News & issues

All's well, says bank, as rupiah falls

Jakarta Post - September 6, 2008

Aditya Suharmoko and Ika Krismantari, Jakarta – The rupiah suffered its biggest daily drop in nearly 10 months on Friday, falling by 1.3 percent to close at 9,375 against the US dollar, a drop the central bank has attributed to recent gains by the greenback.

The fall on Friday capped the 2.4 percent decline the local currency suffered throughout the week, its biggest weekly decline since June 2007, according to Bloomberg data. But despite the numbers, the central bank insists the rupiah remains fundamentally strong.

"It is a global condition. The dollar is strengthening against all other currencies. The rupiah had a bigger decline Friday, although it has been stronger than other currencies in the past few weeks," Bank Indonesia (BI) governor Boediono said Friday. "Fundamentally, there is no problem."

Boediono said BI would keep monitoring fluctuations in the value of the rupiah, but declined to state an acceptable level for the rupiah against the dollar. "We will stay in the market to reduce the volatility (of the rupiah)."

Analysts said BI had been selling the dollar to intervene in the market, as seen in the fall in the country's foreign exchange reserves from US$60.56 billion in July to $58.36 billion last month.

"There was a decline in our foreign exchange reserves in August as we used the dollar to stabilize the rupiah," BI deputy governor Budi Mulya confirmed Thursday.

BI intervenes in currency markets by buying or selling on the foreign exchange.

Purbaya Yudhi Sadewa, Danareksa Research Institute chief researcher, said the rupiah's fall should be attributed not only to the strengthening dollar, but also to negative sentiments across global markets.

The world's top stock markets have been hit by massive drops, causing investors to panic and cut their assets holdings in risky emerging markets.

The Indonesia Composite Index dropped 2.5 percent to close at 2,022.56 on Friday – its lowest since Aug. 21, Bloomberg reported.

Purbaya said BI might have been seeking to protect the weakening rupiah against the dollar in its decision Thursday to raise its interest rate to 9.25 percent.

Fauzi Ichsan, Standard Chartered economist, said the central bank made the right decision in raising the rate, as the rupiah might have fallen further had it not done so.

"I believe the (rupiah's) decline will be short-lived," Fauzi said. "As soon as the global market is back to normal, the rupiah will follow suit."

Purbaya and Fauzi expect the rupiah to hover between Rp 9,200 and Rp 9,400 until the end of the year.

Education budget mostly to teachers

Jakarta Post - September 6, 2008

Erwida Maulia, Jakarta – One-half of the Rp 224.4 trillion (US$24.45 billion) in the education budget proposed for next year has been allocated for ensuring all Indonesian children complete the full nine years of compulsory education.

National Education Minister Bambang Soedibyo said Friday, however, the greatest portion of the funds would go to teachers in the form of monthly salaries and allowances.

"Most of the budget will be channeled to the regions through the General Allocation Funds (DAU) to pay state teachers and subsidize private, as mandated by the 2005 law on teachers and lecturers," Bambang said after a coordinating meeting on the education budget.

Of the 2.2 million estimated teachers across the country, 80 percent worked in primary and junior high schools; therefore, Bambang said, their salaries and allowances would use up most of the budget allocated for basic compulsory education.

The remaining 50 percent of the 2009 education budget will be used to, among others, provide more research funds for universities; fund the School Operational Assistance (BOS) program which helps schools in low-income communities; and develop vocational schools.

He said he hoped the BOS funds could increase by at least 20 percent from this year's figures, which amount to Rp 254,000 per elementary school student per year and Rp 354,000 per junior high school student per year.

The coordinator of the expert team for education funding standards at the agency for national standards in education (BNSP), Abbas Ghozali, said in a discussion last month BOS funds should reach Rp 509,535 per year for each elementary school student and Rp 545,203 per year for each junior high school student. Bambang declined to give more details about figures.

He said the National Education, Religious Affairs and Finance ministries along with the National Development Planning Board would calculate the budget for each education line item in the next two days.

The education ministry's secretary general Dodi Nandika said the basic education funds would also be used to improve access to and quality of basic education, fund basic education equivalency degree programs, renovate old school buildings, build new ones and continue the BOS and textbook procurement programs.

Dodi said the education budget would not be implemented solely through the education ministry but also through the Religious Affairs Ministry, which oversees religious schools, and several other ministries.

For this fiscal year, the education ministry received Rp 52 trillion, and the Religious Affairs Ministry obtained Rp 12 trillion. For next year, the education ministry should receive roughly between Rp 70 trillion and Rp 80 trillion, Bambang said.

Most children in orphanages have parents

Jakarta Post - September 5, 2008

Yuli Tri Suwarni, Bandung – Minister of Social Services Bachtiar Chamsyah called on parents Thursday to take care of their children instead of handing them over to orphanages.

Bachtiar was commenting on results of a survey conducted by the Bandung Social Welfare Institute (STKS), in cooperation with international NGO Save The Children, which showed 90 percent of children living in orphanages still have parents.

The survey, which used qualitative methods, was conducted in 37 orphanages in six provinces: Aceh, Central Java, Maluku, North Sulawesi, West Kalimantan and West Nusa Tenggara from 2006 to 2007.

"We have limited funds to help 6,000 orphanages across the country. Parents who still have financial resources should take care of their children," the minister said.

He said the number of orphanages has doubled in the past five years, with most new ones set up in conflict or disaster areas, such as in Aceh and Maluku.

He said the government currently has allocated about Rp 67 billion (US$7.2 million) of Rp 2.1 trillion of the ministry's budget to help orphanages. Only some of the Rp 67 billion has been disbursed to finance free meals – worth Rp 2,500 per day per meal – for 138,000 children, 30 percent of the total number in orphanages.

"Rp 2.1 trillion is not enough to set up better orphanages. We need better buildings, bedrooms, study rooms. That's the ideal goal," he said.

STKS researcher Ellya Susilowati said the survey, which was also supported by UNICEF and the ministry, found the children were subjected to violence and sexual abuse.

Ellya said the violence, such as beating and pinching by the guardians, occurred often and the staff never considered it abuse. "The caretakers don't have professional handling training. Many of them just know how to feed the children," she said.

She said the survey found abuses in the orphanages were also committed by older children against the younger ones.

Responding to the findings on frequent violence, Bachtiar said the government could not limit the establishment of new orphanages, it could only recommend standards of care for the facilities.

"We cannot prevent people from establishing orphanages. In South Solok, West Sumatra, the Islamic organization Muhammadiyah has built a good orphanage, but they are lacking children and are looking for children from other regions," he said.

SBY's move to halt LPG price hikes politically motivated

Jakarta Post - September 4, 2008

Desy Nurhayati and Mustaqim Adamrah, Jakarta – President Susilo Bambang Yudhoyono on Wednesday ordered state oil and gas firm PT Pertamina to roll back its decision to raise liquefied petroleum gas (LPG) prices, calling it untimely and burdensome to the public – in a move analysts deemed "populist".

Critics said the President's decision, while perhaps helpful, was clearly a politically driven one to gain public support ahead of next year's elections.

On August 25, Pertamina increased the prices of 12-kilogram and 50-kilogram LPG canisters, and announced it would progressively increase them every month until they reached market levels. Yudhoyono deemed the move "inappropriate and untimely", with the start of the Muslim fasting month of Ramadan only days away.

"Policies should not prompt new problems, especially when we are struggling to improve our economy. We should also consider the purchasing power of our people," the President said after a Cabinet meeting to discuss the issue.

State Minister for State-owned Enterprises Sofyan Djalil, Coordinating Minister for the Economy Sri Mulyani Indrawati and Energy and Mineral Resources Minister Purnomo Yusgiantoro also attended the meeting.

"We state, therefore, that there will be no increase in LPG prices, including planned monthly increases in 12-kilogram and 50-kilogram LPG canister prices," Yudhoyono said.

Pertamina said the raise was necessary to minimize its losses. The price for 12-kilogram canisters was increased by 9.5 percent from Rp 63,000 to Rp 69,000, a rise of Rp 500 per kilogram from Rp 5,250 to Rp 5,750. The price for 50-kilogram canisters was raised from Rp 343,900 to Rp 362,750 per canister

Pertamina planned to increase the prices by Rp 500 per kg every month beginning October until they reached market levels. The current market price of LPG is about Rp 11,400 per kg.

Sofyan said the government would not allow Pertamina to raise prices until at least after the 2009 elections.

Analysts were not impressed with Yudhoyono's decision. "If the government is serious, why didn't it do the same thing when Pertamina began raising kerosene prices, which affects lower income people even more?" Ikrar Nusa Bakti of the Indonesian Institute of Sciences (LIPI) told The Jakarta Post.

"There are suggestions Yudhoyono's recent policies are populist and related to the 2009 elections."

Ikrar added the President's decision was "a little too late". "Many families earn only Rp 1 million (US$108.79) a month, and they have to spend Rp 90,000 to Rp 100,000 every month on LPG. This is ridiculous," he said.

University of Indonesia political analyst Andrinof Chaniago said Yudhoyono could very well benefit from this action.

"Looking at it objectively, SBY was right to do this," he told the Post. "But the moment was also favorable for him to gain political momentum."

Actions, demos, protests...

No letup to protests on first day of Ramadan fasting month

Detik.com - September 1, 2008

Laurencius Simanjuntak, Jakarta – It appears that fasting is not deterring some people from taking to the streets to voice their protests. The evidence being that four demonstrations will take place in Jakarta on the first day of the Ramadan fasting month.

According to data from the Metro Jaya regional police Traffic Management Centre for Monday September 1, the first action will take place at 7pm the Central Jakarta District Court on Jl. Gajah Mada.

Following this at around 9.30am, a demonstration will take pace at the National Agency for the Placement and Protection of Overseas Labor (BNP2TKI) on Jl. MT Haryono in South Jakarta.

Then between 10-11.30am, a protest will be held by a group of people at the United Nations representative offices on Jl. MH Thamrin in Central Jakarta and the Batam authority representative offices on Jl. DI Panjaitan in East Jakarta.

In the satellite city of Tangerang meanwhile, a protest action will take place at the offices of PT Langgeng Makmur. (ndr/lrn)

[Translated by James Balowski.]

Aceh

Legislator candidates for Aceh to enrol Koran reading test

Jakarta Post - September 7, 2008

Jakarta – Candidates of House of Representatives member from Aceh are scheduled to follow Koran reading test next week, as part of candidacy criteria.

"Alhamdulillah, every political party has agreed with the requirement," said Yawin Adi Dharma, chairman of candidacy committee at Independent Election Commission in Aceh, as quoted by Antara on Sunday.

Yawin said that the test was implemented with Ordinance No. 3/2008 on local political parties and legislative candidates for the election in Aceh. Article 13 and 36 of the ordinance stipulate that Muslim candidates must be able to perform Islamic rituals and recite from the Koran, respectively.

"The regulation does not violate any higher law, but rather an implementation of sharia spirit," said Yawin.

In the same week, KIP will also test provincial and regency legislative candidates in Aceh, no less that 5,000 people.

The Aceh KIP has formed 10 examination teams, each made up of four Koranic scholars. It will take around a week for the examiners to test all of the candidates. Each participant will be given five minutes to read a verse chosen randomly by the examiner. (dre)

Thousands of legislative candidates to sit Koran test

Jakarta Post - September 3, 2008

Hotli Simanjuntak, Banda Aceh – The predominately Muslim province of Aceh Nanggroe Darussalam is requiring thousands of its legislative candidates to take a Koran proficiency test before they contest the 2009 election.

"None of the provinces in Indonesia require (this), except Aceh," head of the legislative councilors nomination at the Aceh chapter of the Independent Election Commission (KIP) Yawin Adi Dharma told The Jakarta Post.

According to Yawin, the KIP will test 1,368 provincial legislative candidates in Aceh, excluding the 23 regents and mayors in the province.

"We estimate no less than 5,000 legislative candidates will sit the Koran recital tests," said Yawin, adding that the number would not be made final until after the application process, which will last for a few more days.

The test will be held for provincial candidates from Sunday to next Friday in Banda Aceh, while regional candidates will take the test in their respective regencies.

The KIP has decided to go through with its plan despite fierce criticism. "We must implement the rule in line with Ordinance No. 3/2008 on local political parties and legislative candidates for the election in Aceh," said Yawin.

Article 13 and 36 of the ordinance stipulate that Muslim candidates must be able to perform Islamic rituals and recite from the Koran, respectively.

After a series of protracted debates and studies, Home Minister Mardiyanto revoked Article 36 on the grounds that a higher law, Law No. 10/2008, contradicts the ordinance by authorizing national political parties to enact their own policies for their legislative candidates.

Thus, only local party candidates are obliged to take the Koran recital test.

A letter dated July 18, 2008, sent by Mardiyanto to the Aceh governor, states that the Aceh administration is only authorized to enact rules on local parties. "For the time being, we will abide by the initial decision that every candidate must sit the Koran proficiency test," Yawin said.

The Aceh KIP has formed 10 examination teams, each made up of four Koranic scholars. It will take around five days for the examiners to test all of the candidates. Each participant will be given five minutes to read a verse chosen randomly by the examiner.

To aid legislators taking the test, the KIP has issued a special decree specifying technical guidelines on Koranic proficiency.

The proposal to hold the exam has received mixed public reaction. A resident in Ule Kareng, Hasbi, said the Koran recital test should be canceled.

"Even if the candidates are able to read the Koran, it doesn't mean they are able to set a good example for society. Now, many legislators don't care about the commoners, but only think of their own interests," he said.

West Papua

DAP and MRP meet to discuss Wamena shooting incident

Cenderawasih Post - September 4, 2008

The chairman of the MRP, Drs Agus Alua believes that the flag- raising incident that resulted in the shooting dead of Opinus Tabuni, a Papuan in Wamena was handled in a way that was in violation of presidential decree 77 (PP 77) about the use of symbols. 'The intention of the President with PP77 was that it should be used persuasively,' he said.

With about ten incidents involving flag-raising having occurred, problems have arisen relating to PP77. 'None of the cases was handled in accordance with the decree. This means that flag- raising will continue to be a problem until a proper solution is found.'

With reference to a meeting held the day before between DAP and the MRP, DAP has sent a letter to the police chief which states the conditions the police should observe and hopes that the MRP will support that position.

Agus Alua said that the shooting incident is quite a separate matter from the flag-raising and the MRP will call on the police to keep the issues quite separate.

The chairman of the Dewan Adat, Forkorus Yoboisembut together with other DAP members said they reject the idea of the police continuing with their investigations (into the flag-raising) until they have revealed who was responsible for the shooting incident. The shooting incident must be dealt with first along with the motive for the shooting. He said that raising a flag is not a crime but murdering a man is certainly a crime.

He pointed out that on 7 July 2008, they were commemorating World Indigenous People's Day, an international event. The police should ensure that during any investigations, two lawyers should be present, one domestic and one from abroad, he said.

