Friday, July 31, 2009

Revealed: Burma’s nuclear bombshell

BURMA’s isolated military junta is building a secret nuclear reactor and plutonium extraction facilities with North Korean help, with the aim of acquiring its first nuclear bomb in five years, according to evidence from key defectors revealed in an exclusive report today.The secret complex, much of it in caves tunnelled into a mountain at Naung Laing in northern Burma, runs parallel to a civilian reactor being built at another site by Russia that both the Russians and Burmese say will be put under international safeguards.

Two defectors were extensively interviewed separately over the past two years in Thailand by the Australian National University strategic expert Desmond Ball and a Thai-based Irish-Australian journalist, Phil Thornton, who has followed Burma for years.

One was an officer with a secret nuclear battalion in the Burmese army who was sent to Moscow for two years’ training; the other was a former executive of the leading regime business partner, Htoo Trading, who handled nuclear contracts with Russia and North Korea.

Their detailed testimony brings into sharp focus the hints emerging recently from other defector accounts and sightings of North Korean delegations that the Burmese junta, under growing pressure to democratise, is seeking a deterrent to any foreign ‘‘regime change’’.

Their story will ring alarm bells across Asia. ‘‘The evidence is preliminary and needs to be verified, but this is something that would completely change the regional security status quo,’’ said Thitinan Pongsudhirak, the head of Thailand’s Institute of Security and International Studies, yesterday.
‘‘It would move Myanmar [Burma] from not just being a pariah state, but a rogue state – that is, one that jeopardises the security and wellbeing of its immediate neighbours.’’

Washington is increasingly concerned that Burma is the main nuclear proliferation threat from North Korea, after Israel destroyed in September 2007 a reactor the North Koreans were apparently building in Syria.

Professor Ball said another Moscow-trained Burmese army defector was picked up by US intelligence agencies early last year. Some weeks later, Burma protested to Thailand about overflights by unmanned surveillance drones that were apparently launched across Thai territory by US agencies. These would have yielded low-level photographs and air samples, in addition to satellite imagery.

At a meeting with Asian leaders, including some from Burma and North Korea, in Thailand last week, the US Secretary of State, Hillary Clinton, and other foreign ministers won promises from the Burmese they would adhere to United Nations sanctions on North Korean nuclear and missile exports.

China and other Asian nations had recently helped persuade Rangoon to turn back a North Korean freighter, the Nam Kam 1, that was being shadowed by US warships on its way to Burma with an unknown cargo. A month ago, Japanese police arrested a North Korean and two Japanese for allegedly trying to export illegally to Burma a magnetic measuring device that could be used to develop missiles.
Professor Ball, who has studied the Burmese military for several years, said the evidence from two well-placed sources demanded closer study: ‘‘All we can say is these two guys never met up with each other, never knew of each other’s existence, and yet they both tell the same story basically.

‘‘If it was just the Russian reactor, under full International Atomic Energy Agency supervision, which the Russians keep insisting is their policy and the Burmese may have agreed to with that reactor, then the likelihood of them being able to do something with it in terms of producing fissionable fuel and designing a bomb would be zero.

‘‘I’d be more worried about a meltdown like Chernobyl … It’s the North Korean element which adds the danger to it.’’
North Korea’s interest could be a combination of securing a supply of uranium from Burma’s proven reserves, earning hard currency, and keeping its plutonium extraction skills alive in case it agrees to fully dismantle its own Yongbyon nuclear complex. ‘‘Do they want another source of fissionable plutonium 239 to supplement what they get from their Yongbyon reactor?’’ Professor Ball said.
Excerpt from SMH by Hamish McDonald Asia-Pacific Editor

Land mine contamination vast in Vietnam

More than one-third of the land in six central Vietnamese provinces remains contaminated with land mines and unexploded bombs from the Vietnam War, according to a study released Friday. Nearly 35 years after the war's end, Vietnamese civilians are still routinely killed and maimed by leftover mines and other explosives. Vietnam estimates that more than 42,000 people have been killed in such accidents since 1975.

The study by the Vietnam Veterans of America Foundation and Vietnam's ministry of defense provides the most detailed information to date about the amount and location of unexploded ordinance littering a region that saw some of the heaviest fighting and bombardment during the war. The survey was the result of close collaboration between the United States and Vietnam on one of the most sensitive legacies of the conflict.

In addition to mapping unexploded mines and ordinance, the project, which the US government provided $2 million to finance, involved clearing 3,345 acres (1,354 hectares) of land in 1,361 communities across the six provinces.

Hezbollah given green light to broadcast in Australia

HEZBOLLAH'S TV station, twice banned in Australia for supporting terrorism, has been given permission to broadcast into Australia after an investigation found it did not breach the anti-terrorism standard.

The Australian Communication and Media Authority (ACMA) decision on the Lebanese-based al-Manar TV station, announced yesterday, outraged Jewish groups, which said they were less concerned with the station promoting terrorism than its "vicious anti-Semitism".

Hezbollah, a militant Lebanese Muslim party, is banned in the United States as a terrorist organisation, but only its armed wing is proscribed in Australia. Its TV programs endorse suicide bombers, call for Israel's annihilation, and refer to Jews as the offspring of pigs and apes.

Fear Curbs Indonesia’s Nuclear Ambitions

Nuclear power has been on and off the national agenda since the early days of Suharto but the State Minister of Research and Technology still sees it as a safe, clean form of energy and he has not given up on the idea of it becoming a reality.

The lack of understanding about nuclear power was behind protests by thousands of people in 2007 — led by the former president Abdurrahman Wahid, also known as Gus Dur — when his ministry wanted to promote the idea of building a nuclear plant in Jepara, Central Java.

Most Indonesians were overly negative about nuclear power because of a fear of dangerous radiation leaks, and the worry of building plants in such an earthquake and volcano prone country.

Thursday, July 30, 2009

Indonesia: Risk Analysis

- Indonesia risk: Risk overview
- Indonesia Risk: Political Stability Risk
- Indonesia risk: Security risk
- Indonesia risk: Government effectiveness risk
- Indonesia risk: Legal & regulatory risk
- Indonesia risk: Macroeconomic risk
- Indonesia risk: Foreign trade & payments risk
- Indonesia risk: Financial risk
- Indonesia risk: Tax policy risk
- Indonesia risk: Labour market risk
- Indonesia risk: Infrastructure risk
Full report at:

Malaysia's chameleon

The rise, fall and rise of Anwar Ibrahim, South-East Asia’s most extraordinary politician

ONE evening in mid-July Anwar Ibrahim was deep in the rubber-tapping state of Kelantan in northern Malaysia, urging a crowd of rural folk to vote for a devout fishmonger. The candidate was from the conservative Islamic Party (PAS).

A tiny by-election for the state assembly PAS already dominates is ordinarily small beer (or would be, if PAS allowed such a beverage, which it does not). But Mr Anwar needs PAS. For the paradox is that without the Islamists, the alliance he leads of Malay modernisers, Indians and secular Chinese has little chance of driving the ruling United Malays National Organisation (UMNO) from power. The coalition that UMNO dominates has ruled Malaysia since independence in 1957. Mr Anwar longs for UMNO’s destruction. The feeling is mutual.

