INFID, November 04, 2004
INFID's Short News Overview No. 31: Oct 29 – Nov 4, 2004
General News
Indonesia swaps debt for school with Germany
Indonesia has agreed to a 23 million euro (US$29 million) debt swap with Germany,
exchanging repayments for badly-needed education projects, a government official
said on Oct. 3. Jannes Hutagalung, an official at the ministry of national education,
said the deal to be finalized next Monday would see Jakarta channeling funds meant
for paying off its debt into establishing junior high schools in east Indonesia.
In August the U.S. government signed a $468 million development deal including
education programs. A large chunk of the cash was earmarked for Islamic religious
schools, some of which are accused of preaching radical ideology.
Germany's debt-swap deal will be its second with Indonesia, following a 25
million-euro swap for environmental projects, Hutagalung said, adding that more deals
were in the pipeline.
Source: JP 03/11
Debt for Nature Swap Questionable
The absence of clear-cut domestic regulations sanctioning the debt-for-nature-swap
(DNS) scheme has hampered the way for its full-fledged implementation, Kehati
biodiversity foundation said on Oct. 28. Kehati said that there were neither ministries
nor government agencies authorized to manage and hold responsibility for the
implementation of the swap scheme.
Agung Purnomo of Kehati said the absence of a single agency had resulted in
frustrating rivalries among government agencies in the dragging negotiation process
and became major constraint for the implementation of the DNS in the country.
Agung also said the absence of such a rigorous institution had deterred conservation
investors from joining the fray.
A DNS is the cancellation of debts, particularly foreign debts, in exchange for a
commitment to mobilize domestic financing for the conservation of natural resources
or the environment. Indonesia's external debts currently stand at US$73 billion.
Full text: http://www.infid.be/debt_questionable.htm
Source: JP 29/10
State Budget Deficit Totals US$2.6 Bln
A deficit of Rp25.6 trillion (US$2.8 billion) was recorded in the state budget for the first
nine months of this year, lower than the target figure of Rp26.27 trillion or 1.3 per cent
of the country's Gross Domestic Product (GDP), official data showed.
State revenues, including grants, totalled Rp236.1 trillion against a spending of
Rp261.7 trillion. State revenues included taxes totalling Rp184.1 trillion or 65 per cent
of the whole year's target of Rp279.2 trillion, and non tax revenues amounting to
Rp51.9 trillion or 42 per cent of 2004's target of Rp123.8 trillion. Spending by the
central government in the first nine months of this year totalled Rp171.6 trillion or 57
per cent of the whole year's target of Rp300 trillion. Regional administration spending
totalled Rp90 trillion or 69.3 per cent of the target for the whole year.
Analysts said the deficit might lead to more asset sales, bond issues or excise tax
hikes.
Indonesia 9-Month Deficit Near Full Year Target – Govt:
http://www.infid.be/economy_deficit.htm
Sources: AA 3/11, Reuters 2/11
Indonesia's Economic Agenda
While details remain sketchy, the newly unveiled 100-day national economic program
has apparently met the expectations many people have, by showing that the
government literally means business when it comes to improving the country's
investment climate and economy.
Economist Pande Radja Silalahi of the Centre for Strategic and International Studies
(CSIS) and Indonesian Employers Association (APINDO) chairman Sofyan Wanandi
expressed their optimism that the program provided a sound basis for developing
policies that could cure the country's economic ills.
"The direction is there, be it on tax reform, fiscal and macroeconomics consolidation,
and others. There's still a long way to go, but at least (the program) shows clear signs
as to where the new government and its policies are headed," Pande said on Oct. 31.
Pande said in principle, the measures in the program reflected the business
community's needs and requests, and thus indicated the government's commitment
to improving the business climate and so boosting economic activities.
APINDO chairman Sofyan, who also heads the powerful business lobby the National
Economic Recovery Committee (KPEN), also hailed the planned revocation of rulings
that discouraged business.
"Amending the decrees and bylaws alone would help solve 60 to 70 percent of the
problems faced by businesses here, and would eventually attract investment," Sofyan
said, adding that some parts of the economic program followed the recommendations
made in the trade and investment road map prepared by the Indonesian Chamber of
Commerce and Industry (Kadin) and the KPEN.
SBY's cabinet has set five economic priorities: improving the agriculture and forestry
sectors; formulating a better energy policy; developing strategic industries and
infrastructure to create jobs; strengthening the domestic economy; and providing
off-budget stimulus. In addition, the new government has promised not to rock the
macro- economic boat, which has been sailing smoothly and which has provided the
base for the country's current 4.5 per cent economic expansion.
SBY's 100-Day Program Gets Thumbs-up: http://www.infid.be/economy_agenda.htm.
Indonesia's Economic Agenda Still Unclear:
http://www.infid.be/economy_unclear.htm.
Sources: JP 01/11, BT 02/11
House Deadlocked
A month after being sworn in, Indonesian lawmakers have yet to begin work because
of a bitter dispute that could threaten efforts by President Susilo Bambang Yudhoyono
to improve security and cure the country's economic ills.
Legislators who supported Yudhoyono's election bid and those loyal to former
President Megawati Sukarnoputri are unable to agree over which lawmakers should
head parliament's nine commissions.
The two factions, which each control around 50 percent of the seats in the house, are
refusing to meet, and are planning to name their own commission heads
The Nationhood Coalition had insisted that the posts are put to a vote, while the
People's Coalition wants the posts to be proportionally distributed among factions.
