Monday, November 30, 2009

Dubai Crisis Makes its Way to Asia

Malaysian and other Islamic bond issuers could suffer

The revelations of Dubai's monster debt problems have come at an unfortunate time for Malaysia's push to promote itself as both global centre and international mentor in thefield of Islamic finance.

Even if the there is eventually no default on Dubai's sukuk (Islamic bond) issues the image of sukuk as potentially safer than conventional instruments has suffered a blow. Malaysia itself may have little exposure to Dubai, or other over-extended Gulf borrowers, but as the world's leader in sukuk issues it could well see a marked slowdown in what has been a very rapidly expanding business.

The first test will come by December 14 when Nakheel, the property developer arm of state-owned Dubai World, has a big sukuk maturing. Despite a statement Sunday by the United Arab Emirates central bank that it stands behind domestic and foreign banks operating in Dubai, later tests will come if defaults arise and battles begin over how civil courts interpret legal rights under shariah law. There may also be battles if Nakheel or subsequent debtors favor sukuk over conventional bondholders or vice versa. A sukuk is supposed to have an element of risk lacking in secured bonds, but practice is another matter in an industry which is still young.

That is bad luck for a Malaysian industry which can reasonably claim to be bothinnovative and well-organized. Malaysia accounts for roughly 60 percent of total global sukuk issues totalling around US$100 billion. These are roughly divided between ringgit and US dollar issues, mostly by local entities but also by the World Bank and the Islamic Development Bank. Malaysia has been hoping to attract other big-name foreign institutions to its market.

But Dubai is unlikely to represent a permanent setback to Islamic finance, which has been growing in many parts of the world and establishing niches in developed Muslim-minority countries such as the UK.

Since the onset of the global crisis 18 months ago claims that Islamic finance was rooted in the real economy and avoided both derivatives and excessive leverage which devastated the western financial system seemed to be proven by events. At least that was the case until Dubai hit. Even that, so far, has not thus far imperilled any Islamic banks. So long as sukuk holders do not emerge any worse than conventional bond holders from the mess, sukuk's position in global finance should not be badly hurt.

Meanwhile investment funds which do not invest in banking, gambling and alcohol-related stocks have generally outperformed conventional ones since the crisis because of they avoid, among other stocks, conventional banking ones.

Islamic finance has already shown that it can compete on a nearly level playing field with conventional systems in Malaysia and has been able to attract non-Muslim investors. Countries such as Korea and Japan have changed their laws to end some tax disadvantages Islamic products faced because of their focus on profit instead of interest. Thailand also now enables sukuk issues.

Critics claim that the Malaysia sukuk market is being force-fed by the government. Most issues have been, not only by the government but its related enterprises such as national oil company Petronas, government holding company Khazanah Nasional and housing lender Cagamas, and companies with close connections to the government such as Plus and MISC.

Nonetheless, Malaysia can reasonably claim that it has developed a far more extensive range of Islamic products than anywhere else, backed them with a coherent body of regulations and given support both by lawyers and accountants able to operate easily in both Islamic and conventional systems. What began as very basic Islamic banking with only one institution back in the early 1980s has gradually involved to embrace all the significant financial players in Malaysia, even including such obviously non-Islamic ones as HSBC and OCBC, and to gradually grow its range of products to Islamic money market instruments, bonds, insurance (takaful), real estate investment trusts, ETFs and fund management. Now a whole range of big foreign names is present in one aspect or other of the system, the latest being re-insurance.

As of last week, the role of Bank Negara in operating a two-track financial system was officially embodied in new legislation. But in practice Bank Negara has long been responsible for the evolution of shariah-compliant finance by ensuring that first and foremost it was run by people with high levels of financial competence and was complementary to the conventional sector – which still compromises 80 percent of Malaysia's financial industry.

Indeed, the development of Islamic finance in Malaysia owes much to the deep penetration of all financial services throughout Malaysia – the best served of all developing countries according to the World Bank – and the presence of foreign bank and insurance companies willing and able to offer Islamic alongside conventional products.

At the banking and money market level, Bank Negara has emphasised the importance of liquidity management and provided the necessary access for market players to the central bank. Even more important, it has ensured that Malaysia has a single dominant authority on interpretation of shariah law, providing both consistency and security. Elsewhere conflicting interpretations by Muslim scholars about what is and is not acceptable have caused market confusion and continue to create problems for cross-border dealings.

Bank Negara's Shariah Advisory Council offers shariah compliance guidance to all sukuk, IPOs and insurance and other products and monitors them thereafter. Malaysia's civil courts are also bound by the Shariah Advisory Council when ruling on shariah related matters.

With extensive training programs and in-depth research at university levels, Malaysia has gone further than any country in creating a system which is coherent and relevant to today's needs and fits with existing accounting and other standards. Systems in Gulf countries are less developed. As for Saudi Arabia, it simply declares its system to be Islamic even if it hard to tell, say critics, what distinguishes it from conventional and is not exportable. Ditto Iran.

Malaysia's system on the other hand is detailed and it is in English and so more easily transportable to countries, Muslim and otherwise, who feel a need to create local shariah-compliant products.

Although Islamic finance is still only a small part of the system in big Muslim countries such as Turkey, Indonesia and Pakistan it looks set to continue growing both as the pious avoid conventional finance and others see little practical distinction between the two so they may be happy – as are many in Malaysia – to keep a foot in both systems.

If that is the case, Malaysia's mentor role should continue to grow. However, there are also several question marks over the future pace of expansion of Islamic finance, and of Malaysia's ability to capitalise on its expertise.

Firstly, the recent drivers of it – including Malaysia -- have been capital-surplus countries so it has been easy for them to persuade foreigners to create Islamic products which they will buy. Any sustained period of low energy prices will dry up this well, in which case a country like Indonesia, which has raised money through sukuks, will be looking more to countries like China, Korea or Europe for funds.
Secondly, non-Muslim financial centers such as Singapore and London, are developing their own Islamic products and international traders may ultimately prefer to do all their trading, Islamic and conventional, in one place, which is unlikely to be Kuala Lumpur.

Thirdly, it has yet to be shown that Islamic finance has much appeal in low-income Islamic countries such as Bangladesh – which pioneered conventional micro finance. It is barely known in Muslim Africa. India, with the world's second largest Muslim population, has refused to accommodate it. Though Indians t

Few Muslim majority countries are as keen as Malaysia on using the state to promote Islamic systems or have a centralised system of Islamic authority to impose a single set of rules compatible with the secular functions of government. Many Muslim countries, particularly in Africa and central Asia, take a relaxed attitude drinking alcohol, sexual matters and other activities which deviate from stricter interpretations of the Koran and so may be unenthusiastic about bringing piety and Islamic principles into banking.

Fourthly, many including Muslims find the Islamic finance business hypocritical. Most shariah products are, these critics claim, conventional products dressed up in Islamic clothing but in practice no different from interest-bearing and other conventional ones. Thus though they may be competitive, they are also unnecessary. In practice few Muslims actually refuse conventional banking interest, or decline to benefit indirectly from government spending financed by the profits of forbidden activities – gambling, alcohol etc. As a result, according to this argument Islamic finance will remain no more than a niche product for the pious in some countries while in other it is a fad which will fade.

On the negative side for Malaysia must also be reckoned the possibility that official promotion of Islamic finance is not well-received by many of the non-Muslim 40 percent of the population. They may buy some of the products but do not see why they should seem to be favored as are other aspects of Islam in Malaysia.
There is also scant evidence that sukuk have attracted capital to Malaysia. Although some foreign money has come into sukuk and other issues, it is small compared with the capital outflow from which Malaysia suffers. There may be no connection between these outflows and the Islamic agenda, but a current account surplus of 18 percent of gross domestic product in 2008 is evidence of lack of local investment opportunities. So although the progress of Islamic finance brings well-paying jobs and reflects positively badly needed innovation by Malaysians, it may not be a net attractor of capital. Indeed, local access to foreign sukuks may actually induce capital outflows.

But for now at least, Islamic finance is still a growing business. While it grows Malaysia deserves to profit from its many initiatives in expanding its scope and creating a system of rules and governance which complements the conventional one and incorporates liquidity and risk management systems in overall governance of the financial sector. Asia Sentinel by Philip Bowring

Bali Updates

Om Swastiastu ...

Rabies continues to be a topic dominating Bali’s news. The government plans to undertake a census of all dogs on the island. Lawmakers call on the governor to issue a special set of rabies decrees. And, a public hearing on rabies declares that vaccination, not extermination, is the only way to eliminate the rabies scourge.

