Aceh

GAM's Sayed Mustafa Usab: 'I am not a tool of the army'

Tempo Magazine - September 14-20 , 2004

His name is not as popular as that of Ishak Daud or Sofyan Daud. But this rotund man is a key figure in the Free Aceh Movement (GAM). He says he is the one who linked up Aceh Governor Abdullah Puteh with GAM Prime Minister Malik Mahmud at the end of 1999.

Sayed Mustafa Usab, 42, was born in Kabu Tunong in southern Aceh. He was once GAM coordinator for the Mereuhon Daya and South Aceh areas (1999-2001).

His task was to provide information to the GAM leadership in Sweden on the situation in the field and receive their instructions.

He completed his military training in Lybia during the 1989-1990 period.

Sayed owns two passports, one of them under the name of Heriyadi and the other under the name of Azri Azis. As a liaison man, Sayed's mobility is quite high. He can be met in Singapore, Malaysia, Sweden, the Netherlands, Denmark and even Norway. After the death of GAM commander Abdullah Syafei, the job of GAM's South Aceh coordinator was eradicated. Sayed did not have any specific role in the GAM hierarchy. When martial law was enacted by the Megawati government, Sayed became a freight and cargo broker in Jakarta.

Despite his moving from place to place, Sayed was nabbed by the Integrated Intelligence Team at Mal Depok on May 6 recently. Sixty troops were deployed to carry out the operation.

Sayed lives quietly these days. Wearing rubber sandals, a collarless white T-shirt and blue training trousers, Sayed is an inmate at the Tapaktuan Prison in south Aceh-the prison built by the Netherlands in 1912. In contrast to other inmates who must share with six, sometimes 10 people to a cell, Sayed occupies a cell measuring 10.5 square meters all by himself, with his own indoor bathroom. In that cell, Sayed told his story to Yandhrie Arvian of Tempo.

Is it true you once met with Abdullah Puteh? How many times?

Our first meeting was in mid-1999 at the Gran Melia Hotel, in Jakarta. When Puteh was about to become governor, I saw that he was looking fro support from all sides, including myself as someone from west and south Aceh. The next meeting took place in Singapore and at the Kartika Chandra Hotel in Jakarta.

In Singapore, who did Puteh meet?

Malik Mahmud. We met at a seafood restaurant outside the Hotel Royal Brunei, for about one hour. In front of Malik Mahmud, Puteh conveyed his intention to govern Aceh and asked for his blessing. Malik Mahmud did not give any response and thought that he had no right to give support, yet no right to forbid it either.

Is it true Puteh promised to give 40 percent of the province's revenue to GAM if he was elected governor?

I hold that promise. Puteh promised, if elected governor, that he would allocate 40 percent of the provincial budget for GAM. Frankly, when I first heard it, I was enthusiastic. In front of me and Zulkarnaen (Sayed's colleague when they met Puteh at the Kartika Chandra Hotel), Puteh also said he would shoot his own head if he reneged on his promise (a finger pointed to his head).

Where you tempted?

Personally, I was tempted.

Was the promise by Puteh fulfilled?

At the end, I found out Puteh made easy promises. I think Puteh is a hypocrite. After that, he never fulfilled any of the promises. He never gave anything to me or to GAM.

But Puteh denied ever meeting you.

Politicians are like that, hypocrites. I am ready to confront him if necessary. I want Puteh dragged into jail just like me.

Did you ever claim that promise?

No, because ever since he became governor, Puteh was always surrounded by armed men.

Did you ever report to Sweden over that promise?

Yes. But right from the start they [GAM in Sweden-Ed.] had asked whether Puteh could be trusted. It seems the GAM leadership in Sweden were already aware of Puteh's background since he became a businessman. So they were not surprised when the promise was not fulfilled.

Did Puteh ever send funds to GAM?

Never. There were even GAM people in Jakarta who sought Puteh out to kill him. So long as you know, many GAM people are angry at me because I am seen to support Puteh.

Did Puteh ever communicated again with Malik Mahmud?

Not likely. Puteh never met Malik Mahmud again. If a meeting took place, I would have been told by Malik.

Were you being used by the military to oust Puteh?

No. I was not used by anyone. I am against both the military and Puteh. I cannot be a tool of the military, even if I am in prison. I don't want to be involved in a conflict of interest between the military and Puteh.

Next US envoy wants peace for Aceh

Jakarta Post - September 14, 2004

Fabiola Desy Unidjaja, Jakarta -- The United States ambassador- designate to Indonesia B. Lynn Pascoe said that encouraging and facilitating the peace process in Nanggroe Aceh Darussalam would be among his priorities during his tenure in Indonesia. Current ambassador Ralph L. Boyce served in Indonesia since October 2001.

In a statement in front of the US Senate committee on foreign relations, Pascoe said that the Indonesian government would only be able to restore peace and stability in Aceh through nonmilitary, broadly inclusive solutions.

"I believe the US can encourage and help facilitate a peaceful outcome to the violence in Aceh while promoting an approach that simultaneously protects the territorial integrity of Indonesia and the human rights of its citizens," Pascoe said, as quoted by a text provided by the USINFO.STATE.GOV issued on September 10.

The ambassador-designate said that the recent lifting of martial law in Aceh has brought little change in bringing peace to the restive province.

He also expressed concern for the people in Maluku, Sulawesi and Papua who have been suffering due to riots and incidents of human rights abuses.

Pascoe, a 37-year old veteran of the foreign service, has been appointed by the US government to replace Boyce, who has served in Indonesia for almost three years.

Pascoe has served for many years in Asia, including 10 years in Chinese-speaking posts as well as Bangkok, and as envoy to neighboring Malaysia.

In the statement, he further said that Indonesia, both for itself and its relations with the US was entering "a critical time of transition".

He cited that US assistance to Indonesia's counterterrorism efforts and to economic, judicial, and military reform "all play an essential role in helping Indonesians themselves make progress".

"Indonesia's strides in consolidating democracy have been dramatic and deserve our full support, at the same time we remain very concerned with aspects of the human rights there," Pascoe said in the statement.

He cited the first direct presidential election in Indonesia as an important step taken by the world's most populous Muslim country in strengthening its democracy.

On the counterterrorism issue, he lauded the steps taken in dealing with the series of terrorist attacks in the country.

"Indonesia has taken vigorous actions to pursue and prosecute those responsible for the Bali and Marriott bombings, and the Indonesian police have made significant progress in combating the indigenous terror network responsible for these attacks, Jamaah Islamiyah," he said.

In the economic field, Pascoe cited an urgent need for fundamental economic reform and improvements to the investment climate.

He vowed to pursue American interests in these areas especially in ensuring impartiality and the rule of law.

West Papua

One rebel dead, soldier shot in Papua fighting

Jakarta Post - September 16, 2004

Nethy Dharma Somba, Jayapura -- A group of suspected Free Papua Movement (OPM) rebels attacked on Tuesday 15 Indonesian Military (TNI) soldiers in Lima Jari subdistrict, Puncak Jaya regency, leaving one rebel dead and one soldier severely injured.

The attack occurred at about 8:30 a.m. local time, when a group of TNI soldiers on patrol in Lima Jari subdistrict was fired upon by suspected rebels hiding behind a hillock.

Pvt. Joseph from the Army's elite Special Forces, who was at the head of the military patrol, was hit in the shoulder during this initial salvo.

He was immediately aided by his colleagues and taken to Mulia Hospital in Puncak Jaya, before being evacuated to Jayapura, the capital of Papua province. Lima Jari subdistrict is about 750 kilometers southwest of Jayapura.

"The moment I was shot I dropped my rifle, and one of the rebels came from behind the hill and tried to grab my rifle, but I was able to grab it first and sling it across my back. The rebel then returned to behind the hill," Joseph said at the Marthen Indey Army Hospital in Jayapura.

He said that both sides exchanged gunfire before the rebels fled. Joseph said there were about 50 rebels involved in the attack, armed with at least five firearms.

The chief of staff at the Trikora Military Command, Brig. Gen. Getson Manurung, said in Jayapura on Wednesday there were indications the attack was carried out by the Goliat Tabuni rebel group, which is known to operate in the area.

"We can try to track them down, but they blend in with the locals who they use as human shields. The military must be careful and constantly try to differentiate between local residents and the rebels," he said.

This was the second gunfight to take place in the area in the past month. The first incident occurred on Aug. 17, leaving two suspected rebels dead and a Special Forces soldier, First Pvt. Odji, injured. Getson said it was thought the two attacks were carried out by the same group of OPM rebels.

The incident is not expected to affect local voting in the presidential election runoff on September 20, Getson said. "There is no reason not to hold the election there, and there will not be any reinforcement troops. The troops already deployed in the area will be able to maintain the situation," he said.

Following the ambush, Papua Police deputy chief Brig. Gen. FA Purwoko reminded his officers to remain on the alert for groups that might try to disrupt the election or keep people from going to the polls.

Papua Police Headquarters has mobilized two-thirds of its force, or about 6,500 officers. They will be assisted by 1,200 military personnel in guarding polling stations across the province.

'War on terrorism'

Jakarta bombing: symptom of poverty, war and desperation

Green Left Weekly - September 15, 2004

Max Lane -- I condemn the bombing outside the Australian embassy in Jakarta on September 9, which has taken at least nine lives and injured more than 180 Indonesians -- mainly people doing business at the embassy and passers-by. I express my full sympathy to all those who have lost loved ones and who have suffered injury.

Such acts are inhumane, stupid and futile. But they are also a symptom of a world where poverty, desperation and hopelessness about the future, and humiliation of culture, religion, race and nation are more and more pronounced. These evils are driving some people to acts of insane cruelty.

Those who can most be held responsible for this situation are the people in power: those who decide things; who design how the world works; who declare wars, invade countries, support foreign occupations and blithely continue policies wreaking economic terror on the billions of people who live in the Third World.

The Australian government must end its role in maintaining this cruel world order. Initial steps must include the withdrawal of all military forces from the illegal occupation of Iraq -- an occupation so clearly opposed by the Iraqi people. The Australian government should also end its support for the barbaric and cruel occupation by Israel of Palestine. It must immediately announce an end to its shameful support for the Israeli wall of terror.

Federal Labor leader Mark Latham has pledged to send Australian troops into Southeast Asia to break up "regional terrorist networks", if Labor is elected. But supporting Indonesia's security forces won't stop terrorism. Instead, it will encourage state terrorism, like that carried out against Aceh, West Papua and East Timor. Former Australian foreign minister Gareth Evans admitted last year that Australian and US training and support for the Indonesian armed forces has "helped only to produce more professional human rights abusers". Labor's approach will only add to the suffering of people in our region.

The Coalition government, the Labor "opposition", all Australian political parties and the community at large must work to quickly end Australian participation in the military and economic war against the Third World. It is the rich West that is on the offensive today and the war that is unfolding will only begin to end when this offensive ends.

Foreign minister Alexander Downer has repeatedly claimed that these kinds of bombings have no "root cause". I have been involved with Indonesia since 1969 and I know that until three years ago there had never been a single suicide bombing in Indonesia. Why now? Oh, there are no causes...? Absolute garbage. Only an idiot and a hypocrite could make such an "analysis".

Indonesia and the Indonesian people now face a situation where, for the first time ever, it is clearer and clearer to more people that their country, society and nation has no decent future -- unemployment, poverty and rule by Western-backed elites now seem embedded forever. When will their societies "catch-up" to the prosperity of the West? Never, while the West and its institutions dominate their economy. This story is repeated right around the Third World.

There are many in Indonesia and throughout the world who are looking for solutions to this social and economic mess in a rational and creative way. They need our solidarity and support. If we do not unite with them -- the peoples of the Third World building their own anti-globalisation movements -- then the capitalist fundamentalists in Washington and Canberra will get the permanent war they want, which they will use to justify their special powers and privileges. And this in turn will mean a permanent process of producing more recruits for suicide bombings. And so it will go on.

Alternatively, we can make a break through rejecting the West's warmongering and economic plunder. We can align with the mobilising and critical people of the Third World and start a process to turn the world around and create a world where people will really not want to waste their lives in a suicide bombing.

[Max Lane is a translator for the left-wing Indonesian novelist Pramoedya Ananta Toer, and is a research fellow at the Asia Research Centre, Murdoch University.]

Police arrest eight over embassy bombing

Jakarta Post - September 17, 2004

Jakarta/Surabaya/Madiun -- The National Police announced on Thursday that they had arrested at least eight people allegedly linked to last week's deadly blast outside the Australian Embassy in Jakarta, which killed 10 people and injured over 180 others.

National Police chief of detectives Comr. Suyitno Landung Sudjono confirmed the arrests of only seven suspects in East Java, while a police source said another one was nabbed in Jakarta.

"This is part of our efforts to establish a link between terror suspects in West, Central and East Java. We hope we can capture both Azahari bin Husin and Noordin Moh. Top, once we trace their network," said Suyitno.

Azahari and Noordin, both Malaysian fugitives, were believed to have masterminded the 2002 Bali bombings that killed 202 people and the 2003 JW Marriott Hotel attack, which claimed 12 lives.

Police said the two had recruited several new suicide bombers, including those who perpetrated the embassy bombing on September 9, 2004. Now, the terror masterminds each have a Rp 1 billion bounty on their heads.

The same police source further said one man suspected of playing a role in the preparations of the embassy bombing was nabbed somewhere in North Jakarta and is being interrogated at the Jakarta Police headquarters. The source and Suyitno said the police also arrested three people in Sidoarjo, three others in Madiun and two others in Magetan.

The police identified only three of the detained suspects as Rahmatullah, his wife Farida and Agung, who were all nabbed on Wednesday night in a rented house on Jl. Merak III in the Renwin area, Sidoarjo.

"Based on information obtained from Abu Fida, the three are part of Azahari's terror network," said East Java Police spokesman Sr. Comr. Endro Wardoyo. Abu Fida alias Saefuddin, who was accused of having harbored Azahari and Noordin was arrested on August 4 in Surabaya.

Endro said that Rahmatullah, Farida and Agung hosted a forum at their rented house for Azahari's new recruits to take an Islamic oath. "They are being questioned as witnesses to help us in the investigations. We are now detaining them at Sidoarjo Police Station," Endro added.

However, he said three other suspected new recruits, identified only by their initials as SL, HM and AN, managed to evade police arrest by escaping in a dark Toyota Kijang van, adding that the three were about to take an oath at Rahmatullah's house.

Police officers found documents written in Arabic hidden in the well behind the rented house, Endro said. "We are still studying the documents." The police said they were searching for another suspect identified as Gempur Budi Angkoro alias Jabir.

National Police chief Gen. Da'i Bachtiar said Jabir and Hasan, believed to be among those newly recruited by Azahari and Nurdin, were the suicide bombers at the Australian Embassy blast.

Jabir, who is a cousin of Fathurachman Al Ghozi -- a convicted terrorist shot dead in the Philippines in October last year, had not returned to his home in Madiun, East Java, according to his mother Muslihatin. She said the police had taken her blood to be matched with body parts found at the blast site.

Meanwhile, the owner of car showroom Wisma Ratu Mobil on Jl. Jati Makmur in Bekasi, West Java, Siswanto, and his employee Agus were questioned on Thursday at the Jakarta Police Headquarters in connection with the bombing.

The car dealer reportedly sold the white Daihatsu Zebra box van with chassis number 9032109 used in the blast to some unidentified buyers on September 6, only three days before the tragedy.

Army of secret informers needed

Jakarta Post - September 17, 2004

Gandhi Sukardi, Jakarta -- The September 9 bomb explosion in front of the Australian Embassy in Jakarta, could have been prevented if the police and the intelligence services, had an army of secret informers, who are well-paid and full-time, not doing the job as a pastime or amateurs.

Their search for suspect characters by mingling with all levels of the population should be a 24-hour and well-coordinated duty. The perpetrators knew too well that most security officers were or still are preoccupied with the second round of the direct presidential election and that seemed to be the right time to strike whatever their motives.

Future threats from terrorists, using the same device, have now become a very serious problem, which can spill over to extreme groupings dissatisfied with the results of the election, as seen at the central General Elections Commission (KPU) tally as well as at the several polling booths.

If there are no arrests of the suspected group before the September 20 presidential election, personally I have a hunch that violence and bombing explosions may accompany the democratic exercise. The impression is that police and secret agencies have been taking their duties in this respect with too much complacency with no apparent urgency.

In light of the presidential election, it might have been a test by extreme elements of how the security authorities would react to such a challenge. There is too much at stake, nationally and globally, to refrain from greatly strengthening this army of secret informers. And it should be immediately considered, whatever the result of the election. Common people, like myself, sadly fail to understand why Indonesians have become a people that so easily resort to violence. There is fear that the presidential elections will turn out to be an unruly and violent affair after the latest bombing incident.

Intelligence services to be revamped after bombing

Asia Pulse - September 15, 2004

Jakarta -- Indonesia's top security minister has ordered sweeping changes and granted wider powers to its intelligence services following the deadly Australian embassy blast in Jakarta.

With a presidential election on Monday and a nationwide manhunt under way for the two terror masterminds behind the bombing, the minister for security and politics Hari Sabarno announced the shakeup today, saying it would ensure more coordination among rival agencies and departments.

Intelligence officers will have the power to arrest terror suspects immediately instead of having to call for assistance from police or the military.

"Intelligence officers outside the police force have until now not had the power under the law to catch anyone," Sabarno said. "They can only follow, observe and inform."

In future, already powerful intelligence czar AM Hendropriyono, who heads the national intelligence service known as BIN, would make changes "to empower all intelligence officers in this country", Sabarno said.

Indonesia's terrorist hunt has been hampered in the past by the sheer number of intelligence services in the country.

As well as police, BIN and the three branches of the military, both the security ministry and even the foreign affairs department have their own intelligence wings.

"It's true that each force and police actually have their own special anti-terror task," Subarno said. "The problem is how to unite this force to anticipate terrorist actions, to prevent or handle them."

The decision to hand Hendropriyono more power is a surprise. Many analysts in Jakarta had earlier predicted that he might be forced to quit in the wake of Indonesia's third terror attack in only two years.

Sabarno said Indonesia was well prepared to deal with traditional terrorist scenarios like hostage situations and hijackings. But he said the recent wave of suicide bombings was a new threat that authorities were fast trying to counter.

Last week's bombing killed at least nine people, all of them Indonesian, and wounded more than 160 others.

National police chief general Da'i Bachtiar said the suicide bombers had picked the weakest point of the Australian Embassy defences, turning their white truck packed with explosives "a little bit" to the side near the front gate for maximum effect.

Indonesian police were today still piecing together parts of the vehicle. They were also using DNA samples to try and identify whether one or two suicide bombers had been in the vehicle cab. A severed head probably belonging to one of the bombers was found late yesterday on the fifth floor of an office building beside the embassy. More embassy staff returned to work at the mission this morning after work crews began repairing blast-resistant security fences.

A nationwide manhunt has been launched for Azahari Husin and Noordin Mohammed Top, the two Malaysians believed to have masterminded both the embassy attack and the bombing last year of the JW Marriott Hotel in Jakarta, which killed 12 people.

Intelligence failure?

Jakarta Post - September 16, 2004

With only three days to go before balloting begins in the country's final round of its first direct presidential elections on Monday, Indonesians can draw little comfort from official assurances that everything is being done to ensure that the situation remains under control. After all, the deadly bomb attack in front of the Australian Embassy in Kuningan one week ago occurred only minutes after the chief of the National Police, Gen. Da'i Bachtiar, assured the House of Representatives that the situation in Jakarta was "safe and under control."

Of course, that statement, made by the man who should know better than anyone else what immediate dangers are threatening the nation, points at some very serious flaws that are encumbering the effective operation of our security and intelligence services. To make matters worse, the police had apparently ignored warnings, issued a week before by the United States and Australian governments, that there were indications that terrorists were planning a major attack in Indonesia in the coming days. A most unfortunate oversight, given that similar neglect probably led to the devastating JW Marriott Hotel bombing in August last year.

At present, almost two years after the double bomb attacks of October 2002 in Bali, police still have not been able to capture two of the most important suspected masterminds of those two bomb attacks, the Malaysian bomb makers Azahari bin Husin and Noordin M. Top. This, admittedly, is not because police have not been making an effort to find the two. In fact, ever since the Bali blasts, police investigators have been close to catching them more than once. Last year, however, the two managed to give police the slip only minutes before officers arrived at their safe house in Bandung. History practically repeated itself earlier this month, days before the Kuningan blast, when police raided a house in West Jakarta the two were believed to have rented, only to find that they had left two days before, leaving traces of chemicals that police believe were used for making last week's bomb.

An unfortunate coincidence? Perhaps. But many observers believe that the breakdown of coordination and the rivalry that has arisen among the various intelligence agencies since the downfall of President Soeharto in 1998 must be held responsible, at least in part, for this failure. The police and military intelligence services appear to be each going their own way, keeping vital information to themselves rather than sharing it with "rival" agencies and with the National Intelligence Agency (BIN).

Even more serious, some observers suspect that some of the intelligence information gathered may have been leaked -- in this case, to the terrorist masterminds Azahari and Noordin and their abettors, giving them the opportunity to escape. Given that the two Malaysians have slipped through police cordons at least twice that we know of, this is a possibility that the security authorities would certainly do well to look into.

Whatever the case, a revitalization, if not an overhaul or a reorganization, of the country's security and intelligence services seems strongly indicated. Indonesia cannot afford to allow terrorists to continue to wreak havoc within its borders. At the same time, Indonesians must realize that the fight against terrorists and terrorism cannot be left to the government and the police alone. The public, too, must take an active part in the battle against terrorists by alerting the relevant authorities to any suspicious goings on taking place in their respective communities -- of course, without denying individual citizens and residents their right to privacy.

Indonesia's economy shaken, not stirred

Asia Times - September 13, 2004

Bill Guerin, Jakarta -- "Oh my, we were just starting to recover and we have been thrown on the floor again," Indonesian President Megawati Sukarnoputri was quoted as saying over the weekend in response to the bombing last week outside the Australian Embassy.

Thursday's blast, which killed nine and injured at least 180 in Jakarta's "Golden Triangle" business and financial district, is a major blow to a president who has only days left to sell herself to Indonesians as having brought stability back to the nation since taking over in July 2001. The explosion shows the threat to security and stability persists.