That morning, Mr Anwar had been in Perth where he had met Australia’s foreign minister. What had he been doing with Stephen Smith? “Plotting,” replies Mr Anwar, with a conspiratorial wink. Mr Anwar spends a lot of time abroad with national and religious leaders whose names he drops slightly too easily into an engaging conversational style. He moves like quicksilver from one intriguing subject to the next, but you get the uncanny sense that he is speaking to what interests you.
Mr Anwar thinks he will soon need international support. Two days after stumping in Kelantan, pre-trial hearings began in a case in which Mr Anwar stands accused of sodomising a political aide “against the order of nature”. Mr Anwar vigorously denies the charges. He says he is the victim of a political stitch-up. International outrage might help him. Much is fishy about the case. Photographs of the former aide who brought the accusations show him with UMNO members, including people close to the current prime minister, Najib Razak. The charge has been changed from sexual assault to “consensual sex”, yet his accuser has not been charged. (All homosexuality is illegal in Malaysia.)

Mr Anwar has been here before. In 1998 he was charged with corruption and homosexual acts. In custody, he was beaten up by the chief of police. He spent six years in jail, mostly in solitary confinement, until his conviction was overturned. Upon release, his political career seemed over.

It is easy to forget now but for many years Mr Anwar led a charmed life. He made his name as an Islamist student leader in the 1970s and was even jailed under the draconian Internal Security Act. Then he shocked his former colleagues by joining UMNO, where his rise was spectacular. By 1993 he was deputy prime minister and heir to Mahathir Mohamad, the country’s long-serving leader. Malaysia seemed about to fall into his lap.

“Ah,” says Mr Anwar, “the good old days.”
But during the Asian financial crisis of 1997-98, Mr Anwar moved too soon against his mentor, who after 16 years in power was not ready to bow out. Mr Anwar railed against the UMNO cronyism from which he had benefited. Livid, Dr Mahathir threw him out of the cabinet and launched Mr Anwar’s persecution. Mr Anwar’s reformasi movement sputtered out with his jailing.

Yet the hopes which that movement represented surged again after the general election of March 2008, and especially after August 2008 when Mr Anwar won a seat in Penang. In the election the ruling coalition lost its precious two-thirds majority which gave it power to change the constitution. It has since lost five out of six by-elections to Mr Anwar’s forces, which also control four of 13 states. In getting out its message, the opposition has been helped by an explosion of internet opinion that has undermined the influence of the UMNO-controlled mainstream media.
UMNO’s back is against the wall. Even its own officials admit to its arrogance, with corruption bound into the fabric of its power. The New Economic Policy (NEP, introduced in 1971) instituted racial preferences for majority Malays, when ethnic Chinese and Indians owned much of business. But instead of helping the poor, the NEP has enriched rent-seekers around the ruling party, while dragging down economic growth. Resentment has spread from Chinese and Indians to poor or pious Malays.
This has made possible Mr Anwar’s strange alliance. In calling for the end to the NEP, he says poor Chinese and Indians need help as much as Malays—but because there are more poor Malays than other races, they will still get the lion’s share of government help. It is a possible way out from the baneful influence of race on Malaysian politics. But the real strength of this alliance is that Mr Anwar’s charisma and political nous holds it together. Alas, that it is potential weakness, too.
Trials and tribulations
The challenges for Mr Anwar and his alliance will now multiply. For a start, Mr Najib, prime minister since April, has said the NEP must adapt, stealing some of his opponent’s thunder.
Then there is the time-consuming trial. Mr Anwar says he will win whatever the verdict. If he is acquitted, the government which brought the case will be discredited. If found guilty,
tens of thousands of supporters will take to the streets. Mr Anwar hints tantalisingly at new information in a murder case that has gripped the country partly because of its links to Mr Najib. This, he suggests, gives him ammunition to fight back.

Intriguing, but it is unlikely to be enough. If Mr Anwar does go to jail, the alliance may not survive the loss of its leader. If he calls out his supporters—for something of the martyr lurks in him—he may be blamed for the ensuing chaos. And if he appeals to international opinion, his local supporters may question that.
This points to a trap waiting to catch the silver-tongued Mr Anwar, who deftly tells different audiences—religious or secular—what they like to hear. The same blogosphere that helped his meteoric rise may one day pay more attention to his
chameleon qualities. Malaysians would then come to ask more closely: who and what exactly does Anwar stand for?

The Economist [UK]

Wednesday, July 29, 2009

Australian foreign aid to East Timor 'wasted'

The spotlight is again on foreign aid from Australia after comments by East Timor's leadership that foreign aid was being spent on East Timor but not in East Timor. It was only in April that the Australian prime minister Kevin Rudd made similar claims about aid to Papua New Guinea, saying too much Australian aid was being spent on consultant's fees.

East Timor is urging western countries, including Australia, to review foreign aid policies, because he claims that the A$3 billion that have been pledged to East Timor since independence have never made it to the people or been used to relieve poverty.

The military logic to Suu Kyi's trial

The trial of Myanmar's pro-democracy leader Aung San Suu Kyi has ended amid heightened security around the area near the court, with hundreds of trucks full of armed soldiers stationed around Insein prison where the proceedings took place. The prison court is expected to announce its highly anticipated verdict on Friday.

The junta's plan to hold democratic elections next year - the first since Suu Kyi's National League for Democracy (NLD) overwhelmingly won May 1990 polls that were annulled by the military - has been put on hold pending the trial's result. People familiar with the situation say that junta leader Senior General Than Shwe will announce in the wake of the verdict the formation of a civilian-led interim government that will hold administrative power until elections are held next year.

It's a move, analysts say, designed to deflect growing international criticism.
Many critics and observers see the trial as a sham aimed at influencing the upcoming election results in the military's favor. While the prosecution was allowed 23 witnesses, of whom 14 took the stand, the defense was only permitted two of the four witnesses they requested to appear in court, underscoring rights groups' criticism that Myanmar's judiciary lacks independence.

Regime critics have echoed that assessment.The junta fears Aung San Suu Kyi and wants to keep her locked up forever. With elections planned for 2010, they cannot afford to have her free to campaign against them. While locals anxiously await the trial's verdict, few analysts believe that a guilty verdict will spark major public protests similar to those in 2007, which started as complaints against fast-rising food and fuel prices and later brought thousands out onto the streets in broad anti-government demonstrations led by Buddhist monks. That failed attempt at people's power regime change became known around the world as the Saffron Revolution.

All indications are that the generals, unless pushed by their main patrons in Beijing, will as in the past ignore international calls for Suu Kyi's release and genuine political

Oil Updates from Indonesia

- Indonesia Aug gasoline imports seen up, diesel flat
- Pertamina Gets $400m Loan To Finance Expansion Efforts
- Conoco: Expect To Bring On North Belut In Indonesia In 3Q;
- ANALYSIS-Record Asia sweet crude arb a sign of things to come
(Courtesy Joyo News Service)
Full details at:

Papua is still tense. The mystery shooters are not yet revealed.

Papua: Shot in the Dark

THE main road from Tembagapura to PT Freeport Indonesia’s mining center in Timika, Papua, is now like a dead-end. Until Friday of last week, the sound of the bullets from a sniper still caused quite a stir.

The incident started one Saturday dawn three weeks ago. Lukan John Biggs, a Freeport employee from Australia, with his wife Lia Madandan, rode their vehicle from the employee housing at Mile 68 Tembagapura, headed for Rimba Papua Golf Course, in
Kuala Kencana City. They were accompanied by Drew Nicholas Grant, an Australian citizen working at Freeport, and Maju Panjaitan.

