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Indonesia News Digest 37 – October 1-9, 2008
Canberra Times - October 4, 2008
Philip Dorling – One hazard of being prime minister is you never
quite know who you'll meet next.
Kevin Rudd's office goes to considerable lengths to avoid
surprises, but at conferences and public forums anyone may be
next in line to shake his hand. So it was on September 9, when he
was at the national congress of the Returned and Services League
in Townsville.
Among the guests RSL national president Bill Crews introduced to
Mr Rudd was retired Indonesian Lieutenant-General Herman Mantiri,
who was representing the Indonesian veterans' organisation Legion
Veteran Republik Indonesia.
As a former diplomat and foreign policy expert, Mr Rudd wouldn't
have needed a briefing to recall the 1995 controversy over
General Mantiri's appointment as Indonesia's ambassador to
Australia.
Then recently retired from his post as Indonesian's chief of
general staff, General Mantiri was nominated by president Suharto
as Indonesia's representative in Canberra and the Keating
government accepted the appointment. Almost immediately, however,
a storm of protest erupted over remarks General Mantiri had made
three years earlier as Indonesian military commander in East
Timor, when he was interviewed about the 1991 massacre of 270
East Timorese independence demonstrators in Dili's Santa Cruz
cemetery. "We don't regret anything. What happened was quite
proper... we took firm action."
Under intense media and public pressure, the Keating government
revoked its agreement to General Mantiri's appointment and a
diplomatic stand-off between Australia and Indonesia lasted for
months.
Mr Crews told The Canberra Times yesterday that, during his
recent visit, General Mantiri said how disappointed he was when
his diplomatic posting was cancelled, and insisted his remarks
had been reported out of context. No mention was apparently made
of General Mantiri's listing in East Timor's Commission for
Reception, Truth and Reconciliation report as one of the senior
Indonesian military officers who commanded troops responsible for
human rights abuses and atrocities during Indonesia's occupation
of East Timor. General Mantiri is identified as commander from
1976 to 1979 of Airborne Infantry Battalion 700, which was
heavily engaged in operations against the East Timorese
resistance and implicated in a range of human rights violations,
including killings, rape and detention of civilians.
As military commander in East Timor in the aftermath of the Santa
Cruz massacre, he later commanded forces engaged in intensified
operations against the resistance, including detentions of
civilians and the alleged torture and disappearance of
independence supporters.
The commission's report recommends that all UN members "refuse a
visa to any military officer who is named in this report for
either [human rights] violations or command responsibility for
troops accused of violations and take other measures such as
freezing bank accounts until that individual's innocence has been
independently and credibly established".
The Australian Government has not acted on this recommendation.
News of General Mantiri's recent visit to Australia came as the
Australian Federal Police began to investigate Guy Campos, an
East Timorese now in Australia, accused of collaborating with the
military involving kidnapping and torture of East Timorese
citizens during Indonesia's occupation.
An expert on Indonesia's military, Dr Clinton Fernandes, of the
Australian Defence Force Academy, said justice required the
investigation and prosecution of alleged war criminals, whether
they were at the top or the bottom of the chain of command.
"As a first step, Australia shouldn't be giving visas to people
like Mantiri," he said. "Former and serving Indonesian military
officers who exercised command responsib-ility in East Timor
should be held accountable for their own actions and the actions
of their troops during the Indonesian occupation."
Mr Rudd's office was unable to say yesterday what the Prime
Minister and General Mantiri discussed during their meeting.
Jakarta Post - October 8, 2008
Desy Nurhayati, Jakarta – The government has decided to extend
the tenure of Yogyakarta Governor Sultan Hamengkubowono X by
three years, in a bid to prevent a vacuum of power in the
province.
On Tuesday, Home Affairs Minister Mardiyanto said President
Susilo Bambang Yudhoyono had signed a decree on the extension of
the governor's term of office.
"The President held a meeting with the Sultan to discuss the term
extension by three years, in connection with the end of the
governor's tenure on Oct. 9. This extension is to prevent the
vacuum of power while the deliberation of the bill on
Yogyakarta's status has yet to be completed," Mardiyanto said
after the meeting at the presidential office.
Both Yudhoyono and Hamengkubowono have been widely touted as
viable presidential candidates for the 2009 election. Following
Hamengkubuwono's refusal last year to extend his tenure as
governor, speculation was rife he would mount a presidential bid.
The bill on Yogyakarta's status as a special province is
currently being deliberated at the House of Representatives.
Mardiyanto said the deliberation was stalled over whether a new
mechanism to elect the province's governor and deputy governor
was needed.
Unlike other provinces that elect their leaders, the sultan
automatically becomes the governor of Yogyakarta. This special
privilege dates back to the early years of the republic to honor
the sultanate's decision to join the newly born country. The
sultanate was the first independent state to pledge allegiance to
the Republic of Indonesia.
Hamengkubuwono X's tenure ends on Wednesday.
According to Mardiyanto, three years will be enough to complete
the deliberation and the dissemination of the bill.
He stressed the government had always maintained strong
communication with the Yogyakarta administration and community,
despite protests by people in the province claiming the
government had abandoned them by delaying the deliberation.
Thousands of Yogyakartans – grouped under the Yogyakarta
People's Movement – held a rally on Monday, demanding the
reelection of both Hamengkubuwono and his deputy Paku Alas.
Hamengkubuwono said he accepted the government's decision to
extend his tenure.
"I don't mind the extension, as long as it is not five years,
because a five-year period equals one (gubernatorial) term. It
just wouldn't make sense. I am also responsible to Yogyakartans
(to complete the three years) and to support the completion of
the bill," he said.
He declined to comment on his quest for the presidency. "I am not
a presidential candidate and I don't have the capacity to explain
this issue here and now," he said.
A number of surveys have revealed Hamengkubuwono stands a good
chance of winning the vice presidential post, rather than the
presidency. His father, the late Hamengkubuwono IX, was vice
president between 1972 and 1977.
West Papua
Human rights/law
Environment/natural disasters
War on corruption
Islam/religion
Elections/political parties
Armed forces/defense
Police/law enforcement
Economy & investment
Analysis & opinion
News & issues
Diplomatic PM smiles through an awkward moment
Government extends Yogyakarta governor's term
Helpless locals send out laundry, dine out in malls
Jakarta Post - October 4, 2008
Agnes Winarti, Jakarta – Those offering "laundry by the kilo" services are beaming over the plight of Jakartans inundated with dirty clothes and abandoned by their maids during Lebaran, just as mall restaurants happily draw in families bent on avoiding the kitchen stove.
"Most customers said their domestic workers had gone to their hometowns for the holidays," Apik Primadya, owner of Apique's House of Oembah-Oembah in Jatipadang, South Jakarta, told The Jakarta Post on Friday.
The House of Oembah-Oembah gets 30 to 40 percent more laundry during the holiday period, mostly from office workers living in rented rooms, university students and housewives.
"We usually get 50 kilograms a day, but lately we've been taking in 80," said 25-year-old Apik, who keeps regular business hours during Lebaran.
Such laundry services, known locally as laundry kiloan, include washing and ironing. They have been mushrooming around the capital in recent years.
"Many people are perfectly willing to get their laundry into the machine. But the next step, ironing, is too daunting a task," Apik said.
Another laundry operator, Bayu Listiaji, said he saw around four to five times more laundry drop-offs at his shops.
The laundry service takes in various garments and linens: Not just clothes but also bedcovers, curtains, sajadah (prayer mats) and mukena (the white full-body garments Muslim women wear when praying).
"On ordinary days we get 100 to 200 kilos of laundry but during the fasting month we can get as much as 400 to 500 kilos a day," said Bayu, 31.
He said he expected to double his profits during the month of Ramadan and the culminating Idul Fitri holidays, from his usual Rp 15 million (US$1,580) to 25 million per shop. In general, he said, the business was thriving all year round.
Besides evading laundry and hot irons, people are also trying to escape cooking. With hosts of neighborhood eating places away for the holidays, many are turning to the malls to fill their stomachs.
"Our helper and nanny are still away. Taking care of the kids plus doing the chores plus cooking the meals is too much to handle. So we just eat out," said Hendry, a businessman and father of two toddlers.
He said he did not care for malls but had found no other options at hand.
"The eateries near our house are closed and we don't want to go to the crowded recreational places. There's nowhere else to go with the children in Jakarta but the malls," he said, adding his family had already visited three in two days.
Restaurants at the malls benefit. The eateries at Senayan City have more families walking through their doors.
Rizal, who works at one Thai-Japanese-Chinese restaurant there, said four out of every five groups coming to his restaurant were families.
"Usually around half of our customers come with their colleagues or friends. But that's all changed dur-ing this holiday. Most are coming with their families instead." (mri)
Jakarta Post - October 3, 2008
Jakarta – The Huria Batak Protestant Church followers say the pornography bill is "not needed" to maintain Indonesians' morality.
It would be better for the government intensify moral education and consistently uphold existing rules, they said.
"Every regulation, including the porn bill, should be inspired by the spirit of Pancasila (the five principles) and the Bhinneka Tunggal Ika (unity in diversity) paradigm," church preacher Bonar Napitupulu said in a press release.
Race, culture and religious diversity should be considered when creating a regulation, he said.
"The porn bill will be counterproductive if it does not consider the cultural diversity of how Indonesians express their traditional values through the way they dress," he said.
