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Indonesia/East Timor News Digest No 23 - June 5-11, 2000

East Timor

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East Timor

Rebuilding the aim with $100m budget

Sydney Morning Herald - June 10, 2000

Mark Dodd, Dili -- The de facto parliament, the National Consultative Council, has approved a Budget of $US59.23 million to help the nation rebuild after last year's devastating militia violence. The budget will be taken for approval to an international donors' conference in Lisbon this month.

The 15-member council, chaired by Mr Sergio Vieira de Mello, chief of the United Nations Transitional Administration in East Timor (UNTAET), has 11 East Timorese members and decides on important UN regulations.

Last week, Mr Vieira de Mello said this was neither a welfare nor a development budget, but aimed at fiscal restraint. The main beneficiaries of the money, to be paid from the UN and World Bank Trust Funds for East Timor, are the health, education and infrastructure sectors, all hard hit after the September bloodshed.

Health, education and social affairs will receive $US13.65 million, and $US15.4 million will be spent on water, sanitation and infrastructure.

At least $US14.45 million will be used to pay the salaries of an estimated 9,000 East Timorese public servants, and $US15.6 million will be spent on capital works, UNTAET 's head of finance, Ms Fernanda Borges said yesterday.

A total of $US4.66 million will be spent on training 516 East Timorese police and 337 gendarmes.

The justice system has been allocated $US2.9 million, and $US2 million alone earmarked for rebuilding four district courts in the 2000-01 financial year. Funding for justice will be almost halved next financial year.

Ms Borges estimated that revenue this year from taxes and charges would be about $US22 million, rising to $US33 million next year. The budget assumes income of $US1 million this year from a tax on exports of coffee, the country's main crop.

East Timor's Muslims bemoan new hostility

International Herald Tribune - June 8, 2000

Rajiv Chandrasekaran, Dili -- Lured by the opportunity to make it big in the coffee trading business, Abdul Halim moved to this predominantly Roman Catholic territory in 1996 from his largely Islamic hometown on Sumatra island, settling in a small community near the Dili airport filled with fellow Muslim migrants from other parts of the Indonesian archipelago.

At the time, going from the religious majority to the minority did not concern Mr. Halim and his neighbors. The Indonesian government, which ruled East Timor with a stiff military fist, encouraged Muslims to move to the territory under a policy aimed at diluting the strength of independence-minded Timorese.

But now that East Timor is no longer part of Indonesia, having voted for independence in a referendum sponsored by the United Nations last summer, the Muslim minority has found the welcome mat yanked away.

"When we go to the market, the Timorese tell us we are not wanted here," said Mr. Halim, 51. "They say, 'Go back.' They call us troublemakers even though we have caused no trouble here."

Many Muslim families in Mr. Halim's neighborhood escaped the wave of violence that erupted after the independence vote by taking sanctuary in the nearby An-Nur Mosque. They have been unable to return home because their houses have been occupied by Timorese squatters.

"We have tried to go back, but when we arrive the people there tell us we cannot have our homes back because we are not Timorese," said Jamal Chaniago, a leader of the mosque.

The intimidation is not just verbal. The An-Nur Mosque, which has been transformed into a squalid encampment of 265 people, many of them families with young children, is regularly pelted with stones thrown by young Timorese Catholics, according to Islamic leaders and UN officials.

The persecution of East Timor's Muslim minority is emerging as a key test of religious and political tolerance in the new nation, raising fears that this battle-scarred territory could see a wave of violence spawned by the Timorese, who were the last round's victims, against Muslims, ethnic Chinese businessmen and others who are believed to have initially opposed independence.

UN officials who govern the country have condemned the intimidation and pledged that residents before the vote are free to live there now. The UN also has beefed up security at the mosque compound.

Several key Timorese officials, including an independence leader, Xanana Gusmao, and a winner of the Nobel Peace Prize, Jose Ramos-Horta, have said that non-Timorese should be allowed to return, but they differ on how that process should take place, voicing fears that unchecked immigration could let Indonesians and other foreigners snatch economic opportunities from the impoverished Timorese.

"Indonesian business people have come back and are injecting enormous amounts of money into the economy," said Joao Carrascalo, a vice president of the National Council of Timorese Resistance, the umbrella independence group. "They have become provocateurs. They are doing it to destabilize the situation."

Mr. Carrascalo said people who do not have a family connection to Timor, even those who lived in the territory before, should be treated as new migrants and subjected to "the proper scrutiny" before residency permits are granted.

The UN's human-rights chief in East Timor, Sidney Jones, said the animosity toward Muslims, Chinese and others was motivated more by political differences than religious ones. "What you're really seeing is suspicion of people who are still perceived as Indonesian nationals," she said.

Several of the mosque dwellers privately say they would have preferred that Timor remain part of Indonesia, but they insist they did not take part in the violence or support the militias that caused it. Because they were not born in Timor, they were not allowed to vote.

Despite the 24-hour presence of armed UN peacekeepers at the mosque compound, the level of fear is still high among those inside. They rarely leave the area during the day and never at night, Mr. Chaniago said. Many of the men are unemployed, he said, because the Timorese will not hire them.

The tension highlights the steep challenges facing the UN as it also tries to integrate in the new nation the tens of thousands of people, most of them Catholic and native-born Timorese, who voted for the territory to remain a part of Indonesia. With UN encouragement, those people have been slowly returning to East Timor from refugee camps in western Timor. In some cases, the repatriation has proceeded smoothly, but in others, the returnees have been threatened and beaten up by independence supporters.

Indonesian general denies military wrongdoing

Christian Science Monitor - June 8, 2000

Dan Murphy, Jakarta -- As Indonesian prosecutors stepped up their investigation of soldiers for involvement in the atrocities that followed East Timor's independence vote last September, a senior general signaled the military is digging in.

Maj. Gen. Kiki Syahnakri, Indonesia's senior commander in East Timor after the August vote, denied last week that former Monitor contributor Sander Thoenes, suspected to have been killed by Indonesian soldiers on Sept. 21, had died of a gunshot wound.

"Even the officers of the International Force in East Timor (INTERFET) said that he didn't have gunshot wounds," General Syahnakri told reporters after four hours of questioning by prosecutors over the rampage in East Timor last September, while he was responsible for security in the territory.

Syahnakri had acknowledged Thoenes was shot and killed last year. Analysts in Jakarta said his comments appear aimed at creating the impression locally that the circumstances of Thoenes's killing -- one of five East Timor cases given priority by Attorney General Marzuki Darusman -- are not known.

He also continued to deny widespread military backing for the violence. "Nothing much happened" during 18 days of martial law under his command that September, Syahnakri said. During that time, hundreds of East Timorese were killed and more than 200,000 people were forced from their homes and across the border into Indonesia's West Timor. The operation was conducted by militias with the support of Indonesian soldiers.

The general is now chief of the Udayana Military Command overseeing security in Bali and neighboring islands.

His comments sharply contradict the findings of INTERFET and various international investigators.

Australian coroner Gregory Cavanagh, working with the aid of INTERFET reports and a detailed forensic autopsy, found that Thoenes had died from a single gunshot wound to the chest and that "it is probable that a member or members of the 745 Battalion of the [Indonesian Army] shot the deceased."

International human rights groups, the United Nations, and Indonesian investigators have all found that senior Indonesian officers were complicit in the killings in East Timor.

Mr. Darusman said in an interview with the Monitor at the end of May that prosecutors would bring officers to trial by August on charges of involvement with the violence in East Timor. Darusman and human rights activists have repeatedly complained of military efforts to block the investigations, ranging from refusing to produce key witnesses to intimidation.

Timor still suffers

Sydney Morning Herald - June 8, 2000

Dili -- Is there a conspiracy of silence within our media about conditions in East Timor? Sister Fabiol Gusmao, who runs Carmelite health clinics and an orphanage in Dili and dispenses food and medical aid to starving people, recently sent a despairing call for food to the Mary MacKillop Sisters in Sydney.

She said that up to 90 malnourished children per day were coming to one clinic alone, which is in the town of Maubara, about 45km west of Dili. She reported some horrifying statistics about the physique of three of these children: a 12-year-old girl weighing six kilograms, and two brothers, four and six years old, both weighing four kilograms.

Sister Joan Westblade, who is in Timor helping with medical aid in the Catholic clinics, says the Timorese are still desperately short of food, particularly protein food like dried beans and peas, fish and meat.

The former Independent MP for Manly, Dr Peter MacDonald, who recently returned from East Timor , has released figures about deaths from TB which could indicate that about 15 to 20 people die every day from this disease in East Timor. Twenty-five years of starvation and malnutrition have contributed greatly to the severity of diseases like TB, malaria and dengue fever.

[Ian Hodges, Aid co-ordinator, Australia East Timor Association, June 5, Bundeena.]

Demonstrators block Dili traffic over fuel hikes

Lusa - June 7, 2000

Taxi and van drivers blocked traffic in Dili with their vehicles and tried to force their way into the central administrative building Wednesday to protest recent fuel price hikes.

Numbering about 200, the demonstrators agreed to disband after a delegation was received by UN officials and promised another meeting Thursday. It was the second such demonstration in the East Timorese capital since Friday.

One youth was arrested after kicking the head of a UN policeman, an American, when the crowd tried to force its way into the government building.

UN legal code abysmal: lawyers

Sydney Morning Herald - June 7, 2000

Mark Dodd, Dili -- A draft UN legal code designed to serve East Timor's fledgling judiciary was so flawed it would make a criminal conviction virtually impossible, a visiting team of senior Australian legal experts said.

Mr Robert Cavanagh, a barrister and senior lecturer in law at the University of Newcastle, and Mr Liam Shaw, a solicitor with the NSW Department of Public Prosecutions described the draft code as dangerous after being asked to read and advise on any flaws and suggest amendments.

They warned on Monday that implementing the proposed UNTAET regulation "On Provisional Rules of Criminal Procedure" would probably result in "significant difficulties" for the administration of justice. The draft code was to be ratified last Friday by the UN-chaired National Consultative Council, East Timor's de facto government, but has been deferred.

"This is a dangerous and onerous document. It must not be passed if criminal investigations are to have any chance of success," said Mr Cavanagh, a defence lawyer with 16 years' court experience. A High Court judge would find it impossible to interpret, he said.

The concerns of Mr Cavanagh and Mr Shaw were supported by the NSW Deputy Coroner, Ms Jan Stevenson, who is in East Timor to assess the state of the judiciary for the Catholic Agency for Overseas Aid and Development.

She said the draft's authors appeared to have little understanding of the law. "If you are going to draft legislation for a new nation, then you should try and make the legislation such that it can be adopted, used effectively and amended when the new government comes in. This is an abysmal piece of legislation and totally unacceptable anywhere. In fact, it is a frightening piece of legislation. It does not appear to have any cultural relationship to East Timor."

The main concern is the imprecise language, resulting in a document full of contradictory laws. But Mr Cavanagh warned that the UN draft was also inconsistent with the the UN's human rights code and could be used as an instrument of oppression.

Sub-section 29.3 refers to requiring a warrant for an intrusive body search but does not stipulate conditions for the issuing of a warrant, such as "reasonable grounds to believe that material evidence may be found in the person's body".

Rules covering hearing proceedings are riddled with potential problems. There is no provision in the draft to shorten proceedings if an accused wants to plead guilty.

The draft has the potential to admit unreliable or fabricated evidence because there are no provisions covering leading questions. On forensic examination and exhumation, they warned that re-exhumation was forbidden under the proposed UN law.

Yet more than 200 bodies had already been exhumed and reburied by investigators in late 1999 and early 2000 because no pathologist was available. "In effect, these bodies cannot be the subject of an investigation if this regulation is passed. We have been urged by those working in the area to bring this oversight to the relevant authorities," the report said.

UN and East Timorese human rights officials estimate as many as 1,500 independence supporters were murdered in post-ballot violence last September.

UN jails hold 112 detainees, about half of whom were members of pro-Jakarta militias armed and trained by the Indonesian military but who now face charges of murder or multiple murder.

Elections will happen with or without pro-integration group

Surya Timor - June 6, 2000

Kupang -- Responding to an UNTAS statement which said that it would not participate in the 2001 elections in East Timor if the UN didn't clarify UNAMET fraud in the referendum, UNTAET representative in Kupang, Colin Stewart, stressed that the elections will still be carried out even without the pro- integration group. Colin said there are already several well- known groups like Fretilin and UDT as well as other political parties that will participate in the coming elections although there is not yet an official procedure for registering for the election.

Concerning the Popular Timorense Party (PPT) led by Herminio da Silva da Costa, Colin said that if the leaders of that party are willing, they'll be invited to East Timor to work together in determining the process for East Timor's political future. He said that each political party that wants to participate in the 2001 election must first accept the referendum results and the UNTAET government now in East Timor. When asked if the PPT could register for the election from Kupang, Stewart said he didn't know since official procedures had not yet been issued by UNTAET, but he did say there was a strong possibility this would not be permitted. In short, if someone wants to found a political party to participate in the East Timor election, they would need to be in East Timor in order to participate in the process.

Responding to the statement by Florencio Mario Viera who accused Stewart of lying about the referendum being held democratically, Stewart said, "Everywhere in the world there is always some election fraud. But it is certain that the small degree of fraud can't cancel the referendum results [in which pro-independence got nearly 80% of the vote and pro-integration 20%]." If UNTAS thinks he is a big liar, then the world is also a liar, because he wasn't the only one who was involved in the referendum but there were observers from other countries including from Indonesian NGOs.

Florencio said that UNTAS was not questioning the results of the referendum so much as the process of the referendum that was full of fraud. He said that the 2000 observers were all pro- independence and that UNAMET had rejected the UNTAS suggestion so that there be witnesses at the polls and that the vote be counted directly at the polls.
 
Government/politics

Kwik Kian Gie: graft still endemic

Straits Times - June 11, 2000

Jakarta -- Coordinating Economics Minister Kwik Kian Gie admitted on Friday that the culture of corruption, collusion and nepotism was still prevalent in the bureaucracy under President Abdurrahman Wahid, and said it would take a while to eradicate.

"If the government is asked are they still doing KKN practices, yes they are. I'm not surprised ... as it relates to a corrupt mentality," Antara quoted Mr Kwik as saying after a seminar. KKN is the local term for corruption, collusion and nepotism.

