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Help us clean up!
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The World Bank has joined the IMF in a huge rescue package. Indonesian non-government organisations (NGOs) presented this memo to World Bank president James Wolfensohn in Jakarta.
Over the last ten years, we the NGOs have witnessed the shift within the World Bank from a totally closed and government- oriented organisation into a more transparent one. However, the Bank still persists with its paradigm of economic development based on economic growth, supported by a stable political structure, and heavily financed by foreign money through loans and direct investment.
The World Bank has championed Indonesia as a show case of this paradigm. It has used Indonesian 'miracle economic growth' as an example to other developing countries. Now all the 'achievements', which we gained through the hardships and sacrifices of our most vulnerable people, have evaporated in just a few months. This followed the failures of the same paradigm in Latin America, Central America and Mexico in the early 80s.
Law
Non Government Organisations - in Indonesia we participate in the International NGO Forum for Indonesian Development (Infid) - have long advocated the Bank to change this paradigm. The Bank has ignored the political and institutional dimensions of development. These include the development of the rule of law, recognition of human rights, effective democratic mechanisms, a structure to produce accountable government, and effective social control which can actually enhance the economic development process.
On the contrary, the Bank has used the soft approach to the problems of corruption, collusion and oppressive practices of its clients, as long as they can show strong economic growth.
We have advocated human rights and democratisation as the basis for economic development, but the Bank has responded that its business is development and not democratisation. On the contrary, the Bank has continuously increased its support to our government, even though quietly the Bank knew the government was losing its own people's confidence due to corruption and collusion. The Bank knew that the government got its legitimation through an oppressive political system and tight security control, but it chose to ignore them.
Now this problem has culminated in the continuous downfall of Indonesia's rupiah, despite economic and structural reforms imposed by the IMF and the World Bank. Clearly, we need more than just economic and structural reform. We need political and institutional reform to guarantee sustainable development. We need a national leadership which honours the people's sovereignty, which respects human rights and the rule of law, and which respects the principle of the separation of powers within a democratic system.
Recommendations
We recommend that economic reform can only be successful if the following reforms take place simultaneously:
Reform the judiciary system to free it from government intervention;
Reform the political system by abolishing laws that inhibit the freedom to organise, to assemble and express opinions; abolish laws that paralyse political parties and prevent free and just elections;
Develop laws that guarantee social justice within the market economy by acting against corruption and monopolies, and in favour of consumers;
Base all economic reform on poverty alleviation and an environmentally sustainable development principles;
Remove state authority from 'quasi public interest' foundations, and replace them with a state policy that allocates more resources to small and medium enterprises;
Include the Indonesian public in the economic reform. This means disclosing any agreement between the government and the World Bank on the bailout package.
We understand that the World Bank has a limited mandate and perhaps cannot address the whole reform agenda above. Nevertheless, we expect the World Bank to demonstrate an attitude that its support to the Indonesian government is conditional on reform achievements in these political, institutional and social justice areas. We expect the Bank to declare that position publicly as well as to the government of Indonesia.
Jakarta, February 4, 1998
International NGO Forum on Indonesia Development (Infid) Indonesia Steering Committee:
Zoemrotin K Soesilo, Chairwoman
Asmara Nababan, Secretary
Infid has 40 NGO participants, ranging from small organisations to Indonesia's most prominent independent NGOs. This statement is extracted from the original memo.
Inside Indonesia 54: Apr-Jun 1998
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Permeable border
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Indonesian fishermen whose traditional fishing grounds are in Australian waters may have a Mabo-style claim, says CAMPBELL WATSON.
Papela is situated on the island of Roti south-west of Timor, near the maritime border between Indonesia and Australia.
Local tradition says Papela was established during the sixteenth century as a base to fish for shark and trepang around the sandy islands and reefs between north-western Australia and Roti. So Papelans have been fishing there for 500 years.
Most of the 7,000 Papelans are descended from the Islamic seafaring peoples of south and south-east Sulawesi such as the Makassans, Bugis, Butonese and Bajo, and from the islands on the sea route from there such as Flores, Solor and Alor.
Colonial claims
Colonial Great Britain took possession of the Ashmore Islands in 1878 and Cartier Island in 1909. Presumably the claim was based on the same now debunked grounds as claims to the Australian continent itself, namely that they were terra nullius because they had no permanent inhabitants.
In 1931 Britain transferred the Ashmore and Cartier Islands to Australia. Approximately the present land areas were under the control of each state at the time of Indonesian independence soon after World War II.
But claims by Australia and Indonesia to ever more extensive seas continued to move forward. There is not simply one border between the countries but a whole set of them (see map). In 1952 Australia unilaterally claimed the living natural resources of the entire Australian continental shelf, which extends to within 150 km of Roti. It included the trepang and trochus within the Papelans' traditional fisheries.
In 1968 both nations extended their territorial seas, a zone of exclusive control, from three to twelve miles. In 1973 they reached agreement on a seabed jurisdiction line. In 1979 Australia, along with 60 other countries, extended its exclusive fishing zone to 200 miles. The 1982 United Nations Convention on the Law of the Sea (UNCLOS III, coming into effect in 1994) legitimated these extensions to sovereignty.
In 1981 Australia and Indonesia agreed on a provisional fisheries surveillance and enforcement boundary approximately equidistant from each country's coast. The 1993 Timor Gap Treaty for the exploration and exploitation of non-living resources of a large part of the seabed stops just short of the Ashmore and Cartier Islands, which have been identified as highly prospective region for oil and gas.
Restricted fishing
The effect of these extensions of sovereignty has been that gradually the traditional fishing grounds of the Papelans have come to lie entirely within Australian territory. It was only in the 1970s that the Australian government attempted to restrict fishing in those waters by Indonesian craft. Negotiations with the Indonesian government resulted in the Memorandum of Understanding (MOU) of 1974 by which a kind of reservation was set up for Indonesian fishermen. The MOU zone now includes all the waters in a boxed area around the initial group of reefs and cays right up to the Indonesian border.
The MOU provides for Indonesian fishermen using traditional sailing craft and methods of catch to fish within this zone. Fishermen may only use sail and compass and may not operate a radio. Fishing and collecting may only be carried out by traditional means. It is forbidden to take turtles or their eggs or any land based products.
Taking of trochus, trepang, abalone, green snails, sponges and molluscs was initially allowed everywhere. But in 1988 the Ashmore Reef National Nature Reserve was created. This drastically reduced the area in which products could be collected to just the sea bed next to Browse islet and Scott and Seringapatem reefs. Fishermen are only allowed to step onto land within the MOU zone at two of the Ashmore islands and then only to collect fresh water.
Several fishermen claimed it would take a month to catch in Indonesian waters what it would take a week to catch in Australian waters. This is partly due to overfishing and lack of marine management in Indonesia compared to Australia.
Not exclusive
The Papelans themselves regard the seas as open and free and are not inclined to claim exclusive ownership of their traditional fishing grounds.
Many vessels from Sulawesi and other Indonesian ports also fish the waters throughout the border zone. These craft are bigger and motorised. Much of this fishing in Australian waters is 'illegal', although in some cases also based on purported historical rights. The MOU simply specifies 'Indonesian fishermen' as a whole.
Many boats from nations such as Taiwan and Japan also fish on both sides of the border. They employ state of the art technology with devastating effect. Unlike Indonesian vessels most have sufficient capital to purchase licenses although there are also many instances of illegal fishing.
Relations with Australian fishermen are said to be amicable. In certain areas of Indonesia however conflicts are escalating between fishermen from different regions or using different methods of catch. As pressure on marine resources within Indonesia mounts ports adjacent to the border zone, including Papela, are becoming a magnet for their accessibility to unexploited resources. The border remains permeable to marine resources, and inevitably to the fishermen that derive their livelihoods from them.
Dirt poor
Since 1997 the Australian government has begun exercising an increasingly intolerant approach towards boats breaching the strict terms of the MOU. Boats are seized by the Australian navy under directions from the Department of Fisheries and the crews taken into custody. The boats are then towed to either Broome or Darwin. When convicted the crews may be fined heavily or imprisoned, and their boats may be burnt.
Meanwhile the livelihood of the community as a whole is eroding. Forty seven boats were captured and destroyed in 1996 alone, out of a fleet of around 200, leaving over 250 fishermen without a livelihood. Multiply this by each fisherman's unsupported dependents, as well as businesses dependent on their income. Community members claim an increase in violence, disenchantment and alcoholism as a direct effect.
