The opposition’s boycott of planned elections is understandable and principled—but still regrettable
OFFERED a choice between political suicide and a crippled half-life as a legal party, Myanmar’s main opposition force this week, unlike Hamlet, reached for the bare bodkin. Heeding the reported advice of its detained figurehead, Aung San Suu Kyi, the National League for Democracy announced in effect its own termination by refusing to register for the elections the ruling junta has promised to stage later this year. A boycott was the only option if the party was to remain true to its democratic ideals. But it was also, probably, a mistake.
There is no shortage of reasons to justify an electoral boycott. The constitution, drafted without the League’s input and under which the election will be held, was foisted on Myanmar through a farcical “referendum” in 2008. It entrenches the army’s role, guaranteeing it a quarter of parliamentary seats. Many others will be filled by “retired” army officers. Laws bar Miss Suu Kyi from office both as the widow of a foreigner, and, under a rule that also debars many of the League’s other leaders, as the holder of a criminal conviction. For Myanmar’s press, as stifled as any in the world, the opposition and its point of view might as well not exist.
In 1990, the previous time the generals had an election, the League won by a landslide. The junta prevented it taking power, but was mightily embarrassed. It seems determined not to make the same error twice. After 20 years of brutal harassment and persecution of the opposition in all its forms, there is absolutely no chance of a free and fair election. Its leaders, Miss Suu Kyi above all, are cut off from the news, advice and debate to make informed decisions. The “civilian” regime that emerges from the polls will probably be dominated by the very same thugs and incompetents who have made such a benighted mess of a fertile, resource-rich country.
So it is understandable that the League should decline to afford either the constitution or the election any credibility by taking part. And their decision will at least make it harder for the outside world to pretend that these elections open more than a tiny crack in the junta’s totalitarian façade. America and Europe were in any case always going to find it difficult to pretend, but Myanmar’s Asian neighbours might have. And they probably have more influence, which is not saying much.
A crumb is better than no bread
A tiny bit of influence, however, is better than none, which is also why the League should contest the election. Its activists tell foreign diplomats in Yangon that they can continue their struggle for democracy as an NGO. That seems unlikely, given the junta’s record of unmitigated repression. The alternative to registration may well be political extinction.
The League will also be excluded from the first set of significant changes in Myanmar’s government since the present bunch of generals took over, after the crushing of a popular uprising in 1988. Some observers believe change will be far-reaching. They point to the growth of a small but wealthy business class, the limited devolution promised to some of the border areas inhabited by rebellious ethnic minorities, and the generational shift under way in the army itself.
The “senior general”, Than Shwe, is 77 and, apparently worried about the comfort and security of his twilight years, is distributing power among a coalition of interest groups. The crack he has opened, some argue, will widen inexorably. The pluralist genie will be out of the bottle. Even this seems hopelessly wishful thinking. But, at least, some change is coming to Myanmar. Almost any, short of all-out civil war, would be better than none. And it would help if Miss Suu Kyi and her party had some role, however circumscribed, in shaping it. The Economist
Judging from the number of countries that want to accede to Asean's 1976 Treaty of Amity and Cooperation (TAC), one can easily conclude that the 43-year-old grouping is gaining political clout in the international community. Altogether 27 countries, including the United States, have signed on to the regional code of conduct, which denounces the use of force and any attempt to interfere with domestic politics.
More countries are on the waiting list. Canada, the last Asean dialogue partner that has yet to sign the TAC, has recently begun negotiations with Asean for possible accession by the end of this year. The European Union signed the protocol for TAC accession last year pending the ratification of the Third Protocol by all signatories. This instrument permits international organisations whose members are only sovereign states to join. Within the Asean inner circle, it is an open secret that the ratification process will take months, if not years, to complete.
The First Protocol in 1987 enabled Papua New Guinea, the first country outside Southeast Asia, to sign the TAC, followed by the Second Protocol in 1988 that has opened the present floodgate for major powers to accede. Under the protocol, only the Asean High Contracting Parties can identify and consent to the accession of those non-Southeast Asian countries.
Last year, Asean made a U-turn after agreeing to include Turkey in the TAC community. Indonesia strongly opposed Ankara's diplomatic move at this juncture, fearing the negative consequences that could impact on Asean as a whole. Turkey's signing on, if it went as planned last year, would allow Ankara the right to block the EU's accession to the TAC, as it would be a party to the Third Protocol. Deep down, Indonesia fears that Turkey might use the TAC to increase its bargaining power for the latter's effort to join the EU, which has hit a snag.