He said finally that once the police have told the public who it was who murdered Tabuni, they would ask people who it was who carried out the flag-raising.

Multi-nationals in Papua urged to disclose payments to TNI

Radio New Zealand International - September 1, 2008

The Australia-based Mineral Policy Institute is urging all multi-national companies which pay for military protection of vital assets in Indonesia's Papua region to be transparent about the arrangements.

The institute has welcomed a US federal court ruling that ExxonMobil has a case to answer in the suit over alleged killings and torture by Indonesian troops protecting the company's gas project in Aceh province.

The Institute's director, Techa Beaumont, says the decision has major implications for international companies like US company Freeport McMoran, which runs the Grasberg mine in Papua.

She says it's commendable that in its annual report, Freeport discloses the millions it pays in support costs to the Indonesian military to protect its operations:

"Freeport disclosing those payments is a positive step in the right direction – if we could get other companies to do that then we'd be raising the bar. But really the ultimate issue is that if you're paying people to secure your infrastructure, you have to accept that you're going to be responsible for the conduct of those individuals."

US court ruling on Exxonmobil impacts on Freeport in Papua

Radio New Zealand International - September 1, 2008

Analysts say a US federal court ruling involving energy giant Exxonmobil and Indonesia's military has major implications for international companies working in regions like Papua.

The court ruled that ExxonMobil has a case to answer in the suit over alleged killings and torture by Indonesian troops protecting the company's gas project in Aceh province.

The director of the Australia-based Mineral Policy Institute, Techa Beaumont, says the decision acknowledges that if companies pay government militia to do their dirty work then they are also responsible for their conduct.

She says the ruling means that US company Freeport McMoran, which runs the Grasberg mine in Papua, should reconsider paying Indonesian military to safeguard its local operations.

An Australian political scientist, Damien Kingsbury, says the ruling is a significant step toward addressing the human rights agenda in Indonesia and the culpability of the Indonesian military over a long period of time.

Human rights/law

Sparks continue to fly over porn bill

Jakarta Post - September 6, 2008

Abdul Khalik, Jakarta – The House of Representatives is set to push through the pornography bill in October, despite ongoing controversy over the draft law's vague definition of pornography.

Some lawmakers and activists have criticized the controversial bill for criminalizing victims of pornography and threatening the country's pluralism.

Out of the public spotlight, the House's working group (Panja) has finished deliberating the bill and will soon submit it to the special committee (Pansus) for further discussion. The House is scheduled to pass the bill on Oct. 14, 2008, after it is debated by the consultative body (Bamus).

But critics claim serious problems with the bill remain unresolved despite the large number of changes made since the draft law was first introduced in 2006 as the Pornography and Indecent Acts Bill.

"We reject the current bill although it is very different from the original version that was first introduced. We need to do a simulation to determine whether it will in fact create more problems than it solves," legislator Ganjar Pranowo of the Indonesian Democratic Party of Struggle (PDI-P) said.

He said the bill did not distinguish between children and adults, between models and producers and distributors, or between private domains and public spaces.

The bill also duplicates other laws regulating the same issues, including the Criminal Code, the child protection law and the cyber law, he said.

The definition of pornography used in the bill encompasses activities such as artwork and poetry, which could lead to different interpretations by different groups or individuals.

"Pornography is any man-made work that includes sexual materials in the form of drawings, sketches, illustrations, photographs, text, sound, moving pictures, animation, cartoons, poetry, conversation, or any other form of communicative message," reads Article 1 of the bill, a copy of which was obtained by The Jakarta Post.

"It also can be shown through the media to the public; it can arouse lust and lead to the violation of normative values within society; and it can also cause the development of pornographic acts within society."

The Pro-Woman Working Group on the bill said the draft law generalized all forms of pornography based on a free interpretation of morality and failed to specify child pornography. The bill also failed to differentiate among age groups in their access to pornography, it said.

The group suggested that adults (older than 21 years) should be allowed to have private access to pornography, while youths (18- 21 years) and minors (below 18) should not be allowed access.

"It is the access to pornography that should be regulated, with the punishment focused on the industry, such as the owners, founders and distributors rather than the models (actors)," it said. Articles 9 and 11, which regulate the actors and models, criminalize the victims, the group said.

Setara Institute chairman Hendardi pointed to the danger of Article 21 of the bill, which allows any groups or individuals within society to take part in preventive action. "The article will justify hard-liners in taking the law into their own hands, threatening violence against certain groups," he said.

Sidharto Danusubroto, another PDI-P legislator, said pluralism would be under threat should further changes not be made to the bill, as it currently allowed certain groups to force their ideology onto others.

But Mahfudz Siddiq, chairman of the Prosperous Justice Party (PKS) faction in the House, said the law was urgently needed because pornography was too widely available. The PKS and other Islamist organizations, such as the Indonesian Ulema Council, are staunch supporters of the pornography bill.

Talangsari human rights victims demand compensation

Jakarta Post - September 6, 2008

Oyos Saroso H.N., Bandarlampung – Stigmatized as rebels, victims of the bloody Talangsari tragedy in East Lampung asked the government on Friday to rehabilitate their names and give them proper compensation.

"The stigma of rebel is still applied to us since our names have never been rehabilitated. Our children and grandchildren had difficulties to find jobs or to apply to be civil servants," Azwar Kaili, one of the victims of the tragedy which occurred in 1989, said.

The 74-year-old man hoped the government could soon legally settle the human rights violation case and give proper compensations to the victims.

Another victim of the tragedy, Jayus, who is now living in Muara Dua, South Sumatra, said that compensation was needed for the victims to continue their lives. "The stigma was very hard. I had to move from my village to continue our life," the 60-year-old Jayus said.

The tragedy occurred in Cihideung hamlet, Talangsari village, Rajabasa district, Central Lampung regency, when a battalion from the Garuda Hitam Lampung military command attacked the hamlet, which was accused of sheltering a rebel group.

At least 246 people were reportedly killed as a result of the military attack against the Warsidi-led group, which had been based on a 3.5 hectare plot in the hamlet. The government officially acknowledged 27 deaths in the tragedy.

Meanwhile, coordinator of the impunity division of the Committee for Missing Persons and Violence Victims, Chrisbiantoro, praised the National Commission on Human Rights (Komnas HAM) for reviewing the case.

"But Komnas HAM still failed to summon key persons from the military who should be held responsible for the human rights violation," Chrisbiantoro said.

He suggested the rights commission should not just investigate the rights abuses, but also examine the material and intangible losses suffered by the victims. He said the victims had lost their properties, including land and cattle, as well as job opportunities.

"Many of the victims and their families were dismissed from their jobs since they were accused of being involved in the tragedy," he said.

He said Komnas HAM should work hard to bring the rights violations to court. "But it's difficult as Komnas HAM has limited authority."

According to government regulations, victims of gross human right violations can be given compensation and their names rehabilitated once the case concerned has been permanently resolved and settled by the court. "As we know, it's not easy to hold a human rights trial in Indonesia," Chrisbiantoro said.

Prosecutors seek continuation of Muchdi trial in Munir case

Jakarta Post - September 5, 2008

Dian Kuswandini, Jakarta – State prosecutors on Thursday defended their charges of premeditated murder against former State Intelligent Agency (BIN) deputy chief Muchdi Purwopranjono, asking the court to push ahead with the trial.

However, prosecutors did not respond to the defendant's rebuttal against the alleged motive behind the murder of human rights activist Munir Said Thalib, nor the factual errors in the information they presented in their indictment.

Prosecutor Cirus Sinaga said his team had noted Muchdi's plea on several issues, including reported international and national pressure on the trial, conflicting crime scenes, the testimony of BIN agent Budi Santoso, and the authority of the South Jakarta District Court to try the high-profile case.

"Our Constitution and laws say law enforcement in the context of human rights must be respected, honored, promoted, preserved and carried out, primarily by the government. Therefore, accusing this trial of coming under local and international intervention does not make sense," Cirus told the court.

Prosecutors also said defense lawyers' skepticism over key witness Budi was premature. Budi said in his testimony Muchdi had ordered former Garuda pilot Pollycarpus Budihari Priyanto to kill Munir. "We never know what will happen in the next few days – whether we can bring Budi to court, or cross-check his testimony," Cirus said.

Muchdi's lawyers insist Budi had a stronger motive than Muchdi for killing Munir. Cirus also said his team named two crime scenes in its indictment – Singapore's Changi Airport and a Garuda plane – because the location where Munir was poisoned (the airport), could not be separated from the place where he died, which was on the plane.

Munir died of arsenic poisoning on Sept. 7, 2004. Pollycarpus was sentenced to 20 years in prison for his role in the murder.

In the previous hearing, Muchdi's lawyers said prosecutors had failed to establish their client's reason for paying Pollycarpus Rp 17 million. But prosecutors insisted they had explained it.

"We mentioned in our indictment the money was for supporting Pollycarpus' activities. Whether it was to buy arsenic, spy on Munir or for Pollycarpus' pocket money, we should wait for the next session of the trial to find out," prosecutors said.

Prosecutors also asked the court to continue trying the case, despite objections from defense lawyers insisting the authority to try the case belonged to the Central Jakarta District Court, because Munir died outside Indonesia.

The court will hold its next session on September 9, when the judges will decide whether to continue with the case or drop it.

Wrongful arrests reveal police abuse, experts say

Jakarta Post - September 4, 2008

Abdul Khalik, Jakarta – While police, prosecutors and judges are busily denying accusations of wrongful arrest and prosecution over the murder of Muhammad Asrori, the case has revealed law enforcers' use of torture and failure to double-check facts.

Legal experts and human rights activists agreed Wednesday that whatever arguments the police presented to justify their conduct, the public was now aware of their methods for forcing confessions from suspects.

"This case is only one of many cases of police abuse of suspects," Setara Human Rights Watch executive director Hendardi said. "It is common knowledge that everywhere in the police across the country, investigators torture suspects just to get out of them what they want to hear."

Last May, the Jombang District Court sentenced Imam Hambali and Devid Eko Priyanto to 17 years and 12 years in prison, respectively, for the murder of Asrori. Another defendant, Maman, is still being tried.

But a confession by suspected serial killer Verry Idham Henyansyah, alias Ryan, that he had murdered Asrori – and a subsequent DNA test corroborating his account – sparked a public outcry that police, prosecutors and judges had punished innocent people.

Imam and Devid told The Jakarta Post earlier this month the Jombang police had forced them to confess. They claimed the police also dictated to them what they had to do during a re- enactment of the murder.

"We were tortured with a diesel engine (timing) belt. Not only that, we were once forced to confess at gunpoint," Imam said, adding the police had instructed him how he should claim to have stabbed and buried Aldo, as Asrori was also known.

Legal expert Frans H. Winarta criticized the prosecutors for compounding the problem by relying on the case files submitted by the police without making any attempt to verify the evidence.

He said the prosecutors sought credit for closing cases as quickly as possible, and for having the defendants receive as heavy a punishment as possible, especially in cases involving powerless people.

Previous wrongful arrests and prosecutions include that of Ii Darkoni, who was sentenced to five years in prison by the Tasikmalaya District Court in West Java after being charged with killing his neighbor Iyah Hanias in 2007. Police later determined the real murderer after Ii had served part of his jail term.

Also in 2007, Risman Lakoro was sentenced to three years in prison after being charged with killing his daughter Alta Lakoro. While serving his term, his daughter, who had run away from home, suddenly came back.

Risman said police had used torture to force him to confess to the murder.

"These innocent people must be released quickly no matter what the police and prosecutors say," Frans said.

"The attorney general or chief justice or National Police chief must make this decision, and not try to cover up mistakes made by their subordinates."

Ex-BIN deputy blasts murder charges as flawed

Jakarta Post - September 3, 2008

Dian Kuswandini, Jakarta – Former senior intelligence official Muchdi Purwopranjono pleaded not guilty Tuesday to the 2004 murder of a prominent human rights campaigner, claiming the charges against him were flawed.

Instead, the former State Intelligence Agency (BIN) deputy chief blamed ex-BIN agent Budi Santoso for the assassination of Munir Said Thalib.

A team of lawyers for Muchdi, 59, said the indictment, which laid out Muchdi's motives for the murder, was based on "assumptions". The charges were derived from the storybook version of human rights activists, they claimed.

"According to prosecutors, Muchdi killed Munir out of ill will and revenge. But how do they know about Muchdi's feelings?" defense lawyer Rusdianto asked the packed South Jakarta District Court.

In the indictment, prosecutors said Muchdi sought revenge against Munir, who was held responsible for the defendant's removal as chief of the Army's Special Forces (Kopassus) only 52 days after his inauguration in 1998.

The prosecutors said Munir had revealed in an investigation by the Commission on Missing Persons and Victims of Violence (Kontras) that several Kopassus soldiers were involved in the abduction of 13 activists critical of the government between 1997 and 1998. The elite force members, from the Rose Team, were eventually found guilty by the military court.

The dismissal, the prosecutors added, was a slap in the face for Muchdi because it ended his military career.

"All of the information (presented) was wrong. Muchdi's military career didn't end at all. In fact, on the same day of his replacement he was promoted to Army deputy inspector general," Rusdianto said, adding his client was moved from his position 59 days after his inauguration, not 52 days as stated by the prosecutors.

"Moreover, Muchdi's replacement was not because of the abduction incident but merely because of the change in leadership from (late former president) Soeharto to (former president) Habibie," he said.

Rusdianto also said Muchdi was not Kopassus chief at the time of the abductions, but was at that time still the Tanjungpura military commander for Kalimantan, having "no connection to the incident".

The defense lawyers instead accused BIN agent Budi Santoso, who had previously said Muchdi was responsible for the murder.

Prosecutors had earlier quoted the testimony of Budi, who admitted to having been told by pilot Pollycarpus Budihari Priyanto that the order to kill Munir had come from Muchdi.

"Budi's subordinate, Saksi Kawan, said in his testimony on June 13, 2008, that Budi had ordered him to monitor, track and hunt – once again, hunt – Kontras activists from their offices to their homes, as well as observe all Kontras' visitors," another of Muchdi's lawyers Luthfie Hakim said.

"Therefore, Budi had a stronger motive (than Muchdi), and he accused Muchdi in order to clear himself (of the crime)."

The lawyers demanded the court order the prosecutors to present Budi in the next trial to cross-examine his testimony.

The lawyers further said the prosecutors' statement that Muchdi paid a total of Rp 17 million to Pollycarpus was "weak" because they failed to mention the defendant's purpose in giving the money.

"Was it for buying arsenic, spying on Munir, for Pollycarpus' pocket money... or what?" Luthfie asked.

Pollycarpus was jailed for 20 years for his role in the murder, which took place some time during a Garuda flight from Jakarta to Amsterdam on Sept. 6, 2004.