"But thank god, the trust of the economic community has not been eroded," Megawati said on Sunday. Despite widespread pessimism about the economy following the 1997-98 financial crisis, Megawati's administration has put the economy on a modest growth path of 3-4% a year, despite of a string of geopolitical terror shocks (the September 11, 2001, attacks in the US, the October 2002 Bali blasts, the JW Marriott Hotel blast in Jakarta last August, and now the latest tragedy).

On the face of it, she could be right. Despite last week's bombing, and amid fears that more will come, Indonesian stocks quickly rallied. Both capital and currency markets bounced back to regain some ground. The Jakarta Stock Exchange's main index rose 1.9% to hit a new four-month high of 797.775 points at close on Friday. The rupiah dipped against the dollar but closed relatively strong at 9,283.

Similarly, after last year's Marriott bombing that killed 12 people, stocks rose 10% in less than a month. Dealers said on Friday that the risk of Islamic terrorist attacks had already been factored in, and the bomb had not scared the markets, mainly because of a bargain-hunting drive and a resilience toward shocks.

This business-as-usual response to the attack shows the extent to which Indonesian shares are back in favor with international investors and also suggests that portfolio investors understand they will have simply to live with new risks.

Yet, Southeast Asia's biggest economy, forced to rely largely on domestic consumption and exports in the last three years, is under siege again. Economic growth, driven by domestic spending, was only 4.1% in 2003, though this was the highest since the financial meltdown in the late 1990s. In the first half of this year, the economy grew 4.66% from the same period last year but slowed in the second quarter to 4.3% year-on-year, as private consumption slowed.

The government predicts growth to accelerate next year to 5.4% and a statement issued on Friday by Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti said it is critical to maintain the momentum of economic recovery. To maximize economic recovery and sustain growth, solidarity between government and business is a must, Kuntjoro-Jakti added.

The new government will need to work very hard to seek this solidarity from a business community that has consistently complained of the ultra-slow pace of getting things done due to bureaucratic sloth, inconsistency in deregulation packages, inaccuracy stemming from a widespread lack of computerization and, of course, corruption, as manifested by substantial "under the table" added costs.

Businessmen are frightened off by labor disputes that can result in the closure of a plant and the ease with which they can lose court actions. The expected higher insurance premiums ahead will put yet another burden on businesses.

Analysts, though, say the blast won't drive existing foreign investors out of the country since most of them have come to expect violence after a string of bombings across the country in recent years. "I think foreign investors understand the security risk in Indonesia," Bob Broadfoot, managing director of Political Economic Risk Consultancy in Hong Kong, was quoted as saying.

Attracting new foreign direct investment to lift the economy in order to significantly reduce the country's high unemployment rate is, however, another matter altogether. Such investment was already at depressingly low levels before the explosion -- only US$3 billion in the first half of 2004, a third lower than the same period last year.

Foreign investors, as predicted, stayed on the sidelines for most of this election year, nervous about political uncertainties. Megawati is locked in a fight for the presidency with Susilo Bambang Yudhoyono, the outcome of which will be determined on September 20. Yudhoyono, Megawati's security minister until he resigned in March, gets points for leading the anti-terror fight after the Bali blasts, but the president scores on experience and the incumbency factor.

Both would do well to heed a World Bank warning that investment will remain in the doldrums unless clear signs are given that various issues detrimental to the business climate are being addressed. Andrew Steer, World Bank country director in Indonesia, said in a recent seminar on growth and investment that investors have already realized that the complexity of the problems in Indonesia is too deep to be resolved overnight, but what they wanted to see were signs of a clear path toward improvement. "Investors don't yet have confidence that this country is moving clearly in a certain direction," Steer said.

The unfavorable investment atmosphere in Indonesia, due in large part to its weak legal system and corruption, has made the country less competitive in terms of investment when compared with other countries. Yet, former regional chief of the International Monetary Fund (IMF), Hubert Neiss, argues: "Corruption is not an absolute obstacle to investment, as long as there are clear signs that something will be done to fix it."

The blast will have badly spooked foreign investors, who could bring badly needed management skills to protect their investments, as has happened in the banking sector, and whose money could kick-start moribund industries and revive the industrial sector.

Tourism is also likely to be hit bad. The Indonesian Tour and Travel Association (ARSITA) said on Saturday that the tourism industry would need at least six months to recover. The Australian media have already predicted that Bali, just beginning to get back to normal after the 2002 blast in which 202 people were killed, would be struck off holiday-makers' lists. Tourism, along with export textile products, is one of the nation's main sources of revenue from the non-oil and gas sector.

Kuntjoro-Jakti called it all a temporary disturbance. "Growth will recover as we have seen from the previous bombings," he said, adding, "I am not saying it will be business as usual, but we have the record and procedures to handle this. Let's hope we can use that momentum to recover again."

He also reminded his fellow cabinet colleagues that the ability of the government and law enforcement apparatus to move swiftly and decisively in bringing perpetrators to justice will hopefully accelerate the recovery of business and improve the market's confidence in the economy.

Yet, the latest blast points to fundamental weaknesses in intelligence in the national security system and a tendency among the authorities to play down the terrorist threat. Less than 24 hours before the blasts, Hari Sabarno, interim coordinating minister for security and minister for home affairs, said a US advisory issued on September 7, warning that extremist groups might be planning attacks against American and other Western interests in Indonesia was "exaggerated".

On the positive side, the blast has had little effect on the sentiments of the five short-listed bidders for a 51% stake in the lucrative Bank Permata. Government plans to delay selling assets in state-owned companies because of the blast -- a move which could lead to a larger 2004 budget deficit -- appear to have changed. Sales likely to be affected by any delay include Bank Negara Indonesia (BNI) in October and airline PT Merpati Nusantara in November.

"We may delay the plan if the market is unfavorable after the bombing," State Enterprise Minister Laksamana Sukardi said on Thursday. But Mohammad Syahrial, chairman of the government's Asset Management Company (PPA), told the press a day after the blast that bidders had already asked the government to increase the sell-off to 71% of its shares. A 30% stake in Bank Negara Indonesia will also be up for grabs later in the year.

The government has also announced it will go ahead with its forthcoming series of bond issues, one for Rp2 trillion ($215.05 million) and another for Rp3 trillion, on September 28. The hope is that police can swiftly solve the embassy blast, as they did in the case of the Bali bombing, giving the new government that takes over in October the breathing space to strive to improve the investment climate.

Lessons from the Jakarta blast

Asia Times - September 13, 2004

B. Raman -- In looking at the car bomb explosion outside the Australian Embassy in the Indonesian capital of Jakarta last Thursday, one must avoid an over-interpretation and over- assessment of the blast, which caused the death of nine persons and injured more than 100 others, most of them civilians.

The post-September 11, 2001, breed of al-Qaeda watchers tend to hype up every act of terrorism, projecting it as the outcome of an al-Qaeda grand strategy and evidence of the group's octopus- like nature, thereby creating an unwarranted perception of al- Qaeda's continuing anti-state potency and the seeming helplessness of the state in countering this threat. By doing so, these al-Qaeda watchers tend to play into the group's hands and give it an image that helps it in its self-perpetuation.

While the death of even a single individual at the hands of terrorists is shocking and ought to be a matter of concern to the state and the international community, one has to note that on the scale of terrorist incidents, the Jakarta blast would fall into the category of low-to-medium or, at the most, medium gravity. Such incidents have been taking place at frequent intervals in India since 1956. As a result, Indians treat terror attacks with a sense of balance and consciously avoid overreaction and over-projection, which would be counter- productive.

Presuming that the perpetrators of the blast belonged to Jemaah Islamiyah (JI), which seeks to establish a pan-Islamic state in Southeast Asia and is the group blamed for several previous bombings in Indonesia, what is really significant is not that it was able to organize last week's bombing despite stepped-up anti-terrorism security in Indonesia in general and in Jakarta in particular since the JW Marriott Hotel blast in August last year, but that it took JI more than a year to find a suitable volunteer for another suicide mission and to procure the necessary material such a move required.

This speaks well of the counter-terrorism drive instituted by the Indonesian government after the Bali bombings in October 2002. One should avoid projecting the blast as the outcome of any weaknesses in the government's policies and actions. The lessons emerging from the blast are as follows:

The motivation of the jihadi terrorist organizations in Indonesia, whether it is the JI or any other organization, and their urge to vent their anger through acts of terrorism remain strong.

A reservoir of potential suicide bombers is still available to these groups, but no evidence shows that this is an expanding reservoir.

Despite the measures taken by the Indonesian government to strengthen its intelligence collection capability and the assistance it receives from Australia, the US and other countries, Indonesia continues to have gaps in its intelligence coverage. Such gaps are inevitable and cannot be totally eliminated.

Indonesian society still posses on-going pockets of anger that are exploited by jihadi terrorists. In some instances this anger is directed against the government, either because of its perceived anti-Islamic policies or because of its cooperation with Australia and the US. In other instances, it is directed against external powers such as the US and Australia, which are viewed as anti-Islam. The anger against Australia is stronger because of its alleged role in the separation of East Timor from Indonesia, its perceived anti-Islamic immigration policy and its support for US military operations in Afghanistan and Iraq. Jihadi terrorists wanting to remain active and grab media headlines exploit this anger.

This latest terrorist strike does not appear to have had any strategic objective. It was a pure and simple tactical strike to let the world know that the jihadi terrorists remain alive and kicking.

The gravity and impact of the strike would have been greater and the reverberations arising from it would have been felt far beyond Indonesia if the jihadi terrorists had succeeded in their tactical objective of harming Australian lives and interests. The fact that the Australian mission was able to withstand such an attack is not only a tribute to its physical security, but is also proof of the validity of the counter-terrorism adage that where physical security is strong and effective, terrorists cannot prevail, even if intelligence is weak, and where physical security is weak, terrorists might succeed even if intelligence is strong.

There is no evidence so far to connect the blast with al-Qaeda, nor with the observance of the third anniversary of the September 11 attacks in the US, the forthcoming presidential elections in Indonesia or the parliamentary elections in Australia. The impact of the blast on the elections, either in Indonesia or in Australia, will be minimal, if not nil, unless this blast turns out to be the precursor of more to come. Indonesian President Megawati Sukarnoputri and Australian Prime Minister John Howard and his party may still lose the elections, but their defeat, if it comes about, will not be because of this blast but because of their sins of commission and omission in many other matters.

Australia has not yet rid itself of its image as a regional surrogate of the US. The overreaction of its leaders to incidents such as the blast, their unwise statements and actions, such as the high-profile visit of Australian Foreign Minister Alexander Downer to Jakarta immediately after the blast, and their habit of throwing their weight around in the name of counter-terrorism cooperation, with ostentatious offers of financial and professional help in dealing with terrorism, add to the darkness of its image.

That the JI is alive and kicking should not be a matter of surprise. It has much deeper roots in Indonesian society than al-Qaeda has in the society of any Islamic country. To expect its early withering away would be overly optimistic.

Australian police officials have been quoted by the media as warning of another possible terrorist strike directed at Australians in Indonesia. An equally strong possibility is a JI strike in Malaysia directed against the local government or against the nationals and interests of the US and Australia. The Pakistan-based jihadi components of the International Islamic Front have maintained a high level of virulence in their rhetoric against not only their own government, but also against Indonesia and Malaysia ever since the arrest and handing over to the Malaysian and Indonesian authorities some months ago of several Malaysians and Indonesians, including a brother of Hambali, the projected operational chief of JI, from a madrassa (seminary)in Karachi run by the Lashkar-e-Toiba.

B Raman is a former additional secretary, cabinet secretariat for the government of India, New Delhi. Presently, he serves as director of the Institute For Topical Studies, Chennai, and is a distinguished fellow and convener for the Chennai chapter of the Observer Research Foundation.

2004 elections

Presidential poll: more than just a new leader?

Radio Australia - September 17, 2004

Indonesia's Presidential election could herald significant changes to the way the government runs the country. The historic direct Presidential poll will cement the democratic constitution with Indonesia's future. If opinion polls are correct and former military general Susilo Bambang Yudhoyono wins, he will have a firm mandate to pursue his policy agenda. Alongside him sharing power, will be his running mate, millionaire businessman and Golkar Party member, Yusuf Kalla Presenter/Interviewer: Karon Snowdon

Speakers: Yusuf Kalla, Indonesian Vice Presidential candidate.

Snowdon: While the media and public gaze has naturally focussed on presidential aspirant, SBY, his Vice President in waiting, is hardly less ambitious. Under the new constitution and the direct voting system, the millionaire from Sulawesi expects to assert his right to power sharing with SBY should the ticket win on Monday.

Kalla: Yah of course this is different than before in our Constitution, presidents and vice presidents have joined together to win the elections, this means we have a sharing, are sharing, that's why we are sharing to in any government spirit or powers, and we are working accoriding to our capacity, our capability.

Snowdon: Like SBY, Kalla served in the Wahid and Megawati governments, and is a former Coordintating Minister for People's Welfare. He said he would assume responsibility across the economic, business and social welfare areas of the new government if he and SBY win. He argues that Indonesians have been let down by a failure of leadership, first Abdurhaman Wahid and now President Megawati ... that after the economic crisis the public's justified high expectations of better times have not been met.

Kalla: We should reach expectations.

Snowdon: You think you can reach those expectations?

KALLA: Yes, yes, yes for instance to increase the capacities of the nation, we need more activities in business, we need a big push ...we need that big push.

Snowdon: Yusuf Kalla's big push involves strategies to increase economic growth to the 5 per cent needed for new jobs ... by encouraging domestic investors back home from Singapore and Hong Kong , lowering interest rates, improving the tax base and convincing foreign investors to return. Rooting out corruption will begin with a big shake-up in the public service coupled with slowly improving wages.

On national security, he denies Indonesia is more dangerous now than three years ago and says the threat of terrorism would be almost eliminated with the capture of Aziharia Hussein and Noordin Mohamad Top, the alleged ringleaders behind the suicide bombing at the Australian Embassy last week as well as suspected of links to the Bali and Marriot Hotel bombs.

Kalla: If we print ten million photos of Dr Azahari and they put in all the villages and the cities, they'll be easy to find.

Snowdon: So you intend to improve, lift the game of the police and the security forces, push them to do a better job?

Kalla: Yes, yes, because security, one bomb especially suicide bomber is very hard to find, but to identify two men in Indonesia, within two years, if we can find those men I say the terrorists will be reduced substantially in Indonesia.

Snowdon: If after Monday, there's a new resident in the Presidential Palace, more will have changed in Indonesia than the leadership.This year of elections has been notable for the breaking down of old political certainties.

Once the undisputed major force in politics, the Golkar Party has suffered numerous setbacks ... its presidential candidate lost in the first round, party members failed to follow directions and made their own choice, senior figures defected to the SBY/Kalla team, and Golkar decided to form a loose coalition with Megawatti's PDI-P to oppose the new comers.

Golkar Chairman and speaker in the House of Repsesentatives Akbar Tanjung has this week forced the suspension of 11 party members including Yusuf Kalla who are supporting SBY. Kalla says a loss by Megawati and therefore the Coalition could mean Golkar turns on its chairman, replacing him with someone more willing to negotiate with SBY if he wins.

Kalla: Well I think this is the finish of the political career of Akbar Tanjung, and there'll eb a new chairman and it's easier to negotiate with a new chairman.

Half-cocked campaign, half-baked candidates

Jakarta Post - September 14, 2004

Endy M. Bayuni, Chief Editor -- The presidential "dialog" planned for the two candidates this week is proving something of an anticlimax to the entire electoral process: It is the only canvassing activity the two candidates -- the incumbent President, Megawati Soekarnoputri, and former chief security minister Susilo Bambang Yudhoyono -- will be engaging in during the designated three-day campaign period that starts on Tuesday.

By regulation, they cannot campaign otherwise before Monday's election runoff. Obviously, their teams will be campaigning covertly right to the end, but the series of dialogs in the next three days, which will be televised live nationwide, are the only occasions the candidates will appear face to face with their constituents before election day.

The General Elections Commission (KPU) has imposed many campaign restrictions, chiefly with a view to ensure an orderly and peaceful election year. However, the April election for House of Representatives legislators and the July presidential election indicate that the KPU may have been overly cautious.

Both proceeded smoothly and with few reports of violence, not necessarily because of the restrictions, but more likely because there was no reason to fear such violence in the first place. The KPU actually could have given some leeway to make the run-up to next week's election more vibrant and thus allow voters a closer glimpse at the two candidates -- or conversely, allow the candidates to reach out to voters one last time.

At this crucial stage, the KPU should be promoting more political communication between the candidates and voters; instead, it chose to limit such contact in two distinct ways.

First, it ignored appeals from various quarters to relax restrictions to accommodate campaigning outside the designated three-day period.

Second, rather than a public debate between the two candidates, the KPU opted for a "dialog" in which the candidates will appear separately before a panel to address questions they have already vetted. Furthermore, each candidate will appear before their select supporters.

Such a carefully choreographed event reduces the value of a dialog to a mere photo-op and an occasion for the candidates to feel good about themselves.

There is also a nagging feeling that this kind of dialog would be farcical, as it dumbs down the benefits of the event for candidates -- and for voters, too -- in terms of political communication and education.

The KPU's highly cautious approach to the final round of the election thus comes at the expense of the quality of this election and of our democracy.

This is unfortunate in light of the unprecedented direct presidential election -- in the past, the appointment of a president was the responsibility of the People's Consultative Assembly -- and this spirit of promoting a greater connection between the nation's president and its people is not reflected in the campaign regulations, which seem to support the exact opposite.

A campaign period is the best -- though not the only -- opportunity for voters to assess and scrutinize candidates thoroughly.

A well organized and thoroughly prepared presidential debate would provide an occasion to get to know the candidates better, as they would be tested on their policies and political programs, and their stance on many issues of importance. Their personalities -- a vital factor for many voters in making their choice -- would also be exposed.

In addition, for many voters, it is not so much what the candidates say in the debate, but rather, how they say it.

In this day and age of television, appearance and delivery count for much, and aspiring candidates must be able to handle themselves well on any occasion, at any place and at all times. A political debate is therefore the litmus test for any presidential hopeful, and any candidate who shies away from such a stage is simply not up to the job.

It is thus incomprehensible why the KPU succumbed easily to the Megawati camp's request for a "dialog" instead of a face-off between the two candidates.

The debate ahead of the July election may have been a farce, but it was the first one ever held in the country. If some found it rather comical, that was because most candidates were not prepared adequately.

For the two runoff candidates to not engage in a final debate now is regrettable: We are letting them off too easily for a job as important as the president of the republic of the unitary state of Indonesia. A prospective CEO in any respected company would certainly go through far more rigorous assessments before they get the job.

With less than a week before the people cast their ballots and elect their president, the majority of voters probably know too little about the candidates to make an informed decision. It is the old "buying a cat in the sack" phenomenon -- yet again -- that we seem to get at every election.

Most of us simply do not have any idea what we will be getting the country into when we cast our votes on Monday.

The half-cocked campaign would, at best, provide half-baked candidates from which the people must make their choice.

With such an electoral process, this country would most likely be subject, once again, to a mediocre president for the next five years, in spite of the direct and more democratic nature of this historic election.

Advocates to defend NGOs

Jakarta Post - September 14, 2004

Jakarta -- Over 70 lawyers have pledged to defend a coalition of five non-governmental organizations that has been reported to the police by the General Elections Commission (KPU) for defamation.

Iskandar Sonhadji, the coordinator of the lawyers, said over the weekend the move was aimed at protecting the rights of individuals and organizations working to eradicate corruption in the country.

The NGOs had demanded the Corruption Eradication Commission investigate alleged markups in the KPU's procurement of materials for the April 5 legislative election, which they said caused some Rp 375 billion (US$41.6 million) in state losses.

The KPU filed a defamation complaint against the NGOs with the police. KPU deputy chairman Ramlan Surbakti said there was no corruption in the procurements, merely inefficiency.

Can Mega charm her way to victory in time?

Straits Times - September 14, 2004

Derwin Pereira, Jakarta -- The twin-engine Fokker swooped down in the afternoon heat, kicking up yellow dust that snaked across the bumpy airport tarmac.

President Megawati Sukarnoputri, dressed in her trademark flowery batik, emerged from the plane to the cheering hundreds in West Nusa Tenggara. She waved at the crowds before heading to the VIP room for some tea and kueh.

This has become an almost daily routine for the incumbent, who is fighting what could be her last battle to hang on to power. Criticised for being aloof and elusive, the daughter of Indonesia's founding father Sukarno has shed her palace cocoon and metamorphosed into an energetic and flamboyant grassroots politician.

These days, she is crisscrossing the vast archipelago of 220 million people with a single-minded mission: to win precious votes. She is kissing babies, mingling more with farmers and fishermen and labourers and dishing out funds from her huge war chest to woo the wong cilik or "little people".

Ms Megawati is also fighting in the corridors of power. She and her team have cobbled together a national coalition that includes two of the country's largest parties -- Golkar and her Indonesian Democratic Party-Struggle (PDI-P).

After months in the doldrums, especially after PDI-P's devastating defeat in the April legislative poll, the incumbent's fortunes now appear to be rising. She is making up ground. But has she left her run too late to thwart presidential favourite Susilo Bambang Yudhoyono?

Few would have considered such a question even possible last year, when there were no clear alternatives to her and everyone considered her a shoo-in for the presidency. But closer to the April general election, her political star waned against the ascendant Bambang in that contest.

And after the parliamentary polls, she sank further behind him and another former general, Mr Wiranto. But having managed to scrape through to the second round of the presidential polls, she has begun to pick up momentum.

There is still a sizeable gap between Ms Megawati and Mr Bambang in opinion polls, but it is closing. A recent survey carried out by the Indonesian Survey Institute, for example, showed her rating increase by seven percentage points to 30.3 per cent. Her rival saw a fall from 68 to 61 per cent.

Another poll suggested an even closer margin between the two candidates. The Jakarta-based Centre for Political Studies found that 41.3 per cent of some 5,000 respondents would vote for Mr Bambang, while 34.7 per cent were for Ms Megawati.

Polling is still in its infancy in Indonesia and has not been entirely accurate in the past. But it has been a barometer of public approval in the country holding a historic direct presidential election.

Not surprisingly, these figures are fuelling confidence in the palace. An aide to her influential husband Taufik Kiemas told The Straits Times: "There was a mental block in our camp before the first round. Can we clear it? After beating Wiranto to enter the run-off, we are all a lot more hopeful of getting her into office again."

