INFID, August 10, 2006
INFID's Short News Overview No. VII/16: August 4-10, 2006
Debt & Poverty
IMF: Lower Interest Rates Would Support Indonesian Economy
The Indonesian government has room to ease interest rates and increase public
spending to support the economy, the International Monetary Fund said on Aug. 7.
Indonesia's key challenge is raising economic growth rates to reduce unemployment
and alleviate poverty, the IMF said in its latest annual review of the Indonesian
economy. Though the IMF forecasts gross domestic product will pick up in the
second half this year, the multilateral lender noted downside risks from any renewed
financial market turmoil for developing countries and high oil prices.
The IMF predicted Indonesia's economy will expand 5.2% for the year 2006.
"There is scope for fiscal policy to support activity in 2006, while firmly pursuing fiscal
prudence," the IMF said in a press summary of the review. The IMF urged the
government to quickly implement a package of tax reforms that would make the tax
system more efficient, and improve investor confidence.
Monetary policy, too, could provide more support for the economy, as long as the
timing and pace of any interest rate reductions takes into account the stability of
global financial markets, the IMF said.
The fund said the value of the Indonesian rupiah seems "broadly in line with
fundamentals" after some real appreciation recently. Recent intervention by the
central bank to build foreign exchange reserves was "appropriate" but the IMF said
intervention should remain limited to smoothing volatility.
The IMF urged Indonesia to push ahead with privatization of state-owned banks that
don't have a specific public policy objective. Overall, performance by Indonesian banks
has been steadily improving, the IMF said.
"In the meantime, governance could be improved by allowing private shareholders to
participate in their management," the fund said.
Source: DJ 8/8
Government Jan-July budget surplus rp5.78 trln
The government had a budget surplus of 5.78 trln rupiah in the first seven months of
this year, having spent 282.73 trln rupiah or 43.65 pct of its budget for the year, the
Ministry of Finance said. The revenue in the first seven months was 288.51 trln rupiah
or 46.14 pct of the amount budgetted for the whole year.
The government has proposed to raise its deficit for the year to 37.63 trln rupiah or 1.2
pct of GDP from 22 trln rupiah or 0.7 pct of GDP, envisioning an increase in
expenditure to 689.54 trln rupiah and an increase in revenue to 651.91 trln rupiah.
Tax receipts in the first seven months were 216.98 trln rupiah or 52.12 pct of the sum
budgetted for the whole year, and that non-tax revenue was 70.84 trln rupiah or 34.51
pct of the target for the year.
Central government expenditure in the first seven months was 165.51 trln rupiah or
38.7 pct of the amount budgetted for the year.
The central government spent 15.73 trln rupiah on capital goods (25 pct of the
budgetted amount), 17.08 trln rupiah on goods (31 pct), 45.59 trln rupiah on interest
payments (60 pct) and 13.74 trln rupiah on subsidies (17 pct).
Finance Minister Sri Mulyani Indrawati said three ministries -- trade, energy and
forestry -- were the slowest spenders, with none of them spending more than 10 pct of
the full-year target during the first seven months.
"Of course, the relevant ministers will have to take many more efforts," she told
reporters.
Analysts have said acceleration of the budget spending is crucial to stimulating
economic growth given that private consumption, the key growth driver, has been
slowing down following last October's 126 pct fuel price hike.
Indrawati said the pace of government spending has been partly slowed down by a
revised presidential decree issued in 2003 stipulating that government procurement
should follow a tender process, which is very time-consuming.
Source: Antara 9/8
VP: House can decide on 20 percent educational budget
Vice President M Yusuf Kalla said at present the House of Representatives has the
authority to make a decision on a 20 percent educational budget as mandated in the
1945 Constitution.
"Actually, the House is able to decide on it. Please keep in mind that the government
can come up with or forward a proposal, while the House has the power to decide,"
the vice president said in a speech in a national coordinating meeting on education at
his office on Aug. 8.
However, the vice president reminded that if a 20 percent educational budget is to be
set which cannot be bargained, it means that the budgets for other posts should also
be reduced.
In fact, such other posts liable to a reduction only cover the projects relating to road
improvement, infrastructure, bridges, educational and social facilities.
"Regarding salaries, there is no way to reduce them. What can be reduced is only
anything relating to infrastructure, bridges, and health," he said.
According to him, in the future only subsidy and debts could be reduced which have
so far absorbed 30 percent of the national state budget.
"If the implementation of all plans run smoothly and unhampered, in 2009 our subsidy
will decline to Rp70 trillion. Should it turn out to be a reality, we will be able to
increase the budget for education," Kalla said.