The People's Coalition had boycotted plenary meetings in the House due to
disagreements over election mechanisms for leaders of 11 House commissions and
five auxiliary bodies.
Although the meetings were attended by more than 300 of the House's 547 members,
the sessions were attended by five factions only and thus legally invalid.
According to the House's standing orders, a meeting is valid only if it is attended by
more than half of the House members and more than half of the House factions.
The Nationhood Coalition and PKB, however, had agreed to change the House's rules
so that a meeting attended by more than half of the House members could be
declared valid.
The conflict between the two blocs has resulted in dualism in the House, with each
holding separate meetings.
House In War For Political Supremacy: http://www.infid.be/dpr_in_war.htm.
Sources: AP 02/11, JP 03/11 04/11
President, House Face Off on TNI Issue
A military source said Susilo would likely appoint Army chief Gen. Ryamizard
Ryacudu as the new TNI commander, replacing Army Gen. Endriartono Sutarto, 57,
who has passed the mandatory retirement age of 55 years old. The recommendation
was apparently aimed at putting an end to the standoff between the President and the
House of Representatives over the TNI leadership, which ensued when the House
ignored a letter Susilo sent on Oct. 25. The letter communicated Susilo's intention to
revoke former president Megawati Soekarnoputri's decision to accept the resignation
of Endriartono and to nominate Ryamizard as the new TNI chief.
The president apparently backed down on Oct. 29 after a meeting with House leaders
to discuss the succession issue.
House speaker Agung Laksono said that although Sutarto remains TNI commander
for the time being, parliament would continue to push for Ryacudu to replace him.
He said the president had acknowledged the House's authority to discuss the
succession issue and would probably accept Ryacudu's nomination.
The Indonesian Human Rights Watch (Imparsial) said that Susilo must replace all
chiefs of staff and select one as the new military commander, while Susilo needed to
confer the position of TNI chief to the Air Force chief in all fairness. Article 14 of the
recently endorsed Military Law stipulates that the position of TNI chief should be
appointed in rotation to the Army, Air Force and Navy. The president is authorized
constitutionally in their capacity as the TNI supreme commander to appoint a TNI
chief pending House approval.
TNI top job, a strategic post, sets politicians bickering:
http://www.infid.be/military_topjob.htm.
Senayan General, Palace General: http://www.infid.be/military_chief.htm.
Sources: LN 30/10, JP 30/10 01/11
Regional News
Aceh
October 28
The head of the European Union's Troika Delegation, Bernard Bot, said that they were
interested in visiting Aceh and West Papua. According to Bot, their planned visit is
intended to understand developments in the situation in these two provinces. "The
relationship which we and Indonesia wish to develop includes issues of political and
human rights", he said.
Two Acehnese non-government organisations, the Acehnese Popular Democratic
Resistance Front (Front Perlawanan Demokratik Rakyat Aceh, FPDRA) and the
Acehnese Democratic Women's Organisation (Organisasi Perempuan Aceh
Demokrati, ORPAD) demanded the fulfillment of President Bambang Susilo
Yudhoyono's promise during the election campaign that there would be changes in
Aceh. The NGOs called for a promise of amnesty for all prisoners of war as was taken
up during the campaign.
October 30
A military spokesman said nine suspected rebels were killed in separate gunbattles in
Aceh. Six rebels were shot to death on Oct. 29 in eastern and southern Aceh, while
three others were killed in the north, military spokesman Lt. Col. Edyana Sulistiadie
said in a statement.
October 31
The military said Indonesian troops killed seven men they claimed were separatist
rebels in Aceh. Soldiers gunned down four alleged Free Aceh Movement (GAM)
guerrillas near the provincial capital, Banda Aceh. Three others were killed in two
gunbattles in Aceh Besar and South Aceh, military spokesman Ari Mulya Asnawi
said.
November 1
Leading ulemas in Aceh suggested that the government revive a dialog with GAM
rebels to settle decades of conflict there. Chairman of the provincial ulemas council
Muslim Ibrahim told a high-powered government delegation that people of Aceh were
desperate for a normal life like their counterparts in the rest of the nation. Muslim said
the conflict in the province of 4.2 million people could not be solved through the use of
arms, but deliberation and consensus, involving all groups in society that wish to see
peace prevail in the territory. Those who were in Aceh for the meetings included
Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto,
Coordinating Minister for People's Welfare Alwi Shihab, Minister of Social Services
Bachtiar Chamsyah, Minister of Home Affairs M. Ma'aruf, Minister of Finance Yusuf
Anwar, Minister of Energy and Mineral Resources Purnomo Yusgiantoro, National
Police Chief Gen. Da'i Bachtiar and Attorney General Abdul Rahman !
Saleh. The Cabinet members visited Aceh to get input from local government officials
and community leaders about the implementation of the state of civil emergency,
which was imposed on May 19 to replace martial law.
November 2
A discussion held by non-governmental organizations under the Aceh Working Group
(AWG) concluded that dialog involving civilian Acehnese would stop years of violence
in the province. The government must abandon its security approach and open dialog
with civilian figures to settle the Aceh conflict once and for all, the discussion
concluded.
Aceh, a testing ground for Susilo's promises: http://www.infid.be/aceh_testcase.htm.
Sources: TI 28/10, Kompas 30/10, JP 02/11 03/11, AP 30/11 31/11
Abbreviations
AA Asia Pulse/Antara
AFP Agence France-Presse
AP Associated Press
BT Bussiness Time
JP The Jakarta Post
TI Tempo Interaktif
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