That confidence is also rising for other reasons, the most important being the grand alliance of parties that includes political juggernauts Golkar and PDI-P. This has always been "the dream team" of her husband Taufik, given shared ideological bases.

The coalition assumes greater significance today because of the reach of these parties across the distended archipelago. Ms Megawati's party, torn apart by factional rifts, is hanging on to Golkar's coat-tails. Golkar has the best infrastructure and grassroots network in Indonesia today.

Party chairman Akbar Tandjung, like Ms Megawati, has been making whirlwind trips around the archipelago, meeting Golkar cadres to win their endorsement for the coalition. In villages, Golkar is spreading the message: There will be "presents" if the village head or lurah brings in votes for Ms Megawati and her deputy Hasyim Muzadi.

Those with the highest vote will get three cows, the second- placed will get two and the third, one. Prizes will be awarded down to the 10th spot, which merits just a goat. There are also "cash incentives" for religious leaders in East Java and district heads who could be instrumental in swaying public opinion.

But Golkar's relationship with PDI-P is not very smooth. Golkar is split in its support for Ms Megawati. And not all in PDI-P are in favour of a coalition that gives undue benefits to their rivals in terms of Cabinet positions and dominance in local legislatures.

But overall, sentiments in areas outside Java especially are turning in her favour. For one thing, money is oiling the wheels of her campaign. The palace has a huge war chest. The incumbent is also mobilising state resources -- the bureaucracy, state- owned enterprises (SOEs) and police -- to do her bidding. They were very effective in swinging votes to her in the first round.

Plantation workers in SOEs, for example, were asked to vote for Ms Megawati or risk being fired. In some areas, she took all the votes.

The police were also used to thwart any attempt by the armed forces to influence the electoral outcome. They were deployed at polling stations throughout the vast archipelago to keep an eye on the electoral process -- and significantly block out military elements backing former military commander Wiranto. She will do likewise against Mr Bambang. The retired four-star general cannot rely on these resources to drive his campaign.

With election campaigning limited to just three days this week, the President as incumbent has had plenty of time to work the ground directly and through proxies like Golkar and the bureaucracy.

This is worrying her rival. The former general is holding the lead in opinion polls. But his popularity is slowly waning. In part, it could be due to the efforts of major parties like Golkar to win over supporters with goodies.

Mr Bambang does not have a conventional party machinery to mount his campaign. He relies on an informal network of volunteers and NGOs to do that for him together with his small Democratic Party and the increasingly influential Prosperous Justice Party. His election team has long capitalised on his image to score points.

There is a view, even within his camp, that "he might have peaked too soon" in the race. One of his aides disclosed: "He seems to have lost some momentum. After the general election, his popularity was very high and we thought he would win the presidential election in the first round. But his ratings have been sliding ever since because Megawati has been more in the public eye. Bambang seems to have kept a lower profile."

Mr Bambang has also encountered criticism of his deputy Jusuf Kalla, whose blunt views on economic policies and favouring of the pribumis have upset the ethnic Chinese. Against this backdrop, well-placed sources said there are signs that ties between the Bambang and Jusuf campaign teams are "not so harmonious".

But the Bambang Bubble is still being held aloft by the mood for change in Indonesia. He is seen as that symbol for change. Golkar deputy chairman Marzuki Darusman said: "He appeals to a wide section of the population. He does not need any machinery. His biggest asset is his clean image."

The key for both candidates now is to win over the undecided voters. A recent survey in the country's leading daily Kompas indicated that this could be as high as 20 per cent of the electorate.

Where will they go? Last Thursday's terrorist bombing in the capital might have a bearing. Indonesians are concerned about unemployment, rising costs and corruption, but the latest attack in the heart of the nation's business district only reinforces the mood for a military strongman to restore law and order.

The President might have scored over her challenger by being first at the site of the bomb blast and visiting victims in hospital -- cutting short her trip to Brunei, where she was attending the royal wedding of the Crown Prince.

But the thinking, even among some in her camp, is that the third terrorist attack in Indonesia under her watch could cost her some votes.

Having lost her commanding position as front runner, Ms Megawati is now rushing to regain lost ground against her opponent. But many think that she might not be able to do enough in time for next week's poll.

Bambang's people power

Straits Times - September 14, 2004

Salim Osman -- Retired colonel Poedjiyono is a picture of confidence as he entertains guests at his house in Margorejo on the outskirts of Surabaya.

The 59-year-old retired army officer speaks to them individually about their requests and offers them his counsel.

They are residents of the area and his house -- a single-storey bungalow in this densely populated district -- is the headquarters of the Lembaga Demokrat Sejati (LDS) or the True Democrat Institute.

The LDS is a non-government organisation doing community work to uplift the lot of the rakyat kecil (little people). It offers a range of services from foot massage to legal advice, job training and IQ tests for students enrolling to choice schools.

"Our doors are open to anyone from any political party," says Mr Poedjiyono. His mission is also to promote democracy and encourage the masses to participate in the process, he adds.

In reality, the LDS is part of a grassroots network that has been used since September last year to rouse support for former security minister Susilo Bambang Yudhoyono in his bid for the presidency.

It is one of almost 60 institutions that have sprouted in Surabaya this year to back the retired general. These include associations representing farmers, workers and even trishaw riders and surviving on donations from businessmen and other organisations. This loose network has played a crucial role in boosting the popularity of the presidential contender.

It has helped him garner a relatively large number of votes in an area that has been a base for Nahdlatul Ulama, the largest Muslim organisation in the country.

Mr Bambang, of the Democrat Party, and his running mate Muhammad Jusuf Kalla, a Golkar cadre, obtained 33.27 per cent of the votes in the first round of polling in the East Java capital.

The incumbent president, Ms Megawati Sukarnoputri, and her running mate, Nahdlatul Ulama chairman Hasyim Muzadi, won just four percentage points more.

But on the provincial level, Mr Bambang emerged as the winner. He garnered almost seven million votes compared to Mrs Megawati's 5.4 million in the first round of the presidential poll on July 5. East Java has a voter population of 26 million people.

The results came as a pleasant shock to Mr Bambang's campaign team. Despite lacking a political machine as strong as the Golkar Party or the Indonesian Democratic Party-Struggle (PDI-P) of Mrs Megawati, Mr Bambang was able to register a good showing because of his mass appeal and grassroots support.

While his rivals have forged an alliance with Golkar and several other parties in a broad coalition, Mr Bambang has built a coalition of the people through his network of grassroots organisations.

He has pitted what has been dubbed "people power" against Indonesia's traditional mighty political machinery of the Golkar and PDI-P parties.

Businessman Idrus Shahab, of the Democrat Party, told The Straits Times that the party's success in the first round could be attributed to the role played by these grassroots organisations. They include SBY Fans Club and a Pro-SBY Movement that have sprouted nationwide. SBY is a reference to Mr Bambang using the initials of his name.

Members of these organisations have canvassed for votes for the front runner in their respective areas in the province. "We have stepped up our informal campaign for the second round through this network, amassing much support on the ground for SBY," said Mr Idrus.

Mr Idrus, who is on the campaign team for East Java, claims that his network is supported by 57 organisations, commanding a following of 14 million people. "Based on the loose membership that we have in all these organisations, we are confident of garnering at least 60 per cent of the votes," he said in an interview.

But observers contend that another network of retired military men, many operating through several organisations that support Mr Bambang and his campaign team here and in other provinces, is also crucial for ensuring his victory at the poll.

No fewer than six retired senior generals are backing the campaign of Mr Bambang. Despite being retired, they command a following even among the current crop of military officers still in the armed forces.

As Mr Poedjiyono puts it: "We retired military officers support him because we believe he is an able leader who can lead the country forward, compared to other candidates. The fact that some of us may be his former colleagues is purely coincidental." Together with other social groups, they want to clear the way for Mr Bambang to assume the presidency.

Megawati's party power

Straits Times - September 14, 2004

Devi Asmarani, Kupang -- The provincial legislature building on this eastern Indonesian island some 2,000km from Jakarta looks abandoned just days after new councillors took over.

Most of its members have gone out of town, visiting their respective constituents in villages and on the dozens of islands that dot the province to work the ground for the presidential poll next week.

All activities have been suspended until after the election and party machineries have been cranked up in this predominantly Christian province to consolidate support for incumbent President Megawati Sukarnoputri.

She came in second in the July poll at the national level, behind front runner Susilo Bambang Yudhoyono, but here she won, getting 62 per cent of the votes.

Such victory came despite the defeat suffered by her Indonesian Democratic Party-Struggle (PDI-P) at the hands of Golkar in the province in the April legislative election.

It was thanks, in part, to the support she enjoys from the Catholic and other Christian communities here.

The large support base for her is expected to grow in the election run-off after the alliance she forged with one-time main rival Golkar.

In the national Parliament, the four-party coalition has 307 of the 500 seats, making it the largest representative bloc. But getting members of both the parties to work together has its problems in the regions, as has been the case in Jakarta.

In South Sulawesi, Golkar politicians have not been showing much enthusiasm for the coalition and have continued to support Mr Bambang's candidacy, albeit discreetly.

In East Java, disputes over power-sharing between Golkar and PDI-P legislators are causing cracks within the coalition.

Yet in East Nusa Tenggara, it is likely to work. The two camps have set up a common secretariat, appointing a local Golkar member as chief in the province, and drawn up strategies to win the poll.

They target to bring in for Ms Megawati most of the 24 per cent of votes that former general Wiranto won in the second round -- in addition to the 62 per cent that she herself won -- from the province's 2.5 million voters.

Mr Bambang won 13 per cent of the votes in this province in the second round while the remaining 1 per cent was split between the other two contenders, Dr Amien Rais and Mr Hamzah Haz.

Besides, party cadres and bureaucrats affiliated to the party have been instructed to secure victory for Ms Megawati in their localities.

This is in stark contrast to four months ago, when party workers hardly budged to support Mr Wiranto's candidacy.

Said Mr Melkianus Adoe, Golkar's deputy chief in East Nusa Tenggara: 'Frankly, the supplies never came for Mr Wiranto. We can't work without supplies.' He was referring to financial assistance for the campaign.

Golkar's support could be crucial in bringing in the much-needed votes for Ms Megawati in its stronghold areas. Over the three decades as a ruling party, Golkar has built a political network across the archipelago, especially in eastern Indonesia, with loyal followings from the bureaucracy and community leaders.

A PDI-P provincial legislator, Mr Victor Mado Watun, said: "Golkar people are the most experienced in politics. To tell you the truth, we are just rookies." The thinking among the likes of Mr Victor now is that even if Ms Megawati loses to Mr Bambang, Golkar and PDI-P will still have the upper card as they control much of the legislatures under the coalition.

"Without strong party support, Mr Bambang will never get his policy through to the regions," said Mr Victor. The combination of the two parties will make Mr Bambang's leadership shaky, he added.

Many predict if Mr Bambang wins, his presidency will be turbulent and he may face a similar fate to Mr Abdurrahman Wahid, who was impeached in 2000. But this all comes at quite a high political cost to PDI-P.

For one, money has not been the only incentive -- although sources said Golkar has received a handsome US$20-million (S$34- million) bounty from the incumbent President to support her candidacy.

Central to Golkar politicians' willingness to work for her camp is her agreement to give a large share of power in the regional politics to Golkar.

So, will political partnerships influence voters? Many believe so, at least in less developed areas far from the centres of power like Jakarta. "About 60 per cent of people here have only elementary education," said PDI-P's councillor in Kupang, Mr Karel Yani Mbuik. "It's not like in America, where people vote based on issues. Here, they don't even know the difference between one candidate and the other."

Megawati, Susilo and people's choice

Jakarta Post - September 18, 2004

Suko Sudarso, Jakarta -- The presidential election on September 20, is likely to become a battle of symbols -- the popular-change symbol of Susilo Bambang Yudhoyono challenging the authority- stability symbol of Megawati Soekarnoputri.

Any political competition should not result in a one-sided critical judgment of one of the candidates, in this case, Susilo Bambang Yudhoyono. The article entitled Weighing pluses and minuses of candidates (The Jakarta Post, September 8, 2004) is misleading. In my view, the article will lead to misperceptions about Susilo. The writer has tried to find good points about the Megawati regime, but has included inconsistencies and misleading information about Susilo.

It is therefore a must to fairly and objectively scrutinize this writer's biased political evaluation and highlight the subjectivity that colors his article.

Susilo, in fact, was not centrally involved in military operations including the attack on the Indonesian Democratic party (PDI) headquarters, the killing of students at the Trisakti campus, and the Semanggi tragedy during the New Order era. Being a military officer and a constitutionalist, Susilo has always reaffirmed he is ready to take responsibility for any incidents and to face due legal process should accusations about him be brought to court. It seems that the writer also tends to put aside Susilo's role during his tenure as political and security coordinating minister. Megawati's administration owes much of its political stability to Susilo. Susilo's political role was crucial in her last term. Although we cannot say he was too determinant, without Susilo, Megawati would not have been able to promote political stability in the country and would likely have failed to overcome regional conflicts in war-torn Aceh, Ambon, Poso and Papua.

In terms of political stability, Susilo, on the contrary, realizes more work needs to be done in this critical transitional period. In detail, Susilo sees three areas -- the pillars of the state -- which need more work: first, national consensus, values and personal identity; second, national integration, encompassing territorial integrity, the state philosophy Pancasila and social cohesion; and thirdly, dealing with the increasing level of sectarian conflict.

Whoever is elected president should put these three concerns on the national agenda.

The three years of Megawati's administration have not resulted in the institution of the reform mandate she came to power on. Susilo, the challenger, is the presidential aspirant who has the fewest influences from the New Order regime, while Megawati, the incumbent, is the presidential candidate who now represents the "euphoria of the New Order".

Indonesia will have the same leadership style if she is re- elected president -- the status quo of a weak and crooked national leadership will continue. In the long term, it will result in collusion among elites in the executive, legislative and judicative institutions and this in turn will negatively impact the Indonesian people. Of course, it will also hamper the recovery of the economic sector, social development, good governance and law enforcement.

We also should have taken a lesson from Megawati's administration after the 1999 general election.

Charisma without good technical ability can only generate weak and crooked administrations in central and regional governments. Megawati's party coalition is riven with internal disputes and does not communicate efficiently or effectively. This coalition will worsen the country's existing problems and will only bring about more distrust of political parties and of democracy itself.

The coalition of numerous ruling parties will result in a coalition of interests; a weak central government will be associated with dirty deals and ineffective and dysfunctional systems. People will lose their civil power and become the victims of this short-term self interest.

The longer this weak and crooked government rules, the more it will create a dangerous and unstable political situation in the country.

This uncertainty eventually will hamper the country's transition to democracy and could even halt it.

As to anxieties as to whether Susilo would be able to overcome a desire to suppress human rights, freedom of the press and put the military under civilian control, Susilo realizes these three issues are crucial to the future of the country and has pledged to maintain the freedom of the press and put the military under civilian control.

What the article says about Jusuf Kalla is also groundless. Susilo and Kalla have reaffirmed in their campaign that they will build a fair, secure and prosperous country by involving all the country's racial groups without discriminating between native and Chinese Indonesians.

Megawati, on the contrary, has not been able to eradicate corruption or increase jobs in the country. Kwik Kian Gie, the head of Bappenas (the National Development Planning Board) and also the state minister of development, once noted Indonesia has experienced swelling domestic and foreign debts under Megawati's administration. Megawati also refuses to start talks with overseas creditors.

On servicing the government's domestic debt, under Megawati's cabinet banks' obligations to the government have been sold to private foreign-owned firms at prices far lower than the cost of the debts.

Susilo, currently the people's choice in these elections, has a professional military background and a commitment to the military pledge Sapta Marga. Surely the people are not 100 percent wrong in their conviction Susilo would be the best leader for the country who could bring them a better life.

Morality and logic will play vital roles in the selection of either Susilo -- the transformation icon, or Megawati -- the status quo icon. The intellectual Jusuf Wanandi should not ignore the evidence.

[The writer is an executive member of Susilo-Kalla campaign Team and the head of the YKPK (Nationhood, Brotherhood Foundation), a former activist of GMNI-ITB and the former of the deputy head of PDI-P's Research and Development office.]

Trying to make sense of presidential dialog

Jakarta Post - September 18, 2004

Ivy Susanti, Jakarta -- The idea behind staging a televised presidential dialog -- not a debate -- was to give voters the opportunity to learn more about the candidates' platforms, and what could be expected of them if elected president. The result of the three-day dialog may have been to boost one of the candidate's popularity, but it is too early to conclude that an increase in popularity will generate more votes.

It is assumed that the limited campaign schedule, in which the candidates were only allowed three days of campaigning prior to the election runoff on Monday, was settled on because the public is already familiar with the candidates.

However, local newspapers have hinted that the results of the dialog will not significantly sway voters. This is likely true, given the reports of the overall indifference with which much of the public greeted the dialog.

Opinion polls released before the dialog by national and international pollsters showed Susilo Bambang Yudhoyono leading incumbent Megawati Soekarnoputri, but the nagging truth is that we really have no idea of what will happen inside the voting booths.

This may lead us to conclude that the dialog merely served as a forum for the exchange of information, with the candidates giving explanations to the panelists, some of whom were handpicked by the candidates for the occasion.

Given this, why did they waste time and money briefing "uninformed" (so to speak) panelists, as well as pushing our favorite prime-time TV programs off the air?

Let's leave the panelists behind. When we ponder the dialog with sharp eyes and a critical mind, it is obvious we have been denied our right to get a better understanding of our presidential candidates through this strategic medium.

There are certainly no polls or research on what the public expected from the dialog, but we wish we could have gotten more of a look at each of the candidate's personality, to avoid making a bad choice on election day. The audio-visual nature of television certainly would have permitted this. Similarly, the candidates could have used the forum to gain the public's trust.

However, the questions and answers failed to reveal some of the important qualities that could have helped us assess the candidates, such as their consistency and ability to build political support.

Questions started with "how", or asking for "the concrete measure" of something, which took us nowhere because they only gave viewers the impression the candidates had a full understanding of "technical" matters. Many times, however, their answers belied this perception.

Eventually, the candidates' responses to these types of questions sounded like mere rhetoric, or even pretense, because they disregarded the complexity of the matter in question.

A question on the government's fuel subsidy policy was raised during the dialog on Wednesday.

Though asked by an economist, it is essentially a political- economic issue, as it illustrates the dilemma that will be faced by the next president: whether he or she will end the fuel subsidy at the risk of mass demonstrations, and perhaps social violence.

Both candidates indicated they would raise fuel prices, though one quickly added the postscript that the government would not burden the poor.

While their answers showed up in newspaper headlines the next day, we were left to puzzle out exactly how they would do it -- which is the question of the leader's strategy, such as how he or she would gain support from legislators and the media for what would be an unpopular decision. And how can we receive assurances they would take responsibility for such a decision?

Another example: questions on how to improve security were met with suggestions of strengthening cooperation and increasing the capacity of the security apparatus -- particularly intelligence units -- through the procurement of more modern hardware.

These suggestions are slightly misleading to the public. The focus of any security policy should be the general public; a strong and reliable security force is the result of sound policy.

In this regard, procuring more high-tech equipment and boosting cooperation should be viewed as tools and methods for realizing a professional security force, in order to build and maintain a safe community, which should be everyone's first and foremost concern.

Curiously, no panelist followed up by asking where the money should come from to fulfill this plan. And, of course, there was no question of accountability. Blame it on the severe time restraints imposed on the panelists, maybe.

If the presidential dialog, which was called a "fresh start for democracy in our country", fell short of convincing us of the quality of our presidential candidates, what else will do?

And, most importantly, we still have no clue about what the next president should focus on in the next five years.

[The writer is a journalist at The Jakarta Post.]

President disburses more loans

Jakarta Post - September 18, 2004

Bandung -- President Megawati Soekarnoputri handed over Rp 230 billion in bank loans to small- and medium-scale entrepreneurs across West Java and Banten during her visit here on Friday. The loans, disbursed by state bank BRI, require no collateral.

During the working visit, the president also witnessed the signing of an agreement on credit loans to buy Kanzen motorcycles for teachers in West Java and donated an ambulance to the Muhammadiyah Hospital in Bandung and sewing and weaving machines to small-scale textile companies in Majalaya, Cirebon, Garut and Bogor -- all in West Java -- and in Banka Belitung province.

When she stopped at the housing complex of state television station TVRI employees, around 5,000 people turned out -- including political party leaders to support her bid for a full five-year mandate.

She will contest the election against Susilo Bambang Yudhoyono on Monday.

Golkar suspensions weaken pro-Mega coalition: Analysts

Jakarta Post - September 18, 2004

Kurniawan Hari, Jakarta -- Golkar's decision to suspend several of its members would affect a major coalition led by the biggest party to help President Megawati Soekarnoputri retain power in Monday's election runoff, analysts say.

"Instead of bringing benefit to the coalition, the dismissals would have a negative impact on its support for Megawati," political analyst Maswadi Rauf told the press here on Friday.

He explained that the suspensions would worsen the internal bickering within Golkar as several regional chapters of the party may switch allegiance for Susilo Bambang Yudhoyono and running mate Jusuf Kalla.

The suspension of more than 10 Golkar executives could have a boomerang effect on the Nationhood Coalition and present a bad image to Golkar supporters ahead of the September 20 election, added Maswadi from the University of Indonesia. The pro-Megawati coalition comprises Golkar, the Indonesian Democratic Party of Struggle (PDI-P), the United Development Party (PPP) and the Prosperous Peace Party (PDS).

Golkar's decision to give its official backing to Megawati and Hasyim Muzadi was announced after its presidential candidate Wiranto and running mate Solahuddin Wahid lost in the first round of the election on July 5.

Senior Golkar leader Fahmi Idris and his 10 allies were suspended by the party's central board for refusing to support Megawati in the upcoming election. Kalla was also made non-active as a Golkar advisor.

Fahmi and other dissenting executives claimed their suspension was illegal, arguing that the decision was made in violation of the organization's procedures. They had formed a Golkar Reform Forum to solicit support for Susilo-Kalla.

Sukardi Rinakit from the Soegeng Sarjadi Syndicated pollster said that the suspensions had nothing to do with the current political constellation in the country.