Rising opposition prompted lawmakers at the House of Representatives to drop their original plan to pass the bill before the Idul Fitri holiday.
| West Papua |
Reuters - October 8, 2008
Jakarta – Indonesia must do more to save pristine rainforests in Papua from destruction, particularly with plans to open up huge tracts of land to develop palm oil plantations, environmentalists said on Wednesday.
The rapidly expanding palm oil industry in Southeast Asia has come under attack by green groups for destroying rainforests and wildlife, as well the emission of greenhouse gases.
"Although the deforestation rate in Papua is still low, the threat is very high, for instance, with palm oil plantation expansion," Bustar Maitar of Greenpeace said.
He was speaking by telephone from aboard a ship the group is using to tour Indonesia's easternmost province to raise awareness on forests and climate change.
Indonesia's administration in Papua has said it is opening up to 15 million acres (6 million hectares) of land for palm oil, despite earlier pledges to save Indonesia's last forest frontier by tapping carbon trading projects.
Alex Hesegem, Papua's deputy governor, said at least 93,000 hectares of land had been opened for palm oil plantations, but that was being done following environmental principles and government regulations.
"Some regencies have signed a contract with the government and private companies for this palm oil plantation and some more will sign a contract in the near future," Hesegem told Reuters.
Activists said they suspected some companies aimed to use the licences for logging.
"In my estimation, the maximum they can open is 200-300 thousand hectares because the contour of the area is mountainous," said Jefri Saragih of Sawit Watch, a pressure group that monitors the impact of palm oil on forests.
The United Nations Food and Agriculture Organisation (FAO) said in a report that Indonesia was suffering the fastest forest loss in the world at almost 1.9 million hectares per year. Indonesia, the world's biggest palm oil producer, produced 17.18 million tonnes of crude palm oil in 2007, and production is expected to rise to 18.6 million tonnes this year. (Reporting by Olivia Rondonuwu and John Pakage, editing by Ed Davies and Jerry Norton)
ABC News - October 3, 2008
The United Nations High Commissioner for Refugees says it won't resettle more than a hundred refugees from the Indonesian province of Papua to a third country.
Our PNG correspondent Steve Marshall reports the refugees are now living in Papua New Guinea. The Papuan refugees crossed the border into Papua New Guinea many years ago and settled in Port Moresby.
Last year they were evicted from borrowed land have been living in makeshift tents and tarpaulins.
The Papuans have been campaigning to the United Nations High Commissioner for Refugees to be resettled in Vanuatu. However, the UNHCR's Richard Towle says their plea has been rejected.
"From our point of view, resettlement is really a last resort for the most deserving of the deserving on the basis of protection needs and we don't think that this group falls within that category," he said.
The PNG government would rather the refugees return home across the border to Indonesian-governed Papua.
Radio New Zealand International - October 2, 2008
An international health NGO says the death toll from a cholera epidemic in Indonesia's Papua has reached an estimated 200.
Medecins du Monde says it has recorded 150 deaths from cholera in the Dogiyai and Paniai districts of Papua since April but estimates the actual toll could be towards the figure of 290 which local church groups are reporting.
The NGO's medical coordinator, Dr Remco van de Pas, says from their work on the ground in the remote area, around 800 current cases of cholera have been seen although the outbreak is tailing off.
"But it's basically the tip of the iceberg of several health problems and access to clean water and access to education that you see. I believe that this cholera bacterium is always there. When people are in a lower nutritional state, or they have another disease like HIV/AIDS, then they are more vulnerable to this and this is the case in this area."
Dr van de Pas says the government responded by sending medical teams although they have arrived late and in many cases haven't reached affected villages.
| Human rights/law |
Agence France Presse - October 8, 2008
Jakarta – Indonesia is to sign up to a charter committing Southeast Asian nations to the principles of democracy and human rights, its foreign ministry said Wednesday.
A special committee from the House of Representatives has determined to ratify the agreement, ministry spokesman Teuku Faizasyah said.
Indonesia is the last member of the 10-country Association of Southeast Asian Nations (ASEAN) that has not ratified the charter, after the Philippines signed up on Tuesday.
ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Faizasyah said the charter would strengthen the regional bloc, often dismissed as a talking shop which fails to confront human rights abuses in member countries like military-ruled Myanmar.
Myanmar's ratification was one of the reasons Indonesia was slow to sign up, he said.
"At first, we felt that if countries like Myanmar are not obliged to comply with what they sign, then ratifying the charter would be worthless," he said. "But Myanmar's ratification is progress. We're counting on Myanmar to gradually comply with the charter," he said.
The charter requires ASEAN to uphold ideals of democracy and human rights and to make legally binding commitments. It also envisages the creation of a massive free trade zone by 2015.
The charter has been criticised for lacking a solid mechanism for enforcing human rights. Indonesia's parliament is expected to ratify to bill next week.
Jakarta Post - October 7, 2008
Dian Kuswandini, Jakarta – The House of Representatives voted not to pass a controversial bill stipulating an extended mandatory retirement age for the chief justice of the Supreme Court, meaning incumbent Bagir Manan, who turns 67 today, must step down.
Supreme Court spokesman Djoko Sarwoko said Bagir would remain incumbent and continue to work on Court projects until he had received an official letter demanding his retirement, which is expected to be issued on Nov. 1.
Djoko said Bagir's successor would be elected in a vote during a plenary session of Supreme Court justices. Each justice has the right to nominate one justice, including themselves.
"But I have no idea when the plenary meeting will be held. As far as I know, it has not even been planned or scheduled yet," Djoko said.
The government-sponsored bill failed at the legislative stage, largely because of a controversial article extending the mandatory retirement age of a Court chief justice from 65 to 70.
The Indonesian Democratic Party of Struggle (PDI-P) had said that if passed the bill would allow Bagir, who was voted in as chief in 2001, to remain incumbent.
The PDI-P faction asked Bagir on Monday to step down from his position immediately.
"The bill has not been passed yet and Bagir is already 67 as of today. He has to relinquish his post because our law doesn't recognize retroactivity," said PDI-P legislator Eva Sundari of the House's Commission III overseeing legal affairs.
"He (Bagir) can no longer legally hold his position. There is no need to wait for the President to issue a retirement letter. The existing law stipulates that age, not the President, determines when a chief justice must retire."
Fellow PDI-P legislator Sutradara Gintings said he was concerned the Court would be slow in electing Bagir's successor. "It (the election) is supposed to be today. If the justices themselves violate the law, then how will law be enforced?" Sutradara said.
In 2006, Bagir issued a decree extending his retirement age by two years, he said. "Then we (the PDI-P) thought he could improve the judiciary system in the country, so we okayed the extension. But it turned out there was no improvement at all."
The House said Monday it had indefinitely postponed a plenary meeting to pass the bill. "Commission III told me in a letter this morning that the plenary meeting has been called off because it failed to report the deliberation process," House Speaker Agung Laksono said.
Agung said the commission needed more time "to synchronize" several major issues, citing that the House would work to coordinate ongoing discussions on regulations on the Supreme Court, the Judicial Commission and the Constitutional Court.
The unusual haste with which the Supreme Court bill was brought to the House raised suspicions that bribery had been involved. PDI-P legislator Gayus Lumbuun walked out of the deliberation process after graft allegations had been leveled against him.
| Environment/natural disasters |
Jakarta Post - October 7, 2008
Nethy Dharma Somba, Jayapura – The Greenpeace ship Esperanza and its crew of activists arrived in Jayapura on Monday, beginning a two-week campaign on forest protection that is focusing on a moratorium on deforestation in Papua.
Greenpeace Southeast Asia spokesperson Bustar Maitar said the 23 activists would hold discussions, a photo exhibition and gatherings to encourage the public to help protect forests.
"Indonesia suffers from severe deforestation, with large areas of forests across the country being converted to plantation areas, such as commercial palm oil fields," Bustar said.
Bustar said Greenpeace had decided to start the campaign in Papua because the province has limited areas of natural forests that are threatened with deforestation.
The majority of forest areas in Papua are threatened with illegal logging practices and forest conversion into industrial zones, he said. Greenpeace had urged the Indonesian government and private companies to stop forest clearing, Bustar said.
Indonesia is currently ranked forth in the world after the United States, China and Brazil in terms of greenhouse gas emissions, which was largely because of forest clearing, he said.
"Prolonged destruction of forests will have a huge impact on people, cultures and biodiversity. It also constitutes around 20 percent of world's total emissions each year, worsening climate change," Bustar said.
Deforestation in Indonesia (including Papua) has been caused mainly by expansion of palm oil plantations, Greenpeace reports.
Bustar said about 600,000 of some six million hectares of land in Papua had been converted for palm oil plantation use by private investors.
He said Greenpeace hoped investors would steer away from palm oil plantations because of the negative impacts they have on the environment.
Separately, Yuven Ledang of Papua's NGO cooperation said deforestation in Papua was also caused by the country's development, since there were many new regencies there with development projects that required land.
"Tropical forests and peat forests play important roles in global climate change. If people destroy them we will all suffer because we will no longer be able to control greenhouse emissions, which will have a huge impact on the entire human race. Consequently, we need more forest areas to save the planet from the devastating impacts of climate change."
The Greenpeace team will continue its campaign to Manokwari, Kalimantan, Jakarta and Sumatra, before heading to Singapore on the same mission
They will continue to use the Ezperanza which is equipped with a helicopter to support the team in conducting aerial observations.