It is for that reason, he added, the government could not meet a requested 20 percent
rise for the budget of education as already mandated in the 1945 constitution.
Source: Antara 9/8
General News
Execution date set for Poso convicts
Three Christian men found guilty of inciting a bloody outbreak of fighting with Muslims
in eastern Indonesia in 2000 are to be executed on Aug. 12, prosecutors have told the
men's family. Fabianus Tibo, Dominggus da Silva and Marinus Riwu were found guilty
in 2001 in months of violence on Sulawesi island between Muslim and Christian gangs
that left killed around 1,000 people. Tibo's son, Robertus, said prosecutors informed
him by letter on Aug. 8 that his father and the two other men would be killed in the
early hours of Saturday morning by firing squad.
A group of Indonesian NGOs have issued statements rejecting the execution. They
said death penalty" is against human conscience and the 1945 Constitution that
clearly stated the right to life".
Related article:
Execution date set for Poso convicts: http://www.infid.be/poso_execution.htm.
URGENT APPEAL: http://www.ahrchk.net/ua/mainfile.php/2006/1901/.
Source: AP 9/8
Two killed as Indonesian troops, police clash
An Indonesian soldier and a policeman were killed on Tuesday in pre-dawn clashes
involving the two forces on Sumatra island, a police spokesman said.
A policeman shot dead a soldier in a dispute after police pulled over a truck carrying
palm oil fruit guarded by the soldier in Musi Rawas region in South Sumatra province,
said national police spokesman Antono Bachrul Alam.
Angered by the incident, soldiers later attacked the local police headquarters, killing
an officer, he said. A soldier and a policeman were also wounded.
A joint military-police team is investigating the incident, Alam said, adding the
perpetrators would be punished.
Relations between the military and the police have been tense in some parts of
Indonesia since the police, who were under the military's command until 1999, were
given new powers. Police and soldiers have been involved in a number of deadly
clashes in the past. Disputes are often triggered by attempts to win control over
protection rackets. Analysts say both forces are notoriously ill-disciplined and often
engage in illegal activities.
Source: Reuters 8/8, AP 8/8
NGOs: Java mining licenses need review
The government should halt all resource exploration on the densely-populated island
of Java, since it does not have adequate safety measures to mitigate mining-related
accidents, environmental groups say.
The Network for Mining Advocacy (Jatam) and the Indonesian Forum for Environment
(Walhi) demanded that the government immediately review the licenses of all oil and
gas explorations and operations on Java to anticipate accidents that could endanger
lives.
During the review period, they added, all mining operations should be suspended until
the government established procedures to mitigate the impacts of mining accidents.
"The people's protection and safety must be a priority in granting oil and gas mining
permits," said the groups in a joint press statement.
Jatam and Walhi accused the government of dealing poorly with mining accidents, as
reflected in its management of the recent explosion at PetroChina's exploratory site in
Bojonegoro regency, East Java. Authorities have also failed to stop the flow of hot
toxic mud from the PT Lapindo Brantas gas well in Sidoarjo, East Java.
Read more: http://www.infid.be/mining_java.htm.
Related article:
House Speaker Agung urges immediate review of mining contracts:
http://www.infid.be/mining_contract.htm.
Murky Waters in Newmont Trial: http://www.infid.be/newmont_trial_murky.htm.
Source: JP 8/8
President admits indigenous people mistreated
President Susilo Bambang Yudhoyono paid homage to Indonesia's indigenous people
on Aug 9 and said he would propose a law to provide them special protection.
In an event to mark the International Day of the World's Indigenous People in Jakarta,
the President said indigenous people "have shown their wisdom in the use and
preservation of natural resources".
Yudhoyono admitted that the rights of original inhabitants have often been sacrificed
for the sake of development, as powerful business interests seek to exploit natural
resources.
"I am calling on all government officials at the central and local administrations to take
into account the interests of these people in designing and executing development
programs," he said.
Yudhoyono said the government should learn from indigenous people who have
devised ways to use natural resources without causing environmental destruction.
"And that is unlike what we see now. We must ensure that land use and
environmental arrangements are carried out according to traditional values, to prevent
excessive exploitation," he said.
The President said one reason the rights of original inhabitants were often overlooked
was the absence of a law specifically addressing the issue. He said he would propose
a bill to detail the rights and roles of indigenous people, and to require local
administrations to take them into account in carrying out development.