Papela is dirt poor. Malnutrition, infant mortality and birthrates are high. Houses are small and crowded and few have even running water. Most Papelans are educated only to primary level. The average fisherman is lucky to earn Rp 4,000 Rp (a dollar or two) a day.
The small number of boat owners or 'bosses' live in moderate opulence. Most fishermen work for a boss in return for a share of the catch. The majority are already in debt either to a boss or a moneylender before departing to the border fishing grounds. When they lose their livelihood they become further indebted to the boss, who is nevertheless seen as a benefactor.
The fishermen are all male and aged from their mid teens to their thirties. But the economic crisis resulting from the Australian Government's actions affects the entire community. I often encountered anger towards Australia, including at times towards myself as an Australian, because the government denied them a livelihood.
Fishermen explain that primitive navigational methods (as required by the MOU) leave them unable to take reliable bearings or prevent drifting into Australian waters. They are often confused about the terms of the MOU and the area it covers. The border is not marked.
When, occasionally, they admit breaking the terms of the MOU intentionally, they justify it by asserting traditional rights not written into the MOU. One fisherman said: 'What right does a latecomer colonial government have to deny me the right to fish the same grounds as my ancestors?'. Another quoted a more mundane reason: 'It's not the same as Australia here. If we don't go out looking for a living the government doesn't give us money, we starve!'.
Mabo
Only as recently as 1992, in the Mabo decision, has the highest court in Australia recognised that the customary laws of peoples who were in Australia before white sovereignty can give rise to rights within the common law of present-day Australia. These peoples include fishermen from present-day Indonesia, as we have seen.
The Australian government responded with the Native Title Act of 1993, which tried to extinguish the rights of Aboriginals and Torres Strait Islanders that had been recognised at common law and to replace them with a legislative scheme of land and sea rights. Negotiations prior to the legislation, and the legislation itself, did not include any foreign nationals such as the Papelans who may also possess such rights. As a result the Native Title Act may not have extinguished those rights, and the present actions of the Australian government may conceivably be contrary to the common law of Australia.
But doesn't the MOU do effectively the same thing as the Native Title Act? Not exactly. During the negotiations for the MOU the Papelans themselves were only consulted indirectly. The MOU did not embody their negotiating position and as such should not be effective as a voluntary extinguishment of their rights. The MOU can perhaps best be seen as an agreement controlling and regulating the enjoyment of historical and traditional rights that remain intact.
These rights can be renegotiated in line with developments in Australia's common law and its international obligations. Negotiations must involve their genuine representatives in a fair process in which all parties are fully informed of their likely rights.
For example, Papelans could press to be allowed the use of motors, diving equipment and improved methods of catch. As many as 20 fishermen a year from Papela alone perish in Australian waters as a result of primitive craft and navigational instruments, and lack of cyclone warning equipment, as dictated by the terms of the MOU.
Perhaps specific licenses could be granted to those communities with traditional entitlements but who have been most disadvantaged by the extensions to Australia's waters.
The establishment of traditional rights may also act as a bargaining chip to allow Papelans to negotiate on any future oil or gas production in the area. Compensation could be in the form of aid packages, royalties or access to other resources.
Indonesian law
Papelans have little formal education and do not understand how international or Australian law may benefit them. As citizens of Indonesia they have naturally turned to the mechanisms of their own country. However, I found that these bodies have been of little help.
Ever since independence Indonesia has been a unitary state. Empowering local communities has often been construed as being in conflict with this goal.
Of course traditional rights should not have sole claim to determining resource distribution. However in a society in which the state vigorously defends the rights of a small capital owning elite, community rights are a necessary counterbalance. They are part of ensuring a more equitable distribution of wealth. Without them, central governments tend to serve their own interests rather than those of their remote constituents.
Indonesia inherited the civil law tradition from the colonial Dutch. Unlike British and Australian common law, this system attempts to set down the entire contents of the law. While reserving supreme law making power the Dutch did allow for 'natives to be governed by their own customary (adat) laws'.
Ironically, since independence the civil law tradition has continued to expand in the form of increasingly comprehensive laws and regulations. These are usually divorced from traditional rights, and customary law has withered. The latter is now relegated to the role of a cultural anachronism. The official line is that customary law will eventually die out.
The passing of the new Fisheries Act of 1995 supercedes previous legislation and no longer protects traditional fishing rights. Yet Indonesia remains a signatory to UNCLOS III, which requires that such protection be given. In Australia, by contrast, the law is moving in the other direction, in line with broad international trends.
It is ironic that indigenous customary laws are receiving greater recognition within a predominantly settler society such as Australia than in a predominantly 'indigenous' nation such as Indonesia.
If the customary law of a community whose citizens are Indonesian were recognised under Australian common law, it could act as an important bridge with the customary law tradition of Indonesia. It could even lead to a re-invigoration of customary law in Indonesia.
Unfortunately the current legal and political structures in Papela have not been a suitable vehicle to assert Papelans rights. The fishermen do not even know how to conceptualise those rights. Their official letters tend to speak about the Indonesian nation rather than about traditional rights.
Aboriginal communities
In 1993 the Australian Ambassador, Alan Taylor, came to Papela primarily it seems to make Australia's position clear to the fishermen. He made no concessions to a direct request from a fisherman for fishing licenses to be granted to Papelan boats.
The Ambassador was accompanied on his visit by representatives of several Aboriginal communities. Most Papelans did not understand why they were there. But as it becomes more widely known that Aboriginals have traditional sea rights in Australia, the possibility arises of direct negotiations between Indonesian fishing communities and Aboriginal communities on each community's traditional rights.
Papela is now on a trail well worn by Australian anthropologists, lawyers, fisheries staff, film makers, journalists and tourists. Awareness is growing in both Australia and Indonesia that the present agreement is inadequate. The time is certainly ripe for some informed and equitable negotiations.
If Australia recognises the traditional rights of a group of Indonesian citizens within its territory, based on their own customary laws, it would blur the border between the two countries.
If the Indonesian government supports the community of Papela to assert these traditional rights, it could by osmosis lead to a more pluralist legal and political system within Indonesia itself.
Sovereignty would be dispersed to the subject communities of both countries. It would be part of an evolving international standards of rights that more easily crosses borders.
Campbell Watson is an Australian lawyer who has worked with Aboriginal organisations. He lived in Papela for two months in late 1996 under a program of Gajah Mada and Muhammadiyah Universities. He now researches international law at Leiden University. A more detailed report is available from him at: Herengracht 33E, 2312 LA Leiden, Netherlands.
Inside Indonesia 54: Apr-Jun 1998
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Volunteers rescue reefs
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HELEN LANDYMORE found herself surveying rare birds and fish in stunning locations when she joined an Operation Wallacea expedition.
The advert said they were looking for enthusiastic volunteers to help in a wildlife and coral reef survey of a remote part of Sulawesi in Indonesia. Well, I'm enthusiastic to go trekking through towering forests and dive on sites virtually undived before. But surely they couldn't want me - I wouldn't recognise a hornbill from a parrot and although I can dive I've never got past the coloured underwater sheets of reef fish that you can buy in most dive centres.
Nevertheless, spurred on by the thought of doing something different and worthwhile at the same time, I went to an interview. The whole project seemed so exciting that I signed up and a few weeks later found myself in the forests of North Buton with six others.
We were a motley crew. Mark was an experienced birder and worked for the Audubon Society in the USA. Brian was a naturalist from Britain, but who'd never been to the Far East. For the rest of us - two from Singapore, one from Hong Kong and my partner and I - the wildlife of the rainforests was entirely new.
Birds
Mike, the ornithologist on the project was not daunted by the prospect of such a mixed group and we set off in the four-wheel drive vehicle driven by the ever smiling brothers Jusuf and Mansur. Our first night was spent in a local village house, built on stilts, and overlooking a white sand beach.
This paradise village, Kyoko, is about as remote as you're likely to find anywhere in the world. Apart from the Operation Wallacea survey teams it was apparent that the locals had not seen hordes of tourists before. There was an innocence about the village and an unreserved welcome from all the local people.
We left Kyoko before daybreak and trekked into the surrounding forest to get to our target survey area. At first it was still dark as we climbed, but as the sun rose and the early morning mist began to rise over the valley the view was one of the most spectacular I'd ever witnessed.