Jakarta Post - October 3, 2008
Fadli and Jon Afrizal, Batam, Jambi – Coastal erosion is progressing at an alarming rate in Batam and Jambi as a result of widespread illegal logging of mangrove forests, the Maritime Affairs and Fisheries Ministry says.
An estimated 800 to 900 hectares of mangrove forests that function as buffers against strong waves are illegally logged each year.
Marine Resource Supervision and Control Agency head Ansori Zamami on Tuesday told The Jakarta Post his office had filed a report with Batam-Rempang-Galang (Barelang) Police over illegal logging of mangrove forests carried out by two companies in Batam.
On September 14, the agency found PT Harapan Barelang and PT Sinar Jaya felling mangrove trees to be made into charcoal for export to Singapore and Malaysia.
"Damage to mangrove forests in Batam was mainly attributed to widespread illegal logging in the charcoal-making industry. The forests will disappear altogether if no action is taken to prevent this," Ansori said.
He said uncontrolled deforestation would lead to erosion, high tides and depleted fish stocks in the area.
He added his office had sent a team to Batam to take stern measures against those found illegally logging in mangrove forests.
"We truly hope the police will thoroughly investigate those involved in mangrove forest destruction in Batam. We want this to serve as a lesson for other offenders," Ansori said.
Timber derived from mangrove forests in Batam is mostly handled by a number of private companies equipped with only general trading licenses, but not logging permits. Thus these companies evade paying taxes for charcoal exports.
Ansori said the two companies operating on Galang and Rempang islands employed at least 300 loggers, felling between 2,500 and 3,000 mangrove trees from each hectare of mangrove.
He added the companies took between 45 and 60 days to turn out charcoal, with each company able to produce between 1,500 and 21,000 tons. They then shipped their products to Singapore and Malaysia, from where the charcoal was re-exported to other countries.
"We plan to establish a government-to-government agreement with Singapore and Malaysia to curb the trade of charcoal derived illegally from mangrove forests, because the country is incurring huge losses. We hope both countries will cooperate," Ansori said.
Batam Maritime Fisheries and Plantation Office head Suhartini said the practice had been in existence for several decades now, but was done traditionally, in smaller volumes, previously.
"Over the past six years, the industry has been controlled by a number of companies, with no heed for existing policies. We want the police to thoroughly investigate the irresponsible parties. We have so far stopped issuing forest management licenses to anyone," she said.
Suhartini added the Batam municipality had provided soft loans as start-up capital for loggers to encourage them to seek other means of making a living.
Coastal erosion has devastated the east coast of Sumatra, especially in Sadu district, Tanjungjabung regency, Jambi.
The area suffering the brunt of the damage is Cemara village, where erosion is bringing seawater between 300 and 500 meters further inland each year.
Coastal erosion is also affecting coconut farms, concentrated within nine villages in the district. Many coconut trees are having to be felled each day because their roots are too exposed to protect them against rising tides.
With many coconut farms severely incapacitated, villagers are attempting to slow the rate of erosion by replanting mangroves in affected areas.
"The local community is now aware of conservation efforts," said Gita Buana Foundation spokesman Abdul Hadison. He added all community groups in villages along the east coast had been tasked with cultivating their own mangrove saplings that would be grown together later.
"We only supply the bags for the seedlings, while the residents provide the seedlings," he said.
Residents planted a 3-kilometer stretch of mangrove trees in mid-2006. The trees have grown to a height of more than 1.5 meters now, and farmland in the village is no longer affected by coastal erosion.
"People from other villages are now aware of the importance of planting mangroves along the coast," said Hadison.
In 2002, the Tanjungjabung regency administration issued an ordinance to save mangrove forests. The ordinance stipulates offenders can face three months' imprisonment or a fine of Rp 2 million (approximately US$222) if found guilty of illegally logging the forests.
| War on corruption |
Jakarta Post - October 8, 2008
Erwida Maulia, Jakarta – A witness confirmed Tuesday the use of Bank Indonesia funds to make state prosecutors drop investigations into alleged graft involving two former top officials at the central bank in 2003.
Former BI legal bureau head Oey Hoey Tiong said Rp 68.5 billion (US$7.1 million) out of Rp 100 billion in Indonesian Banking Development Foundation (YPPI) funds taken over by the bank went to prosecutors investigating the alleged embezzlement of the bank's liquidity support (BLBI), in which former BI governor Soedradjad Djiwandono, former deputy governor Iwan R. Prawiranata and three former directors were implicated.
Oey was testifying at the Corruption Court in the graft case of Golkar politicians Hamka Yandhu and Anthony Zeidra Abidin, who are accused of receiving the misappropriated BI funds.
The court also heard defense lawyers read out the transcript of a recorded conversation between Oey and Anthony made early last year, which revealed the handover of the funds to prosecutors. Oey admitted to taking part in the conversation.
The government disbursed Rp 144.5 trillion of BLBI funds to ailing major banks during the Asian monetary crisis in 1997 and 1998, but failed to dun the debts. It instead granted debtors large discounts and acquitted some of them of criminal charges during Megawati Soekarnoputri's presidency.
"Oey told me that Rp 5 billion had been earlier given to Pak Soedradjad and Pak Iwan to prevent their detention; the money was handed over to the prosecutors," Anthony told the court.
Prosecutors YW Mere and Baringin Sianturi were in charge of investigating Iwan; while YW Mere, Chairul Amir, Enriana Fahruddin, Andi M Iqbal and Robert Pelealu were in charge of investigating Soedradjad.
Oey told the court Soedradjad received a total of Rp 25 billion in legal aid from BI, Iwan Rp 13.5 billion, while three former BI directors – Hendro Budiyanto, Paul Sutopo and the late Heru Supraptomo – received Rp 10 billion each.
The Supreme Court convicted the three former BI directors, also in relation to the BLBI case, to 18 months in prison each.
The BI graft case came to the fore after the Supreme Audit Agency reported to the Corruption Eradication Commission its findings on the embezzlement of the Rp 100 billion.
Some Rp 68.5 billion of the fund was used for legal aid for former BI senior officials, while the remaining Rp 31.5 billion was given to legislators of the House of Representatives' then Commission IX overseeing financial affairs to expedite the settlement of BLBI cases and pass the amendment of the 1999 BI law.
Besides Hamka and Anthony, who allegedly channeled the embezzled money to fellow Commission IX members, former BI governor Burhanuddin Abdullah, former chief of BI's Surabaya office Rusli Simanjuntak and Oey are standing trial in the case.
Others implicated include former BI deputy governor Aulia Pohan (the father of President Susilo Bambang Yudhoyono's daughter-in- law), State Minister for National Development Planning Paskah Suzetta, and Forestry Minister MS Kaban.
Paskah was then deputy head of Commission IX, while Kaban was one of its members.
Recorded conversation between Anthony Zeidra Abidin (AZA) and Oey Hoy Tiong (OHT):
AZA: But, how did it become so huge, Rp 68.5 billion? For how many people was it?
OHT: Five.
AZA: It was outside the official budget?
OHT: It was outside.
AZA: What was the official budget for?
OHT: It was to pay lawyers.
AZA: So there was (an official budget) from BI and there was an additional budget (from YPPI). Is there proof of issuance for the additional one?
OHT: No, there isn't.
AZA: So it was just disbursed like that?
OHT: For lawyers, they used the official budget. For prosecutors, they sought their own way.
AZA: Who handed over the money?
OHT: Each of the former (members of the BI board of governors).
AZA: They were about to detain Pak Iwan?
OHT: The detention order was already signed.
AZA: So when was it settled...?
OHT: The letter was ripped up. Pak (Soerajad) didn't dare to come to Jakarta. He was in Singapore.
AZA: It would be very embarrassing if he were detained.
OHT: We'll do whatever (it takes to prevent that). Pak (Soedrajad) told us to find someone to do something about this. We couldn't ask the AGO straightly about these matters. It would ruin our relationship. He used his own man, we don't know who he is. We only gave him the funds. He checked how much he needed, and then the amount was proposed to the board.
Jakarta Post - October 7, 2008
Jakarta – Former Bank Indonesia (BI) legal bureau head, Oey Hoey Tiong, on Tuesday admitted to using BI money to prevent the arrest of former BI governor Sudrajat Djiwandono, who was implicated in BI liquidity support corruption case.
Oey, who is on trial for embezzlement, told the Corruption Court that he used the money in response to a testimony by Golkar party legislator Antony Zeidra Abidin, another defendant in the case.
"Oey told me that Sudrajat's lawyer asked him for Rp 5 billion (US$525,000) so he would not be arrested," Antony told the court.
"I asked why, then, he asked for Rp 68.5 billion (of BI money). Oey said that because Sudrajat was already about to be arrested he would do anything to prevent it," he said.
In an earlier testimony, former Bank Indonesia deputy governor Aulia Tantowi Pohan admitted to approving the disbursement of Rp 100 billion (US$10.7 million) from the Indonesian Banking Development Foundation (YPPI), a BI proxy, following a BI board of governors meeting.
Rp 68.5 billion was used for legal aid for five former BI senior officials, while the remainder was used to get support for the central bank from House of Representatives' members.
According to Antony, Oey told him that Sudrajat was about to be detained by the Attorney General's Office (AGO) prosecutors. Oey, however, said that he did not know whether it was the AGO. (dre)
| Islam/religion |
Jakarta Post - October 6, 2008
Jakarta – The leader of radical Islamist group Jemaah Islamiyah was prohibited from visiting convicted Bali bombers at Batu prison, Nusakambangan island, Monday.