Crime, both organized and official, gets attention in several articles this week. The Vice-Regent of Badung says illegal commercial villas in Bali face demolition. The Bali Villa Association calls on the police to introduce standardized security measures for commercial villas. Last week’s story on illegal big bikes in Bali continues to gain steam. A local newspaper alleges tourism officials are asking for illegal licensing fees from hotels, restaurants and bars. And there’ disturbing news of a racket selling the names of Bali visitors to unethical time-share sales people.

Business is good in Bali. Tax officials report collection of hotel and restaurant taxes are on the increase.

Culture and Tourism Minister Jero Wacik reveals more details on his work plan for the first 100 days in office. Local activist call for the establishment of an HIV/AIDS hospice in Bali. Governor’s Pastika request for 1,000 green turtles for ceremonial purposes gets denied by Jakarta.

There’s also coverage of a wonderful day out organized for Bali orphans by the Hard Rock Hotel.

Is Bali a romantic island? High birth rates from the family planning office provide proof that this is indeed an island of love.

This deal won’t last. Round trip Bali to Singapore on KLM for just US$90.

Beaujolais Nouveau 2009 will be arriving in Bali this week on December 4th.

Just some of the news in this week's Bali Update.

Om Çanti Çanti Çanti Om ...
J.M. Daniels - Bali Update
Bali Discovery Tours
To read the full report go to:

Sunday, November 29, 2009

Deflation in Japan

The curse of defeatism

Anybody who thinks deflation is no longer a threat should look at Japan and its flailing authorities

JUDGING by the shrill comments from Wall Street, Japan’s biggest problem is its huge public-sector debt, which has grown to nearly twice the size of the country’s GDP. But it isn’t. Far more pressing is deflation.

On November 20th the new government of Yukio Hatoyama acknowledged what has been obvious for months: that prices are falling again after a three-year hiatus. This is worrying not just for Japan; countries such as America and Britain have more similarities with Japan than is commonly acknowledged. Sadly neither the Hatoyama administration nor the central bank has shown any intention of tackling the latest incarnation of the deflationary curse.

That is a grave miscalculation. Prices in Japan may not yet be in a downward spiral, but deflation is entrenched: even the Bank of Japan (BoJ) acknowledges that prices may fall for at least another two years. The more they do so, the bigger the burden of Japan’s debt becomes, and the more households and firms are likely to retrench.

As it is, high real interest rates act as a powerful brake on Japan’s incipient recovery. Japan may have muddle through scares before, most recently after a five-year splurge of liquidity unleashed by the BoJ between 2001-06. There may be some complacency that because deflation did not spiral downwards then, it will not do so this time. But a few years ago the world economy was strong and Japan could export its way back to health. This time around, global conditions are weaker and the yen is one of the world’s strongest currencies. It is a credit to Japan’s exporters that they are doing well despite such conditions. Largely thanks to them, Japan’s economy jumped forward in the third quarter, though there are already signs that the pace of recovery may be slowing. But to nail deflation once and for all, bolder steps by monetary and fiscal authorities are needed.

The BoJ can start by being more assertive. It is almost as if it is so exasperated by the flaky achievements of its previous anti-deflationary efforts that it would rather sit back and wait for a recovery. But that is a defeatist attitude. If nothing else, it should publicly revive discussion of alternative plans to reflate the economy. That could include increasing government-bond purchases, or setting itself a monetary target not just based on a positive inflation rate, but on robust growth of nominal GDP. If the recovery falters, the BoJ could go further, exploring the use of negative interest rates on bank balances, which would encourage banks to lend money rather than hoarding it at the central bank. Such extraordinary measures would almost inevitably lead to a weaker yen, which would irritate Japan’s trading partners. But Japan cannot get out of the deflationary mess if the y
en keeps strengthening.
Mr Hatoyama’s administration, meanwhile, should stop pestering the BoJ about deflation and face up to its own responsibilities. In the short run that includes keeping fiscal-easing measures in place, at least until there is less deflationary slack in the economy. (So far the government has prevaricated about the need for continued fiscal stimulus.) In the longer term, it should strive to raise Japan’s trend rate of growth, which many reckon has fallen to about 1% a year from 1.5-2% previously, as the population shrinks.

That means boosting productivity through labour-market reform, immigration policies and free trade, none of which the ruling Democratic Party of Japan has been keen on so far. Its goal of prompting growth in the underachieving domestic side of Japan’s economy is a fine one, and certainly there is room for huge productivity improvements in some areas, particularly agriculture. But that should not come at the cost of harming exporters, which the DPJ has myopically threatened to constrain through union-friendly wage controls.

Big bang-bang

In short, Japan needs a double-barrelled big bang to jolt its economy back to life. If that threatens to spook investors, the authorities should have up their sleeve a credible long-term plan to restore order to public finances—but one which should be put in place only when growth is on a firmer footing and deflation has been truly licked. If the consequence of all this additional stimulus is a weaker yen, so be it. It will be a small price to pay if the eventual result is more openness and buoyancy in one of the world’s largest economies. The Economist

The two contrasting faces of the Philippines

IN jarring juxtaposition, and in the stark gaze of the global village, two contrasting faces of the Philippines were on display last week. One was the caring and compassionate face— glowingly portrayed by CNN (and every decent human being’s) “Hero of the Year” Efren Peñaflorida, the self-motivated pushcart educator who, quietly and with little fanfare, took it upon himself to bring hope to the lives of impoverished children.

The other was the brazen and brutal face—shockingly typified by the podgy and savage thug Andal Ampatuan Jr. who, masquerading as a two-bit politician, flaunted an agenda which engrained death as way of life in the psyche of those hapless citizens cursed to be subjugated by the political clan he represented.

While our spirits were uplifted by the tender-hearted and benevolent nature of Peñaflorida’s achievement, the depraved Ampatuan gutted our stomachs by the impervious character of the barbarous rampage he led that at the last official count stands at 57 innocent lives lost.

And here’s the ironic rub. While Peñaflorida attained his new found fame without any assistance whatsoever from the powers that be, Ampatuan acquired his strutting notoriety as an off-shoot to the perceived patronage of people in high places. Such is still the sorry state of affairs in certain quarters of Philippine society.

Matters on this front were not helped when Malacañang Palace spokesman Lorelei Fajardo—who appears increasingly to be suffering from chronic foot-in-the-mouth disease—pointed out in reference to the Ampatuan clan that “it doesn’t mean that they are no longer our friends, if ever they indeed committed the crime.”

Fajardo wasn’t done there. She incredulously went on: “Just because they are in this situation doesn’t mean we will turn our backs on them.”

The real sentiments of the Palace surfaced not long after Fajardo had laid her quick-fire tongue to rest. The entire Ampatuan clan was unceremoniously booted out of the administration party.

As members of the Fourth Estate, we have much reason to grieve over the cruel fate that befell 23 of our comrades who one week ago today courageously placed themselves at the right place, notwithstanding the fact that they fully understood it could be at the wrong time.

All of them toiled tirelessly and fearlessly on a daily basis in this dangerous part of the southern Philippines to safeguard the dignity and human rights of ordinary citizens, and most times providing the only safety buffer between innocent Filipinos and the impunity of political warlords. That they fell heroically in the line of duty will be their everlasting memorial.

The killing fields of Maguindanao will now go down in the annals of infamy as the scene of the greatest single slaughter of journalists in history. Making the callous killer Ampatuan the Pol Pot of the Philippines.

The condemnation of the international community to this mindless election related mass killing was swift and unequivocal.

Expressing his own government’s outrage, British Ambassador Stephen Lillie said, “I condemn this brutal massacre of innocent civilians, including women, journalists and lawyers. I hope that the authorities in the Philippines will take urgent action to bring the perpetrators to justice and prevent further escalation of violence in the run-up to next year’s elections.”

Quite tellingly Lillie continued that “effective action will be crucial in maintaining confidence in the Philippines’ commitment to protect human rights.”

Suffice it to say that the vermin responsible for this unspeakable atrocity must be subjected to judicial extermination—and fast. So it’s gratifying to note that the wheels of justice—that in the Philippines tend to grind painfully, and often selectively, slow —are moving swiftly with the Department of Justice readying multiple counts of murder against the Butcher of Maguindanao.

But we hope not too fast so that legal corners are cut and a less than airtight case is put forward, giving the perpetrators the chance to escape justice via technical loopholes. There are 57 crying and compelling reasons why justice must be seen to be dispensed, and not dispensed with in the cause of political expediency.

Because of the horrific, and audacious, magnitude of the crime the progress and outcome of this case will be keenly watched by the entire Philippine nation and, indeed, much of the civilized world.

Dame Justice must not be seen to be wobbling precariously on her pedestal on this one.