"The prosecutors said the murder was carried out in Changi airport in Singapore but in other parts of the indictment it was mentioned that it took place on the plane," Luthfie said.

The defense team said the international community had pressured President Susilo Bambang Yudhoyono to prosecute someone other than Pollycarpus.

The lawyers said the government received a letter signed by 50 members of the US Congress and a letter from the EU parliament, all asking why only Pollycarpus had been brought to trial.

"This is an indication of foreign intervention in Indonesian politics and jurisdiction," another lawyer Wirawan Adnan said.

The court adjourned the trial until Thursday to hear the prosecution's response.

Indonesian spy pleads not guilty to activist's murder

Agence France Presse - September 2, 2008

Jakarta – A former top Indonesian spy pleaded not guilty Tuesday to ordering the murder by poisoning of a celebrated human rights activist who had exposed military abuses.

Muchdi Purwopranjono, 59, an ex-deputy chief of the State Intelligence Agency (BIN), is on trial accused of plotting activist Munir's murder by arsenic poisoning as he flew from Jakarta to Amsterdam in 2004. "We reject all the charges," defence lawyer Muhammad Lutfi told the court.

Prosecutors have said the killing was an act of revenge after Munir had uncovered the kidnappings of 13 activists allegedly by special forces under Muchdi's command in the late 1990s. The scandal led to the former general's sacking as special forces chief, according to the indictment.

His trial is the first time a high-ranking figure in the military establishment has faced justice over the murder, which rights activists have long suspected was the work of the secret intelligence services.

Munir, who died aged 38, was the leader of independent rights watchdog Kontras and a vocal campaigner for victims of military abuses under the 1966-1998 Suharto dictatorship.

Defence lawyers said there were several holes in the state's case against Muchdi, who showed no emotion as he listened to the proceedings.

"The prosecutors said that the killing took place in Changi airport in Singapore but in other parts of the indictment it was mentionned that it took place on the plane transporting the activist," Lutfi said.

He said the international community had pressured President Susilo Bambang Yudhoyono to prosecute someone other than Pollycarpus Priyanto, a pilot with national carrier Garuda who was sentenced to 20 years' jail over the murder.

"There was a letter signed by 50 members of the US Congress and from the EU parliament... They asked why it was only Pollycarpus that was brought before the court," he told South Jakarta district court.

Prosecutors allege Muchdi ordered Priyanto to poison Munir with arsenic during a Garuda flight from Jakarta to Amsterdam via Singapore.

Muchdi has been in custody since he turned himself in to police on June 19 in Jakarta. The trial will resume on Thursday.

Another BIN official with stronger motive: lawyers

Jakarta Post - September 2, 2008

Another State Intelligence Agency (BIN) official had a stronger motive for murdering human rights activist Munir, Muchdi Purwopranjono's team of lawyers said Tuesday.

Luthfie Hakim, the spokesperson for the team of lawyers, said former BIN deputy V Budi Santoso had ordered that members of the Commission for Missing Persons and Victims of Violence (Kontras) be monitored.

"Muchdi feels victimized (by the prosecution). There is a person with a stronger motive to kill Munir, and that person is Budi Santoso.

"A witness has testified that they were orderd by Budi to monitor, track and hunt Kontras members, and Munir is from Kontras," Luthfie said outside South Jakarta District Court. "How come this has never been exposed?"

Luthfie said the witness allegedly received the monitoring assignment directly from Budi, who at that time worked under Muchdi. Luthfie said Muchdi was not aware of the monitoring and hunting assignment. "Budi has reason to blame his superior, Muchdi," he said.

Labour issues

800,000 in North Sumatra denied bonus

Jakarta Post - September 6, 2008

Apriadi Gunawan, Medan – Misrin, 32, has never received an Idul Fitri bonus (THR) since he started working as a daily-paid employee at Sina Kasih palm oil plantation in Serdang, Bedagai regency, North Sumatra, several years ago.

In addition, the father of three finds it disheartening that his wage is not enough to meet his family's daily needs.

"I only receive Rp 250,000 (US$28) every month. There is no bonus from the company, where I have been working for years. It's pitiful," said the father of three. He said his wife has had to work as a domestic in several households to supplement the family's income. Even though she only receives a small payment, Misrin hoped that by doing this his family could meet their daily needs and prepare for Idul Fitri.

"At most, my wife only earns between Rp 100,000 and Rp 150,000. This is not enough to meet Idul Fitri's demands as prices of everything have sharply increased," Misrin said.

He hoped the government would force businesses to comply with the regulation requiring them to distribute THR.

Misrin is one of 800,000 laborers working at plantation companies across North Sumatra who have not received THR for the past ten years, a Medan-based NGO disclosed.

Chairman of Pelita Sejahtera Organization Gindo Nadapdap said Thursday the workers had contacted the government to push the companies to disburse the legal bonus.

Gindo said that based on the manpower regulation, all workers, permanent workers as well as temporary ones, had the right to receive their THR.

The regulation says those who have worked at a company for at least a year will receive a bonus equivalent to their basic monthly salary, while those who work less than a year will receive one based on the company's policy.

"It is a normative regulation. The companies should obey it and give their employees what is due them," Gindo said.

Separately, North Sumatra Deputy Governor Gatot Pudjo Nugroho insisted all companies in the province, both state and privately run, must pay the allowance to their workers on time.

"We call on all companies to give their workers their THR as it is their legal right," Gatot said Thursday.

He reminded the companies how important the bonus is to their workers as they were facing skyrocketing prices on all commodities. "So, don't be late in paying the bonus. The workers really need it," he said.

Government faces 'difficult' task in meeting jobs target

Jakarta Post - September 4, 2008

The government must help 1.5 million Indonesians find work before the end of the year if it is to meet its target of filling 2.5 million jobs in 2008, Manpower and Transmigration Ministry Erman Suparno said.

With four months to go until the new year, Erman said the government remained optimistic Indonesia's industries could absorb a further 1.5 million workers by "improving labor- intensive industries".

One million Indonesians have so far found work in 2008.

However, Indonesian Employers Association chairman Sofjan Wanandi said it was impossible to absorb 1.5 million laborers within the period. "The government may be optimistic, but the truth is it will be difficult," he said.

Without growth in labor-intensive industries, unemployed people will turn to the informal sector for employment, including running stalls or selling newspapers on the street, Sofyan said. "There is no protection for workers in the informal sector," he added.

According to the Central Statistics Agency (BPS), a 1 percent growth in Indonesia's economy can absorb a maximum of 400,000 laborers. However, statistics have shown that such a rise only absorbs 180,000 workers.

In February, the number of unemployed people stood at 9.43 million, down from 10.01 million a year earlier. The number of workers was 111.48 million – most of whom work in the informal sector.

Sofjan said if the government improved infrastructure, labor- intensive industries might develop.

"Since the 1997 economic crisis, the government has not paid enough attention to labor-intensive industries. Only electronic, food and beverage industries (are the labor-intensive industries that) have grown lately."

The textile industry, for example, has seen its number of laborers decrease as more sophisticated machines have replaced their human counterparts.

According to the Manpower and Transmigration Ministry, the number of workers who have been fired so far this year declined to 1,535 from 22,087 in 2007.

Over the past few years, industries engaged in the telcom and natural resources sectors have seen significant growth. However, these industries are not labor intensive.

Erman said he recognized the phenomenon; "That is why unemployment remains high. Every year, we have about 2.5 million new laborers."

The BPS said employers tended to target workers that had recently graduated from school, leaving little room for other unemployed people to find work.

"Every year, there are about 2.5 million fresh workers looking for jobs, and employers can provide about the same number of jobs – which are mainly given to the new workers (at the expense of existing ones)," BPS chairman Rusman Heriawan said. (JP/Aditya Suharmoko)

Transjakarta bus drivers on strike

Jakarta Post - September 1, 2008

Jakarta – Scores of Transjakarta bus drivers serving the Corridor II (Pulo Gadung - Harmoni) and Corridor III (Kalideres - Harmoni) have gone on strike since early Monday morning

According to reports by Kompas.com, 106 of a total of 114 drivers serving the two routes, which serves 30,000 and 27,000 passengers respectively per day, have gathered at the Batavia pool on Jl. Perintis Kemerdekaan to demand a pay raise and improvement of working conditions.

Transjakarta Operations Control Manager Rene Nunu Mete said the company had undertaken necessary measures in alleviating the disruptions due to the strike.

"We've added extra fleets from Corridor I, V, VII and IV," he said. "The management are now lobbying with the drivers." (amr)

Environment/natural disasters

Government determined to dump mud into river

Jakarta Post - September 6, 2008

Indra Harsaputra, Surabaya – The central government is sticking by its decision to dump mud from the Lapindo disaster into the Porong river despite protests from the local community and environmental activists, claiming it is the best way to deal with the problem.

Deputy chief of operations for the Sidoarjo Mudflow Mitigation Agency (BPLS) Soffian Hadi said the government would not revise presidential decree No. 14/2007, which permits mud to be dumped into the river.

"We are conducting research on the effectiveness of dumping, to convince the public it really is the best solution to the problem," Soffian told The Jakarta Post on Friday.

"We will disclose the research results to the public," he said, adding the study was being conducted by several teams appointed by the government.

Since October 2006, five months after the mudflow began, 69 million cubic meters of mud containing oil and gas have been dumped into the Porong river – an amount reportedly equivalent to 43 million barrels of oil.

The river's depth has significantly dropped from six or seven meters to around three or four, exposing a kilometer-long mud sediment along the river's basin that measures between two and five meters in thickness.

The sediment has caused protests among the local community, particularly because of its bad odor and the overflow of river water it has caused.

Despite the sedimentation, hot mud is still flowing out to sea, Soffian said, adding the sediment would not cause floods as it will turn into sand once the rainy season begins.

"There in nothing wrong with the Porong river. I have checked it and made a detailed study of it. The water flow will carry away the hot mud at a rate of 200 cubic meters per second," he said.

The river current will dramatically increase to 1,600 cubic meters per second during the rainy season, he added.

According to Soffian, sediment has built up along the basin due to a lack of water. For this reason, BPLS has deployed five dredging ships to break it up, allowing it to flow out to sea.

PBLS has also decreased the volume of mud dumped into the river by between 20 and 40 percent, he said.

Some of the mud has been flown to a newly built 300-hectare pond in the Tanggulangin Sejahtera residential compound, Soffian added, as well as to the 370-hectare reservoir near Kedungbendo and Renokenongo villages.

Mud in the latter has reached a depth of between eight and nine meters, drying to the point that village residents are able to ride bicycles and motorbikes on the pond's surface, with children victimized by the disaster using it as a playground.

"We will not build a new pond for the mudflow," Soffian said.

The mudflow has reportedly been expelling about 100,000 cubic meters of mud a day and is predicted to cease in 10 to 15 years.

A long two-year fast for Sidoarjo mudflow victims

Jakarta Post - September 6, 2008

Indra Harsaputra and ID Nugroho, Sidoarjo – For 50-year-old Subiyanto, this year's Muslim fasting month of Ramadan is cause for both despair and hope.

"What else do we have to stop eating? We've been fasting for the past two years. We eat so little, and only once a day," said victim of the Lapindo mudflow disaster.

A father of three, Subiyanto and his family have had to live for more than two years in a kiosk in Porong market following the disaster that began on May 29, 2006. As a parking attendant on the Porong highway, Subiyanto earns Rp 10,000 (US$1.10) a day.

Like most of some 600 victims who call the market home, Subiyanto said he was fully aware of how little the money was. And yet, he said, it was just enough to meet their daily needs.

"The hardship teaches us to give up to God. It's a good religious experience that will move us closer to Him. In fact, we can greet Ramadan cheerfully, as we did last year," he told The Jakarta Post as he broke his fast on Wednesday with a glass of tea.

His wife Ronik, 49, told of having nothing but their threadbare clothes, living in a three by four meter kiosk.

"Initially, I doubted this was really our life, but later I realized we had to accept the reality. We find we are still surviving. We have to be nrimo (accepting)," she said.

Ronik admitted she never considered celebrating the upcoming Idul Fitri holiday, simply because she had no savings to buy new clothes or bake cakes for relatives and neighbors.

She said her family used to own a house in Renokenongo village, but have had difficulty getting compensation from Lapindo because of a lack of documents.

Her husband lost his job after the factory where he worked fell victim to the mudflow. "That is why we fast everyday – because of my husband's low daily income," Ronik said.

The mudflow submerged 19 factories employing more than 1,800 workers, mostly residents of the four villages now buried beneath the huge sea of mud in Porong, Sidoarjo. Each worker received Rp 700,000 in compensation from Lapindo.

Subiyanto said his family did not suffer much because all victims received Rp 300,000 each per month from Lapindo and the government. But the situation worsened after the financial assistance was halted in May this year.

The victims, mostly Muslim, attend Tarawih prayers at the market each evening during the fasting month.

During these prayers, worshipers call on God to open the hearts and minds of the government and Lapindo to their suffering by paying them the compensation due to them, as stipulated in a 2007 presidential decree.

NGOs slam government over mudflow

Jakarta Post - September 5, 2008

Nongovernmental organizations on Thursday threw their support behind mudflow victims from Sidoarjo, East Java, by urging the government to compensate them before the post-Ramadan holiday of Idul Fitri at the latest.

As many as 24 Jakarta-based NGOs, grouped under the Coalition of Justice for Lapindo Mudflow Victims, criticized the government for "neglecting" the fate of those displaced by the sludge that has devastated the area since May 2006.

Some 25 representatives of the victims met with the coalition at the Commission for Missing Persons and Victims of Violence (Kontras) headquarters in Jakarta to seek the NGOs' backing for their demands.

"We ask President Susilo Bambang Yudhoyono to take stern measures to resolve the fate of Sidoarjo mudflow victims," coalition coordinator Usman Hamid told the meeting.

"The President must also be brave and ask all relevant parties, including his minister responsible for this matter, to complete payment of compensation before Idul Fitri."

The representatives, from 10 villages in Sidoarjo, arrived in Jakarta on Friday to push for a clear response over compensation payments, which have yet to be completed two years after the disaster struck.

During their stay in Jakarta, they met with Public Works Minister Djoko Kirmanto and representatives from the Social Services Ministry and the National Land Agency.

The representatives also met with politicians and legislators from several parties, including the National Awakening Party (PKB), the Indonesian Democratic Party for Struggle (PDI-P) and the Prosperous Justice Party (PKS).

"The Democratic Party and the Golkar Party rejected our request for separate meetings," said Sep Muhammad, one of the representatives.

The mudflow victims will return to Sidoarjo on Friday after the President turned down their appeal for a dialog.

Mudflow victims urge government to complete payment

Jakarta Post - September 3, 2008

Desy Nurhayati, Jakarta – Victims of the Sidoarjo mudflow disaster urged the government to speed up compensation payments to them, following a new agreement between them and government representatives last week.