A group of Red Knobbed Hornbills with their huge bills, white tails and eerie barking call swooped across the valley below us, whilst a pair of Sulawesi Serpent Eagles wheeled above. The day just got better and better. We saw three types of parrots, kingfishers, spectacular white fronted mynas and just before we set up camp next to a spectacular waterfall we had our first glimpse of the almost extinct Maleo bird.
This turkey-sized bird doesn't build a nest like any other self-respecting bird, but buries its eggs turtle-like in sand in large communal areas. The eggs are five times the size of chicken eggs and highly valued by the locals. Since the Maleo bird is only found in Sulawesi and the egg eating is a widespread custom, the Maleo is on the edge of extinction, except perhaps in the hill forests of North Buton.
After a few days in the forest we reluctantly left the towering trees, troops of macaques and the friendly locals to join the marine survey team on Hoga island. Hoga is everyone's idea of Robinson Crusoe's island - white sand beaches, palm fringed, glorious coral and uninhabited except for the Operation Wallacea marine base.
Fish
We were welcomed on our arrival in a speedboat by Dr Monica Sullivan - a cheerful Irish marine biologist who'd found herself running this outpost thousands of miles from her native Sligo.
The marine base turned out to be a huge house which apparently had originally been built with World Bank money by the regional government to catch the passing tourist trade! I never saw another passing tourist in all the time I was there and Monica told me that there had been only a handful over the complete year. So why build a tourist house in such a remote location?
Anyway, the house is now in full use with about 20 people based at any one time on the island. The atmosphere was great with everyone busy helping build a school in the local sea gypsy village or learning to dive or improve their dive skills at the dive centre.
The coral around Hoga is one of the most biologically diverse reefs in the world. I know this because we were involved in counting the numbers of species of butterflyfish found on transects along the reef. This is a technique developed by WWF amongst others to give an indication of biological diversity.
The more diverse the coral reef then the more species of butterflyfish are found. The reef at Hoga contained more species of butterflyfish than even the best transects in the apparently spectacular reefs in Irian Jaya!
After two weeks of working alongside the biologists I was beginning to recognise many of the reef fish and a few of the commoner nudibranch and tunicates. There was a real energy about the base as the biologists rushed to finish their data gathering so that the information could be used to set up different zones in the newly created marine national park - zones for fishing, nursery zones, conservation zones.
Australian ornithologist Chris Majors who lives with the sea gypsy community also came across to the base frequently. He has developed an encyclopaedic knowledge of the different sea gypsy families and knows which are involved in bomb and cyanide fishing. This sort of knowledge is essential if the kind of changes necessary to protect the fishery are going to be put into place.
I'd only been away four weeks, but the experience will be with me forever. Going on a normal diving holiday will never have the same appeal again!
Helen Landymore is from England. She joined the expedition in 1997 and now works at Operation Wallacea. Check out the Operation Wallacea Web site: http://www.operatio nwallacea.org.uk, email info@operationwall acea.org.uk.
Inside Indonesia 54: Apr-Jun 1998
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The end of the Asian miracle
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The IMF recipe is no cure for Asia's collapsed economies, says WALDEN BELLO. Instead, a people's strategy is emerging that looks to self-reliance and democratic control over capital.
For its swiftness and confounding of experts, the evaporation of the Asian economic 'miracle' probably ranks second only to the unraveling of Soviet socialism as the greatest surprise of the last half-century. All at once convention has been turned on its head, as South Korea, Thailand and Indonesia line up for a multibillion-dollar bailout from the International Monetary Fund, and many of the same institutions and people who recently celebrated the Asian 'tigers' as the engine of world growth into the twenty-first century now speak of them as a source of financial contagion, even as the trigger for global deflation.
How did this happen? Why were these economies so fragile after all? And what might a program of radical reform - distinct from the discredited policies of the past and from the free-trade nostrums being pushed by the United States - look like?
With events still unfolding, there is a risk in advancing full-blown theories about the collapse. Nevertheless, it is useful to understand the crisis in relation to the different patterns of economic development in Southeast and Northeast Asia.
Foreign capital
In Southeast Asia, where most countries' GNP grew between 6 and 10 percent from 1985 to 1995, the crisis stemmed from a development process sustained not principally by domestic savings and investment but by huge infusions of foreign capital. In the late 1980s the region's growth was heavily dependent on Japanese direct investment. When this began to taper off in the early nineties, alternate sources of capital had to be tapped, particularly international banks looking for higher yields on their loans and mutual funds, and other speculative institutions searching for more profitable investments than were available elsewhere.
Thailand's technocrats pioneered a three-pronged strategy for attracting them: liberalisation of the financial sector; maintenance of high domestic interest rates to suck in portfolio investment and bank capital; and pegging of the currency to the dollar to reassure foreign investors against currency risk.
Widely regarded as the bedrock of Thailand's rise to tigerhood, this formula was soon copied by finance ministries and central banks in Manila, Kuala Lumpur and Jakarta. All received the blessings of the IMF and the World Bank, which saw any move to eliminate barriers between the domestic and global financial markets as a step in the right direction. Indeed, as recently as late 1996, when it was clear that the Thai economy was headed for trouble, the IMF was still praising the government's 'consistent record of sound macroeconomic management policies.'
In retrospect, Thailand exemplified the perils of 'fast-track capitalism'. Net portfolio investment totaled some US$24 billion in the past three to four years, while another US$50 billion entered as loans to Thai banks and enterprises. This capital never found its way into the domestic manufacturing sector or agriculture - low-yield sectors that would provide a decent rate of return only after a long gestation period. The high-yield sectors with a quick turnaround time to which foreign money gravitated were the stock market, consumer financing and, in particular, real estate.
Monuments to folly
Not surprisingly, a real estate glut developed rapidly. By 1996 some US$20 billion in new property was unsold. Monuments to folly were everywhere - the Bangkok Land Company's desolate 'residential complex' near the airport, the empty thirty-story towers in the city's Bangna-trat area. The rest of the pieces fell quickly. Commercial banks and finance companies were horribly overexposed in real estate.
Foreign portfolio investors and banks that had loaned to Thai entities discovered that their customers were carrying a load of nonperforming loans. With a worsening balance of trade, the country's capacity to repay the debts incurred by the private sector became very cloudy. That the current account (or balance of trade in goods and services) was in deficit to the tune of 8.2% of GDP in 1996 struck fear in the hearts of investors, who recognised this figure as about equal to that of Mexico when it suffered its financial meltdown in 1994.
By early 1997 many investors concluded it was time to get out and get out fast. With over US$20 billion in baht parked in Thai stocks or paper or nonresident bank accounts the stampede was potentially disastrous, for it meant unloading trillions of baht for dollars. With too many baht chasing too few dollars, there was huge pressure for devaluation. The scent of panic attracted currency speculators, among them George Soros. The Bank of Thailand initially sought to defend the baht by dumping its dollar reserves on the market, but by July 2, after losing at least US$9 billion of its US$39 billion in reserves, it had to throw in the towel.
Speculators spotted similar skittish behavior among foreign investors in Manila, Kuala Lumpur and Jakarta, where the same conjunction of commercial bank overexposure in real estate, weak export growth and a widening current account deficit was stoking fears of a currency devaluation that could devastate their investment. As in Thailand, speculators rode on the exit of foreign investors.
By late October 1997, the Philippine peso, the Malaysian ringgit and the Indonesian rupiah were still on a downspin as capital continued to exit, resulting in a catastrophic combination of skyrocketing import bills, spiralling costs of servicing the foreign debt of the private sector, heightened interest rates spiking economic activity, and a chain reaction of bankruptcies. The Southeast Asian miracle had come to a screeching stop.
Savings
Meanwhile, things were disintegrating in Korea, where over the past year seven of the country's mighty chaebol, or conglomerates, had come crashing.
Unlike Southeast Asia, Korea built its strength principally on domestic savings, generated partly through equity-enhancing policies such as land reform in the 1950s. Foreign capital had played an important part, but local financial resources extracted through a rigorous system of taxation plus profits derived from the sale of goods to a protected domestic market and to foreign markets opened by an aggressive mercantilist strategy constituted the main source of capital accumulation.
The private sector flourished under a regimen in which the state had the commanding role. By picking winners, providing subsidised credit and protecting them from transnational competition in the domestic market, the state nurtured companies that it later pushed out into the international market. In the early 1980s, the state-chaebol combine appeared unstoppable, as the deep pockets of commercial banks, extremely responsive to government wishes, provided the wherewithal for Hyundai, Samsung and other conglomerates to carve out international markets.