Commenting on the allegations against Central Bank Governor Syahril Sabirin, the minister said Mr Syahril was guilty of KKN practices during the regime of former president B. J. Habibie and "not under the present administration". He also revealed on Friday that an IMF team was arriving in Jakarta tomorrow to review the government's economic-reform programmes.

Indonesia central bank clashes with Wahid

Reuters - June 6, 2000

Jonathan Thatcher, Jakarta -- A growing feud between Indonesian President Abdurrahman Wahid and his scandal-tainted central bank governor threatens more damage to the country's already precarious chances of economic recovery.

On Tuesday, the central bank accused Wahid of undermining both its independence and the economy after Bank Indonesia governor Sjahril Sabirin was officially named a suspect in a politically- charged banking scandal.

"This isn't doing anything positive for the country. It's just more uncertainty," one financial analyst said, adding that investor interest in troubled Indonesia had already dwindled to minimal levels.

Worries of further instability pushed Jakarta share prices and the Indonesian rupiah lower in Tuesday trading. Both have long lost all the gains that followed the initial enthusiasm of Wahid's rise to power last year in Indonesia's first contested presidential election.

Government wants Sabirin out

Attorney-General Marzuki Darusman said the central bank chief should effectively be suspended from duty during the investigation into his role in the Bank Bali scandal.

But one deputy central bank governor, bristling at the move against Sabirin, accused President Wahid of trying to illegally unseat his boss and warned that the consequences would take the rupiah even lower.

"According to the central bank law, the governor will resign because he wants to. In this case he has been put under pressure. It's not good to resign under pressure," Achjar Iljas told Reuters. "We can not accept this ... We will take action. Intervention in the central bank is against the law," Iljas said.

Wahid denies discussing the Bank Bali scandal with the head of the central bank, but Sabirin says he has been pressured several times to step down.

The scandal erupted almost a year ago and revolves around a huge loan collection fee the bank paid to a firm close to the then ruling Golkar party. It has already effectively claimed one top official by helping destroy then-President B.J. Habibie's chances of re-election last October.

Adding to Indonesia's troubles

The naming of Sabirin adds to the country's economic woes, with both the rupiah and share prices under weeks of pressure over fears that unrelenting political uncertainty will prevent the government getting its economic recovery programme to work.

Indonesia's transition to democracy after decades of despotic rule has been marked by repeated scandal. Much of it is left over from the days of disgraced former President Suharto who towards the end of his rule made Sabirin central bank chief. But new ones keep popping up too. The latest involves Wahid's masseur, who is now being hunted by police over the theft of 35 billion rupiah ($4.20 million) from a state agency.

Wahid has publicly suggested Sabirin step down over yet another scandal involving massive Bank Indonesia loans to firms at the height of the economic crisis in 1997 and 1998, most of which have yet to be repaid.

This week, the state audit agency refused to give the central bank a clean bill of health because of those loans. Under a law passed last year, only parliament can sack the head of the central bank.

Mixed signals from parliament

But on Monday, the legislature was giving mixed signals in what is likely to become another political football in the jockeying for position ahead of a crucial meeting of the People's Consultative Assembly, Indonesia's top legislative body.

Wahid's opponents have lost little time in jumping on scandals and controversy to discredit the president ahead of the meeting of the assembly which has the power to force him from office.

Parliamentary speaker Akbar Tandjung said Sabirin would only have to step down if he was found guilty. But deputy speaker Muhaimin Iskandar, a member of Wahid's own political party, said parliament would meet soon to discuss a replacement to Sabirin. "My reading is that Sabirin's gone," one senior treasury manager said.

The timing is particularly sensitive as the government comes under heavy pressure to stop the rupiah from falling. Failure could mean its hopes for economic recovery badly damaged.

And if that happens, analysts warn that the rampant social unrest that has accompanied the past two years of recession could well erupt again.

"When the new government came in [last October] there was real hope it could arrest this uncertainty and do more, but this year [it has shown that] even if it has the will it doesn't have the ability," one analyst said.

My brother the President

Straits Times - June 7, 2000

[Gus Dur's controversial brother speaks frankly to The Straits Times.]

Q: Describe Gus Dur for us.

A: Gus Dur is a great solidarity-maker, but he's not the best administrator in town. His power came from various political centres, so he has to accommodate them in his policy-making.

There's a historical precedent for this, for example, Bung Karno (Indonesia's first President Sukarno) from 1945 to 1959. For 14 years, Bung Karno was very patient, balancing the extreme left and the extreme right. But finally he had had enough.

This is a presidential government. You have to let the President make his choices and give him time before you judge whether he can do it or not. How do you expect a blind man who's had two strokes to overcome Indonesia's problems in six months? If you do, you're crazy.

Q: Some politicians are now talking about letting Gus Dur choose his own ministers instead of insisting on party representation. Will that work for Gus Dur?

A: It will work. But he shouldn't choose opportunists. A lot of the people around him just want to get jobs. People are going round claiming that Gus Dur wanted this, or that he said that. People around Gus Dur have been undermining him.

Q: Does Gus Dur essentially have an "I have nothing to lose" attitude towards life and governance?

A: He's not like that. He still has some martyr syndrome. In wayang, it's called kumbokarno, from the Ramayana stories.

Have you realised that after 1492, when the Dutch fleet was defeated by the Portuguese fleet, the Indonesian world view turned inwards. People of the nusantara became landlocked in their minds. Gus Dur has been saying for the last 20 years, we must turn maritime. So one of the first things he did as President was to appoint a naval officer as Pangab (armed-forces chief). He has noble aspirations.

Hasn't it occurred to anyone that in his first six months, he visited the heads of state of four of the United Nations security council's permanent five members?

Q: It is always assumed that he wanted to cut off any support for an independent Aceh.

A: Yes. And look at the way he asked former Dutch Prime Minister Ruud Lubbers to be the chairman of the reconciliation team in Maluku. Lubbers refused, but the gesture was there. You started the problem, you solve it. Holland planted the seeds of the problem in Maluku centuries ago.

Q: What's the key to understanding Gus Dur?

A: He's very complex. You have two sides of a personality here -- a discursive side which likes to explore ideas and a practical, opportunistic politician. At one end, he's a noble thinker for his people.

People always misread him one way or the other; they don't normally see his opportunistic side. Take his proposal to revoke the MPR decree on communism. That was a shrewd political move.

At the next general election, some of the millions of voters, the descendants of the communist purge in the 60s, who voted for PDI-P, won't be voting for it again. He's trying to make the PKB (Nation Awakening Party) a strong pillar of democracy. Those descendants form a huge number.

Q: So, he is going for the presidency again in 2004?

A: No. He's got two or three people as proteges. He's preparing them for 2004. I can't say who they are. There has to be institution-building first.

Parliament now is like a bunch of children, fighting for the sake of fighting. There's an incongruence now between Parliament membership and ethno-religious differences. There are no cross- cutting loyalties.

Q: And this is necessary for a stable multi-party system?

A: Yes. And the MPs now are looking after themselves and their factions, not the people.

Q: A sort of tribalism?

A: Precisely, except the tribe is not clear-cut. It's strong personal and money ties. If you look at Java, it's divided into three groups -- Mega's (Vice-President Megawati Sukarnoputri) , Gus Dur's and Amien Rais'. Then there are the 14 million Indonesian passport holders of Chinese descent. They'll throw their weight behind Gus Dur, not PDI-P any more because now the party is harassing Chinese.

Then there's the group of non-Javanese and non-Muslims. They can be divided between Mega and Gus Dur. Non-Javanese Muslims? They support Gus Dur and Amien Rais. TNI? They're all for Gus Dur.

Our representation at street level is incongruous with our parliamentary representation. If Parliament forces Gus Dur to step down, people will react in the streets. Why risk it?

Q: Do you think he should go for another term?

A : No. I was the first to object to his being President last year. It's too exhausting for him to go for another term. I told him he inherited a debt of 1,600 trillion rupiah (S$320 billion).

Q: When his doctors said he had a cold earlier in the year, did he actually have a third stroke?

A: No, it was the flu. His blood pressure and temperature went up and our physician brother Umar insisted he went to hospital and took preventive medication.

Q: Some observers say he's still behaving like the chairman of NU, rather than as a president and that's a source of some of the problems.

A: I agree, for security reasons. I don't like the way he allows people in and out of the palace. He always thinks nobody will kill him. But his car had three accidents, including the time when his wife became paralysed. The car tyres were not punctured by stones, but sniper bullets.

Q: Some think that he now relies only on a small and select group of people.

A: No. He doesn't even rely 100 per cent on me and I've been there in the streets for him for 20 years. He's very Javanese; he doesn't trust anyone 100 per cent.
 
Regional conflicts

Military eyes wide shut on latest unrest in Maluku

Christian Science Monitor - June 7, 2000

Dan Murphy, Jakarta -- By omission or commission, the evidence is mounting that elements of the Indonesian military are reigniting the religious conflict in the Maluku islands. The motive? Political payback, perhaps.

As government prosecutors prepare cases against dozens of officers alleged to have ordered killings on the opposite ends of the archipelago in Aceh and East Timor, aid workers, analysts, and even members of President Abdurrahman Wahid's own Cabinet claim soldiers have done little to stop a renewed wave of killing between Christians and Muslims. Touching off the latest bloodbath has been the arrival of Islamic extremists based on the island of Java, led by a secretive commander who claims to have fought and trained in Afghanistan and to have financing from the Middle East. The little-watched conflict has become deadlier than East Timor or Kosovo.

"If it goes on much longer like this, you'll have once-mixed communities completely segregated into different parts of the island," says an aid worker. "Once that happens, you don't get peace easily."

Though the roots of the conflict around the island of Halmahera are complex and tied into tribal politics, it has boiled down to its least-common denominator in the past two months: Christian versus Muslim.

Though part of the same island chain as Ambon, which has been split by Muslim-Christian fighting for almost a year, the local political, ethnic, and religious dynamics are very different.

Some of the president's aides allege the deteriorating situation -- particularly the recent influx of Islamic extremist fighters into the area -- is being encouraged by officers and politicians as a warning to Mr. Wahid to back off on human rights and corruption investigations.

The president "wants to get rid of the military, and of course they're resisting," says Hasyim Wahid, a younger brother and close adviser of the president. He adds that Maluku's problems have evolved from local to national ones as a result.

A Cabinet minister points out the new fighters are well armed: "The only source of guns in Indonesia is the Army." The theory may be hard to believe, but analysts point to the military's rampage in East Timor last year and a legacy of massacres in the provinces of Aceh and Irian Jaya. Military analysts also point out that the military is now deeply divided, with the command structure barely operational in the field.

Fighting first flared in North Maluku at the end of last year. It was a straight-ahead power struggle between the followers of the sultan of Ternate and the sultan of Tidore, the two volcanic islands and ancient rivals on Halmahera's west coast which controlled the world trade in cloves and nutmeg for hundreds of years.

Though the sultans' economic power was broken by the Dutch in the 19th century, they remained locally powerful until last year. Though Muslims themselves, they were traditionally tolerant of other religions, so much so that most of their subjects were Christians. But then the power struggle evolved into something darker.

Mostly Christian ethnic groups in northern Halmahera began to turn on the mostly Muslim ethnic groups that had flooded into the area over the past 20 years, in many cases as the result of a government resettlement policy.

After a wave of Christmastime killings by Christians, the Muslims got organized on a national basis. Still, the violence had cooled until the last half of May, when a more violent, better organized group of Islamic militants began to assert themselves.

Now the Muslims have the upper hand, conducting well-coordinated raids by land and sea on predominantly Christian villages, which are well armed and dug in. Aid workers estimate the death toll has averaged 40 a day for the past two weeks.

Well-financed paramilitaries

The goad to the latest fighting has been the Laskar Jihad (Jihad Paramilitary), led by Dja'far Umar Thalib, an Islamic preacher from Java who fought in Afghanistan in the late 1980s and also has ties to Pakistan and Yemen.

His well-financed paramilitaries from Java and Sumatra have taken control of the Muslim organizations on Ternate in the past month, snuffing out what little hope there was that the conflict could be pulled back from the sectarian brink.

Military pullback

The arrival of the Laskar has coincided with a disturbing pullback by the local military, particularly the Navy. Wahid had ordered a naval blockade to prevent the arrival of the jihad fighters. "Until May, the Navy seemed to be doing their job," says a military analyst. "Now they're nowhere to be seen." Sources on Ternate say sea-borne raids have been originating from the island since the end of May, with no interference from the local military command. Mr. Thalib himself freely moves between Ternate and Java without interference from the government.

In early April, Thalib emerged from obscurity, warning Wahid in a meeting that he would take matters into his own hands if the president didn't do more to help Muslims in Maluku. Wahid angrily dismissed him as a dangerous fanatic.

There has always been a real threat of the Maluku conflict spreading, particularly to the large island of Sulawesi to the west. Sulawesi is mostly Christian to the north, mostly Muslim to the south, and Maluku refugees have gone to the island, choosing locations on religious lines.

Both Muslim and Christian communities have sent fighters back to Maluku in sympathy. Violence has already spread to smaller islands to the north and south of Halmahera.

Juwono Sudarsono, the defense minister, said last week that he suspects supporters of fallen President Suharto, who ruled Indonesia for 32 years and is currently under threat of a corruption trial, are funding the jihad fighters. No high-level military officer has responded yet to Mr. Sudarsono's comments.

For Indonesia, it's a dangerous game. Indonesia is the world's largest Muslim nation (about 90 percent of its 215 million people describe themselves as Muslims) and has long prided itself as being one of the world's most religiously tolerant. But there has always been a hard core of extremists. The more they're allowed to take root and left free to act violently, analysts fear, the more polarized Indonesian society will become.

More troops arrive in Poso, clashes continue

Jakarta Post - June 8, 2000

Palu -- A fresh batch of reinforcement troops arrived in Poso on Wednesday to help quell the continuing sectarian riots there.

Central Sulawesi Police chief Col. Soeroso said 280 personnel from Jakarta's Police Mobile Brigade (Brimob) who set their feet in the restive area would add to 1,500 soldiers from Makassar, South Sulawesi-based Wirabuana Military Command who came earlier.

"Another 1,500 are on their way," Soeroso said. "The troops' main duty is to launch a gun sweeping operation. Up to present rioters are still making sporadic attacks," Soeroso added.