Abubakar Ba'asyir arrived at the Wijayapura pier in Cilacap at 10:30 a.m., requesting permission from local guards to cross to the island to visit the Bali bombers and other terrorists at various prison complexes.
The Bali bombers – Amrozi, Mukhlas and Imam Samudra – are waiting execution, which the government said would be carried out after the Idul Fitri holiday.
The local guards turned down the request saying Ba'asyir did not have the necessary paper work to visit inmates on death row. Permission is needed from the local and provincial level of Law and Human Rights Department.
The rejection caused tension between the guards and Ba'asyir's disciples accompanying him that day. However, Ba'asyir said he could understood the guards' reasons.
"I accept and understand the procedure of visiting inmates on death row as implemented by the law and the human rights department," he said as quoted by Antara news agency.
At 12:30 p.m, Ba'asyir and his followers sailed to Nusakambangan island to visit other convicted terrorists. (and)
Jakarta Post - October 5, 2008
Erwida Maulia, Jakarta – Up to 427 people have died and 1,408 others have been injured in traffic accidents during this year's Idul Fitri exodus, the National Police reported.
These figures were tabulated from reports made between Sept. 25 and Oct. 4, of a total 970 accidents involving 1,258 vehicles, National Police spokesman Insp. Gen. Abubakar Nataprawira said.
Motorcycles topped the list with 836 incidents (66 percent of the total), followed by private cars with 219 incidents, trucks with 137 and public buses 66.
"The figures may still increase because our traffic operation to ensure the safety of homeward-bound travelers during the Idul Fitri holiday is not over yet," Abubakar said on Saturday as quoted by Antara.
The accidents, which had resulted in an estimated Rp 561 million (approximately US$59,700) worth of material losses, were mainly caused by human factors, such as violations of traffic signals or road markings, Abubakar said.
According to police records, 32,291 vehicles – comprising 21,952 motorcycles, 6,724 automobiles, 1,061 buses and 2,554 trucks – have been involved in accidents over the past 10 days of the operation. The traffic operation began seven days before Idul Fitri and will conclude seven days after it.
Last year, police recorded 1,875 accidents during the Idul Fitri period, which killed 798 people, around 75 percent of which were traveling by motorcycle. The number of fatalities had increased 82 percent from the 2006 figure.
Despite the increasing number of holidaymakers traveling by motorcycle this year, police expected a decline in the number of accidents and fatalities.
The return influx of holiday travelers is expected to reach its peak this weekend, as offices are set to resume activities on Monday.
Almost everywhere around Indonesia, travelers are cramming airports, seaports, train stations and bus terminals, forcing some transportation businesses to add to their regular services.
In Yogyakarta, national flag carrier Garuda Indonesia has added three extra flights to its regular nine every day to Jakarta, from Saturday to Monday. Bus operator PO Sumber Alam is operating 250 buses per day, an increase from between 35 and 40 buses per day normally.
In Bengkulu, four private airlines – Mandala Airlines, Batavia Air, Sriwijaya Air and Lion Air – reported tickets for Saturday flights to Jakarta were sold out.
Jakarta Post - October 3, 2008
Abdul Khalik, Jakarta – It is a moment for seeking and giving forgiveness, but for political figures, Idul Fitri has become an opportunity to gain public sympathy, win popularity and express political inclinations by holding an "open house".
During the holiday, people usually visit their elders, work superiors or powerful officials, with one's popularity rated by how many (and which) guests attend one's gathering.
The open house is an effort by political leaders to boost their popularity through a show of generosity and care for ordinary people.
President Susilo Bambang Yudhoyono, former president Megawati Soekarnoputri, Vice President and Golkar chairman Jusuf Kalla, former president Abdurrahman "Gus Dur" Wahid and many other party leaders all held an open house at their respective residences Wednesday, the first day of Idul Fitri.
At the Presidential Palace, Yudhoyono, First Lady Ani Yudhoyono, eldest son Agus Harimurti and his wife Anissa Pohan, and youngest son Edy Baskoro, welcomed political figures in the morning. In the afternoon, it was time for members of the general public, some of whom had waited since 8 a.m. outside the palace.
"I've been waiting to see the President for years. I just want to tell him to continue giving people jobs instead of cash," said Yulan, a visitor.
The three hours allocated for the open house were apparently not enough, with some 3,500 people already lined up to shake hands with the First Family. Some had to wait even longer before the President met them in the evening. On Thursday, Yudhoyono held another open house, this time at his private residence in Cikeas, Bogor regency.
Among Yudhoyono's VIP guests were Kalla and all the Cabinet ministers. The President and his deputy shared a warm hug, seemingly giving credence to Yudhoyono's announcement that the pair will run for reelection next year. Former Timor Leste prime minister Mari Alkatiri and his wife also visited Yudhoyono. Alkatiri managed to chat with the President for 10 minutes, after queuing for even longer.
The surprise of the day, however, was the arrival of Gus Dur. Arriving on a wheelchair, Gus Dur shook hands with Yudhoyono and his family as though all the tension and anger of the past months had disappeared.
Gus Dur has repeatedly accused Yudhoyono of helping National Awakening Party (PKB) chairman Muhaimin Iskandar topple him from the party he established, in a bid to prevent him from running for president.
At Kalla's open house Wednesday, former Golkar Party chairman Akbar Tandjung paid a visit. Golkar stalwart and House of Representatives' Speaker Agung Laksono, as well as deputy Constitutional Court chairman Jimly Asshidiqqie showed their political bent by visiting Indonesian Democratic Party of Struggle (PDI-P) chairwoman Megawati and her husband Taufik Kiemas, adding to speculation that both are keen on becoming Megawati's running mate.
"Why does a Golkar (figure) come here when you have agreed to a coalition (with Yudhoyono)?" Taufik teased Agung as they shook hands.
Reuters - October 1, 2008
Nusakambangan, Indonesia – Three Islamic militants on death row for the deadly 2002 nightclub bombings in Bali sounded a defiant tone on Wednesday during celebrations to mark the end of the Muslim fasting month.
"Please stay out of immoral places, because if my friends bomb the place, there will be casualties," Amrozi, one of the three bombers, told reporters who were allowed to cover the event at a maximum security prison on Nusakambangan island off Java.
Amrozi was dubbed "the smiling bomber" because of his constant grin during the trial after the attacks on Bali's Kuta strip on October 12, 2002 that killed 202 people, including 88 Australians and 38 Indonesian citizens.
The attacks by the Southeast Asian militant group Jemaah Islamiah (JI) were intended to scare away foreigners as part of their drive to make Indonesia, the world's most populous Muslim nation, part of a larger Islamic caliphate.
After praying, the two other militants, Mukhlas and Imam Samudra, pointed at several Australian and American journalists and said: "Number one enemy."
Indonesia's attorney general said in August his office would wait until after Ramadan to execute the men, who have refused to seek clemency from Indonesian President Susilo Bambang Yudhoyono and said they want to die as martyrs.
Separately, Indonesia marked the end of Ramadan by cutting the sentences of more than 53,000 prisoners, including several jailed for having a role in bomb attacks in Bali, said Akbar Hadi, a spokesman for the Directorate General of State Penitentiary.
Indonesia traditionally gives remissions on its independence day on August 17 and on some religious holidays, but the move has sometimes caused anger because it has included inmates jailed over militant bomb attacks.
The remissions to mark Eid al-Fitr celebrations varied from 15 days to two months, said Hadi.
A new law introduced last year prohibits inmates convicted on terrorism, corruption, drugs and illegal logging charges from receiving remissions until they have served one-third of their sentence.
A ceremony organized by the Australian embassy was also held in Bali on Wednesday to mark the third anniversary of a second set of bombings on three cafes in Bali that killed 23 people. (Reporting by Supriyatin; Writing by Olivia Rondonuwu; Editing by Ed Davies)
| Elections/political parties |
Jakarta Post - October 8, 2008
Dian Kuswandini, Jakarta – Informal lobbying within the House of Representatives special committee deliberating the presidential election bill is expected to expedite a decision on the minimum percentage of votes a party must secure to nominate a presidential candidate.
Legislator Ganjar Pranowo of the Indonesian Democratic Party of Struggle (PDI-P) said in Jakarta on Tuesday the special committee members were meeting informally in order to reach a common understanding on the issue before the final meeting next week.
"Some members tend to be 'timid' during formal deliberations, which are presided over by the committee chairman," said Ganjar, a member of the House's Commission II overseeing home affairs.
"Informal lobbying, including one on ones, is more effective. It is expected to melt the tension."
The committee has yet to decide on the minimum percentage of the total votes in the 2009 legislative elections a party must win to be eligible to elect a presidential candidate, with factions suggesting the threshold be set at between 15 and 30 percent.
The Golkar Party, winner of the last legislative election, proposed the mark be set at 30 percent. The United Development Party (PPP) and the Democratic Pioneer Star Party (PBPD) have proposed 15 and 20 percent, respectively. The PDI-P and the Prosperous Justice Party (PKS) said 15-30 percent. The National Mandate Party (PAN), the Democrat Party (PD), the Prosperous Peace Party (PDS), the Star Reform Party (PBR) and the National Awakening Party (PKB) agree the threshold should be set at 15-20 percent.