Several surveys have shown that Susilo and Kalla would win the presidential election, he said. "People already have their preferences. The Golkar conflict will not affect them," Sukardi added.

Meanwhile, Golkar chairman Akbar Tandjung said on Friday that the coalition to support Megawati-Hasyim was solid, while boasting that he is still warmly greeted by party members in the regions.

Separately, Golkar deputy chairman Agung Laksono said the party's dissident politicians would still be given a chance to repent by ceasing their activities. However, Marzuki Darusman, who was among the suspended Golkar members, said he would return the suspension letter to the party's central executive board.

Because the suspension violated the Golkar's organizational rules, it should not be respected, he said.

Based on the rules, Marzuki said, a second warning from the Golkar central board must be issued within 20 days after the first warning and the suspension must be decided 10 days after the second warning.

In fact, the Golkar central board issued the first and second warnings on September 2 and 8 respectively. The suspension was announced last Wednesday.

The organizational rules also state that suspension must also be made after hearing clarification from those members who are to be suspended. "How can the party's central board hand down punishment before asking for clarification from us?" Marzuki asked.

Smear campaign mars cooling-off period

Jakarta Post - September 19, 2004

Jakarta -- Two days before the presidential election runoff on Monday, the campaign team for Susilo Bambang Yudhoyono was kept busy countering allegations that could harm its candidate.

A tabloid called Fakta (Fact) hit the streets in Jakarta on Saturday, running one-sided stories about what it called Susilo's "public deception".

In its cover story, the tabloid reported that Susilo had married a Filipino woman before being admitted to the Military Academy in 1970. Susilo is married to Kristiani Herrawati.

No less than former Army chief Gen. (ret) R. Hartono, the Concern for the Nation Functional Party (PKPB) leader, who has publicly declared his party's support for Megawati Soekarnoputri, took the report seriously.

"I heard these reports long before. But judging from his personality, I didn't believe it," Hartono said. "But if it's true and he is elected, it will hamper his career. Therefore, he has to clarify this story."

The director of Susilo's campaign team, Yusuf Rizal, and former Indonesian Military chief of general affairs Lt. Gen. (ret) Suyono denied the story. Yusuf said the report was an effort to undercut Susilo's bid for the presidency.

Susilo, meanwhile, spent the day defending his doctoral dissertation on agricultural and economic development at the Bogor Institute of Agriculture.

Megawati visited Sragen in Central Java on Saturday to hand out low interest loans to villagers, which she denied was an attempt to buy votes.

"Some cynical people have said the no collateral microcredit program is part of my campaign as a presidential candidate," she said, adding that the program would continue after the election.

Susilo-Kalla pairing gets reformist backing

Jakarta Post - September 17, 2004

Tiarma Siboro and Ridwan Max Sijabat, Jakarta -- A number of national figures, grouped in the newly launched Cultural Movement for Reform, signed a declaration on Thursday to support the Susilo-Kalla ticket in the upcoming presidential runoff.

The figures, mostly reform-minded politicians, declared their support for the emergence of a new national leader committed to total reform in all fields.

They include former president Abdurrahman "Gus Dur" Wahid, his brother Solahuddin "Gus Solah" Wahid, leader of the National Awakening Party (PKB) Alwi Shihab, leader of the Freedom Bull National Party (PNBK) Eros Djarot and Masdar F. Mas'udi, interim head of Nahdlatul Ulama (NU).

During the declaration signing ceremony at the Hilton Hotel here on Thursday, the movement warned voters of corruption and vote- buying by certain groups who want to maintain the status quo in the country. They also criticized the recent establishment of the "Nationhood Coalition" comprising the pro-status-quo parties.

According to the movement's spokespeople, the General Elections Commission (KPU) and the Election Supervisory Body (Panwaslu) must stick to the law in carrying out their tasks to prevent possible disputes among election contenders, their camps and their supporters.

The reformist group also called for equality in power-sharing in a bid to form a more democratic and fair government. Gus Dur said that despite being a signatory to the declaration, he would not vote on September 20. He did however emphasize how important the meeting was when he said, "I insisted on coming to attend this event after canceling two important appointments with the Singaporean minister of foreign affairs and the Malaysian prime minister today", a reference to George Yeow and Abdullah Achmad Badhawi, respectively.

After the declaration, Susilo also met with the widely respected Yogyakarta governor Sultan Hamengkubuwono X. It was the third meeting between the two in the last two months. The first and second meetings took place at the sultan's residence in Yogyakarta.

The sultan said in a press conference after the meeting that he wished to share his experiences and thoughts with Susilo and running mate Yusuf Kalla on political and social issues to create better conditions for the people in the future.

He added that he was not meeting the pair in his official capacity as governor to endorse them, but as a concerned citizen.

In a mass gathering at the Senayan Sports Arena (Istora), Susilo, accompanied by his wife Kristiani Yudhoyono, also received political support from numerous groups of people.

"I am making no promises because it is my obligation to give what the people have asked from me, and if Allah wills it, I will win the presidential election and lead this nation," he said, as the thousands in attendance erupted in applause.

During the two-hour gathering, which included several folksongs, many groups of people shared their own problems with Susilo and expressed their confidence that he would be able to solve the problems in the next five years.

In Makassar, South Sulawesi, 23 groups of people from various backgrounds, also pledged their political support for the Susilo-Kalla ticket in the presidential runoff.

Terrorism on election agenda but unlikely to swing vote

Agence France Presse - Septemeber 19, 2004

A deadly attack on Australia's Jakarta embassy days before Indonesia's presidential polls may help a former general unseat President Megawati Sukarnoputri but is unlikely to prove the poll's tipping point, analysts say.

In the days after the attack, in which nine died and more than 180 were hurt, Susilo Bambang Yudhoyono enjoyed a brief surge in popularity ratings that have placed him consistently above Megawati since a July first-round vote.

Pollsters speculated the gain could be due to rising voter confidence in Yudhoyono's ability to tackle terrorism thanks to his military background and his former job as Megawati's top security minister.

The embassy bombing was the third major terrorist attack in Indonesia in three years, including the Bali bombings and a strike last year on Jakarta's Marriott hotel, all blamed on Al- Qaeda-linked Jemaah Islamiyah extremists.

As security minister Yudhoyono, known as SBY, oversaw the hunt for those responsible, earning him a tough reputation untarnished by the rights abuse allegations surrounding many of his former army colleagues.

"Naturally SBY is considered stronger because he is a military man. He is considered to have more experience in dealing with those activities," said professor Azyumardi Azra, a rector of Indonesia's state Islamic University.

But, says Azra, although Yudhoyono has avoided capitalising on the bombing, his supporters were less restrained, even if their efforts proved fruitless.

"I think SBY did not try to use this bombing to take advantage. But some of his supporters tried to do so, they tried to influence the public by letting them think that Megawati is not strong enough ... but they failed."

"Megawati had a very quick response to the bombing. She returned home from Brunei very quickly and issued a statement very quickly," he said, referring to the president's shortened trip to attend a royal wedding in Brunei.

Although both candidates focused on terrorism in the opening addresses of a series of televised discussions during three days of official campaigning, Azra says the issue has not been a major campaign theme.

Surveys have shown that Indonesia's 153 million voters, almost one-third of them jobless or underemployed, are more concerned with economic reform and tackling corruption than with security.

The Washington-based International Foundation for Electoral Systems said in poll completed before September 9 that only 0.5 percent of respondents said fighting terror was the top issue to be addressed by candidates.

However 59 percent believed Yudhoyono would be more effective at improving security compared with 20 percent for Megawati.

Despite the polls, Dewi Fortuna Anwar of the Habibie Centre political think tank says security has become a premium concern among Indonesians who are increasingly disturbed by the violence taking place on their soil.

"When they go to the polls, people will be more concerned about security than before so they hope that whoever is president will protect them," she said.

But she warned candidates should avoid capitalising on the embassy blast at a time when Indonesia was "in deep grief and great shock".

KPU officials fired for vote mark-up

Jakarta Post - September 17, 2004

Donggala -- Central Sulawesi General Election Commission (KPU) has fired the chief of Donggala Municipality KPU Abdullah Malabang and his four subordinates for vote markup in the July 5 legislative election.

Dharma Sallata Putra, a member of Central Sulawesi KPU, said that the decision followed the recent verdict by the local district court, found the five officials guilty for marking up votes in the legislative election.

In the legislative election, the five officials were found to have changed National Mandate Party (PAN) official votes to 17,027 from 7,027, so that it allowed the PAN candidate a seat in the House of Representatives (DPR).

Controversial quiz ordered shut

Jakarta Post - September 17, 2004

Jakarta/Indramayu/Jayapura -- While not declaring a controversial quiz a violation of campaign regulations, the Election Supervisory Committee (Panwaslu) demanded its halt on Thursday.

The quiz, which has been published in national print media and broadcast on private television stations, offers prizes totaling Rp 14.1 billion (US$1.5 million) for answering questions related to the achievements of President Megawati Soekarnoputri's administration over the past three years. The quiz is allegedly sponsored by state-owned enterprises.

Megawati and Susilo Bambang Yudhoyono will contest the presidential election runoff on September 20.

Panwaslu said the quiz, which has been organized by the little- known Investigation, Mediation and Monitoring Foundation (IMM), had caused a controversy that could impede the basic election principle of fairness, and had the potential to harm either of the presidential candidates.

"We call on the General Elections Commission (KPU) and the Ministry of Social Affairs to suspend the publication of the quiz until the runoff is over," Panwaslu deputy chairman Rozy Munir said here.

The Election Supervisory Committee arrived at its decision after questioning executives of six state-owned companies that pledged to provide the funds for the quiz prizes.

The state-owned companies are Bank Mandiri, BRI and BNI 46, telecommunications company Indosat, oil and gas company Pertamina and coal mining company Bukit Asam.

Panwaslu said the quiz did not constitute a violation of campaign regulations because it was not sponsored by either of the campaign teams.

"As the quiz is not a violation to any election regulations, we are opting not to bring the case to the police for further investigation. If we insisted on pressing charges, the police would simply dismiss them," Panwaslu member Topo Santoso said.

When asked what Panwaslu would do if the KPU, the Ministry of Social Affairs and the IMM ignored its demand that the quiz be halted, Topo said: "We have spoken with the three state banks that agreed to provide funds for the quiz prizes, and they agreed to ignore their pledge to the foundation after we decided on our official stance." The quiz, however, is not the only case that has concerned the public. The Panwaslu office in Indramayu, West Java, reported on Thursday that postcards bearing the picture of Megawati had been circulating in schools in the regency and the surrounding areas, including Ciamis, Tasikmalaya and Garut.

Panwaslu is still unsure whether the postcards are part of an organized campaign, or were simply sent out by individuals.

Thousands of similar postcards also have been found in Jayapura, Merauke and Jayawijaya in Papua province.

An official with the Jayapura post office, Pieter Manduapessy, said the postcards were sent from an address in Jakarta and the office had no choice but to deliver them.

Local Panwaslu member Friets Ramandey said no steps would be taken to stop the distribution of the postcards because they did not violate campaign regulations.

"The postcards are being sent to individuals and are not publicly distributed. Therefore, they are the same as regular mail," he said.

Dissenting Golkar leaders ignore order

Jakarta Post - September 17, 2004

Kurniawan Hari and Luh Putu Trisna Wahyuni, Jakarta/Mataram -- Golkar politicians suspended from the party for refusing to back Megawati Soekarnoputri in Monday's presidential election runoff, continued on Thursday in their activities in support of Susilo Bambang Yudhoyono.

The Golkar dissenters, led by Fahmi Idris and Marzuki Darusman, hosted a national meeting in Jakarta on Thursday to consolidate support for Susilo and running mate Jusuf Kalla.

Earlier, Golkar leader Akbar Tandjung and secretary-general Budi Harsono issued a letter warning all party members against attending the meeting organized by Fahmi and Marzuki.

Thursday's forum was attended by Burhanuddin Napitupulu, Abu Hasan Sazili, Abu Hanifah, Yoeslin Nasution and Juniwati Sofwan, all Golkar executives who were made non-active by the party's central board on Wednesday.

Former home affairs minister Syarwan Hamid, a retired three-star Army general, and businessman Sofyan Wanandi were also seen at the meeting. All of those in attendance, about 250 in all, received pins bearing the pictures of Susilo and Kalla.

Kalla, who was invited to the forum, was unable to attend as he was at a campaign rally at the Senayan sports hall in Central Jakarta. While the meeting was in progress at the Balai Sudirman Building in South Jakarta, a group of 30 people dressed in Golkar's yellow color staged a rally outside the venue.

The protesters denounced Fahmi and Marzuki for using Golkar attributes in their activities even though they had been suspended from the party.

Golkar dismissed Kalla as a party adviser and suspended Fahmi, Marzuki and nine others following a six-hour meeting of the party's central board on Wednesday.

The action was taken against the group for defying Golkar's official decision to support Megawati and running mate Hasyim Muzadi in the September 20 runoff.

Golkar formed a coalition with the Indonesian Democratic Party of Struggle (PDI-P), the United Development Party (PPP) and the Prosperous Peace Party (PDS) to help Megawati win the presidential election.

Fahmi and his allies opposed the Nationhood Coalition, and set up the Golkar Reform Forum to solicit support for Susilo.

Speaking to journalists, Marzuki said he had yet to receive official notification of his suspension, so there was no reason not to go ahead with the meeting on Thursday. "I do not care whether this meeting is considered illegal or not," said the former attorney general.

In a speech at the gathering, Fahmi dismissed the Nationhood Coalition that Golkar had formed, saying it was ineffective.

The recent election of East Java's new provincial legislature speaker is an example of the coalition's inability to exert its will, he added.

Ridwan Hisyam, a local Golkar leader, was defeated by a candidate from the National Awakening Party (PKB) for the position. "It clearly shows that the coalition does not work," Fahmi said.

Akbar insisted on Thursday internal bickering within Golkar would not affect his party's support for Megawati in the election.

The decision to suspend Fahmi and his allies had the support of most of Golkar's regional chapters, Akbar claimed during a visit to the Syeh Zainuddin NW Anjani Islamic boarding school in East Lombok regency, West Nusa Tenggara.

Golkar fires Jusuf Kalla as party advisor

Jakarta Post - September 16, 2004

Kurniawan Hari and Suherdjoko, Jakarta/Semarang -- The Golkar Party dismissed Jusuf Kalla, a member of the party and the running mate of election front-runner Susilo Bambang Yudhoyono, from his post as a Golkar advisor on Wednesday, and suspended the membership of 11 other party members indefinitely for refusing to support Megawati Soekarnoputri in Monday's election runoff.

The 11 suspended Golkar politicians are Fahmi Idris, Marzuki Darusman, Burhanuddin Napitupulu, Juniwati Sofwan, Abu Hasan Sazili, Anton Lesiangi, Priyo Budi Santoso, Abu Hanifah, Yoeslin Nasution, Edison Betaubun and Firman Soebagyo.

"All of them will be given a chance to defend themselves before Golkar's Central Executive Board soon," Golkar secretary-general Budi Harsono told The Jakarta Post here on Wednesday afternoon.

Budi said their stance during the executive board hearings would determine whether further action would be taken against them. No specific date has been set for the hearings.

Golkar, whose presidential candidate Gen. (ret) Wiranto was eliminated in the first round of the presidential election, has officially thrown its support behind President Megawati, who is seeking a full five-year mandate in the election runoff.

The party has also formed a lose coalition with Megawati's Indonesian Democratic Party of Struggle (PDI-P), the United Development Party (PPP) and the Prosperous Peace Party (PDS) to boost Megawati's chances in the election.

Despite the political pact, many Golkar leaders have openly expressed their support for Susilo, a retired four-star Army general, prompting Golkar's Central Executive Board (DPP) to take action against them.

The decision to dismiss Kalla from his advisor's post and suspend 11 other party members was taken during a plenary meeting of Golkar's executive board that lasted from 10:30 p.m. on Tuesday to 4:20 a.m. on Wednesday morning.

Of 47 Golkar executive members attending the meeting, 29 of them called for severe sanctions to be imposed on the dissidents. The other members supported the decision.

In Semarang, Central Java, Golkar chairman Akbar Tandjung said that the 11 politicians had been suspended as they had rejected the party's political line.

Akbar said that the maneuvers by Fahmi and his allies, especially their forming of the Golkar Reform Forum (FPPG), could damage the party's unity. As for the dismissal of Kalla from his advisor's post, Akbar and Budi said that Kalla often organized meetings with Golkar members without giving prior notice to Golkar's executive board.

Golkar deputy chairman Agung Laksono told the press that the party would also review the position of Fahmi as chairman of the Golkar Faction in the People's Consultative Assembly (MPR). "We will discuss the consequences of the suspension in more detail," Agung said, adding that the party had warned the 11 politicians twice, on September 2 and September 8 respectively.

Responding to the decision by the executive board, Kalla said that it was an overreaction. He also questioned which party rules he had violated. He said that Golkar's decision to remove him from the party advisory board and suspend 11 other members was a clear emulation of the New Order's repressive approach.

Kalla acknowledged that he was present at the establishment of the Golkar Reform Forum. However, he claimed that he was only a guest, not a founding member.

Political analyst J. Kristiadi said that Golkar's decision clearly showed the arrogance of Golkar's leaders, and their disregard for the views of grassroots members.

Foreign observers gear up for polls

Jakarta Post - September 16, 2004

Jakarta -- Two foreign agencies officially registered to monitor the presidential election runoff have arrived here to observe the poll from the opening until vote counting.

The Atlanta-based Carter Center said in a statement made available to The Jakarta Post on Wednesday that it would deploy a team of 57 personnel for the mission.

The team, led by Ambassador Douglas Peterson, will witness the poll opening, balloting and vote counting at numerous polling stations in 21 of the country's 32 provinces.

Peterson served as the first post-war US ambassador to Vietnam after serving three terms as representative of Florida's 2nd Congressional District in the US House.

David Carroll, interim director of the Center's Democracy Program, said that the deployment of the monitoring team shows the significance of the country's election runoff on September 20, 2004.

"The presence of international observers is an important demonstration of the interest of the international community in supporting Indonesia's democratization." he said.

Carroll said that the final round of the presidential poll would be the last in a series of important elections in Indonesia this year, providing Indonesia citizens with their first opportunity to directly elect their president.

The Center deployed 60 observers for the first round of the presidential election on July 5, led by former US president Jimmy Carter and former Thai prime minister Chuan Leekpai.

The Carter Center has had 14 long-term observers based throughout Indonesia since May 2004 to monitor and assess the electoral process and political environment.

The center was founded in 1982 by Carter and Rosalynn in partnership with Emory University to advance the causes of peace and public health worldwide.

Another independent foreign poll monitoring team, the European Union Election Observation Mission (EU-EOM), said on Wednesday that 125 observers had arrived in Jakarta from Europe to begin their observation mission in Indonesia.

"The observers will be deployed in all the country's provinces where they will meet our long-term observers who have done their work since September last year," EU-EOM chief observer Glyn Ford said in a separate statement.

He said the observers would monitor the whole electoral process from the opening of polling stations through to the vote counting.

The EU-EOM mission consists of 65 long-time observers, 125 short-term members and 18 officials assigned by embassies of EU- member countries in Jakarta, as well as a team of experts. The EU had also deployed many observers to monitor the first round of the presidential election and the legislative elections in all the country's 32 provinces, which Ford described as "one of the most complex elections in the world".

The EU-EOM is the biggest foreign election monitoring team in Indonesia.

Indonesians set to go to polls

Australian Associated Presse - September 19, 2004

The bombing of the Australian embassy in Jakarta has elevated terrorism, as an election issue, from a shade above nowhere to a point just visible on Indonesia's political horizon.

But the hopes and priorities of Indonesian voters, as they head to the polls on Monday, will be vastly different from those held by anxious regional neighbours.

More than 150 million Indonesians will turn out to directly choose their president for the first time -- less than two weeks after the deadly attack targeting the embassy.

President Megawati Sukarnoputri, the daughter of the Indonesia's charismatic founding president Sukarno, is vying for a second five-year term against retired general Susilo Bambang Yudhoyono, her former chief security minister. And while Indonesia watchers are hoping whoever wins will hunt down the terrorists behind the embassy attack, and ignore opposition by hardline Islamic voters to outlawing Jemaah Islamiah (JI), Indonesians will have their thoughts turned closer to home.

In a nation where most live in rural villages and eke out a living on around $2 a day, voters in the small communities known as kampungs are looking for a leader to lift them out of their economic misery.

That means restoring the high growth rates which tumbled with the fall of the 32-year Suharto dictatorship, making a dent in the vast army of 40 million unemployed and making a serious effort to fight the widespread corruption which bleeds the economy at every level.

That is not to say Indonesians will not be thinking about the country's Islamic terrorist problem, which in truth dates back to colonial times in various guises.

Reminders will be everywhere, in the form of around 120,000 police and the same number of troops on standby at ballot stations at high-risk targets such as embassies and shopping malls.

The embassy blast, which killed nine, has definitely elevated the issue -- although perhaps not to the extent that neighbours such as Australia might have hoped for.

In the wake of the attack, both Megawati and SBY, as he is popularly known, were forced to tackle security during the sedate question-and-answer panel session which passes for a election debate in the world's most populous Muslim nation.

Both promised more coordination, resources and international cooperation in an area thought by most to be the telegenic and commanding Susilo's strong point, given his background.

"He is of course considered stronger because he comes from the army," respected political analyst Daniel Sparingga of Airlangga University said.

But economic concerns are behind Megawati's woeful standing in polls, which if, even close, indicate the self-described former housewife is on course for a crushing loss.

One of the most reliable surveys by the Washington-based International Foundation for Election Systems showed 61 per cent of people were backing Susilo in the runoff, against only 29 per cent for Megawati.

The former Suharto-era opposition leader whose Indonesian Democratic Party of Struggle came to power pledging to fight for the little people is now seen as part of the problem.

Along with her Machiavellian millionaire husband, she now has the backing of Indonesia's ethnic Chinese tycoons, who control business in the nation of 215 million, and is firmly part of Indonesia's elite.

So too is Susilo, the US educated business graduate who has promised to fight corruption and bring on a "second wave" of long-stalled reforms.

It is a sign of the desperation ordinary Indonesians have for change that their best hope for something better is another former general and pro-nationalist.

Many analysts fear an SBY victory will just ensure Indonesia continues to muddle along without any real answers to its myriad economic and security woes.