Projects like the Freeport gold and copper mine in Papua province have long been a
target of critics, who say there has been little effort to preserve the environment or
improve the lives of indigenous people there. Similar cases have taken place
throughout the country. Indigenous people have lost their traditional land and
livelihoods to business interests backed by government forces.
Indonesia has yet to ratify the International Labor Organization (ILO) Convention 169
Concerning Indigenous and Tribal Peoples in Independent Countries.
Related article:
The Right to Possess Land: http://www.infid.be/right_to_land.htm.
Freeport suspects reject indictment: http://www.infid.be/freeport_suspects.htm.
Source: JP 10/8
Rights groups seek reopening of Soeharto case
Human rights and legal aid groups have said they will seek the reopening of the
Soeharto corruption case after the Jakarta High Court reaffirmed that the case was
closed.
The Jakarta High Court in early August overturned a June 12 decision by the South
Jakarta District Court ordering prosecutors to reopen the Soeharto case.
"Within one or two days, we will submit an appeal (to the Supreme Court) or a case
review," the chairman of the Indonesian Human Rights and Legal Aid Association
(APHI), Hotma Timbul Hutapea, said on Aug 10.
The other organizations seeking Soeharto's prosecution are the Anonymous
Committee (KTN), the People Movement for Soeharto's Prosecution (Gemas) and the
Indonesian Legal Aid and Human RightsAssociation (PBHI).
According to Hotma, Soeharto was a symbol of corruption, therefore he should face
prosecution if the government was serious in fighting corruption. "Prosecuting
Soeharto is a symbolof upholding the law and fighting against corruption."
Source: Antara 10/8
Thousands rally against Israeli attacks
Leaders of major religions came together Aug 6 in a united stance against Israeli
attacks on Lebanon, with thousands bringing traffic to a standstill on main
thoroughfares in Jakarta.
The rally and most of the ones held concurrently in Yogyakarta, Surabaya, Makassar
and Medan were organized by the Muslim-based Prosperous Justice Party (PKS).
In Jakarta, an estimated tens of thousands of protesters -- much smaller than the
"One Million Followers" theme of organizers -- marched from Hotel Indonesia traffic
circle to the U.S. Embassy. They also stopped in front of the UN representative office
on Jl. Thamrin, where protest leaders led shouts of criticism at the international body
for failing to bring an end to the Israeli bombardment.
People's Consultative Assembly Speaker and PKS leader Hidayat Nur Wahid told the
crowd in front of the UN building that Israel must halt its aggression. He also
demanded that leaders of the Jewish station should be tried for war crimes in the
International Court of Justice.
Hidayat, along with Indonesian Ulema Council (MUI) chief Din Syamsuddin and
popular cleric Abdullah Gymnastiar, signed a petition demanding Washington stop its
support for Israel and practicing a double standard in the Middle East conflict.
MUI deputy chairman Amidhan also said the world must make Israel take
responsibility for its actions against civilians in Lebanon and Palestine.
"Israel should be taken before the International Court of Justice because it has killed
many children and women," he said.
Related articles:
RI should think twice about peacekeeping in Lebanon:
http://www.infid.be/ri_think_twice.htm.
Indonesian Muslims protest Israel offensive, Bashir seeks "jihad" force:
http://www.infid.be/protest_israel.htm.
Source: JP 7/8
Indonesia projects first nuclear power plant operational by 2011
Indonesia's first 1,200-megawatt nuclear power plant is projected to be in operation by
2011, a senior government official said in a report published on Aug. 6.
Indonesia has intensified its plans for the construction of nuclear power plants in an
attempt to alleviate dependency on oil-and-gas to accommodate the growing demand
for electricity, said Eko Hatmo, a senior official at the state-run national Atomic
Energy Agency [Batan].
"For the preliminary step, a nuclear power plant unit will be built in the area of Mount
Muria, central Java," said Hatmo.
Government officials said recently that they have planned to let contracts next year to
build four plants with total capacity of 4,000 megawatts, expected to be fully
operational by 2025.
However, Indonesian environmentalist groups have warned against the potential
dangers of such a facility, saying there are cheaper, safer ways to generate power
since the country has abundant geothermal, coal and natural gas resources.
Activists argued that building a nuclear plant on crowded Java would risk catastrophe
because of the frequent volcanic eruptions and earthquakes on the island. But officials
said construction of the nuclear power plant was aimed to overcome electricity
shortages, in particular the Java-Bali grid. They also insisted that Mount Muria was
chosen because feasibility studies showed it was the safest area in terms of volcanic
and tectonic activities and tsunami threats.
