Sunday, May 12, 2013

INDONESIA’S perpetual terrorist threats

Indonesia’s elite counterterrorism unit, Densus 88, went on a busy spree in five areas in Banten, West Java and Central Java provinces on Wednesday and Thursday to root out suspected terrorists, killing seven and arresting 13 others believed to be connected to a jihad group in Poso, Central Sulawesi.

National Police spokesman Brig. Gen. Boy Rafli Amar said the suspects were linked with Santoso, who was believed to be behind a series of terrorist attacks in Poso over the past few years.

Over the two days, Densus 88 personnel raided Batang, Kebumen and Kendal in Central Java; Bandung in West Java; and Banten. Investigators are looking into possible links between the terrorist suspects with the alleged plot to bomb the Myanmar embassy in Jakarta in retaliation against that country for recent attacks on Muslims.

 Sectarian violence in Buddhist-majority Myanmar has killed scores of people and tens of thousands of Muslims have been driven from their homes.

Angry hard-line Muslims protested outside the embassy in Jakarta this week, calling for jihad to fight against the persecution. Anger among hard-line Muslims bubbled over the past week, with the arrest of two men suspected of planning to bomb Myanmar’s embassy and calls by radical Islamic leaders to wage jihad, or holy war, against the nearby Southeast Asian country, which is undergoing a transition from decades of military dictatorship to civilian rule that has amplified sectarian and ethnic tensions.

Analysts said that although better intelligence and policing had left Indonesia’s terrorist groups severely depleted by deaths, imprisonment and defections, smaller networks persist. Hard-liners appear to be seizing on the Myanmar issue as an excuse to advance their agenda.

Ansyaad Mbai, Indonesia’s counterterrorism chief, was quoted by the press as saying that the two men arrested in the past week were part of a long-established network responsible for terrorist attacks on police and foreign missions in Indonesia.

Their basic formula, according to Mbai, is that wherever they see repression against Muslims, they will immediately react without regard to any national boundaries.

While the antiterrorism fight gathered steam, Indonesian economic growth lost steam in the first quarter due to declining consumer spending and lower investment, leading to its slowest pace of expansion in more than two years.

The Central Statistics Agency (BPS) announced on Monday that gross domestic product (GDP) grew by 6.02 percent in the first quarter compared to the same period last year, its lowest level since September 2010.

While the central bank and the finance ministry remain upbeat over this year’s growth target of 6.5 percent, the first quarter outcome was below Bank Indonesia’s forecast of 6.2 percent. Some analysts said they did not expect the first quarter trend to be persistent, arguing that even if the government raised the subsidized fuel price, the slowdown in consumption would be offset by rising spending during the upcoming Ramadhan and Idul Fitri celebrations and for preparation of the 2014 general election.

Domestic consumer spending, the primary growth engine for the economy, grew by 5.17 percent from a year ago, down slightly from 5.38 percent in the fourth quarter last year.

The growth slowdown was also exacerbated by lower than expected government spending. Despite measures already put in place by government officials to help speed it up, government spending only grew by 0.42 percent in the first quarter compared to the same period last year but dropped by 42 percent compared to the fourth quarter last year.

The latest development seemed to jolt the government to realization that the domestic economy had begun to feel the brunt of the global economic slump. Acting Finance Minister Hatta Rajasa indicated on Tuesday the government would revise down its 2013 growth target to 6.3-6.4 percent from 6.8 percent.

Most analysts see this new target as too optimistic, predicting that the pace of investment would slow down due to the impact of unfavorable terms of trade and the mounting political noise in the run up to the 2014 elections. Many in the government may think there is nothing fundamentally wrong with the country’s macroeconomic fundamental as capital inflows continue apace, as validated by the bullish sentiment in the stock market.

But while portfolio capital inflows are a good thing, these inflows could sow seeds of instability because money that arrives quickly can leave just as fast, destabilizing local banking, stock and currency markets.

The mode of payment transactions in Indonesia will see dramatic progress in July when bank customers will be able to enjoy full interbank transfer services at any automated teller machine (ATM). The new facility will be made possible after the three providers of local interbank networks — PT Artajasa Pembayaran Elektronis (provider of ATM Bersama network), PT Rintis Sejahtera (Prima) and PT Daya Network Lestari (ALTO) — signed a cooperation agreement on Monday.

The central bank encouraged the companies to prioritize the interbank transfer service because apparently it is the most preferred service by customers when they use ATMs.

Bank Indonesia data showed that the value of transfer service transactions has risen steadily, reaching Rp 142.37 trillion (US$14.62 billion) in February or about 53 percent of total debit card transaction value. As of February, there were 74.37 million ATM and debit cards in Indonesia.

— Vincent Lingga Jakarta Post

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