Aceh

Aceh rebels 'behind spate of pirate attacks'

Straits Times - August 14, 2003

Leslie Lau -- The captain and two crew members of a Malaysian- owned tanker have been kidnapped -- the latest victims in a recent spate of pirate attacks being blamed on Aceh separatist rebels.

The surge in pirate attacks prompted the International Maritime Bureau (IMB) to issue an alert on Tuesday, warning ships in the Malacca Straits to keep close to the Malaysian coastline to avoid pirates operating in the coastal waters of Aceh.

Mr Noel Choong, the Malaysian-based IMB regional director, was quoted by AFP as saying: "We are putting out a red alert to all ships entering the Malacca Straits: Keep clear of Indonesia's Aceh coast and maintain a strict anti-piracy watch."

Since May, nine attacks have taken place in the busy channel that is used by some 50,000 vessels a year.

The latest attack took place on Sunday, when about 10 pirates in military-style uniforms and toting assault rifles shot at the MT Penrider tanker, which was carrying 1,000 tonnes of fuel oil from Singapore to Penang. The raiders abducted the skipper, engineer and assistant engineer -- all Indonesian nationals -- and are demanding US$100,000 in ransom.

Malaysian Marine Police commander Mohamed Muda said yesterday that the pirates pretended to be barter traders as they approached the tanker in two boats. The Penrider, a Labuan- registered vessel, was 22km from Port Klang when the pirates opened fire and demanded that the captain cut the engines.

The ship's owner was contacted and he negotiated the vessel's release with the pirates. But the captain and two crewmen were seized, as were RM10,000 (S$4,600) in cash, a cellphone and some documents. Police officials said the remaining seven crewmen were allowed to head on to Penang in the bullet-riddled tanker with its cargo intact.

Senior Assistant Commissioner (SAC) Mohamed noted that pirates in the area used to be armed only with machetes and that it was uncommon for them to take the crew hostage.

In other recent attacks, pirates also opened fire with automatic weapons on the Dong Yih Taiwanese ship on Saturday, wounding the skipper in the head. That attack took place just off the waters near Aceh.

All ships entering Malaysian waters are now subject to stringent checks, SAC Mohamed said, adding that Malaysian police had asked their Indonesian counterparts to look for the hostages and establish if the pirates were from the Free Aceh Movement.

Industry sources say the surge in attacks could be due to the rebels' need for more funds to acquire weapons in the war-torn province.

The lack of policing and prosecution of those involved in piracy has also contributed to making the waters off Indonesia a high- risk zone for shipping, they added.

TNI signals permanent war against rebels

Green Left Weekly - August 13, 2003

James Balowski, Jakarta -- Delivering her progress report at the annual session of the People's Consultative Assembly on August 1, Indonesia's President Megawati Sukarnoputri said that, despite "occasional mishaps", her government had "put the country back on track". She claimed that after five years of "reform", her administration had achieved economic recovery, "subdued conflicts" across the country and "reduced the threat of separatism".

"Subduing conflicts" and "reducing the threat of separatism" refer to claims by the Indonesian military (TNI) that it is winning the war against the Free Aceh Movement (GAM) in Indonesia's northern-most province of Aceh.

Megawati added that martial law in Aceh would not last long and claimed the war to crush GAM was right, despite reports of many civilian casualties and widespread human rights abuses by the TNI. She did not say when the military operation would end.

For several weeks now, the TNI leadership has been hinting that the so-called integrated operation in Aceh will probably be extended beyond the initial six months of martial law, which was declared on May 19 (the decree allows for an extension).

In one of the clearest statements, Aceh military commander Major-General Endang Suwarya was quoted by the state news agency Antara on July 27 as saying, "What is clear, [is that] the operation to crush Aceh separatist rebels is not limited to six months. As long as those rebels [GAM] still exist, they will have to be rooted out." In her August 1 report, Megawati praised the TNI and those Acehnese who have "worked hand-in-hand" to fight GAM. "Despite their shortages, soldiers and police have done their best to carry out the military and the law enforcement operations", she said. The government was ready to stop the military crackdown and reopen negotiations if GAM laid down its arms, Megawati claimed.

Acehnese legislator Ghazali Abbas, who has been staunchly critical of martial law, slammed the speech, saying it was aimed at maintaining Megawati's popularity ahead of the 2004 presidential election. "This [her speech] was delivered for her political interests on the eve of the presidential election, but it is contradictory to what is actually happening in the field. Let the Acehnese people assess the president's speech", he said. Abbas added that the offensive had claimed many civilian victims.

Unfortunately for Abbas, the legislators were given no opportunity to respond to the president's speech. Chatibul Umam Wiranu and Effendi Choirie, both from the National Awakening Party, said they had tried to interrupt the session to express their views, but failed. "I tried to interrupt, but the microphone is off", Chatibul told the August 2 Jakarta Post.

TNI gains ground Although it is hard to make an objective assessment of the war in Aceh -- since virtually all foreign journalists and observers have been banned from the province and the only source of information is via local journalists "embedded" with TNI troops or the military's media centre -- over the last month the TNI appears to have gained ground against GAM.

The TNI claims that it has killed at least 600 rebels and seized 255 weapons since the operation began on May 19, while more than 1300 rebels have been captured or surrendered. It estimates that GAM has only 1300 armed fighters still active. Before the offensive, GAM was said to have 5000 fighters.

However, it is doubtful that the picture being painted by the government and military is as rosy as is being claimed. With the exception of one or two cases in which TNI-trained militias have "captured" alleged GAM members or their families, far from working "hand-in-hand" with the TNI and police, the Acehnese people are daily being subjected to forced evacuations, harassment, violence, ID checks and looting by troops.

According to a July 23 report by the Brussels-based International Crisis Group (ICG), "virtually everything [the government] is doing now are tactics used before, to disastrous effect. They do not help end separatism; they generate more support for it".

The report was referring to 1989-1998, when Aceh was designated a "special military operations" area. In that period, thousands of people, mostly civilians, died. As a result, popular support for GAM rose dramatically.

"The message coming through clearly is that far from winning the hearts and minds, the government is managing to alienate Acehnese even further", said the ICG report. "The government appears to have no clear objective in this war, no criteria for success, other than control of the territory and body counts, and no exit strategy", it said.

The ICG warned that the TNI's recent efforts to win over the Acehnese seem doomed for failure. "Ultimately, the Indonesian government needs to design a strategy for Aceh that builds on the three pillars cited by [coordinating minister for political affairs] Susilo Bambang Yudhoyono: respect, justice and prosperity", concluded the report.

'Negative impacts'

Central to the TNI's current strategy is to "separate GAM from the people". What this means is that troops enter an area suspected of being a GAM stronghold and forcibly relocate people to dirty, overcrowded and disease-ridden refugee camps, then sweep the area (often preceded by aerial or artillery bombardments) for remaining GAM members.

Not only does this result in massive disruption to people's lives, as they are forced to leave livestock and fields untended for long periods, but many residents return from the camps to find their homes destroyed and their possessions looted by soldiers.

On July 25, TNI chief Endriartono Sutarto apologised to the Acehnese people for the "negative impacts" of the war. Placing Acehnese in makeshift refugee camps "has only prevented [the Acehnese] from continuing their normal life", he admitted to the July 26 Jakarta Post. "Even if the refugees stayed in the camps for three or four days only, they found their homes looted when they moved back to their homes", said Endriartono. Endriartono vowed to prosecute soldiers involved in the looting spree.

According to a report in Singapore's Straits Times on August 2, a team dispatched by Indonesia's national parliament to review the progress of martial law operations returned with reports of human rights violations by soldiers and government officials. According to team members, there are indications that funds meant for housing and feeding refugees may have been used improperly.

The team also said the TNI needs to do more to avoid civilian casualties and fully explain the situations in which non- combatants have been killed.

Ahmad Farhan Hamid, a key member of the team, told the Straits Times: "Some of the people's reports are disturbing. Some legislators believe the government has to change how it operates there if this campaign is to succeed. Without proper treatment of the Aceh people, Indonesia will never truly win this battle against separatism." He explained that Acehnese people, in the refugee camps and in the villages, accuse TNI soldiers and police (especially members of the notorious Brimob police units) of intimidation and extortion. People who use major roads said they were frequently harassed and asked for money at posts staffed by soldiers or police.

Another major complaint is that refugees are not receiving all the supplies destined for them. Aid packages, containing food, medicine and other necessities, that do reach refugee camps are said to be in an unusable state. Some of the medicines are past their expiry dates.

Willian Nessen convicted

In a move designed to remind the international media that Jakarta will not tolerate any reporting of the war in Aceh other than through the TNI-sanctioned channels, the Banda Aceh District Court on August 2 sentenced US freelance journalist William Nessen to one-month-and-10-days' jail. Nessen had already been detained for 40 days. He was released on August 3 and allowed to return to the US. He has been barred from returning to Indonesia for one year.

The charges against Nessen were absurd. Nessen, who had been travelling with GAM rebels in northern Aceh for some six weeks, was charged with violating his journalists' visa by writing for more than one newspaper, failing to obtain a press card, visiting Aceh without permission and not producing appropriate documentation when he surrendered to the authorities on June 24. Nessen's visa did not require him to write for a specific newspaper and the restrictions on journalists visiting Aceh came into force long after he arrived there.

Contrary to Megawati's stated desire to reopen negotiations, GAM negotiators who were involved in previous peace talks brokered by the Henry Dunant Centre and supported by the US, European Union and Japan are also facing ludicrous charges.

In May, five GAM representatives were arrested as they were about to depart for Japan to attend the talks, which were later sabotaged by Jakarta as a pretext to relaunch the war in Aceh. The five are facing charges of terrorism and treason -- charges which carry a maximum penalty of death.

Violence in Bireuen regency continues

Jakarta Post - August 13, 2003

Tertiani ZB Simanjuntak, Lhokseumawe -- The bedug (large drum) outside the small mosque in Ujung Blang village, Gandapura district, Bireuen, pounded incessantly on Tuesday, signaling that the remains of another victim of Indonesia's brutal war in Aceh had been found.

Curious residents soon gathered at a wooden house where two bodies were laid out pending burial.

A woman, Asmaul, 20, was weeping for the death of her mother, Wardani Ibrahim, 48, and sister Nurlina, 25, who were both shot by a group of unidentified people as they were leaving for the market to sell traditional cookies early in the morning. Asmaul will now go to live with her grandmother. Her father passed away in 1996 of an illness.

"Why were they killed? The family had only been selling timpan tepu [traditional food] to survive since the death of Wardani's husband," one of the neighbors said.

The attackers opened fire at Wardani and Nurlina as they were riding a motorcycle on Jl. Ulee Tutu in Tingkeuem Baruonly, near the main road connecting the Aceh capital of Banda Aceh and the neighboring provincial capital of Medan. The mother was shot in the chest, while Nurlila was shot in the head and abdomen from close range.

Gandapura Police chief Second Insp. Ramlis accused the Free Aceh Movement (GAM) rebels of committing the murders. The victims used to sell their timpan tepu to troops in the Kuta Blang area.

"The soldiers often bought food from them, so they may have been taken for cuak [collaborators], or perhaps they were killed because they refused to give the money demanded by GAM," Ramlis said.

He said the same modus operandi was used in the murder of Budiman Chamsyah, a businessman from Gandapura district, on Monday for reportedly refusing to pay protection money demanded by GAM. However, witnesses said one of the two men who shot Budiman wore a red-and-white bandana and had a small red-and-white flag attached to the muzzle of his rifle.

Ramlis refused to comment on this allegation, saying the police were investigating both murder cases.

Later on Tuesday, the Gandapura branch of the Indonesian Red Cross (PMI) unearthed a grave containing the remains of an unidentified man in a remote area surrounded by shrimp ponds in Blang Re. The nearest village, Samuti Krueng, is about two kilometers away from the grave.

The partly decomposed body had been shot in the leg and abdomen. His face, which had been covered by a sarong, was no longer recognizable. Bullet casings were also found inside the grave.

The body was that of a man in his 30s, 1.65 meters in height, light complexion, and wearing a beard and moustache. According to the PMI's Gandapura coordinator, Nurdin, the body may have been in the ground for up six days. It was the fifth grave containing unidentified remains discovered in the district in the last two days.

The graves of four unidentified men were exhumed on Monday in two different locations. All the victims had been shot. No one has so far claimed the bodies.

As of Monday, the state-run Dr. Fauziah Hospital in Bireuen had treated 32 civilian victims, 12 of them suffering from gunshot wounds. The hospital's morgue had also received 37 bodies, most of them civilians. According to morgue attendant, Bahroem, the bodies had been buried in Karang Rejo cemetery in Jeumpa district.

Experts call for an end to Aceh military operation

Jakarta Post - August 13, 2003

M. Taufiqurrahman, Jakarta -- The military offensive to curb the Free Aceh Movement (GAM) has resulted in rampant violations of the Geneva Convention on the protection of civilians in times of war, experts say.

They called on the government on Tuesday to halt the security operation in the country's westernmost province.

Kusnanto Anggoro of the Centre for Strategic and International Studies (CSIS) said on Tuesday that since the government launched the joint operation in Aceh on May 19, it had failed to uphold the Geneva Convention in the protection of war victims.

"Poor intelligence work has resulted in the military mistaking civilians for GAM members," Kusnanto told a seminar on the commemoration of the Geneva Convention here.

Member of the National Commission on Human Rights (Komnas HAM) M.M. Billah concurred, saying that the ongoing military offensive in the resource-rich province had led to gross violations of human rights.

"A team set up by Komnas HAM to probe possible human rights violations in Aceh has collected evidence that extra judicial punishment, mass graves, killing of non-combatants, rape and sexual abuse have indeed taken place during the military operation," he said, adding that all of that constituted a violation of basic humanitarian law.

Kusnanto cited the low number of firearms seized from alleged GAM members compared to the total number of captured GAM members as an example of how the military had wrongly perceived civilians as combatants.

"If the military manages to seize only 200 firearms, but the number of captured GAM members reaches almost 2,000, I suspect that there are many civilians who have been treated as rebels," he said.

He was quick to add that there were a number of civilians and suspected GAM members who had to undergo questioning without the presence of legal counselors, which constituted a violation of Article 3 of Protocol II of the 1977 Geneva Convention.

He also branded the reregistration of civil servants and the reissuing of ID cards for the Acehnese people as a violation of the ban on collective punishment of civilians in the convention.

Kusnanto said after the first three months of the military campaign, it was high time the government decided that the next three months would be the last for the use of military force. "Before the six month period is over, President Megawati Soekarnoputri should have come up with an appropriate exit strategy from the Aceh military operation," he said.

He said that the withdrawal of around 40,000 troops from Aceh would also be very helpful for the government to maintain security in Java and other regions in the country ahead of the coming general elections.

Indonesia is scheduled to hold the legislative elections on April 5, and presidential elections in August 2004.

Officials originally suggested that the offensive could be wound down within six months, but the military had recently indicated a longer timeframe. The martial law administrator Maj. Gen. Endang Suwarya earlier said that "depending on the supporting factors" the military operation might even take years.

The first three months of the military operation has taken its toll in the deaths of 49 military personnel and police, 198 civilians and 481 GAM members. Over 500 school buildings have been torched, leaving about 40,000 students with no place to study. "There are also school buildings which are used as military barracks," he said.

The outspoken member of Komnas HAM said the torching and occupation of school buildings were a violation of the Geneva Convention which stipulates that nonmilitary facilities should not be targets in a combat between two adversaries.

He said a Komnas HAM investigative team would soon leave for Aceh to embark on another probe into the human rights conditions in the troubled province.

Rights body tries to make amends with military

Jakarta Post - August 12, 2003

Tertiani ZB Simanjuntak, Lhokseumawe -- In an apparent attempt to bury the hatchet with the Indonesian Military (TNI), the National Commission on Human Rights (Komnas HAM) has pledged its support to the ongoing conflict in Aceh.

Komnas HAM members Achmad Ali and Taheri Noer met with hundreds of soldiers at the Blang Rancung military post in Syamtalira Aron regency on Sunday to give them a primer on human rights regulations.

"Komnas HAM is not a monster to the TNI and nor is the TNI to us. You [the soldiers] should not think human rights is a nightmare anymore. The emergency law stipulated here gives many exceptions to laws which protect basic rights.

"You are doing a noble job here, where your life is at stake. Human rights violations are natural under such conditions, but the issue is whether there can be legal sanctions given to the perpetrators," Achmad Ali told the soldiers.

Soldiers convicted for crimes such as rape should not question their commanders' policy to bring them to trial, said Achmad Ali, apparently unaware that the 411th Infantry Battalion, which had three members convicted of rape, were in attendance.

Military Operation Commander Maj. Gen. Bambang Dharmono also was in attendance, as well as soldiers of the Aceh marines, and the Army's 143rd Infantry Battalion, the 3rd Marine Battalion and the Mobile Taskforce 3rd Battalion.

One of the marines told The Jakarta Post that although their commander had always given them guidelines on human rights issues, it was the first time they had ever heard it from a "key source". The soldiers asked many questions about whether what they had done was a violation of people's basic rights and whether their own basic rights were protected by the commission.

"The plenary meeting of Komnas HAM, which is the only decision- making institution, has never called for an end to the military operation in Aceh. Just do your job. If you don't shoot or bomb, you are not soldiers, just a joke," said Achmad Ali.

The grudge between the TNI and Komnas HAM started when the latter conducted investigations into possible rights violations by the military and police in East Timor in 1999, the bloodshed in Tanjung Priok, East Jakarta, in 1984, and the shootings of students in 1998 and 1999 in Jakarta.

The latest quarrel occurred when Komnas HAM's monitoring team for war in Aceh, led by M.M. Billah, said it had evidence of mass graves and other rights abuse cases. There was yet a further investigation into the accusation.

In a press conference, Achmad Ali admitted that the team's three-day visit to the province was part of efforts to show them that "the commission is not an enemy of the TNI" and reduce possible rights violations during the military operation.

When asked whether the fence-mending campaign was too late to have an affect, Achmad Ali said it was a follow-up because they had started it at the marine post in Surabaya long before the troops were sent to Aceh.

Bambang Dharmono, who welcomed the team, told reporters that the cooperation with Komnas HAM to give lectures on human rights was evidence of the military's concern of such issues. "We scheduled the team to meet the soldiers on duty in North Aceh and Pidie regencies, because there are the concentration points of troops," he said.

Group says 295 civilians killed in first 60 days of campaign

Agence France Presse - August 12, 2003

Almost 300 civilians were killed in the first two months of the Indonesian military's campaign to crush separatist rebels in Aceh, a rights group in the province said.

The Aceh Referendum Information Centre (SIRA) said in a statement that 235 civilians were killed in the first month after the offensive was launched on May 19 and another 60 in the second month.

The military's latest figures released Sunday show a total of 653 rebels killed since May 19 but do not list civilian casualties. The rebels of the Free Aceh Movement (GAM) say many of those killed are civilians.

The military says more than 1,400 rebels have been arrested or surrendered during the same period while the army and police lost a total of 55 men.

SIRA, which seeks an independence referendum in the province, did not say who it believes killed most of the civilians. "For the TNI [armed forces], the fall of civilian casualites is deemed an unavoidable consequence of a war, no matter how large the civilian casualties," it said.

SIRA said the civilian death toll was calculated based on various reliable field sources but added that it faced difficulties in checking the figure itself. "Therefore, with the support and assistance of all, we are really hoping for a special report [rapporteur] of the UN or from an independent international institution for further investigation," SIRA said.

The head of the centre, Muhammad Nazar, was jailed for five years last month for sedition.