By the early nineties, however, the tide had turned. Failure to invest significantly in research and development translated into continued dependence on Japan for basic machinery, manufacturing inputs and technology, worsening Korea's trade deficit with that country. Also, a bruising US counteroffensive, which included forcing the currency up to raise the price of Korean exports and threatening trade sanctions, reversed its balance of trade with the United States from a US$6 billion surplus in 1988 to a US$11 billion deficit by 1996.
To maintain shrinking profits, business pushed legislation in late 1996 to expand its rights to slough off 'excess labour' and make the surviving work force more productive, on the American model. This was essentially a return to the formula of the early years of the miracle, when the primitive accumulation of capital was derived from harsh exploitation of unskilled labor. When fierce street opposition arose in response to this move, many chaebol had no choice but to rely on the government and the banks to keep money-losing operations alive. That lifeline could not be maintained, though, without the banks themselves being run to the ground.
By October 1997 nonperforming loans were estimated at more than US$50 billion. Foreign banks, which already had about US$200 billion worth of investments and loans in Korea, became reluctant to release new funds. By late November, Seoul, saddled with having to repay some US$72 billion out of a total foreign debt of US$110 billion in one year, joined the IMF queue.
US corporations
Recession is certain, as direct investors follow the example of portfolio investors in reducing their profile in Southeast Asia. Already, nearly all the key Japanese vehicle manufacturers - Toyota, Mitsubishi, Isuzu and Hino - have either shut down or reduced operations in Thailand.
The future is likely to be one of prolonged deflation rather than quick recovery. One reason is that intra-Asian trade, which accounted for 53% of all Asian trade in 1995, will cease to be the main motor of regional growth. Japan has been unable to shake off its six-year recession, and unlike the early nineties, when its weakness was offset by the boom in Southeast Asia and steady growth in Korea, today all three sources of regional demand have been doused, while a fourth, China, remains highly protectionist.
This leaves Europe and the United States as significant mass markets. But low growth and high unemployment continue to dampen demand in Europe; and in America, East Asian exporters will encounter an uphill battle for market share against China and newly competitive Latin American countries.
How the United States will respond politically to the crisis is, of course, a matter of great concern to the Asian elites, and it is unlikely that Washington will desist from exploiting the situation to achieve what it has been aiming at for over the past decade: the free-market transformation of economic systems that are best described as state-assisted capitalist formations.
Since the late 1980s Washington has relentlessly sought to 'level the playing field' for US corporations via liberalisation, deregulation and privatisation of Asian economies. It has used IMF and World Bank 'structural adjustment' programs; a harsh trade campaign threatening retaliation so as to open markets and stop unauthorised use of US technologies; a drive to create an Asian-Pacific free-trade area; and a push to implement GATT agreements eliminating trade quotas, reducing tariffs, banning the use of trade policy for industrialisation purposes and opening agricultural markets.
Golden opportunity
Prior to the crisis, these efforts had brought meager results, except perhaps in the case of Korea - though even its trade surplus-turned-deficit has not changed the US Trade Representative's assessment of it as one of the world's most protected economies. The financial crisis is thus a golden opportunity for Washington.
Indeed, the rollback of protectionism and activist state intervention is already incorporated into the 'stabilisation' programs being negotiated by the IMF. American officials, who effectively vetoed the creation of an Asian Regional Fund independent of the IMF and therefore of Washington, have also made it known -most recently in the case of Korea - that no US direct aid will be forthcoming until the ailing countries acquiesce to IMF demands.
So far, Thai authorities have agreed to remove all limits on foreign ownership of financial firms and are pushing ahead with legislation to allow foreigners to own land, long a taboo. Even before it sought help from the IMF, Jakarta abolished its restrictions on foreign ownership of publicly traded stock, a move replicated by Seoul when it granted foreign investors access to the US$64 billion long-term, guaranteed corporate bond market, access they had been seeking for years. In Indonesia the final agreement is expected to include the abandonment of attempts at industrial policy, such as the national car project and an effort to manufacture passenger jets.
Disturbing
Washington's free-market agenda is not without partisans among the political elite of Asia. In their view, the US corporate sector's embrace of downsizing and other ruthless measures in the early 1990s accounts for America's marked edge over Japan and Europe. According to this school, state-assisted capitalism may have worked in achieving high growth in the early phases of industrialisation but is dysfunctional in an era of globalised markets. Moreover, they argue, state management has spawned corrupt government-business relationships that deprive both local and foreign investors of accurate data on which to make sound decisions, adding to the costs of doing business.
Others, though, are keenly aware of the disturbing side of resurgent US capitalism: the most unequal distribution of income among advanced industrial countries, spreading poverty and deep alienation among the lower classes. Asia's economic chiefs are understandably hesitant about dismantling the institutions of Asian capitalism - for example, lifetime employment of the core industrial labour force, a pillar of Japan, Inc. - if the price is volatile discontent.
An equally significant objection is that radical free-market reform may lead not to the transformation of Asian capitalism but to its unravelling, since policies that re-create the international economy in the image of the US economy do nothing to build on the strengths of the existing economies but simply establish an arena in which the economic actors that followed one particular historical road to advanced capitalism - the free- market/ minimal-state road - will have an unparalleled competitive edge.
Solution
In this view, the solution is not to throw out the activist-state baby with the bathwater but to redraw the state-private sector relationship along the lines of more transparency, more accountability to the public and more democratic oversight of both government and corporations.
Also along the lines of greater government discipline of the private sector, since one of the key lessons of the crisis is that there was not too much state intervention but too little. In Korea, for instance, the loosening of state regulation in the 1980s encouraged the chaebol to pour their profits into speculative investment. Similarly, in Southeast Asia, it was lack of state intervention in financial markets the allowed overinvestment in real estate.
From this perspective, the crying need is for more effective regulation of the private sector and, in particular, the breaking up of corrupt patronage networks linking the public and private sectors. In other words, clean up government so it can serve capital as a more effective partner.
Beyond all the foregoing advocates for reform, however, diverse voices in the region, from labour leaders to academics to environmentalists, are beginning to call for a sharper break with both old-style state-assisted capitalism and free-market zealotry. Although not yet 'operationalised' in hardheaded fashion, their agenda is getting an increasingly sympathetic hearing from the public, particularly in Thailand, 'ground zero' of the collapse.
Selective globalisation
It might be characterised as a program of negotiated and selective integration into the global economy. Among its themes:
1. Globalisation of financial markets has gone too far. Controls are badly needed on the inflow and outflow of foreign capital. Even the deputy managing director of the IMF has recognised this, telling an IMF-World Bank meeting in September: 'Markets are not always right. Sometimes inflows are excessive, and sometimes they may be sustained too long. Markets tend to react late; but then they tend to react fast, sometimes excessively'. Capital controls are needed not just for stability, though, but for managing the development process in a healthy direction.
Very popular among reformers in the region today is the idea of a transactions tax on all cross-border flows of capital that are not clearly earmarked as productive investment. That, along with a measure currently being used by the Chileans - requiring portfolio investors to make an interest-free deposit equal to 30% of their investment that cannot be withdrawn for one or more years - aims to slow the frenzied movements of finance capital. Such measures would create a strong disincentive for speculative capital to enter and exit arbitrarily, with all the destabilising consequences, but would not penalise direct investors that are making more strategic commitments of their money.
2. While foreign investment of the right kind is important,growth must be financed principally from domestic savings and investment. That means good progressive taxation systems. One of the key reasons Southeast Asian elites relied on foreign capital for development was that they did not want to tax themselves.Regressive taxation is the norm in the region, where levies that cut deeply into the incomes of people on the low end of the scale are the chief source of government revenue. Meanwhile, only a tiny minority pays income tax.
But progressive taxation would just be a start. Democratic management of national investment policies is also essential if local savings - which in East Asia remain high relative to other countries - are not to be hijacked by financial elites and channeled to speculative gambles.
3. Development must be reoriented around the domestic market as the main stimulus of development. The tremendous dependence on exports has made the region extremely vulnerable to the vagaries of the global market and sparked a race to the bottom that has beggared significant sectors of the labour force while benefiting only foreign investors and domestic manufacturing elites.
A Keynesian strategy of enlarging the domestic market to generate growth must include a more comprehensive program of asset and income reform, including effective land reform. There is in this, of course, the unfinished social justice agenda of the progressive movement in Asia - an agenda marginalised by the regnant ideology of growth during the 'miracle'.