Is Asean biting off more than it can chew? Obviously, that is the general sentiment prevailing at all echelons of Asean officialdom, even though they would never admit it. At the Asean Summit in Hanoi this Thursday and Friday, Asean leaders will approve guidelines for the TAC that will put the brakes on TAC accession. One of the key elements is the principle of a "flexible moratorium" placed on future membership. Truth be told, if the EU and Canada joined the TAC, that would leave Afghanistan, Bhutan and Nepal as the only remaining countries not on board the regional code of conduct.
Asean needs to contemplate now on the TAC's future and relevance. As signatories increase, Asean is gradually losing control. Turkey's accession was a case in point. At the same time, granted the increased global connectivity and shared universal values, norms and standards, several principles in the TAC could be the subject of further discussion and reviews. Otherwise, the 34-year-old regional code of conduct could be a stumbling bloc for Asean's desire to promote its global role in economic or financial, political or security as well as socio-cultural matters.
Furthermore, just look at the dilemma confronting the current Asean chair, Vietnam, in handling the engagement between the Asean leaders and the representatives of civil-society organisations (CSOs). Despite the positive pledge made last February at the 14th Asean summit in Cha-am by the Vietnamese leader, President Nguyen Minh Triet, who welcomed the idea of putting the interface into the Asean framework, the host eventually decided last month at the senior official meeting in Ho Chi Minh City to put on hold the whole experiment with CSOs.
The interface, which was held twice when Thailand was the chair, revealed the lack of trust on both sides. The CSO representatives viewed the Asean leaders as dictators wanting to suppress their people's role and voices, while the leaders thought the non-governmental stakeholders were troublemakers and wanted to embarrass them. Over half of the Asean leaders did not attend the second interface in October.
It is interesting to note that the host has scheduled a meeting between the Asean leaders and the representatives of the Asean Inter-parliamentary Organisation, one of the estimated 200 non-governmental organisations recognised by Asean, ahead of the opening ceremony. As such, the Vietnamese-style "interface" between both sides at the summit would be an informal gathering for 15 minutes, as it is not placed in between the opening and closing ceremonies.
Indeed, Vietnam has rather active community-based organisations as well as professional groups that could contribute to the ongoing process of transforming Asean into a people-centred grouping. With the proper encouragement of other new members such as Laos and Cambodia, Vietnam could have proceeded in that direction. Earlier discussions among representatives of Asean-based civil-society groups and Vietnam's counterparts yielded encouraging results. Unfortunately, they had no influence on the decision-making.
Furthermore, Asean as a whole has failed to respect the voices of the CSOs and the grass roots. During the inaugural meeting of the Asean Intergovern-mental Commission for Human Rights in Jakarta last week, Asean civil groups were unable to present cases of human-rights violations to the commission. The voices from civil-society groups sounded at times loud and fierce but the AICHR must find ways to take up these issues in the future, as they are real and matters of urgency.
For instance, victims comprising wives and relatives of the Maguindanao massacre in the Philippines as well as those senior citizens who suffered from the past impunity in Indonesia were at the Asean Secretariat to present their cases. It could have been a better start for the AICHR. Last week's failure has already discredited the AICHR, which is the principle organisation promoting and protecting human rights in Asean. Certainly, the AICHR has a limited mandate, but rejecting appeals directly from the victims is deplorable.
The AICHR plans to complete the terms of procedure for approval by the Asean foreign ministers in July. It is imperative that the AICHR takes into consideration the CSOs' views and contributions. Obviously, some of their recommendations could be too progressive, but there are practical elements as well. As a rule-based organisation, Asean would become irrelevant if its members continued to ignore the people's voices and outcries over injustice. By Kavi Chongkittavorn for The Nation, Bangkok
It was not surprising for me to read that Yudi Zulfahri, recruiter and facilitator for Jamaah Islamiyah in Aceh, and his two college friends, Gema Awal Ramadhan and Agam Fitriadi, were among the terrorists arrested in Aceh. I first met Yudi at the As Shunnah mosque in Bandung at the beginning of 2007 while undertaking field research.