Ganjar said the PDI-P had suggested the relatively high mark of 15-30 percent to ensure a more permanent contingent of parties in the House and to save on state spending during elections.
"We don't want temporary support. We can learn from the case of President Susilo Bambang Yudhoyono, who has been criticized of late by his own supporters at the House," he said.
Yudhoyono only received support from his own Democratic Party and the Crescent and Star Party (PBB) during the first round of the presidential election in 2004. In the second round, he received backing from the Golkar Party and other parties.
Because the support Yudhoyono initially received was fragmented, Ganjar said, the coalition in the House that supports his now is weak, resulting in current strong criticism in the final year of his tenure.
"We also want to push for a more affordable election next year. If a candidate can receive strong support, there's a possibility that there will only need to be one round of elections and that will save money."
As an example, he cited the two-round East Java gubernatorial election that cost Rp 1.3 trillion (US$134 million) per round.
Another committee member Lena Maryana Mukti of the PPP said her party would stick to its 15 percent proposal, as 30 percent would be too high for most parties to meet.
"It's a moderate number and it will provide the public with more presidential candidates. Thus, it will offer them more alternatives," she said.
"With more candidates running in 2009, both the public and the candidates can learn and they will be more prepared for the 2014 election."
Lena said the current presidential election law set the minimum requirement at 15 percent, but that the figure had not been kept to in the 2004 election. "We should return to what the law suggests."
Jakarta Post - October 6, 2008
Dian Kuswandini, Jakarta – In an attempt to promote transparency and prevent illegal funding in the presidential election, the House of Representatives has agreed on prison terms for candidates who fail to report their campaign funding.
"There are fears of mysterious and unaudited funds disbursed into candidates' accounts. We've always been suspicious that such funds stem from criminal activities or money laundering," said Ganjar Pranowo of the House's Commission II overseeing national affairs, who is involved in deliberations on the presidential election bill.
Because of this concern, the House's special committee deliberating the bill has endorsed prison terms of between 12 and 48 months for campaigners and candidates who fail to report their campaign funding and donations in the forms of goods and services. In addition, they would have to pay a fine three times the amount of money received.
"A (presidential or vice presidential) candidate would be automatically disqualified from the race once they face this criminal charge," the special committee's chairman, Ferry Mursyidan Baldan, said Sunday.
Ferry, from the Golkar Party, said candidates were prohibited from receiving money from foreign parties, central and regional administrations, as well as state- and province-owned companies.
Ganjar, from the Indonesian Democratic Party of Struggle (PDI-P), said that in the past the General Elections Commission (KPU) had difficulty tracking foreign donations. He added there were many dubious sources of funds in past elections.
"There was a case in which a candidate received Rp 100 million from a becak (three-wheeled pedicab) driver. How could be this possible?" Ganjar said.
The bill demands candidates attach tax identification numbers (NPWP) of each donor in their reports. The NPWP is required for donations of Rp 5 million or more.
Andi Yuliani Paris of the National Mandate Party (PAN) said other important points of the bill included a provision to imprison and fine candidates dropping out of the race.
Under the new bill, candidates who quit the race before the first round of voting would be sentenced to between 24 months and 60 months in jail and fined from Rp 25 billion to Rp 50 billion.
Those who drop out after the first round or during the runoff would face between 36 and 72 months of imprisonment and Rp 50 billion to Rp 100 billion in fines.
"This will demand consistency from the candidates and prevent conspiracy among them and political parties," Andi said, adding it could also "save" the state budget by preventing unnecessary expenditure of election funds.
The House expects to pass the bill on Oct. 24, according to Ferry. Factions remain split over whether a candidate should be selected based on a party's number of votes or House seats.
| Armed forces/defense |
Jakarta Post - October 8, 2008
Jakarta – The Indonesian Military (TNI) announced Tuesday the names of 22 generals who will be promoted or dismissed in the first major military reshuffle since July.
A total of 97 officers of the three armed forces were named in the reshuffle, which was approved by TNI Commander Gen. Djoko Santoso on Sept. 26, TNI spokesman Col. Ahmad Yani Basuki said. The highest ranking officer affected by the shake up is Lt. Gen. Bambang Darmono, currently commander of the Army Training and Education Center. He was reassigned as secretary-general of the National Defense Council (Wantanas), replacing retiring Lt. Gen. Muhammad Yasin.
Maj. Gen. Syaiful Rizal will replace Bambang, who was named military commander in Aceh soon after the government imposed a martial law on the province in 2003.
Yasin announced his resignation as Wantanas secretary-general last month in order to turn to politics. He now chairs the Development Functional Party (Pakar Pangan), one of the 38 parties that have qualified to contest the 2009 legislative elections.
The report announced that 20 other generals have reached mandatory retirement age.
The 29 promoted officers include Brig. Gen. Marciano Norman, a Ministry of Defense official who will lead the presidential task force. Marciano will replace Maj. Gen. Suwarno, who has been named East Java military commander.
Incumbent East Java military commander Maj. Gen. Bambang Suranto will head the Army Staff and Command School.
The reshuffle also saw Rear Marshal Ida Bagus Sanubari named the new head of the National Search and Rescue Agency, replacing Rear Adm. Bambang Karnoyudho, who is retiring.
The Air Force's Rear Marshal Dradjad Rahardjo was appointed commander of National Air Defense. He will succeed Rear Marshal Pandji Utama Iskaq, who will serve as the Air Force's chief operational assistant.
Jakarta Post - October 6, 2008
Rizal Sukma, Jakarta – On Sunday, Oct. 5, the Indonesian Military (TNI) celebrated its 63rd anniversary, although its official commemoration will be held on Oct. 14 in Surabaya.
For the greater part of its history – when it was still called ABRI (Armed Forces the Republic of Indonesia) under Soeharto's 32-year reign – the TNI functioned more as a political than a defense force. It has only been over the past 10 years that the TNI has finally tried to reform and become a professional military.
The move toward military reform started with the collapse of the New Order's authoritarian rule in May 1998. Demands by pro- democracy forces at that time forced the military to issue its own internal guidelines for reform on the same year.
Indonesia began a long and arduous process of military reform. Now, after 10 years, it is time to reflect on the issue.
In the first stage of military reform, there have been many significant progresses. For one, the main demand of reformasi – that the military relinquish its dwifungsi (dual function) role – has been fulfilled. The TNI today is hardly a national political force. Reserved seats in parliament for TNI representatives have been scrapped, all socio-political offices within the TNI have been liquidated, its involvement in practical politics has been terminated, the appointment of a civilian as the minister of defense has become an established practice acceptable to top military brass and the democratic control of the military through civilian oversight by the parliament has been put in place.
The two defense-related laws, No. 3/2002 on State Defense and No. 34/2004 on TNI, might not be perfect, but they do provide a strong basis for the emergence of a professional military within a democratic order and for the implementation of a civilian supremacy principle.
With such progress, we can say that the first generation of military reform – the disengagement of the military from politics – is almost complete. True, some generals do still have a habit of making public political statements and judgments.
There are still many scholars and civilians who tend to glorify and exaggerate the role of the military in politics. For example, these civilians still fantasize that it is only a matter of time before the TNI intervenes again in politics if the civilian government continues to be weak.
There is no denying, however, that there is still some unfinished business. There is still the ongoing problem of military justice. For example, the revision of the military tribunal law – which will allow civilian courts to try soldiers involved in nonmilitary offenses – has not been completed and the culture of impunity remains a serious problem. Moreover, the government has not yet officially taken over military businesses as mandated by Law No. 24/2004. But we can expect that these two problems will be resolved early in 2009.
The problem really lies in the second generation of reform.
First, there is still the problem of developing a defense posture enabling the TNI to undertake its main function: external defense. For this, a minimum deterrence capability is imperative, and that could start with the commitment to fill the gap between the minimum essential force and defense requirements. In the long run, if we are really serious about implementing the layered defense strategy, the plan to rebuild a TNI capable of deterring foreign military intrusion and infiltration from our territory has to be in place.
Second, there is the problem of defining the appropriate missions for the TNI to carry out within the next five to 10 years. Here, considering the challenges and threats facing Indonesia over the next 10 years, the defense development should enable the TNI to carry out at least four key missions: stability support operations, maritime security, humanitarian and emergency relief operations and peacekeeping operations.
Third, the state is still struggling to find ways to compensate its soldiers properly and decently. We cannot expect soldiers to perform professionally with a payment of around Rp 1.5 million a month (US$160). The problem of welfare needs to be given priority in future defense planning.
Fourth, discipline still needs serious attention. There have been too many cases where soldiers get involved in physical clashes with police personnel. Education and training should ensure that soldiers uphold military codes and ethics more firmly.
If the government can focus on these items, then the TNI could be proud as a professional defense force capable of defending the nation and its people through modern fighting capability based on technology and modern strategy, not through the mobilization of civilians for a people's war.
The Economist - October 2, 2008
Jakarta – Reforming Indonesia's army, once among the world's most corrupt and abusive, has been a slow process since the army- backed Suharto regime collapsed ten years ago. A big obstacle to this, and to the country's democratic progress, has been the forces' deep involvement in all sorts of businesses, legal and illegal.
The income from these sidelines – including plantations, logging, hotels and property development – gave the army an unhealthy degree of independence from the civilian government that supposedly oversees it. With much of the revenue being diverted into senior officers' pockets, it also allowed them to keep meddling in politics, even after they were stripped of their guaranteed seats in parliament in 2004.
