yield on the 10 percent note due October 2011 slumped 1.6 percentage points to 14.7 percent, according to closing prices at the Inter Dealer Market Association. The price jumped 3.3083, or 33,083 rupiah per 1 million rupiah face amount, to 89.175. A basis point is 0.01 percentage point.

Government prepares 'responses' to layoffs

Jakarta Post - November 26, 2008

Aditya Suharmoko, Jakarta – While the government is keeping an eye on potential waves of layoffs and preparing "realistic" responses to help businesses cope with slower growth next year, it warns that companies will have to share the burden.

"On the layoffs, we will monitor that based on information from business associations," Finance Minister Sri Mulyani Indrawati said Tuesday. "We'll see also what responses will be needed and can be done by the government. Obviously they have to be realistic responses."

A number of business associations have announced possible mass layoffs next year as export demand dwindles fast due to the global economic downturn.

On Monday, the Manpower and Transmigration Ministry revealed that companies had reported to the ministry plans to dismiss – permanently or temporarily – more than 40,000 workers because of the adverse economic conditions.

The Indonesian Rattan Furniture and Craft Producers Association (AMKRI) announced that the industry may lay off up to 35,000 workers next year, while the Indonesian Textile Association (API) said its industry had already temporarily laid off 14,000 workers on weak export demand.

Many other industries have announced production cuts to cope with the lower demand.

Mulyani said the government would respond to the possible mass layoffs, such as by possibly helping companies reduce their costs.

But she made it clear the government could not shoulder the entire burden and businesses had to do their bit too. "Not all risks will be carried by the government because people and businesspeople should also manage the conditions."

The government did not rule out the possibility of preparing support additional to that in the 2009 state budget, which includes Rp 12.5 trillion in incentives to help stimulate the real sector. The incentives are in the form of waived income and value-added taxes, as well as elimination of import duties.

The government is also considering providing a trade financing facility under which banks could extend loans with lower lending rates to reduce the cost of businesses, Mulyani said. "There is an expectation that businesspeople will have a lesser burden," she said.

Interest rates – a prerequisite for spurring economic growth – are expected to decline as inflation slows next year, according to the Finance Ministry.

The central bank governor, Boediono, said Tuesday that Bank Indonesia would look at the possibility of reducing its key interest rate to help prop up growth. The current benchmark rate stands at 9.5 percent.

Mulyani said the government would try to maintain the level of private consumption next year, the main contributor to the Indonesian economy, to keep the rate of economic growth above 5 percent.

In December 2008, the government will disburse about Rp 120 trillion in funds, which remain idle in the central bank, to stimulate the economy.

Indonesia to offer tax incentives for industries

Reuters - November 26, 2008

Jakarta – Indonesia plans to offer tax incentives in 2009 to help labour-intensive industries as it seeks to boost Southeast Asia's biggest economy amid slowing global demand, a government official said.

Indonesia forecasts economic growth to ease to between 4.5 and 5.0 percent in 2009 from an estimated 6.2 percent this year amid slowing demand for its key commodities such as palm oil and cocoa and expects to rely more on its domestic market of around 226 million people to boost growth.

Industries which may be eligible for tax incentives include food and beverages, electronics, automotives, heavy equipment and small-size geothermal power generators, said Eddy Putra Irawady, the deputy to the chief economics minister.

Government officials declined to elaborate, saying details of the incentives were still being discussed. The incentives will come on top of lower tax rates effective next year.

Under the new tax law approved in the middle of this year, corporate income tax will be cut to 28 percent in 2009 and 25 percent in 2010, from 30 percent currently. "Industries need the government's help," Planning Minister Paskah Suzetta told reporters.

The world's fourth-most populous country has a jobless rate of 8.46 percent of a total labour force of more than 100 million as of February 2008, one of the highest in Asia.

Century back in action as BI looks for signs of crime

Jakarta Post - November 25, 2008

Aditya Suharmoko and Rendi A. Witular, Jakarta – Ailing Bank Century resumed operations Monday, as Bank Indonesia launched a massive investigative audit to detect any violations of banking regulations that may lead to criminal prosecutions.

Bank Century's headquarters in the Senayan complex in Central Jakarta appeared quiet Monday morning with only a small group of customers waiting to withdraw their money, easing concerns of a bank run.

Nevertheless, the bank set a maximum withdrawal limit of Rp 50 million (US$4,350) until its coffers were filled with a Rp 1 trillion cash injection from the Deposit Insurance Agency (LPS) in the afternoon.