SIRA urged the government and the GAM, which has been fighting for independence since 1976, to protect civilians and resume negotiations based on the peace agreement they signed on December 9.

Jakarta unilaterally pulled out of the peace agreement, imposed martial law and launched the military operation after the breakdown of last-ditch peace talks in Tokyo. It accused GAM of not respecting the pact.

An international thinktank, in a report last month, said the military assault is only alienating Acehnese and fuelling support for GAM. The Brussels-based International Crisis Group also questioned military figures for rebel dead, saying there is no way to verify whether these were really guerrillas.

SIRA said that according to its records, the military has deployed some 50,000 troops backed by tanks, aircraft and warships in the province on Sumatra island. The military has not given recent figures for the size of its troop deployment. In June some 30,000 troops and 10,000 police were deployed.

Female activist on trial for treason in Aceh

Agence France Presse - August 12, 2003

A female activist faces 20 years in jail if found guilty in a treason trial which began in Indonesia's Aceh province, where troops are battling separatist rebels.

Prosecutors charged Cut Nur Asyikin, 48, with treason and "sinister conspiracy" by joining rallies in the provincial capital Banda Aceh in November 1999 and 2000 which called for a referendum on independence from Indonesia.

Chief prosecutor Muhi Buddin said Asyikin, who heads the Srikandi non-government organisation for empowerment of women, had in a November 1999 rally spoken about how Acehnese "must continue fighting by way of referendum." "In her speech, the defendant showed her rejection of the government's effort to solve the conflict peacefully through the special autonomy status," Buddin told the district court.

Buddin, quoting what he said was Asyikin's speech, said the defendant had told Acehnese that they "should fight by way of war" if they cannot hold a referendum.

The military on May 19 this year launched a huge operation to crush guerrillas of the Free Aceh Movement (GAM), who have been fighting for independence since 1976 and who reject Jakarta's granting of special autonomy. Authorities have also announced plans to prosecute numerous civilian activists seen as sympathetic to the rebels' cause. The head of the Aceh Referendum Information Centre, Muhammad Nazar, was jailed for five years in July for sedition.

Asyikin, who owns the Rajawali hotel in Banda Aceh, was arrested there by police on May 20 and has been detained since.

Also on trial are five former GAM peace negotiators, who were arrested shortly after last-ditch peace talks with the Indonesian government broke down in Tokyo. The five had been due to join GAM's team in Tokyo in May but were arrested on their way to the airport. Aceh police freed them as the Tokyo talks began but rearrested them when negotiations broke down and the military offensive was launched.

Judges in the trial of Sofyan Ibrahim Tiba, one of the five, ruled Tuesday that his trial should continue because prosecutors had produced enough evidence.

The military says that 658 guerrillas had been killed since May 19 and some 1,400 others have been arrested or surrendered. Human rights groups said close to 300 civilians had been killed with another five added to the toll on Tuesday.

Labour issues

Analysts warn of higher unemployment rate in 2004

Jakarta Post - August 14, 2003

Jakarta -- Economists and labor analysts warned the nation of a possible higher unemployment rate in 2004, due to the heightened security issue and the upcoming general elections.

Former labor minister Bomer Pasaribu said the unemployment rate would increase by 6.2 percent to 42.5 million in 2004 from 40 million early this year, which would result in serious impacts on the unstable situation in the social, economic and political spheres unless emergency measures were taken.

"The unemployment problem will worsen as 2.5 million new job seekers, mostly high school and university graduates, will join the labor force in 2004, while only a maximum 1.1 million are expected to be absorbed in the labor market," he said yesterday. Workers categorized as "unemployed" are those who work less than 40 hours per week, while "open unemployment" indicates those without jobs.

Bomer said the number of jobless under the open unemployment category would reach more than 15 million nationwide. He warned that the issue was a time bomb that could explode some time soon if no progress is achieved in improving the economic, political and security situations.

Bomer, chairman of the Center for Labor and Development Studies (CLDS) and labor economy lecturer at the Bogor Institute of Agriculture (IPB), said he was pessimistic that Indonesia's economic growth would reach five percent in the 2004 fiscal year, since the government did not seem serious in handling security issues, including terrorist attacks and separatism, to create an environment conducive to investment.

Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said the President was scheduled to present the draft 2004 budget to the House of Representatives on August 15, with an economic growth target of five percent.

Defending his arguments, Bomer pointed out that besides the initiation of the 2003 Year of Investment, no significant progress had been made by the government to cope with the unemployment issue, and that new foreign investments did not really create any job opportunities this year.

"Many foreign investors have made divestments in the banking sector, but this does not create any job opportunities. This means the economic growth targeted to reach four percent this year will mostly rely on consumption, which will contribute less to job creation." Bomer said that based on a recent study conducted by CLDS and the International Labor Organization in Jakarta, an economy mostly dependent on the consumption sector for growth was expected to grow by three percent in 2004 and provide between 900,000 and 1.1 million new jobs.

To help cope with the serious unemployment problem, Bomer said, the government's economic and non-economic policies should be oriented to the creation of jobs. "We need concrete measures and policies to lower risks for foreign investments. All necessary measures should be taken to repair Indonesia's image, which has been tarnished by increasing terrorist attacks and separatism," he said.

Dradjad Wibowo, an economic analyst in Jakarta, and Riasto Widiatmono, an economist from Diponegoro University in Semarang, concurred and said the country would have difficulties in reaching a five percent economic growth in 2004, particularly as the IMF economic recovery program would end in December.

Riasto argued that an economic growth of five percent, even if it was realized, would not automatically create jobs for the 2.5 million people entering the work force next year, because growth was based on the consumption sector.

He said the central bank's efforts at lowering its benchmark interest rate had failed to precipitate a similar decline in credit interest rates at local banks, which would continue to hinder development of the real sector.

Dradjad said many political parties would likely buy votes in the next elections, and while this would improve the people's purchasing power, it would simultaneously cause an increase in the inflation rate.

Minister tells employers, workers settle disputes bilaterally

Jakarta Post - August 12, 2003

M. Taufiqurrahman, Jakarta -- Alleging that the labor dispute settlement committee (P4) was plagued by corruption, Minister of Manpower and Transmigration Jacob Nuwa Wea strongly urged employers and workers to settle their industrial disputes between each other, without going to P4.

Nuwa Wea also said that dispute settlement through the committee was found to be ineffective because P4 took too much time, sometimes years, to solve industrial disputes.

"I suggest that both parties meet to reach a common agreement at the plant level. It is the best way to settle a dispute in industrial relations," he told a seminar on industrial relations here.

The minister warned employers not to ask security authorities to intervene in labor disputes, because they usually made it worse.

Under the current mechanism, the committee for labor dispute settlement at the central and regional levels could take up to six years before any legal decision can be produced. Judges who sit at the committee are also reportedly notorious for extorting employers who are implicated in disputes with their workers.

The government and the House of Representatives are currently deliberating a bill on the settlement of labor disputes that will disband the regional and central committees and replace it with an ad hoc labor court. The bill is to replace Laws No. 12/1964 and No 22/1957 on the settlement of industrial disputes. Under the bill, all labor disputes must be settled within 115 days.

Nuwa Wea also called on the workers not to resort to strikes and demonstrations as a means to achieve their goals. "Leave those methods and embark on dialog to reach a common agreement," he said.

Director of the Jakarta Office of International Labor Organization (ILO) Alan Boulton concurred with the minister, saying that there were more benefits for all involved if disputes could be resolved at the plant level.

"Bipartite workplace cooperation ultimately will benefit the company concerned and the workers themselves," he said, adding that benign work conditions could boost productivity and welfare of the workers.

He said that there were many examples in Indonesia that discussion and negotiation leading to collective labor agreements created better relations, instead of conflict, dispute, factory closure and the inevitable loss of jobs.

In a related development, president director of state-owned social security insurance company PT Jamsostek Achmad Djunaidi took his oath of office for another three-year term with a pledge the he and his team would work hard to continue to improve the company's performance and revamp its structure in efforts to provide better service for workers and improve their social welfare.

Director of operations Djoko Sungkono was also sworn in for the next three years to complete its ongoing reorganization programs to improve the company's performance. Sentot Widharto, chief of Jamsostek's regional office in East Java, Bali and West Nusa Tenggara, was appointed as director of human resources and general affairs to replace Bambang Purwoko while B.M. Tri Lestari, chief of the accounting division was installed as director of planning, development and information to replace Sriyono.

Widjokongko Purpoyo was appointed as director of finance to replace Lukmanul Hakim while Samuel Tobing was appointed as director of investments to replace Andy Alamsyah.

According reliable sources at the office of the minister for state-owned enterprises, Djunaidi's reappointment was a reward for the company's good performance under his leadership over the last three years.

The company's total income increased to Rp 982.6 billion (US$115 million) in 2002, up from Rp 320.6 billion in 2001 and Rp 229 billion in 2000. In 1999, Jamsostek suffered a loss of 77.2 billion. Its assets reached Rp 21.3 trillion in 2002, up from Rp 16.5 trillion in 2001 and Rp 11.4 trillion in 2000.

Rural issues

Farmers protest police intimidation

Jakarta Post - August 14, 2003

Padang -- Dozens of farmers from Kapa village in West Sumatra filed a police report on Wednesday, complaining about alleged intimidation against them by security personnel. The farmers say they were victims of intimidation when asked to move from their ancestral lands.

Zulkifli, one of the protesters, said the farmers asked West Sumatra Police Chief Brig. Gen. Adang Firman to investigate the involvement of his subordinates in the case. "We are afraid because they [police officers] are essentially forcing us to leave our land. They even fired shots in the air to threaten us," he said.

The dispute centers on more than 3,800 hectares of ancestral land in Kapa. Some 2,000 hectares are managed by a oil palm plantation, while the remaining 1,800 hectares are controlled by a group of other farmers who are not opposed to the plan.

The protesting farmers demanded that the authorities allow them to continue to manage some 1,400 hectares. But the request was rejected and some of the group's members sold their plots of land to around 50 police officers.

The protesters would press ahead with their demands, according to Zulkifli.

Drought won't harm rice supply, but will hurt farmers' income

Jakarta Post - August 14, 2003

Evi Mariani, Jakarta -- The current drought will not create a rice supply problem at home, but could potentially send millions of farmers into poverty, experts said.

"There will be no supply problem ... Indonesia can always import more rice," Bayu Krisnamurthi, director of the Center of Development Studies at the Bogor Institute of Agriculture (IPB), told The Jakarta Post on Wednesday. But he said the drought could badly affect the lives of farmers.

Bayu could not yet estimate the decrease in production because of the harsh dry season, nor the impact on farmers' income, but based on press reports saying that around 300,000 hectares (ha) of rice fields had so far been affected, some 1.2 million families could fall into poverty.

His calculation is based on statistics that Indonesian farmers own an average of 0.25 ha of paddy field. Each hectare can produce between 4 tons and 4.5 tons of rice a year.

As the current dry season may extend for a longer period, more fields could be affected, which means more farmers will surely suffer.

The Meteorology and Geophysics Agency (BMG) forecasted that the dry season would extend until November. Separately, Pantjar Simatupang, the head of the Center for Agro Social and Economic Research in Bogor, also downplayed the risk of a rice supply problem.

He said that even during the droughts of the mid-1970s and late 1990s, the country did not suffer a rice scarcity problem.

"The world is rich with food sources [that can be imported]," he said. "Even in the 1970s, when other rice producing countries also suffered drought, we still had enough rice," he said.

He also said that the drought would affect farmers and may lead some of them into starvation if the government did not take necessary measures. "I've read in the news that some people, particularly in remote and poor villages have already been forced to eat only once a day or even to are eating anything that is remotely edible."

The Central Statistics Agency (BPS) reported that Indonesia's unhusked rice production reached 51.37 million tons in 2002, while the average national consumption of rice was estimated to reach 28.03 million tons per year. It is estimated that every 3.16 million tons of unhusked rice equal to 2 million tons of rice, which meant a slight surplus.

A report from The Rice Trader, however, showed that in 2002 Indonesia imported 3.70 million tons of rice.

To help minimize the impact of drought on farmers' lives in the future, Bayu said the government had to change its policies on water resource management, criticizing it for a lack of effort in protecting water catchment areas.

"The poor management makes the country experience extreme situations such as floods in the rainy season and droughts in the dry season," he said. "These droughts and floods will be repeated every year if the fundamental problem -- poor water management -- is not improved," he said.

Separately, the Indonesian Farmers Association (HKTI) called on Wednesday for the government to quickly take action to stop rice importation, as the country's unhusked rice output would be adequate to meet domestic demand this year despite the dry season.

HKTI chairman Siswono Yudhohusodo predicted that the country's unhusked rice output would reach 53 million tons this year, or the equivalent of 32 million tons of rice. "This [output] is enough to meet domestic demand of about 29.1 million tons this year," he said.

Police kill land rights protesters

Green Left Weekly - August 13, 2003

The Indonesian Forum for the Environment-Friends of the Earth Indonesia (WALHI) has called for protests against major banks around the world with investments in PT London Sumatera Indonesia Tbk (Lonsum).

This follows the shooting to death by police on July 21 of four protesters who had occupied land taken for a PT London Sumatera rubber plantation. Another 20 were severely wounded and 25 others were arrested in response to a peaceful action by indigenous people.

Earlier that day, 1500 Kajang indigenous community members, traditional landowners and farmers living in Kajang, Bulukumba Municipality, in Indonesia's South Sulawesi province, arrived at Bonto Mangiring village to reclaim their ancestral land. The village is part of a giant rubber plantation owned by Lonsum, a giant rubber and oil-palm plantation company owned by British company Harrisons & Crosfield, with financial backing from various major international banks.

The farmers, indigenous communities and activists were staged the protest to demand their right to land and other resources that were expropriated by PT London Sumatera in 1980. WALHI stated that the murders were an example of the constant use of violence in Indonesia to protect industry and resolve conflicts in favour of corporate interests.

WALHI, a forum of 500 organisations, has joined with other Indonesian groups to form a coalition in solidarity with the people of Bulukumba. It has called on the company and Indonesian authorities to immediately end all violence against the community and individuals involved in the reoccupation, and to respect their customary rights to land and resources.

The coalition has asked for protest letters and action be directed at investors in PT London Sumatera, which include ABN Amro, Credit Suisse, HSBC and Citibank.

Farmers union fights commercialization of water sources

Jakarta Post - August 13, 2003

Muninggar Sri Saraswati, Jakarta -- A farmers union criticized on Tuesday the water resources bill for allowing private companies to exploit springs, which it said would harm farmers who rely on free groundwater.

The water resources bill, which the House plans to discuss at its next session, would allow private companies to take control of springs for business purposes.

Abdul Muis of the Indonesian Farmers Solidarity Union said licensing private companies to control springs would prevent farmers from having access to groundwater. "If the springs exploited by companies were located in the mountains, how could farmers irrigate their land? Would they have to pay the companies?" he asked during a discussion here on Tuesday.

Several large bottled water companies here are already exploiting springs for their private commercial use. Muis warned of a possible conflict with farmers if the bill failed to provide farmers access to water for agricultural purposes.

Articles 41 of the bill stipulates that farmers must obtain water licenses from the authorities. "Only certain groups will get water concessions. The requirements will leave farmers powerless to ensure their water supply," Muis said.

He also feared the concession requirement would lead to collusion between the authorities and businesspeople, at the expense of farmers. "Farmers will suffer the most," he said, pointing out that most farmers in Indonesia occupy small plots of land that are 0.5 hectares in size on average.

M. Toha, chairman of the Federation of Indonesian Farmers Associations, said the water resources bill focused too much on infrastructure projects, and failed to ensure that farmers received water. "It fails to guarantee the water supply for farmers because it views water just as a commodity," he argued.

A discussion participant from the Bogor Institute of Agriculture said the bill favored businesses. "We must side with the farmers because agriculture is the core of our country's economics. How can our agricultural products beat foreign competitors if they are burdened with unnecessary costs?" he said.

The bill will become an umbrella for water management if passed into law. It also will open the way for the private sector to become more involved in managing water.

The bill is part of a program for water resources restructuring in Indonesia, which is being promoted by the World Bank through its Water Resources Sector Adjustment Loan scheme, worth US$300 million.

Reformasi

Leadership crisis in the era of reformasi: Pram

Kompas - August 12, 2003

Jakarta -- In the era of reformasi a national leadership crisis has developed, including among the younger generation. Therefore the younger generation needs to hold a youth congress which can then give rise to a future leader. This leader must have a spirit of leadership and prestige.

This [proposal] was put forward by novelist Pramoedya Ananta Toer in an open discussion at the anniversary of the Institute for Social and Economic Research, Education and Information (LP3ES) in Jakarta on Monday (11/8).

"What the younger generation must do is get active! Fight all the things that are rotten", explained Pram, Pramoedya's familiar name. Without courage from the younger generation, it will be impossible for there to be any progress [in this country]. Pram [said he was] convinced that among the present younger generation it will be possible to find a suitable candidate as a national leader.

"Because I can no longer trust the present political elite at all. What real achievements have they given the nation and state? All of them just talk", said Pram.

When asked whether a section of the younger generation at the moment tends to be apathetic so that they are frequently dubbed the MTV generation, Pram answered "That is the problem they, the younger generation, which they must solve themselves", said Pram.

Commenting on the leadership of [President] Megawati Sukarnoputri, shaking his head he said, "She is not a leader. Megawati came from the palace and returned to the palace. Meanwhile her father came from jail and returned to jail". [Meaning Megawati lived in the presidential palace with her farther, Indonesia's founding President Sukarno, until he was removed by General Suharto and has now returned to the presidential palace as president. Sukarno, then a leading member of the national liberation movement, was jailed by the Dutch during the colonial period then jailed again after Suharto and the military sized power in 1965]. (b14)

[Translated by James Balowski.]

'War on terrorism'

Indonesian terrorist bombings: fact and fiction

Straits Times - August 15, 2003

Derwin Pereira, Jakarta -- This is fiction. The October 12 Bali bombings and the attack on the JW Marriott Hotel here last week were the work of the CIA.

The spy outfit recruited and trained Indonesians to be terrorists for an organisation called Jemaah Islamiah (JI) that had the seal of approval from President George W. Bush.

The CIA flew in its agents to mastermind two deadly attacks on Indonesia in just 10 months. And terrorist fugitive Riduan Isamuddin, alias Hambali, and the other thugs perpetrating violence in Indonesia today are all on the CIA's payroll.

And what is Washington's grand strategy in all this? To discredit Islam and destabilise Indonesia to let the United States take control of the country.

It all seems far-fetched, but some people here don't think it's fiction.

One is Abu Bakar Bashir, the spiritual leader of the JI terror network. He blames the Americans and their "Zionist conspirators" for secretly plotting his arrest and planning the terrorist strikes.

Another is Dien Syamsuddin, an executive of the Indonesian Ulema Council, the country's highest Islamic body, and a member of the 25-million-strong Muhammadiyah group.

The American-trained Dien and other hardliners associated with him have been at the forefront accusing the US of being behind the Bali and Marriott attacks. They are convinced Washington planned the bombings to prod reluctant countries, including Indonesia, into supporting the war on terrorism.

Mr Dien said: "What is JI? It is an American creation to humiliate Muslims to weaken Indonesia so that they can dominate us." It is no surprise that there is this discourse in Indonesia today.

Shaping the views is a deep-seated antipathy towards the West, and the US in particular. Few of Indonesia's radical groups are likely to change their ideas following the Bali attacks. Underlying such perceptions is a strong dose of Javanese thinking and culture.

History has shown Indonesians are more than willing to accept a grand international conspiracy against them. Ingrained in society here is the concept of kambing hitam, or scapegoat -- someone or something Indonesians can always shift blame to, usually external.