On Tuesday, the victims' lawyer, Paring Waluyo Utomo, said they were demanding concrete actions to realize the agreement, despite government assurances that the disbursement would be expedited.

Some 25 representatives from 10 villages in Sidoarjo, East Java, came to Jakarta on Friday to seek certainty about the compensation, which has yet to be completed two years after the disaster struck.

The representatives are staying at the National Commission of Human Rights (Komnas HAM) headquarters in Menteng, Central Jakarta.

On Friday, they met with Public Works Minister Djoko Kirmanto and representatives from the Social Services Ministry, National Land Agency, PT Lapindo Brantas and PT Minarak Lapindo Jaya, in which the parties drew up a new agreement.

One of the main points in the agreement obliges Lapindo to immediately complete the payment of 20 percent of the required compensation to the victims, whose lands were engulfed by the mudflow.

It also stipulated the remaining 80 percent should be paid before the end of a two-year house leasing arrangement.

"The victims are not satisfied with the promises in the agreement. They want it to be truly realized. Many victims have not received the 20 percent installment, let alone the 80 percent," Paring said after a press conference at Komnas HAM headquarters.

"We are seeking more support to force the government and Lapindo to finalize this, including from Komnas HAM and the House of Representatives."

He said the victims no longer wanted to deal with PT Lapindo Brantas and PT Minarak Lapindo Jaya and would leave the government to deal with them.

"We can't force Lapindo (to pay), so we will leave it to the government, which has the power," he said.

He said the victims would monitor the implementation of the agreement at the site.

"We will sue if they fail to comply with it," Paring said.

The agreement also stipulates the government will provide a clean water facility and build drainage for villagers whose lands were not included in the map of affected zones.

Paring said the villagers also demanded the government immediately issue a revised 2007 presidential instruction that includes all victims in the map, thus entitling them to compensation.

Mahmuda, a victim from Renokenongo village, said the representatives would stay in Jakarta until they had secured the government's promise to undertake its responsibility toward them.

She also said they wished to meet with President Susilo Bambang Yudhoyono to demand their rights be upheld.

"We don't know how long we will stay here, but we really expect to meet the President. He is our only hope because he is the one who issued the policy," she said.

"We want to know how much attention he pays in ensuring our rights are upheld."

Agriculture & food security

Protests over president's super hybrid rice

Tempo Interactive - September 6, 2008

Jakarta – The super hybrid rice known as Super toy HL-2 was planted and harvested by no less than the President himself with great fanfare last April.

However, experts say, the rice has not completed test procedures. "We have not officially sold this variety to the market as yet," said Agriculture Department's Food and Plants director-general, Sutarto Ali Muso, yesterday.

Sutarto was responding to farmers' protests in Central Java who were disappointed that this type of rice was not as good as it was promised to be. Many of the rice grains were they were harvested.

Farmers in Grabag are demanding a Rp 22.6 billion compensation from PT Sarana Harapan Indopangan, a company which sponsored the rice and which promised a compensation if the harvest failed.

The company is one of PT Sarana Harapan Indo Group's subsidiaries, whose manager is Heru Lelono, the President's expert staff on autonomy, together with his partner Iswahyudi. Another one of their subsidiaries, PT Sarana Harapan Indohidro previously caused a similar scandal when their much-publicized fuel-saving 'blue energy' machine turned out to be a scam.

The Super Toy's superior trait was published in the agriculture department's website, which claimed it was able to produce three harvests a year without having to re-plant the seeds, and the rice stalks just needed to be pruned after every harvest, prior to growing back.

Lured by the advertisement, Purworejo farmers planted this type of rice in a 103-hectare land, which failed. "I challenge Heru Lelono and Iswahyudi to come to Grabag and meet the farmers themselves. Don't let the people suffer," said Grabag viilage chief, Gandung Sumroiyadi.

Presidential spokesman, Andi Malarangeng said the government is not responsible for the unsuccessful harvest, saying it was not a government project. "The president took part in the first harvest because he was invited by the Purworejo regent," he added, pointing to PT Sarana, as the responsible party.

Heru Lelono, PT Sarana's CEO, refused to take the blame on his own. "The regent is also responsible, because he was the one who recommended this strain of rice,' he said. According to Heru, the company was only responsible until the first harvest in April. "We had no other agreement after that," he said. "Our director (Iswahyudi) is now discussing the matter with the regent."

- Tomi, Elik, Heru CN, Eko Ari, Akbar Tri

Price increases push US soy beyond reach of poor

Associated Press - September 6, 2008

Michael Casey, Surabaya – With the dollar a day he earns scrounging for scrap metal and paper, Jumadi can't buy his family beef or even chicken. But until now, the rail-thin scavenger could at least afford soy.

His wife and two children snacked on slabs of fried fermented soy, known as tempeh, and tossed the cake-like staple into bland bowls of noodles and soup. The soy provided protein, and it was cheap.

Not any more. The cost of tempeh and tofu has doubled to record highs, driven by the soaring price of soybeans imported from the United States.

"What kind of life is this?" complained the 25-year-old, who like many Indonesians goes by only one name, as he stood outside his plywood shack that was buzzing with flies. "I just eat crackers now."

The cost of soy is spreading hunger on the country's main island of Java, where millions of poor and working-class families depend on tofu and tempeh every day.

It is also devastating an entire local industry based on soy products. Hundreds of factories have closed, thousands of people have taken to the streets to protest soy prices and at least one soy vendor killed himself after falling into debt.

The lessons of the soy crunch, however, go far beyond Indonesia. Over the past decade, Indonesia went from growing more than half its soy to relying on the US for 70 percent of it. Now the poor among this country's 220 million people are going hungry because of changes thousands of miles beyond their shores. It is the same story for dozens of countries that came to depend on richer nations for cheap food, only to find themselves squeezed when prices start rising last year.

"There has been a drastic change in prices and these smaller countries have little to say. They basically have to take it," said Abdolreza Abbassian, a grain economist with the FAO. "They were exposed to the negative sides of globalization, rather than the positive."

Soy has long been a staple in Indonesia. But in the 1990s, farmers complained that it was too expensive to grow because the government did not provide cheap seed or low-interest loans. At the same time, they could not compete with cheaper, better soy from countries like the United States, where farmers had advanced technology and government subsidies.

Ruslan, who farms 7 1/2 acres of land in Ponorogo in East Java, planted soybean for two decades. But in the late 1990s, the 50- year-old farmer began growing melons, corn, onions and chili instead.

"I got out of the soybean business because the cost of production was so high that I was not making any profit," he said. "Since I switched to corn and melons, I've always had a good profit."

Because of farmers like Ruslan, Indonesia's soy production dropped over the past nine years from 1.4 million tons to around 700,000. The country stopped fixing prices for imported soy, and this year eliminated import tariffs on soybeans.

At first the imports worked fine. Beans were big, prices were low and people were happy.

But Indonesia was now dependent on the soy fields of the US And it paid the price when the Mississippi River flooded in June, leaving thousands of acres of soybeans waterlogged. By July, soybean futures were up 82 percent over the past year, although they have come down since. Indonesia also felt the ripples from a new demand for alternative fuels. About 20 percent of soy now goes to make biodiesel in the US, up from almost nothing three years ago, the FAO said. And the demand for corn to make ethanol has prompted American farmers like Larry Gleason and Tim Henning to switch away from soy.

Gleason, his three brothers and his dad split 3,500 acres in central Illinois evenly between soy and corn until last spring. Now 70 percent goes to corn. "It's like any other business: You try to find where you're going to make the most money," Gleason said.

Because of the demand for ethanol, the US expanded corn production by 23 percent in 2007, the World Bank found. At the same time, it reduced soybean fields by 16 percent.

Henning calculated last spring that corn brought $75 to $85 more profit per acre than soy. So in 2007, he planted 50 more acres of corn on his 800-acre Minnesota farm and that much less soy. At a time when costs have risen for fuel, fertilizer, machinery and land, Henning is trying to squeeze what money he can from the earth.

"A number of years ago, the farmer got blamed because corn and bean prices were too cheap and farmers overseas were going broke," said Henning, 50. "Now, they are saying the prices are too high and people can't afford to buy the food. So, we kind of feel we are in a damned if you do, damned if you don't situation."

Fuel costs are making it more expensive not just to grow soy, but also to transport it to faraway places like Indonesia by truck, rail and ship. Prices have gone up further because of a shortage of containers from the booming demand from India and China, said Mike Steenhoek, executive director of the Iowa-based Soy Transportation Coalition.

The cost of shipping soy from the Midwest to ports in the Pacific Northwest and onward to Asia has increased from $32 a metric ton two years ago to $80, according to Mark Klein, a spokesman for Minnesota-based Cargill Inc., one of four companies that import soybeans to Indonesia.

"You add it all up and to take a bean from the Dakotas/Minnesota to the Far East is now $1.90 a bushel more than two years ago," Klein said. "That tells part of the story."

The story of the soybean ends back in Indonesia, in cities like Bandung, famous for its tempeh and tofu industry.

Streets in this West Java city are lined with shops selling crispy tempeh crackers and vendors with small carts offering meatball soup with tofu to passing motorists. Hundreds of mom-and-pop operations make tofu and tempeh, Young men fry soy in vats of oil or ferment the pea-size beans in wicker baskets.

With slim profit and no cash on hand, few were prepared when soy prices started rising steadily in August 2007. Since then, soybean prices have jumped 50 percent to a record high – or about twice the rates in 2004.

The price of kerosene and cooking oil rose at the same time. Almost 300 producers in Bandung shut their doors this year.

"If the price keeps going up, maybe the tofu and tempeh industry will disappear," said H. Akil Dermawi, who heads Bandung's tempeh and tofu cooperative. "We know the global economic situation doesn't support micro businesses like tofu and tempeh makers."

One such maker is Syahroni, who came to the West Java town a poor farmer. Over the past decade, he built a successful business selling tempeh to 150 vendors in the city and converted a ground floor room in his Bandung house into a factory.

But since January, he has had to raise his prices 25 percent to cover rising costs, and has reduced the size of his tempeh portions. He promptly lost a third of his customers and profits fell by half.

"In the past, this was profitable. You can see I bought a house," said the 34-year-old father of two. "But now, it's difficult to even buy food for my children. Last year, I could go on a holiday. Now, I can't go anywhere."

Slamet, a street vendor who sold cubes of deep-fried tofu from a cart in the village of Cidemang a few hours outside Jakarta, fared even worse.

For nine years, he worked the town's main street. He brought in a few dollars a day, enough to feed his two children and afford a simple two-room house near the main market.

But as prices peaked in January, he fell 2 million rupiah ($220) in debt, became depressed and stopped eating. His wife came home Jan. 14 to find him hanging by a rope in one of the family's two bedrooms. He was 45.

"He couldn't take the higher prices," said his wife Nuriah, breaking down in tears inside the family's house. "He said there was no point in selling. Now, there is no one to bring in money."

The day he killed himself, thousands of people converged on the capital, Jakarta, to demand that the government provide relief from rising soy prices. The demonstrations sent a chill through a government that still remembers how protests over food prices sparked the overthrow of the Suharto regime more than a decade ago.

The government responded by providing subsidized cooking oil and rice to 19 million households and offering subsidized soybeans to more than 100,000 small tofu and tempeh producers. It also launched a plan to spend more on agriculture and offer incentives like cheap fertilizer, but Indonesia will not be able to meet its own demand for soy until at least 2015.

There is now talk of giving the state the power to set the price for imported soybeans, which worries Ali Basry, the American Soybean Association's country representative. Basry said the rising prices are simply a reflection of market forces.

"Suddenly, the government is trying to calm the situation by putting a subsidy on the bean price," he said. "I don't know."

But tofu and tempeh producers want fixed prices and accuse importers of profiting from the volatility. They are convinced the problem remains the country's dependence on imports.

"My customers get angry because the pieces of tofu are smaller," said Sukarndar, a 38-year-old vendor in Jakarta, who buys freshly baked brown tofu daily at a neighborhood factory and resells it for a few cents at a nearby market.

"I tell them the soybeans come from America," he said, his voice rising in anger. "It is not our fault. I'm being oppressed because of prices in the United States."

[Associated Press writers Irwan Firdaus in Jakarta and Jim Suhr in St. Louis contributed to this report.]

War on corruption

AGO reluctant to reopen probe into BLBI case

Jakarta Post - September 6, 2008

Dian Kuswandini, Jakarta – The Attorney General's Office (AGO) has decided not to reopen the Bank Indonesia liquidity assistance (BLBI) case implicating fugitive tycoon Sjamsul Nursalim, although a state prosecutor has been sentenced for accepting bribes to drop the case.

Assistant Attorney General for Special Crimes Marwan Effendi said here Friday Urip Tri Gunawan's conviction – for taking a US$660,000 bribe from also-convicted Artalyta Suryani to drop the BLBI embezzlement case – would not affect the AGO's decision to close the case.

"With or without Urip, bribes or no bribes, the AGO can't continue," he insisted.

According to Marwan, reopening Sjamsul's BLBI case would conflict with several regulations. The 2003 presidential decree on debtors, he added, stipulated a cooperative debtor deserved a letter of settlement and would not be charged for violating the law. "Moreover, according to the 2000 law on national development, the BLBI case should be settled out of court," he said.

Marwan added, Urip's investigation of Sjamsul's case, which found no inflated or fake assets, was done by auditors appointed by the now-defunct Indonesian Bank Restructuring Agency. "It would have been suspicious if the debtor (Sjamsul) himself had appointed the auditors, but he didn't," he said.

He said Urip's investigation into the appraisal of Sjamsul's assets had not confirmed any suspicions.

Sjamsul, former owner of the now-defunct Bank Dagang Nasional Indonesia, was accused of embezzling Rp 28.4 trillion (US$3.04 billion) in BLBI funds.

The AGO began investigating Sjamsul after discovering values had plummeted on assets he had handed over to the state to pay off his debts, once the government sold the assets on to other parties.

Sjamsul, who also owns Gajah Tunggal Group, handed over three of his companies to repay the Rp 28.4 trillion debt owed the government. However, the companies were later sold for a mere Rp 4.9 trillion.

The BLBI probe was dropped on Feb. 29, 2008, with the AGO citing lack of evidence. Two days later, Artalyta paid Urip off at her house, and the two were arrested the same day.

Marwan said the AGO would reopen the case only if the Jakarta High Court ordered it to do so when it rules on the legal battle being waged by People against Corruption in Indonesia (MAKI).

MAKI had filed a pretrial motion against the AGO with the South Jakarta District Court in April which the district court accepted, ruling May 6 the AGO was to reopen the case.

The ruling said the AGO's decision to halt the investigation was a violation of the 1999 corruption eradication law which states the return of state assets does not nullify the criminal act.

Following the district court verdict, the AGO appealed to the Jakarta High Court.