A law passed that same year instructed the army to surrender its businesses to the government by October 2009. Not much happened until earlier this year, when President Susilo Bambang Yudhoyono (himself a liberal ex-general) created a panel of experts to investigate the firms. The panel is due to report to the president this month. The defence minister, Juwono Sudarsono, says it has identified about 1,500 military firms. But most have gone bust, been bought by the private sector or are close to collapse. Only six viable firms with assets over $50,000 have been found.
The businesses date back to the struggle for independence from the Netherlands in the 1940s. Each unit of the nascent Indonesian forces had to finance itself and any method – even smuggling and drug-trafficking – was acceptable. Under Suharto the businesses became huge money-spinners. Many were disguised as "foundations" for the welfare of lower ranks but were really vehicles for the chiefs' money-laundering and other capers. Recently they have crumbled, as Indonesia's economy has been progressively liberalised and they lost the monopolies they relied on.
The government panel's findings concur with those of a recent study by Lex Rieffel and Jaleswari Pramodhawardani for the Brookings Institution, an American think-tank. It found that by 2006 the combined revenues of Indonesia's military businesses had shrivelled to $185m at most, and put their profits at no more than $73m. These figures are much smaller than military experts had hitherto assumed, and are a fraction of that year's official defence budget of $2.9 billion. Even so, the Brookings study reckons it will be tough to persuade senior officers to give them up while most other arms of the state have their own sidelines.
The findings undermine one of the army chiefs' main excuses for keeping their businesses: that they desperately need the revenues to supplement the meagre official budget. Mr Sudarsono agrees that although the defence budget has now been raised to $3.6 billion, it remains inadequate; he compares this sum, spent to defend a nation of 226m people, with the $4.6 billion that tiny Singapore spends to defend 5m people. He believes he has, however, convinced the top brass that spending on public works and anti-poverty schemes must take priority for the next five to ten years, and that by thus building a stronger economy the government will eventually have more money to spend on defence.
Polls show that the army's reputation among the public has improved. Cases of corruption and abuse still continue (such as in the troubled Papua region) but there is nothing like the top- down organised repression of the Suharto years. A few military strongmen associated with those abuses, such as Prabowo Subianto (son-in-law of the late dictator) and Wiranto, a former army chief, are campaigning for next year's presidential election, perhaps financed from their past business earnings. But their poll ratings are low. Various other ex-military men are running for parliamentary seats but Pramono Anung, the general secretary of the main opposition Indonesian Democratic Party of Struggle, says he sees no sign of a concerted attempt by the army to return to politics.
The problem, notes Tim Huxley of the International Institute for Strategic Studies, a think-tank, is that, as the army's image has improved, that of the police has sunk. The police have taken on many of the bad characteristics once associated with the army: corruption, abuses and running illegal sidelines. Mr Sudarsono says that, though the army has officially given up its role in public security, some local authorities still call on it to deal with unrest because they mistrust the police.
| Police/law enforcement |
Jakarta Post - October 3, 2008
Dian Kuswandini, Jakarta – Gen. Bambang Hendarso Danuri was officially sworn in by President Susilo Bambang Yudhoyono at the State Palace on Tuesday as the new National Police chief.
Bambang, who attained his four-star promotion a day earlier, replaces Gen. Sutanto, who began his retirement on Sept. 30. Bambang will serve as National Police chief until 2010.
After the ceremony, the 56-year-old general reaffirmed his commitment to push for an institutional reform within the police force, particularly in improving the force's image.
"Internal reform is at the top of my concerns. Disciplining disgraced police officers is our top priority," Bambang said. "Stricter sanctions will be imposed on such officers with no exceptions, no matter their rank."
Bambang said internal reform was needed to raise police performance in general. Such internal reform, he went on, should start with monitoring police performance on the streets and in public service centers, where illegal fees are often levied.
"Scrapping (bad) practices in these areas would prevent other unwanted behavior," he said.
He explained he would set up a special team, comprising the police's intelligence unit and professionalism and security division, to tackle the problem of illegal fee demands.
Bambang also said he would continue programs started by Sutanto, including tackling gambling, illegal logging, illegal fishing, illegal mining, corruption, drug abuse and security threats.
"I will not tolerate a gambling center like that in the Genting Highlands resort (in Malaysia)," he stressed.
Bambang will take up office after a transfer of command from Sutanto on Oct. 9 in a ceremony at the Mobile Brigade headquarters in Kelapa Dua, Depok, south of Jakarta. Until that time, police chief duties will be undertaken by deputy chief Comr. Gen. Makbul Padmanegara.
Bambang, who previously served as chief of the National Police's Criminal Investigation Unit, has handed over the reins of this unit to deputy Insp. Gen. Paulus Purwoko.
The only candidate nominated by the President to lead the National Police, Bambang secured support from all 10 factions at the House of Representatives' Commission III last week with positive comments. A graduate of the National Police Academy in 1974, Bambang's stellar track record includes his achievements in arresting former State Intelligence deputy chief Muchdi Purwopranjono as a suspect in the 2004 murder of human rights activist Munir Said Thalib.
While serving as North Sumatra Police chief, Bambang drew praise for successfully ordering the arrest of major illegal logging suspect Adelin Lis.
Following Tuesday's swearing-in ceremony, Sutanto was full of praise for his successor.
"I believe Bambang can continue all the efforts I've made so far," he said.
Sutanto said he had yet to decide what to do after retiring. There is a possibility he may be posted as an ambassador, such as previous police chiefs Da'i Bachtiar and Rusdihardjo, who served as envoys to Malaysia. Failing that, Sutanto may serve as the new president commissioner of state oil and gas firm PT Pertamina.
"I know my ability and capacity. I don't think I have the ability needed for those positions, whether as ambassador or commissioner," he said.
| Economy & investment |
Jakarta Post - October 9, 2008
Aditya Suharmoko, Jakarta – When the US Congress approved a bailout plan last week, it was expected to ease the global financial crisis.
Fast-forward three days, and world markets, including Indonesia's, were plummeting. Coupled with the volatile rupiah, the inevitable question is raised: Will Indonesia suffer another economic crisis?
"No," is the immediate answer from economist Faisal Basri. "Indonesia's economy is stronger now because it has learned a lot from the last crisis."
In the 1997 financial crisis, Indonesia's short-term loans to foreign reserves ratio stood at 175 percent; currently, it stands at 34.5 percent, meaning the country can safely finance its short-term loans.
"Our banking sector was erratic (in 1997), it is now sturdy. Overall, even in Southeast Asia, judging from indicators such as politics and business, Indonesia is fairly stable," Faisal said Wednesday.
The global financial crisis will impact only Indonesia's currency and stock market. "The dollar is scarce because the US government is issuing treasury bonds to finance the bailout and plug its huge deficit."
His remarks echo earlier statements by President Susilo Bambang Yudhoyono that Indonesia will not see a repeat of the late-1990's crisis.
The central bank is also downplaying the possibility of a crisis. On Tuesday, it raised its benchmark interest rate by 25 basis points for six straight months, to 9.5 percent, thus "signaling to market players that the economy is well guarded," according to Bank Indonesia senior deputy governor Miranda S. Goeltom.
Miranda said a consistent rise in the BI rate would assure the market the central bank was in control and ready to safeguard the economy.
She added BI would be in the market to monitor the volatility of the rupiah against the dollar, based on global movements. "The weakening (rupiah) is common as long as it is orderly and on a manageable range," she said.
Still, Faisal warned, Indonesia "may eventually feel the impact of the financial crisis as the US economy slows down, resulting in China shifting its export destination from the US to countries like Indonesia."
How to deal with that? "Guard national borders against imports of unessential goods," he said – the same statement made last week by acting Coordinating Minister for the Economy Sri Mulyani Indrawati.
With some people seeing opportunity at a time of crisis, Faisal said the government should start focusing on potential industries, such as those producing rattan, wood, tea, coffee, cacao and crude palm oil.
"Other countries buy raw materials from us, process and package it, then sell it at a high price. Why don't we start selling our own products?" he said.
With the real sector developing, he went on, Indonesia could have a better economy in the future, while unemployment would drop. Faisal estimated the economy would grow by 5.8 percent this year, well below the government's estimate of 6.2 percent.
He said the economy had slowed in the third quarter of 2008, as seen by a decline in exports and imports, as well as in the financial, services and telecommunications sectors.
The Institute for Development of Economics and Finance (Indef), an economic watchdog, recommended Indonesian authorities prepare a safety net in case a full-blown crisis arose.
The government needs "concrete actions" to safeguard the economy, including providing incentives for exporters and raising the deposit insurance limit from Rp 100 million ($10,325.25) to Rp 250 million, Indef economists said.
Jakarta Post - October 7, 2008
Aditya Suharmoko, Jakarta – Exports in August fell 0.43 percent to US$12.5 billion from the month before, as crude oil prices continued falling, dragging down other commodity prices.
"Exports declined because the volume and the prices of strategic commodities were down," Central Statistics Agency (BPS) deputy chairman for distribution statistics Ali Rosidi announced on Monday during the agency's monthly report.
Oil prices reached an all-time high above $147 per barrel in July, but have fallen sharply since then, with fears that the global financial crisis could hit demand even harder.
On Monday, crude oil prices slumped to an eight-month low, AFP reported. Brent North Sea crude for delivery in November tumbled $3.89 to $86.36 per barrel, while New York light sweet crude for November fell $4.13 down to $89.75 per barrel.