Driving much of this reflexive nationalist and cultural psyche is politics. Some politicians are all too eager to jump on the bandwagon to score points with an increasingly assertive Muslim ground ahead of the 2004 elections.

That is why security czar Susilo Bambang Yudhoyono, who has been one of the most level-headed Indonesian ministers in dealing with terrorism, had to come out openly to brush aside all the conspiracy theories swirling in Jakarta.

"This is the best moment for Indonesia as a nation to collectively express its commitment and responsibility against terrorism," he said on Wednesday. "We must not be defeated by terrorism, it's time to unite to fight it."

Moderate Islamic figures such as Abdurrahman Wahid and Nurcholish Madjid have called on the police not to identify the bombing suspects as JI members until they have sufficient evidence.

But the time lag from denial to accepting that the JI terror network exists is shortening. The local media is the clearest indication of that change. From screaming headlines of a conspiracy against Indonesia, they have swung the other way to acknowledging JI's presence in Indonesia and the threat it poses.

The police are dealing with facts. And there are a number in last week's attack in the capital -- all of which point to JI's involvement.

Fact 1: Indonesian police have already arrested more than 30 JI members for their roles in a string of attacks in the country. Several are now standing trial for last year's Bali bombings.

Fact 2: The suspected bomber in the Marriott explosion was recruited by JI for the attack. Two terrorists in custody now have identified the 28-year-old Asmar Latin Sami, whose severed head was found at the site. Asmar is believed to have graduated from Bashir's religious boarding school in Central Java and had close links with top JI militants, including fugitives Dulmatin, alias Nova, and Malaysian Azahari Bin Husin.

Fact 3: Lending greater credence to JI's involvement in the Marriott attack was similarity with the Bali blasts.

In both attacks, the militants used the same kind of explosives and tried to scrape off the identification numbers on the vehicles used. The Marriott bombers used a mobile phone to set it off -- as in Bali.

All indications so far point to a strike by homegrown Islamic activists, perhaps with links to Osama bin Laden's Al-Qaeda. There is nothing at this stage to link the terror attacks with the CIA. That is a fact.

Police kept in the dark about Java terrorism targets

Sydney Morning Herald - August 15, 2003

Matthew Moore, Jakarta -- Australian Federal Police were given none of the lists of potential bombing targets in Jakarta that Indonesian police say they obtained last month in a raid on a Jemaah Islamiah hideout in Semarang in Central Java.

AFP Commissioner Mick Keelty said that although Australian police were involved in the raid, they were not provided with specific information including the names of seven US oil companies told by Indonesian police their Jakarta offices had been identified in documents found in the Semarang house.

"We were part of the joint raid in Semarang and we know of no documents," Mr Keelty told the Herald yesterday. "We are assuming that that information must have come from somewhere else."

The apparent failure by one or more Indonesian agencies to pass on information comes despite an anti-terrorism memorandum of understanding signed by the two countries last year under which Jakarta and Canberra share sensitive information in their joint efforts to combat terrorism.

Since last week's Marriott Hotel bombing, there have been numerous Indonesian and international media reports in which police have detailed some of more than 50 different targets they say were identified in documents found in the raid.

The head of Indonesian intelligence agency BIN, A.M. Hendropriyono, told SBS television this week that police had identified 51 separate targets.

"We found that, that's what the police report has and among the 51, of course, there are public facilities and something like amusement centres. All the places where the public usually come like malls," he said.

Mr Keelty said the federal police were also unaware of a list of Indonesian politicians reportedly targeted for assassination found in the house. "We have only really picked that up from the press reports," he said, adding that he had also read reports of the seven US oil companies being called into a meeting at the US embassy last month where police told them their names had been marked in one document and appeared on a separate hand-written list.

Many observers believe competition between BIN, police intelligence and military intelligence is a major impediment in Indonesia's efforts to track down terrorists. "This is one of the problems at the moment ... there is a bit of a disconnect," Mr Keelty said.

The Australian ambassador to Indonesia, David Ritchie, said he was not aware that specific information from the Semarang raids had not been passed on to Australia. "I think the information sharing has been good, but it does not mean it can't be improved," he said. "We could certainly work with the Indonesians a lot more to improve information sharing in both directions."

Despite last week's bombing, Mr Keelty said Indonesian police had done a "marvellous job" in disrupting Jemaah Islamiah since the Bali bombings last October, arresting more than 80 suspects and convicting the bomber Amrozi in just 10 months.

However, the police chief admitted the depth of JI support in some sections of the community meant containing the group accused of the Bali and Marriott attacks would take a great deal of time.

"My view is that this will take a generation, it will take 10 to 12 years to get this properly turned around. "There will be milestones on that way, it does not mean the security situation will not improve in that period of time.

"But if you think about the number of people who have been through pesantrens [islamic boarding schools], we don't know what the reaction is going to be to the convictions of the Bali bombers, or the potential conviction of Abu Bakar Bashir ... I think we are in for a long haul to try to settle this down."

Government may revise terror law

Jakarta Post - August 14, 2003

Jakarta -- Amid criticism of poor coordination among security agencies and their failure to prevent the latest bombing in Jakarta, the government is considering revising the 2003 antiterrorism law to give the security agencies more powers to thwart further terrorist attacks.

This is one of three different options that the government is pondering in order to curb terrorism, Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono said here on Wednesday.

"The second option is that the government will improve the implementation of the law, while the third one is the adoption of an internal security law," he told a news conference.

However, the first option -- the revision of Law No. 15/2003 on terrorism -- would be the preferred option for the government as the Indonesian security authorities still lacked the powers needed to tackle terrorist threats, Susilo added.

"Having enacted this law, we now believe that the powers of the security authorities to prevent terrorist attacks are inadequate. Our security agencies need more legal powers than they have been given by the current law so as to allow them to carry out early detection of terrorist threats," he said.

However, analysts and legislators here said that based on the prevailing antiterrorism law, the security authorities and intelligence agencies should have been able to prevent the August 5 bombing of the Marriott Hotel if they had managed to institute good coordination with one another. What they needed was not new legislation or a review of the existing law, but rather coordination, the critics insisted.

Susilo said that what concerned the government most was Article 26 of the antiterrorism law, which states that the security forces cannot arrest terror suspects immediately unless they produce prima facie evidence. Nor are they allowed to detain suspects for more than three days without the approval of the district court. This hampered the government's efforts to take preemptive measures, and impeded the security forces in establishing an early warning system, he added.

However, Susilo would not spell out the details of the revisions he wanted to see, saying only that he would chair a meeting on Thursday with other relevant ministers and senior officials to discuss the planned revisions and the other two available options. "We are expecting that the revision of the law will bring about effective measures to fight terrorism," he said.

Susilo said the government was unlikely to enact a Singapore-or Malaysia-style internal security law to replace the current antiterrorism law, arguing that it this would only stir up strong opposition around the country. "We will not adopt an internal security act (ISA) like Singapore's or Malaysia's. Our situation is different from that of Singapore or Malaysia. The ISA does not provide guarantees for political freedom," he said.

With their ISAs, the Singaporean and Malaysian authorities can arrest persons suspected of threatening stability at any time. They are allowed to detain suspects for up to two years even in the absence of prima facie evidence. However, this leaves the way open for abuses of power, such as the arresting of opposition leaders and prodemocracy activists. Indonesia previously had an antisubversion law that was similar to the ISAs. But, this law was repealed in 1999 after the fall of authoritarian president Soeharto.

Susilo said that compared with the ISAs, the antiterrorism law was very accommodative and guaranteed political freedom. It only targeted terror suspects, not politicians, he added.

He promised that the revision of the law would not reintroduce the antisubversion law by the backdoor, or lead to the adoption of ISA-style provisions. If it were to do so, it could lead to wrongful arrests, he said.

"The revisions will continue to guarantee political freedom. Human rights activists will be free to oversee its implementation." Minister of Justice and Human Rights Yusril Ihza Mahendra echoed Susilo's comments, saying the antiterrorism law was basically adequate although it still needed some revisions. "The problem merely concerns technical issues, namely, we don't have the necessary technology and capabilities to conduct intensive surveillance operations to detect and capture terror suspects," he said.

Human rights and prodemocracy activists have strongly opposed the introduction of an ISA-style law as proposed by Minister of Defense Matori Abdul Djalil, saying it could kill democracy in the country.

Former justice minister Muladi said the adoption of an ISA-style law could stifle the democratization process and violate human rights' principles. "Adopting an ISA would mean reviving the notorious antisubversion law. That is not democratic," he said.

Bali: Would-be martyrs get 'near to God'

Asia Times - August 13, 2003

Richard S. Ehrlich, Jakarta -- Accused Bali bomber Imam Samudra welcomed on Monday prosecution demands for his death, claiming it would bring him "near to God", amid an international debate about whether or not executing terrorists makes them martyrs.

"I'd like to say 'thank you' to the prosecutor team, which has demanded the death sentence. Because in death we live peacefully, and in death we draw near to God," Samudra told a court in Bali.

"If I've made mistakes I'm sorry. If the victims of the bombs were Indonesians and Muslims, I'm sorry," he said. "But if the victims came from countries which are allies of the United States, then I'm pleased," Samudra said at the start of his defense plea during his trial for the October 2002 bombing that killed 202 people, most of them Australians and other foreign tourists.

Newspaper editorials, psychologists and politicians in Indonesia, Australia and the United States, meanwhile, have been debating the value of killing the terrorists convicted in Bali and elsewhere, compared with keeping them in jail for life.

"One way or another, they will die for what they believe," University of Indonesia psychologist Saparinah Sadli told the Jakarta Post. "They have anticipated this from the very beginning, and this explains why Amrozi and other suspects in the Bali blast seem to take the legal process lightly," she said.

The psychologist was referring to Amrozi bin Nurhasyim -- also known as "the smiling bomber" because of his maniacal grin throughout his trial. Amrozi, a 41-year-old mechanic, received a death sentence last Thursday for buying the explosives and vehicle used in the Bali bombing.

"What [confidence] he has displayed during the trial could convince others not to be afraid to follow his path," Saparinah said.

Airlangga University psychiatrist Soetandyo Wingnjosoebroto said, "I can categorize him as a mentally healthy man. I assume he has strongly been indoctrinated by higher authorities in his organization," Soetandyo added.

Washington has said that the Bali bombers belonged to Jemaah Islamiyah, a Southeast Asian Islamic "terrorist" group linked to al-Qaeda. "The court's decision is a clear sign that Indonesia is serious about combating terrorism," US State Department spokeswoman Tara Rigler was quoted as saying after Amrozi's death sentence was announced.

Australia's media echoed that line and said leniency might imply that Bali's court was cowed by the JW Marriott Hotel bombing in Jakarta, which killed 11 people on August 5 -- two days before the judge announced Amrozi's punishment. "It took courage to stare down the implicit threat of the attack on the Marriott Hotel," said The Australian newspaper in an editorial.

The Sydney Morning Herald, however, suggested that "for operational reasons, Amrozi may be more useful to investigators alive, in custody". If Amrozi is executed, it warned, "the fear then must be that the martyr's death he craves will simply rally more zealots to his bloody cause".

The debate over the Bali bombers' fate shows the power and threat that convicted terrorists possess even after they are caught and sentenced -- whether or not they are executed. By imprisoning Amrozi for life, for example, he could spend decades as a mouthpiece expressing terrorists' statements and inspire extremists to seize hostages or commit other acts in demand that he be set free.

Australian Prime Minister John Howard supported Amrozi's execution but met with criticism because Australia does not have capital punishment.

"I know some people disagree with me, some people say that I should be saying, 'Don't execute the man,'" Howard said on Friday. "I'm not going to do that, because I do respect the judicial processes of Indonesia," the prime minister said.

"When you're fighting barbarism and terrorism, I think you need to be careful not to descend to barbaric acts yourself," responded Australian Senator Andrew Bartlett, leader of the Democrat Party. "In my view, the death penalty is a barbaric act that we need to oppose in all circumstances," Bartlett said.

Some of the Bali bombing's British victims were represented by a group that said it would ask Indonesia to lighten Amrozi's punishment to life in prison. On Thursday, when the judge read out the execution sentence against Amrozi, several Australians and other relatives sitting in the public gallery applauded his pending demise. Upon hearing the clapping, however, Amrozi turned to face them, gave a thumbs-up sign, grinned, chuckled and nodded his head as if he was receiving an ovation for his deadly performance.

It was the first death sentence handed down by the court against a key suspect in the Bali blast.

Amrozi's lawyers, meanwhile, filed an appeal against his death sentence that could delay any execution for months or years. "He [Amrozi] has signed a letter authorizing lawyers to make an appeal," lawyer Wirawan Adnan said.

A 14-man firing squad traditionally carries out death sentences in Indonesia, but only one bullet is live and the other 13 are blanks, to lessen the mental and emotional stress on the executioners.

Two of Amrozi's brothers are among more than 30 other men on trial for the Bali assault. They include Samudra, described as an engineer and computer expert, who reportedly learned to become a field commander in Afghanistan.

After returning to Indonesia, Samudra allegedly helped organize Amrozi and others to put together the bomb that destroyed the Sari Club and Paddy's Bar in Kuta Beach, Bali.

"I saw lots of whiteys dancing and lots of whiteys drinking there," Samudra reportedly told police in a confession. "That place ... was a meeting place for US terrorists and their allies," he allegedly confessed.

Two suicide bombers, both named Iqbal, died in twin blasts timed 30 seconds apart. "I was morally responsible for telling [the bombers] to carry out attacks against white people," Samudra told the court on June 11. "Waging war against the United States was my idea, but you should ask Amrozi about the idea of Bali. Amrozi planned it." His trial in Bali, on charges of plotting terrorist acts, started on June 2.

Whether Amrozi or other executed bombers are hailed as martyrs or not, Indonesia still faces future terrorist assaults, authorities said.

"The 17th of August is Indonesia's National Day, and that is a day when we think it is possible there could be a terrorist attack in the central Jakarta area," Australian Foreign Minister Alexander Downer told reporters on August 6.

Why the JI is still alive in Indonesia

Straits Times - August 13, 2003

Derwin Pereira, Jakarta -- The Jemaah Islamiah (JI) terror network continues to survive in Indonesia even after carrying out two of the bloodiest attacks in the country's history.

Though the Megawati administration was amongst the 47 governments worldwide that supported the United Nations' blacklisting of JI, the group is still far from being proscribed in Indonesia. The UN blacklisting, which now applies to 34 outfits with suspected ties to Al-Qaeda, allows UN member nations to act against JI members and entities by freezing their assets, preventing their movement and blocking any attempts to sell or transfer arms.

But political considerations and concerns over shaking up the Muslim ground may be holding Jakarta back -- at least for now. Put simply, the nomenclature JI refers to an Islamic community. Any move to proscribe the group could hurt the sentiments of many Muslims -- about 200 million of whom reside in Indonesia.

Professor Juwono Sudarsono, a respected international relations scholar from the University of Indonesia, said: "The government views it as dubious to name JI as a terrorist outfit because it imposes an a priori stigma on the whole Muslim community in the country. It is saying that almost everyone here is a terrorist." That sentiment echoed after the JW Marriott Hotel bombing and revelations that JI was behind it.

The Indonesia Ulemas Council (MUI), the highest Muslim authority in the country, has been aggressively lobbying the police to stop using the term JI. "Why don't they use another term?" said MUI secretary-general Dien Syamsuddin. "They use the term rogues for officers who commit crimes instead of police or government officials." The recurrent use of the term JI in connection with terrorism would only give a "bad image to Islam", he said.

MUI's response highlights the difficulty the government faces in dealing with JI. The government is caught between a rock and a hard place. If it cracks down on the group, it risks offending the sensitivities of Muslims here.

One senior police officer described the policy being pursued now as a "middle way", where individual JI members are hunted down for particular acts of violence like Bali or Marriott, but not the whole network. This leads to a related point about JI's structure which today is a maze of "amorphous network of cells" and overlapping affiliations with other militant groups in South-east Asia and the Middle East.

"We are not going after an organisation here," said one intelligence official. "It is not so black and white. We are going after individuals here who have been bonded by a common objective of creating an Islamic state. But it does not have an address."

Observers would argue that the Majelis Mujahedin Council (MMI), which JI's spiritual leader Abu Bakar Bashir heads, comes closest to being that organisation. As a public front that Bashir created for JI, it has a hardline ideological platform and is composed of people who hold "a double membership" -- one with MMI and the other with JI.

But the government is all too cautious at this stage and though the ground has shifted against the radicals, it prefers to go slow.

Mr Ansyaad Bai, who heads the Counter Terrorism Cooperation unit, said: "We must uphold the supremacy of the law if we want to categorise JI as a terrorist network. We need enough evidence to prove it is one. Political decisions must be made on evidence of the law."

What law? Jakarta is bereft of tough laws like the Internal Security Act in Singapore and Malaysia to clamp down on JI. And evidence? There is plenty of it now. All of those standing for the Bali bombing trial are JI members. Bashir is the spiritual leader of the outfit. And all fingers are pointing to JI as being responsible for the attack on the Jakarta Marriott last week.

The underlying motivation by the political elite continues to be the fear of "stirring up the pot" and upsetting the Muslim ground ahead of an all-important presidential election next year. Politics, in the end, will decide whether it enters the books here as a terrorist organisation.

Opposition grows to proposed draconian security law

Jakarta Post - August 13, 2003

Jakarta -- Analysts, politicians and top government officials have joined the chorus of opposition on Tuesday to reject the proposed adoption of the draconian Internal Security Act (ISA) as a measure to preempt terrorist attacks.

Kusnanto Anggoro, a political analyst with the Centre for Strategic and International Studies (CSIS), said the adoption of a draconian Singaporean- or Malaysian-style ISA was not the right way to wipe out terrorism in the country. "I think the problem is not whether we have an ISA or not, but the fact that we don't have a comprehensive counterterrorism policy," he said on the sidelines of a seminar on human rights protection.

He cited the lack of coordination among state agencies as constituting the main shortcoming in the fight against terrorism. "Strengthening the cooperation between the Indonesian Military and the National Police is more important than the enactment of an ISA," he said.

Analyst Ichlasul Amal from state-run Gadjah Mada University in Yogyakarta concurred with Kusnanto, saying the enactment of an ISA would not help much in the fight against terrorism. "There is no guarantee that the adoption of an ISA will eliminate the terror threat," he said.

He expressed his deep concern that the adoption of an ISA would instead lead to human rights violations. The best possible way to anticipate and prevent terrorist attacks was improved intelligence and the drawing up of policies that would deter the emergence of militant groups, he said. "Militant and extreme groups should be given a greater say in the country's political system," he said.

Last week, Minister of Defense Matori Abdul Djalil floated the idea to adopt an ISA to combat the intensifying terror attacks, following the devastating bombing at the JW Marriott Hotel in Jakarta, which killed at least 12 people and injured 147 others.

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono and Indonesian Military (TNI) chief Gen. Endriartono Sutarto lent their support to the controversial proposal.

Chairman Roy B.B. Janis of the Indonesian Democratic Party of Struggle (PDI Perjuangan) faction at the House of Representatives underlined that there was no need to produce another antiterrorism regulation. "We don't need a new regulation; optimize the implementation of the existing law," he said after a party meeting here.

He also cited the lack of coordination among security agencies as one of the major factors that have contributed to the increase in terrorist attacks. "What they need to do is to beef up coordination and rigidly enforce the Antiterrorism Law, which we believe is enough to facilitate preventive measures against terrorism," Roy said.