Later in the day, unconfirmed reports said that a Brimob officer died and two others were injured during a clash with rioters.

Elsewhere in North Maluku, armed mobs attacked Duma village in predominantly-Christian Galela district at 7am on Wednesday, leaving four people killed and three others injured, chief of Suara Peduli Halmahera T. Situmorang said later in the day.

Pattimurra Military Commander Brig. Gen. Max Tamaela confirmed the incident, but failed to go into detail. Most of the victims were injured by stray bullets fired by troops and traditional mines Sungga Sungga planted along the area, Tamaela said by phone on Wednesday.

In Ambon, a Brimob undercover named Second Sgt. Nazaruddin was mobbed to death in the predominantly-Muslim Waehaong in down town Ambon on Tuesday night.

A solidarity march was held by hundreds of Islamic Student Association (HMI) activists in Makassar, but it turned violent with some of them stoning three churches en route to the Wirabuana Military Command headquarters.

Their anger multiplied as their demand to meet with military commander Maj. Gen. Slamet Kirbiantoro failed. They pelted the Indonesia Baru Protestant Church, which is only 50 meters away from the military office, with stones.
 
Aceh/West Papua

Rebel group shoots police officer in Aceh

Jakarta Post - June 10, 2000

Banda Aceh -- Rebels shot and wounded a Police Mobile Brigade (Brimob) officer in a gunfight between security forces and Free Aceh Movement (GAM), the third attack since a cease-fire was declared eight days ago, an official said Friday.

Pvt. Philipus was shot in the head and taken to Lilawangsa Military Hospital after a 30-minute gunfight in Cot Krieng village in Muara Dua district, North Aceh on Thursday, local police spokesman Capt. Ahmad Mustafa Kamal said.

"The incident was triggered by the hoisting of hundreds of GAM flags along the five-kilometer route of Jl. Lem Pipa near Exxon- Oil company operations in Blang Mangat early on Thursday. Rebels were escorting groups of people who erected the flags," Ahmad said.

Later in the afternoon, around 50 Brimob personnel arrived in Muara Dua area in attempt to clear the area and pull out the flags. "Suddenly they were ambushed and about 10 rebels escaped into the jungle after the gunfight," Ahmad claimed.

In the past, rebels have often attacked police who removed their flags from villages. In West Aceh, dozens of GAM flags in Kuala district were hoisted along with the national red-and-white in several villages on Friday.

Meanwhile, it was also reported that schools in North Aceh were closed on Friday following a letter, reportedly issued by GAM, declaring Friday a school holiday, officer Ahmad said, adding it remained unclear whether GAM was trying to make Friday, the Muslim day of prayer, a public holiday.

From the date the Geneva pact was signed until June 1, a day before the truce came into effect, a total of 33 people were killed, seven of them security personnel.

`They could be friends in the afternoon, enemies at night'

Straits Times - June 10, 2000

Although Lieutenant Komaruz Zaman might be an emissary of "Operasi Cinta Damai" or Operation Love Peace, he isn't taking any chances in one of Indonesia's most volatile provinces.

As he sits in a cafe in north Aceh, his machine gun at the ready, two friends stand guarding their commander, their eyes searching the street for any sudden movement. Outside another four mobile brigade police guard their truck.

His eyes scanning the street, Lieutenant Komaruz says his relationship with the ordinary people, in one of Indonesia's most conflict-ridden provinces, is good. "The Acehnese and we are all Indonesians so there is no problem," says the 25-year-old Javanese policeman.

However the heavy security required for soldiers and police whenever they venture into town, and the reports of plain-clothed troops shot by mysterious attackers, belie the positive spin on the relationship between the two sides.

As much as their operation is about providing security, it is also about the politics of convincing Acehnese that the police sincerely want a good relationship with the people during this three-month ceasefire. "The most important thing is the people who have suffered," says one police chief.

To prove the armed forces are not taking sides, these police remove an Indonesian flag along with the offending separatist flag from a nearby flagpole.

However, Lt Komaruz admits that winning over the hearts and minds of local people is not easy as easy as lowering an Indonesian flag. Often his mobile brigade unit is blamed for burning buildings and houses when he suspects the rebels did it.

"They want us to look bad, and so the people are more sympathetic towards GAM," he says of the Free Aceh movement's motivation for destroying people's houses.

Operation Love Peace is also a chance for the police to shine after the performance of the armed forces has been discredited in places such as Aceh, Maluku and East Timor, and show that the police, rather than the military, are really capable of enforcing domestic security.

But there are still significant hurdles to overcome, a senior police colonel admits. "Security in this country must be provided by the police but we are not ready. We don't have the equipment, the facilities, the training or even the numbers. "The upper classes demand we respect human rights but the police profession must be supported by education and enough training."

The police have also been a lot faster than the military to hail Aceh's three-month ceasefire, possibly because in this conflict the police have borne the brunt of casualties. This year alone, of the 68 military personnel killed in the conflict, more than two thirds were from the police.

Mr Abdullah Sufi, from Bengkulu, Sumatra, a mobile brigade policeman who is stationed outside Banda Aceh, says he learnt just how risky a policeman's life in Aceh is.

On his first day, here he was greeted with the news that one of his colleagues had been killed during a patrol in West Aceh. "I was happy but afraid to arrive in Aceh," says the 23-year-old.

Nevertheless working in a small station a few kilometres from police or military reinforcements takes its toll. "Every time we hear a blast we jump, even if it is not gun shots," he says with a laugh.

Sitting behind the barricaded local military station on the highway between Banda Aceh and Medan, Mr Abdul says it is difficult to know when they will be attacked and they believe their movements are watched.

Although they are encouraged to be friendly with locals, they still don't know who exactly is a member of the rebel army. "They could be friends in the afternoon but enemies at night," he says.

But as a native of Sumatra, unlike some of the Javanese troops, he says he is able to trust some Acehnese and make real friends such as Mohammad, who he calls brother, and Mohammad's sister, Nana.

Why is Mohammad's house not burnt down and their family isolated as happens to most Acehnese who befriend troops? "In the city, people are more intelligent and more neutral and they don't side with either GAM or TNI," although he adds that of course he only visits in plain clothes.

He says he would have no problem marrying an Acehnese woman. But Mohammad's sister disagrees. "You can't marry a soldier; people will reject you and be suspicious that you are a spy," says Nuriah.

Howard gives Gus Dur Papua reassurance

Agence France-Presse - June 10, 2000

Jakarta -- Australian Prime Minister John Howard yesterday reassured President Abdurrahman Wahid that Australia respects Indonesia's territorial integrity, and agreed to patch up diplomatic relations.

"Any suggestions anywhere that Australia supports the Papuan independence movements is wrong," Mr Howard was quoted by Reuters as saying after meeting Mr Abdurrahman in Tokyo. "I don't think Papua is a problem between our two countries. It isn't and it won't be," Mr Howard added.

Some 3,000 tribal leaders and activists last week held a congress in Irian Jaya that ended with a declaration that the province's incorporation into Indonesia in the 60s was invalid. Mr Abdurrahman rejected the decision and his government also attacked the presence of Australian NGOs at the congress, accusing them of interference.

However, the Indonesian President said he hoped to visit Australia soon despite the fact that many people in Indonesia now object because there were "certain Australians who have aided the declaration of independence by the Papuan people last week".

Ties between Jakarta and Canberra have been rocky since Australia led a UN-sanctioned peacekeeping force that quelled pro- Indonesian violence in East Timor.

The European Union also reasserted its support for Indonesia's territorial integrity on Thursday, after the Papuan Peoples' Congress declared that West Papua was not part of Indonesia.

In a statement, the European Union said: "The EU has repeatedly stressed its support for a strong, democratic, united and prosperous Indonesia. It has also stressed its support for Indonesia's territorial integrity, and for efforts of the current Indonesian government to solve problems, such as Aceh and Irian Jaya, through peaceful negotiation." The United States has also rejected the Papuans' declaration of independence.

[On June 9, Antara reported that Japan has also expressed support for Indonesia's integrity and opposed the breakaway of West Papua - James Balowski.]

Independence demand by 'invalid' congress rejected

South China Morning Post - June 6, 2000

Chris McCal, Jakarta -- Jakarta yesterday rejected a formal demand for independence by a West Papuan congress, slamming the meeting as invalid and its declaration as possibly illegal.

Separatist leaders in turn lambasted Indonesian officials for refusing to recognise reality, adding they could be pushing Papuans towards killing each other in a repeat of last year's violence in East Timor.

Trying to extract himself from the political conflict the meeting has landed him in, President Abdurrahman Wahid said anti- independence voices had been excluded from the seven-day meeting in Jayapura, the capital of the province still officially called Irian Jaya.

Organisers had also broken their word by allowing Westerners to take part, he said. "The Government does not recognise this congress," Mr Wahid said, pointing out that western New Guinea was internationally recognised as Indonesian sovereign territory. But a top independence leader disputed the President's claims. Thom Beanal said there simply were no anti-independence voices among the thousands who took part, and pointed out that migrants from other parts of Indonesia were among the participants.

"Jakarta is trying to form pro-integration and pro-independence camps like in East Timor, Mr Beanal said. Indonesia should be ashamed that they made East Timorese kill each other. They want to make Papuans kill each other. They must know what they are doing."

The President is under heavy pressure over the congress, which he financed to the tune of one billion rupiah (HK$1 million). At the last minute he pulled out of a plan to open it, opening the way for it to turn into a festival for independence, complete with singing and dancing.

Justice Minister Yusril Ihza Mahendra warned that the congress was flirting with the limits of the law in its final statement, which insisted that the province had attained independence from Dutch colonialists in 1961, two years before it joined Indonesia in controversial circumstances. "It is tending towards a breach of the law, because it involves national sovereignty," Mr Mahendra said.

But Mr Beanal attacked officials in Jakarta for failing to come and see the reality for themselves, and said Mr Wahid's decision not to attend the congress was disappointing. He also pointed out that Indonesia's own 1945 constitution stated that every country had the right to freedom.

"If Mahendra does not agree with this, he must change the constitution of Indonesia," Mr Beanal said. "We asked the President to come. We wanted him to see for himself what is happening. He cannot find it out from people in Jakarta. A congress means the people talk and if the people talk, we listen."

Politicians in Jakarta have been trying to play down the significance of the congress, but analysts have warned that the Government must take its demands seriously. They point out that the Government's good words about allowing autonomy have so far not turned into anything meaningful. With a cabinet reshuffle looking likely, it was essential that the new-look Government in Jakarta put the Papuan issue near the top of its agenda, according to political commentator Wimar Witoelar.

"They need to be taken seriously, not just with a dialogue but first initiatives," Mr Witoelar said. "Nothing specific has been submitted to the Papuan people and they cannot be expected to act on faith."

Can Aceh still keep the peace?

Straits Times - June 8, 2000

Marianne Kearney, Banda Aceh -- Aceh's landmark ceasefire is in danger of faltering as the two sides argue about how to monitor whether each side -- the Indonesian army and the separatist rebels -- keep to the agreement which went into effect last Friday.

While the former enemies have agreed to end their military operations during the duration of the three-month ceasefire, they still cannot, as one police member joked, sit at the same table yet, and they still have not agreed on what exactly is the definition of a ceasefire in the first place.

To Indonesia's security team, raising of the red and blue striped Free Aceh flags, now flying from telegraph poles from Banda Aceh in the north to Medan, is a violation of the ceasefire. But to the separatists, who deny that their soldiers erected all of the flags in dispute, this is just a spontaneous expression of happiness at unfolding events or, at worst, political campaigning.

The mini-deadlock comes amid allegations from the separatists that police in North Aceh stole motorcycles and extorted money from villagers when they entered a village on Sunday. Indonesian police said yesterday that separatists armed with grenades entered a government office and threatened to explode the grenades if they were not given money and two government vehicles.

Both sides claim they want the Humanitarian Pause, as it is officially called, to run smoothly, but both teams are putting up significant obstacles to actually reaching a workable agreement.

The Free Aceh's security team said the police should only carry out their operations according to international standards -- obviously an impossible request within a three-month timeframe given the standard of training in the Indonesian police service.

But Indonesian spokesman Colonel Ridwan Karim said the agreement allows military troops to participate in patrols or law enforcement if the police request back-up troops, and they are under police command.

And despite the huge concessions made by the Indonesian government in agreeing to negotiate with the rebel movement, the separatists' security team accuses Indonesian troops of not being serious about reducing tension in the province because they continue to build roadblocks and search vehicles.

Meanwhile, ordinary people here are sceptical of whether the Free Aceh leadership is serious in keeping to the ceasefire agreement. A local activist who declined to be named said: "One scenario says that GAM (Free Aceh Movement) doesn't want the conflict to end because they become very powerful through it."

The more serious violations of the ceasefire have already dashed the high hopes of people long tired of violence. "On June 2, hopes were very high, but now they have begun to doubt a little whether they will see results," said Mr Otto Syamsuddin, from a democracy institute. "I'm still a little confused. I see the government's policy is good, but they don't carry it out," said Mr Sharif Yusuf, a hotel manager.

But analysts said that because of the presence of a "third force" -- criminals and possible army deserters who have been blamed for much of the violence -- both Free Aceh rebels and the military can carry out violent acts, but blame it on this unknown group.

In the region around Banda Aceh, this has already started. According to reports, while police tried to remove a Free Aceh flag from the local police station last Saturday, two masked men began shooting nearby. These men were caught and found to have been soldiers whom they suspect erected the flag in the first place.

Wahid warns army against Papua violence

Agence France-Presse - June 8, 2000

Jakarta -- Indonesian President Abdurrahman Wahid has warned the military against using violence in dealing with calls for independence in West Papua, while one of his top officials yesterday warned Papuans against acts of "treason".

"We must not act as we did in the past. Our soldiers were sent to Aceh and they attacked the people," the President said. "Soldiers must be polite. I do not believe the people are the enemy."

A week-long people's congress in West Papua, formerly Irian Jaya, ended on Sunday with a declaration of the right to independence from Indonesia. Congress participants said the incorporation of the province into Indonesia in 1969 was flawed legally and was therefore null and void. They said they stood by a declaration of independence in 1961.