Saturday, November 28, 2009

Who is responsible for poverty in Papua?

Papua is one of the most underdeveloped regions in this country. And my question is who is actually responsible for creating that poverty? I spent more than four months this year teaching in Fakfak, West Papua. Before I went to Papua I knew how bad the situation in the region was from watching the news.

There is a lot of information about Papua, including information about the levels of poverty and illiteracy in the region. In Papua, the rate of education is very low and people have been known to die from starvation.

The reality of poverty and misery in Papua has drawn my attention for many years. I have devoted much time to thinking about the problems and how to overcome them. When I was in Papua, I started to form a real and complete picture of this problem. I began to ask myself how such a rich island could become so poor. The forest and sea looked like it provided abundant, which could sustain people's livelihood sufficiently.

The forest, river and sea could supply almost every need; wood for housing, various plants for medicine, unlimited land for farming, and animals and fish for consumption. With a little advanced knowledge and technology to manage these great resources, they would certainly lack nothing they would need to live a good life.

Driven by these questions, my thoughts turned to the lifestyle of the Papuan people that I saw while I was living there. I observed what they ate, what they wore, where they went when they got sick, what kind of houses they built, and finally what their definition of rich and poor was. Now apparently they eat rice instead of yam and sago palm, they wear garment clothes instead of more traditional clothing, when they get sick they go directly to a doctor rather than use their own traditional medicines, and the worst of all, they also build concrete houses instead of traditional wooden houses.

This time the measure of rich and poor was not how many pigs someone had, rather more like the Javanese, they measured wealth in terms of the size of their house, what vehicles they drove and what kind of phone they used. They have given up using their own resources and have began to use the products of others; the products of different cultures that come Java (read: modernization, globalization).

Papuans have now become absolutely dependent on other resources. And to get them they must buy them at four to six times the price. They buy clothes, rice, medicine and even building materials from Java. This is a problem, but there is something much bigger; while they must buy everything from Java, on the other hand, they sell almost nothing to Java. It is completely unfair and unjust. This is a problem, but there are bigger problems than this.

Javanese culture has become deeply imbedded in Papuan life. Today, their lifestyle is completely Javanese. They have abandoned their own culture in order to become Javanese. They eat, wear, build houses, and have become consumers just like the Javanese. They were pushed to live on something that their own island could not produce and then neglected their own resources.

Now we have to ask, how did this situation occur? In my opinion, one of the most important causes was the doctrine and theory of developed and underdeveloped regions and societies that was used by the Javanese in their approach to Papua. The Javanese came to Papua and told them that they were poor, backward, and underdeveloped, while at the same time implied how advanced, modern and civilized they were.

In this way the Javanese pushed the Papuans to be like them because they didn't want to be considered as underdeveloped and primitive. And as soon as the Papuans accepted this idea they became dependent on Java - believing they had to buy materials from Java so they too would become advanced, modern and civilized.

But the problem is that as soon as they adopted Javanese culture and became dependant on their products, the Papuans directly detached from their own culture and neglected their island's resources. And what is the result of this? Did the Papuans then became an advanced society like the Javanese? No! All that they got from this was poverty. This Javanization has just made the situation in Papua even worse than before. The Javanization was just a politic of how to sell, not how to help. They pushed Papuans to buy everything they sold, but never thought about how to create jobs for them so they could earn the money to pay for them. So, they just buy with their little saving; after which, poverty just hits harder. By Tri Harmaji, Yogyakarta The writer is a PhD student of ICRS Yogyakarta

Friday, November 27, 2009

If Corruption Is in Our Culture and Our Minds, How Do We Change?

Actress and model Manohara lifts a crocodile at an anti-corruption protest in Jakarta on Monday. (Photo: Jurnasyanto Sukarno, JG)

Corruption. I first became familiar with the concept when I was in the third grade at an international school in France. One of my classmates talked about his mom getting pulled over for speeding while driving him to school. He was worried because they took her license away because of previous traffic violations. Our teacher tried to comfort the poor kid, who looked like he thought his mom was going to be sentenced to life in prison.

As the teacher explained that his mother probably just had to fill out a few forms, I interrupted her and announced proudly to the class that in my beautiful homeland of Indonesia you can just give a policeman the equivalent of a euro or so and get away with speeding!

All the other kids thought this was cool and asked me what else people in Indonesia pay for that they couldn’t in France. I didn’t need much time to think and very casually said, “Well you can pay for your identity card, getting a drivers license, passing airport security, getting into the police force — almost everything really.” The teacher chuckled and then looked me in the eye and said, “That is called bribing, and that’s what makes your country a corrupt one.”

She explained to the class the horrible effect that corruption has on a country. One thing that was extremely close to my heart was poverty, another byproduct of corruption according to the teacher. At that moment my feelings changed. From being overly confident and bragging about my country, I developed an embarrassing, sick, disappointed feeling in my gut. I felt somewhat betrayed by my motherland.

By the time the lunch bell rang, all the kids had probably forgotten about the incident but I didn’t. It was all I could think about through my math, geography and science classes. Instead of rushing to the cafeteria, I rushed to the school’s deserted library and with the help of a computer I learned as much as I possibly could in 45 minutes about corruption. From that day forward my views on the “convenience” of corruption changed.

Is corruption convenient? Yes. Most people I ask say that corruption is a despicable act mostly performed by the government and the “elite.” I then ask them if they’ve ever bribed a cop when being stopped for a traffic violation. No one has said no.

I have come to realize that bribery has become such an ordinary part of our daily lives here that millions of people contribute to it on a daily basis without even realizing it. We bribe as easily as we breathe; we are so used to paying our way out of any little inconvenience in life that we almost make it seem OK to be corrupt.

Is this why corruption is such a big, seemingly unsolvable problem here in Indonesia? Is this why we can’t seem to find a solution to this matter? Is it because corruption is the one problem we can’t pay our way out of?

In my mind, the solution has to start with changing our mind-set toward the convenient aspects of being corrupt. We have to make changes in our mental attitudes toward corruption before just blaming the government. I see this as almost like going green; people can’t keep blaming the large polluting factories while driving a fuel-guzzling SUV.

Sadly, money is power. The one thing that disturbs me the most about corruption is the effect it has on the poor and powerless. The powerless are almost half of Indonesia’s population, and they live on less than Rp 20,000 ($2.10) a day.

So then let’s look at government officials in Indonesia. For example, ministers. Today they earn about Rp 19 million per month. When I see someone earning that amount spend far more than that in just one day, for example, without having another job on the side, I can’t help but be puzzled. I can’t help but ask whether the money they are spending on their fourth car (which most probably won’t even use) is money that is supposed be used to help the less fortunate, build new schools or help victims of natural disasters.

I was speaking with a very respectable man the other day. He works in a very high position in one of the biggest banks in Indonesia. I brought up the subject of the Padang earthquake and was telling him how I was happy that TV stations were raising a substantial amount of money for the victims. As I said that, he smiled at my naivete and he then told me that one local station raised Rp 17 billion. How much went to Padang? Rp 3 billion. What happened to the Rp 14 billion? Who knows.

The latest corruption case to blow up is, of course, the whole issue with Bank Century, top government officials, the police force and the KPK etc. etc. etc. Do you honestly think anyone involved in this mess is innocent of corruption? I don’t.

The more I dig into this issue, the more I realize that the whole system is corrupt. We can’t fix anything by just firing a bunch of people because, literally, everything is corrupt. Corruption is and will be a part of our culture unless we make real changes in ourselves.

In my opinion the only way to make any progress is by tackling the problem at the roots, starting from zero. How do we do that? We have to change our way of thinking. There should be serious lectures in schools, kids should be encouraged to have a real voice and an opinion about their nation’s future — make them develop their minds rather than just sticking to textbooks and assuming everything they read is the truth. In the public schools, we should educate children more about current affairs and corruption, make them debate the issue and broaden their minds. They basically need a view of their own rather than following the way things have always been done. Come on, right now the “grown-ups” aren’t setting what I would call a good example. They need to be challenged by young people.

I know this kind of change will take a long time and I’ll probably be an old granny before it’ll start to have any real effect but we just HAVE to change someday. I’m really tired of watching people complain but then do nothing about the problem of corruption; it makes everyone look like a hypocrite. If no one is willing to stop this culture of sleaze with genuinely good intentions and no dirty money involved, it can’t get better. I guess I would be a hypocrite too if I didn’t try to do something. It might sound a little too ambitious for a 17-year-old girl like me, but I am determined to do something about it. I am positive that we can change.

I’m going to end this with one of my favorite quotes by Margaret Mead, the American cultural anthropologist: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

Manohara Odelia Pinot is a fashion model and television actress.

