INFID, October 14, 2004
INFID's Short News Overview No. V/28: October 8-14, 2004
Happy Ramadhan to all our Muslim brothers and sisters!
Election News
SBY Delivers Victory Speech
President-elect Susilo Bambang Yudhoyono finally delivered his long-awaited victory
speech on Oct. 9, five days after he was declared winner of the country's first direct
presidential vote.
The former general vowed to work hard to resolve the vast Asian country's myriad
problems and to wage a serious fight against the chronic graft that has riddled the
nation for decades.
"Jusuf Kalla and I are grateful to have earned the people's trust to lead the great nation
from 2004 to 2009," said Susilo.
"I promise you, our struggle will elevate our nation to a better place. We also thank
President Megawati ... for your role and support in ensuring the success of this year's
election," said Susilo at his house in Cikeas, Bogor just south of Jakarta.
Megawati herself has not explicitly acknowledged defeat in the historic Sept. 20 vote,
nor has she congratulated Susilo, her former chief security minister.
Susilo spelled out an immediate need for his administration to revise the 2005 state
budget during his first months in office.
Experts agree on the plan by Susilo to revise the 2005 state budget, citing the
urgency to revise the crucial oil price assumption to better reflect current
developments in global oil prices.
Adjustments to the oil price are needed for the next government to ensure a more
accurate benchmark to set other key assumptions in the state budget; chief among
these is the fuel subsidy, as well as revenue from oil and gas and revenue-sharing
between central and local governments.
"The current economic situation has changed quite fast, so the revision (of 2005 state
budget) is needed.
"I think the most important assumption to be immediately revised is the price of oil,"
Minister of Finance Boediono said on Oct. 10 commenting on Susilo's victory speech.
Boediono said that the 2005 state budget was not made to commit the new
government to it, but was more as a legal backup to ensure the availability and
sustainability of the state's finances during governmental transition. In the first 2005
state budget draft, the oil price was set at an annual average of US$24 per barrel.
Based on that, revenue from oil and gas would be fixed at Rp 47.1 trillion ($5.23
billion) and revenue sharing for regional governments at Rp 31.2 trillion.
The oil price assumption is especially crucial in the calculation of the oil subsidy for
next year, which is earmarked at Rp 19 trillion.
Voter View On The First 100 Days Of The SBY-Kalla Government: Analysis of LSI
Survey Findings October 2004: http://www.infid.be/voter-view.doc.
Indonesia's New President Must Not Slip On Oil: http://www.infid.be/election_oil.htm.
Sources: Reuters 9/10, JP 11/10
General News
CGI Meets SBY
Representatives of the Consultative Group on Indonesia (CGI) met with president-elect
Susilo Bambang Yudhoyono on Oct. 13 in an apparent show of support for the
incoming government.
Susilo's spokesman, Dino Pati Djalal, said the closed-door talks centered on, among
other things, programs to boost foreign investment in the country.
Representing the country's main foreign donor institution were U.S. Ambassador
Ralph L. Boyce, Japanese Ambassador Yutaka Iimura and World Bank Country
Director for Indonesia Andrew Steer.
"We all believe that the programs will eventually help the country deal with increasing
unemployment," Dino told a media conference attended also by the CGI figures.
Dino, who is also the Ministry of Foreign Affairs' director for North and Central
America, refused to go into detail about the programs, saying further talks would be
held after Susilo officially took office on Oct. 20.
Susilo will have to tackle open unemployment that has surpassed more than nine
million people, partly because of a lack of foreign investment.
However, foreign direct investment approvals rose by 22 percent in the
January-September period to US$7.9 billion from a year earlier.
The World Bank has said that investment in Indonesia accounts for only 20 percent of
its Gross Domestic Product, which is 10 percent lower than expected.
Security problems, a lack of legal certainty and a corrupt bureaucracy have been
billed as the major obstacles to attracting foreign investment to Indonesia.
The CGI is Indonesia's main donor. Last year, it disbursed about US$3 billion to the
country.
Executive Secretary of INFID Binny Buchori said the visit was not common and
unusual. CGI is a forum of creditor countries and multilateral institutions, she said.
"The visit is unusual because a CGI meeting must be attended by all of its members.
Therefore if the World Bank wanted to meet SBY, it had to get a mandate from the
rest of the members," Binny said on Oct. 14.
According to Binny, the leading CGI members visited SBY to make sure that the next
government would continue to implement the economic program of the current
government, especially the fiscal sustainability and consolidation program. "So do not
think that they would offer debt reductions or debt rescheduling facilities," Binny said.
She also said the visit was to put pressure on the new government to keep
implementing the white paper. Pressures from creditor countries are not new,
especially after IMF announced that Indonesia's debt was sustainable. "But what
happening is that a large chunk of development budget was sacrificed for servicing
debt," Binny explained.
Source: JP 14/10, BI 14/10
Military Chief Resigns
Indonesia's military chief has resigned and President Megawati Sukarnoputri has
replaced him with a hardline general known for his xenophobic remarks and criticism
of rights activists, officials said on Oct. 9.