Although the government has not yet announced its official stance on the issue, Vice President Hamzah Haz shared Roy's view, saying that it would be better for the government to maximize the implementation of the existing regulation and mend its shortcomings.

"If there are still weaknesses, then we can think about other options, such as the adoption of an ISA," Hamzah told reporters. He said the option to adopt an ISA should be studied thoroughly, as the drafting of a new law might not immediately solve the problem.

Minister of Justice and Human Rights Yusril Ihza Mahendra also expressed his personal objection to the idea, saying that enacting the draconian law could mean that the government was going too far. "I suggest that the government should, if needed, 'improve' the Antiterrorism Law instead of adopting an ISA. As far as I know, Minister Susilo was the champion of the idea in the recent informal talks among government officials," he said.

Yusril did not spell out what he meant by improving the Antiterrorism Law. However, he admitted that an ISA was indeed too much and, if enacted, could spark further controversies among the people.

The Cabinet is expected to hold a meeting on Thursday to discuss the issue, after which it will make public the government's official stance on the much-criticized ISA.

Jakarta says likely to strengthen anti-terror law

Reuters - August 13, 2003

Jerry Norton, Jakarta -- Indonesia said on Wednesday it would probably strengthen anti-terrorism regulations to prevent attacks such as last week's bomb blast at a Jakarta hotel, as the US ambassador warned more attempts at attacks were likely.

Chief security minister Susilo Bambang Yudhoyono told reporters the cabinet would debate the issue on Thursday, but added the world's most populous Muslim nation would not copy draconian security laws used by its neighbours.

Anti-terrorism regulations were introduced in the wake of last October's Bali bombings that killed 202 people, mostly foreigners, but are not as far reaching as laws used in Singapore and Malaysia.

Authorities have blamed the Bali and hotel bombings as well as others over the past year on militant Muslims linked to the regional Jemaah Islamiah group and Osama bin Laden's al Qaeda.

"The main idea of the government is to revise the current law. Particularly, we will study whether the current regulation is accommodating enough or not," Yudhoyono told reporters.

However, the government has "no thought" to "plagiarise the ISA [internal security acts] of Singapore and Malaysia". "The government is not as stupid as that, because our conditions are different, the substance is different," he said.

There have been calls by some officials for Indonesia to follow the Singapore and Malaysian examples of draconian internal security laws since the August 5 bombing at the JW Marriott Hotel in Jakarta, which killed 12 people and wounded up to 150.

US warning

But civil rights groups and some legislators have responded angrily to suggestions the government might seek to revive laws similar to those used by former autocrat Suharto during his 32 years of iron rule that ended in 1998.

US envoy to Jakarta Ralph Boyce said he had warned Americans to expect more attempts at terror attacks. In remarks to reporters who asked him about a meeting of US citizens in the heavily guarded embassy complex earlier, Boyce said a theme of his comments was that "we believe it likely there will be further attempts" by militants at such attacks.

He said he also suggested to those at the gathering that if they left the meeting more concerned or even more frightened than when they came they would have got the message. The meeting itself was off the record to the media.

Washington has already issued several warnings, most recently on August 8, of terrorist threats in Indonesia, and said places where Americans and other foreigners gather or reside are potential targets.

While all but one of those who died in the August 5 Marriott attack were Indonesians, the hotel was viewed as a Western symbol, and had been used by the US embassy for various events.

Australia issued a warning on Wednesday for its citizens to avoid all international hotels in Jakarta after new intelligence found the capital could be under threat of further attacks.

"This advice is based on new information, which has led to an assessment that any international hotel in Jakarta could well be an attractive target," Foreign Minister Alexander Downer told parliament.

[With additional reporting by Telly Nathalia in Jakarta and Michelle Nichols in Canberra]

Suicide brigade primed to strike

Sydney Morning Herald - August 12, 2003

Matthew Moore and Karuni Rompies, Jakarta -- The terrorist suspected of blowing up Jakarta's Marriott Hotel was a member of a new suicide brigade of up to 15 bombers who are preparing more attacks, Indonesian police have warned.

Asmar Latin Sani, whose head was found on the fifth floor of the shattered hotel, was a member of Laskar Khos, an Arabic phrase meaning Special Force, whose members were prepared to die in their attacks, a police source told the Herald. The group was formed inside Jemaah Islamiah, the organisation accused of masterminding the Marriott and Bali atrocities.

The revelations came as new information emerged that the Jakarta offices of United States oil companies were on a list of JI targets.

A separate police source told Tempo magazine that a man named Mustafa, one of five JI members arrested in Jakarta in mid-July, had confessed to being the commander of Laskar Khos. He told police the group had between 10 and 15 members skilled in bomb- making who were preparing to carry out suicide attacks.

The Herald source said that besides Asmar, one Laskar Khos member named Ichwanudin had shot himself when police tried to arrest him during raids on JI hideouts in Semarang and Jakarta last month.

Sidney Jones, a JI expert and director of the Jakarta branch of the International Crisis Group, says Laskar Khos exists and is "an elite operations unit".

Ms Jones was aware of a separate suicide brigade operating within JI, but had not heard that Laskar Khos was this group.

Although police seized about a tonne of explosives and detonators, along with weapons and thousands of rounds of ammunition, in the Semarang raid, JI members had already sent two shipments of explosives to Jakarta where they could be used in bombs at any time. Mustafa confessed that he had sent weapons and ammunition to Jakarta, but not explosives.

The United States oil company offices were named in documents seized by police in the Semarang raids. The Los Angeles Times reported that representatives of seven companies -- Halliburton, Exxon-Mobil, Unocal, Caltex Indonesia, Conoco Phillips, Union Texas and Premier Oil -- had attended a meeting at the US embassy before the Marriott bombing where Indonesian police had warned they were on the list.

Company representatives confirmed the meeting yesterday but declined to discuss what new security measures had been taken. Police had also reportedly found a hand-drawn map showing the location of Halliburton's office in south Jakarta. A spokesman for the Australian embassy in Jakarta said he was unaware of any Australian companies on lists found in JI hideouts.

One of the documents seized, says Tempo, was a 20-page book with addresses and sketches of possible targets, including churches in Semarang and Jakarta, malls, and the BCA bank. Four politicians from PDIP, the party of President Megawati Soekarnoputri, were named on an assassination list that also contained their home addresses and sketches of their homes.

Mayhem and moderates in Indonesia

Asia Times - August 12, 2003

Jakarta -- If the forces of peace are winning over the forces of violence in the "war on terror", it is far from obvious in Indonesia.

Less than a week after a car bomb allegedly set off by a suicide bomber (a rarity in the Southeast Asian brand of Islamist terror) killed at least 11 people and injured scores in and around the US-owned JW Marriott Hotel in the Indonesian capital, the alleged leader of the region's most feared Islamist organization delivered a chilling message to his followers from his Jakarta prison cell. And a few days before that, Amrozi bin Nurhasyim, sentenced to the firing squad for his role in last October's terrorist bombings in Bali, accepted the verdict with a smile and a thumbs-up, declaring: "If I die there will be hundred more Amrozis. You can't stop us. It will never end."

On Sunday, Abu Bakar Ba'asyir, a Muslim extremist leader allegedly linked to al-Qaeda and on trial for treason and deadly church bombings, told his followers they must fight to impose Islamic laws dating back 1,300 years and not worry about being called "terrorists".

"I say do not be afraid of being labeled as trying to overthrow [the government] or as terrorists when you are carrying out Islamic Sharia [law] in full," Abu Bakar Ba'asyir said in a speech read out to 3,000 followers at a meeting of the Mujahiden Council of Indonesia (MMI) in Solo, Central Java. Ba'asyir's base is in Solo, where he headed an Islamic school allegedly attended by some of the Bali bombers.

"The Indonesian government must not discredit Muslims wanting to perform their religious duties and should not arrest clerics, religious leaders or religious teachers because that will anger God," Ba'asyir was quoted as warning in a speech sent from his Jakarta prison.

Ba'asyir's speech was read out to stern-faced followers who endorsed it by shouting, "Allahu Akbar" (God is great), including men dressed in camouflage uniforms with their heads wrapped in checkered scarves to conceal their faces. "Allahu Akbar" was also the defiant cry of Amrozi last Thursday, the day he was condemned to death.

The fiery words of Amrozi and Ba'asyir are in stark contrast to those of the moderates who still predominate in the Muslim regions of Southeast Asia, including Indonesia, the world's most populous Muslim country.

"Islam is a religion that teaches peace, charity, love and forgiveness," I Made Karna, the chief judge, said during the sentencing of Amrozi. "The action of the defendant can be classified as cruel and inhuman." His sentiments were echoed by another judge, Lilik Mulyadi, who said, "Islam never teaches violence, murder or any other crimes."

Ba'asyir begged to differ. Hours before last Tuesday's bombing of the Marriott, the white-bearded cleric testified in a Jakarta court that Sharia law could justify several church bombings scattered across Indonesia on Christmas Eve 2000, which killed 19 people.

"If those examples had reasons which were not based on Sharia law, it is obviously wrong. But if there is a Sharia reason -- then from the religious point of view it is right, but not from the national law's point of view," Ba'asyir told the court.

Ba'asyir's followers at the MMI conference met to demand imposition of Sharia law throughout Indonesia, based on the Muslim holy book the Koran, written more than 1,300 years ago. Sharia law metes out severe punishments, including amputation of a hand for theft, and the stoning of death for adultery and other crimes.

Sharia law has never been popular in Indonesia. The organizers of Sunday's rally backed candidates in the last national election, but they failed to win any seats in parliament. However, some commentators have remarked that ordinary Indonesians, increasingly fed up with their secular government's failure to deal with the corruption and incompetence that have denied them justice and economic well-being, have become more sympathetic to reactionary religious ideas such as Sharia. Whether or not that is so, those who argue that frustration with injustice and bad government breeds violence and terror can find plenty of evidence not only in Indonesia but in other Muslim pockets in Southeast Asia, notably the southern Philippines.

Ba'asyir has been accused of being a leader of the terrorist group Jemaah Islamiyah (JI), though he has claimed that the US Central Intelligence Agency invented both al-Qaeda and JI in order to persecute Muslims throughout the world. Notwithstanding that claim, Jemaah Islamiyah is believed to have begun in the mid-1980s fighting to create an Islamic "caliphate" in Southeast Asia -- which would unite Muslim-majority regions of the southern Philippines, southern Thailand, Malaysia, Singapore and Indonesia -- where Sharia law would be imposed.

JI was blamed for last October's bombing on Bali that killed 202 people and for last week's Marriott bombing in Jakarta. Ba'asyir was arrested several days after the October 12 Bali bombing and accused of involvement in the Christmas assaults on the churches, which he denied. He was also accused of teaching and preaching with the alleged commander of the Bali bomb plot, Mukhlas, also known as Ali Ghufron, who is currently facing trial in Bali.

Ba'asyir was also alleged to have known Amrozi, who was convicted on Thursday for buying the van and explosives used in the Bali bombing.

The most wanted fugitive in Asia, suspected JI leader Hambali, whose real name is Riduan Isamuddin, reportedly attended Ba'asyir's Islamic sermons, as did alleged Bali bomber Imam Samudra. Ba'asyir and Hambali are suspected of being the masterminds behind JI. Hambali was also suspected of orchestrating a meeting of al-Qaeda members in January 2000 in Malaysia with two men who hijacked planes in the September 11, 2001, attacks on the United States that killed about 3,000 people.

"I affirm that this group [Jemaah Islamiyah] is behind the Marriott bombing, based on intelligence reports following the arrest [in July] of nine suspects who are also JI members," Indonesian Defense Minister Matori Abdul Djalil told reporters on Friday. "There are many more Jemaah Islamiyah members on the loose in Indonesia. Because of this, I am sure that JI is behind all of this."

The fugitives possess deadly skills, including bomb-making, he added. "Each one of them has special abilities received from training in Afghanistan and Pakistan," Matori said.

Investigators are looking for evidence linking the Bali bombing and the Marriott Hotel attack, based on possible similarities in the mixture of explosives, detonation by mobile phones and the scraping off of the vehicles' identification numbers.

Police identified Asmar Latin Sani, 28, from Sumatra -- where the Jakarta government is battling armed separatists in the state of Aceh -- as the driver of the Toyota minivan that exploded at the Marriott Hotel, after finding his scarred and blistered severed head after it had been hurled by the blast on to the hotel's fifth floor. Asmar has not been linked to the Aceh conflict.

Within hours of the Amrozi verdict, Indonesia's moderate clerics weighed in with their views in support of the judicial process that condemned him to death. They included Ahmad Syafi Maarif, who heads a 20-million-strong body of moderate Muslims in Indonesia, including clerics and religious scholars, called the Muhammadiyah.

Yet, as the Jakarta Post noted in an editorial on Friday, prevailing over the small but effective network of Islamic extremists will not be easy. The English-language daily viewed last Tuesday's car-bomb attack at the Marriott as a stark warning by Muslim militants that they will not let moderates win.

"Given the timing, and the similarities of means and methods employed in the Bali and [Jakarta] blasts, it is difficult not to read the latter as an ominous message to the government of President Megawati Sukarnoputri and to the panel of judges" in the Amrozi case, the editorial said.

Nevertheless, the moderates refuse to be silenced. After the bomb attack, Indonesia's largest religious organization, the 30- million-strong Nahdlatul Ulama, called on the public to avoid provocation and said the bombing had nothing to do with Islam.

Muslim moderates, however, will have to work hard to ensure that their views continue to attract the much more substantial numbers they currently draw. As the Indonesian newspaper Koran Tempo commented in an editorial, "Amrozi's thumbs-up drives us to reply that we will never run out of militants ready to become martyrs."

Government, legislators differ on draconian law

Jakarta Post - August 12, 2003

Kurniawan Hari and Fabiola Desy Unidjaja, Jakarta -- Following last week's Marriott bombing, the government is mulling the adoption of a draconian law to preempt terrorist strikes, but House of Representatives' leaders appear to be having none of it.

At the beginning, the public and the media paid little attention when Minister of Defense Matori Abdul Djalil floated the idea last week of adopting a draconian Singapore or Malaysian-style Internal Security Act (ISA).

But on Monday, Matori was joined by Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono and Indonesian Military (TNI) chief Gen. Endriartono Sutarto, who all lent support to the controversial proposal.

Interestingly, they both voiced their open support after a meeting with President Megawati Soekarnoputri, saying that the existing antiterrorist law was not strong enough to stop a terrorist attack from happening.

"The law says that judges can use intelligence reports to legalize the arrest of a suspect. But that is not enough. We are in a very weak position when it comes to stopping things from happening," Susilo said.

The top security minister said that he would discuss overall antiterrorism measures, including the proposal for the adoption of an ISA-like law, during a meeting at his office this Thursday.

Endriartono supported the possible adoption of an ISA-like law, saying that it would accommodate the needs of the country in taking preemptive measures against possible terrorist attacks.

The proposal was floated following last week's terror attack on the Marriott Hotel in Jakarta, which killed 11 people and injured 148 others. The attack occurred less than one year after major blasts in Bali killed more than 200 people.

The government's proposal, however, has sparked protests from rights activists as well as a number of House leaders and legislators. Their concerns especially center on the fact that the ISA in Singapore and Malaysia gives too much power to security officials, including the power to detain anyone suspected of planning a terror attack for two years without trial.

Indonesia used to have a similar draconian law, the subversion law, which was scrapped in 1999 following the downfall of the authoritarian regime of Soeharto. Soeharto used the subversion law to silence hundreds of his political opponents by sending them to prison without trial.

Rights activists like Hendardi and Munir slammed the current government's desire to adopt another draconian law, saying that the move was aimed at deflecting attention from the government's inability to counter terror attacks. They both expressed concerns that the adoption of such a draconian law would lead to excessive human rights violations.

They suggested that instead of adopting a draconian law, the government should improve the work of its intelligence agencies and use the existing laws, including the Criminal Code, to preempt terror attacks.

House of Representatives' Speaker Akbar Tandjung and chairman of the House defense and security commission, Ibrahim Ambong, joined the chorus rejecting the government's proposal. They contended that the adoption of an ISA-like law would only bring the country back to the dark days of authoritarianism.

"The idea of adopting an ISA would first need a comprehensive assessment because it will spark protests," Akbar told the press after a meeting at his office here. He added that the existing antiterrorism law was more than enough for the security forces to combat terrorism.

Ambong agreed and said that instead of drafting a new law, the country should evaluate the implementation of the antiterrorism law, Law No. 15/2000, by the police.

Both Akbar and Ambong are from the Golkar Party, the second largest in the House after the Indonesian Democratic Party of Struggle (PDI Perjuangan), which is led by President Megawati.

Some legislators from the PDI Perjuangan have, however, apparently given support to the government's controversial proposal. Legislator RK Sembiring Meliala is one of them. He said the country needed a new, tougher law to preempt terror attacks. "I think the new law must give officials the power to launch preemptive measures," Sembiring told The Jakarta Post.

Regional/communal conflicts

Central government set to revise regional autonomy law

Jakarta Post - August 14, 2003

Fabiola Desy Unidjaja, Jakarta -- The central government is set to revise Law No. 22/1999 on regional administration, known also as the regional autonomy law, Minister of Home Affairs Hari Sabarno said, citing its ineffective implementation over the past three years.

The minister said on Wednesday that the revision would focus on articles related to the electoral system for local chief executives, relations between the central government and local administrations, territorial boundaries, and the financial administration of regions.

"We need to revise seven articles of the law that regulate the election of local chief executives as we intend to apply direct elections in the regions," Hari Sabarno said after meeting President Megawati Soekarnoputri here on Wednesday.

He said that as the country had adopted the direct presidential election system, the central government had to amend articles in the regional autonomy law that regulated the election of local administration chief executives.

Law No. 22/1999 stipulates that local administration heads are to be democratically elected by members of the local legislature.

Another article that would be revised concerns relations between the central and regional governments, which have become mired in disputes since the implementation of the law in 2000.

"We have to rearrange the relations between Jakarta and the regions as we have seen a lot of trouble over the past three years of implementation," the minister said.

Local autonomy was introduced in January 2000 during the tenure of former president Abdurrahman Wahid in a bid to ensure equitable distribution of the country's wealth and to preempt demands for independence from a number of areas.

The law was supported by Law No. 25/1999 on financial balance between the center and the regions, which provides for larger financial allocations to the regions.

Megawati has always been among the staunchest critics of the policy, saying that it given excessive power to the regions and threatened the integrity of the country.

Jakarta has received a lot of complaints, especially from foreign investors, saying that the regional autonomy policy was confusing and gave rise to too many local regulations that placed additional burdens on their companies.

Citing these problems, the President ordered the Ministry of Home Affairs to revise the law despite opposition from the regions.

The Association of Indonesian Regency Administrations (Apkasi) has criticized the decision, saying that it was aimed at reintroducing excessive centralization in the country.

Hari said the revised law would be submitted to the House of Representative as soon as possible as it was slated to be implemented in 2004.

"We hope to implement the revised law by 2004. The revision will be discussed as soon as possible with the House," the minister said.

Human rights/law

Megawati signs constitutional court bill into law

Jakarta Post - August 14, 2003

Jakarta -- President Megawati Soekarnoputri endorsed the Constitutional Court Law on Wednesday, to enable the establishment of the court before August 17 as stipulated by the amended 1945 Constitution.

Minister of Justice and Human Rights Yusril Ihza Mahendra said after meeting the President that the law came into force immediately after the signing.

The House of Representatives endorsed the bill on August 6, while it was officially in recess, as both the legislative body and the government were racing against time. Both the government and the House had come under criticism for their snail's pace in deliberating the bill.