Legislators sought bribes from BI, court hears

Jakarta Post - September 6, 2008

Jakarta – Golkar Party politicians Hamka Yandhu and Antony Zeidra Abidin demanded money from Bank Indonesia (BI) officials to speed up the approval of the revised BI law and resolve the alleged embezzlement of bank funds, the Corruption Court heard Friday.

In the first day of the legislators' trial, Corruption Eradication Commission (KPK) prosecutors said bribes had been agreed on during a series of meetings between senior BI officials and members of the then House of Representatives' Commission IX on financial affairs, including Hamka and Antony.

"There is a price for resolving the BLBI (Bank Indonesia liquidity support) case," prosecutors said, reportedly quoting Antony's words to senior BI executives during a meeting in May 2003. Attending the meeting were then BI governor Burhanuddin Abdullah, deputy governors Aulia Pohan, Maman Soemantri, Bunbunan Hutapea, head of communications Rusli Simanjuntak and his subordinate Asnar Ashari. Commission IX representatives were Antony, Hamka, Amru Al Mu'tasyim and Danial Tanjung.

During the meeting the group agreed on the need for Rp 40 billion (US$4.3 million), of which Rp 15 billion would be used to finance the settlement of the BLBI case and the rest to make the House endorse the anticipated amendments to the BI law, the indictment said.

The BI board of governors agreed in a meeting on June 3, 2003, to allocate part of Rp 100 billion from the Indonesian Banking Development Institute (YPPI) to meet the legislators' request.

The prosecutors said the BI officials handed over the money to the House members Hamka and Antony in several stages.

The first payment of Rp 15 billion was made in three installments, the prosecutors claimed. The first was on June 27, 2003, when Rusli, accompanied by Asnar, gave Hamka and Antony Rp 2 billion during a meeting at a Central Jakarta hotel. The second payment was made on July 2, 2003, when the two politicians received Rp 5.5 billion at Antony's house, and the third in August 2003 when Rusli handed over Rp 7.5 billion, also at Antony's house.

The prosecutors said Rusli and Asnar paid the second installment of Rp 16.5 billion to Hamka and Antony in two stages. Hamka received Rp 10.5 billion from Rusli on Sept. 18, 2003, with the remainder given to Antony at his house on Dec. 4, 2003.

In earlier testimony, Hamka said the 52-strong Commission IX shared Rp 30.5 billion from the BI, with commission deputy chief Paskah Suzetta, now the national development planning minister, receiving Rp 1 billion and other members, including Malam Sambat Kaban, now the forestry minister, receiving at least Rp 250 million each.

The prosecutors charged Hamka and Antony under the anti- corruption law. They each face a maximum of 20 years in jail if convicted.

In response to the indictment, Antony's lawyers accused Supreme Audit Agency (BPK) chairman Anwar Nasution of reporting the BI scandal out of disappointment over his failure to become BI governor. Anwar was a senior deputy governor at the BI before moving into the top job at the BPK.

"Anwar's motive was mostly his disappointment," defense lawyer Maqdir Ismail told the court.

The defense read out the transcript of a recorded conversation between Antony and Anwar regarding the case, in which Anwar promised to settle the issue if he obtain the top position. "But if you elect Burhan (Burhanuddin) the governor, you are dead man," the transcript read.

Antony admitted he had met Anwar at the BPK office to clarify the audit findings in a BPK report.

Indonesian prosecutor gets 20 years for corruption: judge

Agence France Presse - September 4, 2008

Jakarta – A disgraced Indonesian prosecutor was sentenced to 20 years' jail Thursday for accepting a 660,000-dollar bribe from a businesswoman to drop a major embezzlement case.

Urip Tri Gunawan's conviction after a brief trial in the Corruption Eradication Commission (KPK) court is the culmination of a scandal that has transfixed the country and rocked the attorney general's office.

The packed courtroom erupted into applause as Judge Teguh Ariyanto sentenced the prosecutor to 20 years and ordered him to pay a fine of 500 million rupiah (54,500 dollars).

Gunawan looked weak as the judge said he had been proven guilty of receiving bribes in return for burying a 10-year probe against fugitive banking tycoon Sjamsul Nursalim.

"The defendant Urip Tri Gunawan has been proven legally and convincingly to have carried out corruption and has been sentenced to 20 years' imprisonment and fined 500 million rupiah," the judge said.

Observers said the sentence, which was five years more than had been requested by the state, was meant as a clear warning that the government was serious in its ongoing anti-corruption drive.

"It's quite a heavy sentence for a senior prosecutor and it will have a deterrent effect," said Febri Diansyah of Indonesian Corruption Watch.

Ariyanto justified the severity of the sentence, saying Gunawan had "tarnished the image and credibility of the attorney general's office and law enforcement in Indonesia".

"The defendant, as a civil servant, failed to support government efforts to eradicate corruption," the judge said.

Asked whether he understood the verdict, Gunawan said he did, adding: "I will consider filing an appeal."

He scribbled personal notes throughout the trail and even after the judge had read the verdict, including appeals for forgiveness and fragments of prayers, according to witnesses in the courtroom.

Nursalim, who is accused of embezzling three billion dollars in mergency bail-out loans to his bank during the Asian financial crisis in 1998, is on the run and believed to be in Singapore.

Gunawan received the bribe from businesswoman Artalyta Suryani, an associate of the banker who was jailed for five years in July in connection with the case.

Secretly taped telephone conversations between Gunawan and Suryani have been played during their trials, opening a window for the public onto the sinister world of high-level vice in one of the world's most corrupt countries.

The prosecutor and the businesswoman were heard using cute nicknames for each other as they discussed the illegal payments and the investigation into the banking tycoon, one of Indonesia's richest men.

At one point Gunawan, who was sacked from his post after the scandal became public, was heard asking for a "bonus".

He was arrested in March as he emerged from Nursalim's Jakarta home with the agreed bribe of 660,000 dollars, just a day after the attorney general's office had dropped its investigation into the banker, citing a lack of evidence.

The prosecutor denied any wrongdoing, saying the money was a loan to help him start an auto business.

Several other prosecutors have been sacked in connection with the case but the attorney general has refused to stand down or reopen the investigation into Nursalim.

YPPI fund disbursement 'wrong from the outset'

Jakarta Post - September 4, 2008

Irawaty Wardany, Jakarta – Expert witnesses testified that the decision made by Bank Indonesia's board of directors in using Rp 100 billion (US$10.9 million) from the Indonesian Banking Development Foundation (YPPI) was wrong from the outset.

"If BI wanted to channel its assets into a foundation, it should have sought a permit from either the Finance Ministry, the President or legislators. If not, then it was wrong," Siswo Sujanto, an expert on foundations from the Justice and Human Rights Ministry, testified at the Corruption Court on Wednesday.

BI established the YPPI in 1970 as a banking research and education center and bankers' resource development.

Novi Gregorianto, tax audit head at the Finance Ministry's Taxation Directorate General, said since the YPPI was established and funded by BI, its financing could be considered state funds.

"If we look at the state's financial management principles, all state funds must be accounted for," he said.

He stressed the funds were not meant for the foundation's interest; instead, they were used by the central bank. "If the foundation's funds were used for BI's interests, then they should be accounted for in BI's financial records," he said.

Novi said the Rp 100 billion fund was liquidated between June and December 2003, but none of the transactions were recorded in YPPI or BI financial statements per December 2003, when the Supreme Audit Agency audited BI's financial statement. "That means the money just disappeared," Novi said.

The money was disbursed to members of the House of Representatives' then Commission IX on financial affairs (now Commission XI) to resolve the central bank's liquidity support (BLBI) cases and the amendment of a BI law, as well as to five former BI officials to obtain legal assistance in corruption cases.

Novi said it could also be said the state had suffered losses of Rp 100 billion because there was no debt account for the money. Not a single record or document proves the existence of the money.

Novi acknowledged the foundation's organization members were the only ones able to cash in the money. "At the time, the members cashed in the money following a memo issued by the supervisory board," he said.

Among supervisory board members being questioned in relation to the case are Aulia Pohan and Maman Sumantri.

The memo was issued based on a June 3, 2003, BI board of governor's decision signed by, among others, then governor Burhanuddin Abdullah, then senior deputy governor Anwar Nasution, Aulia, Raden Maulana Ibrahim and Maman, Novi added.

"The foundation's assets cannot be disbursed to parties other than the foundation's organization members," he said. He added if parties outside the foundation organization used the money, then it was a violation of the 2001 Foundation Law.

When asked by the panel of judges who should be held responsible for the fiasco, Novi said if the foundation was not a legal body, then its founder would have been responsible.

Witness reveals more on Paskah

Jakarta Post - September 2, 2008

Irawaty Wardany, Jakarta – Paskah Suzetta, the current national development planning minister, was involved in attempts to cover up the alleged misappropriation of Rp 100 billion in central bank funds, a court heard Monday.

Bank Indonesia (BI) director of logistics Lukman Bunyamin told the Corruption Court that Paskah met with senior officials from the bank and the Supreme Audit Agency (BPK) at least four times to discuss "settlement" of the fund disbursement.

A total of Rp 31.5 billion of the money allegedly went to 52 members of the former House of Representatives' Commission IX on financial affairs in 2003.

"There was a meeting between Paskah, Burhan and Anwar and a BPK auditor," Lukman Bunyamin, then BI director of internal supervision, told a hearing on Monday.

Then BI governor Burhanuddin Abdullah and BPK chief Anwar Nasution were present at the meeting, he said. "Pak Paskah asked Pak Anwar what the best solution was, but Pak Anwar did not give any way out," he said.

Burhanuddin, former legal director Oey Hoey Tiong and suspended BI Surabaya bureau chief Rusli Simanjuntak are all standing trial over the scandal. Lukman said Anwar suggested the matter be handled according to legal and accounting systems.

Previous hearings have indicated Paskah had a key role in the graft case. He underwent hours of questioning by the Corruption Eradication Commission last month, but denied any link to the BI scandal.

The Golkar politician was one of the members of the former Commission IX that amended the BI law and resolved the BI liquidity support (BLBI) case, in which several former senior BI officials were implicated.

Golkar lawmaker and a suspect in the case, Hamka Yandhu, said Paskah received Rp 1 billion, while other commission members received at least Rp 250 million each.

Paskah allegedly took part in two follow-up meetings at a Central Jakarta hotel in 2005.

"The first meeting was attended by Pak Paskah, Hamka Yandhu, Lucky Fathul Aziz (BI governor's office deputy chief) and me. Pak Burhanuddin asked me to meet with Pak Paskah regarding information about the findings of a BPK audit on BI," Lukman said.

In the second meeting, Lukman said, Paskah suggested a "reconciliation" between BI head of communications Rusli Simanjuntak and House lawmaker Anthony Zeidra Abidin.

"What did he mean by 'reconciliation'?" asked Sutiyono, one of the judges. According to Lukman, "reconciliation" meant "knowing the exact amount of the fund", because at that time Paskah did not believe the amount of BI funds disbursed to the House to be very high.

He said another meeting was held to discuss how to solve the problem, but no conclusion was reached.

The last meeting, allegedly attended by Paskah, Hamka and BPK deputy chairman Abdullah Zaini, took place at a South Jakarta hotel in June 2006. In that meeting, Abdullah Zaini asked BI to pay back the money to the Indonesian Banking Development Institute (YPPI).

The meeting attendees eventually supported an idea to compensate the YPPI by allowing it to use BI land in Kemang, South Jakarta, and to issue debt letters to former BI directors who benefited from the fund.

Islam/religion

Ahmadiyah to file protest against sect ban

Jakarta Post - September 3, 2008

Jakarta – Islamic minority sect Jamaah Ahmadiyah plans to file a protest to the government against the gubernatorial ban in South Sumatra put in place earlier this week.

Yan Husein Lamardi, a member of Ahmadiyah's advocating team, said the regional administration, unlike the central government, had no authority to issue the ban.

The government, he said, had only issued joint ministerial decree on Ahmadiyah's activities and nothing about ban. "No prohibition was stated in the decree," Yan said, as quoted by Tempointeraktif.com.

South Sumatra governor Mahyuddin N.S. issued a decree Monday banning Islamic minority sect Ahmadiyah and any activities of the Indonesian Jamaah Ahmadiyah (JAI) organization from the region.

The governor said the decree was made in accordance with the ministerial decree ordering the sect to stop all religious activities or face charges for blaspheming Islam.

Yan said Ahmadiyah had obeyed the decree and was no longer propagating the sect's teachings. "We no longer mention that there is another prophet after Prophet Muhammad in our sermons," he said.

Ahmadiyah will also protest against violence the sect has been suffering since the issuance of the ministerial decree. Yan said that the sect had suffered at least 24 attacks since the ministerial decree issued two months ago. (dre)

Prostitution as usual in Baturaden during Ramadan

Jakarta Post - September 3, 2008

Agus Maryono, Purwokerto – Sex workers are out in force in the tourist resort of Baturaden, despite an official ban by the local administration on the operation of the area's red-light district during Ramadan.

With many sex workers leaving the brothels on September 1, the first day of the fasting month, many others have chosen to move to nearby rented rooms, hoping for a flurry of orders on the eve of Ramadan.

Twenty-year-old Yuni (not her real name) from Cirebon, West Java, for instance, chose to go home following the temporary closure of her workplace.

"I have nothing to do here, so I decided to go home," she said, adding she told her parents she worked in a restaurant in Jakarta.

But for Ani (also not her real name), it was a different story, and she chose to stay in a nearby rented room. "I am too shy to go home now. I will go home later, maybe four days before Idul Fitri," said the 23-year-old from Tasikmalaya, West Java.

Ani is one 250 sex workers operating in the renowned Gang Sadar I and II, popularly known as GS. During Ramadan, the site is officially closed, and will only reopen after Idul Fitri, the celebration marking the end of the fasting month.

Ani decided to stay near GS until a few days prior to Idul Fitri, saying even during Ramadan clients often paid a visit at night, asking for her service. "As with previous Ramadans, we usually stop serving clients in the daytime, but do business as usual at night," she said.

"Fasting is for the daytime anyway. At night, it's our time to earn money." Former Baturaden pimp Andri, 37, from Purwokerto, agreed, saying most GS sex workers preferred to rent rooms and serve their clients outside the red-light district instead of going home during Ramadan.

"Pimps usually evacuate them to places near GS. They seem to have nothing to do in the daytime, but are kept busy at night," he said.

Andri added the sex workers, mostly between 18 and 25 years of age, could conduct business securely at night during Ramadan because of backing from the local administration and security officers. "As long as they pay them money, they are safe to work there – even during Ramadan," he claimed.

He said the temporary closure of the red-light district had caused significant financial losses to hundreds of hotels, ojek (motorcycle taxi) drivers and vendors operating in Baturaden.

"But the prostitutes have to obey regulations to respect Ramadan. They will resume working when the fasting month is over, bringing the money back to the resort," he said.