Lukan drove with his wife in the passenger seat. Grant and Panjaitan sat in the back seat. Approaching a sharp corner, entering Mile 51-52, Lukan slowed down. Suddenly there was a shot. Seconds later Panjaitan shouted, “Grant’s bleeding!” The 38-year-old man died on the way. “They were ambushed by an armed group,” said Chief of Papua Regional Police, Inspector-General Bagus Ekodanto. Oddly enough, prior to the police processing the scene, several people came in two cars. After taping and taking pictures of the location, they departed.

The police discovered three shell casings of type DJ 564, 5.56 calibre, and three projectiles in a car belonging to the Tembagapura sectoral police which had broken down at the corner where Grant was shot. “The bulllets are army/police standard,” said Ekodanto.

It is estimated that Grant was shot from a distance of 25 meters, from a misty and dark area. Only a sharp-shooter could make the shot. In addition to finding shell casings, the police discovered a box that was used for wrapped rice not far from the
location. “It may belong to the perpetrator,” said Ekodanto.
A source in the National Police suspected that the perpetrator was a member of the Free Papua Movement. But the police wouldn’t speculate. “We’ll look into it first,” said Ekodanto. On Wednesday two weeks ago, an armed group once again struck at
Mile 54. Five policeman were injured.

Four days later, the Mobile Brigade, Brimob, which intended to secure the site of Grant’s shooting received a shower of bullets. Two security vehicles bringing mattresses for the troops were also shot at on the way. Freeport security guard, Markus Rante Allo, died. His partners, Edy Piter Bunga and Eddy Aware, were injured. “They were attacked at Mile 51,” said Ekodanto.

At night, member of Papua’s regional police Provost, Bripda Marson Patipulohi, disappeared and was found dead only the following morning. On Wednesday two weeks ago, five policemen were again targeted at Mile 54. They were sweeping the path that
would be passed by Secretary to Coordinating Minister for Political, Legal & Security Affairs, Lt. Gen. Roberto Romulo, on the way to Timika. All five were injured.

It is suspected the rebels belong to a group that intends to turn Papua into a power and influence business base. Others accuse the group as having ambitions to secure large funds for security from Freeport.

Other information connected the terror to cultural figure Kelly Kwalik. Kelly’s name came to prominence when there was a rebellion in Mapenduma in 1996. Some also said that the terror was triggered by an adat group in connection with the 1 percent contract sharing of the Freeport mine.

Two companies of Brimob troops that landed at Mosez Kilangin Airport, Timika, on Friday two weeks ago, didn’t deter the unrest. On Wednesday last week, a convoy of Freeport buses carrying joint troops from the army and the police were ambushed by a group of armed people near the location where Grant was shot.
The continuous sniper attacks are making efforts to discover who shot Grant more difficult. The police are arresting civilians instead. On Monday of last week, seven Mimika residents were arrested at their homes. “We dare not sleep at nights, afraid of being arrested,” said Yohanes, a resident of Kwamki Baru.

The arrests of civilians provoked reactions from leaders who are members of the Amungme Tribe Adat Deliberations Council, the Kamoro Tribe Adat Deliberations Council, and other elements. “The arrests of civilians are efforts to distract from the shooters,” said Fidelis Zonggonao, a Moni community figure.

Fidelis, who was Banti village head during the Papuan Military Operations Area, questioned the origins of bullets produced by Pindad. On the Pindad wrapper is written Army-TNI. “In a tribal war using arrows, the perpetrators are easily caught,” he said.

“But shooters are never caught. Where did the bullets come from?”
Dwidjo U. Maksum, Tjahjono Ep (Timika)

Correcting some Indonesian History

Air Marshall Omar Dani - From Glory to Controversy

Omar Dani died at the age of 85 from lung complications. The government needs to put right his roles in history. Omar’s coming into office as Minister and the youngest Air Force Chief of Staff in Indonesian history on January 19, 1962 was preceded by a controversial occurrence. His fall was also triggered by a controversial action: the outbreak of the September 30 Movement (G30S).

Omar was sworn in by President Sukarno as Minister/Air Force Chief of Staff when he was still not yet 38. He replaced Suryadarma who had been in charge of the Indonesian Air Force for 16 years. The replacement was made suddenly because on January 15, 1962 there was a battle at the Aru Sea that led to the death of Vice Admiral Yos Sudarso. In Nasution’s book, the Indonesian Air Force (AURI) was seemingly made the scapegoat for not helping the navy ships. As a matter of fact, the battle was a clandestine action that was not part and parcel of the joint Mandala command.

In the G30S incident, Omar made a statement on October 1, 1965 that “AURI was not involved in the September 30 Movement.” This statement which was actually neutral was questioned by Suharto’s group because the statements of navy, army and police corps—which were released later—rejected the September 30 Movement. President Sukarno mentioned that Omar’s statement was made public too abruptly amid a political situation that was not clear yet.

Omar then submitted a letter of withdrawal but this was rejected by Sukarno. As a way out, Bung Karno assigned him to visit European and Asian countries to look for possible collaborations with AURI. Omar could have stayed longer abroad by making use of his expertise as a pilot. But he chose to go back to Jakarta for the sake of “taking responsibility”, he admitted. From December 1966, Omar was jailed. He was only freed 29 years later.

The G30S incident changed history. AURI was accused of involvement. As a result, throughout the New Order, the negative stigma stuck to the corps. The chance of rectifying the history of the air force was available only after Suharto’s fall. An association of retired air marshals represented by Air Marshal Saleh Basarah took an initiative to call Minister of Information Yunus Yosfiah and Minister of Education Juwono Sudarsono requesting an end to screening of the movie Pengkhianatan G30S/PKI (The G30S/PKI Treachery) as a compulsory spectacle on September 30. The movie gave an impression that “Halim (Halim Perdanakusuma was a major air force base in the 1960s—Ed) airport was a lair for rebels.”

The air force then put the history on the right track by launching a book titled Menyingkap Kabut Halim 1965 (Unveiling the Shroud Over Halim 1965, 1999). It was made clear that: first, the training for Dwikora volunteers was carried out in Lubang Buaya village, Pondok Gede, not at AURI’s quarters. Second, institutionally AURI was not involved in the coup, although some personnel were involved. Third, President Sukarno’s coming to Halim Perdanakusuma on October 1, 1965 was in accordance with standard military procedure in emergency. When something untoward happened, the President could be flown abroad or anywhere with a special aircraft through Halim airbase.

The rectification of AURI’s history went smoothly and could apparently be a model as to how past problems could be solved satisfactorily. Now the past trauma has gone. Air Marshal Djoko Suyanto could even become the Commander in Chief of the Indonesian Military.

After resolving the historical puzzle, the actual problem now is the real condition of AURI itself. Will the defense system for such a huge country still rely on a land defense system as it was in the New Order era? Or is it air (and sea) defense that must be strengthened at a faster pace?

The late Wisnu Djajengwinardo, the ex-commander of Halim Perdanakusuma Airbase of 1965-1966, in his memoir mentions that AURI at that time had various sophisticated military planes. In 1962, our neighboring countries did not have the MiG-21 supersonic fighter plane. AURI also had an Mi-6, one of the biggest helicopters in the world. It was so big that when it arrived in Indonesia via the sea and was loaded onto a special truck from Tanjung Priok to Halim Perdanakusuma to be assembled, the tail rotor touched high voltage cables. Major Tek Atang Senjaya who was holding the fuselage got an electric shock and died immediately. (His name was immortalized at Semplak Airport, Bogor.)

