INFID


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Title 

Short News Overview.

No

74

Period

11 January 2002 - 27 January 2002

INFID News

The Institute of Global Justice (IGJ) was launched on Jan. 15, 2002 at Hotel Ambara Jakarta. The launch followed by a seminar on "Indonesia and Doha Ministerial Meeting IV: Rowing in the middle of free trade stream" was opened by Dillon HS and presented Staff Expert of Co-ordinating Minister for Economic Affairs Mahendra Siregar as its Keynote Speaker. Other speakers were Cecilia Oh (Third World Network), Utama Kajo (Indonesian Trade and Industry Chamber/KADIN), Hira Jhamtani (IGJ), Nicola Bullard (Focus on the Global South) and Bonnie Setiawan (INFID). The seminar was divided into two sessions. The first session discussed the ‘Analysis of the Doha Meeting and the post-Doha Meeting’ and was moderated by Sonny Keraf (ex-Minister of Environment). Binny Buchori (INFID Executive Secretary) moderated the second session on the ‘Follow-up of the Doha Meeting’.

The IGJ is a result of INFID’s WTO-related activities for the past three years.

INFID Related Issues

Paris Club III

The creditor countries organised in the Paris Club III have scheduled a third round to discuss the rescheduling of the Indonesian foreign debt payment in April 2002. Earlier Indonesian media have reported that the meeting was to take place in the beginning of February. Deputy Co-ordinating Minister for Economic Affairs on International Relations Komara Djaja said on 15/01 that the meeting was not postponed, because it had never been finally concluded that the meeting would be conducted on February. The Co-ordinating Minister once said that the Paris Club III meeting would be on 8-9 February.

The government is to propose a rescheduling of its principal and interest as much as about US$3 billion. At the Paris Club II meeting, under the co-ordination of the then Co-ordinating Minister Kwik Kian Gie, Indonesia got only the rescheduling for its principal of the amount of US$5.8 billion. The total of Indonesia’s foreign debt currently is US$137.6 billion, of which US$ 74.164 billion (53.9%) is the government foreign debt and the rest is private debt.

Source: Kompas 16/01

Debt

Spurred by Argentina's debt default, economists and bankers have examined levels of government debt in East Asia and concluded that Indonesia is the most vulnerable to Argentine-style repayment problems. They also saw enough differences, however, to suggest that Indonesia will not suffer Argentina's fate.

Indonesia's public debt at the end of 2001 was significantly larger than its annual economic output measured by GDP, according to a report to investors for the first quarter of 2002 by CLSA Emerging Markets, a unit of the Credit Lyonnais financial services group. CLSA estimated that Indonesia's public debt, as a proportion of its GDP last year, amounted to 109.1 percent, up from 23 percent in 1996, before the financial crisis struck. Argentina's public debt-to-GDP ratio at the end of 2001 was 50.4 percent, compared to 35.7 percent in 1996.

But officials and foreign analysts point out that while Indonesia faces serious difficulties, they are significantly different from those that forced Argentina to halt repayments on some of its $132 billion public debt. With around $28 billion in foreign exchange reserves and an economy that is expected to grow by four percent in 2002, slightly faster than last year, Indonesia appears to be in a position to manage its foreign debt repayments without stifling growth. Economists and bankers also believe that it is the domestic debt portion, not the foreign one, which poses the biggest challenge to political and economic stability.

Source: PR 14/01 from IHT 12/02

IMF

World Rain Forest Movement (WRM) Bulletin asked forest activists to not only focussing on the World Bank’s role in forest destruction, but also to pay attention to the more important actor in forest loss, the International Monetary Fund (IMF). The WRM accused IMF and its Structural Adjustment Programme to have imposed implementations of a number of policies on Southern governments which resulted in further impoverishment and widespread environmental degradation. The full text: http://infid.ngonet.be/wrmbulletin.html

Source: WRM Bulletin 54

General News

Fuel prices rise

The Indonesian government has suddenly announced the increase of on average 22% fuel prices on 16/01 in a bid to reduce spending on fuel subsidies and keep this year's state-budget deficit under control. The measure is also in compliance with conditions that President Megawati Sukarnoputri's administration has agreed upon with the International Monetary Fund. International donors and lenders have long argued that Indonesia's fuel-subsidy programme, which keeps domestic prices far lower than international standards, benefits the middle class and should be lifted.