Late yesterday, Cabinet Secretary Marsilam Simanjuntak said Jakarta would maintain both "defensive" and "passive" measures in dealing with the separatist calls. "We will maintain a peaceful situation in Irian Jaya and will not act in an excessive manner," he said. But he warned any action to win independence would amount to "treason" and would be seen as a bid to invite "repressive measures" by security forces.

Machete militias clash as self-rule tensions heat up

Sydney Morning Herald - June 8, 2000

Andrew Kilvert, Jayapura -- Violence has broken out between militias supporting independence and autonomy in the easternmost Indonesian province of West Papua.

Fighting broke out at Waena in the capital, Jayapura, on Tuesday evening when a pro-autonomy militia known as Satgas Merah Putih (Red and White Taskforce) attacked a group of independence militia with machetes.

One person was taken to hospital and the independence militia Satgas Papua (Papuan Taskforce) detained a number of prisoners at its headquarters in Sentani, outside the city. During the fighting five shops were destroyed by fire and a government office damaged.

While there have been similar clashes in outer districts in recent months, this is believed to be the first case of fighting in the capital between the two groups. The independence militia numbers more than 7,000 and has a high profile, often parading the streets wearing black uniforms and providing security for political leaders who support independence. The pro-Indonesia militia is a clandestine organisation with links to Indonesian authorities through the provincial government. Their strength is not known, but researchers put their number at between 5,000 and 10,000.

Tension on the streets is rising following last week's historic congress at which 501 elected representatives from around the province voted for independence from Indonesia and the formation of an indigenous government.

West Papuan congress leaders sought to avoid breaching Indonesian laws forbidding separatism by avoiding a direct declaration of independence. Instead, they asserted that their independence, achieved from the Dutch in 1961, continued to this day.

President of the Papuan Government, Mr Theys Eluay, said he did not recognise Indonesian rule. "We gained our independence in 1961," he said. "We are an independent country, which has been occupied by an invading army." The Papuan leadership has claimed a mandate to establish, among other things, an electoral commission and a foreign affairs department.

Mr Clemens Runaweri, who was yesterday elected foreign minister, called for dialogue with Jakarta saying. "I would strongly urge the Indonesian Government not to take a hard line with us. We [the Papuan congress] have taken the peaceful path towards democracy in Papua," he said.

On Monday Indonesia's President Abdurrahman Wahid rejected calls for independence and warned that security forces would act to maintain order."

The Papuan congress and its elected leadership have received strong support from several leading figures from the neighbouring Melanesian country of Papua New Guinea.

Mr John Tekwie, the Governor of PNG's Sandaun province, called on the Australian Government to throw its support behind Papuan independence. This is unlikely, given statements by the Prime Minister, Mr Howard, and Foreign Affairs Minister, Mr Downer, last week, in which they endorsed Indonesian sovereignty over the territory. Indonesian troop numbers in the province have been bolstered in the past few months from 8,000 to more than 12,000.

Why Aceh splinter groups are in trouble

Strathfor Intelligence Updates - June 6, 2000

A leader of a breakaway faction of the Free Aceh Movement (GAM) was killed in Malaysia just hours before a "humanitarian pause" in Aceh was to take affect. Don Zulfahri, secretary general of the GAM Government Council (GAM MP), was shot twice by an unidentified gunman in a restaurant in Malaysia late on June 1.

Elements of the Indonesia military and other factions of GAM have been blamed for his death. In either case, it is likely other factional leaders will face a similar fate, or simply fade into the background. Both the government and the GAM have an interest in eliminating the leaders of splinter groups in advance of negotiations over the fate of the embattled province.

A resource-rich province on Indonesia's Sumatra, Aceh sits at the mouth of the Strait of Malacca, the gateway between the Indian and Pacific Oceans. Torn by a Muslim secessionist struggle, Aceh threatens to set off a domino effect, fueling separatist and religious movements across the archipelago into neighboring Malaysia.

GAM has been fighting for an independent Acehnese state for two and a half decades under the leadership of Hasan di Tiro, who is currently based in Sweden.

In November 1999, a rift that had been forming within the organization broke open, and Zulfahri established GAM MP in Malaysia. Zulfahri claimed that di Tiro was in poor health and unable to continue to lead the struggle, something di Tiro supporters vehemently denied.

The split gave the Indonesian government an opening. Di Tiro had insisted on negotiations through a third party and firmly supported an armed independence movement. Zulfahri was reportedly more willing to embark on a direct dialogue with the Indonesian government, and opposed to the use of violence to achieve independence.

Back channel talks between the GAM and the Indonesian government began, but with the larger di Tiro faction. These talks led to the signing of a "joint understanding on humanitarian pause" in Switzerland on May 12. Hours before the implementation of the nominal three-month cease-fire agreement took effect June 2, Zulfahri was killed.

Members of Hasan di Tiro's faction of GAM blamed elements of the Indonesian military, claiming Zulfahri was working for the military to undermine the group from the inside, and was killed off now that he was no longer needed. GAM's allegations were backed by Indonesian President Abdurrahman Wahid's special representative to the group; he also suggested elements of the military were involved.

Other accusations have been leveled at di Tiro's GAM supporters, who had previously labeled Zulfahri a traitor and called for him to be brought in, dead or alive. In advance of the first direct talks with the government, di Tiro needed to reassert his control over the entire Free Aceh Movement.

Whether a victim of the Indonesian military or of another faction of the GAM, Zulfahri's death sends a clear signal to other factional leaders in Aceh. Targeting a high-profile but more moderate leader lessens the potential for a violent backlash.

At the same time, it makes it clear that for serious negotiations between GAM and the government to proceed, a unified Acehnese leadership must be established.

For GAM, this situation provides a better, more secure bargaining position in talks with the government. For Jakarta, more dead factional leaders means that the chances of continued armed struggle will be minimized if a deal is inked. While Zulfahri is the first factional leader to be killed, he may not be the last.

Prospects for independence in West Papua

Straits Times - June 6, 2000

Why is Irian Jaya such a hot issue, and are there parallels to be drawn with East Timor? Indonesia analyst Dr John Taylor of South Bank University, London, discusses its prospects for independence in a BBC programme, The World Today, last Friday

Dr Taylor: If you go a long way back, if you go before Indonesia became independent, there was always a notion among West Papuan people that they would have some sort of independence. I mean, the Dutch always promised them that and they thought that was going to happen. I think that after Indonesia became independent and they found that they were territorially part of Indonesia, I think that was a tremendous shock to them.

So, they fought to try and change it, but they didn't make it and so, there's been this feeling for a long time that they should have been independent.

Q: Can you take us through the events of what happened because the bulk of Indonesia became independent at the end of the 1940s, but Papua didn't, did it?

A: Well, what happened after 1949 was that Sukarno insisted that Irian Jaya should be part of Indonesia and a long tussle went on between the United States, the Dutch Government and the Indonesians as to what should happen and in 1962, an agreement was signed whereby there would be an act of free choice in 1969 and between 1962 and 1969, it was occupied by a UN force for a little while, but most of the time by the Indonesian Army.

So, the concession to the Papuans was that they would have this act of free choice, but the concession to the Indonesians was that it would be done after, effectively, a nine-year period of Indonesian control.

Q: During which time, effectively, it became Indonesianised?

A: It became Indonesianised and at one stage, indeed, Sukarno, who was President before Suharto came to power in 1965-66, wanted to get rid of this act of free choice, but when Suharto came to power, to try and improve his international image after all the killings that occurred in the coup, said that there should be an act of free choice.

So, this act of free choice took place in 1969 and the overwhelming majority of the population voted to remain within Indonesia. But, of course, as we now know by many people who were there, who reported on it, it was a really shambolic thing.

Q: It wasn't a free choice?

A: It wasn't an act of free choice. People were just consulted through tribal leaders and the tribal leaders delivered the vote.

Q: But it's not as clear-cut obviously as the East timor situation in terms of it not being a part of Indonesia?

A: No because Indonesia has a territorial claim on Irian Jaya because from 1949 onwards, it was part of the Indonesian Republic, as we know. In 1975, Indonesia invaded East Timor, which was a territory which was Portuguese, which was going through a transition, was going through a process of decolonisation.

They're entirely different and so, the problem for Indonesia is if most of the people who attended the conference that we're looking at were in favour of independence, then really, we have a similar situation to the one in Aceh. And it's very difficult for the Wahid Government to know what to do.

US Embassy supports Indonesia's position on Papua

Associated Press - June 5, 2000

Jakarta -- The US Embassy in Jakarta said Monday that Washington didn't support "independence for Papua or any other part of Indonesia."

It said it had sent an embassy officer to a congress held by Papua nationalists as an observer in line with standard diplomatic practice.

"We find expressions of concern about the presence of foreign diplomats at public gatherings unusual, especially given Indonesia's admirable progress toward an open democratic system," it said.

In recent days, fears on an anti-Indonesian backlash have grown in the province among thousands of settlers from other parts of the nation. Indonesia annexed West Papua, which covered the western half of New Guinea, in 1963.

The act was formalized by the UN in 1969 following a vote by indigenous community leaders. Independence activists now say that process of self-determination was a sham and should be overturned by the world body.

Free Papua Movement rebels have been battling Indonesian forces in a cat-and-mouse guerrilla campaign for almost three decades.

Military threat to curb self-rule move

Sydney Morning Herald - June 6, 2000

Lindsay Murdoch, Jakarta -- Indonesia's President Abdurrahman Wahid yesterday warned of a military crackdown in Papua after a landmark congress in the far-eastern province declared it was no longer part of his country.

If necessary, Indonesian police, backed by the military, would act to secure the vast, resource-rich province, formerly called Irian Jaya, he said. "If that means doing something to people without violating human rights, they will do that."

Mr Wahid and key figures in his enfeebled government are worried that Sunday's declaration by 2,700 delegates at the week-long Papuan People's Congress will lead to the disintegration of Indonesia.

Mr Wahid also warned against international interference in the province's affairs. Jakarta's relations with other countries would depend on them declaring they would not support challenges to Indonesia's territorial integrity, he said.

The congress had urged The Netherlands, the United States and the United Nations to reassess their recognition of Indonesia's rule of Papua, which followed a 1969 UN-supervised plebiscite widely regarded as an Indonesian-orchestrated sham.

The congress moderator, Mr Franzalberth Joku, said at the weekend: "[The plebiscite] ... was conducted under threats of intimidation, sadistic killing, military repression and other immoral acts." The Prime Minister, Mr Howard, and the Foreign Minister, Mr Downer, last week ruled out Australian support for Papua's independence following a claim by Indonesia's Foreign Minister, Mr Alwi Shihab, that several Australian non-government organisations were stirring up trouble in Papua. But Mr Shihab's comments puzzled Canberra because no Australian agencies are operating in the province.

Mr Wahid said yesterday that unnamed countries had apparently "expressed that they admitted Indonesia's sovereignty, including Irian Jaya". He criticised the congress for allowing foreigners to attend.

Indonesian officials were particularly upset by remarks made by delegates from neighbouring Papua New Guinea that were seen as supporting the province's independence. A US diplomat attended the congress but kept a low profile. No Australian representatives were present.

After providing more than $A172,000 to fund the congress, held in the provincial capital, Jayapura, Mr Wahid criticised it for not allowing Papuans who supported Indonesia's rule to attend.

"The majority obviously want to stay with Indonesia," he said. "Because of that the Government will not acknowledge the congress." Mr Wahid said his government must now maintain the country's Constitution and territorial integrity, including Papua.

The congress unanimously passed a resolution declaring that "West Papua has been an independent nation since December 1, 1961". The date refers to when the territory was granted independence from the Dutch as Indonesia escalated its military campaign to claim sovereignty.

Indonesia won the war in 1963 and Papua's annexation was given international recognition in 1969 following the plebiscite. The congress set December 1 this year as the date for countries to reassess their recognition of Indonesia's sovereignty of Papua.

West Papuans set up government

Sydney Morning Herald - June 5, 2000

Andrew Kilvert and agencies, Jayapura -- West Papua yesterday announced the formation of a government and declared independence from Jakarta, as Indonesian soldiers and riot police continued to patrol the streets of the capital, Jayapura.

The announcement followed a week-long congress in Jayapura, where 3,000 indigenous West Papuans have been debating a series of resolutions. While shying away from using the term transitional government, the congress announced an executive of 31 people to represent West Papua.

Mr Clemens Runaweri, a member of the executive and a political leader under Dutch colonial rule, told the Herald: "We want to shape our system along the path of democracy." The executive planned to establish an electoral commission and boundaries, appoint diplomats and draft a constitution.

It also planned to challenge Indonesian sovereignty by calling for a review of the 1969 United Nations-sponsored vote that saw West Papua incorporated into Indonesia.

"[The] Act of Free Choice was conducted under threats of intimidation, sadistic killing, military repression and other immoral acts," the congress moderator, Mr Franzalbert Joku, said.

The congress called for crimes against humanity in the province to be investigated and for those involved brought to justice. It named named a tribal chief, Mr Theys Eluai, as chairman of the Papuan People's Presidium and Mr Tom Beanal as deputy chairman.

President Abdurrahman Wahid has often said that Indonesia will not countenance a state within a state, so independence for West Papua is not on the agenda. At the weekend he criticised the congress as unrepresentative and said most people in West Papua wished to remain integrated with Indonesia.

But Mr Runaweri reponded: "Whilst the congress is not a perfect democracy, the people were selected by their own communities from the 14 regions throughout West Papua with further international West Papuan representatives".

Last week the Foreign Minister, Mr Alwi Shihab, said: "If discussion goes too far [the Government] will have to react".

Tension is growing in Jayapura as West Papuans wait for a response from Jakarta. Soldiers and riot police continue to patrol the streets of Jayapura, including the mobile brigade units implicated in the shooting of 55 protesters in the southern Papuan town of Timika last December.

Over the past six months, the Indonesian authorities have tolerated the formation of a pro-independence West Papua militia and there are fears that any intervention could result in violent clashes between the authorities and the militia.

Villagers from remote areas in traditional dress have flocked into the capital, and protesters armed with bows and arrows, spears and knives have been seen on the streets. Despite some heated debate at the congress, no violence has been reported.

West Papua achieved independence from the Netherlands in 1961. By 1963, the Indonesian military under President Sukarno had seized the province, although small bands of independent guerillas known as OPM continue to operate in the province and along the border with Papua New Guinea. Some guerillas attended the congress, further angering local authorities.