BPS reported meanwhile that non-oil-and-gas exports, also dropped 1.2 percent to $9.56 billion, as demand for rubber products, ores and clothing declined.
On a year-to-year basis however, exports in August rose by 30.26 percent, far above the government's estimated target of 12 percent.
Between January and August, total exports reached $95.45 billion, up 29.87 percent from the same period in 2007. Non-oil-and-gas exports, meanwhile, rose 22.38 percent to $73.54 billion.
Non-oil-and-gas products' main export destinations were Japan ($9.19 billion, or 12.5 percent), the United States ($8.51 billion, or 11.58 percent) and Singapore ($7.19 billion, or 9.77 percent) – all accounting for 33.85 percent of Indonesia's total non-oil-and-gas exports. "Trade with these countries in this eight month period was in surplus," Ali said.
Indonesia has gradually diversified its exports to reduce its dependency on the US as the world's largest importer, said Trade Minister Mari Elka Pangestu.
Many economists believe that the US is on the verge of a recession.
On imports, BPS said Indonesia in August imported more consumer goods and less capital goods or raw materials. Total imports last month fell 7.42 percent to $11.86 billion from July.
In August, Indonesia's imports were made up of 75.94 percent vehicles, industrial components and parts and 16.58 percent capital goods, down from 76.21 percent and 17.13 percent respectively in July. Consumer goods, meanwhile, rose to 7.48 percent from 6.66 percent.
Between January and August, Indonesia spent $89.83 billion on imports, most of which was on vehicles, machinery and parts – of which $11.9 billion was for capital goods, or 13.2 percent of total imports – BPS reported.
Of the total of $66.52 billion non-oil-and-gas imports between January and August, Indonesia mostly imported from China ($10.01 billion, or 15.05 percent), Japan ($9.49 billion, or 14.27 percent) and Singapore ($7.71 billion, or 11.59 percent).
Jakarta Post - October 6, 2008
Aditya Suharmoko, Jakarta – Indonesia may start feeling the pinch of the economic meltdown in the United States and in some European countries as early as next year, dragging down fairly outstanding growth in Southeast Asia's largest economy.
Sluggish demand from Asian countries, which constitute Indonesia's key markets, as well as a shortage in global and domestic cash availability are cited as main factors that will put the economy under pressure.
"We mostly export goods to Asian countries; but if the U.S economy is slowing down, exports from Asia will also contract, thus reducing our exports to the region," said Trade Minister Mari Elka Pangestu. "We may feel the impact (of the slowdown) next year," she added.
Indonesia's main export destinations between January and July this year were Japan (12.35 percent), the US (11.6 percent) and Singapore (9.73 percent). Total exports during this period were valued at US$64.07 million.
Despite an approval by the US House of Representatives for a $700 billion bailout to help settle the banking crisis, the US is already on the verge of grave recession, as indicated initially by a constant unemployment rate and a drop in labor payout.
Ireland, one of the EU's economic tigers, has declared its transition into recession, following two quarters of negative economic growth. France, the EU's second largest economy, has all the indications of being in a slowdown.
On Sunday, Acting Coordinating Minister for the Economy Sri Mulyani Indrawati met with key economic ministers, including Mari, and central bank governor Boediono to discuss the impact of the global economic meltdown.
A concerted measure to absorb the impact will be taken during a Cabinet meeting Monday, at which several noted businesspeople are scheduled to attend.
The government is slated to provide incentives for exporters to take aggressive steps to diversify their export markets and help reduce dependency on the US and Europe, according to Mari.
In a bid to reduce imports of "unessential" goods to balance the country's payments, the government will slap restrictions on these imports, Mulyani said.
Indonesia in targeting 6.2 percent growth this year, with 6.4 percent expected next year.
Bank Indonesia Governor Boediono said the US-led global financial crisis would prompt a shortage of liquidity for local business players as well as the government account.
The tight liquidity will make it harder for the corporate sector to get loans for expansion. Companies will also be hard-pressed to pay overseas debts due to the high cost of refinancing.
As reported earlier by this paper, the government is planning to reduce its state budget deficit over fears it will have difficulty seeking financing to fill the gap.
"The shortage of global liquidity will be felt as a result of this crisis. We must be prepared to face this over the next six months to one year," Boediono said, adding the shortage would affect economies all over the world.
He said the global liquidity shortage would only stabilize once developed economies were on a safer footing.
"We will strengthen the banking sector. Our target is to maintain sustainable lending growth that can support acceptable economic growth and controllable inflation," he said.
Central bank figures show the capital adequacy ratio of local banks in August was 16 percent, above its minimum tolerance of 8 percent. The rate of nonperforming loans was 3.95 percent, below the 5 percent limit set by BI.
To help cushion the economy and ease liquidity problems, the government will speed up spending this year, Mulyani said.
As of August, there are still some Rp 110 trillion in idle funds that could be used to boost the economy.
Jakarta Post - October 4, 2008
Aditya Suharmoko and Ika Krismantari, Jakarta – The Finance Ministry is recalculating the state budget deficit's tolerance level, as the shortage in global liquidity and higher costs of protecting sovereign debts from default threaten to make fund- raising harder.
One option being explored to help sustain the state budget is an adjustment in the financing scheme to patch up the 2009 deficit, head of the ministry's fiscal policy Anggito Abimanyu said recently.
"We have already been able to secure some funds to plug this year's deficit. We think the impact (of the liquidity problem) will be for the 2009 budget. But we still have some time to come up with new measures," Anggito said.
"With the latest development (in the United States), our concern is whether our (government) bonds issued next year can be absorbed by the market. If they can be absorbed the costs will be very high for the government."
The government is planning to issue bonds worth Rp 94.7 trillion (US$10.3 billion) next year to refinance maturing bonds and help plug the budget deficit, which is estimated to reach 1.7 percent of GDP, or around Rp 83 trillion.
The government has been relying more on issuing bonds than on bilateral or multilateral loan programs, which often involve complicated requirements in favor of the donor countries or agencies.
It is considered important for developing countries such as Indonesia to keep the budget deficit in check for many reasons, including to ensure the government has sufficient funds in case of an emergency.
Anggito said the ministry might consider using money leftover from the 2008 state budget to help ease next year's deficit.
"We will go to the House of Representatives to present our 2009 financing strategy by taking the latest development into account. The strategy may also include using unspent funds from this year," he said. As of August, the government had more than Rp 110 trillion in idle funds stored in the central bank.
To plug this year's deficit, Anggito said the government would only need to issue Rp 16 trillion worth of Islamic bonds (sukuk) and short-term government bills. The ministry plans to issue sukuk in late October.
According to JPMorgan Chase, as reported by Bloomberg on Thursday, the cost of protecting Indonesian government bonds from default rose to a record 4.14 percentage points as investors demanded extra yield to own developing-nation bonds instead of US Treasuries.
Meanwhile, Indonesia Stock Exchange (IDX) president director Erry Firmansyah said the corporate sector would feel the pinch from the tight global liquidity and soaring costs of increased debt.
Erry said the IDX had revised down its estimate of corporate bond issues for this year from Rp 40 trillion to Rp 15 trillion. This means the market will see a 52 percent drop in bond issues this year from the Rp 31.27 trillion recorded last year.
"There have been no publicly listed companies filing a request to issue bonds so far, because the appetite for bonds has been bearish lately following the pickup in bond yields. Companies prefer to seek bank loans instead," Erry said.
Jakarta Post - October 3, 2008
Aditya Suharmoko, Jakarta – The Indonesian economy is estimated to grow by more than 6 percent during the year's third quarter on the back of robust private consumption, investment and export, the Finance Ministry says.
Private consumption, especially in consumer goods, between July and September "remained strong", the Finance Ministry head of fiscal policy, Anggito Abimanyu, said Wednesday.
"Growth in consumer goods was relatively high. Exports were also on track although imports were relatively high," Anggito said.
The Finance Ministry will provide an exact figure Monday, he said.
Southeast Asia's biggest economy has seen car and motorcycle sales grow at the fastest pace since the 1997 Asian financial crisis, as commodity boom makes people living in plantation and mining areas wealthier.
The number of motorcycle sales is often used to gauge the purchasing power of middle to lower-income people, while car sales gauge that of the middle to upper-income bracket.
Cement consumption, also a standard of living indicator, remained resilient despite higher construction costs, showing 16 percent growth to 25.6 million tons in the first eight months of 2008 compared to the same period last year.
During the first half of the year, the economy unexpectedly grew 6.4 percent due to strong exports, particularly commodities, according to the Central Statistics Agency (BPS). Analysts, however, warned that the decline in global oil prices might undermine export growth in the coming months and affect the country's economy in general because mining and agricultural commodity prices are tailing oil prices.
Crude oil fell US$2.51, or 2.6 percent, Thursday to $96.02 per barrel in New York, while it was at $96.60 per barrel in London, Bloomberg reported.
Oil has fallen 35 percent after reaching a record $147.27 in July because of fear the global financial crisis will spread through the economy, weakening energy demand.
Analysts have predicted that the Indonesian economy will grow by slightly less than 6 percent by the year's end, below the government's expectation of 6.2 percent.
BPS chairman Rusman Heriawan said the country's economy in the third quarter of 2008 was likely be a bit below the 6.4 percent growth recorded in the second quarter of the year.
"During the fasting month (September), growth in trade sector was up," Rusman said. "However, inflation might soar too."