He also said the local administration had limited the operating hours of nightclubs in the region, allowing them to run from only 9 p.m. to midnight. "In practice, they usually obey only at the beginning of Ramadan," he added.

Soaring prices hit Indonesia's Ramadan

Agence France Presse - September 1, 2008

Arlina Arshad, Jakarta – Families across Indonesia are tightening their belts during the Muslim holy month of Ramadan, as rising food and fuel prices limit spending power for the nightly festivities which break the daily fast.

The world's most populous Muslim-majority country has seen a spike in the cost of food in the lead-up to the fasting month, putting pressure on families already hit hard by sharp rises in subsidised fuel prices.

Prices for essentials such as eggs, meat and cooking oil surged in the week leading up to the start of Ramadan on Monday, as people stocked up for the feasts which end the dawn-to-dusk fasting period.

Jakarta housewife Nina Handayani, 31, said her family would have to forsake traditional Ramadan treats so she could save money for basics like children's clothes.

"No meat, no chicken dishes, just vegetables. And old clothes for me," she said. "I've saved enough for the children's new clothes. It may be hard times for us now but we won't drag our children along."

Mother-of-six Nena said that to break the fast every night, she used to offer a traditional desert made with palm sugar and coconut milk and flavoured with banana, sweet potato or cassava.

"I used to serve dessert for my family to break the fast before we had the main meal consisting of rice. But as everything has become very expensive we can't afford it anymore," she said.

"Our Prophet Mohammed advised us to break the fast with sweet things but I have to think rationally. It's more important to have proper food on the table than sweets, so we can continue to perform the fast until the end of Ramadan."

Inflation is hovering around 12 percent after fuel prices were hiked an average 28.7-percent in May to save the budget from a ballooning subsidy bill.

The fuel price hike was applauded by economists but triggered protests across the vast archipelago, giving a political edge to this year's Ramadan as campaigning swings into gear for next year's elections.

President Susilo Bambang Yudhoyono is seeking a second term in June's polls but his popularity ratings have slumped in favour of his main rival, former president Megawati Sukarnoputri.

"The president doesn't care about us, he only makes empty promises and causes suffering," said street food seller Umi Lestari, 35, in Jakarta. "What's the point of protesting and holding strikes if prices don't come down? We need better leaders."

Lestari said she was spending 24,000 rupiah (2.50 dollars) more every month on cooking gas, or a quarter of her monthly earnings. "Whatever profit I get now will be spent on cooking gas, when previously I could use the extra to buy clothing and snacks," she said.

Her husband, Muhammad Padil, 34, drives a bemo, a three-wheeled transport vehicle. His daily earnings tumbled 200,000 rupiah to 120,000 a day after the government hiked fuel oil prices. Families across Lestari's neighbourhood of north Manggarai, a poorer Jakarta district, are in the same boat.

Her neighbour, Suswanti, 36, said rising gas prices had crushed her hopes of reopening her food stall which she had to shut last year because she could no longer make ends meet.

The housewife and her three young children have been reduced to scouring Jakarta's polluted streets for plastic bottles to sell. "One kilo (2.2 pounds), 25,000 rupiah. Very little," she said.

"We skip breakfast and halve the usual portion for lunch and dinner. I have slashed my children's pocket money and make them walk instead of taking the bus to school. If prices rise further, I may be forced to pull them out of school."

Motorcycle taxi driver Mohammed Awi, 27, said he took home only about 10,000 rupiah a day, or 5,000 rupiah less than a year ago. He owes his landlord five months' rent.

"To the rich, 5,000 rupiah is nothing but for poor people like us it's a big deal. It's the difference between eating and starving," said his 26-year-old wife, Eti Nurhayati.

DPD announces plan to establish body to review sharia bylaws

Jakarta Post - September 2, 2008

Erwida Maulia, Jakarta – The Regional Representatives Council (DPD) and the National Law Commission are planning to establish a body to review unconstitutional ordinances, including sharia- inspired bylaws, enacted by local administrations.

DPD chairman Ginandjar Kartasasmita said in Jakarta on Monday the body would examine all regional bylaws and recommend that those proven unconstitutional be revoked.

"The law center is currently being established. Once it is formed, we will review all the (exclusive) bylaws, which can later be revoked by the court or other mechanisms," he said after a meeting with the Constitutional Court's (MK) nine justices.

"This country belongs to all of us. There should be no exclusivity. Every citizen, regardless of where they live, should not be discriminated against," he said. "Exclusive bylaws can be considered unconstitutional because they apply only to certain groups."

As an example, Ginandjar cited a bylaw enacted by the Tangerang administration in Banten that imposes a curfew on women at night. He also cited a proposal by the administration of Manokwari, West Java, to pass a "Bible regulation".

According to Ginandjar, the resort island of Bali, a largely Hindu province, has also enacted an ordinance insisting that ground is sacred, which makes it difficult for non-Hindus to attain permission to bury their dead in the province. The Hindu tradition is to cremate the dead.

"All things like this need reconciliation and must be settled," Ginandjar said, adding that Indonesia's diversity should be seen as a "blessing" and should not be harmed by such exclusive bylaws.

Since regional-autonomy was first enacted in 1998, many local administrations have enacted sharia-inspired bylaws, which experts, rights activists and moderate Muslim scholars have warned threaten national unity.

Other examples of bylaws deemed unconstitutional include a Koran literacy requirement for students and brides, an Islamic dress- code enforcement on Muslim women and an anti-prostitution regulation.

Critics have said the bylaws are wielded by local elites as a "political tool" to woo Muslim voters during elections. Critics have said the laws may deprive women and non-Muslims of their civil rights, and that they were passed without sufficient preliminary studies.

Newly elected MK Chief Justice Moh. Mahfud M.D. slammed the sharia bylaws a day after being sworn in last week. He said the ordinances should be revoked as they were neither "constitutionally or legally correct" and threatened national integrity. Ginandjar said the DPD shared Mahfud's stance.

The Home Affairs Ministry had earlier pledged to review 37 sharia-based ordinances in force in several regions across the country that were seen to be discriminatory and to violate higher existing regulations. The government has yet to make further comment on carrying out the review.

Ahmadiyah banned in South Sumatra amid pressure

Jakarta Post - September 2, 2008

Khairul Saleh, Palembang – Bowing to pressure from radical organizations, South Sumatra administration on Monday officially banned Ahmadiyah, an Islamic sect considered heretical, in the province.

"We firmly decided Ahmadiyah would be prohibited in the province because the sect is not compatible with Islamic teachings," Acting Governor Mahyudin NS told reporters after holding a meeting to discuss the sect.

The meeting was attended by officials from the provincial offices of the Religious Affairs Ministry, prosecutors, representatives from the Indonesian Ulemas Council (MUI) and other Islamic organizations as well as academics from Palembang-based Raden Fatah State Islamic Institute.

Mahyuddin claimed the decision had a strong legal basis because, he said, the central government had also banned Ahmadiyah. "The decision to ban Ahmadiyah is permanent and can not be reviewed because it is based on valid regulations," Mahyuddin said.

Earlier, several conservative organizations under the Islamic People's Forum (FUI), such as Hizbuth Tahrir Indonesia, Islam Defenders Front and the Indonesian Mujahidin Council, demanded the dissolution of the Ahmadiyah sect.

FUI South Sumatra chairman Umar Said said the forum fully supported the governor's decision to ban the sect which was founded by Mirza Ghulam Ahmad. "So South Sumatra is the second province after West Sumatra to ban Ahmadiyah," Umar said.

There are at least 600 Ahmadiyah followers in the province, including 200 members in Palembang, with nine mosques in cities and regencies including Palembang, Burnai Burlian, Pematang Panggung, Sungai Bungi, Lahat, Lubuk Linggau, Ogan Komering Ilir and Banyuasin.

Most of the Ahmadiyah followers in South Sumatra are of Javanese ethnic descent, and had originally been relocated to these areas through the government-sanctioned transmigration program.

Ahmadiyah believers have become the target of protests and violence (conducted by militants) allegedly due to a religious edict issued by the MUI which declared the sect heretical.

Mosques and properties belonging to Ahmadiyah followers in several areas, including in Bogor (West Java) and Mataram (West Nusa Tenggara) were destroyed by protesters.

MUI said the Ahmadiyah teachings, that Ghulam Ahmad is a prophet of Islam, defy one of the basic doctrines of the religion – that Muhammad is the last prophet of Islam.

On June 9, the Religious Affairs Ministry, the Home Ministry and the Attorney General's Office issued a decree banning Ahmadiyah members from spreading their beliefs.

The decree came the same day as thousands of hard-liners gathered in front of the State Palace in Jakarta to demand the dissolution of Ahmadiyah.

East Java NU: Ramadan sweeping wrong

Jakarta Post - September 2, 2008

Executives of Indonesia's largest Muslim organization, Nadhlatul Ulama for East Java, reject Ramadan sweeps because of their violent nature, which is deemed contrary to the spirit of the holy month.

"We reject the raids because people should not resort to violence in order to preserve the spirit of Ramadan, but rather should remind, in good faith, those who stray," Miftachul Akhyar told Kompas on Tuesday.

Achyar, who is also the supervisor of an Islamic boarding school in Kedungtarukan, Surabaya, said resorting to force during Ramadan would only create a false image of Islam as being analogous with violence.

"Islam should not cause fear in people's hearts. Its tenets are taught with wisdom. An example of this is by referring to the police or authorities whenever inappropriate behavior arises," he said, adding that violence would only cause perceived transgressors to harden their stance.

Achyar also advised gubernatorial and regential candidates, as well as deputy candidates, to avoid turning Islam's holiest month into a campaign vehicle.

"Ramadan should purely be devoted to worship, while other matters like the gubernatorial and regential elections should be put on the back burner for the time being. If Ramadan is politicized, the spirit of worship will dissipate," he said. (amr)

Elections/political parties

Gus Dur hints support for Yusril in presidential election

Jakarta Post - September 7, 2008

Jakarta – Former president Abdurahman "Gus Dur" Wahid says he will support former minister Yusril Ihza Mahendra in the presidential election next year.

Gus Dur, a patron of the National Awakening Party (PKB), told a press conference on Saturday he must support other candidates, if later he could not run for president himself.

"I have to support other candidates, and the one who is closest to me is Yusril," he said after receiving Yusril at the Nahdlatul Ulama office, Antara news agency reported Sunday.

Yusril, who is chairman of the Crescent Star Party (PBB) advisory board, admitted he had discussed his intention to run for president with Gus Dur. "We have known each other, been close friends and helped each other since 1999," he said.

Yusril, along with Gus Dur and Megawati Soekarnoputri all took part in the presidential election in 1999, but at the last moment he dropped out of the race and supported Gus Dur, who was then elected as the fourth president of Indonesia.

With support from Gus Dur, Yusril said, he was more optimistic about his chances in the election. "God willing, we will move forward and never retreat," he said. (dre)

Indonesian politicians befriend old enemies for 2009 polls

Jakarta Post - September 5, 2008

In true keeping with the classic political adageare no permanent friends or enemies, but interests", some politicians have decided to put old rivalries on the back burner in the run-up to next year's legislative elections.

Pius Lustrilanang recently joined a party founded by Lt. Gen. (ret) Prabowo Subianto, who was dismissed from the Army in 1998 after an operation to kidnap anti-government activists, including Pius, was uncovered.

Similarly, Zaenal Maarif signed on with the Democratic Party, despite his court battle last year with the party's chief patron President Susilo Bambang Yudhoyono in a defamation case.

Pius, who was abducted by a team of the Army's elite force Kopassus in February 1998, will contest a House of Representatives seat in an East Nusa Tenggara electoral district under the banner of the Greater Indonesian Movement (Gerindra). Gerindra has registered another of its abduction victim, Desmon J. Mahesa, as a legislative candidate in an East Kalimantan electoral district.

The Democratic Party recruited Zaenal as its legislative candidate for Central Java.

Ikrar Nusa Bhakti, research professor at the Indonesian Institute of Sciences (LIPI), expressed concern over the phenomenon, which he said indicated an erosion of ideals among politicians.

"If politicians uphold freelancing beliefs and a free-wheeling style, we wonder if they are prepared to sacrifice anything to get the position," he told The Jakarta Post.

The problem facing Indonesian politicians and legislators, Ikrar added, was their unwillingness to accept defeat or stay out of power.

"Many of them would be jobless if they were kicked out of a party. They would move to any party willing to accept them. So what can we expect from these politicians?" he said.

Zaenal defended his new alliance with Yudhoyono, whom he said was a leader the country badly needed to ensure continuation of development programs. "Besides, my late mother appeared to me in a dream telling me to support SBY," Zaenal told the Post.

Pius said with Gerindra, he could continue fighting for the people's interests. "I've been in politics for quite a long time. I am among the first activists that turned to politics. It's normal if I look for a place that suits me," said Pius, who obtained his master's degree in the Netherlands.

Several other activists, political observers and politicians now represent parties they used to criticize.

Political expert Indra J. Pilliang, a stalwart critic of the Golkar Party, is now the party's legislative candidate in a Padang electoral district.

Former student activist and Golkar critic Nusron Wahid has been with the party longer. He now represents Golkar in the House. Nusron said people should differentiate the Golkar of today from that of the past. He claims the party is now part of a pro- democracy force.

Indra, a researcher at the Centre for Strategic and International Studies, dismissed speculation he was gunning for a top position.

Indonesian parties turn to celebrities as election looms

Agence France Presse - September 4, 2008

Aubrey Belford, Jakarta – With his sculpted abdominals proudly displayed on his Facebook profile, male model Adrian Maulana cuts a very different figure to the ex-generals and dynastic heirs who dominate Indonesian politics.

He is at the forefront of a new push by Indonesian parties to field celebrities and other tabloid favourites – collectively known as "artis" – as candidates in next year's legislative election.

Sitting with his shirt on in a Japanese restaurant, the 30-year- old Maulana admitted he is "still learning" about politics even though he has already been accepted as a candidate by the liberal National Mandate Party (PAN).

The former engineering student, who was part of the 1998 protests that overthrew dictator Suharto is visibly uncomfortable, his voice quavering, when tackling policy questions.

However the sometime soap opera and film star said "artis" are quick learners and had to memorise scripts at short notice. They also have the common touch, he said.

"We celebrities, we are used to talking to the poor people, we are used to taking pictures with them. So we are more sensitive. We know what they want, we know what they need," he said.

The celebrity candidates are an attempt by parties to reconnect with a public that has become disillusioned with 10 years of democracy, persistent poverty and a steady stream of high-level graft scandals, analysts said.

Sitting lawmaker Nurul Arifin, herself a former actress, said the explosion of celebrity candidates for the April polls exposes how poorly parties have connected with Indonesian voters.

Parties remain the vehicles of big personalities with money. Any candidate who wants to break into politics needs stacks of cash to pay party members and promote themselves through advertising.