Haj: Pilgrims -A lucrative business of sweat and blood

All Muslims wish to go to Mecca to perform haj as required in the Koran. And every year Indonesia sends the largest number of pilgrims to Saudi Arabia, because the Saudi Arabia government allocates 1 percent of the total Muslim population for each country, or 210,000 participants, for this year.

As the government charges about Rp 33 million (US$3,350) each, this year's the total payment from pilgrims is about Rp 2.8 trillion. A huge amount for sure.

If we use the hitungan dagang (business calculation), like many Minangkabau traders in Tanah Abang Market say, the haj travel bureaus together with the Ministry of Religious Affairs will at least get one third as profit.

The pilgrims, of course, will spend more than Rp 33 million. One to three months before their departure, there are series of practices, or training conducted by the travel bureaus or related agencies.

Before and after performing the haj, the participants should donate more money for certain ceremonial and charitable activities.

And don't forget, they should also provide their relatives, neighbors and colleagues with gifts from Tanah Suci, the Holy Land. Overall, each participant may spend about Rp 50 million.

It's a very costly spiritual journey.

One of my close friends, who often became the guide for Indonesian pilgrims, revealed that he made much money every time the season came.

His father, who ran the haj business, could afford to build a nice house and his family enjoyed an easy life. And my friend told me that he was really motivated to learn Arabic and Islam at a pesantren (Islamic boarding school) because he wanted to work for his family business.

He said in the haj business he profited in two ways: Reward from God as well as the reward (wealth) from running the business.

The officials at the Ministry of Religious Affairs, especially those who work at the Ministry's directorate general for haj affairs, may also share my friend's view.
It is a lucrative business and the office is often regarded as lahan basah (a financially profitable division). Once you are there, you will prosper, the officials there often say.

And they are not alone, surely. The fact that one corrupt bureaucracy is correlated with other corrupt ones has been known for long time in relation to the haj management. We can clearly see how all the elements from beginning to end are monopolized.

Take a look at how the ministry manages accommodation. Almost everything is fraudulent: the arrival, the catering, the hotels, transportation, guides, and communication.

The government is very lucky, because many Indonesians are used to being patient and passive. And we can trace this "luck" back to two or three centuries ago.
As retold by Marcel Willox (1997), when it was recorded before the nineteenth century, Indonesians risked their lives and wealth and everything for the haj.

They will tend to remain passive even though they have to sacrifice themselves here or there, because they deeply believe that their death is never a waste. As their intention is declared before they leave, they are already indoctrinated for the eternal life.

But will this kind of business that exploits the belief and willingness of the people carry on like this? Are not there any alternatives to make it fairer and therefore less exploitative?

First of all, since the rules of the game are typically bureaucratic, and therefore strengthen the corrupt practices, the chance for change is slim. So, there should be an initiative from the lawmakers to review or amend the 2008 law on the haj management.

The management of the haj should be required to be more transparent and accountable, especially before the public.

There should be reliable and standardized procedures and operations that the public can trust. The law should ascertain that there is no more aji mumpung (taking advantage) or yang penting jalan (just go ahead).

Second, there should be independent institution(s) filled with independent people which are legally continuously supervising, assisting and auditing the management of the haj in all its aspects.

And it is the government itself, the President at best, that should establish it since it is under the executive's scope of work. The existence of this institution will enable the checks and balances process in the handling of the haj. Khairil Azhar , Jakarta The writer is a teacher at Lazuardi GIS, Jakarta.

Thursday, November 26, 2009

China gets due recognition as a global power

OBSERVERS analysing the visit of US President Barack Obama to China not unnaturally looked for signs of a shift in the world balance of power — and found them. For one thing, the American leader was noticeably respectful of his Chinese hosts and did not attempt to lecture them, at least not in public and probably not in private as well. And the Chinese side finally got what it had wanted for 30 years — to be treated as an equal by the United S t at e s. Of course, the shift in the balance of power does not mean that China is going to replace the US as a global hegemon. It does mean, however, that China will play a much bigger role in world affairs.

During the Bush administration, Beijing was told that it had to learn to be a responsible stakeholder. Now, it is learning that it has to pay a price for a bigger voice in world affairs — the assumption of additional responsibilities.

Power and responsibility go t o g e t h e r.

A joint statement issued by the two countries shows the extent to which they now share a common world view. They reviewed global issues from the Middle East to South Asia; from the global economic recovery to climate change.Each acknowledged the right, indeed the responsibility, of the other to deal with global issues.

“The two sides noted that, at a time when the international environment is undergoing complex and profound changes, the United States and China share a responsibility to cooperatively address regional and global security challenges,” they said. In the joint statement, the US “wel - comes a strong, prosperous and successful China that plays a greater role in world affairs”, addressing China’s concerns of American attempts to frustrate its rise.On its part, China declared that it “welcomes the United States as an Asia-Pacific nation that contributes to peace, stability and prosperity in the region”, thus ameliorating American fears that a rising China would attempt to squeeze it out of the reg ion.

In this emerging world order, both the US and China will have to make adjustments. Washington, known for its predilections for unilateralism, will have to pay greater heed to the interests of China and other countries.And China will have to play a global leadership role to which it is unaccustomed.

The late Deng Xiaoping warned his successors to keep a low profile and never take the lead, and China largely hewed to this course over the last two decades. But as the country has grown to become the world’s third largest economy — soon to become the second largest when overtaking Japan — it will have to come to terms with an unaccustomed new role. In this new role, it will be difficult for China to be a follower in the international community, going along with majority views. Indeed, China will have to moderate its oft-stated policy of noninterference in other countries’ internal affairs.

This is implied in the joint statement, where the two countries agree that they “share increasingly important common responsibilities of major issues concerning global stability and prosperity” and agree to “work together to tackle challenges, and promote world peace, security and prosperity”. America’s and China’s interests are now so intertwined that each acknowledges the right of the other to be involved in its economic affairs since what one country does will affect the other.

Thus, to reassure China that its investments are safe, the United States promised to “take measures to increase national saving as a share of GDP and promote sustainable noninflationary growth” and return the “federal budget deficit to a sustainable path and pursuing measures to encourage private saving”.

And China promised to “continue to implement the policies to adjust economic structure, raise household incomes, expand domestic demand to increase contribution of consumption to GDP growth and reform its social security system”. So what we have now is a framework for a bilateral relationship in which each sees the other as a partner.

What remains now is to build political trust, which is clearly still lacking. While both countries say they are committed to building a positive, cooperative and comprehensive relationship for the 21st century, old problems such as Taiwan, Tibet and human rights are as intractable as ever while new problems are bound to emerge. It will not be easy for this new partnership to work. But if it doesn’t, the outlook for the resolution of world issues in the 21st century will be bleak. By Frank Ching, New Straits Times.

Indonesia - This Tiger's Hungry For The Presidency

ANYONE who doubts whether cashiered general Prabowo Subianto will make a serious bid for the presidency in 2014 need only watch Hungry Is The Tiger, a beautifully filmed documentary that lays out his plan to rescue the country's poor. Using a series of heartrending interviews, interspersed with wayang storytelling, the 79-minute documentary offers the promise of a 'White Revolution' that will turn deprived children into tigers - 'hungry and strong'.

The revolution is about milk and how Indonesia can emulate a successful project in western India, where women are given dairy cows as a way of supplementing the income of their husbands and keeping their children in good health at the same time.
This is not a crass exercise in political hype. Director and cinematographer Gary Hayes - whose new Julia Roberts feature, Eat, Pray, Love, was partly shot in Bali - has created an amazing canvas on which to paint a simple, compelling message. As a professional work, it mirrors the slick televised campaign advertisements that got Prabowo a lot of attention when he first declared his presidential ambitions - something that had never been seen before in Indonesia.

In this case, however, an obviously well-fed Prabowo is introduced only as a goat-breeding former general, who got all his soldiers to drink milk when he was a battalion commander in Bali years ago. He had to abandon his own presidential campaign, but acting as the running mate of Indonesian Democratic Party - Struggle presidential candidate Megawati Sukarnoputri did win him extra visibility.

A former chief of the Indonesian Special Forces and the Army Strategic Reserve, the often hot-headed Prabowo may be controversial. But as a trip this correspondent took through Java earlier this year revealed, he has a growing following. How he keeps himself in the spotlight over the next five years and how much money his businessman-brother, Hashim Djojohadikusumo, is prepared to lay out for him will go a long way towards determining his chances in what is now a wide-open field.