Rusman said inflation in September might accelerate between0.4 percent and 1 percent as demand jumped during the Islamic fasting month of Ramadhan and Idul Fitri holidays.
The government has expected September inflation to reach below0.8 percent as recorded in the same period last year.
"If in the last three months (of 2008), the inflation is similar to that in September, the 11.4 percent inflation target could be achieved," he said.
The government has worked hard to ensure inflation, as the main culprit undermining the economy, be kept below 11.4 percent.
Between January and August, inflation reached 9.4 percent, BPS reported. Year-on-year inflation, meanwhile, stood at 11.85 percent.
Higher inflation will prompt higher interest rates, leading to increased borrowing costs for the corporate sector wanting to expand or for new investors starting up new businesses.
Rusman said the government should ensure food supply went accordingly if it wanted to maintain inflation according to its target.
Reuters - October 2, 2008
Sara Webb and Fitri Wulandari, Cilegon – Like its volcanic namesake nearby, state-owned Krakatau Steel looms large over this part of Indonesia.
Its aged, weather-beaten plants in Cilegon, West Java, push out 2.5 million tons of rolled coil and flat steel a year – enough to build around 4 million cars – making Krakatau a target for some of the world's leading steel-makers.
But rather than bring in a foreign investor to inject much-needed funding and technology, the government has opted to raise money for the country's biggest steel-maker in an initial public offering, or IPO, once markets have settled down.
Krakatau is the biggest employer in this part of West Java and has long been regarded as something of a national treasure. A previous bid to raise funds by selling it to a foreign buyer had to be scrapped because of strong political and public opposition.
As Indonesia heads for elections next year, politicians are wary of upsetting voters by selling Krakatau to a foreigner who might axe jobs, slash benefits, and sell its steel abroad in a bid to improve competitiveness and profits.
"It's a sensitive political issue," said Defense Minister Juwono Sudarsono in a recent interview with Reuters.
While Krakatau "has to improve its performance," he said, an IPO was preferable as it would allow the government to retain ownership and control of a strategically important firm which supplies steel used in infrastructure, construction, and Defense.
"With the improvement in economic performance, we do not have to resort to strategic sales," Sudarsono added.
Bloated, inefficient
The decision says much about Indonesia's efforts to shake up its state-owned enterprises, including plantations, airlines, banks, utilities and energy firms, which have a reputation for being bloated and inefficient.
"With an IPO, there will be more job security and if I have money, I would love to buy the company's shares, as steel will always be in demand," said Subekti, chief foreman at one of Krakatau's mills.
Over the past year, Krakatau has been courted by several strategic investors, including industry leader ArcelorMittal SA, Australia's BlueScope Steel Ltd., and India's Tata Steel and Essar Steel Ltd.
But Subekti, who at 46 has spent more than half his life working for Krakatau Steel, said he saw no advantage in having a foreign strategic investor.
"There's no real improvement at state-owned companies that are taken over by foreign investors. Besides, since Mittal is owned by an individual, they won't care about the community living near the plant or the people in Cilegon," he said, as enormous red-hot slabs of steel thundered past his control room.
"Take Freeport. They make gains, but the people around their mine are very poor," he said, referring to Freeport McMoRan Copper & Gold Inc, which runs the huge Grasberg copper mine in Indonesia's Papua province.
Aspiring capitalists
No wonder, then, that unions and management alike have welcomed the government's decision to go for an IPO.
Posters in praise of the planned privatization adorn Cilegon's offices and streets, where even the names – Billet Road, Pellet Road – are a nod to Krakatau's local importance.
Built in the 1970s and still running partly on Soviet-era equipment, Krakatau has outlined a $1.5 billion expansion so it can benefit from rising demand for steel in Asia, particularly from China and India.
The aspiring capitalists of Cilegon have already seen some changes at Krakatau Steel as it is readied for sale. Long-term contracts were scrapped, enabling Krakatau to sell its products at a higher, spot-market price.
Last year, it returned to the black, making a profit of 314 billion rupiah ($33.5 million), against a loss of 135 billion rupiah in 2006, and the chief executive said he expects profit to climb to 1.2-1.3 trillion rupiah this year.
The secretive, state-owned company is not obliged to provide detailed financial statements to the public because it isn't listed, and in the run-up to its IPO is only just starting to come to terms with dealing with the media.
Still, there is plenty of room for improvement at the firm, named after the volcano that loomed on the opposite side of the Sunda Strait until it blew up in spectacular fashion in 1883.
Krakatau's location, picked by former President Sukarno in honor of an Indonesian independence hero, is nowhere near its raw materials. Gas has to be piped in to fuel the furnaces, while iron pellets are shipped in from Brazil and Sweden.
In Cilegon, it has nearly 8,000 staff, many of whom enjoy housing, transport, medical, schooling, and food subsidies that in Indonesian terms appear generous – though meager by, say, Scandinavian standards. Its assets, worth over 12 trillion rupiah, include machinery and substantial land property holdings.
The firm hopes to raise at least $340 million from its IPO, and a further $1.2 billion from cashflow and debt, according to company documents and officials.
The funds would pay for a new blast furnace, expansion of its steel plants, and an iron ore smelter in South Kalimantan, enabling Krakatau to secure domestic supplies of iron ore so that it can be fully integrated.
Krakatau hasn't upgraded or added new automation for more than a decade, said Fazwah Bujang, chief executive, a chemical engineer by training who spent most of his working life at the company until he took over at the helm last year. "Now is the time to do that. We are going to modernize."
[Additional reporting by Ed Davies, Telly Nathalia, and Harry Suhartono; Editing by Megan Goldin.]
| Analysis & opinion |
Jakarta Post Editorial - October 10, 2008
Who does not think Yogyakarta is special? Only a few who have had the privilege to taste the lifestyle in this ancient city fail to leave enamored.
Most end up making Yogyakarta their spiritual home, or at the very least, they carry a part of the city with them forever.
While this city is full of lore, it is no fable to say that the sights and sounds of the city change people: People from all walks of life, backgrounds and cultures combine to create a colony of common virtue.
Replete with a rich culture, home to high art, bastion of education, paragon of Javanese sentiment and epicenter of Indonesian history, Yogyakarta is not just a city or a way of life – it is a state of mind.
The Sultanate of Ngayogyakarta Hadiningrat was established in the mid-18th century when colonial Dutch rulers divided the preceding Mataram kingdom in two. Despite the division, the sultanate refused to capitulate, triggering numerous uprisings in both the colonial and the modern eras.
From being the site of the rebellion of Prince Diponegoro in the early 19th century to a stronghold of the national revolution in the mid-20th century, Yogyakarta has consistently remained the hub of Indonesia's fighting spirit.
It was the ninth sultan of Yogyakarta who is best remembered as the embodiment of this spirit to win independence. It was under his leadership that the sultanate became the first territory to willingly accede sovereignty to the Republic of Indonesia.
For its contribution, this sultanate, which covers just 3,185 square kilometers, was given the designation of special region with the sultan as its governor.
Sultan Hamengkubuwono IX was a revered man, not just by his "subjects" but also by history. Not surprisingly he was elected as Soeharto's first vice president in 1973.
Five years later, however, he turned down another nomination for vice president. At a time when Soeharto was flexing his muscle and consolidating power, Hamengkubuwono IX spurned those authoritarian tendencies to return home and retire from active political life.
The ninth sultan was a king who did not act like one. He typified the essence of the great philosopher Aristotle centuries earlier who wrote in Politics, "He who is to be a good ruler, must have first been ruled".
The comfort zone that is Yogyakarta persists to this day. The mantle of leadership has now been assumed by the 10th sultan, who rules with equal grace. Still revered, his words remain divine.
But the circumstances through which the present sultan governs have no parallel with those of his father. So when President Susilo Bambang Yudhoyono issued a decree on Wednesday extending the sultan's governorship of Yogyakarta we felt a tinge of unease.
This is a decree that belies written laws that seek to make leaders – local and national – accountable to their people.
Yogyakartans may claim that the sultan is the embodiment of Yogyakarta. They may well mobilize and rally in the thousands to proclaim their sultan as governor, but how odd it is that they would seek to perpetuate an obsolete system that contradicts every shred of political accountability.
It is not that the sultan has ruled badly. Far from it. Rather, the issue here is not who is governor, but rather how that person gains the position. Because, by negating the processes of accountability, we are promoting absolutism.
We believe the sultan to be a wise man who understands that sometimes it is not the end that matters but the means by which that end is achieved. And there is little doubt that if the sultan had to run in an election for governor he would win, perhaps even unrivaled.
Accepting this appointment without an election, no matter how much the people of Yogyakarta claim it to be their will, is an act that corrupts the process towards responsible democratic citizenry.
It is far from a good example for Yogyakartans and a bad precedent for the whole nation.
What typified the ninth sultan was his humility in freely submitting to the sovereignty of the republic.
The current sultan may still retain certain privileges but he is not above the autonomy law, which requires local leaders be elected, irrespective of whether a special law on Yogyakarta is being drafted in the House of Representatives.
"L'tat, c'est moi! (I am the state)," proclaimed Louis XIV, whose 72 years in power made him Europe's longest reigning monarch.
How long is Yogyakarta to maintain such absolutism, perpetuating a class society of ruler and subject?
Claims of divine heritage or even benevolence do not make power a birthright. Only those who submit themselves to be ruled have the right to think of themselves in the position of ruler.