"To many people it is two members of the elite vying with one another," Sparingga said. "Many people don't see an answer."

Neither do many of Indonesia's neighbours after the country's third terrorist attack in two years, despite a massive year-long manhunt for the bomb masterminds. Like ordinary Indonesians, they too will be hoping for the best from the ballot.

Candidates turning to media

Jakarta Post - September 16, 2004

Jakarta/Surabaya/Makassar -- Confronted with a limited campaign period and the vast expanse of the country, candidates of the September 20 runoff have decided to turn to print and electronic media to lure voters.

Photographs of Megawati Soekarnoputri and running mate Hasyim Muzadi, as well as those of Susilo Bambang Yudhoyono and running mate Jusuf Kalla, have been prominent in national newspapers and television broadcasts since the campaign period officially kicked off on Tuesday.

Under the Presidential Elections Law, election runoff candidates are given only three days to organize indoor campaigns, during which they are to explain their programs and policies to the voting public.

However, Megawati and Susilo have both chosen to stay put in Jakarta, leaving their campaign teams to do the leg work across the country.

Meanwhile, the two have booked extended TV spots and taken out huge space in newspapers for election ads, with both candidates claiming to be the right choice to run the country for the next five years. Virtually all Jakarta TV stations are airing campaign ads from both sides every half-hour, and the overkill has been alleviated somewhat by the few versions available: The Megawati- Hasyim team has offered at least three versions, as has the Susilo-Kalla team.

Several newspapers have carried full-page pictures of the candidates, which has certainly benefited the media as additional advertorial income.

The campaign restrictions imposed by the General Elections Commission (KPU) have not left much space for other alternatives: No outdoor rallies are allowed during the three-day period, huge mass gatherings are also out of question and the candidates are obliged to comply with the KPU-organized dialog for three consecutive nights. The dialog seemed like a question-and-answer panel session on the first day of the campaign period, with Megawati and Susilo appearing at separate times before panelists they had hand-picked.

On the second day, Megawati spent her morning among hundreds of street singers, who vowed to campaign for her across Greater Jakarta, and received 40 regional representatives from several provinces.

Later in the day, Megawati was scheduled to launch a program to clear coastal areas in Ancol, North Jakarta, but the incumbent decided not to attend the event, citing unforeseen circumstances.

Meanwhile, challenger Susilo received representatives of Democratic Party chapters across Sumatra, after Megawati's sister, Rachmawati Soekarnoputri, canceled a planned meeting due to asthma and Yogyakarta Sultan Hamengkubuwono X rescheduled his meeting for Thursday. It is not known whether Rachmawati will be available to meet at a later date because of her health condition.

Also on Wednesday, a group of activists claiming to be "guardians of reform" declared their support for Susilo in a rally. Attending the event were dozens of student activists who had fought for reform in 1998 and several noted figures, including lawyer Todung Mulya Lubis, businessman Sofyan Wanandi, former finance minister Fuad Bawazier, former trade minister Rizal Ramli, Partnership Governance Reform chairman H.S. Dillon and a former student activist of the Bandung Institute of Technology, Djumhur Hidayat.

In Surabaya, neither camp took advantage of the allotted time to hold indoor campaigns, and instead held interactive dialogs at state-owned RRI radio station and TVRI.

Meanwhile, United Development Party (PPP) chairman and incumbent Vice President Hamzah Haz told Nahdlatul Ulama (NU) followers to vote for the Megawati-Hasyim pair. Hasyim is the current NU leader, but is suspended from his position during the campaigns.

In Makassar, South Sulawesi, the Prosperous Justice Party (PKS) distributed flowers and drew up a petition of support for Susilo-Kalla.

Next government will raise fuel prices next year

Jakarta Post - September 16, 2004

Zakki P. Hakim, Jakarta -- The two presidential candidates and their running mates were forced to address what may be the toughest economic challenge next year -- raising fuel prices at home -- when they met a group of economists during a televised dialogue late on Wednesday.

Presidential candidate Susilo Bambang Yudhoyono acknowledged he might have to cut the costly fuel subsidies and consequently raise fuel prices next year if international oil prices remained high.

Responding to a question from panelist Lin Che Wei, Susilo, who has so far been leading in the opinion polls, said that cutting the subsidies was crucial to avoiding fiscal disaster. But he was quick to add that any cut in the fuel subsidy would not cause suffering for low-income people.

"We aim to apply a targeted subsidy," said Susilo, who got the chance to go first during the second day of a two-day dialog.

Meanwhile, President Megawati Soekarnoputri failed to give a direct answer when panelist Mari E. Pangestu raised the same question, saying that the next government would have to face the tough reality that oil prices would not decline to below $30 per barrel in the near future (the Megawati government has proposed what many see as an unrealistic oil price assumption of $24 per barrel and higher fuel subsidy spending of Rp 36 trillion in the 2005 draft state budget.

However, Mega's running mate, Hasyim Muzadi, acknowledged that the next government would eventually have to adopt the politically unpopular measure of cutting subsidies due to budget constraints.

"Subsidies will be removed, although gradually, and there will be compensation [for low income people]," said Hasyim, who seemed to be more confident in answering questions than his would-be boss.

Renewed debate on whether the government should continue with the current expensive fuel subsidy has recently emerged after oil prices soared to record levels of more than US$45 per barrel, which may force the government to boost this year's fuel subsidy by 344 percent to Rp 63 trillion from the initial allocation of Rp 14.5 trillion (by comparison, development spending in the current state budget is Rp 67 trillion)

The current government has decided not to raise fuel prices this year due to the fear of social and political unrest during the current election season (former authoritarian president Soeharto was forced to step down partly due to his decision -- under pressure from the IMF -- to raise fuel prices). But critics say that the fuel subsidies mainly benefit car owners, and that the huge sums involved would be better allocated on other purposes, such as education or defense.

Susilo and his running mate Jusuf Kalla, and Mega and her partner Hasyim presented their economic platforms separately.

As in the first day of the dialogue, the limited time allowed to the panelists to ask questions and to the candidates to respond left the studio audience and television viewers with more questions than answers.

But, basically, the two pairings promised economic measures that would boost growth, create more employment, protect farmers, and boost the role of small and medium enterprises in the economy.

Presidential candidates pledge to get tough on terror

Agence France Presse - September 15, 2004

Indonesia's presidential candidates pledged to get tough on terrorism as official campaigning began for the country's first direct leadership polls -- a contest overshadowed by a deadly embassy attack.

In a televised discussion on the first of three days' official campaigning for the September 20 polls, incumbent Megawati Sukarnoputri defended her government's record on tackling militants, promising to step up security.

Speaking just days after her country was jolted by a fresh extremist attack, she tried to reassure voters that with her at the helm, Indonesia would remain a stable nation where a flourishing economy would alleviate widespread poverty.

Nine people were killed in an attack last Thursday on Australia's Jakarta embassy which police have blamed on the Al-Qaeda-linked Jemaah Islamiyah organisation held responsible for the 2002 Bali bombings and other strikes.

Megawati's uneasy television appearance, in which she answered questions from a selected panel, marked a departure for the president, who has made a policy of avoiding public events where she is required to stray from a script.

Her camp earlier this month refused a challenge to a televised debate from her former security minister Susilo Bambang Yudhoyono, who was clearly more at ease in front of the cameras during the discussion, offering jokes and asides as he laid out his policies.

The discussion is likely to be the most high profile event during the pre-poll campaigning which got off to a slow start on a day dominated by a series of bomb hoaxes at public buildings across the country.

Outlining her policies, Megawati defended her government's record on security, saying the latest attack could not easily have been prevented.

"Terrorism can take place anywhere. Let us take the example of the United States ... the Twin Towers September 11 incident could not be prevented and it took place.

"A bomb, even more so a suicide bombing done by using a vehicle or something that moves, even the experts said that there is nothing that can detect that," she said.

Amid warnings from Australian and Indonesian police that Islamic extremists blamed for the bombing were plotting further attacks, Megawati has put the country on "full alert" before the polls and ordered a huge security increase.

Yudhoyono, an ex general, also focused on tackling terrorism, saying the emphasis should be placed on giving intelligence agencies a preventative role.

"What is clear is that their ability for early detection must be enhanced. But what is also clear is that the intelligence [agency] does not work alone," he said adding that security forces must enhance cooperation.

Both candidates also covered the key issues of economic growth and alleviating poverty and broached the thorny subject of corruption, a major disincentive to vital foreign investment in Indonesia.

Megawati promised greater transparency while Yudhoyono said he would ensure anti-corruption bodies worked "effectively" to implement a five year plan aimed at vastly reducing graft.

Tuesday's debate is unlikely to dissuade voters already drawn to the former general by his suave personality and common touch. Megawati meanwhile will be left struggling to shed an aloof image that cost her support in a first round ballot in July.

In the latest opinion poll, taken before the embassy blast, Yudhoyono was out in front with Megawati closing the gap.

In the Indonesian Survey Institute study carried out in August, 61 percent preferred Yudhoyono over 30.3 percent for Megawati. A July survey by the same body showed 23 percent for Megawati and 68 percent for her rival.

The September 20 poll is the first time Indonesians will be able to directly elect their president and vice president, who were previously selected by legislators.

Megawati gets makeover in pre-election blitz

Agence France Presse - September 15, 2004

With surveys favouring her suave presidential poll rival, Indonesia's Megawati Sukarnoputri has sought to shed an aloof and uncaring image and rebrand herself as a go-getting and attentive leader.

Daughter of the country's founding president Sukarno, Megawati has enjoyed strong popularity in the past, relying on the support of so-called "little people", won over by her promises of reform.

But legislative polls in April saw Megawati's Indonesian Democratic Party of Struggle suffer heavy losses against the victorious Golkar party.

And a first round presidential vote in which she finished second to her former security minister Susilo Bambang Yudhoyono seems to have acted as a wake up call for the president ahead of a September 20 final voting round.

Critics claim voters have been turned off by Megawati's image as a dour and distant leader who prefers the dank corridors of power to public appearances and media interviews.

"There was criticism that Megawati was lacking in public communications skills. This has been enough to undermine her popularity and one of the main reasons why she and her party have not been performing too well," said political analyst Dewi Fortuna Anwar of the Habibie Centre think tank.

Faced by a media-savvy rival with a common touch and a penchant for crooning in what opinion polls say has largely become a popularity contest, the president has undergone a remarkable makeover which has seen her leap into the spotlight.

Apparently no longer wary of her public, she has spent more time outside the capital in the past few months than she has during her entire three-year tenure, hobnobbing with poor farmers, fishermen and clerics while liberally doling out assistance and funding.

In the second half of August alone she visited 22 towns and cities across the Indonesia's sprawling archipelago, including a high profile visit to the troubled region of Aceh, where government troops are fighting to crush rebels.

Amid televised pomp and pageantry the president visited soldiers engaged in the 16-month Aceh military operation during a flying visit to the staunchly Islamic province where she also doled out Korans for Islamic schools.

In another deft touch, Megawati was visibly swift in cutting short a trip to Brunei in the wake of a deadly bomb attack on the Australian embassy in Jakarta to visit victims and reassure her country.

Despite Megawati's unquestionable transformation, those orchestrating her campaign deny she has changed tactics.

"This is entirely normal for an incumbent president, to show that his or her government has contributed to the progress and to the development of the country," said Cornelis Lay, a political scientist with the Megawati Centre.

According to the Habibie Centre's Anwar, while the sudden flurry of activity may not be unusual for a political candidate, many voters were likely to view it with cynicism.

"It comes across as a public relations exercise, not something genuine that comes deep from the heart. It looks as an image- building exercise for Mega and not something undertaken for the sake of national interest," she said.

The Mega metamorphosis is great but rather late

Jakarta Post - September 16, 2004

Ong Hock Chuan, Jakarta -- There has been a fundamental shift in how President Megawati Soekarnoputri communicates. The Megawati we saw during Tuesday night's presidential "dialog" was definitely a different one from the Megawati in the first round of presidential dialogs weeks ago.

Mega watchers will note that up to the last presidential dialog she was her old self -- tentative, insecure, inarticulate and unprepared to speak before the public. She looked and sounded more like a dowdy housewife, happier to tend to affairs of the household than affairs of the state.

Then something happened. By Tuesday night Megawati was still a bit stiff, but she was doing all the right things to communicate effectively. Gone was the horrendous handbag that she plonked in front of the rostrum during the first dialog. Gone were the ridiculously folded notes that she clung to. And gone was the sense of confusion and helplessness that she greeted each question with.

In its place was a well-prepared Megawati who looked like she was confident, in control and in possession of the facts. This was a Megawati who could parry the more uncomfortable questions and deliver a message of how successful her administration has been in effecting change.

What happened? To a public relations practitioner, the answer is obvious: Megawati has, at last, been media trained. In media training executives and politicians are taught how to communicate effectively in an interview situation, whether it is in the format of Tuesday night's dialog or before a pack of aggressive reporters.

There are two components to effective communication: the content and the delivery.

The content consists of boiling down all that the interviewee has to say into two or three main ideas that are expressed in short, concise and memorable statements. These are called key messages and the interviewee's job is to repeat them as often as possible during the interview.

In Megawati's case one of the key messages was how successful her leadership has been in introducing change. There were at least four or five occasions during the dialog where she expressed this idea, saying that she had successfully introduced this law or that initiative and all that remains was merely the implementation.

Then there is the delivery. This is as important as, if not more than, the content. The late Ronald Reagan, who was known as the Great Communicator, was a master at this. No matter what he said, it seemed credible and likable. Successful delivery depends on body language and the use of voice.

In these areas, Megawati also seems to have had a makeover. Though she still does not come across as an animated or inspiring orator like her father, she was noticeably better. She looked responsive to the questions from the panelists. When confronted with difficult questions, she answered with confidence and seemed even to enjoy the session. Unlike the last time, where she leaned on the rostrum, she affected good posture and was attentive. She spoke clearly and enunciated well.

And she made eye contact with the panelists and the audience. Although she still needs to work on sweeping the audience with her eyes to make contact with more people, she at least did not make the same mistake as her rival, Susilo Bambang Yudhoyono. Like Megawati, his answers were well prepared and rehearsed but his trainers overlooked correcting his habit of rapid eye movements. This created the perception of shiftiness and mitigated the effectiveness of his otherwise competent though uninspiring delivery.

The result was a perception that Megawati came out better in the dialog. She even appeared mildly presidential.

Will this be enough to tilt the balance at the presidential polls on Monday? It is doubtful, as her change may be a case of too little too late. Whatever the outcome of the election, however, Megawati's metamorphosis raises intriguing questions about the future of Indonesian politics.

Like most of Indonesia's politicians, Megawati has obstinately refused professional help in managing her public image. Yet her performance on Tuesday night as well as in the immediate aftermath of the bombing outside the Australian Embassy -- where she cut short her visit to Brunei and returned to pay a symbolic visit to ground zero and the victims in the hospital. She also delivered a speech that expressed empathy as well as an action plan -- a clear indication that the age of the image maker has arrived in Indonesian politics.

From now on we will increasingly see the products of political marketing. Politicians will increasingly be slicker and more sophisticated in the use of public relations strategies and tactics to win the image war, so they can win the political war.

Will this result in a more open Indonesia where its political leaders have to communicate with the people to win their support? Or will it mean the rise to power of the slick, ruthless politician who's mastered the sound bite and other tricks of persuasion but has little else to offer?

Time will tell, but in the meantime we can rejoice that there is change in the air. Change is the result of self-realization. Where self-realization exists, there is capacity for improvement. This may be Megawati's lasting gift to Indonesia, no matter how she does in Monday's presidential elections.

The writer is a Partner at PT Maverick Solusi Komunikasi, a PR consultancy specializing in crisis/issue management as well as brand communications.

Candidates dialog receives cool response

Jakarta Post - September 15, 2004

Fabiola Desy Unidjaja, Jakarta -- The much-awaited dialog involving the presidential candidates and their running mates failed to draw much public interest on Tuesday, with less than half of the around 600 seats available being occupied by the supporters of the two camps.

The limited time allocated to the panelists to ask questions and for the candidates to answer left the audience and television viewers with more questions than answers as to how the candidates would run the country if elected.

Most of the time, moderator Natalia Soebagyo was forced to stop either the panelists or the presidential candidates and their running mates due to the limited time allowed for each question and answer.

The two pairs of candidates -- Megawati Soekarnoputri and running mate Hasyim Muzadi, and Susilo Bambang Yudhoyono and partner Jusuf Kalla -- were given three minutes each to explain their programs on security, political affairs, human rights and local autonomy issues.

The Megawati-Hasyim duo appeared first at 8 p.m., with the panelists being sociologist Daniel Sparringa of Air Langga University in Surabaya, law expert Harkristuti Harkrisnowo of the University of Indonesia (UI), and political analysts Ikrar Nusa Bakti of the Indonesian Institute of Sciences (LIPI) and Maswardi Rauf of UI.

Susilo and Kalla came on at 9 p.m., with the panelists this time being analysts Dewi Fortuna Anwar and Fachry Ali, law expert Romli Atmasasmita and sociologist Bambang Soemantri.

While the panelists were initially chosen by the General Elections Commission (KPU), the final say rested with the candidates.

Appeared uneasy before the panelists, Megawati had to ask panelists to repeat their questions several times, and had to rush to answer the questions as the moderator repeatedly reminded her that time was running out. Her running mate, Hasyim, showed more confidence in answering the questions and won applause from the audience.

Meanwhile, Susilo and Kalla benefited from coming second as both the panelists and moderator appeared to have learned from the first session how to make more effective use of the one-hour time period allowed.

Both Susilo and Kalla were clearly better prepared than Megawati and Hasyim in answering the questions of the panelists.

The audience was mostly made up of politicians, pollsters, political analysts and journalists from various media outlets.

Compared to the debate held by the KPU before the first round of the presidential election last July 5, the dialog was more relaxed as none of the candidates felt "offended" by the moderator or panelists.

Speaking for Megawati's camp, Pramono Anung Wibowo of the Indonesian Democratic Party (PDI-P) said he was quite happy with the dialog and considered it to have been more effective than the previous dialog. "For us, the dialog this time around was more useful in allowing us to articulate our views than it was the first time around," he said.

"The only problem was the lack of time. How can we explain our program in only one hour," Pramono said after the dialog. He further contended that should Megawati appear to be hesitant in answering the questions, it was simply because she had made no special preparations for the dialog.

Meanwhile, Daniel Sparringa said after the dialog that it would do little to influence voter choices as most had already made up their minds. He also said that the voters would have preferred to see the candidates going face to face during the same session and answering the same questions.

Corruption/collusion/nepotism

Activists demand regent be prosecuted

Jakarta Post - September 18, 2004

Kendari -- Dozens of activists held a protest on Friday in downtown Kendari, demanding that prosecutors speed up a probe into the alleged embezzlement of Rp 11.6 billion (US$1.2 million) by Muna regent Ridwan Bae.

The regent was accused of embezzling Rp 11.6 billion in a teak tender recently in the regency.

But, later on the same day, hundreds of protesters supporting the regent were seen gathering in a park in front of the Southeast Sulawesi Prosecutor's office, where the first group of protesters were holding the rally.

The two groups were soon locked in a war of words, but security personnel quickly pacified both groups so that physical violence was prevented.

Media/press freedom

Jakarta court puts media freedom behind bars

Asia Times - September 18, 2004

Gary LaMoshi, Denpasar -- A Jakarta court on Thursday sentenced a leading magazine editor to a year in jail for libel in a case seen as a landmark for press freedom in Indonesia, a country supposedly in the era of reformasi. The verdict deals a harsh blow to press freedom and reinforces Indonesian courts' reputation for bizarre decisions, a key barrier to investment.

The court found three journalists from Indonesia's most respected news magazine Tempo guilty of libel, but, citing Indonesia's 1999 Press Law, the three-judge panel ruled that only editor-in-chief Bambang Harymurti should be punished.

The ruling adds fuel to the controversy over using the criminal code rather than the press law in media cases. Thursday's verdict ignored Supreme Court Chief Justice Bagir Manan's advice to judges not to criminalize media cases, as well as an appeals court ruling on Tuesday that overturned two previous convictions in related cases against Tempo because the suits were not brought under the press law. (None of the suits against Tempo have been brought under the press law).

Business magnate Tomy Winata has filed at least seven lawsuits against Tempo, most related to an article published on March 3, 2003, headlined "Ada Tomy di Tenabang?" (Is Tomy in Tanah Abang?). The article examined pervasive rumors of Winata's involvement in a February 2003 fire that gutted Jakarta's Tanah Abang, an aged textile market complex on the city's increasingly fashionable outskirts.

Redevelopment under fire

The article included reporter Ahmad Taufik's account of redevelopment plans for the market filed by an associate of Winata's from a source inside the city government. After the fire, Tanah Abang merchants told Taufik they had been asked to approve a redevelopment plan and that many market tenants had balked. In Indonesia, fires are a common tool for convincing reluctant occupants to leave property that tycoon's desire, and, in an earlier article for Tempo's daily newspaper, Taufik reported that merchants suspected arson in the blaze. City officials have not investigated the cause of the fire.

Taufik's March 3 article also included Winata's denial of involvement with the redevelopment plans, backed by additional quotes from Central Jakarta Mayor Hosea Petra Lumbun and the president of the company that operates Tanah Abang. The article raised the possibility that business rivals had tried to taint Winata by associating him with the Tanah Abang plan. Expert testimony at the trial declared the March 3 article overall favorable to Winata.

But Winata didn't think so. On March 9, thugs identifying Winata as their "boss" stormed Tempo's office, destroyed equipment and assaulted Taufik and another employee while police reportedly looked on. Winata has denied any connection to the incident, though he admits police called to ask his advice on handling the episode.

Two days later, Winata filed a complaint against Tempo that led to this latest trial. Taufik, Harymurti and the article's copy editor were charged with criminal defamation and publishing false information that led to a public disturbance. Prosecutors demanded two-year jail sentences for the trio with the stipulation that, if convicted, Harymurti begin his sentence immediately, even if he files an appeal. The court denied that motion, and Harymurti remains free pending appeal.

Denial allowed to ride

The closely watched trial was at times reduced to a farce. Both Winata and Mayor Lumbun testified they never talked to Tempo, despite authenticated tape recordings and phone records confirming such conversations. Their denials were a key plank in the prosecution's case, but judges refused to delay their verdict until the results of Tempo's perjury complaints against the two men were revealed.