Yudi was attending Jamaah As Shunnah (JA)’s weekly radical group meeting and the group’s leader, Ustadz Lesmana who is also an acquaintance of the al-Qaeda operative Umar Al Faruq, introduced him to me. Yudi was at the time new to radicalism and lacked an in-depth knowledge of Islam. So did his two friends, whom he brought to our next meeting. Yudi told JA that his reason for joining the group was because he wanted to do something for oppressed Muslims and felt rejected by society due to his fundamental Islamic views. He also mentioned that he needed to have a community that shared his passion for jihad and hatred of non-Muslims. During further weekly meetings at this radical mosque, Yudi showed his enthusiasm of violent jihad to his new radical friends.
He actively voiced his concern over the innocent victims of the Iraq and Afghanistan wars and expressed his desire to get involved, consulting JA members on how to get into Iraq or Afghanistan. Yudi also invited some members of the group to go to South Thailand and proposed setting up a military training camp in Aceh. Meanwhile, besides attending weekly JA meetings, Yudi also paid frequent visits to the jailed MMI military trainer Yuli Harsono and the jailed Jamaah Tauhid wal Jihad leader, Aman Abdurrahman. In addition, Yudi also suggested that the group make radical changes by appointing a new and younger amirul jihad (jihad leader) and military commander to prepare the group for future terrorist attacks in Bandung and Jakarta.
Yudi’s fast moves raised the suspicions of Ustadz Lesmana. Not only did he lack Islamic knowledge, but his presence had split the group into two factions: One wanted to lay low and the other wanted to be more active in pursuing violent jihad through active military training, bomb making training, conducting surveillance and building networks with other radical groups in Indonesia and Southeast Asia. Ustadz Lesmana suspected that Yudi might be a government agent because of his job as a civil servant.
For security reasons, Ustadz Lesmana encouraged other JA members to isolate Yudi and those members who shared his impatience to pursue terrorism. Feeling rejected, Yudi left the group in search of another more radical group. From another JA member I learnt that he wanted to prove to people that he was a real jihadist and JA’s rejection only confirmed his determination for jihad. As reported by media, Yudi moved to Jakarta, and joined a radical group associated with Aman Abdurrahman’s Jamaah Tauhid wal Jihad. He also met Sofyan Tsauri who introduced him to Dulmatin.
The process of Yudi’s involvement with radical and terrorist groups is interesting to observe. His perceived marginalization by society due to different religious ideas drove him to find a radical group to where he could feel acceptance. When he joined JA, he crossed what John Horgan, expert in the psychology of terrorism, calls the “alienation threshold”, a point at which he retreated into a small group of like-minded and angry people. Here he was involved in an intense period of in-group socialization through which he was indoctrinated by radical teachers such as Halawi and Aman Abdurrahman using books written by Egyptian Syekh Abdul Qadir Bin Abdul Aziz, such as Al Wala’ wal Baro (Love and Hate for God’s sake), Al-Umdah fi I’dadal-Uddah (The Fundamentals of Preparedness for Holy War), Al-Jami’ fi Talab al-‘Ilm al-Sharif (The Compilation on Seeking Honorable Knowledge) and Ma’alim Asasiyah fil Jihad (Manual for Jihadi Jurisprudence).
Yudi’s next stage of becoming a terrorist was accelerated by the alienation he experienced from JA which pushed him across Horgan’s “violence threshold”, a point at which he was ready to commit violence. He was arrested in the final stage of becoming a terrorist, namely in preparation for an attack. Yudi’s journey to terrorism might have been stopped if people around him had have intervened before he crossed the alienation threshold. Parents, friends and religious teachers could have engaged him in dialogue regarding his religious views and social or political grievances. Even after he joined JA, he might have stayed away from terrorism if JA leaders and members had not isolated him but instead instilled in him a milder view.
Besides Yudi, there were two other JA members who were similarly isolated, one of whom did not pursue terrorism despite strong intentions to kill Americans. The reason, he told me, was that his family, friends and more importantly religious teachers talked to him and kept persuading him to avoid violent jihad. People like Yudi are not so different from us. We all need acceptance, we all need a community to which we feel we can belong and contribute positively, and we all need respect.
It is all very well for us to judge and despise “terrorists”, but it might be more productive if we are able to put aside these initial responses and to try to understand the individual journey’s such people make and why they might make them.
Only with such an understanding then can we start to help them address the grievances they face and find the support they need without resorting to terrorism. The writer Muh Taufiqurrohman, Jakarta holds a masters in International Relations from UNPAR and has undertaken research on terrorism.
