SELECTED INDONESIA NEWS AND VIEWS

IBRAHIM ISA'S

SELECTED INDONESIA NEWS AND VIEWS

Tuesday, January 03 – 01- 2012

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--- PEOPLE AND NATURAL WEALTH

--- ATTORNEY GENERAL'S OFFICE PERFORMED POORLY IN 2011

--- 2012: YUDHOYONO'S FINAL CHANCE TO CURB CORRUPTION

--- SBY OUTLINES ECONOMIC STRATEGY TO IDX

--- SBY MUST LEARN FROM GUS DUR ON RELIGIOUS CONFLICTS

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PEOPLE AND NATURAL WEALTH

The Jakarta Post Editorial --| Mon, 01/02/2012

We deplore the police’s mishandling of the anti-mining protests at the Sape port in Bima, West Nusa Tenggara, last week that caused the deaths of two demonstrators and injured more than two dozen.

But revoking the mining license of the Indonesia-Australia joint venture at the heart of the protest simply because of the incident would mean that government would succumb to a mob rule — a timid act that could leave most major mining concessions in a legal blackhole.

Even though investigations are still underway into the underlying factors behind protests and the causes of the violence, we don’t believe the Sumber Mineral Nusantara-Arc Exploration joint venture was directly or indirectly involved in that incident.

It is never popular to stand up in defense of big business, let alone for a foreign company.

But we don’t think that Arc Exploration, an Australian gold company that is publicly listed in Sydney, would risk damaging its reputation by violating the law to protect a 25,000-hectare mining concession that it acquired at substantial cost.

Moreover, we reckon the joint venture had gone through more than one year of bureaucratic and legal processes dealing with various ministries overseeing mining, forestry and the environment and other local agencies to obtain its license.

If residents were so fearful of the environmental impact of the mining operations that they staged massive protests, why then did the Bima administration award the mining license in the first place?

The mining company halted its explorations immediately after the incident - a wise corporate action to allow for a cooling-down period.

But Bima Regent Ferry Zulkarnaen cannot immediately revoke the mining license without due process to ascertain the faults, if any, of the mining contractor and any malfeasance committed during the licensing process.

It has been a common phenomenon since the ushering in of our democratic era in 1998, for the people, who for more than 32 years were completely excluded from the decision-making process regarding the exploitation of natural wealth, to become overzealous in asserting their rights.

They sometime release their vent-up frustrations in street protests, irrationally demanding that the mining contracts in their areas simply be annulled, claiming that the mines had not benefited the local community and had instead damaged the environments.

The issue, though, is that the mass protests such as those at the Sape port last week often attract a wide mixture of pressure groups, informal leaders and human rights and environment activists. Some represent genuine causes and legitimate grievances. Other, however, advance self-serving agendas and stand ready to exploit any situation.

Certainly, businesses are not always right and those that are found guilty of violating the laws should be brought to justice.

The government should be extra careful in analyzing the main reasons behind the protests. If such demonstrations are not handled properly, mobs will have a field day and businesses will be at the mercy of the law of the jungle.

Mining, together with plantations and fisheries, are the most promising resource-based ventures in the country and account for nearly 40 percent of our total exports.

However, legal and regulatory certainty is vitally important for mining investment because the industry is capital and technology intensive, highly risky, has a long payback period and operates mostly in remote areas where basic infrastructure is inadequate.

When a big mining company enters a remote area, its operations generate a sharp rise in local people’s expectations through the impact of its community-development programs. Many players, individuals or NGOs — often from outside the mining area — often jump in, trying to use mining companies as a tool for advancing personal or public interests, offering advocacy services either to secure fees or to seek popularity and political prestige.

All these aspects of development should be investigated thoroughly in analyzing the people’s concerns about the mining concession.

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ATTORNEY GENERAL'S OFFICE PERFORMED POORLY IN 2011

The Jakarta Post, Jakarta | Sat, 12/31/2011

The Attorney General’s Office (AGO) acknowledged on Friday that it had failed to take the lead in the country’s bureaucratic reform and had not performed well in law enforcement. The office could understand why the public had given it the thumbs down.