With the fall of Soeharto, the West Papuan independence movement has become more open in its call for independence. "There is no turning back from here," Mr Runaweri said. "This will raise eyebrows in Jakarta, but the people's will is our strength. The will of 2 million Papuan people worries us more than Jakarta."

West Papuans declare independence from Indonesia

Jakarta Post - June 5, 2000

Neles Tebay, Jayapura -- Defying warnings from Jakarta, the Papuan Congress ended on Sunday with a declaration that West Papua, or Irian Jaya as the territory is still officially called, is no longer a part of the Republic of Indonesia.

And according to participants at the congress, it never was. "West Papua has been an independent nation since December 1, 1961," the resolution of independence, read by the congress' secretary-general Thaha Alhamid, stated.

The date refers to when the territory was granted independence from the Netherlands as Indonesia escalated its military campaign to claim sovereignty. Indonesia won the war in 1963 and the annexation was given international recognition in 1969, following a United Nations-supervised plebiscite.

Thaha said the congress rejected the 1962 New York agreement on the plebiscite between Indonesia, the Netherlands and the United Nations since the Papuans were never consulted.

The 1969 plebiscite was attended by 1,025 tribal leaders who voted for integration under intimidation, pressure and killings, he said. "We call on the United Nations to revoke resolution No. 2504,19/12,1969," he added.

The congress urged Indonesia, the Netherlands, the United States and the United Nations to recognize the political rights of Papuans and to reassess their position toward an independent West Papua by December 1.

In spite of the exchange of harsh words between Jakarta and Jayapura, the week-long congress at Cendrawasih stadium ended peacefully. Police stayed away as the congress deployed its personnel to handle security in and around the venue.

The congress, originally due to end on Saturday, was extended for another day because of debates over the wording of the independence declaration. There were fears an outright declaration of independence would antagonize Jakarta.

They settled for declaring independence dating back to 1961 in keeping with the congress' theme to review the history of West Papua's integration into Indonesia.

Meanwhile, hundreds of military and police officers were deployed around town in anticipation of trouble. The fears turned out to be unfounded.

Acting Irian Jaya Governor Musiran Darmosuwito and provincial legislative council chairman TN Kaiway attended the closing ceremony but military chief Maj. Gen. Inkriwang and police chief Brig. Gen. SY. Wenas, however, were not present.

Jakarta-appointed Musiran avoided addressing the independence declaration but praised the congress' participants for keeping order and peace throughout the meeting. He appealed to West Papuans to respect the rights of non-Papuans living and working in the territory. "I call on all people in Irian Jaya to continually keep unity so that every one here can live and go about their business peacefully." Tom Beanal, the deputy chairman of the Papua Presidium, also assured non-Papuans in Irian Jaya that their rights would be respected. "We need them to develop our country," Tom said.

The Papuan Presidium will disseminate the results of the congress in a peaceful manner, he said. "We will fight for the sovereignty recognition which we had [in 1961]," he said.

Another source of contention from Jakarta was the presence of many foreigners, mostly representing non-governmental organizations, at the congress. Viktor Kaisiepo from the Netherlands, representing the European delegates, promised to explain the congress' results to major countries and the United Nations.

West Papuan leaders at the congress meanwhile rejected President Abdurrahman Wahid's claim that the independence aspirations did not have the support of the majority of West Papuans, most of whom live in remote jungles. "Only 0.01 percent of Papuans want to remain in Indonesia, while 99.9 percent want independence," Herman Awom, a member of the presidium, said.

Congress delegates debated on Sunday the status of Yorrys Raweyai of the Pemuda Pancasila youth organization, with his close links to the previous regime of former president Soeharto.

A delegate demanded that Yorrys be expelled from the Papuan Presidium but others felt that he should be retained. "His status will be decided by the presidium after the congress," Awom said.
 
Human rights/law

Chinese in Indonesia set to push for rights

Straits Times - June 9, 2000

Ian Timberlake, Jakarta -- Buoyed by overtures from Indonesia's democratic President and emboldened by the nation's new climate of freedom, ethnic Chinese here say they are ready to push for an end to years of discrimination.

"If the Chinese want the same rights as the others, we have to fight for them," said Mr Benny Setiono, chairman of the Chinese Indonesian Association. His people are believed to make up at least six million of Indonesia's 210 million citizens.

They have been subject to discriminatory government policies and racist violence ever since the archipelago of 17,000 islands and an estimated 300 ethnic groups gained independence from the Dutch in 1945. Mr Setiono and other community leaders are calling for an end to bureaucratic practices and laws that they say target them unfairly, despite what they see as the sincere intention of President Abdurrahman Wahid to embrace religious minorities. In this mainly Muslim nation, most ethnic Chinese are Buddhist, Christian or Confucian.

Although some racist laws are no longer being enforced, the Gus Dur government has revoked only one. The legislation is a legacy of the 32-year reign of former strongman Suharto who stepped down two years ago amid violent civil unrest centred in Glodok, Jakarta's Chinatown.

Gus Dur was voted into office by legislators in October after Indonesia's first free general elections in decades. One of his first acts was to revoke a 1967 presidential decree that forbade the public celebration of Chinese religious and traditional festivals.

"It was revoked in January, just in time for the celebration of the Chinese New Year," said Ms Mely Tan, a sociologist at the private Atma Jaya Catholic University in Jakarta.

Mr Abdurrahman, who claims to have some Chinese ancestry, attended the festivals that featured lion and dragon dances. "We trust Gus Dur very much," said Mr Setiono. "Now people feel freer."

Coinciding with Gus Dur's reversal of the ban, new Chinese newspapers began appearing and were sold openly on Pancoran Street, a crowed market area in Chinatown.

"I think minorities don't feel afraid anymore," said Mr Cyrillus Kerong, a Catholic and non-Chinese native of Flores Island in eastern Indonesia. He is chief editor of Indonesia Shang Bao, a daily launched in April by the long-established Bisnis Indonesia newspaper to target local and foreign business people who speak Mandarin.

Shang Bao is one of at least five new Chinese papers now published in Indonesia. But Ms Tan pointed out: "Only one regulation has been revoked and that's on cultural expression but the others are still there."

During Dutch colonial rule, ethnic Chinese were, for a time, forced to live in designated neighbourhoods. After Indonesian independence, they faced quotas designed to limit their entry to state universities.

There were other discriminatory laws and some violence in the first years after independence but attempts to control the ethnic Chinese peaked during the rule of Suharto.

The general seized power in 1965 after what he claimed was a coup attempt by the Chinese-backed Indonesian Communist Party. Many ethnic Chinese were jailed or murdered during the massacre of thousands of alleged communists and their sympathisers by soldiers and Muslim gangs.

Mr Tedy Jusuf was a young ethnic Chinese army officer at the time. There was never a law against ethnic Chinese serving in the armed forces, he said, but he was given a different job to make his life difficult. "I did my best and was patient so I could survive.

Many Chinese friends in the armed forces quit ... They pretended they were not Chinese or they became Muslim." He rose to the rank of brigadier-general and retired from active service in 1996. He is now chairman of the Indonesian Chinese Social Organisation.

Ethnic Chinese say the Suharto regime seized their schools, refused to recognise Confucianism, ordered them to adopt Indonesian names, forced them to carry a special citizenship document, allowed only one Chinese newspaper, and generally promoted ethnic Chinese assimilation.

"You know how many regulations there are about the Chinese? Three books!" said Mr Setiono whose family has been Indonesian for more than two centuries, he said. "For more than 20 or 30 years, the Indonesian Chinese lost their confidence," said Mr Jusuf.

Now, some of that confidence is returning. In May, about 20 members of youth group Simpatik staged the first public protest by ethnic Chinese. Marching to the presidential palace, they demanded an end to the remaining discriminatory laws, and asked that the government bring to justice those responsible for the 1998 violence that left about 1,200 people killed and dozens of women raped.

Mr Setiono has talked about meeting senior government and security officials after the latest outbreak of rioting in Chinatown. On May 13, the second anniversary of the 1998 rampage, national police raided roadside peddlers of pirated VCDs in Chinatown. The vendors, who are not ethnic Chinese, went wild and were joined by a group of young men who damaged several nearby businesses and shops in the Harco Glodok plaza. There is little evidence this incident was directed at ethnic Chinese "but the Chinese are always among the victims," he said.

Aside from the May 1998 Jakarta riots, ethnic Chinese were targeted in November 1998, as well as in 1997, 1980, 1974 and 1973.

Mr Syafi'i Ma'arif, national chairman of the Muslim Muhammadiyah organisation, blames the violent history on "socio-economic jealousy". Muhammadiyah, with about 30 million supporters, is a social and educational body.

During the Suharto era, Chinese were estimated to control at least 70 per cent of Indonesia's private sector and a small group of Chinese conglomerates provided key economic support for Suharto's regime.

"This gives us a big problem. People think all the Chinese are like that," said Mr Setiono, a retired businessman. Mr Kerong said the Suharto regime exploited social tension between the Chinese and pribumi (natives) to help entrench itself.

Although some Chinese are poor fishermen and farmers, many had no choice but to go into business, said Mr Hasballah Sa'ad, Indonesia's State Minister for Human Rights. "We blocked the Chinese in certain areas. They had no chance in political activities, none in the bureaucracy. It's very unfair."

He pointed out that ethnic Chinese Kwik Kian Gie holds a senior Cabinet post as Coordinating Minister for the Economy, Finance and Industry -- a sign of the present government's belief in equality.

Mr Syafi'i said some ethnic Chinese are "trying to become true Indonesian citizens" but others still view pribumi as inferior. But he agrees that discriminatory laws must ultimately disappear. "As a democratic nation, we have to treat every citizen equally." Mr Setiono sounds optimistic that further legislative changes are coming. "One by one, I think. It takes time."

Others are not so convinced. "Maybe Gus Dur has ideas about human rights, democracy and so on but the Indonesian elite doesn't think the same way," Mr Jusuf said. In his Harco hardware store, Mr Edy Jan said Chinese cannot escape discrimination. "If they don't want me here, okay. I'll go somewhere else."

[The writer is a Canadian journalist based in Indonesia. He contributed this article to The Straits Times.]

Human Rights courts bill welcome, but flawed

Tapol Press Release - June 8, 2000

The Indonesian Minister of Law and Legislation, Yusril Ihza Mahendra, this week formally submitted to the Indonesian House of Representatives (DPR) a bill to set up human rights courts to try "gross violations of human rights". Special ad hoc courts will have jurisdiction over past violations, including those connected with last year's murder and destruction in East Timor.

Tapol welcomes this move to bring human rights violators to justice, but fears that the bill will face opposition in Parliament from the armed forces members and their allies intent on protecting military personnel from possible indictment.

Tapol has submitted a detailed critique of the bill to the Minister and others in the administration. A major concern is that the bill's definition of "gross violations" does not include a requirement that the crimes be committed pursuant to state policy, a central feature of international law on crimes against humanity. As a result, the authorities will be able to treat offences as ordinary human rights crimes and not as political or state crimes. It is likely that a familiar pattern will be followed whereby lower-ranking military officers will be targeted so that senior officers and political leaders can avoid accountability.

The bill gives the President alone, on the recommendation of the DPR, the power to set up ad hoc courts for past violations and provides for ministers and parliament to have a role in the appointment of investigators, prosecutors and judges. This invites unacceptable political interference in various stages of the judicial process, says Tapol in its submission to the Minister.

President Wahid has already intervened by saying that he will pardon leading generals if they are found guilty. Justice will not be done and be seen to done unless appropriate punishments are administered, Tapol points out.

A complete overhaul of the judiciary will be required before independent and impartial trials can take place according to international standards. It is widely acknowledged that very few judges are independent and untainted by judicial corruption. The Law Minister himself has admitted there is a shortage of "capable and clean" judges. He has set out a five-year plan to revamp the legal system, but that timetable may be wildly optimistic given the immense size of the task facing him. An international tribunal remains the only viable option for the speedy trial of those responsible for the violence in East Timor, insists Tapol.

Suharto's libel case against Time thrown out

Agence France-Presse - June 7, 2000

In another blow to ex-president Suharto, a court yesterday rejected a multi-billion-dollar criminal defamation case he had filed against the US magazine Time.

Judge Sihol Sitompul, heading a panel of three judges at the Central Jakarta District Court, ruled Mr Suharto's defamation suit could not be accepted for lack of evidence.

"The panel of judges deems that in the reports of Time magazine, there are no elements of libel as has been alleged by the plaintiff. Therefore, the charges of the plaintiff should be all rejected," Judge Sitompul said.

Mr Suharto, now under house arrest, sued the magazine for US$27 billion over a cover story the magazine ran in May last year that claimed his family was sitting on a fortune of about US$15 billion. The report also alleged Mr Suharto had hurriedly transferred about US$9 billion from a bank in Switzerland to another in Austria shortly after he fell from power in May 1998 amid mass protests.

Endang Sumarti, a member of the panel of judges, said the picture of Mr Suharto on the cover of the magazine's issue on May 24 last year -- which showed him, wearing an 18th-century wig, pictured on a US dollar note with multiple zeros and the words Mr Suharto Inc stamped on it -- was "within the bounds of reasonable fairness".

He said that after the expert testimonies of journalists called to the witness stand, the picture of Mr Suharto could not be construed as depicting him being in control of a large business conglomerate, as Mr Suharto's lawyers charged.

"It is a victory for press freedom, for judicial independence and for the people of Indonesia," said Time Asia's Hong Kong-based editor, Donald Morrison. Morrison was one of those named in the suit.

Mr Suharto's lawyer, Juan Felix Tampubolon, blamed the judges. The failure of the court to provide what he called a "fair ruling" was because "of the mistake of the judges in bringing in expert witnesses".

The former strongman, who turns 79 tomorrow, suffered a mild stroke last year. He has been barred from leaving either Jakarta or the country since April 12 and the authorities put him under house arrest last month. His lawyers have taken the Attorney- General's Office to court over the house arrest order and that case is due to open at another court in Jakarta today.
 
News & issues

Five men burned alive by mob in Jakarta

Jakarta Post - June 11, 2000

Jakarta -- Five suspected holdup men were mobbed and burned to death by an angry crowd after being caught demanding money from passengers of a mikrolet public minivan in East Jakarta on Saturday.