Note: to see the original piece by Catharine Dalpino, go to:
http://asiasecurity.macfound.org/blog/entry/111the_kopassus_kerfuffle/
Response re Indonesia’s “Special Forces KOPASSUS Kerfuffle”
Asia Security Initiative
The Asia Security Initiative’s March 29 post, “The Kopassus Kerfuffle” by Catharine Dalpino, is a timely and thoughtful analysis regarding the U.S. decision whether to provide training or other assistance to Indonesia’s Special Forces Kopassus.
This issue is important, as indicated by Ms. Dalpino, not only for the future of U.S.-Indonesia military relations, but also for the future of U.S. observance of the 1997 Leahy law which prohibits foreign military units from participating in military training or receiving assistance for weapons purchases if unit members have committed human rights violations for which they have not been brought to account.
The decision whether or not to skirt provisions of the Leahy law is a litmus test of whether the Administration respects U.S. Congressional mandates not to provide assistance to corrupt, human rights abusing forces that remain unaccountable for their crimes.
Ms. Dalpino’s piece fails to place the U.S. debate over assistance to Kopassus in the broader context of U.S. assistance to the Indonesian military (TNI). For many years, a bipartisan, bi-cameral majority in the U.S. Congress insisted that the prospect of U.S. assistance to the TNI be used as leverage to exact real reform.
This consensus was based on the recognition that this key institution had not been a part of the transformative reform movement that followed the 1998 overthrow of the military dictator Suharto. Instead, the TNI has remained the single greatest threat to democratization in Indonesia, eluding civilian control and insisting on impunity before the courts for its personnel who violate human rights or engage in illegal activities, including people trafficking.
U.S. observance of the Leahy law suffered serious erosion during the Bush Administration. In 2005 the administration used a “national security waiver” to remove remaining restrictions and U.S. assistance ceased to serve as a key incentive for reform. Unsurprisingly, faltering TNI reform stopped. Since then, the TNI failed to meet legislative requirements that it disburse its business empire which includes both legal and illegal businesses. That action, mandated by the Indonesian Parliament in 2004 was to have been completed by 2009. Failure of that key reform has enabled the TNI to maintain access to non-Indonesian government budget resources and to evade civilian control. The TNI also remains unaccountable for human rights violations and other crimes, enjoying impunity before an Indonesian justice system that is deeply corrupt and easily intimidated. Despite this the Obama administration has continued to pursue a broad military-to-military relationship with the TNI (but not its special forces).
Ms. Dalpino’s article also fails to emphasize that the debate over U.S. assistance to Kopassus is not simply a U.S. debate. Many Indonesian NGO’s and individual Indonesians are opposing U.S. assistance to Kopassus, and have urged U.S. and international NGOs and observers to join them. These Indonesian voices have been especially important and noteworthy given the risk they face for their criticism of the Indonesian military which has regularly targeted its Indonesian critics.
Finally, Ms. Dalpino raises the “osmosis” theory which conjectures that Kopassus could become a human-rights respecting organization through collaborative contact with U.S. forces. Yet, the Kopassus awful record was indelibly established during decades of close association with U.S. forces during the Suharto era. The reality is that Kopassus contact with rights-respecting Australian and other foreign forces has had no impact on the essential criminality of the Kopassus. The “osmosis” argument does not wash. President Obama ultimately faces a choice on principle. Inevitably, that choice will reveal the level of importance he attaches to respect for human rights, accountability and civilian control of the military.
Catherin Dalpino responds:
Ed McWilliams has offered a very thoughtful response, and I don’t disagree with most of his criticisms, which primarily expand on brief mentions I had made of other points (e.g., Indonesian human rights NGO concerns over Kopassus). And I do agree that the Kopassus issue is about more than Indonesia and is an early test case of the Obama administration’s implementation of the Leahy Law as part of the human rights framework of the US Government, a point that should be raised with Jakarta.
It is not uncommon for people to assume that legislation is aimed at a specific country or situation and therefore to be confused or disappointed that the law is not easily swept away with a change in bilateral relations. However, Mr. McWilliams has misread my including the “osmosis” theory in my recitation of the arguments on both sides of the issue as an endorsement of that theory. I would agree with him that mere contact with the armed forces of a democratic country seldom if ever has a tranformative effect. We have ample evidence of that from a wide range of military-to-miltary relations in several regions.
Ed McWilliams is a retired US diplomat. He worked as political counselor in Jakarta and received the American Foreign Service Association’s Christian Herter Award for creative dissent by a senior foreign service official.