With the present condition of minimalist weaponry and the high frequencies of plane crashes, the prospect of making the Indonesian Air Force a respected air defense system in Southeast Asia, or even in Asia, is still far from reality. Ironically, AURI once had a glorious past under Omar Dani’s leadership.
Asvi Warman Adam, LIPI historian Tempo Magazine

Tuesday, July 28, 2009

Rights group sues UK government over "rendition"

Human rights lawyers took legal action against the British government on Tuesday, accusing it of involvement in the illegal transfer of a terrorism suspect from Indonesia to Egypt where they say he was tortured.

Reprieve, a British-based rights group, says Britain knowingly allowed Mohammed Saad Iqbal Madni to be transferred from Jakarta to Egypt via a U.S. airbase on Diego Garcia, a British-ruled island in the Indian Ocean, in 2002.

Once in Egypt, Madni says he was tortured with cattle prods for three months and then sent to the U.S. prison at Guantanamo Bay in Cuba where he was held for six years before being released last August without charge. He now lives in Pakistan.
If successful, the case could formally link Britain to the illegal transfer of suspects across borders for the first time. Britain has admitted U.S. "rendition" flights passed through its territory but said it had been unaware of this at the time.

The case aims to make the British government come clean about how much it knew about rendition flights.

Diego Garcia, one of a collection of islands in the Chagos Archipelago, has been under British jurisdiction since the 1960s. The population was forcibly removed from the islands in the 1960s and 70s and an airbase built. Since then it has been leased to the United States for military use. The British government has always fought through the courts to keep access to Diego Garcia restricted, winning a legal fight last year to keep the descendants of forcibly removed Chagos Islanders from returning to resettle the island.

Separatists in Indonesia's Papua raise independence flag

25 July 2009, in the border region between Indonesia's Papua Province and Papua New Guinea (PNG), members of the National Liberation Army of the Free Papua Movement
(TPN-OPM) raised a Morning Star Flag next to the Muru River, in Kampung Wembi, Arso Timur Sub-district, Keerom District, Papua.

The group, led by Lambert Peukikir, demanded open dialogue regarding Papuan independence. Head of the Information Service for XVII/Cenderawasih Military Area Command, Lieutenant Colonel Susilo, said the flag was raised about one kilometre from an Indonesian Armed Forces (TNI) Battalion 725 Security Post in Kampung Wembi. He added that TNI's response was limited to being alert and increasing surveillance, as the police are responsible for handling such cases.

According to information collected by Kompas, the flying of the Morning Star flag was part of efforts by OPM to get the government to be willing to discuss the Papua issue.

Additionally, they reject all forms of intimidation of Papuan activists. This incident almost resulted in an armed clash between the separatist group and local security forces.

Monday, July 27, 2009

Indonesia: Local Groups Offer Shelter To Militants

Fugitive terrorist Noordin M. Top and his accomplices managed to maintain their presence in the country because local groups helped them to establish a secure base of operations. These local groups are believed to be influenced by Salafist groups such as Saudi Arabia’s Wahabis, the Muslim Brotherhood and Hizbut Thahrir.
Noordin, believed to be the leader of a JI breakaway group seeking to attack Western targets, is accused of planning and carrying out the bombings in Bali in 2002 and 2005, as well as attacks in Jakarta in 2003 and 2004. He remains at large, despite several manhunts targeting his cell over the last few years. It is believed that Wahabi teachings have become influential in the Central Java town of Cilacap, where Noordin was sheltered by Bahrudin Latif, the 60-year-old head of Al-Muaddib, an Islamic boarding school. Bahrudin’s daughter, Ari Aryani, is married to Noordin. “Al-Muaddib, which means ‘civilization’ in Arabic, has been used as a terrorist camp.

Thailand’s Restive South - Border Fence Or A Fence-Off?

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Philippine Democracy in Spotlight for Arroyo ‘Farewell’ Speech

Philippine President Gloria Arroyo makes what should be her last state of the nation speech with opposition politicians waiting to see if she’ll try to stay in power beyond her six-year, one-term limit. Lawmakers in the Arroyo-controlled House of Representatives last month called for an unprecedented joint vote with the smaller Senate to discuss amending the constitution. Senators, outnumbered by House members 10-to-1, oppose changes before next year’s elections and without a constitutional convention elected for the purpose.

Arroyo risks stirring the wrath of voters suspicious that her election five years ago was fraudulent. She also will have to tailor her message before she meets President Barack Obama in Washington this week. The U.S. backs democracies in Southeast Asia such as the Philippines and Indonesia to counter China’s influence and stem the spread of terrorist offshoots of al-Qaeda.

ASEAN and China FTA to ignite `tug of war in trade'

A free trade agreement between the Association of Southeast Asian Nations and China (ASEAN-China FTA) will likely ignite a trade war between Indonesia and China with local producers likely to ask the government to impose a number of tariff and non-tariff barriers - Indonesian National Standards (SNI), anti-dumping measures, or safeguards - as Chinese products would further injure the domestic market once the FTA became effective.

China might consequently retaliate by imposing similar measures.

Indonesia was currently in a similar trade war against Turkey. Turkey has now imposed anti-dumping duties on Indonesian tires and textiles after Indonesia imposed additional import duties on Turkey's flour.

The FTA, which will come into effect on Jan. 1, 2010, will scrap all import duties on textiles, footwear and leather products, ceramics, food and beverages, iron and steel products, petrochemicals and electronics shipped out of China to Indonesia.

Indonesia: Another bombing possible

Another bomb attack could still happen as the nation’s various law enforcement institutions have yet to comprehensively integrate their intelligence data while Home Affairs Ministry had yet to update the nation’s civil registry. Experts on intelligence and law enforcement agreed that the nation’s largest weakness was the lack of an integrated intelligence data and an overlapping – if not contradictory – civil registry system. Intelligence data from several institutions tend to contradict each other and create a hole in the nation’s security.

Sunday, July 26, 2009

Bali Updates

Om Swastiastu ...

In the week following the Jakarta bombings it was clearly not "business as usual in Bali." Hotels and events are making every effort to scrutinize access, while surprise police check points may be waiting around every bend in the road. We have the latest statement on security from the Bali Hotel Association; the cancellation of a major international karate tournament in Bali link to the Jakarta attacks; plans by police to place an officer in every one of Bali's 732 villages; the allocation of nearly US$ 1 million by the government to bolster tourism promotion in the post-bombing period; and a report from Garuda that passenger loads remain constant on inbound flights to Bali.

We also have an editorial on what we think remains a major lapse in island security – "Bali Security: The Elephant in the Room."

PLN – the people who run the National Power Utility, are warning Bali to expect power outages on an almost daily basis September – November. Read this week's update and find out why.

There's news of protests at the Balinese port of Gilimanuk; anger from the people of West Flores regarding plans to move a population of ten Komodo dragons to Bali; and the opening of new Garuda Corporate offices in Jakarta.

Celebrity Michelin Chef Joel Antunes is cooking in Bali this week, July 27-30 at the Ayana Resort. Book now!

For your calendar there's news of the Bali 10K run on August 10, 2009 and an important one-man exhibition by Made Wianta August 6 – 31, 2009 at the Ganesha Gallery.

Keep up to date on Bali 24/7 by following me on at BaliUpdateEd

Om Çanti Çanti Çanti Om ...

J.M. Daniels - Bali Update
Bali Discovery Tours

For a full transcript go to

Bombs found aboard Philippines ferry

Twelve bombs were found hidden inside a bathroom in a ferry in the central Philippines, raising fears of another bombing campaign by suspected Islamic militants.