But the real farce is that a criminal trial over a news article took place at all in Indonesia's era of reformasi, a period that began after former president Suharto's authoritarian rule was brought to an end.

For three decades Suharto's government shackled the press. Tempo, along two other popular news magazines, was shut down in 1994 after reporting a disagreement between the military and future president BJ Habibie over the purchase of defective East German naval vessels. Tempo didn't resume publishing until 1999, after Suharto's fall.

In the wave of post-Suharto reforms, Indonesia passed a press law that provides a public forum for grievances against the media. Under the press law, complainants are guaranteed a right of reply to articles, a press council mediates disputes, and, if mediation fails, aggrieved parties may file charges against the publication, with a maximum fine of Rp500 million (US$58,000).

However, there is no requirement that the public use the press law for its grievance against the media. Indonesia's compliant police, prosecutors and courts have made it easy for those with power to short circuit the press law and seek criminal and civil judgments with far higher fines against publications and individuals, along with jail time for journalists.

Presidential leadership

President Megawati Sukarnoputri led the way, endorsing a lawsuit last year against two editors of the Rakyat Merdeka (People's Freedom) newspaper for caricatures and articles that she called offensive. The editors were convicted and currently are appealing the verdict. Megawati and her rival in Monday's presidential run-off election, Susilo Bambang Yudhoyono, have not commented on Thursday's verdict.

Tempo and its employees have faced at least nine suits, none brought under the press law. Winata has brought seven of these cases and won favorable lower court verdicts in four out of the five decided so far. A libel verdict centering on an article on Winata's possible involvement in a proposal for a casino in Southeast Sulawesi handed down in January levied a fine of $1 million, not the equivalent in rupiah, the first time an Indonesia court had fined a defendant in a foreign currency. Experts cited the dollar denomination as an attempt to add to the publication's hardship. Tempo lawyers said the verdict smacked of collusion between the court and Winata. The same court earlier dismissed charges against David Tijoe, who led last March's assault on the Tempo office.

The US dollar fine was not the first time the courts had taken extraordinary measures in a Tempo case. A day after the March 9 assault on Tempo's headquarters, Tempo founder Goenawan Mohamad made comments targeted at Winata that spurred him to launch a civil defamation case against Goenawan. As a result, prosecutors sought possession of Goenawan's home in hopes of selling it to guarantee for a possible future fine.

In all, Tempo has been sued for the equivalent of nearly $100 million, and current judgments under appeal total more than $45 million, in addition to possible jail time for employees.

Under Suharto, the government could sign an order to shut down publications and jail journalists, or worse. Now the government says the media is free, but journalists still face criminal prosecution and violence as in those days, with the added twist that publications face the threat of bankruptcy through ruinous fines. Until Indonesia's government takes Chief Justice Manan's advice to force litigants to use its press law in media cases and stops tolerating violence against the media, claims of a free press will remain bankrupt.

[Gary LaMoshi, a longtime editor of investor rights advocate eRaider.com, has also contributed to Slate and Salon.com. He's worked as a broadcast producer and as a print writer and editor in the United States and Asia. He moved to Hong Kong in 1995 and now splits his time between there and Indonesia.]

'Blow to democracy'

Jakarta Post - September 17, 2004

Sari P. Setiogi, Jakarta -- International and domestic observers lambasted on Thursday the guilty verdict against Tempo magazine's chief editor Bambang Harymurti and called it a setback for the country's press freedom and democracy.

The chief editor of leading daily Kompas, Suryopratomo, said he feared the defamation verdict and one-year sentence would set bad precedent for criminalization of the press.

"We worry that in the future all mistakes committed by the media will be perceived as errors by design that are driven by hatred or ill will," he said.

Bambang was found guilty of defaming businessman Tomy Winata in an article that appeared in the March 3-9, 2003 edition of the magazine. The article questioned whether there was a link between Tomy and the fire that razed the Tanah Abang textile market in Central Jakarta.

Fellow defendants, Tempo journalists Ahmad Taufik and Iskandar Ali Thamrin, were acquitted on the grounds that they were not responsible for the publication of the "defamatory" article.

Press Council senior member Sabam Leo Batubara said the court ruling proved there was unfairness and inconsistency in the interpretation of the country's law.

"Just a couple of days ago, under the same law, the Jakarta High Court overturned the district court's verdict against Tempo for an unsubstantiated report and defamation. Today, the court here did something completely different. Where is the fairness then?" wondered Sabam. He was referring to a civil lawsuit filed by Tomy on the same matter.

The international community, which had closely followed the trial of Bambang and his reporters, likened the verdict to a return to dictatorship. The president of International Federation of Journalists (IFJ), Christopher Warren, said the verdict continued "a deeply disturbing trend mirroring the darkest days of the Soeharto regime for media freedom in Indonesia." "This is a sad day for press freedom in Indonesia. No journalist should ever be jailed for defamation," Warren said.

IFJ legal expert James Nolan said the verdict had the potential for a chilling effect on press freedom by hampering journalism on a day-to-day basis.

United States Embassy press attache M. Max Kwak told The Jakarta Post he was delighted by the acquittal of Taufik and Iskandar, but was "saddened" by the conviction of Bambang. "While it is the responsibility of the Indonesian court to rule on the case before them in accordance with the Indonesian laws, we have concern about the legal process that leads to the imprisonment of professional journalists and creates circumstances that could damage Indonesia's democracy," said Kwak.

Separately, the European Union said in its statement it would continue monitoring carefully the trials during the appeal process. "The EU regards press freedom and the freedom of information as crucial democratic values," it said.

Suryopratomo, however, said the verdict should teach the national media a lesson to improve its professionalism. Kompas, he said, now required all its reporters to verify all facts and stick to accepted standards. "We are no longer just required to cover both sides, but also to verify facts, which is not easy as most of our journalists are not used to it," he said.

Hundreds of people who were divided into supporters of Tempo and Tomy thronged the street in front of the court on Jl. Gadjah Mada during the hearing, singing songs and carrying signs, mostly cheering for their side.

'Tempo' editor gets a year

Jakarta Post - September 17, 2004

Urip Hudiono, Jakarta -- The Central Jakarta District Court found Tempo weekly guilty on Thursday of publishing false material and libel, and sentenced chief editor Bambang Harymurti to a suspended one-year jail term. The court, however, acquitted the journalists who wrote the article in question.

The differing verdicts was the result of the judges decision to take into consideration only certain aspects of the Press Law in determining who should be held accountable in respect of the libel complaint filed by well-connected businessman Tomy Winata.

"As regards press freedom, which is a vital ingredient of democracy, the court has taken into consideration Law No. 40/1999 on the press as the principal legislation covering all matters concerning the media," presiding judge Suripto said.

"However, as the court has also evidence from expert witnesses to the effect that this legislation does not deal specifically about misleading information and libel, the court must also refer to other legislation."

Defendants Bambang, Ahmad Taufik and Teuku Iskandar Ali were prosecuted for violating Article 14 of Law No. 1/1946 on publishing false material that could lead to public unrest, as well as Articles 310 and 311 of the Criminal Code on defamation.

Titled Is Tomy in Tenabang?, the article in question, which was published in the weekly's March 3-9, 2003 edition, referred to Tomy as a "big scavenger" and insinuated that he was involved in the fire that gutted the Tanah Abang textile market on February 19, 2003, so as to allow him to press ahead with a redevelopment project.

Taking turns reading the verdict with judicial panel members Kusriyanto and Ridwan Mansyur, Suripto explained that the defendants could not provide conclusive proof that there had in fact been a redevelopment plan as stated in the article, while all of the relevant city officials denied that there was any such plan.

Suripto further said that the defendants had also incited public unrest as "they should have known that the an article would have had an effect on the feelings of the fire victims", and had also failed to "conclusively prove that Tomy was a scavenger, as stated."

The judges decided that Taufik and Iskandar could not be held liable, however, as under Articles 12 and 18 of the Press Law, the consequences of any violations committed by a media outlet had to be borne by its chief editor.

Speaking after the trial, Tempo lawyer Todung Mulya Lubis said that his clients would file an appeal, even for Ahmad and Iskandar, as the court had also found them guilty.

"We will appeal as the judges did not entirely base their verdicts on the Press Law or the journalist code of ethics," he said. "The defendants should have been cleared of all charges as the article adhered to all the basic principles of journalism."

The prosecutors also said they would consider an appeal as the verdict was more lenient than the two-year prison terms they had sought against each of the defendants.

Bambang expressed the hope that the high court would create a similar precedent in favor of press freedom as the United States Supreme Court had done when it overturned a guilty verdict against New York Times journalists in 1964.

Court clears two reporters but rules article defamatory

Agence France Presse - September 16, 2004

In what was seen as a test case for press freedoms in newly democratic Indonesia, a court cleared two journalists of libel but said the article they wrote was defamatory.

The ruling on a case filed by a well-connected businessman against the Tempo news magazine will be welcomed by rights activists, however the verdict leaves uncertain the fate of the magazine's editor, who may now be held responsible.

Judge Suripto said an article written by reporters Ahmad Taufik and Teuku Iskandar Ali about businessman Tommy Winata was libelous but the two could not be held responsible for its publication.

Winata accused Tempo, a Time magazine lookalike with a reputation for investigative reporting, of defaming him in a story in March 2003 which he claims insinuated he used arson in the hope of winning a rebuilding contract.

Ahead of Thursday's hearing, rights groups led by Amnesty International had condemned the case, saying it marked a step backwards for Indonesia as the country was emerging from years of censorship into democracy.

It said the court's use of the criminal code to hear the case instead of a standard press law, meaning the defendants faced possible jail terms, was unwarranted as the Tempo staff has undertaken fair and balanced reporting.

Speaking after the verdict, journalist Ali said he suspected that the government had intervened in the case ahead of voting on Monday because a guilty verdict could damage President Megawati Sukarnoputri's election hopes. "It's part of a promotion ploy from the Megawati government," he said.

Taufik said he feared judges would now place the blame on editor Bambang Harimurti for allowing the article to be published. The verdict on Harimuti is scheduled to be delivered later Thursday.

The hearing at the Central Jakarta district court was attended by supporters of both sides in the dispute, including media watchdog activists. "Free press, yes. Lying press, no," read a banner carried by Winata's supporters, while free press activists countered with a poster declaring: "Media freedom is your freedom".

Tempo had already lost four of seven cases involving Winata and was ordered to pay more than 1.5 million dollars in damages to the businessman over other reports. Two verdicts have been overturned on appeal.

Wind of change blows prior to 'Tempo' verdict

Jakarta Post - September 16, 2004

Jakarta -- In a departure from the general legal trend that has characterized the Tempo saga and coming ahead of the verdict expected on Thursday from the Central Jakarta District Court, a high court ruled in favor of the Tempo Media Group in its appeals against two lower court rulings.

The high court ruled on Tuesday in favor of Tempo's appeals against rulings from separate lower courts for two libel suits filed by well-connected businessman Tomy Winata against the media group, overturning court orders to pay damages to the tycoon.

The ruling was handed down just after Chief Justice Bagir Manan told senior judges on Tuesday to consider using the Press Law instead of the Criminal Code in settling all disputes involving the press.

Tempo chief editor Bambang Harymurti and journalists Ahmad Taufik and Teuku Iskandar Ali have been charged for violating the Criminal Code in inciting social instability and defaming Tomy through its article, Is Tomy in Tenabang?.

The prosecution sought a two-year sentence for each of the defendants and immediate arrest for Bambang.

The Tempo media group has to date faced nine lawsuits. Seven of them were filed by Tomy in three of the five Jakarta district courts.

High court judge Harifin A. Tumpa, who presided over the Tempo appeals, was quoted by Koran Tempo daily as saying on Tuesday that the court had decided to dismiss the cases, as they were covered by specific legislation that took precedence over general legislation (the Criminal Code).

Harifin said the lower court judges had erred by not applying Press Law No. 40/1999 when arriving at their decisions. "We cannot use general laws for the cases," he said.

Harifin further said the cases were also "special", as they basically dealt with a conflict between public interest and an individual's rights. "The press has a duty to inform the public," he said. "Anyone who feels that their rights were violated by this should first use their right to reply."

The South Jakarta District Court had ordered Koran Tempo in January to pay a whopping US$1 million in damages to Tomy for publishing the article, (Southeast Sulawesi) Governor Ali Mazi denies Tomy Winata to open casino, in its February 6, 2003, edition. Tomy had sued the daily's publisher for Rp 21 billion (US$2.29 million).

The court's verdict sparked controversy, as it was the first time a court set damages in a foreign currency. The amount also contravenes with the Press Law, which stipulates that the maximum fine for press-related cases is Rp 500 million.

In March, the Central Jakarta District Court ordered Tempo magazine to pay Rp 500 million in damages to Tomy for publishing the Tanah Abang article. Tomy had sued the magazine Rp 200 billion for the article, which he claimed insinuated his involvement in a fire that razed the Tanah Abang textile market in February 2003 with an aim to win its renovation project. Tomy's lawyers OC Kaligis and Desmond J. Mahesa said they would appeal to the Supreme Court over the high court's ruling.

Boarder & security issues

TNI ready to secure UN agencies in western Timor

Antara - September 16, 2004

Kupang -- The Indonesian Military (TNI) is ready to provide protection for UN agencies that reopen in East Nusa Tenggara province, the western part of Timor island, a local commander said on Wednesday.

"Actually, it is the duty of the police, but we are ready to help the police guard the country," Wirasakti Military Resort Commander Col. Maswardi Moesanip said.

"We are ready to protect UN agencies if they want to reopen their offices in the province," he added, speaking after a meeting with UN Representative to Indonesia Bo Asplund.

The Wirasakti Military Resort oversees East Nusa Tenggara, or West Timor, which borders East Timor.

Asplund was visiting the area to assess the Alert V status imposed by the UN Security Council since the September 6, 2000, killing of three UN humanitarian workers allegedly by former East Timorese taking refuge in the province.

All UN agencies helping the refugees were ordered to pull out from East Nusa Tenggara until security returns to normal.

The Security Council plans to downgrade the status to Alert IV, which would allow UN agencies to resume operations. "Asplund, however, was concerned about the safety of UN employees once they resume operations, and requested protection from the police and the military," said Maswardi.

Maswardi further said an Alert IV status would not reflect the current condition in the province, which is relatively peaceful.

"The status is similar to those applied in Iraq, although it is much, much safer here," he said. "Actually the UN ... should downgrade it directly to safe status. Perhaps the UN wants to do so gradually."

Human rights/law

House to press ahead social security system bill

Jakarta Post - September 18, 2004

Ridwan Max Sijabat, Jakarta -- Ignoring main stake holders' aspirations, the House of Representatives is determined to complete the deliberation of the much-criticized bill on national social security system (SJSN) next week.

Surya Chandra Surapaty, chairman of the House's working committee deliberating the bill, declined to receive a group of employers and labor activists who were trying to stop the House deliberating the bill here on Friday. Surya said that the bill deliberation has been nearing completion and was scheduled to be brought to a plenary session on September 21.

He said both the government and the working committee have agreed to set up a small team to formulate and synchronize all contentious issues that have been already discussed over the last several months.

"The small team [Timus] will work on Friday, Saturday and Sunday to ensure that the bill is ready to be endorsed on Tuesday," he said.

The Bipartite Forum representing employers grouped in the Indonesian Employers' Association (Apindo) and labor unions have opposed the bill since they had not been involved in preparing the bill's academic draft and its substance would certainly affect them.

"We are really confused over the working committee's rejection. Is it a state institution representing the people or a retail company fighting to reach its sale target? If it is a legislative body it should not turn a deaf ear to employers and workers, both main stake holders in the social security bill," Hasanuddin Rachman, a spokesman for the Bipartite Forum, told The Jakarta Post here on Friday.

The Bipartite Forum which sent 200 delegates to meet with the House's working committee on September 2, proposed to the committee to suspend the bill's deliberation for numerous reasons, but the committee decided to continue the deliberation for specified reasons.

"Two major factions in the working committee have seemingly been determined to complete the deliberation and endorse it before their term of office ends at the end of this month. Although many sides, including employers and workers, have expressed their opposition to the controversial bill," said a member of the working committee who asked for anonymity.

Hasanuddin reiterated that employers and workers have opposed the bill which they claimed to be overlapping with the social security programs for workers (Jamsostek), civil servants (Askes and Taspen), public transport passengers (Jasa Raharja) and servicemen (Asabri).

"Besides, both workers and employers will be asked to give cross-subsidy for the poor for their participation in the social security programs," he said.

Hasanuddin added that according to information he gained from the working committee, the government would ask all the five state- owned companies to provide a total of Rp 3 trillion to run the social security programs for the poor.

Hasanuddin explained that the Bipartite Forum has submitted their objections to the bill to the House but so far no positive response had been given. He said the working committee has ignored the objections "because the committee's chairman and several members of the committee have their own interests in the establishment of a national body running the national social security system."

Dita Indah Sari, chairwoman of the National Front for the Struggle of Indonesian Workers (FPNBI), said workers would stage a demonstration at the House on Saturday until Tuesday to pressurize the House to suspend endorsing the controversial bill.

Manpower and Transmigration Minister Jacob Nuwa Wea, said that he personally opposed the bill because the government did not pay its own contribution to the social security programs, it was not fair if workers and employers have to give cross-subsidy for the poor.

"I have urged the House's working committee to suspend the bill and leave it to the next new parliament because its enforcement will certainly raise many conflicts in the field in the future," he said.

He said that the social security programs for workers could not be merged under the national system since Jamsostek programs were jointly financed by workers and employers.

State-owned PT Jamsostek's president Achmad Djunaidi said that his company has also submitted its opposition to the bill to the House because the new bill recommended the merger of the five state-companies under the national social security system.

"Besides we have been running for more than 26 years with 13 million workers participating in the programs and total assets of Rp 28 trillion (US$3 billion)," he said.

Focus on Jakarta

Revised three-in-one traffic policy now official

Jakarta Post - September 18, 2004

Damar Harsanto, Jakarta -- The city administration began implementing the revised three-in-one traffic policy on Friday, though it did little to alleviate the usual heavy congestion along the major thoroughfares of Jl. Thamrin and Jl. Sudirman.

Workers began flooding out of their offices along these two streets at about 3 p.m. in order to avoid the restricted zone.

The administration has pushed back the start of the evening three-in-one restriction from 4 p.m. to 4:30 p.m., in response to complaints from vendors in Glodok who said their profit had dropped by 50 percent since the policy's implementation.

"It [the revision] is part of our efforts to boost economic activities along the three-in-one zone, which is similar to the busway corridor that starts from Jl. Sisingamangaraja in Blok M, South Jakarta, to Jl. Gajah Mada in Kota, West Jakarta," Governor Sutiyoso said in a gubernatorial decree on the revised traffic policy dated September 17.

Previously, the three-in-one restriction was enforced on weekdays from 7 a.m. to 10 a.m. in the morning, and 4 p.m. to 7 p.m. in the evening.

The administration originally extended the hours of the three-in-one policy on January 24, in an effort to support the implementation of the new busway corridor. The traffic policy was expected to encourage private car owners to leave their vehicles at home and take the busway.

However, the Jakarta chapter of the Indonesian Hoteliers Association (PHRI) said on Thursday the extended three-in-one hours had damaged business activities along the three-in-one zone.

"We are suffering monthly potential losses of about Rp 40 billion [US$4.49 million] because of the implementation of the three-in- one policy, especially in the afternoon," said Hari Santosa, the chairman of the PHRI Jakarta chapter.

Association of Indonesian Retailers chairman Handaka Santosa said earlier the traffic restriction discouraged people from visiting shopping centers.

Sutiyoso, however, said his administration would not scrap the policy, despite the complaints. "This policy is meant to deter people from using private vehicles, which is necessary given the rapid increase in the number of new cars in the city. It is the most lenient traffic policy compared to other cities in the world," he said.

The policy, which was first introduced in 1993, has been criticized as a failure because many private car owners simply hire people off the street to serve as passengers before entering the restricted zone.

Law No. 14/1992 on traffic stipulates that motorists who violate the three-in-one policy can face a maximum sentence of one month in jail and a fine of up to Rp 1 million.

News & issues

Bill on domestic violence draws praise

Jakarta Post - September 14, 2004

Kurniawan Hari, Jakarta -- The House of Representatives is scheduled to pass the bill on domestic violence on Tuesday, although women activists say it is not strong enough to serve as a deterrent, as it does not set minimum penalties for perpetrators.

The endorsement of the bill is expected to provide a major boost for at least 303 institutions, which have been working together with the National Commission for Violence against Women (Komnas Perempuan) to help victims of domestic violence.

A recent report by the women's rights body showed that of 5,934 cases of violence it was dealing with, approximately 46 percent (2,703 cases) involved domestic violence or violence within the family.

Of those cases, only 162 reached court, while the rest were either withdrawn by the victims or could not be heard due to insufficient evidence.

Ratna Batara Munti from the Legal Aid Institute for Women (LBH Apik) appreciated that House legislators had adopted some proposals submitted by women activists, but cited room for improvement.

In line with the activists' demands, the bill stipulates that physical violence, psychological violence, sexual violence, and economic violence are crimes.

The bill also says a victim of domestic violence can testify as a witness. "We are glad that the legislators accommodated our aspirations. However, we criticize the bill for failing to set minimum punishments," Ratna told The Jakarta Post on Monday.

Only two of the 10 acts of violence spelled out in the bill carry minimum and maximum penalties, while most of them are subject to maximum penalties. Rita Serena Kolibonso of the Mitra Perempuan women's advocacy group concurred with Ratna, saying the lack of minimum punishments would increase the chances of violators escaping justice. Without minimum penalties, the judges can hand down probation sentences, Rita said.

In response to the criticism, the Ministry of Justice and Human Rights' director of legislation Abdul Gani Abdullah said the inclusion of minimum penalties in the bill could encourage the conflicting couple to divorce (due to a long period of separation).

Ratna said that she and other women activists would disseminate information on the contents of the bill to the people, as well as law enforcers, after its endorsement. She suggested that judges who are to hear cases of domestic violence should improve their knowledge on gender issues to prevent them from being biased against women.