A campaign of terror is underway in Thailand, with both sides to the political conflict pinning blame on the other for a series of grenade attacks that have targeted government
offices, military installations and private businesses. Unknown assailants have launched more than a score of explosives attacks this month amid a heavy security force presence in the national capital. While early attacks were seemingly designed to avoid human casualties, more recent blasts have targeted populated areas and seriously injured soldiers and civilians. Some fear the surge in violence signals a dangerous new phase of the four-year-old conflict pitting supporters and detractors of self-exiled former premier Thaksin Shinawatra, who was toppled in a 2006 military coup.
The explosive attacks in Bangkok have coincided with anti-government street protests spearheaded by the United Front Against Dictatorship for Democracy (UDD), a Thaksin-aligned protest group that remobilized in mid-March to pressure Prime Minister Abhisit Vejjajiva to dissolve parliament and call new polls. The rally represents the UDD's first major mobilization since last April's demonstrations degenerated into rioting and eventuated in a military crackdown.
The present rally was organized two weeks after Thailand's Supreme Court ruled to seize more than US$1.4 billion worth of Thaksin's assets. The protesters' demand that the government stand down immediately comes as Abhisit's Democrat Party stands to reap political benefits from a gathering economic recovery that has buoyed the stock market and currency amid the protests. Talks this week aimed at defusing tensions between Abhisit and UDD co-leaders broke down over conflicting views on a timetable for holding new elections. In response, the UDD has vowed to amass its largest demonstration yet in a waxing and waning three-week-old campaign many fear could yet tilt towards violence as protest leaders fail to achieve their stated aims.
Against that confrontational backdrop, there are conflicting theories about the possible masterminds and motivations behind the grenade attacks, with some more plausible than others. UDD leaders have claimed that the military is behind the attacks to discredit their self-proclaimed "peaceful" and "non-violent" protest movement. They've suggested the military has cynically targeted its own and other government facilities to blame its protestors and justify suppression.
"We are afraid it is the security forces themselves that plant them and blame us," said Sean Boonracong, the UDD's international spokesman, by text message. "The international media are skeptical of the 30 bombs exploded in Bangkok and yet they do not blame us." He insinuated that US-trained Thai troops have orchestrated the bombings - though to date security officials have exercised restraint when confronted by UDD protestors. "The black ops taught by the US is an old hat and has not done the tricks it used to," Boonracong said. "The army cannot plant the bombs and coup themselves to restore stability" as they have in the past.
Days before the UDD took to the streets, Deputy Prime Minister Suthep Thaugsuban claimed that foreign governments, including reportedly the US, provided intelligence warning of possible sabotage at UDD rallies based on information gleaned from wiretapped telephone conversations involving Thaksin. The US embassy has declined to comment on Suthep's claims, and before the UDD rally began in a statement urged protestors and their leaders to "forswear the use of violence" and for the government to "exercise appropriate restraint". One US embassy official was for unclear reasons on the scene with reporters videotaping a March 17 blood-spilling ritual by the UDD at the front gate of Abhisit's personal residence.
While the circumstances around the attacks are murky, many analysts discount the UDD's claims that the military's top brass is behind the bombings. They reason that the military has little, if any, motivation to further destabilize Abhisit's coalition government, which top soldiers allegedly helped from behind-the-scenes to cobble together in a late 2008 parliamentary vote.
Top army commanders are believed to favor the political status quo until at least October, when a scheduled reshuffle should see through its planned transition from army commander Gen Anupong Paochinda to his deputy, Gen Prayuth Chan-ocha, a handover the Thaksin-aligned opposition Peua Thai party would likely thwart if it won power at the polls. Anupong was involved in the 2006 military coup that ousted Thaksin.
While Anupong famously refused to act on previous Thaksin-aligned governments' orders to suppress People's Alliance for Democracy (PAD) protestors in 2008, including while the protest group occupied Bangkok's international airports, he has worked in lockstep with Abhisit's government to maintain law and order during UDD demonstrations.
Loose Arms
Poorly guarded military armories and easy black-market access to basic munitions means that there is a deep pool of potential suspects for the attacks beyond the military, say analysts. Government spokesman Panitan Wattanayagorn said that police investigations into the attacks revealed "political groups" were involved in certain assaults and that evidence showed assailants "weren't too experienced in launching RPGs [rocket-propelled grenades]".
He strongly denied UDD allegations of official involvement in the attacks. "We have no benefits or motives for doing so. The attacks are a negative for us, especially when they attack our own offices." He said that the government had "cooperated closely" with UDD leaders to ensure the protests' security.