Vast numbers of people remain marginalised because of grinding poverty, particularly in the countryside. Land and assets reform would simultaneously bring them into the market, empower them economically and politically, and create the conditions for social and political stability. Achieving economic sustainability based on a dynamic domestic market can no longer be divorced from issues of equity.
4. While the fundamental mechanism of production, distribution and exchange will have to be something more sensible and rational than the 'invisible hand' of the market, neither the interventionist hand of the East Asian state nor the heavy hand of the socialist state is a good substitute. Certainly, the state is essential to curb the market for the common good, but in East Asia the state and the private sector have traditionally worked in nontransparent fashion to advance the interests of the upper classes and foreign capital. While not denying that market and state can play an important and subsidiary role in the allocation of resources, the emerging view is that the fundamental economic mechanism must be democratic decision making by communities, civic organisations and people's movements. The challenge is how to operationalise such institutions of economic democracy.
5. The centrality of ecological sustainability is also one of the hard lessons of the crisis. As any visitor to Bangkok could testify, twelve years of fast-track capitalism has left an industrial infrastructure that will be antiquated in a few years, hundreds of unoccupied high-rises, a horrendous traffic problem only slightly mitigated by the repossession of thousands of late- model cars from bankrupt owners, a rapid rundown of natural resources, and an environment severely, if not mortally, impaired.
Instead of 8-10% growth rates, many environmentalists prefer rates of 3-4%. This links the social and environmental agendas, since the elites' addiction to high growth is at least partly explained by their desire to take the lion's share of wealth while still allowing some to trickle down to the lower classes for the sake of social peace. The alternative - redistribution of wealth - is clearly less acceptable to the ruling groups, but is the key to a pattern of development that combines economic growth, political stability and ecological sustainability.
These ideas and others remain to be welded into a coherent strategy, and that strategy in turn awaits a mass movement to carry it. The emergence of such a movement must not be underestimated.
One clear lesson of the crisis is that the region's elites are anachronistic. They will fight their displacement, but the drastic loss of legitimacy stemming from their economic mismanagement provides a window of opportunity for progressive movements, like Thailand's increasingly influential Forum of the Poor - a unique alliance of environmentalists, farmers and workers - to translate these ides into effective political strategies for change.Frozen during the years of the long boom, mass politics with a class edge is about to return to centre stage.
Walden Bello is co-director of Focus on the Global South, an analysis and action program of the Chulalongkorn University Social Research Institute in Bangkok. He is co-author, with Stephanie Rosenfeld, of 'Dragons in distress: Asia's miracle economies in crisis' (Food First/Penguin). This article first appeared in New York's 'The Nation', 12-19 January 1997.
Inside Indonesia 54: Apr-Jun 1998
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Markets, morals and leadership after the boom
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Authoritarian Southeast Asian governments have been dealt a blow by market forces, says MICHAEL VATIKIOTIS, but democracy will not flourish until people begin to organise locally.
Imagine a man, proud of his life's achievements, striding down the street with his head in the air. Along comes somebody, out of the blue and without warning who punches this man smack in the stomach. Winded and gasping for air, the man staggers and falls, not knowing why he was attacked. He recovers and goes home feeling dazed, but also worried. Now he is consumed with doubts. He asks himself, who was this stranger and why did he hit me? The incident bugs him all night. He can't sleep. A man of such achievement, such pride; who could possibly want to assault him? The next morning he falls ill and has to be rushed to hospital with a lacerated ulcer.
Now, put yourself in the shoes of a man like President Suharto of Indonesia, or Prime Minister Mahathir Mohamad of Malaysia. For the past decade they have presided over some 7% of growth per year; growth and prosperity has earned them plaudits and sustained them in power. Foreign investors praise them for their economic achievements, if not for their liberal politics. Along comes this economic crisis, like a tropical downpour; suddenly and without warning. They are winded, suddenly deprived of the oxygen that has sustained them in power - and exposed to all the flaws in the system they have created.
Mahathir now finds that his anti-western rhetoric has a direct impact on the value of his currency. He once remarked that he felt he could bash the west with impunity because investment kept pouring in. Suharto finds that his family's business interests have become a liability, directly affecting the value of his currency and undermining his considerable economic achievements. Not long before, foreigners would seek out joint ventures with the family firms; now they treat them like pariahs. Both men have been unwell; Suharto is suffering from a urinary tract complaint; Mahathir has had flu - both in the medical and political sense.
Ironic
Given the stress these leaders have been under and the accelerated pressure for change, quite possibly the economic crisis facing Southeast Asia today will contribute to the end of Suharto's 32 year rule and Mahathir's 17 year rule. If that is so, I find it a little ironic that the end of authoritarian rule has been precipitated by economics rather than politics. The cold and heartless mechanism of the market has moved what ideals, compassion and morality failed to dislodge. It's a dangerous way to bring about political change, I think, because it happens without thorough institutional reform. There is, in other words, no guarantee that their successors will be any less authoritarian.
Markets make poor long term regulators of politics. Markets are fickle; sentiment changes or is distracted and moves on. Interests, on the other hand, especially corporate interests, tend to be more permanent, representing long term investment, and therefore bend more easily to political realities.
In the case of Indonesia many people believe that there will never be another Suharto, another leader with quite the same breathtaking powers. The pressure for political liberalisation will, they say, be overwhelming on his successor. I advise caution on this point. That's what they said after Sukarno left the stage, replaced by a shy, awkward general who always smiled called Suharto.
Back in the early 1990s I remember paying a visit to Fuad Hassan, who was then education minister in Jakarta. He reminded me that Suharto's New Order was hailed by students as the prelude to political reform back in 1966. The atmosphere of glasnost was short lived, however. By the mid-1970s, Suharto was jailing dissidents and fashioning laws to limit the basic elements of democracy vaguely enshrined in the country's 53 year-old constitution.
Suharto was never credited with liberal views, but Mahathir held liberal ideas in his youth. Given his own extensive powers today, it's ironic that in the 1970s, when he was still in the political wilderness, Mahathir criticised the country's founding Prime Minister Tunku Abdul Rahman for being too powerful and 'making the party subservient to the person.' The general feeling, he wrote 'was that whether or not the parliament sat, the government would carry on.'
Monarchical
The first lesson to be learned from the process of political change in Southeast Asia is that a change of leadership does not necessarily bring about a change of political culture. As I have written elsewhere, the politics of Indonesia, and to a lesser extent Malaysia, reflects the revival or recovery of essentially monarchical traditions buried deep in the indigenous culture. The transition to independence superimposed elements of democracy on a lingering culture of paternalistic rule that drew heavily on local traditions of monarchy. In the Middle Eastern context, a similar process produced what have been called 'non-hereditary monarchies', a modern tradition which Hafez Assad of Syria and Saddam Hussein of Iraq continue to uphold.
This hybrid political culture persists in Indonesia. Look how even the most ardent supporters of political change in Indonesia worry about 'who' rather than 'what' will replace Suharto. To my mind there is precious little evidence that the Indonesian body politic is ready to introduce an effective mechanism of peaceful succession, say by limiting the term of any president to two terms; or to limit the personalisation of power first Sukarno and now Suharto enjoys.
The absence of political parties operating in a vigorously pluralistic environment makes it hard to imagine a successor to Suharto who is not tied closely to the military. The threat of unrest caused by Indonesia's alarming social and economic cleavages makes it highly unlikely that Suharto's successor will weaken the power of the presidency.
Thailand may be different in this respect. Reliance on strong, charismatic leadership is there in the shape of the monarchy. But power is conveniently diffused by the King's constitutional status; the king looks after larger moral and nationalist issues, while a succession of elected prime ministers are held accountable for the economic management of the country.
Prime ministers come and go, while the monarchy offers stability through continuity. It's a crude separation of powers that allows citizens to benefit from the sustained moral authority needed to bind society together, yet hold economic managers accountable to their actions by tossing them out of office.
But let me say that despite the widely-held perception that Thailand has travelled further along the path to democracy, I sense there are many pitfalls ahead. First and foremost is the risk that institutions of democracy will be built on poor foundations. What I mean here is illustrated by theoretical work that has been done on political change in Italy.
Local participation
Robert Putnam's ground breaking study of regional government in Italy (Making democracy work: civic traditions in modern Italy, 1993) has been described as work as important to understanding democracy as De Tocqueville's Democracy in America. Serious scholars of democratic theory from Plato to De Tocqueville have all pointed out that effective democratic government depends on the quality and commitment to civic values of its citizenry. As well as elections, a legislature and a constitution, civil associations, local participation and power all contribute to the effectiveness and stability of democratic government.