"With the endorsement, we can continue with the selection of the justices, so we can appoint them as soon as possible," Yusril said. The court will consist of nine judges with the President, the House and the Supreme Court each appointing three. As of Wednesday, only three judges had been appointed to the court, after Chief Justice Bagir Manan named justice Laica Marzuki, chief of Surabaya administrative court Sudarsono and chief of Bengkulu high court Muarar Siahaan to the Constitutional Court bench.

A Presidential Palace official said Megawati was slated to swear in the nine judges on August 15 after delivering her State of the Nation address.

Yusril said the government would give the public until noon on Thursday to scrutinize its candidate justices. "Should there be any objections, we will nominate others," he said. The House had also invited the public to submit their input on its candidates, but only three serious respondents voiced their views.

The National Consortium for Legal Reform (KRHN) said on Wednesday it could not find any quality candidates to sit on the Constitutional Court, therefore it opted not to comment on any of the nominees picked by the government and the House.

The KRHN and other non-governmental organizations (NGOs) would therefore only monitor the selection process and try to ensure a fair process, KRHN chairman Firmansyah Arifin said on the sidelines of the House's selection process.

"It [the candidates] had become a hot subject of debate among NGOs, but then we agreed to focus on the selection process," he said.

The government named seven candidates yesterday, but ended with six with the withdrawal of Hamid Awaluddin the same day.

While appreciating the honor, Hamid said he preferred to concentrate on his current duties as a member of the General Elections Commission (KPU), saying the House would be burdened with another fit and proper test to select his successor if he was appointed to the Constitutional Court.

Also yesterday, House Commission II for law and home affairs began its two-day fit and proper test for its 13 candidates.

Members of the 63-strong commission examined seven candidates on their understanding of the responsibilities of the Constitutional Court and its justices: former legislator Achmad Rustandi, legislator Ali Hardi Kiaidemak, former Supreme Court justice Benjamin Mangkoedilaga, lecturer Dahlan Thaib, former Supreme Court justice Edith Nababan, lecturer Eko Sugitario and legislator Harun Kamil.

Sayuti Rahawarin of the Daulatul Ummah Party (PDU) faction asked the candidates whether judicial review into laws would mean a total revision of those laws or simply the specific articles.

Tahir Saimima of the United Development Party (PPP) specifically questioned Benyamin's capabilities if appointed, given that he is nearing retirement age.

The new law stipulates that serving justices must not be more than 67 years of age, while Benyamin is 66 years old, as is Edith Nababan.

After the fit and proper test for the remaining candidates finishes on Thursday, the commission is slated to announce its selection.

Focus on Jakarta

Soeharto puts the boot in for Monas 'Walk of Fame'

Jakarta Post - August 15, 2003

Bambang Nurbianto, Jakarta -- Tight security is still in place at former president Soeharto's residence on Jl. Cendana 8, Central Jakarta, as was observed upon the arrival of Jakarta Governor Sutiyoso on Thursday.

Even though five-star Army general (ret) Soeharto was ousted from office, he still retains some clout, as he apparently barred his door to some city administration officials and made them wait outside. Sutiyoso, himself a former Jakarta Military Commander, paid a visit to Soeharto to request the former strongman's footprints for the country's version of the Walk of Fame in Hollywood. The as yet unnamed national walk of fame will run along Jl. Medan Merdeka Utara outside the National Monument (Monas) park and facing Merdeka Palace.

Sutiyoso was reluctant to say much about his meeting with Soeharto, only that his intention was to get Soeharto's footprints.

He also said very little about Soeharto's health, which has become a public curiosity, as the legal process against him in 2000 for embezzling billions of dollars from the state's coffers was halted for health reasons. The panel of judges considered him unfit to stand a trial.

"He is old, but he looks very fresh," was Sutiyoso's response when asked about Soeharto's condition, and mentioned that he had difficulties speaking.

Sutiyoso said he met the former president in a special room for guests, accompanied only by two workers who took the imprint of Soeharto's feet. Soeharto was accompanied by his eldest daughter Siti Hardiyanti Rukmana, former minister of justice Ismail Saleh and former state secretary Saadilah Mursjid.

Soeharto's footprints will be placed next to the footprints of President Megawati Soekarnoputri and former presidents Abdurrahman "Gus Dur" Wahid and B.J. Habibie. Founding president Sukarno's footprints will also be immortalized in concrete.

On the opposite side of Monas park, along Jl. Medan Merdeka Selatan, facing the City Hall, Sutiyoso's footprints and those of former governors of the capital will also be line the pavement. Megawati's and Sutiyoso's footprints were taken when they officiated the Green Jakarta program at Monas park on June 5.

The walk of fame is expected to be completed before the country's Independence Day on August 17. However, since the production process will take around a month, it is unlikely the project will be finished on time.

The footprints of other distinguished figures of the city and the country are also to be included in the walk. A special team has been set up by the City Park Agency to decide who will receive the honor.

Soeharto to have his footprints on Monas 'Walk of Fame'

Jakarta Post - August 14, 2003

Bambang Nurbianto, Jakarta -- Former president Soeharto may have lost power but he is still important enough for Jakarta Governor Sutiyoso to be willing to visit him for a pair of his footprints.

Sutiyoso is scheduled to meet the former strongman, who led the country for 32 years, at Soeharto's residence at Jl. Cendana No. 8, Central Jakarta.

Apparently inspired by Hollywood's Walk of Fame, the pavement containing the footprints of Indonesia's "beautiful people" will run along Jl. Medan Merdeka Utara outside the National Monument (Monas) park and facing the Merdeka Palace. It is due to be in place before Independence Day on August 17, and, as usual in Indonesia, politicians, generals and former generals cum politicians are likely to dominate the show.

Soeharto's footprints will be placed side-by-side with the footprints of President Megawati Soekarnoputri, and former presidents Abdurrahman "Gus Dur" Wahid and B.J. Habibie. Founding president Soekarno's footprints will also find immortality there.

Sutiyoso was reluctant to comment on his planned meeting with Soeharto. "I'm only going there to get his footprints," he told the press on Wednesday before leaving City Hall.

Soeharto has rarely been seen in public since a panel of judges ruled in 2000 that he was unfit to stand trial on corruption charges for health reasons. However, despite his reported ill health, he has managed to make the gruelling trip to Cilacap, Central Java, to visit his son, Hutomo "Tommy" Mandala Putra, who is currently serving a 15-year prison sentence in the Nusakambangan top security prison.

On the opposite side of the National Monument Park, Jl. Medan Merdeka Selatan, facing the City Hall, Sutiyoso's footprints and those of former city governors will be installed on the pavement.

Megawati's and Sutiyoso's footprints were taken when they were both officiating during the Green Jakarta program at Monas park on June 5.

City parks agency director Mauritz Napitupulu said that his men had already secured Megawati's and Gus Dur's footprints. Habibie's would be taken the next time he visits Jakarta. The agency has also taken the footprints of all of the city's former governors.

Mauritz said that no ceremony would be held to mark the installation of the footprints on the pavement.

Besides presidents and governors, distinguished citizens of the city and the nation will also have their footprints taken in the future. The agency is to set up a special team to determine who merits having their footprints preserved for posterity.

Mauritz said that there was a "certain philosophy" behind the taking of the footprints. "We want to inspire the young people to follow in the footsteps of those people whose footprints have been placed here as these people have successfully developed the country," he said apparently oblivious to all the squalor surrounding him in Jakarta.

According to one Jakarta wit, however, concrete shoes rather than concrete footprints would be more appropriate for some of the "celebrities" involved.

Environment

CI warns of depleting coral reefs in Indonesia

Jakarta Post - August 13, 2003

Moch. N. Kurniawan, Jakarta -- Conservation International (CI) warned on Tuesday that Indonesia would lose its coral reefs in 10 years if the government was unable to conserve them and people continued to use fish bombs.

"People who use fish bombs may be not evil as they only do it because they have to make a living. But people must realize that if they continue to destroy coral reefs, they will eliminate fish, food and their incomes in the future," Peter A. Seligmann, CI's chief executive officer, told The Jakarta Post.

According to Seligmann, Indonesia would become known as a country that destroyed the natural gifts that were bestowed upon it if the destruction of reefs persisted.

During his visit to Indonesia, Seligmann is scheduled to meet President Megawati Soekarnoputri, State Minister for the Environment Nabiel Makarim and Minister of Forestry M. Prakosa.

He had earlier met with Minister of Maritime Affairs and Fisheries Rokhmin Dahuri.

Indonesia has over 17,000 islands, making it the largest island state in the world.

Seligmann suggested that the government draft a law to protect reefs. "Such a law is not for the sake of the international community. It is for the benefit of Indonesians," said Jatna Supriatna, regional vice president of CI for Indonesia, who accompanied Seligmann.

Seligmann said that Indonesia needed to ensure that reef areas were well protected to allow fish to grow, and to set aside areas for fishing. The government is also obliged to educate people to support sustainable fishing, he added.

Seligmann realized that Indonesia was facing a lot of environmental issues, including illegal logging, but the government and people could not just resolve one problem and ignore the others. Nevertheless, he praised Megawati's and Minister Rokhmin's commitment to improving the condition of coral reefs in Indonesia.

Seligmann said CI had offered support to Indonesia to establish a trust fund for marine conservation. "We will contribute US$1 million to help support the planned establishment of the trust fund," he said. "We are really committed to the plan." He said that CI would talk with the Indonesian government about possible contributors to the fund, its management and other details over the next few months.

Islam/religion

Islam, Indonesian style

Asia Times - August 15, 2003

Richard S Ehrlich, Jakarta -- Washington has linked al-Qaeda to the bomb attacks on Bali and the JW Marriott Hotel, but Muslim extremists' demands for a strict Islamic society are not popular in Indonesia. Many Indonesian Muslims prefer to meld religious tradition with modern lifestyles and have overwhelmingly rejected fundamentalist candidates in local and national elections. Suicide Muslim bombers also do not enjoy much support.

"I hate the terrorists. The fanatics are crazy," said a Muslim office worker as he studied photographs published by police of two men wanted in connection with the car bomb blast on August 5 in front of the JW Marriott Hotel in Jakarta.

The explosion killed 11 people, including the bomb-packed van's alleged driver Asmar Latin Sani, 28, whose bloodied severed head was thrown by the blast on to the Marriott Hotel's fifth floor. Police spent Tuesday searching for the two men who earlier bought the vehicle second-hand after it was advertised in a newspaper.

"Indonesia is 90 percent Muslim, but we have many styles, many different groups of Muslims, and I think we should all live together, not just one fanatic style. We also want to live with the Christians and Buddhists and others," the office worker, in his 20s, said. "Indonesia is not the same as Saudi Arabia," he added.

Proof of Indonesia's Islamic tolerance and forward-looking style are displayed in the strangest places. Behind him, for example, a muted television beamed a local broadcast of MTV, highlighting an Indonesian teenage girl wearing a traditional Islamic head-cover, which cloaked her hair, ears and neck -- allowing only her oval face to appear. She mischievously grinned and introduced to Indonesia's avid MTV audience the latest steamy video by Britney Spears' ex-boyfriend Justin Timberlake.

On the street, meanwhile, a ramshackle bookshop offered tiny bumper stickers for sale, including several stating: "I Love Islam" and "Islam is the Best". The shop, trying to be trendy, also sold stickers illustrated with a hip icon -- the yellow smiley face -- wearing a flat, college graduation cap and proudly captioned: "Muslim Intellectual".

Serious Islamic items also appear on sale throughout Indonesia, often liberally displayed near Christian, Buddhist and animist images and statues. Such mixing of religions and respect is commonplace, and is being updated to a globalized 21st century.

In a typical middle-class department store, one-third of an upper floor sells Islamic clothing, prayer carpets and embossed holy Koran books under a big wooden sign that says: "Muslim Corner". The women's Islamic clothes are modest but label-conscious, separated on racks under the names of local dress designers. "On sale" signs try to tempt customers. Each portable prayer carpet comes with a large, sewn-in plastic compass that tells the direction to Mecca when the rug is plunked on the ground, because Muslims must bow toward that holy Saudi Arabian city when praying. While the devout ponder a purchase, they can hear saucy hip-hop songs by Missy Elliot and other American singers pumping through the department store's public sound system.

Outdoors, five times a day, countless Muslim mosques broadcast their muezzins' lilting, Arabic call to prayer through electric loudspeakers that echo throughout this muggy, urbanized capital above the din of traffic. The mosques are crowded. Muslims are allowed to take a break from work each time the muezzins call, even while working in hospitals or other emergency services. But many other Muslims attend only once a week, on Fridays.

Across Indonesia, however, thousands of Muslim men and women have openly demanded an Islamic regime with harsh sharia laws drawn from the Koran and rooted in their ideal of a society more than 1,300 years ago. "We have made up our minds not to stray from our ultimate goal of establishing Islamic law in the country," Irfan S Awwas, executive chairman of the influential Mujahideen Council of Indonesia, recently told reporters.

The council, also known as MMI, is led Abu Bakar Ba'asyir, currently in prison while on trial for alleged involvement in a string of Christmas Eve church bombings in 2000 that killed 19 people and for attempting to assassinate President Megawati Sukarnoputri when she was vice president.

"I say do not be afraid of being labeled as trying to overthrow [the government], or as terrorists, when you are carrying out Islamic sharia in full," Ba'asyir said in a speech relayed from prison and read out to 3,000 enthusiastic followers on Sunday at the start of a three-day MMI rally.

Washington insists Ba'asyir is a leader of Jemaah Islamiyah, a "foreign terrorist organization" in Southeast Asia linked to Osama bin Laden's al-Qaeda network and the Bali and JW Marriott Hotel bombings. Ba'asyir insists Jemaah Islamiyah does not exist and he claims to be innocent of all wrongdoing. He blames the US Central Intelligence Agency for inventing Jemaah Islamiyah to stoke anti-Muslim propaganda and persecute the faithful.

Amid the rhetoric, violence, fear and confusion, many Indonesians have become leery and resentful of Ba'asyir and other Islamic hardliners, especially after the bombings killed fellow Indonesians who lived and worked at the targeted sites.

For many Indonesians, the Marriott Hotel attack was especially galling because 10 Indonesians -- most of them taxi drivers -- and one foreigner died when the car bomb gutted the hotel's entrance. In Bali, 202 people died in blast last October 12 and while most of them were Australian and other foreign tourists, many of the dead included working-class Indonesians.

Meanwhile, the beat of goes on for moderate, modernizing Muslims. Boosting people's spirits at a recent televised dance, broadcast nationwide, a popular singer named Zwesty mangled the lyrics to "Say a Little Prayer" -- but her song was not religious. It was made famous by American soul singer Aretha Franklin.

While Zwesty crooned, Indonesian adults in suits and other formal attire danced in cocktail-lounge ambiance, including a few mature women wearing Islamic head-coverings who did their best to boogie.

Indonesia calls on Muslims to drop conspiracy theories

Straits Times - August 14, 2003

Devi Asmarani, Jakarta -- The Indonesian government yesterday called on Muslims in the country to stop talking about conspiracy theories against the religion and start uniting in the fight against terrorism.

In a veiled reference to Muslim hardliners, who have accused the United States and its "Zionist allies" of being behind the previous spate of bombings in the country, Coordinating Minister for Security and Politics Susilo Bambang Yudhoyono said terrorism was a real threat for the nation and one that needed to be fought collectively.

"This is the best moment for Indonesia as a nation to collectively express its commitment and responsibility against terrorism. We must not be defeated by terrorism, it's time to unite to fight it," he told a press briefing yesterday.

Even after the Bali and JW Marriott Hotel bombings, many Indonesians are still arguing over whether the events were part of an international conspiracy to destabilise Indonesia and undermine Islam.

"Stop debating this, and let the Indonesian police conduct its investigation and the intelligence agency to reveal its intelligence gathering," he said. He also urged other countries to "understand that Indonesia has taken steps to counter terrorism and stop blaming us for what has happened".

Today is the first time that the Indonesian government has addressed the terrorist issue so strongly. However, there has been suggestions that Jakarta should be firmer in tackling the public confusion that is arising from contradictory statements put out by various religious figures about the terrorist activities.

One of the perpetrators of such information is Mr Din Syamsudin, an executive of the country's highest Islamic body, the Indonesian Ulema Council, and of the second largest Muslim group, Muhammadiyah. Together with other hardliners, he has condemned the government for linking the terrorist attacks to the Jemaah Islamiah (JI) group, which they claim is a fictitious organisation created by the US and the CIA.

The government has been extremely cautious about making allegations against the JI and its role in the bombings for fear of offending Muslims. But the government has acknowledged that the perpetrators of many terrorist attacks in the country belong to the same militant group.

Even moderate figures such as former president Abdurrahman Wahid and Mr Nurcholish Madjid, who is seeking to run for the presidency next year, have called on the police not to identify the bombing suspects as JI members until there is clear proof.

Jemaah Islamiah literally means Islamic community and associating it to the blasts could upset the predominantly moderate Muslim majority, they said. Their comments do not represent the majority view. More often than not, these statements are made with a political agenda -- they want the support of the hardliners, analysts said.

Hardline Muslim group retains Bashir as leader

Agence France Presse - August 13, 2003

Jakarta -- A hardline Indonesian Muslim group agreed yesterday to retain suspected terror group chief Abu Bakar Bashir as its leader for another five years.

The Indonesian Mujahedin Council (MMI), closing its congress in the Central Java city of Solo, also urged the government to acquit the detained Bashir of all charges.

The Muslim cleric is on trial in Jakarta for plotting to overthrow the government and to set up an Islamic state. Prosecutors earlier yesterday sought a 15-year jail sentence for him. Prosecutors and police say Bashir heads the Jemaah Islamiah.

"The congress has appointed ustadz [teacher] Abu Bakar Bashir as the emir of the mujahedin for the 2003-2008 period," a closing statement from MMI said. Bashir, 64, has chaired the MMI -- an umbrella organisation for groups advocating Islamic syariah law in Indonesia -- since 2000.

In a written address to the congress from jail, the cleric called on Sunday for Muslims to keep campaigning peacefully for syariah law. The closing statement said the MMI "opposes all forms of terrorism, be they conducted by individuals, groups or states, because this runs against Islamic syariah".

Poor turnout shows militants are losing support

Straits Times - August 12, 2003

Devi Asmarani, Jakarta -- The much-publicised three-day meeting of the Indonesian Mujahideen Council (MMI) was meant to show that the radical Islamic movement is very much alive despite the fact that its leader Abu Bakar Bashir is on trial for terrorism.

But a poor turnout at the MMI's national congress in the Central Java town of Solo which ends today shows that the ground may be turning against the militants.

A host of political leaders, including Vice-President Hamzah Haz and Cabinet minister Yusril Ihza Mahendra, backed out from the meeting at the last minute. Both men are leaders of Islamic-based political parties which have been supportive of the MMI's cause.

Less than 2,000 people showed up at the event's opening ceremony on Sunday, much fewer than the promised 15,000 supporters. If it were not for the extensive local and foreign media coverage, many locals said they would not have been aware of the event -- the second since Bashir founded it three years ago -- in their town.

A Muslim scholar specialising in militant movements, Mr Khamami Zada, told The Straits Times: "Compared to when they started, MMI's popularity is on a decline because the escalating terrorist attacks have been linked to militant religious followers." He supported recent media polls that said most moderate Muslims in Indonesia believe the Jemaah Islamiah (JI) is behind the Bali and Jakarta bombings and other terrorist attacks. Also, apart from Bashir, other senior members of the movement have been imprisoned on terrorism charges. They include Agus Dwikarna in the Philippines and Mohamad Iqbal Abdurrahman or Abu Jibril in Malaysia.