Intelligence officials, foreign diplomats and other political analysts who spoke with Asia Times Online all said that they believe radical elements loyal to Thaksin - though not necessarily on his orders or with the UDD's knowledge - are more likely behind the bombs. None of those interviewed, however, provided hard evidence to corroborate their assessments. One Bangkok-based diplomat speculated that it was "no coincidence" that the grenade targets were often the same government institutions that house the bureaucratic elites that UDD leaders have pilloried from their protest stage. He noted that while there were similar anonymous grenade attacks during the rival PAD protests in 2008, in contrast the explosions were launched inside, not outside, of the protest site.
Another diplomat tracking developments believes that certain of the bombings against military targets have been designed to goad an armed response that the UDD would aim to portray as a repeat of the 1992 bloody clashes that saw soldiers kill more than 200 pro-democracy street demonstrators and resulted in King Bhumibol Adulyadej intervening to restore stability and reconcile opposing camps.
In particular, the diplomat believes last Saturday's grenade attack at the 11th Infantry Division, launched just hours before UDD protestors arrived en masse at the installation, where Abhisit, Suthep and Anupong have holed up to monitor security developments, was coordinated to elicit a retaliatory military response against unarmed demonstrators. (At least seven soldiers have been injured in grenade attacks launched at military installations since the UDD launched its protests; so far there have been no reported incidents of security forces injuring protestors.)
"Everyone in the government and military, top-to-bottom, know that these are attempts to provoke a reaction and no-one is fooled," said one diplomat, on condition of anonymity. "The people behind these attacks are either deluded, thick or desperate, and Thaksin fits at least one of those categories." In his phone-in addresses to the protest site, Thaksin has advocated non-violence, but in a recent speech told his followers to prepare for "sacrifices".
Other analysts believe that the mysterious violence corresponds with previous UDD threats to take up arms. The UDD said in a recent press statement that it had abandoned its previous call to "armed struggle" and from its protest stage UDD leaders have distanced themselves from more radical Thaksin supporters who had criticized the UDD's tactics and advocated more aggressive means to topple the government.
It's unclear to some diplomats and analysts whether the bombings are an outgrowth of competition between different camps jockeying to maintain Thaksin's favor. The radicals include most notably Maj Gen Khattiya Sawasdipol, alias Seh Daeng, who earlier claimed to organize the UDD's black-vested security detail but in recent weeks has criticized the protest group's leadership and publicity stunt tactics. His personal aide, Pornwat Thongthanaboon, alias K-Thong, is being held in police detention in connection with a YouTube clip in which he accurately predicted bombings would occur across Bangkok in the wake of the Supreme Court verdict against Thaksin. Seh Daeng has told local media that he is not responsible for the recent grenade attacks, but he has also predicted accurately that the bombing campaign would continue.
A series of photos making the email rounds among diplomats and others shows a fatigue-wearing Seh Daeng and Thaksin arm-in-arm and conferring in recent weeks at the exiled former leader's plush residence in Dubai. The final photo in the series shows Seh Daeng and UDD leader Veera Musikapong, sporting a pink polo shirt, in a state of embrace at the bottom of an elaborate staircase.
It's thus not clear to some analysts whether the public split between mainstream and radical pro-Thaksin camps is real, or fabricated to obscure left-hand, right-hand tactics that are aimed at maintaining popular support for the UDD through claims to non-violence, while seeking in coordinating fashion to destabilize the government through mysterious grenade attacks.
Some analysts fear that the UDD's failure to topple the government, or to win through talks any substantial concessions from Abhisit, will lead the pro-Thaksin protest group towards more drastic measures. But at least one recent public opinion poll showed that substantially more Thais believe Abhisit should complete his term rather than yield to the UDD's demands for immediate dissolution, and its not clear that more grenade attacks from either side will change that popular sentiment. By Shawn W Crispin Asia Times Online's Southeast Asia Editor.
Strong growth and political stability made Indonesia southeast Asia's most attractive investment destination last year, but the outlook is threatened by a struggle between reformers and powerful vested interests. For the moment, the reformers appear to have the upper hand, but a major setback could rattle Indonesia's financial markets and hurt prospects for a credit rating upgrade with Indonesia now rated just one notch below the coveted investment grade by Fitch.
The benchmark stock index .JKSE has surged 154 percent from its Oct. 28, 2008 low and is now close to setting an all-time high, while the rupiah IDR= has strengthened from 12,600 per dollar in November 2008 to trade at about 9,090. The sovereign credit default swap spread IDGV5YUSAC=R has tightened to around 161 basis points from 182 a month ago.