Recent reports suggest the brothers have had a falling out in recent weeks because of Hashim's insistence on having a bigger say in Prabowo's Great Indonesia Movement Party (Gerindra), which controls 26 seats in the new Parliament. But if that is the case, it won't last long. They have always been close, as befits brothers whose father, former finance minister Sumitro Djojohadikusumo, always saw them as a dream team: Prabowo the military and political leader, and Hashim the financier.

While it is far too early to make a serious assessment for 2014, it is still a wide-open field with only Din Syamsuddin, the head of mass Muslim organisation Muhammadiyah, as the other likely candidate at this point.

Golkar chairman Aburizal Bakrie may be tempted, but Indonesians are wary of businessmen, particularly someone whose drilling company is widely blamed for causing the ongoing Sidoarjo mudflow disaster in vote-rich East Java. What we don't know is whether President Susilo Bambang Yudhoyono will use the incumbency in his final two years to promote a possible successor to carry the banner of his majority Democratic Party.

There is virtually no one on the horizon at this point, but Vice- President Boediono or Finance Minister Sri Mulyani Indrawati could be contenders - or even Paramadina University president Anies Baswedan, 40, clearly a national leader in the making.
Certainly, Hungry Is The Tiger is a strong reminder that Prabowo is in there for the long haul, as is his retention of Dallas-based Republican strategist Rob Allyn, who acted as scriptwriter and executive producer for the film. The emphasis on self-sufficiency is interesting. Prabowo is, after all, the former son-in-law of ex-president Suharto, whose obsession with growing enough rice for a populace that was once close to starvation won him a United Nations award in the late 1970s. More importantly, Prabowo sees the political advantages of focusing on the rural poor in particular and on the so-called 'people's economy' - a lesson he learnt from deposed Thai prime minister Thaksin Shinawatra.

Some people called Thaksin's rural programmes 'money politics', failing to recognise that it was a win-win situation - not only for Thaksin himself, but more importantly, for a huge section of voters who had previously been largely ignored.

Human rights groups will almost certainly continue to highlight the role Prabowo has admitted to playing in the 1997-98 abduction of pro-democracy activists, 12 of whom have disappeared. But many voters are either too young to remember that period or, like a lot of people I have talked to in the rural hinterland, simply choose to put it all behind them in favour of someone they seem to genuinely like.

That's the interesting thing about Prabowo, even if he is portrayed in elite circles as a dangerous man. He does seem to appeal to a wide range of younger constituents, a great many of them girls whose jilbabs indicate a devout adherence to Islam.

There is no question, however, that Prabowo's human rights record will continue to haunt him if he ever becomes president. He is currently banned from visiting the United States and openly acknowledges that he would have to send his vice-president in his place. The Straits Times (Singapore) John McBeth, Senior Writer

Wednesday, November 25, 2009

Indonesia and Malaysia - The ties that bind need to be strengthened

IN recent years, the ties between Malaysia and Indonesia have come to be defined by the issue of migrant workers.
For many in Indonesia, the face of Malaysia is of heartless employers who maim and kill poor, hapless domestic workers who left home in hope of earning money to send back to loved ones.

Malaysia is also seen as a thief who steals the arts and crafts of Indonesia and claims them as its own.

For many in Malaysia, on the other hand, Indonesia is associated with illegal migrant workers blamed for petty and violent crimes that often end in injury and death.

It is tragic that bilateral relations have deteriorated to such narrow perceptions after 52 years of diplomatic relations.

It is well worth the efforts of both governments to dispel such perceptions, as the ties between the two countries are far deeper and more meaningful than these narrow perceptions.
For a start, the Malaysian embassy in Jakarta could have a public affairs section to respond to accusations and queries from the Indonesian press and groups ranging from labour unions to human rights advocates. The embassy lacks such a section at present.

For one recent example, the perception here is that Malaysians were behind a website mocking Indonesia, leading to demonstrations outside the Malaysian embassy in Jakarta, but there was no official response from Malaysian representatives.

Nor has there been any refutation of the accusation by the fringe nationalist group, Bendera, that one Indonesian migrant worker dies in Malaysia every day through abuse and neglect.

A public affairs section would also be invaluable in engaging with Indonesia's press, civil society, non-governmental organisations and other groups to foster better relations.

The Indonesian press has grown into a large, powerful and influential force.

The combined national and local print media number an estimated 1,000 publications, according to the Indonesian Journalists Alliance.

Good ties with the press will help put a fair perspective on important issues, or whenever Malaysia needs the Indonesian press to explain and disseminate its side of the story.

Indonesia is a country of great importance to Malaysia and the rest of the region. It is Southeast Asia's largest economy and has the world's fourth-largest population with 240 million people. Malaysia's population is about 12 per cent of Indonesia's.

Indonesia is a sprawling archipelago spread across 17,000 islands and shares a long border with Malaysia.

Behind the headlines of maid abuse and criminal migrant workers, Malaysian and Indonesian investors have been cooperating to create jobs and wealth for both countries in agriculture plantations, telecommunications and mining.

It is important for that to be more widely known among Malaysians and Indonesians alike. How many realise that Malaysia is Indonesia's fourth-largest investor?

Last year, Malaysia's approved investments in Indonesia totalled US$2.35 billion (RM8 billion), according to official figures.

Bilateral trade jumped 14 per cent last year to total RM44.9 billion from RM39.1 billion in 2007.

While many Indonesian students study in Malaysia, Indonesian universities also play host to 5,900 Malaysians.

Fuelled by leisure and business travel, Malaysian tourist arrivals in Indonesia rose to 800,000 last year. Every weekend, Malaysians flock to the hillside city of Bandung for retail therapy at the dozens of factory outlets offering a wide variety of clothes, jeans and T-shirts at cheap prices.

The number of Indonesians visiting Malaysia is far greater, totalling 1.8 million.

Indonesian President Susilo Bambang Yudhoyono chose Malaysia as the first foreign state to visit after his re-election to a second term in July.

It was a gesture of goodwill deeply appreciated by Malaysian Prime Minister Datuk Seri Najib Razak, who had attended Susilo's inauguration for a second term on Oct 20.

These are positive signs for Malaysia-Indonesia ties. Indonesia's newly-appointed Foreign Minister Marty Natalegawa described Susilo's visit to Malaysia as having a "great, great outcome".

"All the dynamics and chemistry were extremely positive, emphasising why bilateral relationships are so important," Marty said upon his return to Jakarta.

* The writer is NST's Jakarta correspondent

Afghanistan: Elections and the Crisis of Governance


Kabul/Brussels, 25 November 2009: Only vigorous constitutional and electoral reforms will prevent Afghanistan from slipping further into instability after Hamid Karzai’s fraudulent re-election.

Afghanistan: Elections and the Crisis of Governance,* the latest policy briefing from the International Crisis Group, examines the situation in Afghanistan after a deeply flawed presidential electoral process delivered a critical blow to the legitimacy of both the government and the international community. The briefing argues that institutions facing a credibility crisis of such huge proportions cannot defeat the insurgency.

“Karzai’s retaining power under these circumstances has bolstered the impression that the international community is disinterested in or incapable of checking corruption”, says Candace Rondeaux, Crisis Group Senior Analyst. “It handed the Taliban a huge public relations victory”.

To stem the decline in public confidence, the international community, particularly the US and the UN, must urgently put in place and vigorously support a number of key measures, including:

• restrictions on the size of the cabinet, barring nominees with demonstrated links to armed groups or criminal activities from joining government;
• the formation of an impartial commission of inquiry to conduct a thorough public review of the 20 August 2009 elections; the National Assembly’s use of its full sanctioning powers against those suspected of abusing their offices to influence the polls; and vigorous pursuit by the attorney general and courts of criminal prosecutions of those involved in flagrant violations of the law;
• consultations among relevant Afghan and international actors to achieve consensus on immediate steps to strengthen the machinery for the 2010 elections;
• convocation of a loya jirga to undertake constitutional reform, including consultations on the role of the Supreme Court; enhancing the independence of the judiciary and legislature; and meaningfully devolving authority and resources to provincial and district levels; and
• resignation of UN Mission in Afghanistan (UNAMA) chief and UN Special Representative of Secretary-General Kai Eide, since he has lost the faith of many on his staff and the necessary trust of many parts of the Afghan polity, accompanied by a thorough re-evaluation of the advisory role of UNAMA’s Enhancing Legal and Electoral Capacity for Tomorrow (ELECT) program view to rebuild public support for Afghanistan’s electoral institutions and processes.
“The international community has too often acted as if the election cycle was merely a box to tick, and we’ve all seen where that has led”, says Samina Ahmed, Crisis Group’s South Asia Project Director. “Impending decisions about military strategies, troop levels and state-building concepts may mean little if we do not cauterise the damage these fraudulent elections inflicted on Afghanistan. Only thorough reform can do that”.