Critics questioned the motive and timing of the moves, since they came little more
than a week before Megawati was scheduled to hand power to president-elect Susilo
Bambang Yudhoyono on Oct. 20.
Gen. Endriantono Sutarto, who has headed the military since 2002, submitted his
resignation letter Sept. 24. Megawati formally notified parliament of his resignation
and replacement on Oct. 8.
Parliament speaker Agung Laksono said on Oct. 9 there was nothing unusual about
the moves because Endriantono had long talked of retiring and Gen. Ryamizard
Ryacudu was one of the candidates in line to replace him. Agung said that
Endriartono technically was still the TNI chief until the House made its decision.
Endriantono hasn't commented on his resignation. But sources close to the general
said he opposed Megawati's recent decision to promote interim Security Minister Hari
Sabarno and Intelligence Chief A.M. Hendropriyono to four-star generals.
Ryacudu is a staunch nationalist who has earned a reputation over the years for
making controversial remarks. He hailed soldiers who killed a peace-advocating
separatist leader as "heroes," called two Germans shot by troops "stupid" for
vacationing in a dangerous part of the country, and said human rights workers should
have their "heads knocked off." He also is fond of saying that Indonesia is overrun with
spies from Australia, the U.S., U.K. and Israel.
TNI spokesman Maj. Gen. Sjafrie Sjamsoeddin said on Oct. 11 that his office had
sent out telegrams declaring that Endriartono was still the TNI chief. "As long as the
discussion in the House is still in the process, the chain of command of TNI remains
in the control of Endriartono until the appointment of the new TNI chief," he said. The
House will convene a plenary session on Oct. 15 to discuss the matter.
The resignation has polarized the Nationhood Coalition and the People's Coalition in
the House of Representatives in another debate.
The Golkar faction, the largest with 127 seats, said on Oct. 13 that the House needed
to discuss and approve Endriartono's resignation and Ryamizard's appointment as his
replacement immediately. Golkar has the support of the Indonesian Democratic Party
of Struggle (PDI-P), the Prosperous Peace Party (PDS) and the Reform Star Party
(PBR). The factions are grouped under the Nationhood Coalition, which has a
combined strength of 264 seats.
The rival camp, consisting of the United Development Party (PPP), the Democratic
Party, the National Mandate Party (PAN), the National Awakening Party (PKB), the
Prosperous Justice Party (PKS) and the Democratic Pioneer Star (BPD) factions,
said discussions should be delayed until the inauguration of the new president on
Oct. 20. The People's Coalition controls 286 seats, meaning it will win on paper if the
House calls for a vote to settle the dispute.
A Four-Star Fiasco: http://www.infid.be/military_fiasco.htm.
Sources: AP 9/10, JP 9/10 12/10 14/10
Boediono Defends Debt Discount Policy
Minister of Finance Boediono said on Oct. 11 there was no "political motive" behind
the government's latest policy to offer huge discounts to companies with debts to the
state. Boediono said that the policy was merely aimed at easing the burden of the
indebted small- and medium-sized enterprises (SMEs) in a bid to accelerate the debt
repayment process.
He explained that the settlement of the debts would not only allow the government to
recover the state funds, but should also make the SMEs more bankable, which in turn
would help accelerate economic growth.
Boediono was commenting on the government policy announced over the weekend
that it would provide a discount of between 25 percent and 50 percent for debt
principal and the writing off of interest rate arrears and penalties. The facility was
being offered to debtors who less than Rp 10 billion (about US$1 million) in debt,
which have challenged an earlier debt settlement mechanism imposed by the now
defunct Indonesian Bank Restructuring Agency (IBRA) in the courts.
The debtors initially borrowed the money from local banks. But in the wake of the late
1990s financial crisis, the government, via IBRA, took over the troubled banks and
their debt. IBRA, which had the task of collecting the money owed by the debtors,
was officially closed down in February 2004, but the government set up a team to deal
with the unsettled debts.
Boediono said that the new policy was launched at a time when the current
government was ending its mandate because the team was given a deadline until
January 2005 to complete IBRA's unfinished debt restructuring work.
He also said they wanted to prevent abuse of the debt discount policy, so the
government planned an audit mechanism by an independent auditor.
Source: JP 12/10
Bomb Blast at Indonesian Embassy in Paris
A small package bomb exploded outside the Indonesian embassy in Paris on Oct. 8,
slightly injuring 10 people and shattering nearby windows. The bomb caused only
minor damage to the embassy when it went off shortly after 5 a.m. Nine of the 10
injured, some of them embassy staff, were taken to hospital, most with slight cuts
from flying glass.
The blast was "obviously an act with criminal intent," French Interior Minister
Dominique de Villepin said, while visiting the scene along with the head of Paris
police.
Foreign ministry spokesman Yuri Thamrin said it was not yet sure if the attack
targeted the Indonesian embassy.