Attorney General Basrief Arief said he had failed to spearhead reform in his notoriously corrupt institution. The attorney general made the statement during the annual press review at his South Jakarta office.

Over the year, Basrief said, his office had seen 206 prosecutors and 130 administrative staff punished for acts of indiscipline.
“It’s clear that there are still many prosecutors who commit illicit deeds. We are personally still unsatisfied with our own performance in serving the people,” Basrief said.

According to him, of the 206 prosecutors who received punishment, around one third of them were
“severely punished” after they were proven to have abused their authority as law-enforcement officials.

Among 130 administrative staff who received punishment, dozens were dishonorably discharged because they “had not even gone to their office at all”.
Basrief said he could understand why the public regarded the AGO as having performed poorly, specifically citing the AGO’s weak human resources as the institution’s biggest shortcoming.

“[The AGO’s staff] are still weak in terms of moral integrity as well as technical competency in handling cases,” said Basrief who vowed to boost the human resources sector in 2012 to restore public trust in his institution.

This year, the AGO has been overwhelmed by many highly controversial cases involving its prosecutors. Last week, Takalar State Prosecutor’s Office head Rakhmat Harianto was reported to have allegedly blackmailed a witness for Rp 500 million (US$54,836) in exchange for not making the witness a suspect in a graft case.

In November, investigators from the Corruption Eradication Commission (KPK) confiscated Rp 99.9 million from the Cibinong State Prosecutor Office’s parking lot and arrested a prosecutor named Sistoyo for allegedly taking the money as a bribe.
Also in November, Hari Soetopo, a prosecutor at Lamongan State Prosecutor’s Office hit the headlines after being reported by a woman for allegedly making her pregnant.

Under Basrief’s leadership, the AGO was also condemned by many for its “generosity” in issuing letters ordering a halt to investigations (SP3).
In 2011, the AGO issued SP3 letters in three high-profile cases: the floating crane procurement of PT Tambang Batubara Bukit Asam, the asset takeover of PT Kiani Kertas and the allegation of abuse of power by South Kalimantan governor Rudi Arifin.

Basrief, however, rejected allegations that there were “backdoor deals” behind the issuance of SP3 letters, saying that the AGO issued the SP3 letters professionally and based on established laws.

“[In PT Kiani Kertas’ case] there was no state loss, the state actually benefitted,” he argued.
Andhi Nirwanto, junior attorney general for special crimes, said that the only reason the AGO issued SP3 letters was because it could not find enough proof to bring the case to court.
“There are many who say that the only job of the AGO’s special crimes division is to halt investigations,” Andhi said. “But if we don’t have the proof and we insist on bringing the case to court, [the accused] will eventually be acquitted.”

Despite all its flaws, Basrief claimed that the AGO had successfully prevented Rp 27 trillion (US$2.97 billion) and $ 2,920 in state losses this year. (sat)

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2012: YUDHOYONO'S FINAL CHANCE TO CURB CORRUPTION

Donny Syofyan, Padang | Fri, 12/30/2011

The New Year is approaching. As it is less than one week away, this is a great time to review and reflect on the previous year while preparing for the year to come.

It is motivating to reflect on the accomplishments of the previous year, review our challenges and outcomes and prepare for the year to come with a new set of goals. A failure to review the past will likely lead us to fall into the same hole over and over again in the future.

The fight against bribery and corruption has been the watchword this year, which has witnessed a great number of corruption scandals involving high-ranking officials, lawmakers, judges and prosecutors.

Muhammad Nazaruddin’s alleged involvement in the SEA Games sports facility construction scandal, the case
of convicted Central Jakarta Commercial Court judge Syarifudin Umar, the arrest of prosecutor Sistoyo at the Cibinong Prosecutor’s Office, to mention just a few cases, suggest that corruption is really an everyday occurrence for the Indonesian public.

This might backfire for President Susilo Bambang Yudhoyono in 2012. Yudhoyono must use 2012 as his final chance to curb corruption and restore the public trust.

The endless cycle of corruption in 2011 signifies the debacle of reform leadership. The Democratic Party, which initially appeared on the country’s political stage as a reform party, for instance, has slipped off the tracks.