Unlike the shadowy JI, the MMI is a formal organisation with branches in several provinces. It openly campaigns for the imposition of syariah, or Islamic law, in Indonesia.

It has vowed to stand by Bashir, believing he has been wronged in a "grand design" by the West to undermine Islam. But experts said religious militancy has been losing moral support since the Bali bombings last October.

Some of the Bali bombing suspects were allegedly linked to Bashir while he was a preacher in exile in Malaysia. And a man believed to be the suicide bomber in last week's bomb attack at the JW Marriott Hotel is a graduate of Bashir's Islamic boarding school in Solo.

Like other fringe groups, the MMI took shape after the fall of the Suharto regime and flourished under the government of Mr Abdurrahman Wahid.

A government source said: "In the beginning, association with fringe groups like the MMI was politically correct because they were supposedly marginalised and even victimised by the Suharto regime. Nowadays, I think politicians know not to get too close with these groups, fearing implication for their political career."

The MMI's influence over the media could also be dwindling, observers said. Last year, the group succeeded in making local TV channels withdraw advertisements and programmes it deemed un- Islamic, including a public service message that preached moderate and tolerant Islamic teaching.

Armed forces/police

Government to give more power to TNI

Jakarta Post - August 15, 2003

Muninggar Sri Saraswati, Jakarta -- In a response to the rampant terror attacks plaguing the country in the past year, the government has decided to give the Indonesian Military (TNI) some of its pre-reform era powers back.

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono said on Thursday that the government would empower the military to detect and find possible terror threats that needed an immediate response.

"There has been a long-standing impression that the TNI should only handle external defense while internal security is in the hands of the police. This is not exactly consistent with the law," Susilo said without elaborating at a press conference after presiding over a ministerial meeting on political and security affairs.

In the spirit of the reform movement, the People's Consultative Assembly (MPR) decided in 2000 to restrict the military to a defense-of-the-borders only role and entrusted internal security to the police. The ensuing police law and defense law confirmed the clear-cut division of the forces, which marked at least a symbolic end to the military's leading role in the country's affairs. The National Police fell under the armed forces, or ABRI, before that.

Susilo said the government intended to provide the TNI with a greater role in internal security due to the police's lack of personnel, and because the military had some of its personnel underutilized.

"The government will give a greater role, or appropriate space, for the TNI to carry our their duties as long as it is related to national interests, although the focal point remains the police," Susilo said. He did not elaborate on the extent of the military's role in the fight against terrorism, or how terror would be defined. The government, Susilo said, would still consult the House of Representatives or the MPR over the issue.

It remains unclear whether the military's greater role in security affairs will be part of the amendment to the Antiterrorism Law No. 15/2003, which was discussed during a meeting hosted by Susilo.

Also attending the meeting were TNI chief Gen. Endriartono Sutarto, National Police chief Gen. Da'i Bachtiar, justice minister Yusril Ihza Mahendra, defense minister Matori Abdul Djalil, Attorney General M.A. Rachman and National Intelligence Body chief Hendropriyono.

Endriartono, Matori and Hendropriyono had thrown their weight behind a proposal to adopt a Singapore-like internal security act in a bid to combat terrorism. Hendropriyono is also apparently seeking greater authority for intelligence officers to make arrests, similar to the way they did just that during the New Order regime of former president Soeharto.

Susilo said that the antiterrorism law needed revising. It was passed in the wake of the Bali bombings, but, according to the retired army officer, needed to be made "more effective" in preventing terror attacks.

"We will do it as soon as possible. We cannot wait because terrorism is a real threat and we should not be in a weak position," he said, saying that the government had evaluated the application of the law following the Bali bombings.

As many as nine articles in the law are expected to be revised in a bid to make it stronger, Susilo said. The articles deal with preemptive action against any form of terror and the use of intelligence reports as evidence to charge suspects.

Susilo said they also discussed the need for a drastic improvement of human resources, training, systems, infrastructure and funds in the country's efforts to fight terrorism. All the suggestions will be brought before the full Cabinet next week.

Yusril added that the revision of the law would provide more room for the police to investigate people based on allegations, without having to wait for a court order or a warrant.

Separately, Muhammadiyah chairman Ahmad Syafii Ma'arif said that he agreed with the government's plan to revise the law, but he warned against the adoption of an internal security act, as it could infringe on human rights. Muhammadiyah is the second largest Muslim organization, which claims 30 million followers.

Another noted Muslim figure, Ulil Abshar Abdalla, called on people to remain vigilant about the planned revision of the law as it was prone to human rights abuses.

The country used to have a draconian antisubversion law, which was widely abused by the New Order administration to oppress and imprison anyone it considered a political opponent.

Navy investigator says marine killed businessman

Jakarta Post - August 14, 2003

A'an Suryana, Jakarta -- After a two-week investigation, Navy investigators have apparently found the culprits in the assassination of PT Asaba computer firm president director Budi Hartono Angsono and his Army bodyguard Second. Sgt. Edi Siyep.

Navy spokesman First Adm. Adyaman A.S. told a press conference on Wednesday that four marines had admitted their involvement in the murder. The four were identified by their initials as Second. Lt. SAS, Second Corp. SR, Second Corp. FH and First Pvt. SS, who hail from the Second Marine Brigade based in Cilandak, South Jakarta. "Second Corporal SR was the shooter in the brutal murder," said Adyaman, while reading out a statement signed by Navy Chief of Staff Adm. Bernard Kent Sondakh.

Adyaman said the four would likely be charged with premeditated murder, which carries a maximum sentence of death.

In his first public statement on the matter, Bernard apologized to the country for the incident, saying it was "a severe blow to the Navy Corps" and at the same time it had tarnished the reputation of the military.

The murder took place on the morning of July 19, as Budi Hartono and Edi Siyep were about to play basketball at Sasana Krida stadium in Pluit, North Jakarta. Edi, a member of the Army's elite unit, Kopassus, was opening his boss' left rear door when SR shot him in the head. Budi tried to run away, but SR shot Budi in the back and head repeatedly, Adyaman said.

Marine Brig. Gen. Soenarko G.A., the head of Navy's internal affairs, said the investigators found nine spent bullet casings at the site. "Six hit the body of Budi Hartono, and one hit Edi," Soenarko said during the press conference at the Navy Headquarters in Cilangkap, East Jakarta. He said SR used a 9mm caliber pistol. SR was accompanied by at least one of the other three marines, who was waiting on a motorcycle nearby.

According to Adyaman, after the investigation, the four marines admitted that they were hired by Gunawan Santoso, formerly Budi Hartono's son-in-law/business colleague, and now the prime suspect in the case.

Gunawan, who is still at large, was convicted and given two years and seven months in prison after being found guilty in a Rp 25 billion (US$3.05 million) embezzlement case while he was a supervisor in Budi Hartono's company. Gunawan escaped from prison earlier this year. Police had earlier stated that revenge was possibly the motive behind the murder.

Adyaman said that Gunawan had hired the four marines for the murder and he gave them Rp 2 million to execute Budi Hartono. "The amount may be small, but the four marines have been emotionally close to Gunawan as they have known him since 1998," said Adyaman.

Adyaman said that the investigation could be completed at the end of August, to enable a speedy prosecution. The investigators have recommended dishonorable discharge from the military as well.

Meanwhile, in his statement, Bernard said the Navy would also investigate whether their direct superiors were in any way involved.

Indonesian Military (TNI) chief Gen. Endriartono Sutarto has acknowledged that many soldiers became involved in illegal activities due to their small salaries, but underlined that the TNI would no longer tolerate this.

The TNI chief, however, said he could not prevent military personnel from providing security to individuals or companies due to the absence of law regulating the issue.

Generals told to set example

Jakarta Post - August 13, 2003

Tiarma Siboro, Jakarta -- Low-ranking military personnel have given mixed reactions to an instruction by the Indonesian Military (TNI) banning enlisted members from taking side jobs to augment their income.

"My salary is not enough to cover my family's basic needs. But if military leaders want us to stop taking side jobs as security guards, they should first set examples for us by leading a modest life," said Dulmatin (not his real name), who moonlighted as a security guard for a private company.

He was referring to those generals, who are known to lead a high-rolling life, with some owning more than two luxury cars and mansions. "How can we listen to them [military leaders] if they themselves only talk about power and money every day?" he asked.

Another military personnel, whose wife also works to support their family, voiced a different opinion. He said being a member of the military carried with it several compromises, including leading a modest life. "I don't think we have to be jealous of our superiors being richer than we are, because I believe they have greater responsibilities than we do," Sunarya (not his real name), told the Post.

Following the fatal shooting of businessman Boedyharto Angsono and First Sgt. Edy Siyep, a Special Forces (Kopassus) member who had been moonlighting as Angsono's bodyguard, TNI chief Gen. Endriartono Sutarto ordered all military units to crack down on soldiers taking side jobs, which violates the Military Oath, and underlined that the TNI would not hesitate to discharge soldiers involved in such activities.

Four Marines have also been implicated in the cold-blooded murder, which is believed to have been contracted out to professional sharpshooters.

Many soldiers moonlight as security guards at private offices, nightclubs and hotels, and even as personal bodyguards, to augment their base salaries of Rp 750,000 to Rp 1.5 million a month, which was not enough to cope with the soaring prices of basic needs.

Dulmatin said that he did not want a side job at hotels or nightclubs, because the position was generally associated with illegal businesses. "Well ... we know so," he simply said when asked to explain further.

Soldiers guarding vital installations in conflict-prone territories are more likely to enjoy a small amount of additional income from what they call "protection money". PT Freeport Indonesia in Papua confirmed last year that they had paid up to US$5.6 million in protection money since it began operations in the 1970s.

TNI to get tough on members backing criminals

Jakarta Post - August 12, 2003

Fabiola Desy Unidjaja, Jakarta -- Indonesian Military (TNI) chief Gen. Endriartono Sutarto has ordered all military units across the country to crack down on soldiers involved in criminal activities.

Citing reports on the possible involvement of four marines in the murder of a businessman and his bodyguard in Jakarta, Endriartono said on Monday the TNI would not hesitate to take action against any soldier involved in illegal activities.

"I have instructed all units to ensure that none of their soldiers are involved in [criminal] business. We will not tolerate that," the four-star general said on Monday.

He said the TNI as an institution would not hesitate to dismiss any member who provided protection to criminals. "Soldiers were trained to serve the country and the people, not to provide security backing for criminals," Endriartono said.

It is common for TNI members to have side jobs such as working as bodyguards, in order to supplement their official pay. There are rumors that some soldiers make money by providing protection for criminal gangs involved in gambling, drug dealing and smuggling, or even by hiring themselves out as assassins.

Four marines were recently arrested on suspicion of murdering a businessman in Jakarta, after being hired by the man's business competitor. They are now being detained for intensive questioning.

Endriartono acknowledged that many soldiers became involved in illegal activities due to their small salaries, but underlined that the TNI would no longer tolerate this. "The TNI has dismissed many soldiers for this sort of thing and will continue to do so," he said.

Endriartono said he would do everything in his power to see that the marines were punished to the full extent of the law if they were found guilty. "I will ensure that they get the harshest sentence possible if they were involved in this business," he said.

Endriartono had said earlier he could not prevent military personnel from providing security to individuals or companies due to the absence of law regulating the issue.

One mid-ranking TNI officer told The Jakarta Post on Monday a soldier could earn about Rp 2.5 million (US$297) a month working as a bodyguard, double the salary of a captain. "A bodyguard's salary does not include tips or extras from the client. So it is a profitable job that they can do when they are not on duty," said the officer, who asked not to be named.

He said soldiers could be hired to commit murder for between Rp 30 million and Rp 50 million. "When they [the soldiers] really need money they do these things, because they have the skills and the equipment necessary," the officer said.

Military ties

Downer reassures on Kopassus troops

Australian Associated Press - August 14, 2003

Australia would do its best to ensure Kopassus troops who trained East Timor militias would not be involved in joint activities when military links were re-established, Foreign Minister Alexander Downer said.

Opposition foreign affairs spokesman Kevin Rudd raised an incident at Suai, in East Timor, on October 6, 1999, in which two Australian soldiers in an Interfet vehicle came under fire and were seriously wounded. Two militia members were killed.

"Can the minister assure the House that neither Gardapaksi, described by the minister's department as closely associated with Kopassus and used to conduct activities on its behalf, nor any other Kopassus-trained unit, were responsible for opening fire on Australian troops on that occasion?" Mr Rudd said.

"How will the minister ensure that in the re-establishment of links with Kopassus, that all those Kopassus troops responsible for the training of militia in East Timor for operations against pro-independence elements and the Australian Defence Force, will not form part of the Kopassus units with whom the minister now proposes to re-establish links?

Mr Downer said it had been a longstanding policy that where the government was aware of people involved in partner-militaries who had breached human rights, Australia would endeavour not to be involved with them.

"We will continue to maintain that policy," he said. "Our view ... is that where we are aware of TNI members, be they in Kopassus or other unit of TNI with which we may have, through necessity, have some degree of cooperation, and those people have involved in egregious human rights abuses of one kind or another, then we won't be participating in activities with those people."

The Australian Defence Force revealed earlier this week it was planning to resume links with Kopassus. "We make no apology for the fact that we are prepared to work with those elements in Indonesia that have the greatest capacity to help release Australians who may be taken hostage in that country, or may be part of some hijacking drama," Mr Downer said.

We must not get back in bed with Kopassus

Melbourne Age - August 14, 2003

Damien Kingsbury -- The push by the Australian Government to renew its association with the Indonesian military's feared Kopassus special forces is perhaps the most doubtful proposition in what has been a history of questionable arrangements. The rationale is that, should Australians be kidnapped by terrorists in Indonesia, the anti-terrorist Group V of Kopassus is the only organisation we could count on.

Kopassus Group V has engaged in two previous hostage rescue missions. The first was in 1981, when a Garuda aircraft was hijacked by Islamic extremists to Bangkok airport. The rescue mission freed 50 passengers and left dead three hijackers, one Kopassus member and members of the aircraft crew. Two captured hijackers who left Bangkok with Kopassus alive arrived in Jakarta dead.

The second operation was when the Free Papua Movement (OPM) kidnapped nine members of the Worldwide Fund for Nature in 1996. Despite being supported by mercenaries from Executive Outcomes, Kopassus failed to find the hostages, even though they were within kilometres of them for days. Eventually the OPM killed two Indonesian hostages and freed the Europeans. The freed hostages found their way to a regular army unit, not Kopassus. None of the OPM kidnappers was found.

The history of Kopassus's other activities reads more like that of a terrorist organisation, which is not surprising given that the techniquesand tactics of terror are explicitly outlined in chapter five of a confidential Kopassus training manual.

This terrorism dates to the anti-communist massacres of the mid- 1960s, and in 1975 the murder of Australian journalists and subsequent invasion of East Timor. Kopassus also set up the Islamic organisation Komando Jihad that hijacked the plane in 1981 and which has since emerged as Jemaah Islamiah.

Along the way, Kopassus has murdered and tortured political activists, trade unionists and human rights workers. It has also trained, equipped and led militias in East Timor, West Papua and Aceh, and Kopassus members trained the notorious Laskar Jihad Islamic militia, which stepped up conflict in the Ambon region, leaving up to 10,000 dead. It was Kopassus that murdered Papuan independence leader Theys Eluay in 2001, and who Indonesian police say killed three teachers (two of whom were American) and wounded 12 others in an ambush near the Freeport mine last year. For this, the US Congress extended its existing ban on contact with the Indonesian military.

Kopassus still trains and organises the militias in West Timor that continue cross-border destabilisation operations into East Timor, according to a range of senior UN officials I spoke to there just weeks ago, and based on the Kopassus and militia members I saw in West Timor days later. It is because of these cross-border raids that the Australian army has extended its stay in East Timor.

Then there are the Kopassus businesses, protection rackets and other criminal activities that provide most of its funds and help ensure it is not officially accountable. So why then the push for renewing links? General Peter Cosgrove's support for renewing Kopassus links is driven by a narcissistic sense of military "professionalism", in which military-to-military links should be retained regardless of the behaviour of such militaries. This has underwritten Australia-Indonesia military ties since the 1970s, and was sustained throughout the darkest years of Indonesia's New Order.

The Australian Government, meanwhile, has been driven by a desire to satisfy requests from the Bush Administration, since mid-2000, that Australia form closer relations with Indonesia, especially since September 11 as part of the war on terror. General Cosgrove and others claim that Indonesia's anti-terrorist alternative to Kopassus, the national police Gegana unit, is not sufficiently trained for hostage release.

However, there are numerous precedents for the militaries of one country working in another in hostage situations -- Kopassus in Thailand isbut one example -- and Australia's own SAS and federal police are certainly better equipped to handle any hostage situation in Indonesia should it arise.

Australia is also intending to help train its Indonesian anti- terrorist counterpart. Yet Kopassus has proven time and again that it has a culture of violence, especially against civilians. Australia should not again become an accessory to such anti- civilian violence.

[Dr Damien Kingsbury is head of philosophical, political and international studies at Deakin University and the author of Power Politics and the Indonesian Military, RoutledgeCurzon 2003.]

Washington refuses Kopassus

The Australian - August 13, 2003

John Kerin Sian Powell -- The US would not renew its ties with Indonesian special forces arm Kopassus until it resolved alleged military involvement in the unsolved murder of two US citizens in 2001, Deputy Secretary of State Richard Armitage said yesterday.

Asked to comment on controversial moves by the Howard Government to renew ties between Australian and Indonesian special forces to combat terrorism, Mr Armitage said the US was not willing to work with Kopassus, although he supported Australia's decision to do so. "It's obviously a very dangerous neighborhood - Kopassus has certain anti-terror units that are highly trained ... I think it's in Australia's interests to develop operations ... not mindlessly without thinking of the past but focusing on the future," he said.

Foreign Minister Alexander Downer came under fire yesterday over Kopassus's poor human rights record, and said Australian troops would deal only with members who had not been involved in human rights abuses or terrorism.

The Opposition and the Greens have accused the Government of ignoring atrocities committed by Kopassus-backed militia in the lead-up to East Timor's independence, and in Jakarta's brutal suppression of Acehnese separatists.

Several Kopassus troops also were found to have murdered Papua independence activist Theys Eluay in 2001. Mr Downer told parliament that Australia's special forces would work only with Kopassus's Unit 81, which specialises in counter-terrorism. "We will limit our co-operation to exclude those people we know to have links to Laskar Jihad and other violent groups or who have been involved in serious human rights abuses," he said.

Australian ambassador to Indonesia David Ritchie said yesterday Kopassus had special strengths, and that Unit 81 was "your primary response unit in a hostage situation".

But a leading defence analyst warned last night that a "pick-and-choose" policy could offend the Indonesian Government and be "extremely difficult" to put into practice.

Should military ties with Kopassus be renewed?

Radio Australia - August 12, 2003

Australia has announced it will renew military ties with Indonesia's special forces unit, Kopassus, just four years after severing links following allegations that Kopassus had co- ordinated the East Timor massacres. The Australian Defence Force has supported the plan but the federal opposition says the move is inappropriate, given its alleged links to terrorist groups and human rights abuses.

Presenter/Interviewer: Linda LoPresti

Speakers: Bob Lowry, Indonesian military specialist.

Lowry: "Well Kopassus is the equivalent of the Australian SAS or the British SAS responsible for special operations including counter revolutionary warfare operations and intelligence operations against domestic insurgents and so on. And the allegations against it stem from the legacy of the Suharto era when the special forces were employed, especially in East Timor to run the militias and to run covert operations against the clandestine and the East Timorese opposition."