The improvised explosive devices, made of bottles with gunpowder, blasting caps, shrapnel and wiring, were found hidden in a sack in the bathroom of the MV Blue Water Princess on Saturday just as it was about to depart the city of Lucena for the central island of Masbate. It was not clear if the bombs were intended to go off inside the ferry or were to be used elsewhere. The discovery of the bombs also came just days before President Gloria Arroyo is scheduled to make her annual State of the Nation Address (SONA) to Congress.

The government had warned there may be attempts to disrupt the speech and has deployed more security forces as a precaution.

Earlier this month, a spate of bombings in the southern Philippines left about a dozen dead and 100 wounded. The blasts were largely blamed on Muslim extremists.
The extremist group the Abu Sayyaf is blamed for the country’s worst terror attack in which more than 100 people were killed in the bombing of a ferry in 2004.

Terrorists see Bali as key target

A TERROR network master plan uncovered after bombings in Bali in 2005, but not made fully public until now, proves the terrorists believed responsible for the latest Jakarta hotel bombings saw the resort island of Bali as a prime target for future attacks. Previously unpublished parts of the plan reveal that the network, led by fugitive Noordin Mohamad Top, decided to target places in Bali where tourists gather, also singling out people arriving or departing on flights from Australia.

The plan also directs terrorists using small bombs in backpacks to target the memorial to the 2002 bombings in Bali that killed 202 people, including 88 Australians.Other targets include the art market in the mountain tourist village of Ubud and beaches such as Kuta.

The plan was found on the computer of Azahari bin Husin, Top's right-hand man, who was shot dead during a police raid in November 2005 following the second Bali bombing. It is unclear whether Azahari or Top wrote the terrorist guidelines.The plan urges terrorists toattack Bali, one of the most popular foreign tourist destinations for Australians.

Saturday, July 25, 2009

The Stern Hu affair is a worrying preview of a world run on China’s rules

The Chinese are happy to call Australia their true friend until we dare to question their unarguable rightness.

They are faraway times now, but before Stern Hu was interred in the bowels of a Shanghai star chamber, maybe he sampled the beaches of southern Sri Lanka, or trekked into that wild panhandle of north-eastern Afghanistan that juts into China. Or maybe he’d been to Mandalay, most anywhere in Africa or to the most venal border town I’ve ever had the misfortune to be trapped in overnight, a nasty Chinese railhead called Suifenfe, populated with the most ferocious prostitutes servicing timber merchants on their way to waste Russia’s forested far east.
If Hu — or Kevin Rudd for that matter — had spent time in any of those places, he’d better understand why he’s now designated an Enemy of the Chinese People, about as serious a charge the Chinese Communist Party can lay, and presumed guilty of whatever
crime it chooses, before the unlikely event he is released from his nightmare into the arms of Rio Tinto, his family and an outraged Australia.
On that Lankan seascape, in Burma, Afghanistan and all those other miserably poor places where just a fraction of China’s $2 trillion pile goes a very long way, he’ll have seen myriad
Chinese quietly doing their solemn patriotic duty for the party’s cherished zu guo — guaranteeing the motherland’s economic security by plundering foreign mines and oilfields, building Chinese-run ports, refineries and airports, painstakingly assembling a quasi-sovereign supply chain that connects the raw stuff fuelling the ‘economic miracle’ to
toiling minions back home, who export it as finished products back to us. This network is all centrally supervised by Beijing, and it will never be finished. No other country so obscures the boundaries between State and Mammon on such an industrial nationally-interested scale. It’s an awesome undertaking, but get in the way of it, by having too much say in pricing commodities fuelling a strategic industry like, well, steel, then China will try to permanently excise you from the game.
Such is how the dragon is fed and stable, which keeps the Chinese Communist Party in power. And to the leadership untouchable behind the vermilion walls of the Zhongnanhai
compound in central Beijing, that’s all that really matters. To them, people like Stern Hu and the fuss raised around him are barely noticeable wrinkles in fulfilling their mandate of
heaven: to make China as economically independent as possible within the world’s sovereign inconveniences. For which, read Western influence.
The rights of the individual are surrendered to those of the party and China, which are ideologically indivisible anyway. And, as China doesn’t mind reminding us by demanding we butt out, apparently it’s in all our collective interest to submit.
So get used to it. China Inc will soon enough be the world’s biggest economy — it is already banking the GFC-crippled US — and the Pax Sinica’s rules of engagement will not be as nearly so benign or negotiable as the Western democratic systems it replaces. China’s starting point of negotiation is to demand agreement with its terms, and then engagement happens. China states its inarguable correctness, which you must accept because if you don’t someone else will get the deal, and there is a long line behind you. You are China’s ‘true friend’ until mutual interests do not align. Stern Hu’s dramas are a window into our
economic future, how a Sinosphere might work. And if it doesn’t sometimes, China blames everyone but itself. But it’s important that Hu happened, because now we know.
There’s a lot of cultural and ideological baggage in all this: China’s ‘5,000 years of history’ that the party manipulates to suit itself; the innate belief — exemplified by the two characters denoting China — that it is the ‘central nation’, the very centre of civilisation; the correcting of ancient foreign (colonial) wrongs against China; a paranoid insecurity stemming from the historical fact that China is inherently chaotic — one reason why the Chinese are the world’s biggest and most widely-spread diaspora — but now countered by the party’s absolute conviction that its rule, even today’s pragmatic crypto-commie version, is indisputably correct and was historically inevitable, another absolute truth that brooks no discussion. As it reminds us daily, the CCP is the only regime in Chinese history to adequately feed and house its masses, and unite and secure (almost) all the territory historically claimed as Chinese.
‘China is totally non-transparent,’ says Richard McGregor, former Beijing bureau chief for the Financial Times. ‘The legal system is explicitly under the control of the party, and even if there was a genuine case against Rio for corruption of some kind, it’s unlikely that it could credibly made by the Chinese. That system is so tightly bound in politics that it is incapable of transmitting a plausible message about the rule of law. By all appearances, the Stern Hu case is about the system reasserting itself, to regain political control over a strategic industry, and using old-fashioned methods of state security to do so.’
Of the welter of commentaries on Hu’s — and Australia’s — predicament, perhaps the most sinister came from the Chinese themselves, via an Australian placeman. Writing in the Age, and unencumbered by appropriate designation, one Mark Crosby last week suggested Hu was roadkill on the way to a promised land of limitless prosperity: ‘This affair will turn out to be a small bump on the long road to China’s full integration into the world economy.’
Crosby says the matter exposed many questions about ‘our’ trade relationship with China. Er, our? Crosby presents himself as an Australian citizen, and an associate professor at Melbourne University, but he is also billed as a director of something called the Confucius Institute. Melbourne Uni we get, but the Confucius Institute? It is one of the more controversial exports from China in recent years, a seemingly benign projector of Beijing’s soft power campaign, accelerated since the 1989 Tiananmen massacre of pro-democracy protestors. Having only rehabilitated the ‘feudal’ Confucius’s philosophical legacy in
the 1990s, at least Beijing’s true believers had the good sense
not to call their propaganda unit the Mao Institute.
It presents itself as a Chinese version of the Alliance Française, Germany’s Goethe Institute or the British Council: an innocent vehicle for advancing language and cultural studies. So
why is Crosby wading into the Hu story on the institute’s behalf? The dragon is in the detail; Crosby is the CI’s ‘business research’ director, representing a state-controlled
body that ‘provides information and consultative services concerning Chinese education, culture, economy and society’. The CI is controlled by the same state that controls its biggest economic entities, the same state or, more to the point, the monolithic party that directs China’s steel industry and its legal system. In China, it’s all neat, circular, controlled, opaque and absolute.
The CI is where China does some of its best propaganda spadework these days. Unlike other ‘cultural’ institutes operating through shopfronts and embassies, the CI’s modus operandi is to ingratiate itself into the world’s universities, where it becomes the well-funded de facto Chinese studies faculty. But as CI critics like veteran Australian diplomat in China Jocelyn Chey ask, what happens when appropriate academic examination of
all things Chinese calls for the necessary critique of Tiananmen, Taiwan, Tibet, Xinjiang, of anything the party deems politically off-limits? Expect the CI to throw its weight around
We saw last week the lengths China is willing to go to in order to get Australians behind Beijing’s message, heavying the organisers of a Melbourne film festival to drop a documentary about a Uighur independence leader. We saw it last year during the Olympic torch relay farce, with the blue-tracksuited ‘Protectors of the Flame’ Sebastian Coe described as thugs. And we saw it in our own parliament in 2003, which President Bush of
the US and China’s President Hu Jintao addressed within a day of each other. The Greens jeered Bush’s speech because Australians were held at Guantanamo Bay, criticism he took with grace. The Chinese, up the next day, freaked when they heard Bob Brown was going to raise Tibet during Hu’s speech. They demanded — successfully — that Australia silence elected officials in its own parliament, threatening the Speaker if anyone dared interrupt Hu’s speech, to be broadcast live on China’s state TV.
‘It is all very well to point to China’s murkiness with regard to the arrest of Hu and to the murkiness surrounding the iron ore trade and China’s state-owned enterprises,’ the CI’s Crosby writes, ‘but our [there’s that equivocating possessive pronoun again!] Foreign Investment Review Board processes would seem just as murky to outsiders. One thing that seems clear is that our foreign investment rules need to be more transparent.’
Er, wait on. An Australian in the employ of the non-democratic Chinese government lecturing democratic Australia on transparency? The sheer chutzpah of Crosby’s column far outweighs its intellectual poverty and fudging. Australia may well send mixed signals on what constitutes the national economic interest — a common grumble of Chinese firms that don’t get their way when plundering Oz resources — but how are the FIRB’s processes apposite to the brutal way Beijing has treated Hu? Rudd and Wayne Swan didn’t lock up Chinalco’s boss Xiong Weiping while they were deliberating his offer to plunge $20
billion in Rio-Tinto and finagle seller-to-buyer influence over Australia’s primary resource. Do Crosby and his CI mates seriously expect us to believe that the CCP’s political left hand doesn’t know what the right hand of its legal apparatus is doing, or hasn’t told it what to do? Party history tells us that is exactly what is happening. Methinks the likes of ‘Aussie
Mark’ Crosby, whoever he is, answers to and writes his columns, has drunk a little too lovingly of the CCP Kool-Aid to be a neutral observer of this drama.
Since Hu was detained on 5 July, we’ve learned much about the Sino-Australian relationship. We’ve learned that Canberra was chummy with China’s senior leadership because Rudd is an ex-diplomat who impressed Hu Jintao with his Mandarin at APEC
and meets secretly with junketing Politburo members. Canberra first claimed the Hu matter had nothing to do with it, maybe hoping no one would notice. As the heat increased on a Rudd singed as China’s ‘Manchurian Candidate’ by the Joel Fitzgibbon affair, he expressed ‘concern’ about Hu. The press and talkback shock jocks got hold of him, so Rudd talked tough, doing that ‘We warn the Czar’ thing Australian pols love, to show us how hairy-chested they are — except it only shows them depilated. After moving on Hu, Beijing has done mostly nothing. It pre-judged Hu as a corrupt spy, and all the more traitorous because he switched nationality, and then told Australia to pipe down lest the ire of our biggest trading partner impact badly elsewhere. Rudd flubbed around trying to present low-level municipal types and sub-ministers as Chinese rainmakers, the best he could summon. What good is a zhengyou — a true friend — when your fair-weather Chinese mates won’t take your calls?
Hu has also exposed as nonsense that Australia ‘punches above its weight’. That pompous twaddle that we are at the centre of things only seems to be true when it doesn’t matter — while supping at the White House — and never when it does, like now, when Australia really is at the centre of things because Hu has become an international metaphor for what happens in China. Pace the bellicose Fijian junta, it’s not even true in the western Pacific, where Australia claims to be the superpower. About the only field of human endeavour in which Australia punches above its weight is on the sporting field.
No, as Stern Hu now knows, the world sees his adopted country as what it is — a massive mine packaged into a blousy democracy of 21 million people, an international welterweight at best whose grumpy calls you can ignore. It’s left to DFAT to pathetically remind Mrs Hu that Australians abroad must be aware that the laws of foreign countries can be different to those of Australia, as it figures out how deep to kowtow.
The Spectator (Australia)
July 22, 2009 Eric Ellis