Celebrities, already well recognised by Indonesia's masses, get to bypass – or at least get a discount on – this process "because they already have social capital," Arifin said.

"I'm worried about the substance of these artis. Do they know the substance of politics? Do they know what it means to be a politician?" she asked.

The party most enthusiastically recruiting celebrities, Maulana's PAN, is working hard to make sure its famous candidates don't become embarrassments.

PAN has appointed its own "head of cinema and infotainment" to look after its 15 celebrities and has hired a private political consultancy to run special training sessions.

The star candidates gather at least weekly at a conference table in front of a bank of plasma screens for workshops on party strategy, current issues and political basics.

Political scientist Bima Arya Sugiyarto, who has been hired to help in the training, said some of his charges still had a lot of work to do before they could enter parliament. "For some people they do have an adequate knowledge of politics, for others they really are beginners," Sugiarto said.

The push for celebrities by parties across the spectrum is an acknowledgement that politicians are trying to combat a dirty reputation for brown-paper-bag politics, he said.

"Massive publicity for corruption scandals by party politicians has really damaged the image of party politics," he said. "They hope that by recruiting celebrities and public figures, the public will still vote for the parties' candidates."

PAN's celebrity coordinator, Amazon Dalimunthe, said the party valued the relatively clean image of celebrities enough to risk the ire of rank-and-file party members passed over for candidacy.

"Of course there's jealousy (from party cadres). They protested, but the party leadership is looking at it from a wider perspective," Dalimunthe said.

Celebrities have been embraced with fervour across much of Indonesia's fractious political spectrum.

The parties of President Susilo Bambang Yudhoyono and his main rival Megawati Sukarnoputri have recruited TV and film stars, joining tickets that include one of ex-general Yudhoyono's sons and one of Megawati's daughters.

Former special forces chief, alleged human rights violator and Suharto son-in-law Prabowo Subianto has also tapped a sweet-faced soap star to run with his nationalist Gerindra Party.

Even the Islamic United Development Party has a popular singer of "dangdut," an Arabic and Indian-infused pop music associated in equal parts with sleazy dens and the country's rural heartland.

Government backs open election

Jakarta Post - September 4, 2008

Desy Nurhayati, Jakarta – Public hopes for a democratic election received a new boost on Wednesday, with the government throwing its weight behind a political move to introduce an open election system next year.

State Secretary Hatta Radjasa said the government had proposed an open system to replace the party list system in a draft election bill. The current system has been widely criticized for allowing political parties to name party loyalists to either national or regional legislative councils.

"We lost in the vote, therefore the House of Representatives endorsed the party list method," Hatta said, recounting the deliberation of the election law.

Article 124 of the election law, passed by the House in March, stipulates that candidates who win at least 30 percent of votes automatically secure legislative seats. The remaining seats go to candidates based on party lists.

A group of 60 lawmakers from various House factions recently signed a motion demanding a move to the open election system.

Five major House factions – the Golkar Party, the Indonesian Democratic Party of Struggle (PDI-P), the Democratic Party, the National Mandate Party (PAN) and the Crescent Star Party (PBB) – have also formally requested a review of Article 124.

Golkar and the PDI-P were among those that insisted on maintaining the party list system during deliberation of the election bill.

Hatta said the revision was necessary to provide legal certainty for political parties committed to a democratic election.

In previous elections, all political parties employed a numerical method to determine their legislative members, with the election law allowing their central boards to appoint party loyalists to legislative councils.

Loyalists to party leaders commonly topped lists of legislative candidates, and contested elections in the parties' strongholds to ensure they would secure legislative seats.

Also on Wednesday, youth members from President Susilo Bambang Yudhoyono's Democratic Party joined the call for an open election system and urged the party to immediately issue a guideline on the proposed mechanism.

Legislative candidate ads only present image, not 'sweat'

Detik.com - September 3, 2008

Laurencius Simanjuntak, Jakarta – In the lead up to the 2009 general elections many legislative candidates are using advertisements in the mass media to campaign for themselves. Some however are only being polished up by the media without informing the public about what they have done for the nation and state.

"These leaders are usually people who are directly campaigning using the services of a political consultant. They are transformed, polished so that they [appear] to be a national leader for the future", said Indonesian Institute of Science (LIPI) political observer Ikrar Nusa Bakti.

Bakti conveyed this during a dialogue titled "Civil Vs Military Legislative Candidates in the Context of Regional Development", at the Regional House of Representatives building at the Senayan parliamentary complex in Jakarta on Wednesday September 3.

According to Bakti, these advertisements by legislative candidates are sometimes manipulative because through these ads, the image of prospective leaders can be polished up.

"Whereas what is being polished, never informs the people about what their vision and mission is for Indonesia in the future", said Bakti.

These advertisements by legislative candidates that have been appearing in many different media, according Bakti, only show the capabilities of candidates in a particular field, not the results of their "[hard work and] sweat".

"Claiming himself to be a leader of farmers but he has never been a farmer or retail trader", explain the LIPI researcher when commenting on one particular legislative candidate's advertisement [ads by former army special forces commander retired General Prabowo Subianto – JB].

National Mandate Party general chairperson Sutrisno Bachir meanwhile, who was also present at the dialogue, said that the advertisements that should be criticised are those whose source of funding is unclear.

"Is if from the state, from the people? Now, my money is kosher money, I'm not a state civil servant, not a minister, a president or vice president", explained the businessperson form Pekalongan in Central Java. (lrn/nwk)

[Translated by James Balowski.]

Election commission rejects Pelopor party

Tempo Interactive - September 3, 2008

Eko Ari Wibowo, Jakarta – The National Election Commission rejected on Tuesday the application of Pelopor Party for failing to meet the minimum percentage of female legislator candidate.

In accordance to the article 53 in Law number 10 of 2008 on legislative election, one political party required to nominate at least 30 per cent female candidates of all the candidates it is nominating.

Pelopor Party according to official in the commission, Endang Sulastri, nominated 99 legislators and female candidates only counted for 21 per cent of the total candidates.

So far, Endang said the largest percentage of female legislators were nominated by the Prosperous Justice Party (44 per cent), National Mandate Party (32 Per cent), and Golkar Party (31 per cent). The total number of female candidates according to the commission are now at 14.020, which counts 36,4 per cent of the total candidates submitted by all political parties.

Activists file judicial review on election law

Jakarta Post - September 2, 2008

Jakarta – Three activists has filed for a judicial review with the Constitutional Court on Wednesday to demand it annul several articles in the 2003 law on presidential elections.

Political analyst and activist Fadjroel Rachman, together with Mariana Amiruddin, Executive Director of Jurnal Perempuan woman group, and Bob Febrian, Muhammadiyah Youth activist, claimed that they were fighting for the Indonesian citizens' right to vote for non-political party candidates.

"Three articles of the law state that the only way to become presidential candidates is through political party or political parties' coalition. This (mechanism) leaves not chance for citizens to vote for or run as independent candidates," said the activists' lawyer, Taufik Basari, as quoted by Kompas.com.

Fadjroel, who has declared his readiness to be an independent presidential candidate, said all citizens should be entitled to run for the 2009 presidential election without being nominated by a political party.

Mariana said allowing independent presidential candidates would create more opportunities for democratic solutions and maintaining sense of tolerance.

Constitutional Court had previously allowed independent candidates to run in local direct elections. (dre)

Golkar members grumble over lists

Jakarta Post - September 1, 2008

Abdul Khalik, Jakarta – Scores of Golkar politicians have questioned the party's seriousness in adopting an open system to determine its legislative candidates for the 2009 election.

The practice of placing Golkar leaders' loyalists or cronies at the top of its list of legislative candidates has increased internal resentment in the country's largest party.

Some Golkar figures said they had heard of discontent and distrust among party members over the list of candidates submitted to the General Elections Commission (KPU). Several even threatened to withdraw their candidacy or quit the party.

Others have said the way the party arranged its legislative list led to doubt over whether Golkar would seriously implement an open system rather than the numerical order mechanism recognized in the 2008 legislative election law.

The open system allows a party to determine its legislative members based on the votes each wins in the election. The numerical order mechanism authorizes the party's central board to appoint loyalists to legislative councils.

Young outspoken Golkar lawmaker Yudhi Chrisnandi decided not to run for reelection in protest after the party placed him fourth on the list of candidates for the Cirebon electoral district in West Java. He said he withdrew his candidacy because he believed that Golkar's open system was a "lie".

"Looking at the education level of our voters, many of them will vote for the party's symbol only. The party will distribute votes for candidates at the top of the list. So the party leaders will pick who they like," Yudhi said.

He demanded the party divide the votes evenly among all candidates if the party did not gain the required number of votes to create a new seat.

"Many members are angry with this list of candidates. Some senior members, who have served the party for 15 years, were sidelined while new people suddenly top the lists. I am questioning if they are better than me," he said.

Golkar deputy secretary-general Rully Chairul Azwar acknowledged that discontent began to spread through the party after its list of legislative candidates was announced.

"But it is normal. We faced a similar problem five years ago and we managed to survive," he said.

Golkar recently decided to shift from the numerical order method to an open system in determining its legislative members after a series of defeats in regional elections and protests by some members against the placement of little-known members in the legislative candidate list.

Rully said those resigning from the list must have realized they would not get enough votes to be elected, citing massive candidacy withdrawals in other parties as an example.

Last week, candidates from the National Mandate Party (PAN), National Awakening Party (PKB) and Democratic Party withdrew their bids for a seat in the legislature, saying they did not want to waste money when it was apparent they would lose.

Golkar recently lost gubernatorial elections in its traditional strongholds, including West Java, North Sumatra, South Sulawesi, Southeast Sulawesi, North Maluku, West Nusa Tenggara and East Nusa Tenggara.

The latest national surveys by Indo Barometer, the Centre for Strategic and International Studies and the Reform Institute have put Golkar behind the Indonesian Democratic Party of Struggle (PDI-P) going into the 2009 legislative election.

Opinion & analysis

The real incentives

Jakarta Post Editorial - September 8, 2008

Last week's passage of the income tax law is the best Idul Fitri gift the country could provide to our businesses and fellow taxpayers. The law provides a real incentive for investors to do business and for people to work harder.

Unlike past tax breaks, which benefited only certain companies, especially those with close ties to the power holders, this newly passed income tax law gives incentives to all businesses in the form of reduced rates.

The new law sets corporate income tax at 28 percent flat in 2009 and 25 percent in 2010, replacing the existing progressive system, which could go up to 35 percent. Under the current system, most corporations end up paying 35 percent.

This reduction in income tax rates serves as a real incentive for businesses. In the past, the government has actually provided a number of tax incentives, including in income tax, but all those incentives came with strings attached, which often meant higher costs for companies in order to benefit.

These new income tax rates mean Indonesia is becoming more competitive in attracting new investment as its rates are now on par with those in neighboring countries, especially Malaysia, Thailand and Vietnam – all of which have corporate incomes tax rates around 25 percent. (Singapore is an exception: Its income tax rate sits at 18 percent).

High income tax has in the past discouraged investors from investing directly in Indonesia. Some foreign investors investing in the country had their offices incorporated overseas to avoid the high income tax. Not only that, a number of local investors invested in Indonesia through foreign legal entities, again to avoid the high income tax. Now, with this new income tax law, we expect these investors to invest directly through legal entities in Indonesia.

Not only that, we expect these foreign investors will take their local companies public by listing them on the local stock market to gain further benefits from the new tax law. Any companies that have at least 40 percent of their shares listed and traded on the local stock exchange will have their income tax rate cut by 5 percent. This kind of incentive was simply nonexistent before.

This incentive is good not only for those listed companies but also for the country. As more and more companies go public, they will be subject to greater market transparency. They will thus have more solid ground to grow on and will then share their increasing profits with more people.

The new income tax law is also good for micro, small and medium enterprises (MSMEs), which in the past were subject to different income tax rates depending on their profit margins. Now, any business with a turnover of less than Rp 50 billion (US$5.5 million) will be required to pay only half the normal income tax rate, meaning they will pay 14 percent next year and 12.5 percent in 2010.

This lower rate for MSMEs will encourage their development, and as they grow, they will eventually graduate and pay the full amount of income tax.

But it's not only MSMEs, publicly listed companies and the corporate sector in general that benefits – this law is also good for individual taxpayers.

This law benefits individual taxpayers in two ways: by increasing the minimum taxable annual income threshold from Rp 13.2 million to Rp 15.84 million, and by cutting the maximum income tax rate from 35 percent to 30 percent.

Unlike the flat rate for businesses, this law imposes progressive tax rates for individual taxpayers, varying from as low as 5 percent to as high as 30 percent. This progressive rate aims to protect low-income earners, who form the majority of the Indonesian workforce.

Further good news from the new income tax law is that the government will waive the exit tax of Rp 1 million starting next year for registered taxpayers and will eliminate it altogether in the following year, 2010. This is good for encouraging travel, especially to the founding member countries of ASEAN, for which a visa is not required.

With all these real incentives for taxpayers, both commercial and individual taxpayers, the government is prepared to lose Rp 40 trillion in tax revenue next year when the law comes into force. But the benefits far outweigh the losses. And these losses will soon be recovered through increased economic activity and thus increased tax revenue in following years.

All in all, this new law is good for everyone: Good for corporations, good for MSMEs, good for publicly listed companies good for individual taxpayers. And so it must be good for the government and the country.

Ten years after Suharto, fighting 'democratic' neocolonialism

Direct Action - September 1, 2008

Sam King – This year's May Day demonstrations in Jakarta took on a special significance because they came 10 years after General Suharto was forced by mass street protests to resign as Indonesia's president. The May 1 marches were followed by another lively round of protests on May 21, the anniversary of the day Suharto fell. These mobilisations also protested the removal of fuel subsidies by the government of President Susilo Bambang Yudhoyono, which has caused steep rises in the price of all basic goods including food – amounting to a pay cut for ordinary people.

The coincidence of the 10th anniversary of Suharto's fall and the Yudhoyono government's austerity for poor people was not missed by many worker activists and others, who point out that all of Suharto's "democratic" successors have continued and deepened economic policies pioneered under Suharto, which put national development and the poor at the mercy of foreign capital.

Four decades of economic growth along the lines prescribed by Western governments and financial institutions have left Indonesia without a broad industrial base. There is very little of the industry that is needed to process Indonesia's enormous mineral wealth. As in all largely unindustrialised countries, most oil, natural gas and minerals are exported unprocessed. Industrial development is both narrowly export-focused and mostly foreign owned.

Low-tech labour-intensive industries like textiles, clothing, footwear and basic electrical goods are manufactured for export. The government imposes no requirement for foreign investors to transfer technology to Indonesia, which it could do. For instance, technology transfer has been demanded by Venezuela's socialist President Hugo Chavez. Calling for investment to develop Venezuela's planned new cable car systems, which will service poor hilltop neighbourhoods, Chavez stated that Venezuela would give contracts only to foreign companies that agree to pass on their technical knowledge to Venezuelans.