"We had to limit the amount of withdrawals so that every depositor could collect their money," said a Bank Century official who asked not to be named. The bank has refused also to conduct any foreign currency transactions for the time being.

Financial planner Dwi Melia, 32, who came to Century to collect a term deposit, which matured Monday, is fearing the worst: She said she planned to move her money to other banks despite the government takeover. "It (Century) is supposed to be safe after the takeover," she said. "But I'm not taking any chances."

Another customer, Dwi, who had term deposits in rupiah and US dollars, said her dollar deposit was returned in rupiah as the bank was unable to transfer her money in dollars. She said she had no objection to receiving rupiah.

However, some customers still trusted in Century because of its competitive edge in certain services.

Amelia, who was drawing down an equivalent of $1000, said she remained confident in the bank, despite its attached risk, because of its services in foreign currency transactions.

Hadidjaja, a National Police detective, said he remained upbeat about his $10,000 deposit because he had a lot of faith in the government and the LPS.

Century has been under the management of the government- sanctioned LPS since Friday, after the bank's capital adequacy ratio (CAR) plunged to negative 2.3 percent from around 18 percent as of September. The CAR is a gauge of a bank's health, with the mandatory minimum set at 8 percent.

The LPS has put in place a new management team to revive Century before selling it to potential investors.

"The new investors will deal with the LPS. Existing Century shareholders are no longer eligible to handle the bank," LPS president commissioner Rudjito said.

Bank Indonesia (BI) deputy governor Muliaman Hadad said the LPS would have three years, with an extension of two years, to fix Century, although there was some optimism the LPS would be able to sell the bank within six months.

Meanwhile, BI deputy governor Siti Chalimah Fadjrijah said an investigative audit into Century was underway to identify any breaches that could end up in criminal prosecutions.

"The law enforcers will follow up on the results of the investigation," she said.

BI has demanded Century's controlling shareholders Rafat Ali Rivsi and Hesham Alwarraq, representing First Gulf Asia Holding, and businessman Robert Tantular, return bank assets worth $123 million parked in Singapore and the United Kingdom.

The Century collapse has been attributed by BI officials to an "inherited problem" resulting from the imprudent purchase in 2002 of high-risk notes worth $225 million. On Oct. 30, Century defaulted on some $56 million in loan payments to replace the notes.

The default triggered a run on deposits by Century's major corporate depositors, jeopardizing the bank's sustainability.

Liquidity crunch at 'moderate' level

Jakarta Post - November 25, 2008

Rendi A. Witular, Jakarta – The liquidity squeeze in the domestic banking industry hit a "moderate" level for the first time in three years this month with the global financial turmoil yet to reach its worst point, a senior central bank official says.

Bank Indonesia (BI) deputy governor Muliaman Hadad said Sunday the pressure on liquidity in the banking sector had reached a point where the interest rate for borrowing money between banks had soared to between 9 percent and 10 percent on average.

"We categorize the range as 'moderate'. This is the first time in three years. We believe the liquidity squeeze level will remain that way in the near future," said Muliaman, adding that a "high" level was when the cost exceeded 11 percent.

He said the liquidity squeeze hitting local banks had been triggered not by a lack of available funds, but rather because of low confidence between banks in lending money to each other, causing more jitters among banks keeping a tight grip on their cash.

Banks account for 79 percent of assets in the financial sector, of which some 70 percent is controlled by the 15 largest banks. There were 126 banks operating in the country as of September.

To fund banks in need of liquidity without raising legal problems, BI recently issued a regulation allowing it to bail out banks and provide overnight funds to commercial lenders.

Controlling shareholders of banks seeking the facility will have to provide assets as collateral.

BI has also extended the emergency lending assistance period from 90 days to up to six months.

Muliaman also said there would be a rising trend in nonperforming loan (NPL) in banks to within a psychological level of 5 percent next year from the average 3.89 percent recorded in September because of the possibility of some companies collapsing.

"But we are still gauging the risk in order to get the exact picture of the NPL risk next year," he said.

The central bank requires banks to have an NPL tolerance level of less than 5 percent of their outstanding loans. According to BI, the rate of NPLs in September stood at 3.90 percent of the total Rp 1,287.40 trillion (US$111.22 billion) in loans. Third-party funds stood at Rp 1,601.50 trillion, putting the loan-to-deposit ratio at about 80.39 percent.

Another risk forecast by the central bank is the low profitability of the banking sector despite an estimation that lending growth will remain fairly robust at 22 percent next year, lower than the 33 percent growth forecast for this year.