"In addition to that of course they've been involved in operations in places like Aceh, in Irian Jaya, and some of the actions they were involved in there went well beyond what the law would allow. There are accusation in some quarters that some of these abuses have been continued, especially in places like Aceh and Papua."

Lopresti: And there are allegations that Kopassus has close links to a range of terrorists and militia groups. Does that have any foundation?

Lowry: "Well we really don't know, there's no doubt that it did in the past, especially in the case of East Timor, and in terms of their military intelligence etc., the intelligence services would, especially as a result of what's happened in the last couple of years. They're keeping a close eye on many of these groups. That doesn't mean that they're necessarily working in cooperation with them, but they may well have people who have close relationships with them for various purposes."

Lopresti: Is it possible for Australia to split its dealing with Kopassus, that is to only deal with those responsible for counter terrorism and hostage rescue, which is what Prime Minister John Howard is saying is important to Australia's interests?

Lowry: "Well yes and no. No in the sense that Kopassus is a formation in the Indonesian army and if we want to do any cooperation with them then we have to operate through the Indonesian army chain of command and the Kopassus chain of command. But any cooperation at a practical level of course can be contained to those sorts of activities, which are likely to be useful in a hostage situation. So that you can isolate in a practical sense, even though you're dealing with an organisation that is yet to taste the full flow of democratic reforms."

Lopresti: It is essentially though a military outfit, so is it capable of dealing with Jemaah Islamiah for example, which is not obviously an armed group like the Free Aceh Separatists?

Lowry: "No as people have pointed out, I mean the primary responsibility for tracking these people down and dealing with them according to the law belongs to the police and the state intelligence service. But the point is being made that once an act occurs and if you need to employ the sorts of forces that the army has to deal with terrorist groups, then you've got no option but to employ them. And that's where the government is caught between the rock and the hard place in that although allegations have been made against these people, the reality is that if there is a serious crisis they will have to be employed."

Lopresti: So does Australia's federal opposition have a point when it says that Australia should shift its emphasis on to building relations with the civilian controlled police force? Is that police force capable of dealing with major terrorist situations?

Lowry: "No not at the moment, it's developing its capacity in terms of both the intelligence apparatus and the ability to track people down in forensic science and all of those fields, and it does have a counter terrorist unit. But it doesn't have the sort of specialised training that the special forces have in terms of counter-hijacking, rescuing hostages in difficult places, for example from oil rigs or from particular locations which are strongly held. So in those sort of situations the military would still be required."

Cosgrove defends renewed ties with Kopassus

Radio Australia - August 12, 2003

Linda Mottram: Though domestic issues are resurgent with the resumption of Federal Parliamentary sittings, security remains dominant, and the matter of how best to fight terrorism in Indonesia is fuelling a heated debate here in Australia.

The Chief of the Australian Defence Force has defended plans to resume counter terrorism training for Indonesia's disgraced Kopassus special forces unit. Some talks already underway.

It comes after the Federal Opposition argued that counter- terrorism training should be focussed on Indonesia's police, and not Kopassus, and the Prime Minister's accusation in response that Labor is ignoring the prospect that Australian lives could be at stake. Matt Brown reports from Canberra.

Matt Brown: According to the Federal Opposition, the best way to help Indonesia fight terrorism is by training the Indonesian National Police, not Kopassus, which has been condemned for its human rights abuses in East Timor, Irian Jaya, Aceh and elsewhere. But the Chief of the Australian Defence Force, General Peter Cosgrove, says Kopassus is the only way to go, because the Indonesian police, or POLRI, are not presently able to handle the task.

Peter Cosgrove: I think it's quite clear that at the moment the POLRI capability in that regard is at a modest level, getting better but at a modest level, and we've got a real problem here and now with terrorism in the region. So it was something that was logical. It hasn't progressed, at this stage, beyond the goodwill and the discussions, to say that this is an area both countries would like to explore, but they are at the moment the force in Indonesia who would assist Australians if they were under that sort of threat in Indonesia.

Matt Brown: That being the case, Labor's Foreign Affairs Spokesman, Kevin Rudd, says the Government's missed an opportunity to bolster an important Indonesian police capability.

Kevin Rudd: Well I've visited Indonesian National Police in Jakarta, I think last November from memory. They were crying out for assistance from Australia to assist in the development of their counter-terrorism capabilities then.

Matt Brown: But the Prime Minister has characterised Labor's opposition to renewed ties with Kopassus this way.

John Howard: There is a capacity within that organisation to deal with hijacking in terrorist situations, and those who oppose the links, like Mr Rudd, are really saying that even if Australian lives might be at risk, we don't have contact with them.

Matt Brown: That's angered Kevin Rudd.

Kevin Rudd: The Prime Minister's remarks I regard as an offensive slur and unbecoming of a Prime Minister of Australia.

The bottom line is this, nine months ago John Howard's Government confirmed to the Australian Senate that Kopassus had links with terrorist organisations. Is John Howard now saying that what the Australian Government said to the Senate at that time is no longer applicable, no longer accurate? Well let him say so.

Matt Brown: General Cosgrove says Kopassus is probably the only force that could handle a hostage rescue situation in Indonesia, and the Australian military has valuable assistance to offer that could end up saving the lives of Australians.

Peter Cosgrove: We believe we've got a pretty reasonable counter-hijack and hostage rescue capability here in Australia, and we would like to know that Aussies who might be in a poor position of that nature, off-shore, would have the benefit of some of our expertise available to anybody who would like to exploit it.

Matt Brown: The issue was last explored when the Chief of the Australian Army, Lieutenant General Peter Leahy, and the Head of the Special Operations Command, Major General Duncan Lewis, visited Indonesia a few weeks ago.

Peter Cosgrove: It was a matter of discussions in principle, without there being any operationalising of the proposition at this stage.

Matt Brown: Further details will be explored by the Australian Defence Attachi in Jakarta, in discussions with his Indonesian counterparts.

Linda Mottram: Matt Brown reporting from Canberra.

Bush, Howard keen to resume military cooperation

Green Left Weekly - August 13, 2003

Vannessa Hearman -- The United States and Australia are moving closer to restoring full military cooperation with Indonesia, including with the discredited Kopassus special operations unit of the Indonesian armed forces (TNI).

In July, the administration of US President George Bush was reported to have been close to releasing US$400,000 for the TNI as part of the International Military Education and Training (IMET) program. However, after an outcry by US human rights organisations, including Amnesty International and Human Rights Watch, deputy secretary of state Richard Armitage announced to the Australian Financial Review on August 7 that the funds would not be released after all.

A US Senate committee voted to withhold funds until criminal prosecutions are undertaken against those responsible for killing US citizens last August in West Papua. Two Americans and an Indonesian were killed in an ambush near the US-owned Freeport mine. Investigations by Indonesian police indicated that the TNI was involved.

Military cooperation programs were suspended by the US and Australia following the destruction of East Timor by TNI-linked gangs in 1999. While senior TNI officers were indicted by the United Nations Serious Crimes Unit in East Timor to stand trial for crimes against humanity, Indonesia has refused to cooperate and no country has raised a protest against this.

One of those indicted, General Wiranto, who was armed forces chief in September 1999 during the sacking of East Timor, will seek preselection as the Golkar party's presidential candidate in Indonesia's 2004 presidential elections.

On August 5, Major General Adam Damiri, former regional commander for East Timor in 1999, was sentenced by an Indonesian tribunal for his role in 1999 to three years' jail; Damiri is likely to lodge an appeal. Damiri was permitted on several occasions to be absent from court in order to take part in prosecuting the TNI's war in Aceh, which began on May 20.

The tribunal has acquitted 12 of the 18 defendants and given light sentences to those convicted -- all of whom are appealing.

The Bush administration is keen to resume full military ties with Indonesia. Deputy defence secretary Paul Wolfowitz, a former US ambassador to Indonesia, has been pushing for "engagement" with the TNI and personally escorted Indonesian defence minister Matori Abdul Djalil as he lobbied Congress members. The July 22 Christian Science Monitor reported that in June, Wolfowitz argued: "I believe exposure of Indonesian officers to [the] US has been a way to promote reform efforts in the military, not to set them back." However, former Australian foreign minister Gareth Evans told the July 24 International Herald Tribune that years of training and support from Australia and the US for the TNI has "helped only to produce more professional human rights abusers".

Evans, while foreign minister, also sought "constructive engagement" with Suharto dictatorship in Indonesia. At that time, he supported the Wolfowitz view that such a policy helped undermine authoritarianism. Just as the Bush administration presses for a restoration of relations with the TNI as part of its bogus "war on terrorism", so too has Prime Minister John Howard's government. Canberra seized upon the opportunity provided by the Bali terrorist bombing in October as justification for greater links with the TNI.

Defence minister Robert Hill was quick to promote ties with Kopassus after the bombing, arguing that Indonesia's terrorist- fighting capacity was located inside Kopassus. Hill ignored evidence of Kopassus' links with terror gangs, such as East Timor's anti-independence militias and the Laskar Jihad group, as well as its role in the kidnapping and disappearance of Indonesian activists during the pro-democracy movement in 1998.

Former Australian ambassador Ric Smith stated four days before the Bali bombings, at an Indonesia-Australia Business Council luncheon on October 8, that "the defence relationship was never turned off completely, even after East Timor, and we are now re- building it, quietly, step-by-step".

On July 31, Australian Chief of Army Lieutenant-General Peter Leahy met with Indonesian defence minister Matori Abdul Djalil. A spokesperson for Djalil said that both sides were interested in undertaking joint military exercises to fight "people smuggling" and "terrorism".

The August 5 bombing of the Marriott Hotel in Jakarta will be used to further this agenda by the Indonesian and Australian governments. Indonesian foreign affairs spokesperson Marty Natalegawa told ABC's Lateline on August 6 that "preemptive" measures against terrorism would be taken which might result in "inconveniences in [Indonesians'] daily lives".

PM defends ADF link with Indonesian forces

Australian Associated Press - August 12, 2003

Prime Minister John Howard has defended plans for Australia's military to resume links with Indonesia's notorious Kopassus special forces troops.

The Australian Defence Force (ADF) plans to resume contact and possibly counter-terrorism training with Kopassus, despite its suspected support for the militia carnage in East Timor in 1999.

Links between the ADF and the Indonesians were severed four years ago after accusations that Kopassus helped orchestrate the bloody wave of anti-independence violence.

The Greens yesterday raised accusations of kidnap, arson and murder against two Kopassus battalions enforcing martial law in the strife-torn province of Aceh.

But Mr Howard said it was in Australia's interests to resume contact with Indonesia's top military force to help battle terrorism in the region.

"I think it's important to understand that the contact is very limited, and there is capacity within that organisation to deal with hijacking and terrorist situations," he told journalists.

He said those who opposed the links, including Labor foreign spokesman Kevin Rudd, failed to realise that Kopassus troops could one day be called on to save Australians caught in terrorist violence. Mr Rudd accused Mr Howard of hypocrisy because the government had only months ago detailed Kopassus links to terrorism in the Senate.

"Nine months later, he tells us that he's going to use this self-same organisation to fight terrorists," he told AAP.

Mr Rudd said the government had done nothing to expand counter- terrorism links with Indonesian national police in the 10 months since the Bali bombing, despite the fact they were clearly capable of cooperating with Australia.

"Howard has got a responsibility to tell the Australian people what he's been doing for the last nine months in not responding to Indonesian national police requests to enhance their resources and their capability to be as sharp-edged as possible," he said.

Defence Minister Robert Hill said the resumption of links would not sacrifice Indonesian human rights.

Howard defends ties with Jakarta's special forces

Straits Times - August 12, 2003

Canberra -- Australian Prime Minister John Howard yesterday defended a controversial plan to renew military links with Indonesia's elite Kopassus unit to help fight terror in the region -- despite previously banning work with the group due to its questionable human rights record.

His remarks came a day after defence force chief Peter Cosgrove said Australia needed to cooperate with Kopassus because the special forces unit was responsible for counter-terrorism and hostage rescue in Indonesia.

Yesterday, Mr Howard said the ties were in Australia's interests. "It is important to understand that the contact is very limited, and there is capacity within that organisation to deal with hijacking and terror situations," he told journalists, adding that Kopassus troops could one day be called on to save Australians caught in terrorist situations.

Defence Minister Robert Hill also told the Senate: "Whether it is with the police or whether it is with Kopassus, we will work with those Indonesian force elements necessary to best ensure safety of Australian citizens." At the same time, Australia would continue to pressure Indonesia over human rights concerns, he said.

Australian and Indonesian forces had close ties during the 1990s and signed a military treaty in 1995. Many officers from the Indonesian military -- known as TNI -- and Kopassus soldiers trained at Canberra's defence academy.

Australia cut military ties with Jakarta in September 1999 after pro-Jakarta militias trained by the army and police went on a bloody rampage in East Timor following its vote for independence. Kopassus, which has long been accused of rights abuses throughout Indonesia, was accused of being behind much of the violence.

Canberra has already re-established some links with the TNI, but has been reluctant to forge a new relationship with Kopassus. The elite forces have also been accused of supporting and helping train the Islamic extremist group Laskar Jihad.

But Australia's main opposition Labor party expressed concerns about renewing the links.

Uneasy Allies

SBS Dateline - August 13, 2003

Australia's willingness to engage internationally on the war on terror has led it recently to re-engage with the military here. But the US has not been so willing. Last night, US Deputy Secretary of State Richard Armitage claimed that it would be premature for America to reopen training and funding links with the Indonesian military until the deaths of two Americans in another supposed terrorist attack in West Papua last year is resolved.

Tonight's story is likely to shed very significant light upon that incident and poses very pertinent questions about other terrorist attacks in Indonesia, including this one.

Until tonight, the American survivors in the attack in West Papua have maintained a media silence. In their first television interview, they spoke with Dateline's Ginny Stein and their testimony raises very serious doubts about the role of the Indonesian military.

Reporter: Ginny Stein

Patsy Spier: This is a picture of my family and some of our friends and these are -- a picture of Rick and I that was taken in Sumatra about four years ago.

A year ago, Patsy Spier had it all -- a great job, a loving husband and travel plans to rival a myriad of past adventures.

Patsy Spier: And I just wanted to get married and we had three friends there who were our witnesses and took pictures of the whole time. And it was a lovely day and it cost us $19.

Patsy and and Rick's love of exploring brought them to one of the world's most remote places -- the Freeport McMoran mine in West Papua, the world's largest copper and gold mine.

Patsy Spier: Papua was -- there weren't a lot of -- it was like the last untouched area in the world where there was an American school, and we didn't mind at all being in isolated areas because we always had each other and we knew that.

We were very aware of the dangers that were there but we didn't feel that danger in Tembagapura. We felt that we were protected there because of the mine and the security around the mine.

But that life was shattered the day a group of gunmen stepped out into the middle of this jungle road firing hundreds of rounds at point-blank range into the two-vehicle convoy in which she and her husband Rick were travelling. A preliminary investigation by Indonesian police found there was a strong possibility of involvement by the military. Indonesia's armed forces responded by declaring they were not guilty. An important finding when Australia is considering re-establishing its links with the military's elite special forces, Kopassus. The survivor's testimony is in stark contrast to the military's claims.

Patsy Spier: The first two shots killed Rick and Ted and then the shooting just kept continuing into their vehicle until our vehicle came upon it which was three minutes later or so, and then the shooting started coming into our vehicle.

Steve Emma, a newly arrived teacher at the mine's international school, was sitting behind Rick Spier and the school's principal Ted Burgon when they were shot dead. Steve was shot twice, in the back and hip.

Steve Emma: I think actually the first shot hit Rick but not dead on -- maybe in the shoulder or whatever. The second shot, I think, hit his face. But it was in seconds as in milliseconds.

Reporter: And the third hit Ted?

Steve Emma: The third hit Ted.

On this fog-drenched mountain road, almost one year ago, 45 minutes of pure terror followed as round after round was fired into their vehicles.

Man: The driver was killed, went into the bank and then this vehicle was behind and it also stopped. Patsy was travelling separately to her husband in the second of the two vehicles.

Patsy Spier: I am pinned down and I am on my hip and the shooting just continued. The glass was shattered and the shooting was poof poof poof. It wasn't automatic rrrrr. It was poof, poof, into our vehicles and screaming and people were trying to get out of the seatbelts to get down.

By the time help arrived, three teachers were dead and eight others injured, including a 6-year-old girl.

Until now, not one of the survivors of this ambush has been prepared to speak on camera about their ordeal. Fear, coupled with the trauma of the attack, has held them back. Now two of the survivors have summoned the courage to speak to Dateline in the hope that by telling their story, action will be taken to find the killers.

Patsy Spier: This shouldn't have happened to Rick. It shouldn't have happened to me. It shouldn't have happened to the 14 people who were involved in that ambush. It was so horrific, it was so monstrous, it was so evil what happened to us.

Steve Emma: It was hell, and therefore whether it was a terrorist act or whatever, it shouldn't occur. I mean, to put people through that, whether they survive or not.

It was these men, Papua's separatist rebels, that Indonesia's military, in the first few days after the attack, quickly accused of murder.

Freeport's exploitation of Papua's rich resources has generated deep resentment among locals, many of whom live in poverty after being forced off their land. Papua's police were called to investigate. General Made Pastika was West Papua's police chief at the time. He later became the chief investigator into the Bali bombing. He spoke with Dateline last year following the shooting. He said his preliminary investigation confirmed the intensity of the attack and also raised questions about the military's involvement.

Made Pastika, former police chief, West Papua: We found 134 shoot marks on the vehicles, mostly in the body of the minibus, two minibus. Some are in the trucks and some in the trailer. We saw that this shooting was very brutal.

Reporter: To fire 134 shots in a short period of time...

Made Pastika: That was only the shoot marks in the body of the vehicle. But you can also say that -- we can also say that some other rounds were shot to the glasses -- all glasses of this vehicle also broken.

The survivors were first medivaced to Townsville. Patsy and Steve have relived over and over the minutes they were pinned down under gunfire.

Steve Emma: Whether I wanted to give up I wasn't sure, but after 25 minutes of being under constant gunfire and it not stopping, I was at a point of I wanted to die.

Patsy Spier: After about 45 minutes and the shooting was still continuing 'cause we didn't know any of this help was coming, and it was OK if they came and shot me. I had felt very at peace that it was OK.

Reporter: Because you were there for that long and you thought it through?

Patsy Spier: Yeah, because I felt Rick was gone and it was so unbelievable what was happening and the terror of it.

Patsy was shot twice, first in the back, the bullet shattering a rib, the second bullet sliced through her foot. Before she was flown out, she asked to see her husband one last time.

Patsy Spier: Before we left, they wheeled my gurney into a room where Rick was laying on a gurney and he had a big wad of cotton or gauze in his mouth that was pink, but from the side, because I couldn't lean up or anything, he looked, he looked fine and so I got to hold his hand and tell him I loved him.

From Townsville, Patsy went back to America to be with her family, with her brother, his wife and their son in Denver. From there, she watched and waited for Indonesian authorities to investigate. First, Indonesia's police implicated the military. The military then cleared itself of any wrong doing. Patsy Spier realised she had to act. Three times she went to Washington.

Patsy Spier: This is a letter from Congressman Wolfe and I met with him in March when I was there.

"Dear Mrs Spier, enclosed please find a response from the DOJ. I hope this information is helpful to you and will continue to monitor this situation. Again, thank you for contacting me. Frank R. Wolfe, Member of Congress."

And then he wrote "Wanted you to see the enclosed, best wishes."

Bill: This is his actual writing there?

Patsy: Yeah.

Bill: That's good.

Her one-woman campaign to find the truth began in earnest.