Another Papua shooting

Shooting incident hits Freeport again

Another Shooting incident rocked gold and copper miner PT Freeport Indonesia.
The shooting occurred between Mile 51 and Mile 54 of the road linking the town of Timika and Freeport's Grasberg mining site. The shooting targeted a car carrying medical supplies. In the same area, a 29-year-old Australian, an Indonesian security guard working for Freeport and a policeman died in ambushes earlier this month. In the same area, two American teachers and their Indonesian colleague were killed in a 2002 attack.

Friday, July 24, 2009

Burma - The Lady should be for turning

Aung San Suu Kyi is remarkable. But Myanmar’s problems are more than just those of democracy denied.

JULY 20th marked the 20th anniversary of the day when military rulers first placed Aung San Suu Kyi under house arrest. The leader of Myanmar’s democracy movement has since spent more than 13 years detained at home or, as now, in a Yangon prison. She awaits the verdict of a sham trial in which she was charged with breaking the terms of her detention after an uninvited American, a nut, swam across to her lakeside home. Miss Suu Kyi plays a long game. But so does the military. It seized power in 1962. It has used force to put down two extraordinarily brave sets of pro-democracy protests, in 1988 and 2007. And it has ignored the result of free elections in 1990, convincingly won by Miss Suu Kyi’s National League for Democracy.

Miss Suu Kyi, 64 and frail, has not wavered in her call for the junta to respect the election result and free what are now thought to be 2,100 political prisoners. She has long argued for countries to apply pressure by forbidding companies to trade with Myanmar or invest in it. The West has responded with sanctions regimes. Britain’s prime minister, Gordon Brown, recently called for even tougher financial measures against Myanmar.

There is no doubting Miss Suu Kyi’s courage. A decade ago she turned down the generals’ offer to leave the country (presumably, for good) to care for her dying husband. She never saw him again. Two sons have not seen their mother for years. Miss Suu Kyi’s moral stature puts her on a level with other imprisoned or exiled symbols of quiet resistance, the Dalai Lama and Nelson Mandela. She keeps democratic hopes alive in Myanmar; and around the world she inspires campaigners for freedom in the face of thuggish regimes. Elegant and dignified, she is the person any engaged liberal at Harvard or Oxford most wants to invite to dinner but can’t. This year garden parties at British embassies celebrating the Queen’s birthday were decorated with portraits of Miss Suu Kyi. At the embassy in Jakarta, a picture of her is projected onto an outside wall. She is, literally, democracy’s poster girl.