Local banks posted operational profits of Rp 39.50 trillion (US$3.43 billion) in the first nine months of the year, up from Rp 37.28 trillion in the same period last year.

Indonesian growth forecast to slide to 2.5 percent

Jakarta Post - November 24, 2008

Jakarta – Indonesia's economy will still end up this year with a forecast growth in gross domestic product of nearly 6 percent mainly on the back of robust expansion in the first three quarters.

However, as the global financial crisis has been getting worse since September and economic recession has spread from the United States to Europe and Japan, analysts have been constantly revising downward their forecasts on Indonesia's economic outlook.

Only about ten days ago, Justin Wood, the Economist Intelligence Unit's director for Southeast Asia, forecast a 3.7 percent economic expansion for Indonesia next year. This, he acknowledged, was below the consensus forecast of economists.

But President of PT UBS Securities Indonesia Sarah-Jane Wagg, in an interview with The Jakarta Post's Vincent Lingga last week, came up with an even lower estimate, forecasting that Southeast Asia's largest economy would expand by a mere 2.5 percent, a nine-year low.

The following are excerpts from the interview:

Question: What do you think will be the outlook of Indonesia's economy next year?

Answer: Given our global recession call, we are expecting Indonesian growth to moderate quite significantly, falling to 2.5 percent in 2009 from an estimated 5.8 percent this year. The prices of almost all primary commodities are falling and investments would be very weak. But I think there are virtually no downside risks to this forecast, meaning that would be the bottom.

What will be the key drivers?

Private consumption will remain the locomotive. However, the cyclical downturn alongside the tightening liquidity we are already seeing will affect investment growth. It will be difficult for private investment for exogenous and endogenous reasons.

Globally, there is a flight of capital away from developing economies and Indonesia will not remain unscathed. Access to financing is already being made difficult for corporations, as the Bakrie Brothers episode is demonstrating.

Domestically, a tightening liquidity situation, given the rapid credit expansion in the previous three quarters and keener competition for funding (meaning higher costs) is also putting new lending on hold, thus impacting private investment in a similar fashion. Growth in Bank lending will slow significantly from the current 35 percent annual rate to 10 percent or even lower in 2009.

How do you see the rupiah will perform next year?

I think it may take two quarters before imbalances such as the high lending activity and corrections on imports translate into a small current account surplus, especially because export growth is likely to continue to decline and trade volume growth is expected to fall further, while the prices of most primary commodities will remain low.

Until then, as the economic numbers turn significantly weaker, the risk of capital withdrawal and currency weakness remains.

The government should make it compulsory for all on-shore transactions to be in rupiah. I think there would not be much leeway for Bank Indonesia to lower its benchmark interest rate because a significant easing of the monetary stance could affect the rupiah.

The differentials between the BI Rate and the US Fed funds should be kept relatively high to encourage investors and depositors to hold onto their rupiah assets. We expect the current rupiah overshoot to recover to Rp 9,800 per dollar by end 2009.

What about the Indonesian stock exchange?

Sorry, its almost an impossible call as the current trading level is totally divorced from the fundamentals of the economy.

What are the prospects for government and corporate bonds?

New government and corporate bond issuance will remain difficult in our view until global liquidity eases more significantly and global currency fluctuations stabilize (in part reflecting the end of capital repatriation on a large scale back to the American dollar) and risk appetite thus returns.

However, investors would still be interested in both corporate and government bonds at the right prices, meaning that investors would demand high yields, perhaps as high as 16 percent.

Bonds from extremely well managed companies operating in sectors with high-growth prospects in the future still have a good chance on the market.

People

Harry A. Poeze: The chronicler of Tan Malaka

Jakarta Post - November 25, 2008

Ary Hermawan, Jakarta – Harry A. Poeze is a Dutch historian who has dedicated half his life to unraveling the mysteries surrounding Tan Malaka, an obscure Indonesian hero once vilified and forgotten by the nation whose independence he had fought for.

An avid reader of history books, young Poeze was fascinated by stories of the early Dutch settlers in the archipelago, although they taught him about little more than the famous Dutch hero Jan Pieterszoon Coen – a villain in the eyes of Indonesians.

Not until he studied politics at the University of Amsterdam in the 1970s and became infatuated with the flowering nationalist movement in early 20th century Indonesia did he become aware of Tan Malaka, who once lived in the Netherlands and became the first Indonesian to run for a seat in the Dutch parliament.

At the time, he recalled, Tan Malaka's name appeared occasionally in some history books written by Dutch historians. He was then – and is probably even today – overshadowed by politicians such as Sukarno or Sjahrir.