Following is a summary of key Indonesia risks to watch:
* GOVERNMENT EFFECTIVENESS IN DRIVING REFORM
President Susilo Bambang Yudhoyono, re-elected with a strong mandate in July last year, is widely seen as a progressive, market-friendly reformer. Many investors hoped the pace of reform would pick up in his second term after he chose Boediono, an economist, as vice president, kept two key technocrats -- Sri Mulyani Indrawati and Mari Pangestu -- in economic posts in his cabinet, and set up a presidential delivery unit headed by Kuntoro Mangkusubroto.
Instead, his government was distracted by a highly politicised inquiry -- driven by opponents of reform -- into the rescue of Bank Century, a small lender, that ended in March with parliament recommending a criminal investigation into the bailout decision. Yudhoyono stated his full support for Indrawati and Boediono, who had backed the bailout to avoid a collapse of confidence in the financial sector, signalling that their jobs are safe. Boediono in March announced a new team to oversee reform of the bureaucracy, a positive sign for foreign investors. Also, healthy fundamentals and a large and growing domestic consumer base still provide reasons to invest in Indonesia even if reform prospects dim.
What to watch:
-- Opponents of reform, including those within Yudhoyono's ruling coalition, will probably try to block pro-investment policies such as changes to the tough labour laws and cuts in energy subsidies.
-- The future of the coalition. The Bank Century inquiry strained relations between Yudhoyono's Democrats and coalition partners Golkar, tycoon Aburizal Bakrie's party which opposes much reform, and the Islamist PKS, which sometimes takes a
nationalist, anti-Western stance.
* CORRUPTION AND GOVERNANCE
Corruption emerged as a defining issue at the start of Yudhoyono's second term, with popular anger mounting over a power struggle between the respected Corruption Eradication Commission (KPK) and the attorney-general's office and police. The KPK has made significant progress in investigating corrupt officials, but this has stirred powerful opposition. Yudhoyono has vowed to back the anti-corruption drive but his slow response to the KPK scandal disappointed many Indonesians.
However under Kuntoro, the presidential delivery unit and legal task force has begun tackling legal reform, for example exposing graft in the prison system and investigating various officials suspected of perverting the course of justice.
What to watch:
-- How effective Kuntoro's presidential delivery unit is in tackling legal reform and other issues that deter investors.
-- Pace of reform of Indonesia's civil service, police and courts. Yudhoyono's cautious response to the power struggle over the KPK suggests he will move much more slowly than markets had hoped, confirming his reputation for preferring gradual change to bold, sweeping reform. Investors betting on more decisive reform during Yudhoyono's second term have had to adjust expectations.
* HOT MONEY AND CAPITAL CONTROLS
The rupiah was Asia's best-performing currency in 2009 with a gain of 17 percent against the dollar, threatening Indonesia's export competitiveness, and is up about 3 percent this year, making it one of the region's better performers. Memories are also still raw of the 1998 Asian crisis, which was widely blamed in Indonesia on foreign "hot money" being yanked from the country. The central bank says it will keep intervening to stem the rupiah's gains but seems comfortable with the steady appreciation as this helps to contain imported inflation.
Late last year the senior deputy governor said Bank Indonesia was studying the possibility of curbing foreign ownership of its short-term debt or SBIs, sparking speculation about tighter capital controls. Instead, in March, it started to reduce the frequency of the auctions for one-month SBIs, which has resulted in foreign investors shifting into three-month paper instead.
What to watch:
-- Data on exports and speculative inflows, and whether the central bank's measures for SBI auctions has the desired effect of reducing short-term volatile capital inflows. If problems arise, expect controls may be tightened. Draconian measures that send investors fleeing to the exits are unlikely -- measures would be aimed at directing flows, rather than halting them, so any negative impact on asset prices would be relatively muted. However, the issue can still spook markets -- the rupiah suffered its biggest one-day sell-off in nine months last November due to mixed signals on capital controls.
* SECURITY
Suicide bombings at two luxury hotels in Jakarta last July were the first major terror attacks in Indonesia since 2005 and raised concerns that the threat from militants was again on the rise. The killing of Noordin Mohammad Top and, more recently, the bomb-making expert Dulmatin, may have significantly reduced that threat, but the risk persists.