Indonesia's present "democracy" – like the Suharto dictatorship – has secured considerable profits for capital. The economy returned to growth in 1999 and has averaged 5.2% GDP growth annually since 2000. GDP growth rose to 6.3% last year, according to the International Monetary Fund's World Economic Outlook Database in April. Foreign direct investment reached a record US$10.3 billion in 2007, up from $6 billion in the previous year, according to BusinessWeek.

Even manufacturing has grown – by 41% between 2000 and 2007, according to a March report by Statistics Indonesia. However, the number of workers employed in manufacturing has been almost static since 2004. The same is true for workers in agriculture, services and transport. Only mining has had meaningful employment growth.

Two to three million people enter the workforce every year, so unemployment is rising. This has made it possible for bosses to reduce wages steadily over the last decade. Workers who are organised to demand higher wages are often threatened or sacked. Between 2004 and 2007, manufacturing workers received wage rises of 1.7%, while hotel workers received 13%. Over the same period, inflation was 41%, meaning real wages were 28-40% lower over four years. The previous seven years were a similar story.

Barbie dolls and false eyelashes

In "democratic" Indonesia, the statistical "average person" gets 5% richer every year, but the overwhelming majority get much poorer while watching the rich get richer. In 2006, the average monthly minimum wage was Rp602,700 (A$72.50) while the official minimum cost of living was Rp719,834 ($86.50). The average wage was Rp997,000 in 2006 and Rp1,077,312 in 2007. Inflation is expected to be over 10% this year due to the May cut in the fuel subsidy. The number of millionaires in Indonesia rose 16% in 2007, according to Forbes.com.

Growth in manufacturing does not mean more jobs in socially useful occupations, but finding niche markets in an irrational international marketplace. The latest "success story" is the production and export of false eyelashes. These are mass-marketed by the Japanese fashion industry to malls throughout the world. Madonna and Jennifer Lopez are among the customers. A large proportion of the world's Barbie dolls are also made in Indonesia.

Faced with competition from more efficient Chinese manufacturing, Indonesian workers are told that they need to accept worsening working conditions to secure their jobs. However, the main obstacles cited by foreign investors in Indonesia are not wage levels but corruption, lack of legal security and poor infrastructure.

Imperialism

The international financial press prints articles that simply report the slowly improving "business environment" in Indonesia, while the Indonesian-language mass media are forced at least to discuss the social and environmental problems rife across the archipelago, because ordinary people view Indonesia as being in crisis. The question being posed to wider and wider audiences by radical left groups such the Political Committee of the Poor- People's Democratic Party (KPRM-PRD) is, "Can the economic questions be solved by stepping outside capitalist logic?" Can Indonesia's existing and often idle factories and workers and the mineral wealth all be mobilised to fulfil real human needs inside Indonesia? This would mean manufacturing capital goods that can improve efficiency in agriculture, modernising transportation, expanding primary industries that can process the massive agricultural, forestry and mining produce and expanding the health and education systems.

The Indonesian economy today is far stronger than the economies of the present imperialist countries were when they were in the early stages of industrialisation. For example, steel production in Indonesia today is 3.9 million tonnes per year. That is equivalent to 40% of the combined iron and steel production of the five largest industrial economies of 1870. The reason that Indonesia, like all Third World countries, is not able to use existing technologies to move on to a new stage of broad-based industrialisation is that it is forced to compete in an international market already dominated by around two dozen imperialist powers, which maintain a monopoly of advanced technology for themselves.

Every industry entered, every economic move made on the international market, is always closely watched by bigger, stronger and more experienced competitors that are ready to steal the ball at any time. Investment decisions are made according to what is profitable for foreign capitalists. For the imperialist countries to maintain their position of dominance, it is necessary to keep Indonesia and the majority of the world's people in technological and therefore economic dependence.

In 2007, Indonesia exported US$101 billion worth of goods and services and received in return just US$61 billion in imports. Such an outpouring of wealth into other economies mimics the colonial economic structure under Dutch rule. Indonesia's first president, Sukarno, made this point in Indonesia Accuses! – his defence speech delivered in a colonial criminal court in Bandung in 1929. He said: "The exports of such a colony always exceed its imports; the wealth extracted from it always exceeds the value of goods brought into it." Money raised from these exports is often appropriated by foreign investors as profit. As for goods coming in, according to Sukarno: "All colonial land is primarily a field of enterprise for surplus foreign capital." Foreign debts

In 2008, the Indonesian government plans to spend Rp7.4 trillion ($2.1 billion) repaying foreign debt. In 2006 it paid $2.9 billion. This is despite the fact that a large part of the debt was accumulated under the military dictatorship and much of the money was embezzled by Suharto's family and business partners, who have never been put on trial. This is not the first time Indonesia's politicians have agreed, on behalf of the Indonesian people, to pay other people's debts.

The 1949 Round Table Agreement that recognised Indonesian independence from the Netherlands committed Indonesia to pay US$1.1 billion in "debt" to the Netherlands for the expenses the Dutch accrued re-invading Indonesia after World War II. This agreement, brokered by the US, indicated the Indonesian workers' and peasants' contribution to underwriting the Marshall Plan to rebuild capitalist Europe after World War II.

In a press release last May 29, the IMF praised the government of Yudhoyono, saying: "Overall, fiscal policy has been sound", with "further significant declines in the public debt-to-GDP ratio." What this means is that there have been "further significant" flows of money from the government of Indonesia to its major creditors – Japan, the World Bank and the Asian Development Bank.

At its national congress held in June 2006, the left-wing Workers' Demands Alliance (ABM) adopted a platform of four demands: "cancel the foreign debt", "nationalise natural resources and vital industries that are foreign owned", "build a strong national industry" and "eradicate corruption". Nationalisation of natural resources such as oil, gas and minerals would provide a substantial income to the state that could be used for development such as building "a strong national industry". The expropriation of foreign capital would stop the remittance of profits, which starves Indonesia of investment funds.

Cancelling payments on the unjust foreign debt would provide additional investment funds. On August 23, foreign minister Sri Mulyani Indrawati revealed that the government's payment of interest on domestic and foreign debt this year would amount to Rp97 trillion (US$10.6 billion) – 12% of government revenue. Natural resources accounted for around 25% of government revenue in 2007, but most revenue from natural resources is taken by foreign companies.

Venezuelan impact

The Venezuelan socialist revolution and its making real the nationalisation of Latin America's largest corporation – the Venezuelan state oil company PDVSA – are having a significant impact on Indonesian politics. It is not only the left in Jakarta that talks about the Venezuelan revolution. Elite politicians such as General Wiranto, now a presidential candidate, also talk in the mass media of the example provided by the Chavez government.

Wiranto – internationally infamous for his involvement in human rights abuses in East Timor – and other "fake reformers" from the political elite are comfortable portraying Hugo Chavez as a charismatic ex-general, while Niken Dwi Ismoyowati, from the newly formed Indonesian chapter of Hands off Venezuela, is more interested in the massive popular participation that has made the Venezuelan revolution possible. Speaking to Direct Action in July, Ismoyomati pointed out: "It was the people rising up that defeated the counter-revolution in 2002, and all of the social missions [programs for improving the living conditions of the poor] are organised by the people".

Where there is some agreement – at least in words – between some figures in the political elite and the left on the need to nationalise, or at least increase state involvement in, certain key industries, this has led a section of the left to get involved in elite electoral politics. Most notably, labour movement activist Dita Sari and 40 other leaders of the National Liberation Party of Struggle (Papernas) joined the Star Reform Party (PBR) on August 2. The PBR does not originate from the popular movements. It is an Islamic party that has opposed cancelling the foreign debt and has pushed for Islamic law in many provincial representative bodies.

Last December, Sari told Australia's Green Left Weekly that the PBR is "not left, revolutionary or progressive, but to some extent can accept our program". She explained that her new orientation is related to the weakness of the social movements, which she described as "scattered". She told GLW: "Everyone is busy with their own issues, their own meetings and day-to-day activities, like it's business as usual." She added: "We keep banging on those doors. We keep saying 'come on, come on, come on' to the social movements."

Constructing a people's alternative

Manik Wijis Sadmoko from the KPRM-PRD, which recently broke with Sari's group, argues that, on its own, even outright nationalisation is not enough. He told Direct Action: "In the 1950s [then president] Sukarno, under pressure from the workers, nationalised Dutch-owned businesses. Because the workers did not take control themselves, management passed into the hands of the military, which became very rich. These new 'capitalist bureaucrats', as they were called at the time, became a key base for the military dictatorship that took power in 1965.

"In Venezuela the PDVSA was nationalised in the 1970s but it did not benefit the people until the character of the Venezuelan state changed fundamentally. Today in Indonesia there is a well- connected section of the elite who believe they would benefit by bringing some more of the economy under the control of the corrupt Indonesian state, where they could use it as their milking cow."

The KPRM-PRD agitates for nationalisation "under people's control". It sees groups like ABM and the National Struggle Front (FPN), which groups workers, urban poor, peasants and students, as the building blocks of a future working people's government. Such a government would be able to replace the existing capitalist government when all the popular organisations are united, eventually forming workers' councils, peasants' councils and community councils.

"All of the Indonesian people are oppressed by neo-colonialism", said Sadmoko. "For that reason the people are responsive to a political and economic program that can end that oppression. Many people at first find it hard to believe that change is possible, so we like to point to the example where change is actually happening – in Venezuela."

History of struggle

People's councils are not new in Indonesia. Local laskar (people's militia) and badan perjuang (struggle organisations) formed spontaneously all over Indonesia in 1945 to fight off the returning Dutch colonialists. By early 1946, the struggle organisations had overthrown village heads, pro-Dutch bureaucrats and local nobles. This spontaneous local movement annihilated much of the colonial infrastructure. In doing so, the common people became armed, mobilised and much more politically aware. This popular movement prevented the Dutch from ever re- establishing their colonial regime across the archipelago.

A section of the movement led by a widely known revolutionary, Tan Malaka, attempted to establish popular power at the national level by uniting all the popular struggle organisations into a national council that would allow the common people to govern directly in their own interests. Tan Malaka, who was supported by the supreme commander of the republican army, General Sudirman, forged unity under the slogan "100% independence". This was opposed to Sukarno's policy of "diplomacy", which involved promising concessions to the Dutch in exchange for them recognising the republican government.

Tan Malaka was jailed by the republicans in 1946. After Sukarno publicly threw his personal support behind diplomacy, the struggle organisations movement failed to establish its power nationally. However, popular struggle dominated Indonesian political life from the 1950s until the coup of 1965. Only the mass murder of the left by Suharto's New Order military dictatorship in 1965-66 was eventually able to defeat popular politics. After the massacres, in which at least 1 million people were killed, Indonesia was once again opened up to be picked over by foreign capitalists.

Today, 10 years after the defeat of the military dictatorship, the political space is growing again for mass mobilisation politics. According to the KPRM-PRD, this will again lead to the formation of popular struggle organisations that can become the basis for a people's power able to take Indonesia out of its current impasse. "Indonesia is still oppressed by foreign capital. The Indonesian capitalist class has proven itself powerless to solve all of the basic social problems of the people – so the people have no choice but to fight", said Sadmoko.

Rapid and spontaneous formation of trade unions, including some 86 federations by 2006, tends to support this analysis. There are also countless struggles of peasants and the urban poor. Unity of the 86 federations would massively increase the bargaining position of workers, but that alone could not solve the social and economic problems of working people. If capital can still move offshore or shut down factories when it pleases, and make all the important decisions about the economy, trade unionism alone will be helpless.

"Only the organised power of all the working people around a clear program of national liberation can defeat neocolonialism'', said Sadmoko. "There are no shortcuts, and we reject collaboration with rotten politicians. We are confident. National oppression is the objective basis for people to become conscious and to make a popular national liberation movement. We are fighting every day to bring that into being."

Direct legislative election

Jakarta Post Editorial - September 4, 2008

The legislative election is half a year away, and yet the existing legislation regulating the electoral process, which is still party- rather than people-oriented, has lately become the sticking point threatening the smooth and timely organization of the political event which occurs every five years.

There has been increasing pressure – both inside and outside the House of Representatives – to have this law amended, especially the article regarding the selection of candidates for the 2009 legislative election.

The 2008 Law on Legislative Elections, constitutionally valid for next year's election, stipulates that a party candidate will earn a seat if he/she manages to gain a minimum 30 percent of the vote division number (BPP) – calculated by dividing the number of votes with the number of legislative seats at stake in an electoral district.

If no candidate can reach the threshold, the law says seats obtained by the party will be given to those ranking at the top of the party's list of candidates.

Despite the existing stipulations, attempts have been made by some political parties, through their five factions at the House, to amend the legislative election law: Among other means, proposing a majority vote system for the selection of candidates to be elected; or that the General Elections Commission (KPU) conduct the candidate selection based on political parties' internal mechanisms.

The majority vote base means that remaining seats would go to candidates who earn the most votes, regardless of their ranking in party lists.

The five factions' move, however, has been challenged by women's activists who have demanded the party rank system be retained as it provides more opportunities for female candidates to be elected.

The 2008 law does not strictly regulate the serial numbering mechanism for legislative candidates submitted by each political party in the election. It only stipulates at least one in every three candidates submitted be female.

Activists have also disagreed with the proposal that the KPU let the political parties' internal mechanisms elect candidates as this would be open to manipulation and backroom deals.

Other critics, however, back the majority vote mechanism because electing candidates using a party list system, they say, would facilitate a continued domination of legislative bodies by party loyalists – irrespective of their public popularity.

The five House factions, their supporters and the women's activists all have solid points supporting their respective arguments. However, there is not a one-size-fits-all mechanism for every aspect of our lives, including politics, and there certainly will not be such a mechanism for the selection of legislative candidates that will satisfy the interests of everyone at stake.

The 2008 law is indeed far from perfect, but it is the available valid regulation that we have for the 2009 legislative elections. And if we later fail to develop the perfect law for the legislative elections (through the amendments proposed), in time at least the nation will still have an opportunity to get the best parliamentarians elected in next year's election (those who are hoped to produce the best legislation in the future, including regulations for the subsequent 2014 legislative election).

To begin with, all political parties contesting next year's election should stop forwarding their own interests, and put those of the people (voters) – the true holders of all political decision-making processes in Indonesia – above the interests of any other individuals or groups.

Whatever mechanism is eventually agreed upon next year, it must be obtained through an agreement of the majority, and aim to provide maximum opportunities for people to access the country's political affairs (including in the decision-making process at the future House of Representatives, whose members they elect).

Democracy, by definition, is a government or system in which the supreme power is vested in the people, and is exercised by them directly or indirectly through a system of representation usually involving periodical free elections. Therefore in selecting the best election legislation mechanism, we must also let the people decide.