There was not much information on the Marxist thinker, Poeze said. The man was probably considered insignificant in Indonesia's history.

Historians were unsure even about his whereabouts during the decisive period that led the country to independence, let alone his role in the revolution.

"Sometimes they (Dutch historians) mentioned the name of Tan Malaka. He might have been there, he probably did this," Poeze told The Jakarta Post at a recent interview at the office of his publisher, Yayasan Obor Indonesia.

Poeze then wrote a dissertation on Tan Malaka, which was published in 1976 under the title Tan Malaka Strijder voor Indonesie's vrijheid: Levensloop van 1897 tot 1945 (Tan Malaka, a Fighter for Indonesian Freedom: Life from 1897 to 1945).

It was not too difficult for him to write Tan Malaka's life up to 1945 as the "lonely fighter" had written an autobiography while in exile.

The holy grail for Poeze's research would then be Tan Malaka's political activities during and after the 1945 proclamation of independence.

Poeze visited Indonesia a few times, but only to return to his homeland without any worthwhile findings. Not until the 1980s, after meeting with Tan Malaka's former secretary, did he manage to shed some light on the hero's political activities during the revolution. However, he was then appointed the publications director of The Royal Netherlands Institute of Southeast Asian and Caribbean Studies (KITLV), leaving him only one day a week to work on his research.

After decades of researching and writing, he finally published a book – 2,200 pages divided into three volumes – in which he argues that the exiled Marxist politician played an important role in the revolution before his death at the hand of an Indonesian soldier in 1949.

The book, titled Verguisd en vergeten; Tan Malaka, de links beweging en de Indonesiche Revolutie, 1945-1949 (Vilified and Forgotten: Tan Malaka, the Leftist Movement and the Indonesian Revolution, 1945-1949), is now being translated into Indonesian.

The Indonesian version will be released in six volumes, the first of which was launched recently at a gathering of a large number of Tan Malaka's supporters, predominantly young people.

"Many Indonesians helped me to write the book. It is only a token of my appreciation to them that I want my books to be translated into Indonesian and to be used as a source of understanding of what transpired at the beginning of the revolution," he said.

The publisher, Yayasan Obor Indonesia, said the public enthusiasm for the translation was extraordinary, as indicated by large number of people attending the launch event.

But Poeze was not entirely surprised. He said he was aware of the increasing recognition for Tan Malaka, who has become a cult figure comparable to Che Guevara among Indonesian youth following the fall of iron-fisted leader Soeharto.

Controversially dubbed "The Father of Development", Soeharto persistently demonized Tan Malaka for his leftist and radical thoughts, striking his name from the pages of history while he was in power.

Poeze recalled how he had to trick librarians and archive staff to get important documents during the New Order regime.

"I always said I was researching the Indonesian revolution, which was true of course. But I never mentioned the name of Tan Malaka because if I mentioned him, they would say, "No, no, you can't write about Tan Malaka. This is a touchy and sensitive issue'," he said.

Soeharto's dictatorship was only one of many obstacles. Another huge problem was the rumors, myths and legends surrounding the life of Tan Malaka, a charismatic, self-effacing figure who chose to live underground. "There were about 20 versions of his death and to write one of them was difficult," he said.

One man, he said, claimed to have shot the forgotten hero, but he was convinced the claim was at best erroneous. "He did shoot someone whom he thought was Tan Malaka. "You must be like a detective," he quipped.

The eyewitnesses he interviewed in the 1980s had mostly died and some of the important documents he acquired in Yogyakarta have since been lost. His research, he said, thus could not be repeated.

Since the collapse of the Soviet Union, Poeze has been able to collect new materials – including articles Tan Malaka anonymously wrote for international Communist newspapers – to revise his dissertation. Poeze's son, who married an Indonesian woman, is now running an Indonesian restaurant in Haarlem in the Netherlands, which is, coincidentally, only 100 meters from Tan Malaka's house while he was studying there, in "the land of the colonizers".

Asked for his personal opinion on the Indonesian hero, the 62- year-old said the man was admirable, "but he made a lot mistakes". "History is written by the winner and Tan Malaka was continuously the loser," said the jovial Dutch historian.

Analysis & opinion

Indonesia: Tracing a path towards parliament

Green Left Weekly - November 29, 2008

Kelik Ismunanto – After such a long period of time in a vacuum, uncertain of how to respond to change caused by neoliberal economic policies, little by little, democracy movement activists have been able to wrest back the political podium.