For weeks the military regime has delayed pronouncing a verdict in its trial, perhaps so as not to embarrass fellow members of the ten-country Association of South-East Asian Nations (ASEAN), meeting for its annual summit this week in Thailand. Yet few doubt but that Miss Suu Kyi will be put away for even longer. Her house, which has become a shrine to the democracy movement’s living deity, may be confiscated and razed. Myanmar’s leaders have called for elections next year, but on terms that ensure the military is the force behind civilian rule. Having Miss Suu Kyi to stand and fight is not part of the programme.

An even longer game, then, for Miss Suu Kyi and her supporters.

But is it the right one?

A growing body of opinion thinks not. It follows a tedious ritual. The world calls for freedom and democracy. The United Nations dispatches a representative to Yangon. He is fobbed off. The Lady continues in detention. The UN’s most recent big cheese was none other than the secretary-general. Ban Ki-moon left Yangon earlier this month without being allowed to meet Miss Suu Kyi.

This costs more than just wasted journeys. Myanmar is rich in natural gas, timber and gems. China and India, strategic rivals to east and west, chummy up to the junta. The Burmese elite has second homes and bank accounts in Thailand. Russia sells the generals arms, as does China, and both provide cover for the generals on the Security Council. So Myanmar does now in fact engage with the world—but its engagement takes the ugly form of a rapacious capitalism with amoral partners. Hillary Clinton, on her first trip to Asia as secretary of state, admitted that isolation “hasn’t influenced the junta”. An American review of Myanmar policy is under way, but official silence over Miss Suu Kyi’s trial hints at a certain confusion. Because there is no engagement, America’s soft power has no traction.
Worse, everyone from the UN down views Myanmar through the lens of democracy above all else—even development. For a desperate country with shocking rates of disease and mortality such a priority is dubious at best, shameful at worst. If nothing else, it fails to acknowledge how development can improve local governance. In the Irrawaddy delta in the wake of cyclone Nargis, which struck last year killing 140,000, deciding how humanitarian aid should be spent has increased civic participation and local autonomy in the face of an uncaring regime. Yet apart from Japan, official aid levels to Myanmar are pitiful compared even with other poor countries.

Icon or obstacle?

Lastly, depicting Myanmar as a kind of velvet revolution gone wrong, as Thant Myint-U, a historian of Burma, points out, is to ignore a big part of the picture. The paranoid regime’s inward-looking cast is conditioned by centuries of invasions, among them by the British and, after independence in 1948, by American-backed Chinese Nationalists. Since independence, the military has faced dozens of communist and ethnic insurgencies. It is true that since the 1990s, ceasefires have been signed in all but two. But independent Burma did not emerge as a unified state and, under early democratic rule, insurgencies flourished. The remaining conflicts, financed by drugs trafficking, are the longest-running wars in the world. They cannot simply be ignored.

Sanctions have helped bring about no democratic transition in Asia—on the contrary. So imagine if the West reversed policy, dropped sanctions and pursued engagement. The generals have already looked at the development paths blazed by China and Vietnam and said they want to follow. In comparison to the regimes in those two countries, Myanmar’s badly lacks legitimacy. So Mr Thant says that development could bring about swift changes to the political landscape, as eventually happened in Indonesia. Development, in other words, could be the fastest path to democracy.
Will the courageous Lady admit as much?
The Economist [UK]

Not as simple as Mahathir paints it

MALAYSIA is long overdue for a national debate on the costs and benefits of the wide-ranging affirmative action programme it adopted 38 years ago. But judging by the provocative comments earlier this week by former prime minister Mahathir Mohamad, the country will have to wait a little longer for an informed discussion.
Tun Dr Mahathir indirectly defended the programme, which was called the New Economic Policy (NEP) when introduced in 1971. It is still referred to as the NEP, despite undergoing several incarnations since then. Unfortunately, he framed his remarks in the same old ethnic terms and failed to address the rising clamour over specific issues of inequality and Malaysia's declining competitiveness. Apart from offering some debatable statistics and observations on bumiputera corporate ownership, property holdings and poverty, Dr Mahathir presented his opinions as a case of Malays versus Chinese. What little the Malays have today is being taken away from them, he wrote in his popular blog, saying 'the non-Malays have become the real masters' of the country. Analysts interpreted the posting as veiled criticism of Prime Minister Najib Razak, who has liberalised several aspects of the
NEP since taking office in April. But the sniping aside, Dr Mahathir's assessment fails to acknowledge the main reasons the NEP has become so divisive. Some of the NEP's harshest critics now are in fact Malays.

The NEP was implemented after the May 13, 1969 racial riots, when Malay deprivation was pinpointed as the underlying cause of the unrest. The NEP's twin aims were the eradication of poverty among all Malaysians, and restructuring society so that race would no longer be identified with economic function. With Dr Mahathir as premier from 1981 to 2003, the NEP became more controversial. It was linked to a policy of privatisation, as he sought to create a small group of Malay millionaires, dubbed cronies by critics, who would become role models for their community.

The results are mixed. Poverty has been reduced drastically over the past few decades as Malaysia recorded sustained high growth rates. Its middle class has expanded to include significant numbers of Malays, and the gap between the Malay and Chinese communities has narrowed.

Affirmative action, however, also has sharpened inequality in Malaysian society. By 2004, the country had the most extreme inequality in South-east Asia, according to the World Bank. Small-scale, mostly Malay farmers and fishermen who do not fit into the modernised economy have been comparatively marginalised. Non-Malay bumiputeras, predominantly in Sabah and Sarawak, also have been left in the dust. Sizable numbers of Indian labourers, displaced by an influx of foreign workers and the development of plantations for industrial and residential use, have joined the ranks of the unemployed in urban squatter areas. They constitute the new poor.
Malay dissatisfaction has increased with growing awareness that better-off and politically connected Malays benefit disproportionately from the NEP. The majority resented the use of public funds to rescue a few wealthy Malay businessmen during the 1997-98 Asian financial crisis. It is a source of anger that Malay millionaires, for example, can take advantage of a 5 per cent housing discount for bumiputeras. In addition, the children of newly rich Malays seem to be the ones best placed to capitalise on ethnic preferences in the future, leaving their country cousins and poorer city relatives further behind.

Affirmative action also hinders Malaysia's international competitiveness, a consideration that is becoming more acute as China and India set a sizzling economic pace. In 1971, Malaysia ranked third in East Asia, after Japan and Singapore, in terms of gross domestic product per capita. By 1990, it had fallen behind South Korea, Taiwan and Hong Kong. And the gap continues to widen.

A growing band of critics has argued that the NEP should be modified or scrapped altogether. In last year's polls, the opposition led by former deputy premier Anwar Ibrahim made unprecedented gains, drawing support from all communities, by
proposing a Malaysian Economic Agenda. It focused on needs, rather than ethnicity, and would replace the NEP, should the opposition come to power.

In criticising the material status of Malays, Dr Mahathir is passing judgment on his own record, as the current state of Malaysia is largely the outcome of policies he pursued for 22 years. Although it is almost six years since he retired, little has been done by his successors to alter the long-term patterns of growth and distribution that he set in place. is only 20 per cent, while Chinese Malaysians hold 50 per cent despite accounting for a mere 26 per cent of the population, Dr Mahathir accepts questionable methodology. The 20 per cent
government figure is obtained by using the par rather than the market value of shares, and by excluding stakes held in trust for bumiputeras.