Yet in the post-cold war era political progress in Asia has been judged using more macro, ephemeral aspects of government; mostly whether elections are held, regardless of their outcome. And for many Thais, it seems that democracy is to be guaranteed by a new charter that seeks to clean up politics by ruling that only educated people can stand for election.
Well, in the case of Italy, cementing democracy in place was not that easy, as Putnam so convincingly shows. It wasn't really until representative politics started working at the local level that true elements of a democratic culture began to emerge. In much the same way, here in Thailand, I cannot see genuine democratic government being established without concessions being made to regional and local autonomy.
In other words, it is less a matter of establishing strong political parties, compulsory voting and educated candidates; this amounts to imposing a democratic blueprint on a society unaccustomed to its organic nature. It is more a question of encouraging a sense of civic community, starting with popular commitment to local level organisations neither imposed nor supervised from above.
Thailand is a long way from reaching this goal. Although the new constitution allows for a degree of political decentralisation as a first step towards promoting a civic community, resistance from the centre will be strong. And as the recent district council elections on the outskirts of Bangkok demonstrated, the culture of vote-buying will be harder to erase in times of economic stress.
Michael Vatikiotis is a correspondent with the 'Far Eastern Economic Review'. Now based in Bangkok, he was posted to Indonesia in the late 1980s and early 90s, and wrote the book 'Indonesian politics under Suharto' (Routledge, 1993).
Inside Indonesia 54: Apr-Jun 1998
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We want a new government!
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There are plenty of capable Indonesians who can take over from Suharto, says the activist group PIJAR.
History is knocking at Indonesia's door. And on Monday 26 January dozens of activists belonging to Pijar Indonesia knocked at the People's Consultative Assembly building (MPR). Bearing a banner with the words 'A new president will ease the storm', the group reiterated Pijar's belief that only when Suharto steps down will the economic and political catastrophe end. Pijar is convinced that Suharto is himself the real storm and the catastrophe.
Yelling slogans like 'Reject Suharto, change Suharto!', 'Long live Megawati!', 'Bring down prices, Suharto and his family!', and others, the Pijarians then combined forces with about a hundred PDI-Megawati supporters who had gathered earlier in the lobby of the old parliament. From that moment the two pro- democracy groups began a joint action.
Pijar and PDI-Megawati activists alternately presented speeches, slogan yelling, poetry readings, and songs (accompanied by Pijar's musical ensemble Foker). All were momentarily silenced by the entry into the building of parliamentarians Harmoko and Abdul Ghafur, but soon they broke into loud shouts of 'Reject Suharto, change Suharto!' and 'Bring down prices, Suharto and his family!'. The two senior parliamentarians quickly went inside with reddening faces.
Megawati and Amien
The action was led by Pijar Indonesia chairman Widyankristyoko, who ended it by reading a Pijar statement entitled 'A new president will ease the storm'. The title alludes to the president's budget speech on 6 January, where he assured the nation that 'the storm will ease by and by'.
Pijar basically urged the MPR assembly in March to withdraw its mandate to Suharto and not to reelect him as president. President Suharto has used his political position to enrich himself, his family, and his colleagues. As a result most of the Indonesian people are now suffering from the collapse of the economic and political system.
Pijar wants the MPR to nominate and elect Megawati Sukarnoputri and Amien Rais as president and vice-president. Behind these two leaders for renewal stand six million angry people who have lost their jobs, 30 million PDI-Megawati supporters, tens of millions of Amien Rais supporters, and many more anxious people in the cities.
After conveying this demand to the MPR, Pijar also proposed what it called 'An Indonesian Transitional Government 1998-2000'. This transitional government will run for two years and have as its main task to organise fair and honest elections. Only people with a proven social commitment and who are still young are eligible to sit in this government.
Among them are the following:
Abdurrahman Wahid (also known as Gus Dur, chairman of the Islamic organisation Nahdatul Ulama) as chairman of the MPR;
Mudrick Sangidu (chairman of the Solo branch of the Islamic political party PPP and also a Megawati supporter) as chairman of parliament;
Adi Andojo Soetjipto (honest former High Court judge) as chief judge of the High Court;
Try Sutrisno (current Vice-President, a retired army general) as chairman of the Supreme Advisory Council, DPA;
Mar'ie Muhammad (current Finance Minister) as chairman of the anti-corruption watchdog BPK;
Of course, the president should be Megawati Sukarnoputri, and the vice-president Amien Rais. Of the 22 members of the transitional cabinet, two are in government already, namely:
Sarwono Kusumaatmadja (current Environment and Population Minister) as State Secretary;
General Wiranto (current Army Chief of Staff) as Armed Forces Commander.
From the Muslim intellectuals association Icmi there are:
Adi Sasono (Icmi general secretary) as Minister for Cooperations and Small Business;
Dr Jalaluddin Rakhmat (university lecturer in communication) as Information Minister;
Dr Nurcholish Madjid (moderate Islamic intellectual) as Minister for Religious Tolerance.
From within the secular nationalist political party PDI there are:
Kwik Kian Gie (lecturer and columnist in economics) as Minister for Planning and Chairman of the national planning board Bappenas;
Dr Mochtar Buchori (academic at the Academy of Sciences) as Education Minister;
Laksamana Sukardi (banking specialist) as Governor of the Bank of Indonesia;
Alex Litaay (secretary of Megawati's PDI) as Youth Minister.
From among well-known critical analysts, there are:
Marzuki Darusman (member of the National Human Rights Commission) as Foreign Minister;
Dr Todung Mulya Lubis (lawyer and one of the founders of the legal aid movement) as Justice Minister;
Dr Sri Bintang Pamungkas (engineer, founder of the political group Pudi, currently a political prisoner) as Minister for Industry and Trade;
Dr Muchtar Pakpahan (lawyer, founder of the independent labour union SBSI, currently a political prisoner) as Labour Minister;
Permadi (lawyer, psychic and Megawati supporter) as Attorney General;
Abdul Hakim Garuda Nusantara (lawyer, head of the human rights organisation Elsam) as Minister for Land.
Pijar, founded in 1989, consists largely of students in Jakarta. It produces an alternative news magazine (available on the internet at http://kdp- net.sparklist.com/) and has taken part in many protests for reform.
Inside Indonesia 54: Apr-Jun 1998
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Operation Wallacea
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MARK ERDMANN explains the history of an exciting venture in reef conservation using volunteer divers.
Operation Wallacea is a three-year pilot project designed to test the principle of using paying volunteer naturalists to conduct rapid ecological assessments in areas of high conservation value in the Wallacea region of eastern Indonesia.
Operation Wallacea started in June 1995 with start-up funds from the HongkongBank Care-for-Nature Programme. It is under joint Indonesian sponsorship of the Indonesian Institute of Sciences (LIPI), the Wallacea Development Institute (WDI) and the Directorate General of Forestry and Conservation (PHPA).
The non-profit endeavour comprises terrestrial and marine components. Initial projects centred on the island of Buton and the Tukang Besi Archipelago respectively.
Cousteau
The terrestrial component of Operation Wallacea has focused mainly on surveying birds. In the marine component, volunteer divers survey the vast reef system which Jacques Cousteau once described as one of the most beautiful he had ever experienced.
The marine component is divided into three phases. Phase I involved volunteers rapidly assessing the reef for coral community cover, abundances of important reef food fish, overall reef condition as well as traditional use patterns. They did this for all reefs in the Tukang Besi Archipelago.
The results of these surveys were used first of all to identify specific reefs worthy of more detailed investigation by volunteers helped by taxonomic and fisheries specialists (Phase II), and finally to aid in promulgating a holistic management plan for the proposed 200,000 hectare Tukang Besi Marine National Park (Phase III).
The Tukang Besi Archipelago (see map) is set in a remote island group off southeast Sulawesi. It is well-known for displaying all the major reef formations - atolls, barrier, fringing and patch reefs - within a relatively small area. All four major islands in the archipelago - Wangi, Kaledupa, Tomea, and Binongko - are inhabited, with a total population of around 100,000 people spread among 30 or more villages.
Two major ethnic groups inhabit the islands. The Butonese fish and farm at a subsistence level. The exclusively sea-faring Bajau fish and collect turtles, trepang, and other marine invertebrates. They also mine coral and coral sand to build and repair their villages.