The five gang members, already listed on the local police's most wanted list, met their tragic deaths at the Jl. TB Simatupang and Jl. Raya Bogor intersection at 2.15pm, shortly after their victims daringly screamed for help. By evening, police had released the identity only one of the five men: Nurdin, 33, of Cilandak, South Jakarta.

Ciracas Police chief Capt. Titik Valentina said the five bodies would be taken to Cipto Mangunkusumo General Hospital for postmortem examinations. "We're still completing the administrative procedures," the policewoman said.

According to witnesses, the five men were on board an M06 mikrolet plying the Kampung Melayu-Gandaria route and had threatened the passengers, who then alerted passersby in the area.

But East Jakarta Police detective Second Lt. Ferdy Sambo quoted local residents as saying that the five had just committed a crime in the area and got away by taking a mikrolet.

Their victim, who was in the area, yelled "thief ... thief ..." and pointed his finger at the five men. "The people then blocked off the mikrolet and forced them to get out and then mobbed them," Ferdy said.

The angry locals recognized the five as robbers in the area. Witnesses said the mob first beat the five before somebody poured gasoline over them and set them on fire. All five died on the spot. The police arrived a few minutes later.

Rio Tinto gold mine to reopen after siege ends

Dow Jones Newswires - June 9, 2000

Simon Montlake, Jakarta -- Local activists protesting over land rights have lifted a siege of a 14-ton-a-year gold mine in Kalimantan, owned and operated by a unit of Anglo-Australian miner Rio Tinto Ltd. (A.CRA), the company said Friday.

The agreement reached Thursday should allow the miner, PT Kelian Equatorial Mining to restart operations Monday while negotiations on land claims with community representatives continue, said spokesman Kasan Mulyono.

Kelian Equatorial, which is 90%-owned by Rio Tinto and 10%-owned by local partner PT Harita Jayaraya, suspended operations April 29 and has since managed only three days of production during a brief respite in the siege. "The road is now open again," Mulyono said.

The protesters are demanding compensation from Rio Tinto and the Indonesian government for land they allege was taken from them in the late 1980s. The siege cut off supplies of fuel and lime to the mine, which has only one access road.

Rio Tinto Indonesia says it has paid compensation twice in the past, but displaced communities claim that the amount was insufficient and that some households weren't compensated.

The company last month estimated it had suffered 20,000 ounces of lost production during the first three weeks of the siege. Mulyono wasn't able immediately to update this estimate.

The April 29 suspension was the first time that Rio Tinto has stopped production since it began operating the $250 million mine in 1992. It plans to close the mine in 2004.

Soeharto alone, far from the storm

Sydney Morning Herald - June 10, 2000

Lindsay Murdoch, Jakarta -- Not long ago feted as South-East Asia's greatest leader, Indonesia's former president Soeharto knows little about the dramatic changes taking place in the country he ruled for 32 years.

His family do not allow Mr Soeharto, who turned 79 this week, to read newspapers or watch television news, apparently for fear his blood pressure will rise.

Guarded by 100 heavily armed soldiers, Mr Soeharto spends his days in the same sprawling colonial house in an up-market Jakarta suburb where he has lived for decades, watching cartoons or Discovery channel.

Under house arrest pending corruption charges being laid against him and with people needing a government permit to visit, Mr Soeharto looks a lonely and forlorn figure, according to the few visitors who go to the house.

"When I came there Soeharto was sitting all alone and I said happy birthday to him," said Mr Juan Felix Tampubolon, one of his lawyers.

Only a parrot perched in a cage near the Soeharto dining room now recognises his leadership. It screeches "selamat pagi Bapak Presiden" (good morning, Mr President).

Despite slurred speech caused by a mild stroke and a claimed loss of memory that is hampering government investigations, Mr Soeharto must still be able to hear chants of "kill Soeharto, hang Soeharto" that often erupt on the other side of barricades and barbed wire in Jalan Cendana, the street he has made famous.

But the soldiers, led by officers Mr Soeharto personally trusts, have orders to shoot if necessary, to protect the man Time magazine accused of looting the country of $US15 billion.

A few times every week student groups gather near Cendana to demand he be jailed for corruption and nepotism. Often the demonstrations erupt into violence.

The Attorney-General, Mr Marzuki Darusman, who put Mr Soeharto under house arrest a fortnight ago, has said he will lay charges against him by August 10.

Mr Soeharto's lawyers argue he is unfit to answer questions in once-weekly grilling sessions by government prosecutors. They hint that the stroke damaged his brain.

But prosecutors are not convinced. They say he tries every ploy possible to frustrate the investigations, such as insisting on answering questions in Javanese, rather than the modern Indonesian language he did much to instil around the multi-ethnic nation.

His lawyers say this is a sign of his infirmity. Mr Soeharto insists he does not have a cent stashed in foreign banks and claims his wealth came from thriftiness with his presidential salary and rent from two houses he owns.

However, on Tuesday a court dismissed a multi-billion dollar libel suit he had brought against Time, a humiliating blow to the man who presided over one of the world's most corrupt judicial systems.

Mr Soeharto insists under interrogation that his actions were in the country's best interests. He told investigators, for example, that he had awarded a lucrative national car project to his youngest son, Tommy, because no-one else applied.

A former governor of Jakarta, Mr Ali Sadikin, said Mr Soeharto's supporters were trying to sabotage the Attorney-General's investigations. "They are afraid they will be implicated and their wrongdoings uncovered," he said.

Mr Sadikin said 60 per cent of MPs and Jakarta's businesspeople were part of Mr Soeharto's so-called New Order. "Many of them are not much better than bandits."

Government lawyers complain that Mr Soeharto's high-powered and expensive team of lawyers is using the courts to frustrate every step taken the Attorney-General takes. Deep suspicions remain among Jakarta's elite that a group of rich and powerful people close to Mr Soeharto, including his six children, are fomenting trouble across the country.

The Minister for Defence, Mr Juwono Sudarsono, said last week that a series of riots and disturbances plaguing Indonesia were linked to Mr Soeharto's supporters.

Until then, president Abdurrahman Wahid, government investigators and police had referred vaguely to unnamed provocateurs when talking about the outbreaks of violence.

[On June 9, Agence France-Presse reported that prosecutors had extended a house arrest order imposed on Suharto by 30 more days. Suharto has been barred from leaving Jakarta since April 12 and was first placed under house arrest on May 29. The order was handed to and signed by Suharto's chief lawyer Juan Felix Tampubolon. Tampubolon said he thought the extension was unnecessary because Suharto had been cooperative and had not tried to go anywhere. "We don't see the urgency," he said - James Balowski.]

Lawmakers launch new probe into Bulog

Straits Times - June 10, 2000

Devi Asmarani, Jakarta -- Parliamentarians from the party linked to Indonesian President Abdurrahman Wahid are spearheading a new probe into an estimated 2.7 trillion rupiah (S$513 million) allegedly stolen from the National Logistics Agency (Bulog) under his predecessors.

And heading their list of "witnesses" to testify about their roles in facilitating the alleged irregularities is Parliament Speaker Akbar Tandjung -- currently embroiled in a stand-off with the President over his attempts to oust central bank governor Syahril Sabirin.

The probe by Nation Awakening Party (PKB) legislators into Bulog's "off-budget funds" comes hot on the heels of fears here that the government might quietly shut down ongoing police inquiries into the latest Bulog money scam involving some of Mr Abdurrahman's closest aides and his former masseur Suwondo.

As much of the embezzled 35 billion rupiah has been recovered, speculation is rife that this latest parliamentary manoeuvre is a gimmick to divert attention from the Indonesian leader's woes.

PKB legislator Imam Churmein, who sits on a parliamentary commission overseeing Bulog, told The Straits Times yesterday that its new probe was triggered by the 35 billion rupiah scam.

Mr Abdurrahman has alleged since "Buloggate" surfaced last month that his name was being besmirched by his political foes. They however point out that he did indeed ask Bulog deputy chief Sapuan in January if he could have half of the 185 billion rupiah in off-budget funds Bulog had in its coffers.

Mr Churmein said yesterday: "We are concerned about the lack of transparent rules in the use of Bulog's off-budget funds. We want to find out what sort of abuses went on in the past."

His commission, backed by legislators from PKB and Indonesian Democratic Party-Perjuangan (PDI-P) of Vice-President Megawati Sukarnoputri, set up an eight-member team to look into the alleged illegal use of Bulog funds by officials and businessmen linked to former President Suharto.

Among those it intends to question are four former Bulog chiefs, including Mr Rahardi Ramelan, former Trade and Industry Minister, and Mr Jusuf Kalla.

According to Mr Widjanarko Puspojo, head of the probe team, Mr Akbar, as state Secretary under Mr Habibie, had to answer why he approved Bulog's request to continue handling its own non- budgetary funds, despite a recommendation by the State Audit Agency to incorporate the money into Bulog's official budget. A recent report by the state auditors said that over 2 trillion rupiah was withdrawn from the non-budgetary funds from 1994 to 1999.

The "Buloggate" scandal involving Mr Abdurrahman's aides was exposed shortly after he sacked Mr Kalla, prompting many to speculate that the expose was related to the latter's dismissal.

At a press conference yesterday, the non-government organisation GOWA, which uncovered the scam, dismissed allegations that it was linked to the President's political rivals.

"Yes, we've been linked with General Wiranto, Habibie, Fuad Bawazier, and just recently Arifin Panigoro, but none of it is true," GOWA's coordinator Farid Faqih said. Mr Fuad was a former finance minister while Mr Arifin is a PDI-P executive.

Jakarta police get go-ahead to shoot rioters

Straits Times - June 9, 2000

Jakarta -- Authorities in Jakarta have given the go-ahead for police to shoot rioters if other attempts to control them fail, according to reports published here yesterday.

The decision was reached at a meeting between administration leaders, the military, police and civic leaders at the Jakarta governor's office on Wednesday, the Warta Kota daily reported.

"One of the conclusions of the meeting is that we agreed to give a legal and political umbrella to the security personnel so that they do not hesitate in taking action," Jakarta Governor Sutiyoso said.

He said soldiers and police were under a "psychological burden", afraid to act firmly against law violators, including rioters, for fear of being accused of human rights violations.

"We will use bullets to shoot looters in the leg if we cannot control them by other means," the chief of the police force's operational command, Colonel Nono Supriyono, was quoted by the Jakarta Post as saying. Mr Sutiyoso said shooting would only be directed against rioters resisting orders from the security forces and those attacking with fuel bombs.

Fuel bombs have been used increasingly by protesters and rioters in recent cases of unrest and demonstrations, resulting in casualties among security personnel and damage to property.

The meeting was held to discuss ways of securing the capital during the general convention of the People's Consultative Assembly (MPR), the country's highest legislative body, in August. The measure was taken in anticipation of possible outbreaks of violence during the convention, Col Supriyono said.

Meanwhile, police used tear gas and traded blows with a small group of anti-government student protesters near Jakarta's presidential palace yesterday.

About 50 demonstrators from a group calling itself the Universal Front of Indonesia had demanded that the entire Cabinet of President be dismissed for failing to fix the nation's economic and social problems.

Witnesses said several protesters were arrested. During the melee, lasting only five minutes, police officers assaulted Associated Press photographer Eugene Hoshiko.

In another protest, about 100 students damaged the main gates of the attorney-general's office and demanded that former President Suharto be placed on trial immediately for corruption.

Howard looks to the future

South China Morning Post - June 9, 2000

Agence France-Presse in Tokyo -- Australian Prime Minister John Howard sought to move beyond past acrimony at yesterday's summit with Indonesian President Abdurrahman Wahid, the first since the East Timor crisis.

"My meeting with the President of Indonesia was extremely positive," Mr Howard told a news conference after the summit, held on the sidelines of a memorial in Tokyo for deceased Japanese prime minister Keizo Obuchi.

"The relations between the two countries, I think, have benefited enormously from the meeting that we held today," the Australian Prime Minister said. "Both of us agree that we should focus on the future and put the past behind us. Neither of us pretended that there have not been problems in the past, but neither of us wanted to dwell on that."

Relations have been frayed since October last year, when Australia led an international peace force to East Timor to put down a killing spree by Indonesian-backed militias after the former Portuguese colony had voted for independence.

Mr Howard described Mr Wahid as "a man of great charm" and said he had told the Indonesian leader he would be welcome to visit Australia whenever he wanted. Mr Wahid is expected to visit Australia in July.

Earlier Mr Wahid agreed it was time for reconciliation, but he said any state visit by him to Australia was still hostage to ill-feeling in Indonesia over East Timor and alleged Australian backing for separatists in Irian Jaya, or West Papua. "Many people in Indonesia now object to my visiting Australia because there are Australians who have aided the creation of independence for the Papuan people," Mr Wahid said.

Yohanes Yakob denies he planned Solidamor attack

Surya Timor - June 7, 2000

Kupang - Head of an advocacy team for a legal aid organization, Yohanes Yacob, did not design the attack on the Solidamor office that was carried out by a delegation of East Timor refugees (DPTT) two weeks ago.

Yohanes Yacob's denial was issued through a statement sent to ST at the end of last week, responding to a statement made by UNTAS and former Vice Head of PPI that was issued earlier.

According to Yakob, if viewed in terms of the law, the attack on the Solidamor office was clearly illegal because there was damage and beatings by the refugees. However, DPTT had a logical solution because it is as if this republic allows a country within a country. What more, DPTT feels Solidamor is a provocative organization that has ruined actively free political values including destruction of the source of Indonesia's economic order. Also, the love of Solidamor activists is totally polluted.

Concerning the problem of his name being mentioned as the mover behind DPTT's attack on the Solidamor office, Yacob said that matter was very ticklish. "I remind the person who mentioned my name in regard to that attack. As Secretary General of the Informal Institute for Indonesian People's Training (LIPMI) that has or oversees 153 social organizations throughout Indonesia with a strength of more than 3 million members, if I want to destroy Solidamor, I don't need to use the strength of DPTT, my 500,000 members who live in Jakarta are enough. That doesn't include sympathizers," wrote Yakob.

