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INFID Related Issues IMF/Debt The International Monetary Fund
(IMF) completed on Aug. 10 reviewing Indonesia’s economic situation and the
implementation of economic reform measures in the country. "The main
message is that they have made progress but they should not relax their
efforts and there are certain areas where things have not gone as fast as
they should and I think it’s in their own interests to revitalise and
reinvigorate progress," IMF Senior Adviser Asia and Pacific Department
Daniel Citrin said. Citrin is the leader of around 15 Fund officials visiting
Jakarta. On the 2002 budget targets, he said annual inflation of nine percent
was possible; growth would likely reach 3.5 percent, below the four percent
target; and the budget deficit would likely come in at or below the target of
2.5 percent of gross domestic product (GDP). He also said wrapping up the
sale of Bank Niaga was very important or investor perception in the sale
process would be damaged. Citrin said lack of legal certainty and sometimes
confusing regulations issued by regional provinces were keeping investors
away from Indonesia. Meanwhile, State Minister and head
of the National Development Planning Board (Bappenas) Kwik Kian Gie said the
Indonesian Bank Restructuring Agency (IBRA) has hidden an official report
saying the government’s bond liabilities could swell to Rp14,000 trillion
(US$1.55 trillion), which will affect fiscal sustainability. "IBRA
issues reports about the best and worst scenario. The best scenario is that
the bond debt is at least Rp1.030 trillion and the worst scenario is the debt
will swell to Rp14,000 trillion," Kwik said after a meeting with Citrin
on Aug 7. He said he discussed with Citrin about the controversial issue of
bank divestment launched by the government. Kwik has been known to be against
extending co-operation with IMF that recommended divestment of government
shares in recapitalized banks. He recently advised a group of local lawyers
to go ahead and file a class action lawsuit against the IMF for its policies
in the country. Sources: JP 12/08, Reuters 08/08, AA
08/08, FT 09/08 Constitutional Reform The 10-day session of the People’s
Consultative Assembly (MPR), which scheduled to end on Aug. 10 but extended
to Aug. 11, took major steps towards giving voters a say in choosing the
president, and moved to end the presence of the military in the Parliament. In
total the Assembly passed 14 amendments to the constitution including the
direct election for president and the removal of military and police from
political life. It also rejected calls for inclusion of Islamic Sharia law in
the Constitution and squashed the move to insert the racially-charged term
‘pribumi’ –meaning indigenous or native- into an MPR decree on economic
recommendations to be made this year by the Assembly to the government. The
MPR, however, failed to incorporate the much-demanded constitutional
commission into the amended Constitution, but referred to it in an MPR
decree. Indonesians in general praise the
constitutional amendment. But Adi Abidin and Wand Nicodemus of Asia
Foundation noted that the proposed system for 2004 that allocates seats
according to population in per province would heighten the difference between
Java and the outer islands, particularly for eastern Indonesia. In the new
arrangement, they explained, the next DPR would have 550 elected seats
compared to the current 462 seats, but there would not be any automatic
allocation of one seat per regency or township as in 1999. This means the
heavily populated provinces in Java would gain the most DPR seats. Provinces
in the so-called Eastern Indonesia Area may likely have fewer seats, of which
Papua would experience the largest decline; it would have only five seats compared
to the current 13 seats. Read the complete article at: http://www.infid.be/whobenefits2004poll.htm. Sources: ST 11/08, 12/08, AT
14/08, JP 12/08 General News War on terror The International Crisis Group
reported that Indonesia was not a terrorist hotbed and warned that US
pressure on Indonesia authorities to crack down on Islamic militant could be
seriously counterproductive. The report, written by the Group’s Indonesia
Director Sidney Jones, downplays suggestions of widespread links between
Islamic militants operating in Indonesia and the al Qaeda network. It says
only one network of militant Muslims –which Muslim cleric Abu Bakar Bashir
helped found- produced all the Indonesian nationals so far suspected of links
to al Qaeda. According to Ms. Jones, proponents of radical Islam in Indonesia
remain a small minority. But she adds, "Even a tiny group of people can
cause an immense amount of damage." She also said that Indonesian
military was implicated in Islamic terrorism. "If you scratch any
radical Islamic group in Indonesia, you will find some security forces
involvement," Ms. Jones said on Aug. 12. The challenge, she concluded, is
for Indonesia and its allies to "be alert to the possibility of
individuals making common cause with international criminals" without
undermining the country’s fragile democracy. Repression by the Suharto
government gave birth to the network and repression now could serve to
invigorate it, she added. The complete report can be
obtained at ICG’s website: www.crisisweb.org. Sources: Reuters 09/08, NYT 10/08, AP
12/08 Soeharto An announcement by doctors on Aug.
12 that ex-dictator Soeharto is still unable to communicate properly will
likely further delay his prosecution. Dr. Akmal Taher, who led a team of 20
physicians from the state-run Cipto Mangunkusumo Hospital said that Suharto
was "incapable of putting more than four words together and could not
understand long sentences." He said Soeharto’s physical condition was
good but he suffered permanent brain damage that made it difficult for him to
speak. The medical team nevertheless refused to give an opinion as to whether
Soeharto could stand trial, saying that it task had been merely to determine
the state of his health. Under Indonesian law, a person cannot be brought to
trial if it is proven that his medical condition is unstable and it
determined that a trial could jeopardise his health. The South Jakarta District
Court suspended his case two years ago. The chief prosecutor in the case, Yan
Mere, said the prosecution service would now study the findings. Sources: JP 13/08, AP 12/08, ST
13/08 Regional News Poso Tensions engulfed the town of Poso
on Aug. 13 after at least six people were killed and hundreds of houses and
two churches set ablaze in fresh attacks on three Christian villages, just
hours after a second round of peace talks ended. In the second round of peace
talks, hosted by Co-ordinating Minister for Welfare Jusuf Kalla, Muslim and
Christians vowed to work together along with the police and military forces
to help restore peace. But most of the Christian delegates boycotted the
talks, saying Muslim militia groups have carried out series of attacks
recently and killed several Christians. Last week, Italian tourist Lorenzo
Tadey was shot dead as the bus he was travelling in was sprayed with bullets.
Kalla said Muslim militant was not behind the attack, but did not say who he
believed the attackers might be. Local church officials and
security officers said the attackers of the three Christian villages were an
armed group of unidentified people. But Noldy Tacoh, a secretary with the
Crisis Center belonging to the Central Sulawesi church, however, blamed the
attack on police Mobile Brigade troops. Christians say Muslim among the
security forces have been aiding hardline groups like the Indonesian
Mujaheeden Council and Laskar Jihad , who have set up operations in Poso. Central
Sulawesi Police chief Brig, Gen. Zainal Abidin Ishak denied that his
personnel were involved in the attack. Sources: JP 14/08 11/08, AFP 10/08,
SCMP 14/08, AFP 10/08 Abbreviations AA Asia Pulse/Antara Stichting TitanE |
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