INFID, June 23, 2006
INFID's Short News Overview No. VII/11: June 16-23, 2006
Debt & Poverty
Indonesia to repay $3.7b of IMF loan
The government will repay about US$3.7 billion, or half of the country's debt to the
International Monetary Fund ahead of schedule, the multilateral lender said in a
statement on June 22.
The partial repayment "ahead of schedule reflects Indonesia's strengthening
macro-economic fundamentals and improved balance of payments position", Rodrigo
de Rato, the fund's managing director, said in the same statement. The statement did
not specify when the government would make the payment.
The country owes around US$7.8 billion to the IMF, which Indonesia received in the
form of standby loans as part of a multibillion dollar bailout program after the regional
financial crisis of late 1990s. The original schedule called for repayment of the total
debt by December 2010.
In recent months, Bank Indonesia and Finance Ministry officials have indicated the
government's intention to accelerate the debt repayment given the country's rising
foreign exchange reserves, now at more than $44 billion. The move will ease the
interest rate burden on the loans. Bank Indonesia Governor Burhanuddin Abdullah has
recently said that the first payment would be made this month, with the second
payment to be made later this year.
Central bank officials have also said that the advance repayment would not hurt the
rupiah and should be received as a positive development from an international
perspective. Reserves have surged on higher revenue from oil and gas exports amid
rising crude-oil prices, as well as estimated monthly inflows of around $1 billion since
January from stock market investors bullish about Indonesia's economic outlook. The
government has forecast economic growth of 5.9 percent this year, compared to last
year's 5.6 percent.
Some, however, have criticized the advance repayment of the IMF loan because of
concerns over the sustainability of the country's foreign reserves. Those worries were
heightened by the recent fall in the value of the rupiah against the U.S. dollar as
foreign investors fled emerging markets on interest rate jitters.
Related articles:
IMF Press Release: Indonesia to Make Early Repayment of Half of its Outstanding
Obligations to the IMF: http://www.imf.org/external/np/sec/pr/2006/pr06139.htm
Govt may use idle funds at BI to plug budget deficit:
http://www.infid.be/idle_funds.htm.
Source: JP 23/06
Civilian Supremacy
Indonesia: Military Business Threatens Human Rights
The Indonesian government's plans to reform military-owned businesses do not
sufficiently address the human rights problems fueled by the current system, Human
Rights Watch said in a new report released today. The Indonesian military's
independent financing undermines civilian control, contributing to abuses of power by
the armed forces and impeding reform.
"The military's money-making creates an obvious conflict of interest with its proper
role," said Lisa Misol, researcher with the and Human Rights Program of Human
Rights Watch and author of the report. "Instead of protecting Indonesians, troops are
using violence and intimidation to further their business interests. And because the
government doesn't control the purse-strings, it can't really control them."
The 136-page report, Too High a Price: The Human Rights Cost of the Indonesian
Military's Economic Activities," is the most comprehensive account to date of the
harmful effect on civilians of the armed forces' involvement in business. Human Rights
Watch called on the Indonesian government to ban all military businesses, reform the
budget process and hold military personnel accountable for crimes.
The Indonesian military raises money outside the government budget through a
sprawling network of legal and illegal businesses, by providing paid services, and
through acts of corruption such as mark-ups in military purchases. Many of these
businesses are not controlled by the military's central command, but they have been
allowed to spread as a flawed response to budget constraints.
Read more: http://hrw.org/english/docs/2006/06/21/indone13587.htm.
Related article:
'Law enforcement not yet a priority in Indonesia'
:http://www.infid.be/law_not_priority.htm.
Source: HRW 21/06
General News
RI supports global review of rights conditions
As a member of the newly-established United Nations Human Rights Council,
Indonesia will support a periodic human rights review of every UN member nation,
Foreign Minister Hassan Wirayuda said June 14.
The council met for the first time in Geneva on June 19. Hassan said the review was
not aimed at accusing certain countries of human rights violations but at helping them
solve problems and implement human rights.
"The review should be carried out based on universality, fairness, objectivity. It should
not select only certain topics or be aimed at certain countries. With these points, we
can avoid politicizing efforts to implement human rights principles," he told a seminar
on Indonesia's role in the Human Rights Council on June 14.
Hassan said by focusing on fixing human rights conditions rather than intending to
punish countries with poor records, the council could improve international human
rights and avoid being labeled a divisive force.
The United Nations Summit in September 2005 decided by consensus to establish
the Human Rights Council to replace the 60-year old Commission for Human Rights.
The Human Rights Council was established by the General Assembly in its March 15
resolution this year, a legal basis binding all member states of the UN.
Read more: http://www.infid.be/hr_ri_supports.htm.
Statement Governement of Indonesia at the High Level Segment of the First Session
of Human Rights Council:
http://www.ohchr.org/english/bodies/hrcouncil/docs/statements/indonesia.pdf.
Source: JP 15/06
Lack of Reform Degrades Indonesian Summit
Business groups said on June 16 they were disappointed that the Indonesian
government's long-awaited infrastructure summit had been downgraded in size.
Vice-President Jusuf Kalla confirmed during the week the oft-postponed summit, now
scheduled for November, would be only a series of sectoral seminars. Mr Kalla said
the government still needed to put in place regulations before major projects could be
offered to investors.
"It's better for us to complete the [regulatory] procedures first," Mr Kalla said. "There's
no need for a big meeting, it's better to have smaller, more focused meetings."
The summit was supposed to attract investors to large-scale projects such as toll
roads, power stations and ports. It was supposed to be a follow-up to a summit held
in January last year that was widely judged a failure.
The chairman of the International Business Chamber, Peter Fanning, said it was
embarrassing how slowly Indonesia was moving to attract foreign investors for
projects.