Nazaruddin’s dismissal as the party’s treasurer showed the half-hearted fight against corruption, since there was no political amputation by cutting off its wayward elites.

Party chairman Anas Urbaningrum demurred from resigning, which in turn indicated the party’s lackluster opposition of any political scandal on one side and setting a bad precedent for the country’s politics on the other.

Corruption has become complicated due to trendy political dynasties in the country’s major parties. With Edhi Baskoro Yudhoyono and Puan Maharani becoming the secretary-general of the Democratic Party and deputy chairwoman of the Indonesian Democratic Party of Struggle respectively, the war on corruption is prone to rhetoric and non-transparency owing to internal resistance.

Rather than setting the scene for future young intellectual politicians, mainstream parties prefer elite families to maintain their power.

In addition, the collapse of law enforcement agencies to curb corruption strongly shows that corruption is a multifaceted phenomenon.
President Yudhoyono, therefore, must drive reform. He must give external bodies more teeth, such
as the Prosecutors Commission that is working to revamp the Attorney General’s Office (AGO) and synergize the Supreme Court and the Judicial Commission to more closely monitor the courts and develop a better system for the recruitment of judges.

Much of the President’s time will be spent on debating urgent bills in 2012. The House has arrived at a compromise to assign a rank the 64 bills on the National Legislation Program in 2012.
One of the 2012’s most pressing bills is an amendment to the 2002 Corruption Eradication Commission Law. During 2011, the idea of dismantling of the country’s most trusted antigraft body came to the fore, especially supported by lawmakers.

Yudhoyono’s commitment to exposing corruption in government and the House would be in vain without stopping any means to strike and criminalize the KPK.
Such potential remains because of growing concern that the House will curtail the antigraft commission’s authority. The House’s budget committee even threatened to suspend discussions on the 2012 state budget to protest the questioning of its leaders by the KPK over graft allegations in a project administered by the Manpower and Transmigration Ministry.

Eradicating corruption in Indonesia cannot simply depend upon the government’s law enforcement agencies such as the National Police and the AGO, considering their corrupt behavior and the closed approaches they frequently applied to many graft cases.
In a transitional period characterized by strong need for power survival, it is not wrong to have a “super body”. Some countries with low rankings on corruption indicies still have superbodies like the KPK.

Singapore’s Corrupt Practices Investigation Bureau, for example, has been in existence since 1952. Combating corruption calls for prevention, not merely enforcement or execution.
It will be quite a job to stamp down corruption to the full in 2013. Overall, political parties in 2013 will be occupied with encountering legislative and presidential elections in 2014. Political energy and resources are centering on political consolidation instead of working for reform commitment.

An intense war on corruption would damage necessary political coalitions and alliances prior to 2014 election since no single party aspires to seeking enemies.
For sure, the bribery fight may work in 2013. Yet such a struggle is no longer something given specific attention. Ideas of a clean government will be powerless given short-term and pragmatic power retention.

Things will get worse as government officers and politicians often get amnesia marked by repeated blackouts on their wrongdoings and vows. It is public knowledge that many politicians prefer to patronize the people rather than listen to their concerns. Populism has gone haywire.

The public has a vey low level of tolerance for leaders who disappoint them. The success of Yudhoyono will be measured by the public trust at the end of his tenure. The very foundation of the public’s trust in Yudhoyono depends on his promise of clean leadership.

The writer is a lecturer in the faculty of cultural sciences of Andalas University, Padang.

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SBY OUTLINES ECONOMIC STRATEGY TO IDX

If the stock market was “Kid-Zania”, then President Susilo Bambang Yudhoyono’s speech at the first day of trading on Monday was like a father laying out his financial plans so that the kids could continue playing grown-ups.
In so many words, Yudhoyono said the Indonesia Stock Exchange (IDX) owed much of its positive performance in 2011 to prudent fiscal and monetary policies formed under his stewardship.

The stock market ended a bumpy year on Dec. 30, 2011, with the Jakarta Composite Index (JCI) at 3,821.99, growing by a modest 3.2 percent compared to the previous year, making it nonetheless the third best performer globally in an era of great economic uncertainty.