Police recently discovered a new network of armed Islamist militants operating a secret training base in Aceh, Sumatra province. Analysts have warned that dangerous militants are using the prison system to recruit and spread their ideology, while recent trials of militants have shown that funding came from the Middle East.
What to watch:
-- Ability of militants to regroup and launch more attacks. Particularly if remaining militants are able to establish firm enough links with al Qaeda or allies in Southeast Asia to secure sustained funding, expertise and recruits, the threat may be far from over. But Indonesia's markets have proven highly resilient to bomb attacks. Unless there is a significant and sustained deterioration in security, any sell-off would be small and short-term. (Compiled by Andrew Marshall, Sunanda Creagh and Sara Webb)
THE high-profile case of Rio Tinto executive Stern Hu closed with the three-judge court sentencing the Australian citizen to 10 years in prison on charges of corruption and stealing commercial secrets.
Australian Foreign Minister Stephen Smith termed the sentence harsh and pointed out that part of the trial was held behind closed doors, with no Australian official present, despite a Sino-Australian consular agreement that provides for such presence.
"Because we have had no access to that part of the trial, there are I think serious, unanswered questions which international business community will want to continue to pursue with China," Smith said.
The fact that the Chinese closed part of the trial despite the clear terms of a bilateral agreement is worrisome and casts doubt on the value of China's signature on any treaty or international accord.
An agreement on consular relations, which came into force in 2000, provides: "In the case of a trial or other legal proceeding against a national of the sending state in the receiving state, the appropriate authorities shall make available to the consular post information on charges against the national. A consular officer shall be permitted to attend the trial or other legal proceedings."
However, the Chinese Foreign Ministry spokesman, Qin Gang, defended the barring of Australian consular officials by saying: "The China-Australia Consular Agreement should work on the premise of respect to China's sovereignty and judicial sovereignty.
"China's judicial authorities decide how to handle the case in light of Chinese laws and the nature of the case, and we should respect their decision."
This is a stark reversal of China's previous position on international agreements, which is that they are superior to domestic law.
In 1987, before the signing of the China-Australia consular agreement, the Chinese Foreign Ministry, the Supreme People's Court, the Supreme People's Procuratorate, the Public Security Ministry, the Ministry of State Security and the Ministry of Justice jointly issued a document declaring that "when domestic law or internal regulations conflict with our treaty obligations, we shall apply the relevant provisions of international treaties".
Moreover, Jerome A. Cohen, an American specialist in Chinese law, and an associate, Yu-jie Chen, have pointed to another document issued on June 20, 1995, which like the 1987 document, was issued jointly in the names of the Foreign Ministry and the most authoritative criminal justice agencies in China, including the Supreme People's Court and the Ministry of Justice.
While the 1987 document refers generally to the principle of international treaties overriding domestic law, the 1995 document, called Regulations on the Handling of Certain Problems in Foreign-Related Cases, directly addresses the issue of foreign consular attendance at trials that are closed to the public.
Article 1 (c) of those regulations specifies that when there is a conflict between Chinese domestic laws and regulations and China's treaty commitments, the treaty's provisions should apply.
Furthermore, Article 6 (a) of the regulations provides that if China has signed agreements expressly permitting consular presence, then foreign consular attendance must be permitted even in closed trials.
In view of these Chinese regulations, it is difficult to understand how the Foreign Ministry spokesman, Qin Gang, could have said: "Please don't confuse a country's sovereignty, particularly its judicial sovereignty, with the Sino-Australian consular agreement.
"The Sino-Australian consular agreement also needs to respect China's sovereignty and judicial sovereignty."
This seems to reflect a lack of understanding of the nature of international agreements. When signing a treaty, a government, through an exercise of its sovereignty, agrees in effect to limit the exercise of its sovereignty in specific circumstances.
Cohen and Chen point out that the Stern Hu case is not the first time in which the Chinese Foreign Ministry and Chinese courts have not acted in accordance with the 1995 regulations.
"Last summer," they wrote, "the United States government's claim to send consuls to observe the trial of American citizen Xue Feng on charges of illegally obtaining state secrets relating to the oil industry, a trial that has not yet been concluded, was also rejected."
For China to say that it can change the content of treaties after they have been signed and come into effect sends the international community the troubling signal that China's signature is worthless since it can decide not to honour a treaty at any time.
Surely, China does not want the world to think that now that it has become strong and powerful, it no longer intends to abide by international norms, including the observance of treaty obligations. FRANK CHING New Straits Times Kuala Lumpur