In the last few months, several national television stations provided a free political stage for activists such as Dita Sari, Budiman Sujatmiko, Pius Lustrilanang and other young activists who are contesting the forthcoming 2009 elections, to explain their reason for choosing the parliamentary tactic.

Among young activists, there have been opinions in favour and against this tactic. Many activists have longed to fill the available political stage with their fresh ideas and concepts as a solution to the Indonesian nation's problems. This longing has found a place to rest with the candidature of several activists in the 2009 poll.

Electoral tactic

The candidature of several activists was debated on TV screens. These include Dita, a leader of the People's Democratic Party (PRD), under the banner of the Star Reform Party (PBR), as well as Budiman via the Indonesian Democratic Party of Struggle (PDIP) and Pius through Gerindra.

The cynicism and mockery at the position taken by Dita, Budiman and Pius, leveled by their ex-comrades from the student movement of the 1990s, questions the effectiveness of the parliamentary tactic taken by sections of the student movement that are attempting to propel forward a mass popular movement – to a movement of the mass of people who are more and more thrown on the scrapheap of poverty.

The fact that today, Indonesians are deprived of more and more of their basic rights as citizens and that the state is completely abrogating its duties to guarantee the welfare of the people helps to create the cynicism among activists towards the state and its institutions such as parliament.

This is also because of past experience, where activists have entered parliament and promptly forgotten what they were fighting for, as if a line has been drawn between the parliamentary and extra-parliamentary movements, that somehow these two movements are fundamentally opposed and separate.

This might be true based on recent experiences, but if we look back through history and the experiences of other nations, let's say that of Malaysia, such an assumption or prejudice is wrong.

In Malaysia, the combination and synergy between the parliamentary and extra-parliamentary movements were able to open up the democratic space that had been monopolised by the ruling party.

Post-1998

If we look back to the fall of the Suharto dictatorship in 1998, the democracy movement fragmented while the fake reformists were able to consolidate themselves.

Political elites and former bureaucrats in Suharto's New Order regime were able to seize back the legal political space, for example through the setting up of new political parties, or gaining other public positions.

Meanwhile, the democracy movement became more fragmented in various institutions, and activists became entrapped within the activities of each respective institution. Of course, part of the changes had to do with the fact that movement activists were getting older, with new challenges to face – such as having families to feed – and leaving behind the world of student politics.

Meanwhile the life of the people, who had been the driving force of the movement, was becoming more and more destroyed by market economy policies implemented by successive post-Suharto governments.

The role of the state, which had in the past been able to ameliorate the effects of the global economy, is disappearing more and more. The role of providing regulation and protection that was still able to be performed by the Suharto regime began to be cast aside by policies forced on Indonesia by institutions such as the International Monetary Fund and the World Bank.

Indonesia natural resource wealth was more and more depleted thanks to the antics of the political elite and foreign corporations.

Farmers who sell on the open market scream with the kind of prices being paid for their products. Workers are facing a bleak future thanks to policies of outsourcing; the cost of education and health care rises and rises because of the withdrawal of subsidies.

These are recent problems that are growing acute, problems that didn't taken on such massive dimensions under Suharto.

Ten years since the fall of Suharto and the height of the student reform movement, the movement has been at a loss in responding to sociological changes and consciousness of the masses that have been the result of the intensifying effects of the free market economy.

Activists have failed in formulating a concept of the basic problems confronting society today that could be the basis of a common platform. The parliamentary option chosen by some of the 1998 activists is a tactic aimed at a breakthrough to pierce the stagnation of the movement.

It has been shown that the important task of wresting back the people's economic and social rights cannot be achieved simply through an extra-parliamentary movement. Parliament is the main edifice that needs to fortify the people against the ferocity of the free market.

To demarcate between parliamentary and extra-parliamentary roads is not the right solution for building the people's movement.

As was explained by Dita Sari on television recently, the extra- parliamentary movement needs parliament to formalise the program they are struggling for.

Similarly, those who sit in parliament as genuine people's representatives need those on the outside to pressure the entire parliament to act in the interests of the people, to respond to their needs.

A synergy between the parliamentary and extra-parliamentary sections of the movement is of absolute necessity.

[This article was published in the Solo Pos on 27 October and has been translated by Vannessa Hearman. The writer is a PRD leader and a former 1990s student activist.]

Balanced between Bali and Obama

Asia Times - November 25, 2008

Simon Roughneen, Port Moresby – Speaking in Washington ahead of the recent Group of 20 global economic summit, Indonesian President Susilo Bambang Yudhoyono, popularly known as SBY, said his country offered a "shining example where democracy, Islam and modernity thrive together".