Key Articles

• Article 44: Physical violence carries a maximum penalty of five years in jail or a Rp 15 million fine. If the victims suffer severe injury, the penalty is raised to 10 years in jail or a Rp 30 million fine. If the violence causes death, the maximum penalty is 15 years in jail or a Rp 45 million fine. If the violence is committed by a husband against a wife, or vice versa, and does not cause serious wounds, the maximum penalty is four months in jail or a Rp 5 million fine.
• Article 45: Psychological violence carries a maximum penalty of three years in jail or a Rp 9 million fine. If the psychological violence is committed by a husband against wife, or vice versa, and does not hamper daily activities, the maximum penalty is four months in jail or a Rp 3 million fine.
• Article 46: Sexual violence (including marital rape) carries a maximum penalty of 12 years in jail or a Rp 36 million fine.
• Article 47: Someone who drives another member of their household to have sex for commercial purposes faces a minimum penalty of four years in jail or a Rp 12 million fine -- and a maximum penalty of 15 years in jail or a Rp 300 million.
• Article 48: Sexual violence that causes serious wounds, a mental disorder, or leads to the death of a fetus, or damage to the reproductive organs, carries a minimum penalty of five years in jail or a Rp 25 million fine, and a maximum penalty of 20 million in jail or a Rp 500 million fine.
• Article 49: Anyone who ignores the well-being of their charges faces three years in jail or a Rp 15 million fine.
• Article 50: Apart from imprisonment or jail, the bill also requires convicts to undergo counseling.

I was tricked into working as a sex worker, girl says

Jakarta Post - September 14, 2004

Slamet Susanto, Yogyakarta -- The hopes of Tas (not her real name) of getting a decent job were shattered after she ended up in a karaoke bar on Batam island. The 14-year old girl, who had just finished elementary school in Pagedongan, Banjarnegara, Central Java, was lured to Batam by her own neighbor, Parwati, 25.

She was enticed by an offer to work as a tea delivery girl at a cafe in Batam with a monthly salary of Rp 5 million. But the moment she arrived in Batam, Parwati sold her to the MK karaoke bar in Kampung Pelita for Rp 1.5 million and she was forced to become a sex worker.

"My ordeal began when a friend Eka Cipta Novendi, 22, introduced me to Parwati who promised me a job. As I was unemployed and wished to earn my own money, I just believed her then," said Tas. "I left for Batam on June 7 with another girl, with the initials BD, 25, without saying goodbye to my family and with only the clothes I was wearing at the time," she said hesitantly, holding back tears.

Since she did not bid farewell to her family, her relatives thought she had gone missing.

Her identity was falsified prior to her departure. Her name was stated as Fatmawati on the plane ticket and she used the alias Indah Fitriani Dewi at the karaoke bar. Her age was also stated as 19.

Upon arriving in Batam, Tas was taken to the karaoke parlor by Parwati and was greeted warmly by its manager she identified only as Agung.

Through an employee, Wiwi, she was told that she had been sold by Parwati for only Rp 1.5 million to work for five months. She was charged Rp 1.5 million for her meals for five months, which was considered a debt.

During her stay on the industrial island, Tas had once tried to escape but was detected. She was eventually forced to become a sex worker for six weeks and had been booked by guests of the bar on at least 13 occasions.

A guest pays Rp 280,000 for a single booking -- Rp 80,000 of which would go for the taxi fare, Rp 100,000 for her pimp and Rp 100,000 for herself (in the form of a voucher that could only be cashed upon completion of her contract).

On July 31, 2004, a social worker with an non-governmental organization managed to sneak her out of the parlor by booking her and then took her to Barelang Police Station.

Tas later flew to Yogyakarta on Aug. 12. From there, she returned home to Banjarnegara, accompanied by activists of the Anak Merdeka Indonesia Foundation (SAMIN).

The foundation later reported Tas' case to Banjarnegara Police on Aug. 20. Three other NGOs -- the Setara Semarang Foundation, the Yogyakarta Women's Joint Secretariat and Yogyakarta's Indonesian Women's Coalition helped in the case.

"Eka was immediately arrested by the Banjarnegara Police that night on charges of child trafficking. However according to the police, Parwati has fled to Malaysia," said Buyung Ridwan Tanjung, a lawyer representing Tas.

The plight of Tas highlights similar cases of child trafficking, which is widespread across Indonesia rated the world's third worst country in its commitment against women and child trafficking.

An estimated population of 230,000 women and child sex workers were trafficked throughout the country. Data from the United Nations Children's Fund (Unicef) shows there were some 70,000 children were involved in the commercial sex industry, some 30 percent of them below 18 years of age.

Directive to report to neighbourhood chiefs ignored

Jakarta Post - September 14, 2004

Bambang Nurbianto, Jakarta -- "A visitor staying for over 24 hours must report to the neighborhood unit (RT) chief," read notices posted all over the city. However, many residents simply turn the other cheek.

Therefore, local authorities -- such as neighborhood chiefs -- lack data on thousands of people living in boarding houses and rented houses -- which enjoy a high turnover here.

An explosion in front of the Australian Embassy on Jl. Rasuna Said in Kuningan, South Jakarta, served as a grim reminder to local leaders and community members that the above notice is displayed for a good reason.

The police's preliminary investigation revealed that key suspects of the bombing -- Azahari Hussin and Noordin Moh. Top -- had been hiding in a rented house in Cengkareng, West Jakarta prior to the attack.

Police had also found explosive materials in rented houses related to terror threats including those in Pondok Kelapa, East Jakarta, in July, 2001; Tapos subdistrict, Depok, in July, 2002; Pondok Aren subdistrict, Tangerang in 2001; and Cimanggis, Depok, in March, 2004.

Following the bomb attack, Governor Sutiyoso reiterated his call to neighborhood chiefs, community unit (RW) chiefs and subdistrict chiefs to remain vigilant on newcomers staying in their areas. He asked local leaders to collect data on people living in boarding houses and rented homes, to prevent the houses being used as hideouts.

Muslich, RT 15 chief in Bendungan Hilir subdistrict, Central Jakarta, said on Monday that 16 of 55 houses in the area had become boarding houses.

He claimed he had always reminded house owners to update data on tenants, but many ignored his call.

"Only five tenants reported their presence to me," he told The Jakarta Post.

Another boarding house owner in Karet subdistrict, Setiabudi, South Jakarta -- who requested anonymity -- said that he did not report new tenants to the RT chief but kept copies of their ID cards.

"I know the identity of all tenants in my houses. I told them to report to the RT chief, but many of them are reluctant. I can't force them because, as far as I know, it's not obligatory," he said.

Bylaw No. 11/1988 on general order in Jakarta does not stipulate that house owners and tenants must report their presence to RT chiefs.

Anthony, the tenant of a boarding house in Bendungan Hilir, said he did not report to the RT chief as he did not think it was necessary. He said that the house owner did not tell him to do so either.

Muslich said data on residents in his neighborhood was not needed for security purposes only, but also if something happened to the tenants.

"If they die or are involved in a crime, I will be the first to be questioned. Therefore, I should know details of who is living in this neighborhood," he said.

Younger gays, transvestites have courage to come out

Jakarta Post - September 18, 2004

A. Junaidi -- If there was one person known to talk in seminars or discussions about the gay and transvestite communities in Indonesia as recently as five years ago, only one name would probably have come up: Dede Oetomo, chairman of GAYA Nusantara and a sociolinguist from the Surabaya-based Airlangga University.

But now, the gay and transvestite movement, which was founded in the 1980s by Dede, who is now 51 years old, has new faces. Young members are more daring about coming out and demanding recognition from the state and society.

Mamoto Gultom and his partner Hendy Sahertian of the Pelangi Kasih Nusantara Foundation (YPKN) in Jakarta, Widodo of the Pelangi foundation in Yogyakarta, Lenny Sugiharto of the Srikandi Sejati foundation or Irma of the Surabaya Transvestites Association (Perwakos) are outspoken members of the younger generation of activists, advocating the rights of gays and transvestites.

"State recognition for gay relations is important. It could probably reduce frequent partner changes among gays and, then, decrease the risk of HIV/AIDS," Mamoto said on the sidelines of The National Meeting: Sexuality and Men's Sexual Health, in Puncak, West Java, last week.

Mamoto, a medical doctor who graduated from the Indonesian Christian University and has had a relationship with Hendy for seven years, said recognition would give more gays the courage to come out.

Besides state recognition, Irma said, many transvestites hoped that the community could learn to accept them. "I was sad when one of my friends died. People refused to prepare the body for burial. So, we bathed the body and prayed for him ourselves," Irma said at the meeting.

Some transvestites are demanding to be able to use their chosen female names and photographs on their ID cards rather than being forced to use their male given names.

Only in Papua can transvestites select from three different kinds of ID cards, one which identifies them as male with their given name, one that lists their female identity, or one which identifies them as transvestites rather than as male or female.

"The Papua administration is very supportive of transvestites. I'm carrying my female ID card now because the meeting's committee gave me plane tickets with my female sexual identity," Henny Hamdi, chairperson of the Papua Transvestites Communication Forum, said.

Widodo said gays and transvestites who wanted to achieve recognition by the state and society in general should also join other movements, instead of becoming exclusive.

"We in Yogyakarta are often involved in rallies with farmers and join discussions on human rights, the arts and the mass media," Widodo said.

Islamic activist and women's rights advocate Lies Marcoes Natsir suggested that the gay and transvestite movement use a three- level approach: state, religion and grassroots, as has been resorted to by the feminist movement, especially in Indonesia.

"At the state level, we can influence policy that can give recognition to gays and transvestites," Lies, who is also an executive at the Indonesian Conference on Religion and Peace (ICRP), said.

She said the movement could also cooperate with some progressive religious experts to reinterpret religious texts in a manner more friendly to gay and transvestite communities. She emphasized the importance of a grassroots movement that would require the unity of gays and transvestites in struggling for their demands.

Activists on trial for 'defaming President'

Jakarta Post - September 17, 2004

Andi Hajramurni, Makassar -- The Makassar District Court began hearing on Thursday the case of six student and labor activists charged with insulting President Megawati Soekarnoputri during a protest in April.

The defendants, including Rudi Hartono, the chairman of the Makassar National Democratic Student League, and Ihsar Yatim, a former chairman of the Maritime Executive Board at Hasanuddin University, could face a maximum of six years in prison if found guilty.

The other four defendants are the director of the Association of the Indonesian Poor, Al Ilyas Akbar, National Front for United Indonesian Labor Unions chairman Muh. Anshar, Community Youth Movement chairwoman Wahida Baharuddin Upa and the director of the Legal Aid Institute of the People of Makassar, Petrus Pice Jailahi.

During the opening day of the trial, which is being presided over by judge Muhammad Adnan, prosecutor Muhammad Taufik said the six defendants violated Article 160 of the Criminal Code on the defamation of the president and other state officials.

The six also are accused of violating articles 134 and 137 of the Criminal Code for calling on people to boycott the elections.

Taufik said the defendants also provoked others to violate election laws, as well as disrupting public order during a protest on April 3, 2004, at the office of the South Sulawesi General Elections Commission.

He said the protest, held two days prior to the April 5 legislative election, was illegal because organizers had not received a permit from the authorities.

Police eventually dispersed the protesters, including dozens of student and labor activists opposed to Megawati, Vice President Hamzah Haz and House of Representatives Speaker Akbar Tandjung.

The protesters also opposed the nomination of presidential candidates with military backgrounds, and urged people to boycott the legislative and presidential elections.

The trial on Thursday was attended by dozens of students from universities in South Sulawesi. The session lasted for one hour before the trial was adjourned to September 23, at which time the court will hear the defendants' pleas.

Environment

Untad study finds Palu Bay polluted

Jakarta Post - September 14, 2004

Palu -- The level of heavy metals in Palu Bay has surpassed tolerable standards -- ollowing the unchecked, daily dumping of liquid waste by local residents, an environmental study has found.

"At least seven kinds of metals have polluted the bay," a study conducted by Tadulako University's Environmental Research Center (PPLH-Untad) and the Palu administration said on Sunday.

Among the metals found in the bay are copper, zinc, lead and mercury. However, the study has not yet assessed the level of metal contamination and how this might affect the local marine ecosystem and lives of local residents.

Meanwhile, Palu Environmental Impact Management Agency head Yusri Asryad said the increasing concentration of heavy metals in the bay was inseparable from daily waste dumped by local residents, with the greatest waste found in Palu municipality and Donggala regency.

Haze returns to Pekanbaru

Jakarta Post - September 17, 2004

Pekanbaru -- Haze returned on Thursday to the skies of Pekanbaru, raising concern over new breathing problems spreading in the city.

Pekanbaru Deputy Mayor Erwandy Saleh said that the quality of the air in the city was poor.

Pekanbaru Meteorological and Geophysics Agency recorded on Thursday the haze density at 120 particulate matters per 10 micron, considerably higher than the minimum threshold of 100 particulate matters per 10 micron. Erwandy blamed the forest fires for the return of haze to the city.

Health & education

Principals charged 'illegal' fees: Agency

Jakarta Post - September 14, 2004

Jakarta -- Twelve junior high school principals were found to have charged extra fees aside from -- hose that had been set between school boards and parents, an official of the Jakarta Education Agency said on Monday. "They have violated regulations, because the city education agency has given the period from July 29 to Aug. 7 for parents and school boards to determine fees," said Kamaludin, an agency official, was quoted by Tempo Interaktif.

The principals had charged parents for uniforms and textbooks after Aug. 7, although they later returned the money.

Kamaludin said the 12 principals would be given sanctions in accordance with Government Regulation No. 30/1990 on education. "They will still be punished...," he said.

Maternal mortality rate down, more work needed

Jakarta Post - September 17, 2004

Dewi Santoso, Jakarta -- While the current trend of maternal mortality rate (MMR) shows a decreasing pattern, it may be difficult for Indonesia to achieve the target of MMR of around 125 per 100,000 births set by the United Nations' Millenium Development Goals, an expert says.

According to the Indonesian Demographic and Health Survey (SDKI), the country's mortality rate decreased from 307 per 100,000 births in 2003, down from 334 per 100,000 births in 1997 and 390 per 100,000 births in 1994.

Head of the University of Indonesia's Center for Family Welfare, Endang L. Achadi, said on Wednesday that it might be difficult for Indonesia to achieve the MMR of 125 per 100,000 births in 2015 as the country lacked qualified community health centers (puskesmas) and health workers.

"It's true that we're on the right track as the maternal mortality rate in the country has decreased in the past 10 years. To reach 125 in 2015, it means that [the MMR] has to be reduced by 182 over the next 10 years, which I find it quite difficult to achieve as we don't have enough midwives and qualified health centers," said Endang.

Data from the National Family Planning Board (BKKBN) shows that there are 80,000 midwives in 2004, of which 86 percent (68,777) are located in villages, while the remaining in cities. Of the 68,777 midwives, 40 percent are private midwives, 50 percent civil servants and the remaining based on contracts.

According to data from the Central Statistics Agency (BPS), there were 27,428 puskesmas and 1,215 hospitals in 2002.

Endang praised the government's efforts in reducing the country's MMR by recruiting and training 60,000 midwives in villages and upgrading community health centers and hospitals.

However, she said that more efforts were needed to reduce the country's MMR as Indonesia is still ranked below other Southeast Asia countries.

Data from the United Nations Population Funds (UNFPA) show that the MMR in Malaysia stands at 41 per 100,000 births, Thailand 44 per 100,000 births and Vietnam 130 per 100,000 births.

"We're even behind Vietnam. Thus, more efforts by all layers of society, not just the government, are needed," Endang told The Jakarta Post.

She gave out an example that might help reduce the country's mortality rate. "Free medical services for the poor, just like in Malaysia, may help as many of poor people in our country do not have access to medical services due to the high charges," she said.

She added that improving the quality of the country's medical services and increasing the budget for the health sector might also help in reducing the MMR.

In 2000, representatives of 189 nations gathered at the United Nations for a historic Millennium Summit and adopted an ambitious set of goals called the Millennium Development Goals (MDGs), which set the target to reduce by half the number of people living in extreme poverty, achieve universal primary education, promote gender equality, reduce infant mortality rate and reduce MMR by 2015.

Islam/religion

Islam and inter-religion ties

Jakarta Post - September 14, 2004

Mujiburrahman, Paris -- Over the past two decades, debates and controversies have abounded among Indonesian Muslims on the interpretations of Islamic theological and legal doctrines on interreligious relations. The variety of Muslim opinion stems from their different methods of interpretation, socio-political developments in the country and transnational interactions.

To simplify the complexities of the various opinions and discourses on this issue, it would be helpful to put them into two opposite groups: The first group is those who try to find similarities, parallels and common ground with other religions; and the second is those who attempt to assert differences, borders and clear-cut religious identities. The first group can be called "inclusive"; and the second, "exclusive". Those who have tried to find a theological common ground between Islam and other religions have attempted to develop at least three lines of discourse.

First, those who argue that Islam does not only mean a religion revealed to Muhammad, but also a religion revealed to other prophets, including Jesus. In this regard, the term Islam is understood in its generic meaning, that is, a total submission to God.

According to this interpretation, although the form of Islam revealed to Muhammad is the perfect one, it does not abrogate the other "Islams". Those who believe in other "Islams", therefore, can attain salvation. Who are they? To answer this question, this group refers to the Koranic term ahl al-kitab, which means "people of the book". According to the classical Koran exegesis, the term refers exclusively to Jews and Christians, but inclusive Muslims argue that the term also includes Buddhists, Hindus and Confucians.

Secondly, there is another group going further than the first. This group believes in what is called the perennial philosophy, al-hikma al-khalida. According to this philosophy, every authentic religious tradition has two levels of truth: the esoteric and the exoteric.

The third is the group trying to avoid the metaphysical speculation of theology and find a more "down-to-earth" formulation. This group usually emphasizes the ethical dimensions of religion as the common ground for interreligious cooperation.

Inspired by the Catholic liberation theology and its parallels in Islamic discourses developed by Hassan Hanafi and Asghar Ali, this group promotes the idea of "social justice for all." What are the responses of the opposite group? This group will say that, while it is true that all religions revealed to the prophets are essentially Islam, when the Prophet Muhammad came, he was the unifier of all prophets. Thus, everybody should believe in his message, including the ahl al-kitab -- which only comprises Jews and Christians for exclusive Muslims -- and if they did not, they would go to hell.

With regards the perennial philosophy, this group argues that it is a heretical doctrine that was rejected by the ulema. They further argue that, theologically speaking, no good reason exists to claim that Islam is the same as other religions. How can we say, for instance, that the Christian doctrine of trinity is equal to tawhid, the strict monotheism of Islam? As for the idea of social justice for all, this group can accept it, but it should be put under an Islamic framework because only an "Islamic system" can lead people to real social justice.

What about Islamic legal issues? Among those issues discussed by Indonesian Muslims are apostasy, attending Christmas celebrations, interreligious marriages and inheritance.

According to classical Islamic jurisprudence fiqh, a male apostate will be given capital punishment, while a female apostate will be jailed until she repents.

For the inclusive group, fiqh is no longer feasible. First of all, it goes against religious freedom guaranteed by Islam -- that is, religion is not compulsive.

Second, the law of apostasy -- hukm al-ridda -- was applied in classical Islam in a very specific context, when all male Muslims were also soldiers. Thus, within this context, apostasy means high treason against the state.

On the other hand, there are at least two positions among the exclusivists. One, they believe that the law of apostasy is still relevant today, but because Indonesia is not an Islamic state, the law cannot be applied in the country. Two, there is a more radical opinion saying that the law of apostasy should be developed further.

Based on the perceived aggressive Christianization in the country, the exclusive group suggests Muslims use the law of apostasy against missionaries. The rationale is that, if the Muslim apostate is punished by capital punishment, then the missionary who caused the apostasy also deserves the same.

With regards the issue of Christmas celebrations, the inclusive group says Muslims are allowed to say "Merry Christmas" to Christians and attend the celebration, as long as they do not engage in Christian rites. For the exclusivists, it is unlawful -- haram -- for a Muslim to attend any Christmas celebrations, because participating in the celebration implies that the attendee also believes in Jesus the same way as Christians. Similar argument is also used to discourage Muslims from wishing a "Merry Christmas" to their Christian neighbors.

Moreover, the inclusive group has tried to reinterpret the Islamic rule on interreligious marriages. They argued that as no explicit statement existed in the Koran forbidding a female Muslim to marry a male ahl al-kitab, the prohibition was just a matter of human efforts to interpret the divine message. Thus, in line with socio-political developments in the modern world, this group proposes another line of reasoning to permit interreligious marriages, regardless of the sexes.

In contrast, the exclusivists take at least two positions: One is based on the classical point of view, that only a male Muslim is allowed to marry a female non-Muslim, not vice-versa. The other position is to close the door to interreligious marriages, completely, regardless of the sexes.

The argument is, although a male Muslim is allowed to marry a female non-Muslim, due to the situation in Indonesia where interreligious marriage is allegedly used for religious proselytization -- especially by Christians -- it is safer to prohibit it as a preventive action.

As for the inheritance law, the exclusive group is still attached to the classical idea that non-Muslims cannot inherit from Muslims, regardless of their blood relationships.

In contrast, the inclusive group believes non-Muslims have the right to inherit from their Muslim families. They argue that it was the prophet's saying, not the Koran, that prohibited non- Muslims to inherit from their Muslim family.

For the time being, the inclusive discourses seem to be attracting more and more of the Muslim middle class in the country.

Certainly, this will also depend on the mode of interaction between the inclusive and the exclusive proponents' discourse and how the other non-Islamic religious groups, especially Christians -- who are considered the "most significant other" to Muslims, develop their discourse on similar issues.

[The writer is a Ph.D. Candidate at ISIM/ Utrecht University in the Netherlands.]

A leap of faith: Taking the plunge in interreligious marriage

Jakarta Post - September 19, 2004

Hera Diani, Jakarta -- As the projector flickered, people in interfaith relationships told their stories.

Indah said she and her siblings were labeled illegitimate and mocked because their parents were of different religions.

A married couple claimed there was never a problem; the differences, in fact, helped their children become more tolerant.

Meanwhile, Hilmar told of being caught in the middle as both his parents and those of his girlfriend opposed their union.

"Both sides fear their future grandchildren will follow another religion than theirs. What's marriage for then, finding (religious) followers?" the young man said in exasperation.