This former Soeharto lawyer explained that while in Jakarta, the DPTT program had been sent to various groups, including to the office of the LPBHN Kedsindo Advocacy Team. As DPTT's legal authority, KPBHN Kedsindo was limited to the legal arena and [had nothing to do with] the political unit. He gave as an example, if a DPTT member was to be processed according to law, then LPBHN Kedsindo as an advocacy organization would give legal services in accordance with the ethical codes of advocacy and the oath of office.

According to Yacob, the existence and role of Solidamor has political interests that play a role in destroying its own nation. He further questioned the presence of Solidamor Director, Bonar Tigor Naipospos who is currently in Dili. Because, according to Yacob, if he wants to demand justice, he doesn't need to go to Dili because in Indonesia there is also an institution that regulates such matters.

Concerning the UNTAS statement that DPTT still uses an old pattern, Yacob said they may be using an old pattern but at least DPTT members had proved they were ready to sacrifice their lives for their country as compared to continually holding meetings to point the finger at each other with using Pancasila and the 1945 constitution as a shield.

Solidamor Director, Bonar Tigor Naipospos, who was contacted via handy phone, responded to Yakob's accusation that Solidamor is a provocateur said that Yohanes Yakob knows nothing about Solidamor because Yakob is nothing more than a tool that turns here and there. According to Bonar, the name of the organization is certainly Solidamor, but the mission and vision of its struggle is not just for East Timor but also for Indonesia in relation to efforts to uphold democracy and Indonesia's image outside the country.

For example, Solidamor greatly cares about the arbitrary arrests of democracy activists during Suharto's regime. Concerning Yakob's accusation that Solidamor is also an organization that has ruined the actively free political values of Indonesia, Bonar thinks Yakob as a hired person wants to take advantage of the Indonesian nation.

Solidamor is precisely the opposite and wants to fix Indonesia's image in the eyes of the international world. It has never sought to ruin the Indonesian nation in any way.

Concerning Yakob's accusation that Solidamor only uses Pancasila and the 1945 constitution as a shield in its daily organizational activities, Bonar said he understood Pancasila and the constitution better than Yakob.

Government lifts ban on Miss Indonesia pageant

Straits Times - June 6, 2000

Jakarta -- The Miss Indonesia beauty contest, which has been banned for the past four years following opposition from Muslim groups, is to be held again this week with full government support.

Chairman of the Miss Indonesia Foundation, Ms Mooryati Soedibyo, said the contest, to be held from tomorrow to Saturday, would be attended by 30 women from 25 of the country's 26 provinces.

The newly-elected Miss Universe 2000, Ms Lara Dutta from India, is expected to attend the event. "The contestants will be judged based on their intellectual ability, behaviour and beauty," said Miss Mooryati.

She said the grand final of the beauty contest will take place on Saturday at the Taman Mini Indonesia Indah (Beautiful Indonesia in Miniature Park) and be attended by some 1,000 people.

The State Minister for Women's Empowerment, Ms Khofifah Indar Parawansa, said the government supported the event. But she said contests such as these should view women as an asset, not a commodity to be exploited. "So, whoever wins the contest will be one of the country's assets and not merely a tourist commodity," Ms Khofifah said.

Minister for Tourism and the Arts Hidayat Jaelani said he hoped the event would help restore the country's image, which has been tarnished badly by social unrest and political uncertainty.
 
Arms/armed forces

US: Training Indonesian terrorists in `anti-terrorism'

Green Left Weekly - June 7, 2000

The following is a statement presented by United States journalist Allan Nairn to the US House of Representatives Subcommittee on Human Rights on May 11.

Mr Chairman and members of the subcommittee, my name is Allan Nairn. Last fall, I testified before this committee after witnessing the final days of the physical destruction of East Timor by the Indonesian Armed Forces (TNI). I recently returned to free East Timor, and also managed to enter Indonesia and examine military operations in the rural zones.

The Indonesian military and security forces are now politically discredited, and the movement against them -- that began in the streets -- has now reached the Jakarta elites. Freedom and democracy are now within realistic reach in Indonesia, but only if the illegitimate power of the armed and security forces can be broken. The key determining factors in this struggle will be continued protest on the ground and action by the US Congress to maintain and strengthen the current ban on military aid.

Pro-democracy action will have to come from Congress, though, because US President Bill Clinton's administration is now attempting to shore up the politically fading TNI. Unbeknownst to the US public, and to many in Congress, it is looking for ways to aid a military that still pursues a policy of terror against civilians.

Policy of terror

In Aceh, where I visited, the Army and National Police (Polri) are sweeping through rural villages, sometimes killing civilians at a rate of three to six per day.

Some of the units leading this campaign, including the Polri's Gegana and Brimob [mobile brigade] have now been slated for new lethal training from Washington.

In several areas, including West Kalimantan, where I also was, military and police intelligence have been stirring and exacerbating ethnic fighting. Near one town I visited, the Polri were actually handing out a printed hit list of eight individuals who were being hunted by a lynch mob of armed young men who had seized the town.

The police stood back and watched as they burned buses and ran wild. Local residents said that this was a common occurrence in the zone.

These tactics are consistent with the policy enunciated in secret TNI documents recently left behind after the TNI quit East Timor. The documents, many recovered by Yayasan Hak, the Timorese human rights group, include a covert operations manual for TNI's notorious Kopassus red berets.

This classified manual (Buku Petunjuk tentang Sandi Yudha TNI AD, Nomor: 43-B-01; issued June 30, 1999) states that Kopassus personnel are to be prepared in the "tactic and technique" of "terror" and "kidnapping". It is signed and authorized by numerous senior officers including General Johny Lumintang, the long-time US protigi touted by the US State Department as a "moderate", who was recently served with a crimes against humanity lawsuit shortly after attending a gathering at the US National Defense University. (After the suit was filed, US Ambassador Gelbard expressed regret and praised General Lumintang as a "friend" of the US.) The Kopassus manual meshes with other recovered documents which make it clear that violence against civilians is still a core doctrine of TNI.

Yet, despite this, the administration is now trying to move on several fronts to restore material US support for the Indonesian armed forces.

Unbeknownst to the public and to many in Congress, the US administration is now going forward with plans to stage a CARAT (Cooperation Afloat Readiness and Training) military exercise with the TNI this [northern] summer.

CARAT

CARAT is a large-scale exercise, involving the US navy, marines and other forces, that stages simulated amphibious invasions of Indonesian islands.

According to a Pentagon memo ("Response to Congressman Lane Evans et. al", July 15, 1998) previous CARATs have included: "Amphibious landing, patrolling, live fire cross training, parachute training, fast rope, small boat ops, reconnaissance surveillance, raids."

The 1998 CARAT was cancelled after the congressional uproar over JCET (Joint Combined Exchange Training), the program under which the US taught urban warfare and sniper techniques in circumvention of the congressional ban on US military training for Indonesia. But last year, as the Timor terror built toward a climax, the Pentagon went ahead with another CARAT just before the independence vote (CARAT was August 11-25. The vote was on August 30.).

Not only, by this timing, did the US reaffirm faith in TNI at the crucial moment, but it also explicitly prepared Indonesian officers, who immediately after CARAT went straight into East Timor for the final weeks of the terror campaign.

One of these officers, Lieutenant Colonel (later Colonel) Willem, helped coordinate the Indonesian naval forces in CARAT and then went to Dili where he served as a senior official in KOREM military headquarters, the very base from which the Aitarak militias staged their terror raids during late September. I saw this first-hand since I was a prisoner in KOREM and was interrogated by Colonel Willem, who, since his Timor stint, has been promoted to head the personal staff of Admiral Widodo, the new national TNI commander.

If the Pentagon and TNI hold another CARAT this summer, they will not have missed a beat: exercise in August, 1999; move on to destroy East Timor. Then exercise again in summer 2000, as if nothing untoward had happened.

In addition to CARAT, the administration has also approved TNI attendance at a US-Thai exercise, Cobra Gold, that is under way right now (May 9-23). In the recent past, according to the Pentagon's Asia-Pacific Defense Forum (Spring, 1998 issue), Cobra Gold has involved "combined air assault", "combined amphibious assault", infantry insertion, "unconventional warfare", "weapons training, [and] camouflage techniques", simulated "guerrilla" bases, "direct action, special reconnaissance, foreign internal defense and counter-terrorism".

If Congress lets the administration get away with this attempt to shore up the TNI, they then intend to move forward with a multi- phased plan to restore other types of aid.

FBI-trained police

On another bureaucratic track, the US embassy in Jakarta, the CIA and other agencies are already planning new lethal training for the Polri, including their notorious Gegana and Brimob special units. The police were an integral part of the Timor terror. They took the lead in the mass abductions. And they are at the forefront of the sweeps killing civilians in Aceh.

A 1999 US Marine Corps intelligence seminar (the Indonesia Joint Cultural Intelligence Seminar, Wargaming Division, Marine Corps Warfighting Laboratory. Seminar held January 14, 1999) concluded, "The Indonesian Police Force is one of the most disliked/hated organizations in the country -- on a daily basis the Police are the most visible instrument of government oppression". It categorised the Polri as being among the "Groups to Avoid" in Indonesia.

Yet Polri documents indicate that the police have in the recent past received training from the FBI and other US agencies in topics including "explosive incident and counter measures". Now the administration is privately planning to resume police counter- terrorism training with a specific eye to what ambassador Gelbard has called Muslim extremists in Aceh.

Since there is little dispute that Polri kills civilians for political ends -- and since such use of violence is, of course, the definition of terrorism -- the Clinton administration is now, in effect, planning to train terrorists in anti-terrorism. These are lethal skills that up to now have been applied not to defend civilians but rather to abduct and kill them if the military and police do not like their views.

TNI's territorial function needs review: Legislators

Jakarta Post - June 5, 2000

Ridwan M. Sijabat, Jakarta -- Legislators and observers are calling for a complete transformation of the Army's territorial function, which they say has aggravated political and security instability nationwide.

Aberson Marle Sihaloho, an outspoken legislator from the Indonesian Democratic Party of Struggle (PDI Perjuangan), told The Jakarta Post that the long series of violent incidents which had swept the country had a lot to do with the uncompleted state of internal reform in the military, especially the powerful Army.

"Despite the military's withdrawal from day-to-day politics and the bureaucracy, the presence of military commands, districts and soldiers in rural and remote areas remains a serious obstacle to civilian rule," he said. "The riots and social conflicts in many regions have been linked to these military units".

Aberson alleged that there should be a strong suspicion of Army involvement in most of the riots that have broken out since former president Soeharto stepped down on May 21, 1998.

He suspected the Rp 1.4 trillion distributed by former president Soeharto to various military commands on May 5, 1998, may have been misused to create chaos. "So far, the funds have never been accounted for," he added.

Aberson said the Army's territorial function, including the presence of military commands and districts, should be phased out because it was no longer relevant to the reform era and the geopolitical situation.

"To be consistent with the Indonesian Military's defense function, the Navy and the Air Force should stand at the front line to face threats from outside the country because, naturally, threats will come from the sea and air," he said.

Arifin Panigoro, chairman of the PDI Perjuangan faction at the House of Representatives, agreed, saying police should be the ones responsible for maintaining security and order.

"The military is no longer in charge of security at home. It should mainly focus on its defense function. Thus military commands and districts are no longer needed in connection with the defense function," he said.

He also suggested that the Army's lower-ranking infantry soldiers, whose number reach an estimated 270,000, be transferred to the National Police force to strengthen it in its duties.

He also encouraged senior generals who were seen to support the former New Order regime to retire ahead of their mandatory retirement age. "Such a policy was made by the United States government regarding its National Guards after the Vietnam war," he claimed.

Achmad Faqih, secretary of the National Awakening Party (PKB) faction said his faction had proposed military reform to the House leadership. "Our faction has lobbied other factions to make the military's internal reform the House's main agenda," he said.

Meanwhile, military observer Salim Said called on the House to issue a national decision on the military's functions and position in the political system.

"A new law is needed to replace the current ones on the defense system and military doctrine, in order to describe the military's position and its relations with other organizations and state institutions," he said.

Salim said he would agree to a gradual phasing out of the military commands and districts to allow TNI make necessary adjustments. "The presence of military subdistricts in Jakarta and other big cities may be no longer needed, but their presence in rural and remote areas should remain to help police maintain order and security," he said.

Said also said the military -- TNI Headquarters, the Army, Navy and Air Force -- should be audited annually by the Supreme Audit Agency (BPK), and the promotion of middle and high-ranking officers should be dependent on approval from the House and the government.

"The House could then control the TNI through its budgeting and the promotion of officials to strategic positions in the military," he said. Indria Samego, a political observer from the Indonesian Institute of Sciences (LIPI), said it was crucial that the military pulled out from politics and businesses if it was to focus on its main defense function.

"The military's involvement in politics and businesses has indirectly weakened the civilian government," Indria contended. "Changes will be made if the military commands and military districts are phased out and servicemen are barred from running businesses," he said.

Harold Crouch, an Australian Indonesianist, said during an international seminar on the military here recently that all military commands and military districts should be phased out because its territorial function had given the military considerable capacity to intervene in local politics under the guise of maintaining stability.

He said in the past Soeharto used the military's territorial network to manipulate civilian organizations and repress potential opposition.
 
Economy & investment 

Supermarkets packed, car sales up - so where's the problem?

Agence France-Presse - June 11, 2000

Jakarta -- Shoppers pack the supermarkets in the Indonesian capital these days, car and mobile phone sales are jumping, seven new airlines are ready to hit the skies and companies are reporting solid first quarter profits.

Consumer spending, the government says, will be the main engine behind an up to four percent growth of Gross Domestic Product (GDP) this year after a dismal zero growth last year and minus almost 14 percent the year before that. So what's the problem?

And if as the International Monetary Fund (IMF) says, Indonesia is the country farthest from being able to say it has turned the corner in digging itself out of the dragging regional financial crisis, where is the money coming from?

The first thing to note, analysts caution, is that it is only the few well-off -- maybe 20 million people out of the country's 210 million -- who are on what can only be described as a spending spree, at least compared to the austerity of 1998-1999.

The rest, the majority, says National Institute of Sciences'economist Thee Kian Wie, are still subsisting, hurting just as much as they were two years ago.

Henry Yusuf, managing director of Danatama Securities, agreed. "The ones who are spending now are mostly the middle to upper class who profit from interest rates or the exchange rate," Yusuf told AFP. Many of the upper crust have US dollar accounts overseas, and are profiting nicely from the fall in the rupiah, he adds.