In the same address, he praised President George W. Bush as "one of the most pro-Indonesia American presidents in the history of our bilateral relations" while hedging, "There is no better story, no better example, of the virtue of people-to-people connections than the powerful impact of Barack Obama's election to today's Indonesians."

With the world's single-largest Muslim population stretched across a vast archipelago of over 17,000 islands, Indonesia is an important regional actor and counterterrorism ally for the US. As Southeast Asia's biggest and the world's fourth-largest country, Indonesia's complex domestic politics will represent a significant challenge to Obama's foreign policy, which is expected to de-emphasize Bush's counterterrorism initiatives towards the region.

Just days before SBY's US visit, Indonesian authorities executed three of the men involved in the 2002 Bali bombings, a terror attack that killed 202 civilians, many of them Australian and European tourists. The potential for a backlash after the executions remains hard to quantify, but for now appears to be minimal, according to experts.

"Commentary on Indonesian websites indicates that most people have got the message that the Bali bombers were just common murderers, and there does not seem to be any indication that their potential martyrdom has recruited anyone," said Adrian Vickers, professor of Southeast Asian Studies at the University of Sydney.

Yet others say the possibility of future anti-Western attacks in Indonesia cannot be ruled out. Ahmad Suraedy, executive director of Jakarta's Wahid Institute, linked to the former Indonesian president Abdurrahman Wahid, said "there are some groups that gave public support for the actors and groups, including for those executed. [The eventual outcome] will depend on the Indonesian government's terrorism policy".

That US-backed policy has in general been a success, at least over the short term. But questions remain over its long-term viability. The widespread revulsion and fears caused by the Bali bombings, coming so soon after the September 11, 2001, terrorist attacks against the US, focused minds in Jakarta's political and security establishment.

A US- and Australian-backed joint intelligence effort, fronted by a local police unit known as Detachment 88, snared a number of high-profile Jemaah Islamiyah (JI) terror suspects, including Abu Dujana, who was arrested in July 2007 and thought to be the militant group's military leader.

JI had carried out numerous attacks, first against Indonesian Christians in 2000, before changing tack to focus on Western interests and civilians. Still a legal entity in Indonesia, JI is widely deemed a terrorist organization with links to al-Qaeda and a desire to impose a caliphate across Southeast Asian Muslim regions, encompassing Indonesia, Malaysia, southern Thailand and the southern Philippines. Since the Bali bombings, JI is thought to have been severely weakened with the arrests of hundreds of its suspected supporters and operatives. Yet analysts say risks remain.

"Detachment 88 is the most capable counterterror unit in Southeast Asia," said Rohan Gunaratna, head of Singapore's International Center for Political Violence and Terrorism Research and the author of numerous books on international terrorism.

Yet he argues that Indonesia's overall counter-terrorism strategy is flawed, lacking the political vigor and strategic direction necessary for the longer-term. "Indonesia's political and religious leaders must build new platforms to counter ideology," he said, expressing concerns Indonesian authorities are reluctant to confront radicalism.

Gunaratna believes Abu Bakr Bashir, the radical cleric widely regarded as JI's founding father who spent 26 months in jail for his alleged role in the Bali bombings, has been handled too leniently. "Bashir must be dealt with – he should go back to jail," Gunaratna said. Referring to Bashir's stated plans to jump into party politics ahead of 2009 elections, he added: "The Indonesian authorities must not allow him become a political figure."

Conservative constituency

Some say fears of a conservative Islamic backlash factored into the secular government's handling of the Bali bombers, which over the course of six years became a long-drawn media saga in which the accused were given ample publicity opportunities to profess their lack of remorse before their eventual executions. They were executed amid much media fanfare earlier this month.

"The three terrorists most responsible for the carnage in Bali in October 2002 have finally been executed after months of uncertainty that turned the waiting into a public spectacle that only upset and infuriated relatives of the victims and prolonged their pain," the Jakarta Post said in an editorial the day after the sentences were carried out. (See Media-savvy ending for Bali bombers, Asia Times Online, November 17, 2008.)

Other potential flashpoints across this 240 million-plus country, comprising hundreds of different languages and ethnic groups, include the Sulawesi and the Maluka regions where Muslims and Christians have clashed in the past. Ahmad Suraedy believes that "the Indonesian government provides little protection to minorities, including Muslim minority sects" leaving the country "vulnerable to violence given the many religions and ethnicities".