The documentary was part of the book launching and discussion for Tafsir Ulang Perkawinan Lintas Agama, Perspektif Perempuan dan Pluralisme (Reinterpretation of Interfaith Marriage Through the Perspective of Women and Plurality).

Published by Kapal Perempuan, a women's non-governmental organization, and the New Zealand Agency for International Development (NZAID), the book tells of both successful and failed interfaith marriages, the perspectives of religious leaders and scholars from different religions, as well as the legal viewpoint.

Interfaith marriage is still one of the most complicated and sensitive issues in Indonesian society, involving a potential tinder box of emotion-laden questions of religious right and wrong, the state and the individual's right to choose a partner.

Law No. 1/1974 on matrimony states a marriage is only legal when it is conducted according to one religion, which supports the stance of opponents of interfaith marriage.

Many couples circumvent the legal restriction by getting married under one religion, but then practicing their respective faiths. Others with more financial security opt to go abroad to wed.

In 2001, news circulated of a consortium -- with representatives from the government, non-governmental organizations and UNICEF -- that was working on a bill to legalize interfaith marriage for those wishing to retain their respective religions.

The plan has yet to be realized; even if it is, entrenched attitudes cannot be changed overnight.

Parents fear the assumption of others that they did not bring up their children "properly". Young people, knowing the "rules, immediately dismiss the notion of dating someone of another faith.

The new book further illustrates how women, often oppressed in the domestic sphere, also face more societal pressure than their menfolk in interfaith marriages.

In Islam, for instance, women are considered to have committed adultery if they marry non-Muslim men, but it's not the same stigma for men, who are expected to be able to convert their wives to their faith.

"It forces women to obey all the rules aimed at them, which in turn will make them sacrifice their love," said Yanti Muchtar of Kapal Perempuan in the book's introduction.

Muslim scholar Siti Musdah Mulia cited research showing that in unions of Muslim men with non-Muslim women, 50 percent of the couples' children took their father's religion.

Conversely, when Muslim women married non-Muslim men, the percentage was 80 percent.

"It indicates that a mother's influence on the children's religion is greater than the father's. It means the perception that women are weak and easily converted to other religions is wrong," she said.

According to Musdah, there is also a misconception of musyrik, or those who worship others than God, whom Muslims are prohibited from marrying.

"The common perception of musyrik is a non Muslim, whereas worshiping others can mean worshiping money, wealth, anything," said Musdah, an expert staff at the Ministry of Religious Affairs and the secretary-general at the Indonesian Conference on Religion and Peace (ICRP).

She added that only three of the more than 6,000 verses in the Koran address interfaith marriage.

"I urge people to be more critical, don't take religion for granted."

Musdah also considers the restriction on interfaith marriage as a political vehicle of the government to accommodate the demands of religious institutions.

"It's strange that for people who get married in other countries, their marriage is legal here although they are of different religions," said Musdah Mulia.

Stranger still, Musdah said, was that after the Indonesian Ulemas Council (MUI) issued an edict in 1980 restricting all Muslims from marrying out of Islam, its Jakarta branch announced six years later that Muslim men could marry non-Muslim women.

"But in 1994, the (second) edict was withdrawn," Musdah said.

Meanwhile, another Muslim scholar, Hasanuddin, said that Islam's origins date back to a time of conflict, and that as a missionary religion it originally set out to gain more followers.

"It's a whole different situation nowadays. There would have to be empirical proof to show that interfaith marriage would make the Muslim population decline," said Hasanuddin, who teaches at the State Institute of Islamic Studies (IAIN) Jakarta.

"If interfaith marriages are legalized, it won't necessarily lead to people of different religions marrying each other. Marriages between different ethnic groups are allowed, yet still many people don't favor it."

Women's right activist and minister Ester Mariani Ga, meanwhile, said that interfaith marriage was a "gift" of a pluralistic society but "... The state should accommodate every religion's view on the legal state of marriage, and religion should not become a means to control their citizens". Ultimately, marriage is about two people in love.

Audience member Yati, a Catholic whose husband is a Muslim, said she believed God only required people to behave properly. "That's all that God's asking. So, we shouldn't be afraid of any restrictions because they are lower than God's."

'Mairil' homosexuality in boarding schools

Jakarta Post - September 18, 2004

Almost all religions forbid homosexuality as can be seen in the story of Sodom and Gomorrah in the Bible or the people of the Prophet Luth in the Koran. According to a recent study, however, homosexuality can be found even in religious institutions, including in pesantren (Islamic boarding schools).

Islamic expert Achmad Zainul "Inung" Hamdi said a certain type of homosexual activity, known as mairil or sempetan occurred between male students (santri) at the boarding schools. "It happens between senior students and junior students. The Kyai [leaders of the schools] know about the practice, but they ignore it," Inung, who is a lecturer at the State Islamic Institute, in Malang East Java.

Speaking at the four-day National Meeting: Sexuality and Men's Sexual Health, last week, Inung said the senior students -- usually young assistant teachers -- gave "more attention" than usual to junior students.

He said mairil was defined as a penetration between the legs, instead of anal sex. "If there were anal sex in the pesantren, it would be rare since anal sex or liwath is forbidden. Mairil is considered as an "emergency exit" for students," Inung, who got his masters degree at Sunan Ampel State Islamic Institute, explained.

He said a famous pesantren in Kediri, East Java, even decided to allow the practice among students in its bahtsul masail discussion forum a few years ago. He said the practice was tolerated, especially among students who had reached marriageable age, but were still studying or teaching in the boarding schools.

Sociologist Dede Oetomo said Inung's explanation showed homosexuality was a reality in society, including in religious institutions, although some denied it. "We have found a former student of a pesantren is now living with HIV/AIDS. He is now under treatment," Dede, who is also HIV/AIDS activist, said.

Dede said a counseling team was preparing a method for increasing awareness of HIV/AIDS for men who have sex with men (MSM), including holding information campaigns in pesantren.

He said awareness of the need of safe sex was important because the number of men who had sex with men was large and was not only gays and transvestites but also bisexuals. "Besides injectable drug users, MSM are also prone to HIV/AIDS. These men could be gays, transvestites, or even husbands," Dede, who has a PhD from Cornell University, said. Homosexuality is also found in Indonesian traditional cultures, such as the bissu in Gowa, South Sulawesi and warok-gemblak in Ponorogo, East Java.

In bissu tradition, some transvestites become the bissu (leaders of traditional rituals) who have power to inaugurate traditional kings. The bissu transvestite is considered a representative of God who is believed to be genderless.

After the failed coup in 1965 blamed by many on the Indonesian Communist Party, the tradition vanished as the military considered the bissu to be supporters of the party. Currently the tradition is being revived.

In East Java, the warok is one of the male performers in Reog traditional dance. The warok maintains his spiritual and physical power by having sexual relations with young men known as gemblak.

Armed forces/police

Observers tell military must to return to the barracks

Jakarta Post - September 14, 2004

Ridwan Max Sijabat, Jakarta -- The rejection by several political parties and non-governmental organizations of the contentious bill on the Indonesian Military (TNI) is a reflection of the public's hatred of military personnel's involvement in crime and of military institutions' involvement in socio-political affairs.

Despite the reform era, the people are confused and fearful of "military supremacy", as the country was ruled by a militaristic-style regime for more than 32 years under president Soeharto, also a retired Army general.

The National Awakening Party (PKB) and the National Mandate Party (PAN) are two of many parties that have opposed the bill currently being deliberated by the House of Representatives and the government.

The parties are of the same opinion as non-governmental organization Propatria and several military analysts that new legislation is needed for the military to continue the stagnant internal reform in the organization.

PKB has been fighting for the inclusion of the concept of civilian supremacy in the bill and for the gradual phasing-out of the much-criticized military territorial function.

"Internal reform in the military must go on," PKB secretary- general Muhaimin Iskandar said recently.

Separately, Makmur Keliat, a lecturer of the postgraduate program at the University of Indonesia, criticized the current hierarchy in which police and military chiefs are subordinate to the president.

"The armed forces dealing with defense must be subordinate to the defense ministry and led by a defense minister while their joint commander should be appointed by the president," he said in a seminar on military and democracy here recently.

Makmur also said that the territorial function in the form of military organizations in the regions -- military commands, military districts and military posts -- should be phased out and all military personnel should go back to the barracks to conduct more training and exercises to make them professional.

"Besides, the government also must allocate an adequate annual defense budget to prevent the military from engaging in business as it has done," he said, adding that only in Indonesia, and not in any other country does the military do business.

Maj. Gen. (retired) Chalib Gazali, former coordinator of the Army chief's expert staff, concurred and said the military's insistence that it would propose its own draft to be taken an a reference and it should be involved during the bill's deliberation was a reflection of the fact that the military has not accepted civilian supremacy.

"The TNI should listen to the people and what their representatives want to do in the legislative body in line with the deliberation of the TNI bill," he said, adding that the military should not formulate the bill itself.

He conceded that the military's resistance to civilian supremacy and the proposed elimination of the territorial function has something to do with the Army's feeling of superiority.

Despite the country's maritime territory, the Army has played a powerful and dominant role, especially during the New Order era, because it has felt superior, not only to the Navy and the Air Force, but also to the people since it has succeeded in crushing security disturbances and separatist movements. The two presidential candidates contending the election runoff on September 20 looked cautious in responding to this issue apparently due to their closeness to the military.

Irma Hutabarat, a member of the Megawati-Hasyim national success team, said both President Megawati Soekarnoputri and the Indonesian Democratic Party of Struggle (PDI-P) supported gradual reform in the military organization to ensure civilian supremacy.

"Internal reform in all state institutions has been in progress, since the National Police separated from the TNI. This has made Megawati's government very different president Soeharto's regime," she said, adding that Megawati has asked the House not to rush the bill.

Budhi Santoso, a strategist of the Susilo-Kalla team, said Susilo Bambang Yudhoyono, also a former chief of the TNI's territorial affairs, would comply with the law, including the legislation on the military, if he won the presidential election.

Business & investment

No panic reaction

Jakarta Post - September 14, 2004

Although the financial market in Jakarta did not panic after Thursday's bomb attack -- ear the Australian embassy compound, it is no longer business as usual in so far as the market's perception of Indonesia's country risk is concerned.

The huge terrorist attack, the third in the past three years, certainly increased the degree of concern about security and safety affairs -- the No. 1 enemy for investors and tourists.

Stocks on the Jakarta Stock Exchange (JSX) did tumble more than 4 percent on the news of the mid-morning bomb blast but recovered quickly in afternoon trading so that the JSX price index was down only a mere 0.8 percent to end that day at 782.65.

Likewise, the rupiah weakened 1.2 percent against the dollar immediately after the attack but rebounded later to regain most of its loss to close at Rp 9,300. The financial market also remained firm on Friday.

Businesses in the country have indeed been operating under continued fear and warnings of terrorist attacks, especially after the first devastating bombs in Bali in October, 2002. But the financial market seemed already capable of distinguishing an isolated incident from deep-rooted trend that could damage the fundamentals of the economy. Whether this perception would sustain or turn into heightened fears depends on the speed and credibility with which the government can resolve these terrorist threats.

However insignificant the initial impact of the bomb attack seems to be, the blast will certainly slow down the process of regaining investor confidence. If before last week's terrorist attack, it was mainly the political risks related to the presidential election that stood in the way of capital inflows, the causes of uncertainty have now increased to include high security risks.

The financial market is most vulnerable to uncertainty as portfolio investors can easily shift their investment from one place to another. True, volatility is the natural character of a financial market, but too-high fluctuations make sensible business-risk calculations almost impossible.

Moreover, due to its huge foreign and domestic debt burdens, the state budget is also highly vulnerable to the movements in the currency and interest rates. The government has estimated that every Rp 100 depreciation of the rupiah rate against the US dollar will immediately add Rp 9.70 billion to its foreign debt- servicing burdens.

Yet more damaging is that a weakening rupiah always increases inflationary pressures (imported inflation) as the costs of imports accordingly become higher and this in turn will require the central bank to tighten its money policy by raising interest rates to control inflation.

The problem though, is that higher interest rates will immediately increase the interest charges on government bonds. The finance ministry has estimated that every single percentage point rise in the central bank's benchmark interest rate will add almost Rp 2.3 trillion (US$247 million) to the domestic debt- servicing burden.

Tourism is another sector that could immediately get a severe hit. The growth of tourist arrivals, which reached as high as 31 percent in the first seven months of this year, may slow down, cutting into the revenues of airlines, hotels, restaurants, souvenir shops and other related businesses such as suppliers of food and water and land transport services.

Insurance premiums on doing business in and with Indonesia will also rise. Worse still, heightened fears of security disturbances may prompt buyers overseas to divert orders from Indonesia to other countries out of concerns about delivery. Further down the line, sharp drops in exports would adversely affect the balance of payment conditions and consequently increase downward pressures on the rupiah.

These ominous signs are quite saddening indeed because the pace of Indonesia's economic recovery was poised to increase after the presidential election.

However, the damage could still be contained and the healing (confidence-rebuilding) process could be speeded up if the latest bomb attack can be resolved quickly and credibly -- meaning that those masterminding the attack are caught -- and the presidential election on Monday runs smoothly and fairly. Anything less would abort the economic recovery and could lead the country into an even worse crisis.

Rupiah to stabilize, stocks to soar further - analysts

Jakarta Post - September 14, 2004

Jakarta -- The rupiah, having weathered a huge shock last week following the latest bomb attack in the country, is likely to move within a narrow range this week with pressures slowly dwindling, analysts said on Sunday. The local unit closed on a positive note last week at 9,280 per dollar after dropping to above 9,400 the day earlier just after the bombing. In the previous week, the rupiah ended at 9,278 a dollar. "For this week, with the panic over, the rupiah I think will hover at relatively the same level," Farial Anwar of Currency Investment Management said.

"Also, this week is the last week before the election runoff, which would most likely keep investors -- except for speculators -- on the sidelines, applying a wait and see approach.

"That will keep the pressure off the rupiah. My prediction is that -- assuming that nothing extraordinary happens -- it would hover at around the 9,250-9,350 level," Farial told The Jakarta Post.

The election day, which will see President Megawati Soekarnoputri facing Susilo Bambang Yudhoyono for the 2004-2009 presidential term, is scheduled for September 20.

A powerful bomb went off on Thursday in front of the Australian Embassy, which killed nine people and injured 180 others -- leaving the financial market in limbo on panic selling afterwards.

But, the rupiah staged a quick recovery the following day on optimism that police would be able to quickly solve the case and that the attack would not undermine the economy or sabotage the forthcoming presidential election.

Another analyst, who works for a foreign bank in Jakarta, echoed Anwar's forecast. "Although I do not see any reason for the rupiah to strengthen, I do not expect it to weaken either. The dollar factor, which is unlikely to strengthen against other major currencies, will also help," he told the post.

"I thing a movement of more than Rp 200 will be very unlikely." While the rupiah is expected to be stable, the stock index is predicted to maintain its upward trend with dealers betting the index to breach the 800-point level.

The index soared to its highest level in four months on Friday, defying concerns that the bombing would further impede the country's economic recovery.

The index dropped 4 percent right after the blast, but regained ground to close 0.8 percent lower on the same day. It ended at 797.78 points last week, up by 1.4 percent from the previous week, with average daily transaction valued at Rp 1.08 trillion (US$116.41 million) as against Rp 865.07 billion the week before.

"We expect the index to surpass the 800 point level this week on further rebound," one stock dealer said, adding that investors would likely seek gains from undervalued banking shares.

Indonesia needs borrowing strategy

Jakarta Post - September 17, 2004

Tony Hotland, Jakarta -- The government must establish a "country borrowing strategy" and improve the distribution mechanism of foreign loans to regional administrations to ensure the efficient and effective use of the loans in the future.

Prasetijono Widjojo, deputy for development financing at the National Development Planning Board (Bappenas), said on Thursday that the strategy should include a loan management mechanism and specific types of programs to be financed by the foreign loans.

"First, we have to strictly identify what we need the loans for. The government needs to keep in mind that a loan, soft or not, is still a debt that we have to repay," he said during a seminar held by the Indonesian Economists Association (ISEI).

Furthermore, he added, the government should be able to monitor the effectiveness of the use of the loans, based on the criteria of measurability, accountability and cost recovery.

"Also important is to identify the exit strategy of the (foreign) loan so that it won't be perpetual, the transparency of each project to be financed, and to quickly recognize possible project failures," Prasetijono said.

He stressed that such a strategy was crucial to ease pressure on the state budget, and in the efforts to set aside higher financing for development purposes.

He explained that several problems remained in effectively using foreign loans, such as the absence of a specific institution that managed loans to boost coordination, the poor planning of the intended projects, and the ineffective use of bonds.

Debt-trapped Indonesia has been mired in billions of dollars of debts and forced to practice tight fiscal policies over the past few years to increase revenue, mostly from taxes, to repay the debts.

The tight policies, analysts say, are some of the factors that deters investors from investing in the country due to the lower revenue margin they could collect.

According to Bappenas data, the government's foreign debts currently stand at US$80.91 billion, which is 32 percent of the gross domestic product (GDP). The figure is higher than in 2002 ($74.49 billion, or 35 percent of GDP), and in 2001 ($69.40 billion or 42.8 percent of GDP).

The debt ratio to GDP started to show a declining trend in 2000, but was largely attributed to higher economic growth rather than declining debts.

Most of the debts, according to the data, are allocated for the development of infrastructure, especially in the transportation and energy sectors.

Based on the composition, 35.65 percent of the government's debts for the last 10 years are from bilateral loans, followed with 27.77 percent from multilateral institutions, except the International Monetary Fund, while the rest are mainly from export credits.

Embassy bombing will affect FDI

Jakarta Post - September 17, 2004

Jakarta -- Amid reports of a continuing slump in foreign direct investment (FDI), Indonesia is in for even gloomier prospects after the recent Australian Embassy bomb attack, according to Indonesian-Australian Business Council chairman Noke Kiroyan.

While refusing to release specific data, Noke said on Thursday that the bomb blast had discouraged some Australian investors -- who had earlier intended to invest here.

"For existing investors, the impact may not be that massive. But for those who are still in the process of investing here, it has caused great concern.

"They're at least canceling their investment plans, if not pulling out altogether," Noke told a press gathering, while calling on the authorities to quickly catch the bombers and introduce measures to avoid similar occurrences in the future.

Noke is the latest industry figure to voice concern about the impact of the bombing, which has killed nine people so far and injured more than 180 others, on investment, especially from overseas.

The stock market, however, quickly recovered from the shock of the bombing, with the Jakarta Stock Index breaching a new record of 822 points at one point on Wednesday. The index ended lower on profit-taking.

Even before the terror attack, foreign direct investment (FDI) was scare as a result of various uncertainties and problems. FDI approvals during the first seven months of this year fell by 33 percent to US$3.3 billion from $4.97 billion in the same January-July period of last year.

After the bomb blast, security fears have added to the already long list of obstacles deterring investment. A lack of legal certainty, corruption, taxation problems, labor disputes and the chaotic implementation of local autonomy are among the major problems being faced.

The volume of trade between Indonesia and Australia is valued at $9 billion per year, and is on the upward path. Indonesia is currently Australia's tenth largest export destination.

Noke said the council had not yet been able to come up definitive figures on which or how many investors had canceled or postponed their investment plans here, as it was still collecting information.

For Indonesia, the lack of foreign investment has deprived the economy of a powerful growth catalyst, with the economy having grown by a modest rate of around 4 percent over the past couple of years.

Investment now accounts for less than 15 percent of the country's gross domestic product (GDP), with domestic consumption contributing some 75 percent.

The return of foreign investment is seen as the only way of generating stronger economic growth of at least 6 percent annually -- which is believed to be the minimum level necessary to provide employment for the some 2.5 million people joining the labor force each year, and thereby reduce poverty and unemployment.

Chris Kanter of the Indonesian Chamber of Commerce and Industry (Kadin), who was also present at the gathering, said that Indonesia was now considered less attractive than Malaysia and Vietnam in terms of investment, and on a par with Cambodia.

Low competitiveness seen as major obstacle to growth

Jakarta Post - September 16, 2004

Low competitiveness in the country's manufacturing products is a major obstacle in the efforts to push economic growth, according to a senior economist.

Centre for Strategic and International Studies (CSIS) economist Mari E. Pangestu said on Wednesday that low competitiveness had hampered both exports and investment, two key factors to accelerate economic growth.

"The declining competitiveness of our products is mainly a result of higher labor costs and a high-cost economy due to corruption and unnecessary additional fees.

The depreciation of the rupiah, which actually could bring benefits for our products, is outweighed by the rising inflation in the domestic market," Mari said during a seminar held by the Indonesian Economists Association (ISEI).

Labor costs, she said, were now estimated to stand at US$35 higher than that before the 1997 crisis but were not parallel with higher productivity, and the problem was exacerbated by unsupportive labor laws.

"The high-cost economy we have here doesn't only affect financing, but also creates uncertainty because industry players will have to put more of their products in the storerooms, and we will be considered unreliable in product delivery. In time, it affects our position in the regional and global production network," Mari added.

The country's economy has been growing at a meager annual rate of around 4 percent during the past couple of years driven mainly by strong domestic consumption as exports and investments remain weak.

Central Bank senior deputy governor Miranda S. Goeltom, who also attended the seminar, agreed that the declining competitiveness of Indonesian products would thus increase the country's dependence on the export performance of only the main commodities and certain export destinations.

"This is also one of the factors that contribute to the many risks that one has to seriously take into account in making future business plans here," said Miranda.

Regarding the unsupportive infrastructure, Mari explained that the problem had caused increases in export fees. "According to an estimation, Indonesia could boost its exports by 18 percent if logistics and procedures at the ports could reach a level of efficiency of even only half the average of Asia-Pacific countries," she said.

Therefore, Mari, rumored to be the next coordinating minister for the economy under a Megawati Soekarnoputri administration, suggested improvement in macroeconomic areas, international trade, and investment.

For macroeconomic issues, the government must stabilize and control inflation, and tackle the structural problems that cause inflation, such as distribution and transportation issues, she asserted.

For international trade, Mari said the country should remove completely all non-tariff barriers and reduce the high-cost economy. "I think we should also review the effectiveness of tax on luxury goods and simplify the bureaucracy at ports," said Mari.

While for investment, she suggested that the Capital Investment Coordinating Board seriously implement the one-stop service to ease procedures and quickly find solutions to any cases involving foreign investors.