From Stability to Chaos in Indonesia

JAKARTA - Indonesian President Susilo Bambang Yudhoyono delivered earlier this week an eagerly awaited announcement on the scandal involving the Attorney General's Office (AGO) and National Police's alleged efforts to undermine the quasi-independent and widely respected Corruption Eradication Commission (KPK), which in recent years has convicted top-level officials from both institutions.

But Yudhoyono's vague pronouncement on November 23 failed to clear the air and left unanswered questions about his own possible involvement in the alleged plot. Re-elected in July with an overwhelming democratic mandate, Yudhoyono has more recently experienced a reversal of political fortunes as his corruption-busting credentials have come into doubt and protesters in cities across the country have taken to the streets calling for his resignation.

The political stability Yudhoyono previously represented to both domestic and foreign investors has in recent weeks suddenly come undone, with the specter of possible impeachment proceedings against Yudhoyono and doubts about his freshly elected government's survival. How he handles the allegations and street protests will put his commitment to democratic processes and reform to a stiff test in the weeks and months ahead, political analysts say.

The first hints of potential foul play among Yudhoyono's top ranks emerged with his previous administration's bailout of the mid-sized PT Bank Century. Allegations that part of the rescue funds were diverted to his re-election campaign coffers have been officially and consistently denied, but not yet disproved through a truly independent investigation. On Monday, the Supreme Audit Agency released a report indicating massive financial irregularities in the US$717 million bailout scheme.

Street protesters have called for the KPK to investigate the bailout scandal and more immediately for Yudhoyono, Vice President Boediono and Finance Minister Sri Mulyani Indrawati to resign over the allegations of wrongdoing. The KPK scandal appears to involve a wider conspiracy at the highest levels of the judicial and law-enforcement agencies, both of which answer ultimately to Yudhoyono. Whether it was targeted to suppress a possible KPK investigation into the circumstances surrounding the Bank Century bailout is still unclear.

The case against the KPK spiraled from the arrest this May of Antasari Azhar, then the acting chair of the KPK, for his alleged involvement in contracting the murder of a businessman involved in a love triangle with a young female golf caddy.
While in custody, Antasari made and later withdrew allegations of bribery, influence peddling, and extortion within the KPK, a quasi-independent institution that hitherto had a rare reputation in Indonesia's corrupt official context for integrity and independence.

Charges were later filed against two KPK deputy chairmen, Bibit Samad Rianto and Chandra M Hamzah, for extorting money from Angodo, the brother of a suspect in a case they were considering. However, secret tapes of conversations between Angodo and senior police and AGO officials appeared to reveal a conspiracy to frame the two senior KPK officials.

The tapes were leaked to the press and later played in nationally televised court proceedings. They included references to Yudhoyono, suggesting that he was aware of and even possibly supported the alleged frame-up. Street protests erupted over the tapes' revelations, leading to calls for Yudhoyono's resignation and Bibit's and Chandra's release from detention.

In response, Yudhoyono formed an ad hoc fact-finding team, known as the Team of Eight, comprised of lawyers and high-profile anti-corruption advocates to look into the scandal and produce a report of their recommendations. The team found there was no legitimate case against Bibit or Chandra and recommended that the investigations and case building against them be immediately halted. It also recommended a thorough restructuring of the police and AGO.

Yudhoyono made his announcement on the team's findings on Monday and disappointed those who hoped for clear and decisive executive action. While suggesting that the case against Bibit and Chandra should not be taken to court, he was unclear as to whether the case ought to be dropped and the investigations halted. His recommendation was based on what he referred to as "growing public distrust" of the police and AGO.

Going beyond the Team of Eight's recommendations, he added, "Immediate efforts to correct and improve the three institutions are necessary," suggesting that fault could yet be found with the KPK, which since its establishment has produced a 100% conviction rate and jailed a number of former top officials. He added he "did not want disharmony between the KPK, the police and AGO to be permanent".

Chandra and Bibit had indicated their desire to see the case brought to trial so that they could be publicly vindicated of the charges that include abuse of power, bribery and extortion. The defendants' lawyers said after Monday's announcement that they were not clear about the president's intentions and Chandra expressed his confusion to the press, "What does he mean? Maybe we should wait two or three days to see the clearer picture."

Yudhoyono's vague comments underscore his well-known tendency to appease competing camps and maintain a veneer of stability. But the "disharmony" he alluded to is likely to persist as long as the KPK, tasked with uprooting corruption, and the police and AGO, often rated as among the most corrupt institutions in one of the most corrupt countries in the world, remain natural enemies.

Analysts see little prospect of detente as long as the KPK continues to exist and the current top level staffs of the police and AGO remain in place. By likening the squabble to a family affair that could be solved through polite talks, Yudhoyono has raised questions about his leadership and democratic commitment and resurrected complaints often heard during the authoritarian Suharto era about state-protected impunity for wayward top-level officials.

Many commentators have taken the view that Yudhoyono has squandered a golden opportunity to tackle with force the endemic corruption in Indonesia that threatens democratic progress and weighs against investor sentiment. Public outrage over the case has given him the mandate to take radical steps in cleaning up the police and Attorney General's Office. But his lack of action is giving wider currency to perceptions that Yudhoyono is not only indecisive, but potentially complicit in abuse of power and corruption. By Patrick Guntensperger, Jakarta-based journalist.

Toll Rising in Philippines Massacre

SALMAN, Philippines — As the toll in what is now considered the Philippines’ worst case of election violence rose to 57 on Wednesday, the authorities focused their suspicions on a powerful clan allied with President Gloria Macapagal Arroyo. In Manila, the Arroyo administration promised a swift investigation. The president “is enraged by these barbaric acts,” a spokesman, Cerge Remonde, said. “She has literally thrown the full force of the law and has mobilized the security and police forces of the state to go after the perpetrators. We are expecting arrests and prosecution in the next 24 hours.”

The army announced that it would disband a 200-member militia controlled by the clan suspected in the Monday attack, the Ampatuan family. Later on Wednesday, Mrs. Arroyo’s political party, the Lakas Kampi CMD, announced that it had expelled the
patriarch of the Ampatuan clan, Andal Ampatuan Sr., and two of his sons, Datu Unsay Mayor Andal Jr. and Zalday.

The army also deployed 500 extra troops from the central Philippines to the province ofMaguindanao here on the southern island of Mindanao, an area that is home to decades-long Muslim and communist rebellions as well as fiefdoms ruled by powerful families.

As the authorities continued to search for bodies, they unearthed 11 more Wednesday on a grassy hilltop overlooking this village, not far from another mass grave with 46 of the victims — most of them members of the rival Mangudadatu clan, accompanied by 18 journalists.

The killings appeared to be directly linked to an electoral challenge to the Ampatuans mounted by the Mangudadatu family, which is based in a neighboring province. But they were rooted in a long-established political system where the national government has supported and sometimes armed families to curb the influence of Muslim and Communist insurgents. Families have often ended up clashing in feuds called “rido” that can grow so violent that they regularly send ordinary residents fleeing as refugees.

Investigators have yet to name suspects in the killings but are looking into allegations that members of the disbanded Ampatuan militia were involved. Led by the family patriarch, Andal Ampatuan Sr., the governor of Maguindanao, the Ampatuans have ruled the province as their fiefdom since early this decade. Because most of Mindanao is a semi-autonomous Muslim region, the governor had the authority to carve up the province into smaller fiefdoms for his sons. New towns, along with new administrative offices and housing, can be seen along the main road cutting through the province.