Mount Muria, located on the northern part of Central Java, has been dormant for more
than 3,000 years, officials said.
Source: DPA 6/8
Indonesian general who stored scores of weapons wanted to start museum:
probe
A recently deceased general who was keeping scores of weapons in his home was
hoping to start an arms museum and was not involved in illegal weapon sales, an
army investigator said.
Officers found 145 automatic rifles, 42 handguns, nine grenades, 28 binoculars and
28,000 rounds of ammunition at the home of Brig. Gen. Koesmayadi, formerly the
army's deputy logistic chief, after his death in June.
Military police chief Maj. Gen. Hendardji said Koesmayadi was storing the weapons
"because he had an obsession to establish an arms museum."
Hendardji said nine other men suspected of supplying the weapons to Koesmayadi,
who died at age 55 of natural causes, were still being investigated.There had been
speculation that Koesmayadi was involved in the arms trade.
The military is one of Indonesia's most corrupt institutions and its weapons and
equipment procurement division is seen as its most graft-ridden. Soldiers have been
accused of supplying weapons to criminals, separatist rebels in outlying regions, and
to Christian and Islamic militia in the Maluku islands, which was wracked by religious
violence in 2000.
Related articles:
General's stash only a hobby, TNI claims: http://www.infid.be/stash_hobby.htm.
Tripped at 'Satan's Warehouse': http://www.infid.be/satan_warehouse.htm.
Source: AP 10/8
NU Chairman Hasyim Muzadi: The Country Could Disintegrate
The Nahdlatul Ulama (NU) has become, once again, the subject of hot debate. This
time, it was because they declared their loyalty to the 1945 Constitution and
Pancasila, a result of the Ulama (religious leaders) national convention and the NU
Conference in Surabaya last July. More recently, NU Chairman KH Achmad Hasyim
Muzadi, 62, came out with a strong statement against the barrage of bylaws
containing elements of Syariah. "Islamic Syariah should exist in the context of civil
society, not nation-state," said the patron and founder of the Al-Hikam Pondok
Pesantren (Islamic boarding school), in Malang, East Java. He is worried that the
formalization of Islamic Syariah through the bylaws will trigger a breakup of the nation.
Read more: http://www.infid.be/hasyim_muzadi.htm.
Related article:
Why a Caning in Indonesia Is Now Everyone’s Business:
http://www.infid.be/everyone_business.htm.
Source: TM 8/8
Aceh
Govt to mark Aceh accord
The government is to commemorate the anniversary of the Aug. 15, 2005 truce in
Aceh with a series of events next week, including a conference to build long-lasting
peace. The agreement ended three decades of separatist fighting in the province.
Presidential spokesman Dino Pati Djalal said on Aug. 9 the conference will take place
in Jakarta on Aug. 14 and will be opened by President Susilo Bambang Yudhoyono.
Vice President Jusuf Kalla is slated to close it.
The forum will feature Justice and Human Rights Minister Hamid Awaluddin, legislator
Theo Sambuaga, Free Aceh Movement (GAM) leader Malik Mahmoud and Aceh
Monitoring Mission (AMM) chief Pieter Feith as speakers.
The participants are scheduled to fly to Aceh on Aug. 15 to tour the province, which
was devastated by the Dec. 2004 tsunami, and attend ceremonial events. The
government also plans to play short films about Aceh and videos containing
congratulatory messages from world leaders.
Meanwhile a senior former rebel in Aceh warned that violence could again break out
within a decade if a dispute over the implementation of a historic peace deal last year
is not resolved. Djuli said on Aug 10 that many Achenese felt a strong sense of
injustice over the wording in a recent law passed by lawmakers in the capital.
Related articles:
Peace In Indonesia's Aceh Spurs Illegal Logging Boom:
http://www.infid.be/aceh_peace_logging.htm.
Peace Under Pressure in Aceh: http://www.infid.be/aceh_peace_under.htm.
Sources: JP 10/8, AP 10/8
Papua
'Time for govt to change approach to Papua'
President Susilo Bambang Yudhoyono's recent visit to Papua marked the
government's renewed commitment to addressing the multitude of problems facing the
local people. Papua University scholar Agus Sumule, who helped draft the law on
special autonomy for Papua, shared with The Jakarta Post's Dwi Atmanta his views
on the implementation of the law.
Read more: http://www.infid.be/papua_change_approach.htm.
Source: JP 9/8
Abbreviations
AFP Agence France-Presse
AP Associated Press
DPA Deutsche Presse-Agentur
JP The Jakarta Post
TM Tempo Magazine
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