From a research and management perspective, the area is not well-known. Other than Jacques Cousteau, only a few scientists had visited the area before 1995. Among them were the Indonesian- Dutch Snellius II expedition in 1984, a Worldwide Fund for Nature (WWF) survey in 1989, and several university diving club trips from Bogor Agricultural Institute (IPB) during the early 1990s.
All these expeditions reported good to spectacular coral reef conditions, but none spent more than 4-5 days surveying the area. These tantalising but incomplete reports made Indonesian conservation specialists want to gazette the area as a marine protected area. But they lacked the time and funding to complete the necessary baseline surveys.
Paying volunteers
Enter Operation Wallacea. The principle behind the project is simple. Use paying dive volunteers to help survey and map a remote reef system in preparation for designating and zoning the area as a marine park.
Groups of 8-20 volunteers from around the globe undergo an intensive one week training period. They learn rapid reef assessment techniques, including visual scuba-diving surveys of reef fish and benthic invertebrate communities.
They then go on 1-3 week survey expeditions to quantify reef conditions throughout the archipelago. The results benefit all involved. Volunteers are treated to exploration-style diving while greatly increasing their knowledge of reef fish and invertebrates under the careful tutelage of professional marine biologists. They come away knowing that the time, money and effort they invested will be invaluable for the future of Tukang Besi marine protected area.
Equally important for the future of the reefs, local communities also benefit. They are now acutely aware of the value of their reef resources. They have experienced the tangible benefits of diving ecotourism. They work as cooks, boatmen, and other staff. They have uncovered a new (insatiable!) market for food-fish and produce, and a market for the sale of local handicrafts such as hand-woven sarongs and baskets. Local officials now also have much more awareness of the rich marine natural resources of the area.
Operations Wallacea's first survey period between June 1995 and January 1996 resulted in about 214 man-weeks of volunteer help. This increased to over 500 man-weeks during the second and third periods.
Fantastic
Survey results showed that reef conditions in the Tukang Besi rivalled or exceeded those of most other Indonesian reefs, particularly those which are now marine reserves. Coral and invertebrate life on the many scattered atolls and patch reefs was fantastic.
Larger marine life was also fairly common. Sea turtles, manta rays and dugong were abundant by Indonesian standards. Volunteers frequently spotted cetaceans in the area, including a number of sperm and pilot whales, orcas, and several dolphin species.
Unfortunately, they also found evidence of reef degradation. Localised eutrophication due to human sewage may be occurring in the bays of some villages, though marine pollution seems negligible overall. Reef sharks were virtually absent, apparently due to overfishing for shark fin. Volunteers observed both cyanide and blast fishing. The establishment of a marine park in the area will clearly require extensive education of local villagers, as well as attentive management combined with enforcement capabilities.
The results of Operation Wallacea's pilot project look promising for the development of a Tukang Besi Marine Park. They firmly establish the use of dive volunteer surveys as a cost- effective tool for Indonesian marine conservation development.
Mark Erdmann is an American who helped start the marine component of Operation Wallacea in 1995. He is now doing marine research in North Sulawesi.
Inside Indonesia 54: Apr-Jun 1998
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Thinking through a new tomorrow
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What should democracy activists do in these last days of the New Order? DANIEL LEV offers some pointers.
These days are full of rumours - that the Suharto family has fled Jakarta, that they are in Germany, that they are still in Jakarta. That Suharto fainted, that he didn't faint and was seen by the Russian ambassador. What do you make of this confusing situation?
We must be aware that we really do not know what is going on. But whether or not these rumours are true, it is clear to me that the New Order is almost over. Suharto cannot last much longer. Perhaps because of his health. Or - and this is more important - because the Indonesian people no longer accept his leadership, moreover in the present desperate economic situation which was caused by the government itself. That makes this regime very weak indeed. And now we are in transition to something different, the shape of which is still quite unclear.
If his family want to run away overseas because they are afraid, we need to ask why. Because they really understand the implications of the economic situation? Or because they have been confronted by the military leadership? Who wants them to leave? And why? All that is unclear.
Did Sukarno in his last days ever think of running away from his responsibilities?
I'm sure it never occurred to him! His sense of responsibility as a leader was very deep.
I know that when a hostile People's Consultative Assembly asked him to explain himself in June 1966 he came. And when they considered his report incomplete, he filled it in immediately.
Sukarno knew very well he was finished. Yet the most important thing for him was that he should exert all his energies to resolve the chaos of the moment.
I think Sukarno was genuinely worried about the large number of casualties. He felt responsible at that time. But the one we have now is completely different, that is quite obvious.
Right now pro-democracy activists are trying to establish a democratic agenda for transition. What choices do you think they have? What attitudes should they take?
The situation at the moment is extremely difficult and dangerous for everyone. Everyone is confused, no one is ready to deal with a situation that is changing so rapidly. In my view if the regime is really ending then the army leadership will take control for at least a while. No one else is as well organised.
Activists wanting change right now need to take a cool attitude, be cautious, preferably even be a little conservative. Because if indeed the army leadership is taking control of the situation, they too do not know what might happen. They are just as confused as everyone else. I think they will feel the need for help and because of that there may be an opportunity to negotiate.
I think it is very important for activists to be aware of that opportunity. So they will be ready to negotiate. They should not dream of great things but should be really cautious. That way there will be no useless sacrifices. That way no demonstrations will turn into riots, or be turned deliberately into riots. Activists should be cool-headed and cautious.
Which are the most important political ideas to discuss in the coming days?
If they want to confront the military leadership they should come armed with very clear ideas, ones that have been agreed on by the pro-democracy groups. I hope no one will be too egocentric and no one will want anything too 'crazy' or be too idealistic. These are the days to really play politics. They should be able to negotiate, to make offers and counter-offers until their most important conditions have been met. They must be able to set priorities.
For example, and this is very important right now, the press should be truly free. It is so necessary to have a lot of debate. People must have lots of information so they are not dependent on rumours. Secondly, all political prisoners must be freed now. All those activists in jail now should take part in the negotiations, push hard for their ideas, and gain experience in sensible politics. That way no group will feel it did not get an opportunity to participate in this transformation.
I also think it is very important that the various groups talk among themselves to determine their priorities. Besides a free press and the release of political prisoners, they must have ideas about what kind of change is the most important and what can actually be achieved. For instance, thought should be given to the question of which institutions are the most important to be reformed right now. Parliament? Political parties? Should there be freedom to organise as widely as possible so that new political leaders can emerge, younger ones with new ideas? And so on.
There should also be some kind of agreement among intellectuals, those who already have mature ideas on things. Among them people such as Gus Dur, Amien Rais, Arief Budiman, Marsillam Simanjuntak, Goenawan Mohamad, Muchtar Pakpahan, and others. They should not be too quick to stress differences in ideology. Whether they agree or disagree, all the political and intellectual leaders should take part in this discussion. A discussion with activists, and also with the military leadership if indeed Abri is going to take over.
There also need to be people with experience in running government, yet who still enjoy the people's trust. People like (Finance Minister) Mar'ie Muhammad, (Bank of Indonesia governor) Sudradjad Djiwandono, (Transmigration Minister) Siswono Yudohusodo, for example. Agree or disagree, these people clearly have experience, are honest enough, and they can help give leadership during a transition. I know my approach might sound overly cautious. Don't be too macho, too idealistic. Think about which changes can really be implemented.
The Indonesian economy is on the brink of destruction. No one believes in the rupiah any longer. Last Thursday the price of a US dollar reached Rp 12,500. All prices have gone up two or three times. Some essentials food stuffs - rice, sugar, cooking oil, baby milk - are difficult to find or are being rationed. How can confidence in the economy be restored?
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The most important thing right now is political change. This government cannot possibly any longer win the trust of the people. They are only supported by their friends and relations. The economy will continue to decline until there is a new political leadership that the people really trust. If the present political elite really wants to remain an elite they have to be serious about building a government that can be controlled and trusted by the people. That can only be a government that is honest, courageous enough to speak out and to admit the real difficulties.
What connection do you see between the political and the economic agendas?
The economy now is totally dependent on the politics.
What political steps need to be taken in the coming days?
Efforts are underway to bring together popular leaders. Can Amien Rais, Megawati, and Gus Dur come together? Can they negotiate? I don't know. But if they can meet they will give a wonderful example to be followed by others.
If there are differences of opinion that is only natural. They will always be there. But if they can just meet and begin serious negotiations - on the basis of their shared concern for a society in serious trouble - that would be a wonderful example. That would mean that Amien, Gus Dur, Megawati and others are responsible people.