In anticipation of higher fuel prices, however, traders and distributors of staple products, including rice, have begun to charge higher prices for their goods. Reports from various parts of the country have shown dramatic increases in the price of rice, causing panic buying and shortages. Shortages of kerosene, used for lighting oil lamps and simple stoves, have also occurred in different parts of the country since the government said last week it would go ahead with fuel-price hikes. However, reports said that the sudden announcement did not trigger a long queue at gas stations as it usually happened when increase in fuel prices was announced.

NGO Coalition and Consumers Group reject the increase of the fuel prices: http://infid.ngonet.be/fuelprices

Sources: ST 12/01, Kompas 17/01, AFP 17/01

Regional News

Aceh

After a cabinet meeting on Jan. 10 Co-ordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono said that the government had decided to re-establish the military command (Kodam) in the troubled province of Aceh. despite objections from the Acehnese and human rights campaigners. The idea of Governor Abdullah Puteh to revive the military command delivered on Jan. 2 was generally perceived as the Indonesian Military (TNI) manipulation of the situation in order to regain its political role and to impose a military solution. Susilo argued that the province needed special treatment to curb separatist activities since the separatist movement in Aceh posed a threat to a national unity, and it was the constitutional duty of the TNI to maintain national integrity.

The government has also formed an Aceh Desk under the co-ordination of Vice President Hamzah Haz and headed by the Minister of Religious Affairs Said Agil Husin Al Manawir in its effort to solve the conflicts in the region. The desk has 17 members and started to work on Jan. 15. However, neither the tasks nor the members was revealed to the public, but Manawar said that it was in line the government’s plan to revive the military command. He also said that his appointment to head the desk was because a religious approach is needed in the settlement of Aceh.

In response to the government plan to re-establish the military command, on Jan. 12 the Free Aceh Movement (GAM) called for a three-day general strike, which caused tens of thousands of people thronged markets in major Acehnese cities and towns on Jan. 15 in preparation for the strike scheduled on Jan. 16-18.Explosions and volleys of gunfire were reported to be heard in the outskirt of the province’s capital Banda Aceh and Lhokseumawe. Banda Aceh itself was reported as quiet on Jan. 16 as markets and offices ceased from its daily activities. The transportation means within and from and into the province was crippled as no transportation company dared to challenge the calls. Reports on the second day of the strike said that Aceh has been paralysed despite intensive government campaigns to ignore the strike calls. Meanwhile, Vice President Hamzah Haz, who is assigned to handle the Aceh problem, was on his tour of duty in Aceh on Jan.16-17.

Few analysts foresee a quick end to the war, as GAM has said that it would accept nothing but independence. Jakarta, in turn, has vowed never to let the province go.

Maklumat Demokrasi (Democracy Declaration) II: Re-establishment of the regional military command in Aceh: An attack on peace and justice: http://infid.ngonet.be/maklumataceh

Sources: JP 11/01, 14/01,API 16/01, AFP 16/01, 17/01, SP 16/01, TI 17/01

Papua

Indonesian police said their probe into the murder of a pro-independence leader in Papua province had reached a stalemate. Papua police chief Made Mangku Pastika said on Jan. 13 that police would continue the investigation into the November killing of Theys Eluay but with less intensity. "Our investigation into They’s case are no longer significant as we have reached a point where they cannot be developed any further," Pastika said. Pastika said an independent team being formed from church and other officials to probe the killing would hopefully be able to shed light on the affair. Police have not ruled military involvement in the killing although the army as an institution has denied all the charges. Police said evidence had emerged linking soldiers from the feared Kopassus special forces with the killing. Pastika said on Jan. 15 that rogue troops might have been involved in the murder and the military had so far been "very co-operative" in helping unravel the mystery behind Eluay’s death. Home Affairs Minister Hari Sabarno said on 17/01 that Indonesia's military and police would not be represented in a proposed team to investigate the murder. Sabarno added members from the attorney general's office and the home ministry's inspectorate general would be among the members, according to a proposed list of names.

Sources: Reuters 13/01, 15/01, AFP 17/01

Abbreviations

AFP: Agence France-Presse
API: Asia Pacific Institute
IHT: International Herald Tribune
JP: The Jakarta Post
PR: Press Review World Bank Development News
SP: Suara Pembaruan Daily
ST: Strait Times
TI: Tempo Interaktif

 

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