Patsy Spier: It was unbelievable to me that they would be allowed to investigate themselves so that told me that the FBI, another, an outside agency, had to come in because the investigation was stalled at that point.

The Indonesian Government's attitude driving her further.

Patsy Spier: This is what it says. It says the Timika case was purely an unfortunate incident and noone planned or organised it. Obviously they don't realise that the ambush lasted 45 minutes on a mining road. There's only one road for thousands of miles and that's it and they had -- those shooters had to be brought up through checkpoints, with hundreds of rounds of ammunition and guns, dropped off and there had to be communication.

Reporter: So an unfortunate incident?

Patsy Spier: Is not. It just tells me that they're not reporting the facts. This is Tembagapura. This shows the road on the way up to Tembagapura from Timika. Patsy and Rick were the school's veterans, having spent more than eight years in Indonesia. This was to have been their third year at the remote mountain top school. The procedures for travelling down a road, which the mining company pays the military to secure, were well known to both of them.

Patsy Spier: See the tunnel, would be another sort of a checkpoint, but they have to record the numbers because it's a one-way tunnel, like the vehicle that I thought ran Rick off the road was going toward the tunnel. If that vehicle didn't get help for us, then it had to go through the tunnel and it had to be recorded so they could find out who was in that vehicle. Whether they were part of the shooting team or whether they were just people that didn't get us help.

The road from the mine down to the lowlands of Timika is the lifeline to the outside world. The only way to reach the ambush site undetected would be a journey by foot, which would take days. On the day of the ambush, Steve Emma experienced for the first time the security procedures that were in place and the military's control of the process.

Reporter: In your mind, it would mean anyone coming in and out -- there would be a record, wouldn't there?

Steve Emma: I would think so, yes. I mean for the fact that I actually watched Rick fill out about five or six different columns of people's names, I think their ID number, where they were going, the time, and when they would return and watched him sign it. So there should've been.

Indonesia's military has been paid handsomely over the years to provide security for the giant Freeport mine. Since it opened in 1973, Freeport's security staff numbers have grown from 200 to 2,000. The company paid the military more than US$40 million to secure its mine site and its people. It's been a very lucrative business for the military but for Freeport, perhaps money not well spent.

There are several theories why the attack took place. One of the most credible points to an extortion attempt against the US mining company by local Indonesian army officers.

The teachers had been in Freeport vehicles travelling on Freeport's road, but so had two senior executives who passed the ambush site just minutes before the teachers.

Freeport, for its part, has not been forthcoming about the attacks or a possible motive, refusing all public comment. A spokesman answered Dateline's queries with an email, saying,

"This is a police matter and we cannot comment on the ongoing investigations. Freeport has no knowledge of the identity of the perpetrators but hopes that whoever they are, they will be brought to justice."

The firepower unleashed the day of the ambush was well beyond the collective weaponry, believed to be held by separatist rebels. But survivors have described the shooters they saw as being Papuan in appearance. This has raised speculation about Kopassus's involvement for Indonesia's elite special forces have a history of training local tribes people to do their dirty work.

In May this year, intelligence reports disclosed during a closed hearing at the US Senate Foreign Relations Committee raised the extent of military involvement in the ambush.

Russ Feingold, Democrate senator: Mr President, last August, and let's be clear to the Senate, because the Senator from Missouri did not mention, last August, two Americans were killed and eight were wounded in an ambush in West Papua, Indonesia.

Indonesia's police investigated and their report concluded that the Indonesian military was very likely responsible for the deaths of these Americans.

American politicians were beginning to take notice.

Russ Feingold: Real partners in the fight against terrorism do not murder American citizens. And they do not conspire to cover up such murders. Mr President, I reserve the balance of my time.

But finding consensus on which way to act at a time when America is keen to engage Indonesia in its war on terror has been a political challenge.

Kit Bond, Republican senator: We need to support the people within these countries who are resisting the extremists in the countries. It is a tremendous challenge for them to stand up to extreme voices.

We should be supporting. We ought not to be sticking a finger in their eye. We ought not to be gratuitously slapping them in the face. In the case of Indonesia, we should encourage strengthening those institutions the Government will rely on to investigate terrorism, apprehend terrorists and prevent further attacks.

In Indonesia, the only institution with that capacity is the military.

As America's politicians debated whether to renew aid to the Indonesian military, so too did Australia. Patsy Spier was worried.

Patsy Spier: Well at first I thought holy Toledo -- if Australia re-establishes military ties with the elite training and because Australia and America are such allies of each other, that perhaps my government would follow Australia's lead.

But that's why I've gone to Washington three times is to educate my congress people that Americans were murdered and the Indonesian military are being accused by their own civilian police of being apparently behind the ambush. Patsy has continued to push for action.

Patsy Spier: I started vehemently writing letters to senators and congressmen and people in the State Department, just asking we need to get our FBI agents in there, we need to do that.

She called on the government to block the release of military training funds, in particular, funds from a program known as IMET, or International Military Education and Training.

Patsy Spier: In my mind, this is a gold star to re-establish this IMET funds. It would be a gold star to tell the Indonesian military "We think you're A-OK."

Their own civilian police have implicated them into the murder of Rick, Ted and Bambang. Having them investigate themselves and then come up as being innocent isn't very logical.

All they have to do now is cooperate with the FBI agents by giving us access to witnesses without intimidation and have full access to all the evidence. As soon as they can do that, then the IMET funds perhaps could be released to them.

Republican Tom Tancredo is Patsy's hometown congressman. He believes Indonesia's military was involved but says the motive remains unclear.

Tom Tancredo, Republican congressman: I am convinced that the military, that some members of the Indonesian military played a role in this. I do not know how great a role, I don't know if they had total control over it and I don't know what the motivation was yet.

There's a lot of speculation as to exactly what caused it but I believe that it was the military.

He says while the amount of money withheld at the moment is small, it is by no means insignificant.

Tom Tancredo: $600,000 but it's not -- that's not going to change anything internally. They're not looking at that and saying, "Oh gee, if we don't get that $600,000 we can't do X right now."

The only significance, I think, it has, is that it portends something else. It portends a bigger cut, a -- if they do nothing in response to it, it ratchets up the situation, the seriousness of the situation, I think.

The Freeport ambush has become the biggest impediment to the resumption of military aid between Indonesia and the United States.

Tom Tancredo: Many parts of the world don't understand why one, two American lives would matter this much in the total scheme of things, but it's one of the things I think that separates Western civilisation from other civilisations.

Last week, Indonesia's military was told the IMET training program would remain frozen. The United States making it clear it remains dissatisfied with Indonesia's level of cooperation in investigating the Freeport killings.

But Indonesia's near neighbour Australia has softened the pain of that blow to the military's credibility.

Australia's chief of the Defence Force, General Peter Cosgrove, announced this week that Canberra has re-established ties with Indonesia's notorious special forces Kopassus -- all in the name of the global fight against terrorism.

Economy & investment

IMF praises Indonesia's 2004 budget proposal

Dow Jones News - August 15, 2003

Jakarta -- The International Monetary Fund Friday praised Indonesia's 2004 budget proposal, which aims to reduce the budget deficit to 1.2% of the gross domestic product from 1.8% this year. "It's a good budget policy," David Nellor, the IMF'srepresentative in Indonesia, told reporters.

President Megawati Soekarnoputri said in her speech to the parliament that the government will continue to implement strict belt-tightening measures aimed at getting the country's financesback in shape.

Total expenditures are forecast at Rp 368.8 trillion rupiah (U$43.1 billion), down 0.5% from this year, while revenues are slated to jump 2.3% to Rp 343.9 trillion.

The IMF has led a multibillion-dollar bailout program for Indonesia since the 1997-98 Asian financial crisis. Indonesia has said it won't borrow from the fund again when its current $5 billion lending program runs out at the end of this year.

Modern investing logic explodes in Indonesia

Asia Times - August 15, 2003

Gary LaMoshi, Denpasar -- If you worried about the economic impact of the bombing of the JW Marriott in Jakarta on August 5, you're behind the times. Enlightened investors saw the bomb as a buying opportunity and jumped into the local stock market. The Indonesian benchmark index plummeted 3.1 percent on the day of the tragedy, but it's rebounded nearly 5 percent since, and the rupiah's exchange rate has stabilized after a brief hiccup.

The Jakarta stock market index is up nearly 50 percent since October 12, when a more deadly bomb killed 202 people in Bali. Fund managers now point to that disaster as a market bottom, the right moment to leap in. These modern thinkers embrace the instruction of famed nineteenth century British financier Nathan Meyer Rothschild that "when there's blood on the streets" it's time to buy.

Rothschild converted the family's fortune to dynastic proportions by buying from panic sellers during the Napoleonic wars. However, in his greatest investing coup, Rothschild wasn't exactly following his own advice. He learned ahead of others, via carrier pigeon, that the Duke of Wellington had defeated Bonaparte at Waterloo. With all market watchers' eyes on him, Rothschild sold, sparking the panic. He then bought at depressed prices to make a killing.

Indonesia dreamin' Ethics aside, the main thing to remember is that Rothschild made his bets only after he knew the outcome. Those investing in Indonesia today can be similarly confident only in their dreams.

Of course, dreaming always plays a part when investing in emerging markets like Indonesia because the reality isn't terribly appealing (and therein lie the opportunities for those with vision and imagination). Aside from Indonesia's battered economy, corruption and security concerns, treatment of minority stockholders throughout Southeast Asia makes most share purchases an act of faith rather than a rational investment.

Equity markets can become exercises in the greater fool theory: buy, then find a bigger fool to sell to. There's also an element of self-fulfilling prophecy, as demonstrated in the US markets during their bull run -- as long as investors remain confident and buy when prices fall, they'll spark recoveries that push prices to new peaks. Eventually, though, fundamentals catch up with dreams, and the last buyer gets buried in the crash.

Fund managers do hedge their optimism about Indonesia with the qualifier: as long as there's not another terrorist incident. The US and Australia, however, have not just issued the usual travel advisories after the August 5 bomb, they've given specific warnings about future attacks. Meanwhile, addressing Association of Southeast Asian Nations on its 36th anniversary last week, Indonesian President Megawati Sukarnoputri threw up her hands, saying terrorism was too big a problem for individual nations or even regional groupings to tackle on their own. All sides have covered themselves in advance for the next attack, but investors needn't worry. If the Bali bomb and Jakarta blast were buying opportunities, the next strike should be seen as a convenient restart for late arriving dreamers.

Low impact bomb

Lately dreaming appears to have expanded its realm beyond the usual fund manager suspects and replaced reality in Indonesia's general business and economic communities and the related government agencies. In these cases, you wonder who's fooling whom.

For example, experts in the public and private sectors dismiss the impact of the Jakarta bombing on the country's sputtering recovery. Any effects will be short-lived, they insist, and limited to specific sectors such as tourism. And even tourism officials discount the problem, saying that they registered a 10 percent cancellation rate for Jakarta hotels last week before new bookings resumed this week.

That means Jakarta, the hardly scenic capital best known for rising crime, traffic and pollution, expects visitors to return faster than they did in Bali, the world's favorite island according to Travel + Leisure magazine. Bali is still reeling 10 months after its terrorist attack despite a US$1 billion government stimulus package.

On Friday, President Megawati will announce her government's economic growth target of 5 percent for next year. That's a 25 percent boost over this year's target of 4 percent -- there's no guarantee Indonesia will reach that target after 3.4 percent growth in the most recently reported quarter -- and far short of the 6 or 7 percent needed to get a substantial portion of the estimated 40 unemployed back to work.

The increased growth in 2004, according to the government's plan, will be driven by greater domestic consumption, higher exports and increased investment. Dream on.

Forecast cloudy

It's hard to imagine how much more Indonesian consumers, with annual per capita incomes under $800, can lift the economy. Current growth has been the product of domestic consumption on the backs of Indonesians who have little choice but to buy food and other essentials at prices climbing two or three times the reported growth rate. Net capital outflows continue, meaning the smart money keeps heading for the exits, taking advantage of the rupiah's rise to get more for local earnings they move offshore.

Curiously, exports fell by nearly a quarter following the Bali bombing. They're rising from that bottom, but the stronger rupiah crimps their potential growth. Energy prices are likely to head lower, and no concrete programs have emerged from constant talk about aiding manufacturing or agricultural exporters. Whatever programs may emerge, they're unlikely to succeed without reforms that reduce the corruption plaguing productivity.

As for reforms, leaving the International Monetary Fund program at the end of this year will eliminate any meaningful pressure for reform, as well as push the government into the commercial market for loans of $2 billion or more in a national election year.

The IMF exit will also cast a shadow on investment, an apparent bright spot this year. Foreign investment approvals have risen by $1.5 billion compared to the first seven months of last year to $4.7 billion. That would seem like a success for what the President Megawati declared "Invest in Indonesia Year". The lack of any identifiable programs in connection with the declaration and a closer look at the numbers tell a different story.

The gains follow a 35 percent drop in 2002, the fifth straight annual decline in foreign investment figure. Moreover, according to Indonesia's Investment Coordinating Board, only 45 percent of the 2003 total qualifies as foreign direct investment that will add jobs or expand the economy; the rest were deals between overseas investors.

Worse, domestic investment continued to plunge, down another 23 percent compared to the first seven months of last year to $1.35 billion. That follows a 57 percent decline in 2002.

Indonesians probably have just as many dreams as anyone else. But they seem to be much more adept than foreigners at preventing those dreams from guiding their wallets. That seems like a bit traditional thinking that the moderns could profit from.

Domestic investment approvals plunge

Jakarta Post - August 13, 2003

Jakarta -- Investment activity in the country remains in the doldrums with the Investment Coordinating Board (BKPM) revealing a bleak picture of investment during the first seven months of this year.

The board actually reported an increase in foreign investment approvals over the same period from US$3.2 billion in 2002 to $4.67 billion this year. However, only $2.1 billion of this year's figure could be categorized as foreign direct investment (FDI).

Foreign direct investment usually translates into new projects in the real sector that absorb unemployed people. For the first seven months of this year, BKPM approved 519 new projects worth $1.5 billion and expansion projects worth $616 million.

Meanwhile, the other $2.5 billion in foreign investment approvals would not translate into new projects as they came from approved changes of ownership in projects or companies involving foreign investors.

The board also reported that foreign investors were mostly interested in trading and repair work with 229 approved projects, followed by the machine and electronics sector (59 projects) and hotel and restaurant sector (34 projects).

On the domestic investment side, however, BKPM reported a 23 percent fall in domestic investment approvals to Rp 11.7 trillion (US$1.35 billion) in the first seven months of this year from Rp 15.3 trillion posted in the same period last year.

The approved domestic investment will reportedly go to 114 projects, including 97 new projects and 45 expansion projects. The figure also includes approvals for changes of ownership in 17 projects Domestic investment will mostly be for chemical-related industries (14), machinery and electronics (12), transportation and communication (11).

The board did not offer any reason for the decline in the figures, which should further expose the country's continued weak business activity.

Analysts have long blamed the ongoing crisis, with a series of terror attacks, as the main factors keeping foreign investors at bay. In addition, the slow pace of restructuring in both the banking and corporate sectors have also been cited as key obstacles hampering investment.

That slow pace of reform has not only caused low capital demands for new projects from the private sector but also kept the sector at a high-risk rating, making banks reluctant to channel commercial loans to them.

That condition adds to the overall unfavorable investment climate in the country, with investors complaining about various conditions here that are detrimental to investment. They include legal uncertainty as a result of decentralization, security fears, labor-related disputes and lack of confidence in the courts.

As part of attempts to lure more investors, the government has declared this year as Indonesia's Investment Year, but so far this declaration has failed to lure new investors.

Investment approvals have been consistently declining since 1997. In 2002, FDI approvals plummeted by 35 percent, while domestic investment approvals dropped by 57 percent.

Before the crisis, investment was one of the country's main engines of economic growth. But now, it only accounts for less than 15 percent of economic growth in terms of gross domestic product (GDP) with household consumption contributing more than 70 percent.

IMF completes tenth review on Indonesian economy

Jakarta Post - August 13, 2003

Jakarta -- After completing its 10th review of Indonesia's economic reform program, the International Monetary Fund (IMF) praised the stable performance of the country's financial markets despite the recent bombing at a Jakarta hotel.

"The foreign exchange, equity, and bond markets have performed well, despite the recent tragedy at the JW Marriott Hotel in Jakarta," IMF Asia Pacific senior adviser Daniel Citrin said in a statement issued on Tuesday. The solid performance of the financial markets reflects the resilience of Indonesia's economy, the IMF said, which led to optimism that "the modest growth of around 4 percent remains achievable this year".

The government has targeted 4 percent economic growth in the 2003 state budget.

The rupiah and the stock index, both of which stumbled after the Marriott bombing last week, have regained their footing. On Tuesday, the rupiah closed at Rp 8,535 per US dollar, rallying for the fourth successive trading day, with Monday's closing at 8,540. The August 5 attack killed 11 people and injured some 150 others.

The statement also noted that the country had made progress in reforming various areas of the economy, including the financial sector, public finance and macroeconomics. The IMF said this progress would "help entrench the gains in macroeconomic stability as well as boost the prospects for growth and employment".

The review will be presented to the IMF's board of executives in Washington. If approved by the board, it could lead to the disbursement of a US$480 million loan tranche. That would be one of the fund's remaining two loan disbursements, after Indonesia decided not to extend the current $5 billion IMF loan program when it expires in December.

"The decision not to request a successor financial arrangement reflects the success of the government in improving macroeconomic conditions over the past couple of years," the IMF said of the government's decision to enter a post-program monitoring (PPM) arrangement with the fund rather than extending the program.

Under the PPM arrangement, the IMF will still meet twice a year with the Indonesian government to discuss the economy -- its performance and policies, the statement said.

Indonesia requested an IMF bailout program after being hit by the 1997-1998 economic crisis. In return for the IMF loans, the country had to draw up quarterly economic reform targets that were subject to the approval of the IMF.

IMF's latest assessment of RI's economy

1. On macroeconomic performance: Inflation has declined markedly and the government now expects it will be in the range of 5 percent to 6 percent by year-end. The 2003 budget is on track and this will support the steady reduction in public debt ratio.
2. On financial sector reforms: Development in preparing a financial safety net -- including establishing a deposit insurance facility -- will permit, over time, an unwinding of the blanket guarantee of bank liabilities while ensuring the systemic safety of the financial system.
3. On public finance reforms: The ongoing reforms of the tax and customs administration are to be broadened. The Ministry of Finance is to be reorganized to provide effective treasury and budget functions.

Indonesia can still hit growth target, says IMF

Agence France Presse - August 12, 2003

Jakarta -- Indonesia can still achieve its growth target for this year despite last week's deadly bombing at the JW Marriott Hotel in Jakarta, a senior International Monetary Fund (IMF) official said yesterday.

"We still think that growth within the range of 3.5 to 4 per cent this year, which is the government target, is achievable," Asia- Pacific senior adviser Daniel Citrin told reporters.

Some observers feared that the bombing, which killed 11 people and wounded 149, and is blamed on the Jemaah Islamiah terror group, will deter foreign investment.

But analysts said the impact of the act of terrorism on overall growth would be limited as the country's economy relies on domestic factors to drive growth. "Of course, it is still early to say, but we still think it is achievable," Mr Citrin said.

He also shared the central bank's year-end inflation forecast of between 5 and 6 per cent, compared with the initial forecast of 8 to 9 per cent. Mr Citrin heads an IMF mission that is reviewing Indonesia's economic programme.

A successful review will pave the way for the disbursement of the next instalment of IMF loans totalling around US$480 million. The IMF still has to make two disbursements to complete its five- year, US$5 billion loan before it expires in December.