Despite these concerns, Obama's recent election success has energized many Indonesians, enhancing at least temporarily perceptions of the US and the West at the expense of JI and other homegrown radical and intolerant groups.

Just days after Obama's win, SBY stated, "He spoke our language, knew our culture, ate our food, played with Indonesian friends from various ethnic backgrounds." He regaled listeners in Washington on how students and teachers at Besuki Elementary, Obama's old school in Jakarta, danced and wept when the election result came through. Tricia Iskander, Jakarta representative of the US-Indonesia Society, told Asia Times Online that "Indonesians have high expectations of Obama, as he is considered familiar with Indonesia where he spent his childhood. Many people perceive that his win will boost bilateral relations".

Ahmad Suraedy added: "The Obama election will change perceptions in Indonesia. Not only of the US, but it could have a positive impact on inter-religious relations across the archipelago." If so, there are still conflicting signals. The recent passage of a broadly written and long controversial anti-pornography law was widely viewed as a government sop to conservative Islamic forces in an election season.

And there are still radical groups such as the Hizb-ut-Tahrir, which brought 90,000 supporters out to a rally at a Jakarta stadium in August 2007 where its leaders condemned democracy as contrary to Islam, lurking in the wings. And it wasn't that long ago that a 2006 poll found that one out of every ten Indonesians supported terrorist attacks if they were carried out to "protect the faith".

Such conservative views, to be sure, are still in the minority. Nadlatul Ulama and Muhammidiyah, Indonesia's two main mass Muslim organizations with a combined membership of over 70 million adherents, both condemned the executed Bali bombers as terrorists and insisted they should not be glorified as martyrs. Both groups have branched out into multifaceted social and educational portfolios and have softened their previous calls for an Islamic state to be established in Indonesia.

That's in line with the wider popular aspiration for prosperity in a country that has recovered more slowly than others from the debilitating 1998 Asian financial crisis. Economic rather than counter-terrorism issues could, for better or worse, define a new era of US-Indonesian relations under Obama. "Some Indonesians are worried that the Democrats will focus on issues that this country might not like, such as human rights, and will have a protectionist economic policy," said the US-Indonesia Society's Iskander.

[Simon Roughneen is a roving freelance journalist. He has reported from Africa, Southeast Asia, the Middle East and Pakistan.]

Farmers get little from CPO tax cut

Jakarta Post - November 26, 2008

Amzul Rifin, Tokyo – The government has decided to lower the export tax on crude palm oil (CPO) in November 2008 from 2.5 percent to 0 percent. This decision was included in the 10 policies the government has put in place to mitigate the financial crisis affecting the country.

The government changed the minimum reference price CPO had to attain to incur the tax from US$550 per ton to $700 per ton. This means as long as the CPO reference price, or international price, stays below $700 per ton, the export tax tariff will remain at zero. The reference price for November is $646.84 per ton. This decision was made to increase CPO export levels in the coming months.

Many people involved in the industry cheered this new policy, believing that the 0 percent CPO export tax will increase farmers' income. But is it true?

Before answering this question, let's consider farmers' position in the palm oil industry. They supply the fresh fruit bunch (FFB) which is milled in refineries owned by state-owned (PTPN) or private plantations.

In 2005 small-scale farmers contributed 31 percent of the total palm oil produced in Indonesia. The largest contributor was private plantations at 52 percent and the smallest was state- owned plantations at 17 percent. But, unlike the plantations, farmers sell only FFB whereas the other two players can choose to sell FFB, CPO or refined palm oil. This makes farmer uniquely vulnerable to FFB price changes.

In the global economy, all prices are related. The price of FFB and domestic CPO is influenced by the international price of CPO, not by the amount of export tax levied. When, for example, the CPO international price peaked in April 2008 the domestic CPO price peaked as well, even though the export tax tariff was up to 20 percent.

Examples like this demonstrate how any increase in the CPO international price will be transmitted to the CPO domestic price and then to the price of FFB in turn. The tandem price fluctuations are not perfectly parallel: A one percent increase in the international price does not mean the domestic CPO price would increase by one percent too, but by less than one percent. And the price of FFB, which affects farmers' revenue, would increase even less. Should prices decline, farmers would suffer the most because the price of FFB will fall proportionally further than the CPO domestic price.

From the farmer's viewpoint, the FFB price is determined not by market mechanisms but by the formula applied according to government decree which factors in the proportion index, prices and yields for both crude and refined palm oil. From this formula, we can infer the export tax is not included directly in the FFB price. It is accommodated instead in the CPO price.