Monday, November 23, 2009

When Indonesia invaded East Timor Now Release of Balibo papers blocked

The Australian Defence Department has blocked the release of 34-year-old intelligence papers that would shed new light on the deaths of the Balibo Five journalists and potentially embarrass former prime minister Gough Whitlam. Defence Minister John Faulkner's department has withheld from public release the contents of Defence intelligence reports on the events surrounding Indonesia's 1975 invasion of the former Portuguese colony of East Timor.
In mid-2007, Australian Defence Force Academy senior lecturer Clinton Fernandes applied under the Archives Act for access to reports on East Timor prepared by the Office of Current Intelligence within the Joint Intelligence Organisation, the forerunner to today's Defence Intelligence Organisation. Dr Fernandes served as historical adviser to producer Robert Connolly's movie Balibo, which deals with the murder by Indonesian troops of five Australian-based newsmen at Balibo in East Timor in October 1975. The Indonesian Government still maintains that the journalists were accidentally killed in crossfire.
After more than two years' delay, the Defence Department released to the National Archives hundreds of pages of material, including Office of Current Intelligence situation reports formerly classified Top Secret Australian Eyes Only. However, almost all of the contents have been blacked out on the publicly released copies. In justifying the decision to withhold almost all of the content, the National Archives cited advice from Defence that the information ''continues to be sensitive''.
It is known that the Office of Current Intelligence's 1975 reports on East Timor drew heavily on the interception of Indonesian military communications that revealed Indonesian forces were operating covertly in the Portuguese colony before the full-scale invasion. A former military intelligence officer, Dr Fernandes said he was ''surprised'' by the decision to withhold the information given ''the lengthy passage of time, the independence of East Timor, democratic political change in Indonesia, and great changes in the technology of intelligence collection''.
''It really is long overdue for the Australian people to get the truth about what our government knew about the invasion of a small, defenseless neighbour about whether our diplomats and politicians, most notably Gough Whitlam, turned a blind eye to what was about to happen,'' he said. Long-time East Timor campaigner and widow of journalist Greg Shackleton who was killed at Balibo, Shirley Shackleton, also expressed surprise at the decision.
''Senator Faulkner ought to show his commitment to openness and accountability, rather than allow his officials to keep the cone of silence over the truth about Balibo.'' However, Professor Alan Dupont, of Sydney University's Centre for International Security Studies,
expressed the view that the intelligence reports should not be released, at least not for another 20 or 30 years, if ever.
Professor Dupont served as an analyst on the Office of Current Intelligence's South-East Asia desk in 1975 and wrote or contributed to many of the suppressed reports. ''This material would only inflame relations [between Australia and Indonesia],'' he said. Meanwhile, Indonesian censors have formed a special team to decide whether to allow Balibo to be shown at the Jakarta International Film Festival. The film's release in Australia earlier this year came just weeks before the Australian Federal Police announced they had opened a war- crimes investigation into the killings. The Canberra Times By Philip Dorling National Affairs Correspondent

Bali Updates

Om Swastiastu ...

Some of the top news stories from Bali this week include concern among Bali officials that rabies might spread from the island's dog to monkey populations; a developing scandal in North Bali where hospitals have been caught selling "free" rabies vaccines; a two-year sentence has been handed down to a Sanur-based land swindler; fire destroys one villas at a popular Ubud area resort; and closer scrutiny of North Bali villas is now underway by that areas tax officials.

There's also news of the confiscation of 15 protected pangolin scaly anteaters; an adamant rejection from the people of Serangan island of a government proposal to allow a limited number of turtles to be sold for ceremonial purposes; a call for a heightened awareness of the dangers of pedophilia in Bali; pressure on Bali police to get tough with big bikers; and news from Australia of the death of travel pioneer Jack De Lissa.

Bali continues to earn well-deserved awards. The Como Shambhala Uma Ubud Resort has just been named "Spa Resort of the Year" at the SpAsia awards in Hong Kong. Meanwhile, four Bali hotels get special recognition in London at the World Travel Awards.

Last week, two ministers from the presidential cabinet did an unscheduled inspection of Bali's airport. Read what they found and their promises to improve the airport's service to the public.

Looking for fun activities in Bali? Watch the Tour D'Indonesia Bike race from Jakarta to Bali ending in Bali on December 2 and 3. There's an important contemporary art exhibition at The Ganesha Gallery December 10, 2009 through January 2, 2010. And, if you're free on Thursday, November 26, join the crowd at a special charity evening for the earthquake-stricken kids of West Sumatra where I'll be serving as art auctioneer selling some one-of-a-kind masterpieces.

Just some of the news in this week's Bali Update.

To get Bali news as it happens, follow me on at

Om Çanti Çanti Çanti Om ...
J.M. Daniels - Bali Update
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Sunday, November 22, 2009

Indonesia - The Republic of Gecko

Indonesia's treasury of fables has a new entry in the wake of a protracted stand-off between up-and-coming corruption busters on one side and long-established police force and state prosecutors on the other.

To many Indonesians, the tale of a fight between a gecko, which represents the Corruption Eradication Commission (KPK), and a crocodile - National Police - has much in common with the classic bedtime story Bawang Merah Bawang Putih, or even the Mahabharata chronicle pitting Pandawa and Kurawa against one another. They are all about a battle between a hero and a villain, in which the former suffers but fights back to beat the latter at last.

That the KPK has won mounting public support in the face of the allegations of the National Police and the Attorney General's Office (AGO) is not necessarily the work of media campaigns, but the state of the mind of the public at large, which tends to side with the weak, the oppressed and - unfortunately - the good, against the strong, the powerful and the evil.

The presidential fact-finding team formed to probe into an alleged conspiracy to frame KPK deputies Bibit Samad Rianto and Chandra Mara Hamzah might have read the public's psyche when they came up with their recommendations this week, which as many had predicted went the KPK's way although the team admitted the antigraft body, too, was no angel.

The team suggested the police and prosecutors halt their investigation into criminal cases involving Bibit and Chandra due to lack of evidence.

The team also recommended that the President punish officials directly involved in the flawed legal process against the suspended KPK leaders and wage a war on case brokers and a mafia affecting all law enforcement agencies as is apparent in the current KPK case.

It would come as no surprise if the team of eight, led by presidential advisor Adnan Buyung Nasution, claimed that they took into consideration the public's "sense of justice" when they drafted their recommendations, given the growing distrust in the conventional law enforcement institutions that tend to follow the due process of law rather than deliver justice.

People have long witnessed inconsistencies in the way the law is enforced. There is a gap between the ideal and the reality when it comes to equality before the law as evident in the presence of the untouchables or certain people who thanks to their economic or political connections can evade justice.

Since its inception in 2003, the KPK has lived up to expectations that the law is upheld indiscriminately. One by one the corruption busters brought to justice powerful big-wigs, ranging from regents to House lawmakers. Although missing major cases like the misuse of Bank Indonesia Liquidity Loans (BLBI), the KPK has changed the face of law enforcement in the country long mired with corruption.

Chandra and Bibit were part of the KPK's new leadership that deliberately targeted politicians at the House as soon as they took office, despite the fact that they were elected by the lawmakers. The KPK leaders also had no fear in sending to jail former BI deputy governor Aulia Pohan, whose daughter is married to the President's eldest son.

A recent study conducted by the Indonesian Survey Circle (LSI) revealed growing suspicion that the President himself might play a part in the move against the KPK, due to his silence despite the tape recording of a plot to frame Bibit and Chandra that mentioned his name.

The research was only based on how the media reported the conflict between the KPK and the police, but its conclusion could serve as a reminder, if not a warning, that the President needs to take bold and quick measures in response to the case.
According to the study, the public negative perception of Yudhoyono rose to 64 percent from 54 percent within a week as a result of his failure to act quickly to address the controversy surrounding the alleged conspiracy to weaken the KPK. The LSI also warned that the President's inability to pass the early test would play havoc with his short and long-term programs.

Contrary to LSI's advice and the public high expectation, the President opted to leave the fact-finding team's recommendations to the National Police and the AGO, which are the parties the team concluded to be responsible for the KPK debacle.
The President's inaction has allowed the National Police and the AGO to resist the team's recommendations as well as the public's wishes as was evident in the reinstatement of chief detective Comr. Gen. Susno Duadji and Deputy Attorney General Abdul Hakim Ritonga.

The two officials were mentioned in the wiretapped conversations that strongly hinted at the backroom wheeling and dealing thought to characterize the "buying and selling" of justice in the country.

In a similar mood, Yudhoyono expressed his reluctance to take the recommendations submitted by his fact-finding team in connection with the controversial KPK case, saying he could not take actions beyond his authority.

The public is waiting for the President to announce on Monday his decisions regarding the recommendations of his fact-finding team. A watered down plan of action will further confirm suspicion that the KPK case is directly or indirectly connected with the much bigger case: The controversial Rp 6.76 trillion (US$716 million) bailout awarded to Bank Century.

The ball is already on the court. The President must listen to people's wishes or he will play the risky crocodile role. - Dwi Atmanta

Indonesian lessons for secular India

If you had to pick the place in the Muslim world least susceptible to any kind of religious extremism, it would be hard to find a better candidate than Indonesia. The world's most populous Muslim country is on Islam's eastern edge, separated from the faith's Arabian birthplace by space and time. Islam washed up in the archipelago in the 12th century, took root in the 15th and became dominant as late as the 17th. For the most part, it arrived through trade rather than conquest, by Indian dhow rather than Arab charger. It was preceded by more than a millennium of Hinduism and Buddhism, whose achievements included Borobudur, a massive 9th-century Buddhist stupa.