According to one independent academic assessment, the 30 per cent bumiputera equity target, set in 1971, was achieved as early as 1997. Another assessment showed the bumiputera corporate share at 45 per cent in 2004. By using the low official figure, Dr Mahathir and other Malay nationalists believe they can build a stronger case for continued affirmative action. However, critics can argue just as persuasively that a policy that has not achieved its target after nearly four decades is fundamentally flawed.

A final irony: Dr Mahathir, as prime minister, contributed to non-Malay corporate wealth by including in his inner circle a number of high-profile Chinese Malaysian tycoons, who were favoured with privatisation and other contracts.
Barry Wain, For The Straits Times Barry Wain, writer-in-residence at the Institute of Southeast Asian Studies, is author of Malaysian Maverick: Mahathir Mohamad In Turbulent Times, to be published this November by Palgrave Macmillan.

Balibo 'case closed': Indonesia

The new feature film about the Balibo Five may stir up fresh controversy in Australia, but as far as Indonesia is concerned it's case closed. Robert Connolly's film, which depicts Indonesian troops murdering the five ustralia-based journalists in the East Timor border town of Balibo in 1975, will open the Melbourne International Film Festival on Friday. The film's release comes nearly two years after NSW deputy coroner Dorelle Pinch found Indonesian forces deliberately killed the journalists to cover up their invasion of East Timor. The inquest dismissed claims by successive Australian and Indonesian governments that Greg Shackleton, Brian Peters, Malcolm Rennie, Gary Cunningham and Tony Stewart were accidentally killed in crossfire.

The film has reignited debate about the killings and hopes it will lead to legal action against the alleged leader of the attack team, Yunus Yosfiah.

Indonesia regards the film as a work of fiction.

Oil and Mining Updates from Indonesia

- Huaneng Interested In Bidding For Indonesian Coal Co-Report
- China Shenhua Energy Unit To Invest $331M In Indonesia Project
- South Korea electric power major buys into Indonesian coal producer
- Indonesia Govt To Maximize Share In Mahakam Block Gas Field
- Power Plant In Gorontalo, Indonesia To Start Operating In 2011
For full report courtesy Joyo News Service go to:

Business & Trade updates from Jakarta

- Moody's keeps positive outlook on Indonesia rating
- Indonesia reverse-repo gets no winning bids
- Indonesia aims to raise 2 trln rph in debt sale
- Bank Rakyat Indonesia Set To Acquire Bank Bukopin
- Indonesia's Bank Century Swings To Profit In First Half
- Indonesian Telcos Delay $700 Mln Optic Cable Project Until Dec
- TABLE-Indonesia June vehicle sales fall 27.7 pct yr/yr
- Indonesia '09 motorcycle sales revised up-Astra Honda
- TABLE-Indonesia June motorbike sales drop 10.8 pct y/y
- Indonesian State Firms' Dividend Payments Up 300%
- Indonesia Banks' NPLs Estimated To Not Exceed 5%: Bi
- Indonesia's Mandala To Operate Two New Airbus Aircraft
- Indonesian minister pushes for APEC regional trade financing cooperation
For full report courtesy Joyo News Service go to:

Indonesia: The Hotel Bombings

Full report available at:

Jakarta- Int. Crisis Group report: suicide bombers attacked two hotels in the heart of a Jakarta business district, killing nine and injuring more than 50, the first successful terrorist attack in Indonesia in almost four years. While no one has claimed responsibility, police are virtually certain it was the work of Noordin Mohammed Top, who leads a breakaway group from Jemaah Islamiyah (JI), the regional jihadi organisation responsible for the first Bali bombing in 2002. One of the hotels, the Marriott, was bombed by Noordin’s group in 2003; this time, a meeting of mostly foreign businessmen appears to have been the target. The restaurant of the nearby Ritz-Carlton was als o bombed.

The attack sets back Indonesia’s counter-terrorism efforts, but its political and economic impact has been minor. On 23 July President Yudhoyono was declared the winner of the 8 July elections with more than 60 per cent of the vote; nothing about the bombing is likely to weaken his government or prompt a crisis. The impact on the business community, which lost four prom­inent members, has been devastating, but economic indicators are stable.

The question everyone is asking is whether it will happen again. If the perpetrators are arrested quickly, Indonesians and expatriates will relax, although it will not necessarily mean the end of terrorist cells in Indonesia. If Noordin Top eludes police again, as he has for the last seven years, the nervousness will remain. One key question for the police to answer is how the operation was funded. It is possible the bombers raised the funds locally through armed robberies as they did for the October 2005 Bali bombing. If money came from an outside donor, a possible source would be al-Qaeda or its affiliates. This would open the possibility that outside donors could look for other Indonesian partners in the future, even if Noordin Top is behind bars. A third possibility is a donation from an Indonesian source outside the Noordin group itself.

This briefing provides answers to some frequently asked questions about the bombings: where did Noordin Top come from? What is his relation to JI? Why were these hotels targeted? What does this mean for the government’s deradicalisation program? And what additional measures should the government take? The easiest step and the most unwise would be to turn the anti-terrorism law into an internal security act that allowed for lengthy preventive detention. Instead, Indonesia needs continued attention to community policing, more attention to JI-affiliated schools that offer protection to men like Noordin and opportunities for recruitment, more understanding of international linkages, better intelligence and more support for prison reform.

Indonesia: The Hotel Bombings

Jakarta- Int. Crisis Group report: suicide bombers attacked two hotels in the heart of a Jakarta business district, killing nine and injuring more than 50, the first successful terrorist attack in Indonesia in almost four years. While no one has claimed responsibility, police are virtually certain it was the work of Noordin Mohammed Top, who leads a breakaway group from Jemaah Islamiyah (JI), the regional jihadi organisation responsible for the first Bali bombing in 2002. One of the hotels, the Marriott, was bombed by Noordin’s group in 2003; this time, a meeting of mostly foreign businessmen appears to have been the target. The restaurant of the nearby Ritz-Carlton was als o bombed.

The attack sets back Indonesia’s counter-terrorism efforts, but its political and economic impact has been minor. On 23 July President Yudhoyono was declared the winner of the 8 July elections with more than 60 per cent of the vote; nothing about the bombing is likely to weaken his government or prompt a crisis. The impact on the business community, which lost four prom­inent members, has been devastating, but economic indicators are stable.

The question everyone is asking is whether it will happen again. If the perpetrators are arrested quickly, Indonesians and expatriates will relax, although it will not necessarily mean the end of terrorist cells in Indonesia. If Noordin Top eludes police again, as he has for the last seven years, the nervousness will remain. One key question for the police to answer is how the operation was funded. It is possible the bombers raised the funds locally through armed robberies as they did for the October 2005 Bali bombing. If money came from an outside donor, a possible source would be al-Qaeda or its affiliates. This would open the possibility that outside donors could look for other Indonesian partners in the future, even if Noordin Top is behind bars. A third possibility is a donation from an Indonesian source outside the Noordin group itself.

This briefing provides answers to some frequently asked questions about the bombings: where did Noordin Top come from? What is his relation to JI? Why were these hotels targeted? What does this mean for the government’s deradicalisation program? And what additional measures should the government take? The easiest step and the most unwise would be to turn the anti-terrorism law into an internal security act that allowed for lengthy preventive detention. Instead, Indonesia needs continued attention to community policing, more attention to JI-affiliated schools that offer protection to men like Noordin and opportunities for recruitment, more understanding of international linkages, better intelligence and more support for prison reform.