Going back to the previous question, the 0 percent export tax will not benefit farmers much. The main factor that could prevent farmers from ensuring steady, decent income is price fluctuations. The government needs to consider imposing a policy to minimize price fluctuations of domestic CPO caused by changes in the international price.

In the long run, several changes have to be made to minimize the risk of CPO international price fluctuations which hurts farmer the most.

First, nowadays 70 percent of Indonesia's palm oil production is being exported, which makes palm oil producers heavily dependent on the international market and highly exposed to international market turbulence. In the future, domestic consumption of palm oil should be increased by expanding the current capacity through product diversification such as biofuel from palm oil.

Second, take advantage of the fact that refined palm oil fluctuates less than CPO in the international market. Indonesia exports 48 percent Crude, 52 percent refined. Compare this ratio with Malaysia's. Only 15 percent of its palm oil export is in the form of CPO. By exporting more refined palm oil, besides gaining a higher price, Indonesia can mitigate the effects of price fluctuations.

[The writer is a doctoral student at the University of Tokyo, Japan, and lecturer in the Department of Agribusiness, Faculty of Economics and Management, Bogor Agricultural University.]

Tough for workers, employers

Jakarta Post Editorial - November 25, 2008

It is certainly a very difficult time for companies in Indonesia now and will continue to be so next year, as our economy begins to feel the devastating impact of the financial crisis and recession in the world's economic powerhouses – the United States, Europe and Japan.

Worse still, the consensus forecast among analysts is that the situation will get worse before it gradually gets better, probably late in 2010.

In fact, our businesses are already feeling the pinch, as evidenced by the massive worker layoffs made or planned by companies already hit by the global economic downturn.

Manpower Ministry data show that 21,000 workers could be laid off by the end of this year, with another 13,000 or so other redundant employees receiving only nominal wages.

The situation this time around is different from our 1997-1998 economic crisis when companies that served the international market continued to do rather well: This time it is the export- oriented businesses – most of which are natural resources based -- that are suffering the most because of the depressed demand in the developed world.

Worse still, while companies badly need to cut costs to stay competitive in the international market, our labor regulations remain too rigid to allow for a realignment of employment structures.

Firing workers remains the most expensive option, with severance allowances sometimes eight times as high as those in Malaysia, China, Bangladesh and India. This anomaly occurs even though we have more than 12 million unemployed and around 40 million – almost 50 percent of our total workforce – underemployed.

Yet the government and the parliament do not seem to have the courage to amend the 2003 labor laws, instead succumbing to threats by agitating trade union leaders who have steadfastly opposed any attempt to make labor regulations more flexible.

President Susilo Bambang Yudhoyono's Cabinet issued in October a joint ministerial decree designed to serve as a broad guideline for tripartite (government-employer-worker) negotiations for minimum wages for next year in anticipation of the tough economic times ahead.

However, instead of providing a conducive legal foundation for maintaining peaceful industrial relations, the ministerial ruling caused unrest among trade unions, which claim the regulation has weakened their bargaining power vis-a-vis employers. We still wonder why the government issued such a poorly drafted regulation in the first place, because it includes virtually nothing in the way of facilitating meaningful wage negotiations between workers and employers.

One of the five articles in the decree, which caps wage rises for next year at the rate of economic growth (estimated at 6 percent this year), has instead provoked several trade unions to organize massive street protests.

Adversarial relationships, let alone confrontations, between employers and trade unions at this difficult time will surely benefit nobody but will instead make our products and our overall economy much less competitive.

Workers, given their weak bargaining position, do need protective labor regulations because the market cannot always strike a good balance between the often opposing interests of workers and employers. They need a strong framework in which fair wages and working conditions can be set.

But overly protective or too rigid regulations, as they are now according to most employers and potential investors, could hurt growth in formal-sector employment, which accounts for around 65 percent of the total labor force.

On the other hand, a free-wheeling labor market or too flexible labor regulations will never work in the interest of workers, especially because more than 80 percent of the nation's labor force is not covered by an adequate social security system.

The government needs to consider companies' grievances more seriously, whether their problems are redundant workers, lack of trade financing, inadequate export insurance, unnecessary delays of imports or bureaucratic red tape, and take the necessary corrective measures accordingly.

The 2009 state budget provides Rp 12.5 trillion (US$1 billion) for what it calls a "stimulus" for businesses to weather the difficult economic conditions ahead. But this sum is paltry considering the magnitude of the challenges to come.

The most helpful stimulus for businesses right now would be the creation of a better business environment through more efficient bureaucratic infrastructure and protection of the local market from smuggled foreign goods.