"A summit was always going to be an embarrassment, so this comes as no
surprise," Mr Fanning said. "A lot of promises were made quite stupidly that there
would be a significant amount of regulation - and a large number of projects - open for
tender immediately after the first summit, and none of that happened.
"It was just an embarrassment and that's why it's never been held again. Realistically,
nothing has changed."
Mr Fanning said there was strong interest from foreign investors in Indonesia but the
government had yet to introduce the necessary regulations to remove legal
uncertainty.
"They should just ditch [the summit]," he said. "They just can't get their act together
in terms of making wholesale changes to contract conditions and the legal framework
of infrastructure development."
Last year's summit offered domestic and foreign investors 91 projects worth
$US22.5billion but only a handful have since reached the tendering process. These
projects were designed as an initial tranche of a five-year, $US150billion infrastructure
investment program.
The November follow-up has already been delayed three times. Chris Kanter, deputy
chairman of the Indonesian Chamber of Commerce, which is organising the
conference, denied it had been downgraded.
"It goes ahead as scheduled," Mr Kanter said. "As organiser of the event, we have
never decided to downgrade it."
However, the head of the government's infrastructure development committee,
Bambang Susanto, said the change of format would benefit investors. "The investors
can directly make business deals," Mr Susanto said. "It will focus on transactions as
regulation reformation has been in progress."
Source: AFR 17/06
Muslim moderates told to stand up and be counted
Empowering moderates to speak up in the increasingly divided Islamic world is
essential to promote peace and cultivate interfaith harmony, the chairman of
Indonesia's largest Islamic organization Nahdlatul Ulama said on June 21.
Hasyim Muzadi, addressing the opening of the second International Conference of
Islam Scholars, said challenges in today's Islamic world required the strengthening of
the voice of moderates in the modernization of the religion.
Hasyim hoped the conference, organized by the NU and bringing together more than
300 scholars from 53 countries, would be able to serve such a need through "pooling
intellectual resources and integrate endeavors to promote solidarity".
He also said there should be concerted efforts to eliminate the use of symbols of
religion to justify acts of violence and terror.
In his remarks, President Susilo Bambang Yudhoyono warned about the rising global
prejudice against Islam, and urged Muslims to demonstrate the religion's teachings
were peaceful and encourage understanding of different faiths.
Read more: http://www.infid.be/muslim_urged_tackle.htm.
Related article:
Indonesia under threat from creeping Islamization:
http://www.infid.be/indonesia_under_threat.htm.
Source: JP 21/06
Aceh
Acehnese demand greater share of development fund
Aceh needs extra general funding from the central government to compensate the
people there for three decades of violent conflict and the province's now-depleted
natural resources, a group of Acehnese political activists says. Iskandar Ganie of
Syiah Kuala University said the Acehnese deserved more development funding than
the amount the government had allocated under special autonomy for Papua.
"Additional funds for the Acehnese should amount to at least 2 percent of the general
allocation fund (DAU) for a 25-year period -- the amount that was decided for the
Papuan people," Iskandar said.
Iskandar was speaking on behalf of the Aceh Network for Democracy.
The draft Aceh governance bill drawn up by Acehnese delegates requires central
government to pay the provincial administration at 5 percent of the DAU for economic
development, education and health services on top of the money the province receives
from revenue sharing schemes involving natural resource projects.
However, on June legislators in the House of Representatives working committee
drafting the Aceh governance bill set additional funding at only 1 percent of the DAU
for the first five years -- a total of Rp 8.25 trillion (US$870 million).
Read more: http://www.infid.be/aceh_demand_greater.htm.
Source: JP 15/06
Papua
Papuan refugees refuse to meet with RI's House members
A group of 42 refugees from Indonesia's restive Papua province have refused to meet
with members of the Indonesia's House of Representatives visiting Australia, a refugee
advocate said June 15.
Australia's decision to grant temporary asylum to the Papuans - who arrived on
Australia's northern coast in April claiming they were fleeing genocide - infuriated
Jakarta, which withdrew its ambassador in protest. Indonesia recently restored
Ambassador Hamzah Thayeb to his post in Canberra after Prime Minister John
Howard's conservative government moved to amend immigration laws so that all
asylum seekers arriving by boat are sent to island detention camps.
A legislative delegation traveling with Thayeb requested permission to meet with the
refugees this week, according to David Manne, a lawyer with the Refugee Immigration
Legal Center in the southern city of Melbourne. He said the refugees had refused the
offer.
The Papuans claimed Indonesian troops were committing genocide in their homeland
which became part of Indonesia in a now discredited U.N. ballot in 1963.
"They're shocked and scared by the suggestion of meeting with Indonesian officials,"
Manne said. "They've just been found recently by Australian immigration officials to
have a well-founded fear of being persecuted by Indonesian authorities."
He said the refugees wanted to be left alone "in safety and security without
approaches from the Indonesian officials."
Earlier, the leader of the delegation, Muhammad Hikam, told Australian Broadcasting
Corp. radio that the Papuan refugees were rejecting "a good friendship" by refusing to
meet with him and his fellow lawmakers.
Related article:
"First things first": Amnesty International Seeks Australia-Indonesia Declaration on
Respect for Human Rights: http://www.infid.be/papua_ai_statement.htm.
Papuans give legislation marching orders: http://www.infid.be/papua_marching.htm.
Is a presidential instruction on Papua really necessary?:
http://www.infid.be/papua_inpres.htm.
Source: AP 15/06
Abbreviations
AFP Agence France-Presse
AFR Australian Financial Review
AP Associated Press
JP The Jakarta Post
HRW Human Rights Watch
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