"On the other side it's the people exporting who earn US dollars, and that's basically it. For the lower class people, they hardly spend, they just buy things for their daily needs. It's quite tough for them right now," Yusuf said.

"The rich in Indonesia," Wie says, "are still very rich," and demand which had been deferred at the height of the crisis is showing itself now that people are slightly more confident.

"Rather than sitting on their money, they are spending it on consumer durables," he said, flocking in their thousands to places like Jakarta's new French hypermarket, Carrefour. "It's astounding the number of people there," he says, adding that he too estimates the moneyed at some 20 million people.

He rejects the idea that the country's ethnic Chinese, brutally targeted in the 1998 riots, are bringing money back into the country in any significant amounts.

"Why should they?" he asks, referring to the volatile security and political situation in Indonesia which has left almost all potential foreign investors glued to the sidelines, and putting their money elsewhere.

In a country where the banking system is still in tatters though, small businesses are keeping enough working capital to keep their operations running, he says.

In addition, 90 percent of all consumer spending in Indonesia is in cash, Visa International country manager Ellyana Fuad told the Jakarta Post this week -- a fact that residents joke helps the corruption and counterfeiting industries.

Marie Pangestu of the center for Strategic and International Studies, one of the country's leading economists, says there are still "a lot of people with cash." In addition many of them reaped comfortable profits from astronomically high interest rates introduced during the crisis. "As soon as the [October 1999] elections came about and interest rates started coming down, people started spending," she told AFP.

Official figures reflect the rapid pick-up in production of such commodities as cars, motorcycles, paper, cement and television sets, video recorders, mobile telephones and other electronic goods to meet demand despite a banking system still in rubble.

Motorcycle sales are predicted to rise by 39 percent this year to 800,000 units, car sales are expected to follow. Per capita paper consumption has increased to its pre-crisis level of around 16.5 kilograms a year from 5.5 kilograms, according to the Paper Producers Association (APKI).

Cement production is soaring, seven new airlines have registered to start operations, the Ramayana supermarket chain plans six new outlets, and electronics sales have jumped.

But Pangestu says not to be fooled, and that she is worried. "Companies are using excess capacity, they do need working capital, but they are using retained earnings and suppliers' credits," Pangestu said.

In addition, small and medium sized businesses which had very little debt with the banks, are managing. "Growth based on those variables [is good for] only one or two years. Eventually you will get to where the investment restrictions will be felt.

"We are not out of the woods. There is a real worry about complacency setting in -- unless [the government] can push through the reforms, banking and corporate.

"We may be able to get growth, but it is not sustainable," she says pointing to similar earlier patterns of recovery in South Korea and Thailand which were led by a return of consumer spending.

But in their cases, she said, there is "a lot of foreign investment, new investment, including domestic capital, either joint venture partners putting more in shares, and in the case of South Korea mergers and acquisitions."

"That's obviously driving their growth into a more sustainable path ... they have made more progress ... they have more room" than Indonesia, where, she said confidence is "still very low."

Investors to shun mining sector

Reuters - June 9, 2000

Grace Nirang, Jakarta -- Little fresh investment will flow into Indonesia's mining sector this year as companies hug the sidelines due to a host of problems plaguing the industry.

Rampant illegal mining, conflicts with local residents and uncertainty over implementation of autonomy laws in outlying provinces made Indonesia's mining sector attractive only to the brave foreign miner, industry sources and analysts said.

"Existing investors will wait for the implementation of the autonomy laws, while prospective ones will be waiting for better security," Erry Riyana Hardjapamekas, president of state-owned tin producer PT Timah Tbk, told Reuters. "I don't think anyone will dare to make major investments [in the industry] at least until next year."

Such an outlook poses another blow to Indonesia, once regarded as one of the most lucrative mineral destinations in the world. Indeed, the mining sector accounted for 10 percent of gross domestic product in 1999, according to official figures.

Analysts had hoped the mining sector -- which encompasses gold, tin, silver, copper and coal -- would provide fresh impetus to an economy struggling to find its feet after nearly three years of crisis.

The Mines and Energy Ministry has said that at least 24 foreign mining companies, mostly in exploration stages, had already delayed their operations in Indonesia due to uncertainty over security and financial problems.

A ministry official said overall new mining investment was worth $327 million last year. "This year it will be much lower," said the official.

Host of problems hobble miners

With the breakdown of law and order in Indonesia following economic crisis and the downfall of former president Suharto in 1998, illegal mining and tension with disgruntled residents in mining areas has become widespread.

The autonomy law, which takes effect in 2001, will give regional governments more say in managing their own affairs, including mining, partly as a way of easing tensions over who benefits from extracted minerals. The ultimate impact of that law is unclear.

Mines and Energy Minister Susilo Bambang Yudhoyono recently said Indonesia had lost around 30 tonnes of gold ore and four million tonnes of coal last year because of illegal mining.

Rick Ness, president director of gold miner PT Newmont Minahasa Raya, told Reuters that illegal miners had hampered ore extraction and processing and also damaged the environment.

"Big mining companies are usually held to high standards when it comes to waste control. But this is not the case for illegal miners, who operate in the same areas and for whose actions mining companies are often blamed," he said.

Newmont Minahasa Raya, a unit of Denver-based Newmont Mining Corp, has had its share of problems with regional authorities flexing their muscles in Indonesia's new democracy.

In Sulawesi last April a tax row with regional authorities threatened to close the mine until a compromise was found after Newmont agreed to pay $3 million for tax and community services.

Various problems have also affected gold and silver miner PT Kelian Equatorial mining, owned by Rio Tinto, and the giant Freeport gold and copper mine in remote Irian Jaya, majority owned by Freeport-McMoran Copper & Gold Inc.

In May, Kelian Equatorial was forced to temporarily halt production and evacuate workers from its site in East Kalimantan after protesters seeking land compensation blockaded all access roads to the site.

More conflicts predicted

Ness said implementation of the autonomy law could trigger more disputes between local governments and mining firms because the new rules could contradict existing mining contracts.

President Abdurrahman Wahid has pledged to honour all international contracts, but urged foreign firms to renegotiate any deals that resulted from corruption under Suharto's regime.

"As well, it will be difficult for regional authorities to provide the same standards of expertise as the central government," Ness added.

South Sumatra Governor Rosihan Anwar said the autonomy law was not enough to settle problems between miners and locals. He said some conflicts during the transition were to be expected. "Local expectations of the autonomy laws are too high. More demands are likely because locals still feel what they receive is too little," Anwar said.

Royalties hike criticised

In light of these problems, the government's recent move to raise royalties poses another blow for the mining industry. "Foreign investors rely on financing in order to develop or expand projects.

The royalty increases reduce our ability to raise necessary financing because they effectively reduce the level at which a project becomes financially feasible," Ness said.

An official at a foreign bank in Jakarta said problems and uncertainties would make banks reluctant to finance miners. "Investment in the mining sector in Indonesia is now categorised as high-risk. Mining companies will find it more difficult to get loans from banks," the banker said.

Ness of Newmont called on the government to show clear leadership during the period of transformation for the sector. "Foreign investors, particularly those in the mining industry where investments often have a 20- or 30-year lifespan, must have an element of certainty in order to secure financing," he said.

Indonesia government disarray threatens economy

Dow Jones Newswires - June 8, 2000

Grainne McCarthy, Jakarta -- The President's masseur embezzles money from the country's key food agency; the President's talk of capital controls spooks the international community; the President's showdown with the central bank governor sends investors fleeing. You'd think that for Indonesia things couldn't get much worse. Well, you'd be wrong.

President Abdurrahman Wahid -- who left the country last night for another round-the-world tour, this time taking in eight countries -- doesn't seem overly concerned about the disarray that's crippling his seven-month old government. But everybody else seems to have realized that decision-making in Indonesia is in limbo, and Wahid urgently needs to do something about it.

Concerns about Wahid's erratic style are fueling fears that Indonesia's new leadership isn't that different from the autocratic rule of former President Suharto. The criticisms of Wahid -- about allegations of corruption in his inner circle, his weak economic team, his unexplained sacking of cabinet ministers, his moves to place key allies in top positions in state enterprises and institutions, including Bank Indonesia -- echo many of the charges critics made against the former dictator.

But it's also becoming clear that Wahid and his team of economic ministers aren't prepared to take strong and united action to deal with the wide range of serious economic problems the country faces.

The government is way behind on reforming the sprawling state banks. And, in a move that triggered alarm bells, Wahid recently sacked the respected Robby Djohan from the helm of the country's largest bank, replacing him with the president of struggling petrochemical plant Chandra Asri -- a company that's defaulted on loans to state banks.

It's also behind on cracking down on recalcitrant debtors -- if necessary prosecuting some and throwing them in jail -- in appointing new, clean, judges to the courts, and in speeding loan and asset recovery by the Indonesian Bank Restructuring Agency.

Jeopardizing support from IMF, others

The sluggishness is jeopardizing continued support from the International Monetary Fund, which continues to threaten to delay loans if more deadlines for key reforms are missed. Slow reforms and corruption concerns also puts key international support for the 2000 and 2001 budget from the World Bank and other lenders at risk.

The biggest danger is that Wahid's fumbling with the economy will weigh further on the rupiah, put pressure on inflation, and -- as has happened in Indonesia so many times before -- send angry people onto the streets for more rioting and violence.

To be sure, a fragile, consumer spending-led recovery has started here, despite the problems. The economy grew 3.2% in the first quarter and the government expects it to grow 4% over the year as a whole.

But given that the economy only grew 0.2% last year and contracted 14% in 1998, 4% growth isn't much, and certainly isn't enough to really push the country out of the deep hole it has fallen into during the past few years.

Wahid himself isn't the only problem, although his unpredictable leadership style and the sense that he's running the country as a one-man show isn't helping. Coordinating economics minister Kwik Kian Gie is also a major weak link in the economic team's chain.

As coordinating minister, Kwik is charged with implementing the economic program and leading a team of ministers in tackling the country's deep economic woes. But Kwik has made crystal clear in recent weeks that he doesn't believe in the program, or even have confidence in Wahid's leadership.

A long-time critic of government policy before becoming a minister last October, Kwik argues that IMF-mandated policies weren't necessarily the medicine Indonesia needed as it struggled with the world's worst banking crisis in modern times.

But instead of biting his tongue and getting on with the job, Kwik has done exactly the opposite. On a trip to Washington last week, during which he met World Bank Managing Director Sven Sandstrom, IMF First Deputy Managing Director Stanley Fischer and US Treasury Secretary Lawrence Summers, Kwik spoke consistently of the government in the third person, as if he wasn't part of it. "Disastrous," is how one finance official in Jakarta described Kwik's performance in Washington.

No secret Kwik wants to resign

It's no secret that Kwik would like to resign from his post. But so far he's been prevented from doing so by Wahid and Vice- President Megawati Sukarnoputri -- chairman of Kwik's PDI-P party -- who say he can't. The result: Kwik's already mentally stepped down, something which is weighing on international observers' nerves.

"You have an erratic president and a weak coordinating minister," said the finance official. "It's a deadly combination." Indonesians increasingly recognize the crucial crossroads at which the country stands. A group of leading economic and political commentators are set to gather in Bali at the end of June to come up with "urgent priorities" given "the critical state of national affairs." It's not all negative. Wahid has made an excellent stab at reforming the military and cementing civilian leadership of Indonesia. He's respected as a leading democracy advocate and firmly opposes mixing mosque and state, an important view in the world's largest Muslim country. While he could well be attacked at a major meeting of the country's highest legislative body on August 12, Wahid is a consummate political operator and a brilliant puppet-master in the true Indonesian sense. He will most likely survive his August test.

But his main challenge remains the economy. If Wahid wants to seriously tackle its problems, he needs to replace Kwik with someone more committed to leading the economic reform program. He should also sack other ministers that aren't performing, and thus end speculation that he's always on the verge of reshuffling his cabinet. He should then come clean about his own business interests and those of his close associates to silence speculation about corruption.

Most people would agree that Indonesia currently has no alternative to Wahid and most generally believe he is still the best person to lead Indonesia.

But the most prevailing view in Jakarta now is that Wahid and his ministers are suffering from a disease called complacency, an opinion perhaps reinforced by the president's rambling trip abroad. If he wants to build a lasting legacy, Wahid needs to firmly convince the international community -- and more importantly millions of impatient Indonesians -- that he can carry through in dragging the country out of its stagnation.

Steady implementation of program will strengthen rupiah

Agence France-Presse - June 5, 2000

Jakarta -- A steady commitment by the Indonesian government to implement pleged economic reforms will strengthen the ailing rupiah, a top official with the International Monetary Fund said Monday.

"What is needed to strengthen confidence in the rupiah is quite clear -- a steady and feasible implementation of economic programs," visiting IMF managing director Horst Koehler said.

Speaking to journalists at the end of a three-day visit before departing for India, Koehler said the weakness of the rupiah was related mostly to poor reform implementation rather than deficiencies in the foreign exchange system.

His comments followed an assurance by Indonesian President Abdurrahman earlier in the day that the government would not introduce capital controls as a means of strengthening the rupiah.

"Strongly backed economic stability and forceful implementation of further structural reforms will no doubt strengthen the rupiah," Koehler said.

Praising Indonesia's accomplishments in implementing economic reform programs -- demonstrated by the IMF's prediction of a four percent economic growth this year -- Koehler said the country's economic program was "working".

But he quickly pointed out that the four percent projected economic growth alone was "not enough," and that there had to be "more growth in order to reduce poverty and give jobs to the people."

Koehler also said President Abdurrahman Wahid's commitment to "closely monitor" the implementation of the pledged program in his cabinet was "good news particularly for investors."

"Because [that way] they will know that the [government's] direction is clear and it is fully backed by the president and the economic team," he said.

But Koehler warned that he saw "an urgent need" for the Indonesian Banking Restructuring Agency (IBRA) to "accelerate its decision-making" policies. "That means to sell assets, to restructure [state and private] enterprises and banks in order to stimulate investments," he said. "A further delay in the process to sell assets and restructure enterprises would lead to a deterioration of IBRA's assets values," Koehler added.

The IMF is the coordinator of a 46-billion dollar bailout package cobbled together in 1997 along with a reform program to pull Indonesia out of the Asian financial crisis, which started in mid-1997.


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