In his keynote speech, Yudho-yono told stock traders that the country had to be prepared for another round of uncertainty as decision makers in the US and Europe were still struggling to avoid another recession.
A government-appointed think tank, the National Economic Committee (KEN), warned recently that crises in the developed world would weaken Indonesian exports, create foreign liquidity problems and hurt investment growth. The committee said Indonesia’s financial markets were poised to bear the brunt of high volatility.

Gloomy outlook aside, there was room for hope, Yudhoyono said, especially after Fitch Ratings had reinstated the status of Indonesian sovereign debt to investment-grade level. Yudhoyono said he would maximize efforts to cash in on the positive momentum.
Yudhoyono’s strategy for weathering the external turbulence is to maintain his style of economic leadership, which has been characterized by a conservative fiscal policy — meaning a low state budget deficit, high domestic consumption and double-digit export growth.

In the finalized 2012 state budget, the government predicted revenue of Rp 1,292.9 trillion with expected state spending of Rp 1,418.5 trillion; and a budget deficit of 1.5 percent of GDP. Yudhoyono said the 2011 budget deficit stood at 1.3 percent, well below the 2 percent target.The Finance Ministry said that it hoped to maintain inflation at a maximum of 5.3 percent this year. The inflation rate stood at 3.79 percent in 2011.

“We have to maintain the fiscal policy, the debt to GDP ratio, inflation rate and the interest rate. When the government achieves such conditions, it is the economic actors’ time to step up,” the President said.

Yudhoyono may argue that the performance of the stock market should reflect the country’s economic fundamentals, which he has vowed to maintain. However, analysts have long argued that the IDX suffers from a structural problem of having too much foreign funds in its investment pool, which makes it extremely vulnerable to external shocks.

Foreign funds traditionally control more than 60 percent of daily transactions in the stock market, which reached Rp 24.2 trillion by the end of last year.
Considering the large amount of so-called “hot” money, volatility in the Indonesian financial market directly translates into more pressure on the rupiah.

IDX president director Ito Warsito brushed off fears over the inability to increase the proportion of Indonesian investors, saying that it was an accepted characteristic of the Indonesian stock market.

He denied that more foreign investors would cause instability in the secondary market.
“An increase in the number of foreign investors is a logical consequence of Indonesia being of interest to global investors,” he said.

In his speech, Yudhoyono failed to address these concerns, which have the potential to destabilize the economy. KEN, the economic think tank that the President personally appointed, warned that Indonesia should reactivate the currency-swap agreement with China and Japan under the Chiang Mai Initiative in order quell this single-most detrimental force in the economy.

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SBY MUST LEARN FROM GUS DUR ON RELIGIOUS CONFLICTS

Bagus BT Saragih, The Jakarta Post, Jakarta | Fri, 12/30/2011

In the wake of the brutal arson attack against a Shiite Islamic boarding school in Sampang, Madura, East Java, an activist has called on President Susilo Bambang Yudhoyono to learn from his predecessor, the late Abdurrahman “Gus Dur” Wahid, in handling rampant religious conflict in the country.

“After the fatal attack against Ahmadiyah followers in Cikeusik, Banten, in February, such religious conflicts continue. This is a result of the poor and weak leadership of President Yudhoyono, particularly when it comes to maintaining tolerance in this plural nation,” International Center for Transitional Justice (ICTJ) advocate Usman Hamid said in a statement made available to The Jakarta Post on Friday.

“The President should look at Gus Dur, whose demise will be commemorated on Dec. 31. Gus Dur was always at the forefront of defending minorities,” he added.

A compound belonging to the Shiite community in Sampang was allegedly burned down on Thursday by Sunni Muslims, who make up the majority of the Islamic population in Indonesia.

No casualties were reported.

Several buildings were damaged, including a student dormitory, a mosque, a kitchen, a store and the home of Shiite Islamic boarding school principal Tajul Muluk

Approximately 250 Shiites who lost their homes have been evacuated to the Sampang sports center about 20 kilometers from their neighborhood.

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