Sources: Reuters 8/10, AP 8/10, AFP 8/10
Antigraft Activist's Home Bombed Again
A small bomb exploded outside the house of an anti-corruption activist in Sulawesi
early Oct. 12, breaking windows but causing no injuries, police said. The bomb - the
second attack on the home of activist Hidayatullah in the past year - exploded at 3:30
a.m. (1930 GMT) in the town of Kendari, about 1,740 kilometers (1,080 miles)
northeast of the capital Jakarta.
"The explosion came from a rudimentary low explosive device, and we are
investigating the motive," said local police spokesman Capt. Juhartono.
No one has been arrested but some police officials believe the attack was in response
to Hidayatullah's campaign against corruption in the local parliament. His group, the
People's Mandate Assembly (MARA), have repeatedly held protests against
authorities' failure to detain corrupt legislators.
Hidayatullah has spearheaded many campaigns against corruption involving officials in
Southeast Sulawesi.
On Oct. 11, he led a demonstration to the province's legislative council to put
pressure on local authorities to prosecute Muna Regent Ridwan Bae in a graft scandal
over the auction of smuggled teakwood. Hidayatullah has also persistently pressed
ahead with calls for an investigation into alleged money politics during the election of
Southeast Sulawesi Governor Ali Mazi by the previous legislature.
Sources: AP 11/10, JP 13/10
Regional News
Aceh
An Islamic judicial system has been introduced in Indonesia's restive province of Aceh
as part of increased autonomy granted to the staunchly Muslim province by Jakarta, a
judge said on Oct. 12.
"The head of the Supreme Court is currently in Aceh to inaugurate the operation of the
Sharia Court there," said Andi Syamsu Alam, deputy chairman of the Supreme Court
for religious court affairs. Alam said Supreme Court chairman Bagir Manan
inaugurated the system in the provincial capital Banda Aceh on Oct. 11.
Under the new system, 19 district/municipal religious courts and one appeal court
based in the Acehnese capital will hear cases in addition to the existing network of
secular courts.
"Cases involving non-Muslims are still handled by the (secular) judicial court," Alam
said.
The Sharia Court, he said, would not use the penal and civil code but will be based on
qanuns, decrees governing formal and material laws on particular issues that are
formulated by local government. Alam said that the Supreme Court remained the
highest court of appeal in the Sharia court system.
Meanwhile, a military helicopter crashed on Oct. 12 in Aceh, killing all eight soldiers
on board. The Bell-2005 helicopter crashed in Blang Rekar, a mountainous subdistrict
in Central Aceh, as it was flying back to the North Aceh capital of Lhokseumawe. The
military has blamed bad weather in Aceh for causing the helicopter crash.
Army chief Gen. Ryamizard Ryacudu said on Oct. 13 the ill-fated chopper was among
the TNI's aging aircraft, but it was fit to fly. "The helicopter was checked before the
flight. It was poor weather that caused the accident," Ryamizard said.
The Free Aceh Movement (GAM) had previously claimed to shoot down the United
States-made aircraft, which was purchased by the Army in 1974.
Bireuen, where the chopper crashed, is among those regencies that have seen heavy
and frequent gunfights between the TNI and GAM since last May, when the state of
civil emergency was imposed.
Source: AFP 12/10, AP 12/10, JP 14/10
Ambon
Two homemade bombs exploded in the eastern city of Ambon on Oct. 7. No one was
hurt in the blast and no damage was reported.
The two blasts were heard at about 11:30 a.m. some 25 meters behind the Silo
church in Sirimau district, Ambon. The church is being renovated after having been set
ablaze during the 1999-2002 riots.
The explosions caused panic among local residents and at the nearby Pattimura
University.
"The exploded bombs were low-power explosives," Maluku Police spokesman Sr.
Comr. Endro Prasetyo said.
Some 30 minutes prior to the incident, local police had arrested a suspected drug
dealer who had long been included on their list of wanted people in Maluku, along with
a quantity of crystal amphetamine (shabu-shabu). The arrest of the suspect, identified
only as Jamal, was made in the area of Jl. Baru adjacent to the bomb site. Ambon
Police chief Adj. Sr. Comr. Leonidas Braksan said his office was investigating whether
the blasts were connected with the arrest of Jamal.
The bomb site is an area bordering two communities of Muslims and Christians,
which clashed for three years until they signed a peace pact in February 2002.
Thousands of people were killed in the riots.
Source: JP 8/10
Upcoming Event
TAPOL, the Human Rights Campaign and Down To Earth, International Campaign For
Ecological Justice in Indonesia organised a seminar on Oct. 16, 2004: "Ladia
Galaska: Eco-destruction and Indonesian Military in Aceh: What Role for the
UK/EU?". For more information visit: http://tapol.gn.apc.org and or
http://dte.gn.apc.org and or email plovers@gn.apc.org.
Abbreviations
AFP Agence France-Presse
AP Associated Press
BI Bisnis Indonesia
JP The Jakarta Post
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