As the anthropologist Clifford Geertz wrote in comparing Indonesia to Morocco: "In Indonesia Islam did not construct a civilization, it appropriated one."
In India, a strain of Islamic orthodoxy was sometimes in open conflict with Hinduism. But in Indonesia, the new faith sat comfortably atop a Hindu-Buddhist past. Like most Indians, and unlike the Arabs, most Indonesians continued to believe that there are many paths to God. Indeed, until recently, Indonesian Islam - steeped in a culture of music and mysticism - was synonymous with tolerance. By and large, the one-in-eight Indonesians who are Christian, Buddhist, Hindu or Animist, rarely faced discrimination, much less religious violence.

Most strikingly, Indonesians did not confuse being Muslim with being Arab. Their national airline is named Garuda. The national epic is the Mahabharata. In Bahasa Indonesia, the word for heaven is surga, the word for hell neraka.

But this culture of pluralism and tolerance can no longer be taken for granted. Today, Indonesia is struggling to cope with the same conflict between moderate and radical Islam that has ripped apart Muslim communities from Morocco to Mindanao. Radical Muslims, those who seek to order every aspect of society and the state - from burqas to banking - by the medieval dictates of sharia law remain in the minority, but their numbers are growing. Moreover, these believers make up for numbers with zeal, organization and the conviction that history is on their side.

For Indians the drama unfolding in Indonesia is especially urgent because the conflict there is as much cultural as political, a battle between a native, deeply Indicized Islam and a strident Arab import. Over the past 30 years, Arab names have gradually edged out Sanskrit ones in kindergartens. Headscarves have mushroomed on college campuses. In offices, the greeting assalamu alaikum has become an alternative to the religiously neutral selamat pagi, or good morning. The traditional tiered-roof Javanese mosque has given way to the ubiquitous onion dome.

For the first time, a generation of Javanese children is growing up unfamiliar with Arjuna and Bhima from the Mahabharata.

The political consequences of this broad cultural shift are already apparent. President Susilo Bambang Yudhoyono's ruling coalition includes the Prosperous Justice Party, a highly disciplined cadre- based organization whose roots can be traced to the banned Muslim Brotherhood of Egypt. In recent years, a demand that Indonesian Muslims follow sharia law has resurfaced.

In universities throughout the archipelago, students congregate in mosques to study the writings of the Egyptian radical Sayyid Qutb, or to enroll in Hizbut Tahrir, another group banned in many countries for its call to unite all Muslims in a single superstate that recalls the Ottoman Caliphate.To be sure, only a fraction of orthodox Indonesian Muslims espouse violence, but that has been enough to make the past decade the bloodiest in the country's history since the anti-communist pogroms of the 1960s. Terrorist attacks - Bali bombings, and the Jakarta hotel bombings - make headlines. But much more goes on under the international radar screen. In the Moluccas, the once fabled Spice Islands, the aftermath of a bloody civil war has segregated Muslims and Christians on religious lines. Across Java, Christians complain of church burnings and intimidation by local militias. As in Pakistan,
the tiny Ahmadiyya community is under attack for departing from mainstream Sunni orthodoxy. by claiming that their founder, Mirza Ghulam Ahmad (1835-1908), received revelations directly from God. Balinese Hindus have protested against a so-called "anti-pornography" law, which they see as an attempt to impose orthodox Islamic values on non-Muslims.

Nonetheless, despite these inroads by radicals, the battle for Indonesia is far from lost. Moderates can count on the deep roots of Javanese culture, a non-sectarian constitution and deeply secular business, military and cultural elite. Indonesia may yet live up to its promise as a bastion of moderation, a Muslim version of, say, Thailand. But by the same token, nobody who follows the region should be surprised by a very different outcome, an Indonesia where radical Islam continues its march toward cultural and political influence, in short a Southeast Asian version of Pakistan.

The writer, Sadanand Dhume is a Washington-based journalist, has reported from New Delhi and Jakarta for the Far Eastern Economic Review.

Saturday, November 21, 2009

Will the Philippines Police also shoot Christian Squatters?

I am in Jakarta, participating in a conference on counter-terrorism and the role of civil society. How ironic to receive the news from Manila about police shooting Muslim squatters. Three Muslims were killed, according to reports, as a result of the violent demolition incident in a Muslim community in Baclaran on November 18. The fatalities included a 7-year-old boy, while 20 more were injured. I am trying to recall whether the police also shoot to kill Christian squatters.

Can’t think of any incident in the last 20 years. This is how the state makes it easy for terrorists to recruit new members from Muslim groups. Treat them violently but treat non-Muslims with kid gloves.

News accounts indicate that the demolition started to become violent when the demolition team, backed up by the Pasay City police, started to tear down a mosque in the community and when Pasay City policemen opened fire at resisting residents.

I share the indignation of all Muslims with this blatant disregard for human life. I share the sentiment of Anak Mindanao Party List Rep. Mujiv Hataman when he said that the demolition drive, though covered by a court order, “was brutal and bereft of respect for the human rights of the hapless residents.” This is simply criminal!

The police are there to maintain order. When people started hurling stones, is it correct police procedure to fire at unarmed civilians? Shouldn’t they just withdraw and allow negotiations to ensue so that the matter can be resolved without killing three Muslims?

The demolition team should have been sensitive to the rights of the people, especially in the case of tearing down a mosque without the assurance of a relocation site. In the news reports, the police, who under usual circumstances would have dealt with the resistance with maximum tolerance, fired their guns directly at the Muslim residents.

Let me be clear: I believe in protecting property rights, and I do not condone violence, be it throwing of stones and debris or shooting someone. But it is important to put this unfortunate event into perspective.

How can any society justify the shooting of homeless people who were resisting the demolition of the area they call home? I can at least understand the police shooting at bank robbers who fire back at them.

But these are informal settlers whose only fault is that they do not own a house in their own country.

According to a report by the Metro Manila Inter-Agency Committee on Informal Settlers (MMIAC) one out of every five residents in Metro Manila is a squatter. This represents 21 percent of the 2.6 million households population in Metro Manila.

This is therefore not just a question of property rights but also a question of social justice. I saw on TV one Muslim sister shouting, “Hindi kami bobo, hindi kami magpipilit sa isang lugar na hindi amin! Pero saan kami pupunta? Saan kami titira?” What has become of our society? People demand for shelter and we give them bullets?

And it also strikes me as ironic that the mosque at the center of the controversy is named after Rajah Sulayman, one of the three Muslim rulers (the others are Rajah Matanda and Rajah Lakandula) who governed Manila during the mid-16th century. Today, Muslims are squatters in this territory that were previously ruled by their ancestors.

I cannot help but recall the tremendous dislocations of Muslims in Mindanao as a result of Christian immigration to the island. According to the venerable scholar, Dr. Samuel Tan, the Muslims comprised 49 percent of the total population in Mindanao. By 1970, it was down to 18 percent. The Christian population, on the other hand, increased dramatically from 22 percent to 69 percent of the total population. Today, if government figures are to be believed, Muslims comprise 20 percent of the Mindanao population.

This dramatic shift in population was brought about by an incredible growth of government-sponsored Christian Filipino immigration from northern provinces to the Muslim South. In addition, the land laws of the first Philippine Republic defined all unregistered lands in Mindanao to be public land or military reservations.

Just to dramatize the hostility with which the state treats Muslims: In September 2009, the military bombed a village in Indanan, Sulu as the villagers were preparing to go to the mosque to celebrate Eid’l Fitr, which marks the end of the holy month of Ramadan, one of the 2 most sacred celebrations of the Muslim world. The military operations, to arrest three “high value targets,” killed several, caused panic among the worshippers, and disrupted the celebrations altogether. It forcibly displaced 300 families in Marang, Indanan, and other barangays. Government troops then raised the Philippine flag on a hill at Sitio Talibang in Indanan town on Jolo Island. Would government have approved such a military operation if the terrorists were in a village in Bicol, to celebrate Christmas Eve mass with their families? I think not.

I do not wish to suggest that an inflammatory Christian vs. Muslim perspective because we at the Philippine Council for Islam and Democracy have long been advocates of interfaith dialog. But violations of human rights of the Muslims such as what transpired in Baclaran do remind us so eloquently that we are a minority in this country and that justice is not always tilted in our favor.

And I am here in Jakarta, to contribute my thoughts on how we in civil society can help the state counter terrorism. First, let the State treat Muslims as citizens, as humans. And then perhaps we can discuss how we can collaborate to fight terrorism. By Amina Rusel for the Manila Times.

Editor’s note: The Philippine National Police continues to deny that there has been any death. But says nine persons, including six from the demolition team, were hurt. No names and details of slain victims have been given by Muslims to the authorities at press time. But they claim they immediately buried or cremated the dead.