Dan Lev teaches politics at Washington University in Seattle. He first went to Indonesia in the 1950s and has written extensively about politics and law. The interview was conducted by an anonymous interviewer in Indonesian on 8 January 1998 and appeared on Indonesia-L.
Inside Indonesia 54: Apr-Jun 1998
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A Javanese king talks of his end
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When speaking off the cuff, Suharto sees himself not as a modern president but as a Javanese king. Ben Abel talks with BEN ANDERSON.
Golkar's executive council once more nominated Suharto as president. In response, Suharto gave a long speech on 19 October 1997, without notes and using a lot of Javanese. In the first part, he spoke of 'giving thanks to the One God, being introspective,' etc. Then he asked: 'Do the people still have confidence in me?'. How do you interpret all this?
These are just political niceties, just cliches. If you want to know the real Suharto look at what happened on 27 July 1996. How he overthrew Megawati and shattered PDI solidarity. He clearly wanted Mega and her supporters crushed before the election. 'Being introspective' doesn't come into it at all.
Some people interpreted Suharto's question about 'the people's confidence' in modern ways. Holding a referendum, polls, and so on. But is the people's confidence really important in the thought world of Javanese kings? What does a king mean by the people's confidence?
The kings of old obviously didn't think much about the opinion of the people, who were mostly illiterate, lived in isolated villages, and died soon after 30. Javanese kings never consciously considered the public interest. But if we look at the Mataram Dynasty, the people's confidence did become important at certain moments. Not the confidence that the king was good, because that was very rarely the case. But whether the people believed the king still had the divine light.
Once the people believed the king's divine light had moved on, it would be difficult to restore. And then the people's loyalty could evaporate very quickly. Then aspirants to the throne could find all kinds of support coming their way. It was a problem of popular psychology. But to what extent all that will apply in the coming months, I can't say for sure.
In another part of his speech Suharto said that if the people no longer believed in him then he would 'place himself within the succession philosophy of the Javanese shadow puppet theatre'. He said that philosophy was lengser keprabon, madeg pandito, meaning to step down as king and become a priest. How do you understand this 'philosophy of succession' of Suharto's?
But is there really a philosophy of the shadow puppet theatre? Let alone about succession? Don't forget, suksesi is a western word. I'm not aware of an equivalent in Javanese. If we look at the shadow puppet theatre or at the Javanese chronicles, the concept of succession as a constitutional process under the law is completely absent. Whenever a new king appears it is on the basis of blood relation or by violence.
Fascinating that Suharto should talk about the philosophy of the theatre and not of the court chronicles. For the chronicles represent the real history of the Javanese dynasties throughout time. The atmosphere and morality of the two are quite different. In the theatre, up to a point, we find the noble morality of the knights. But the chronicles are filled with betrayal, with coup- d'etats, with deceit, magic and all kinds of filthiness and horrible cruelty.
As far as I know, no king ever voluntarily does lengser keprabon in the Javanese chronicles (Babad Tanah Jawi). Kings forced to do lengser keprabon yes, often. In the theatre, for instance in the Mahabharata story, I know of only one instance. That was Abiyoso. And Abiyoso failed completely in the second part, namely becoming a priest (madeg pandito). Because he had favourites among his children - who were all defective in one way or another - in the end his grandchildren massacred one another in the gruesome Brotoyudo wars. So Abiyoso can hardly be held up as a fine example.
And that was the only time. So to say that lengser keprabon is the philosophy of succession in the theatre is completely wrong! I'm not even sure whether the cliche lengser keprabon madeg pandito is really an ancient expression or something that was made up towards the end of the Dutch colonial period.
Do you think Suharto's way of thinking reflects what you wrote in 'The idea of power in Javanese culture' in 1972?
Suharto's speech can certainly be read as the words of a king in serious trouble, looking for a way to retain power. In olden times people believed that if there was an earthquake, or a volcanic eruption or an epidemic, these things signified that the divine light had moved from the king. Certainly a lot of people still believe that. As they see bad things happening these last two years the idea easily arises that Suharto's time of glory is ending. And indeed many think that the sun is now setting on the New Order. So in that regard, yes, it fits with 'The idea of power in Javanese culture'.
From Suharto's words we can see that he really has no idea of a presidency. The concept 'president' is hollow, illusory. Whereas the concept 'king' seems to him to fit with Javanese culture and tradition.
Whenever Suharto gives a formal speech it is full of western expressions: sustainable development, constitution, economic growth, etc. These speeches are of course written for him by his staff in the State Secretariat. But when he speaks off the cuff his language changes 100%. Then his Javaneseness dominates. He comes out with concepts that have no connection with modernity - for instance the mystical importance of the Javanese alphabet.
Suharto is a complicated man. He was born and raised in the transition between the old world and the modern. And remember that in the time of the kings there were no elections, no political parties, no non-government organisations, and no press. The situation today simply cannot be compared with those times.
After explaining his philosophy of succession, Suharto explained the job of a priest: 'First, to grow close to God Almighty; second, to raise offspring who are useful to the nation. And then to give advice to society, and to advise the powerful to lead from behind'. What do you think about this?
It's rather funny. In the world of the theatre people are respected for their experience and wisdom. But if the priest only feels it necessary to grow close to God Almighty after he has stepped down as king, it looks as if throughout his life he has been far away. It looks like someone about to die, who has to repent a little! Is that a good example? And then look at the words in detail. Which God does this priest want to grow close to? Aha, God Almighty. Wouldn't it be better and indeed more necessary to always grow closer to the All-Merciful and the All- Forgiving?
And then about raising offspring. This Suharto has been doing diligently for a long time. But to say they were raised to become useful to the nation, that's still some time off. Please note too that in former times the concept 'useful to the nation' didn't exist. So Suharto's 'traditional' thoughts about madeg pandito in fact have no connection with the real traditions.
The idea of leading from behind (tut wuri handayani) comes from Ki Hajar Dewantoro at the end of the colonial era. It was the philosophy of an aristocratic bureaucrat under the Dutch, the idea of the 'gentle command'. It has nothing to do with the theatre, and even less with the chronicles.
His thoughts on madeg pandito show that Suharto has a multicoloured mentality. There is the element of the little colonial aristocrat, there is the element of shadow puppet theatre, there is the Machiavellian element from the Javanese chronicles, there is a little bit of Ki Hajar Dewantoro, there are the remnants of nationalism from the revolutionary era, there is the influence of a military system first created by the Prussian army, and so on. It's like a mixed salad. That's what makes the man so interesting.
When Suharto speaks off the cuff it is as if he is standing before the public in his drawers. As if his presidential mask has been taken off, and we can see him as he is. I suspect that behind the mask he is an extraordinarily cold Javanese man. Exceptionally cold.
What do you mean?
Cold in the sense that everything is calculated. When he is cruel it is not because he is angry but because it is part of his strategy. He is very cautious, suspicious, rarely acts spontaneously. When he tries to be friendly we feel no warmth. We look right and left to see what he is hiding.
In order to retain their power, kings in olden times often sacrificed their own parents, their children, in-laws, friends. Is the same thing visible in the history of this king Suharto?
Well, Suharto's story is not yet over. Over the last thirty years he has in fact always tried to protect his extended family. Only now, in rather desperate straits, are we seeing things like the actions against the banks of his son Bambang or his half- brother Probosutedjo.
As for his friends, friendship should be a relation of equality. But because the king - who has absolute power - regards himself as the representative or even the child of the gods, he cannot think of anyone as an equal to him. And of course, since there is no law, constitution, and so on, the king is afraid that at any time someone might force him to do lengser keprabon. So he is always full of suspicion. The European kings also had no friends. Does Suharto have friends? I've never heard it.
Ben Anderson is professor of politics at Cornell University, USA, and has written numerous books and articles on Indonesia. Ben Abel also works at Cornell University. This is an extract of an interview in Indonesian that appeared on Indonesia-L in November 1997.
Inside Indonesia 54: Apr-Jun 1998
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Wicked!
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Chaos
Former Armed Forces commander Feisal Tanjung was invited to a banquet with prominent professionals in Jakarta. He was representing the professionals in Abri.
After the ceremony, the guests went into the garden and Feisal, with a piece of cake in his hand, approached a doctor and an engineer who were each talking up their own profession.
'The doctor's profession is the oldest in the world', said the doctor. 'God was a surgeon when he took a rib from Adam's side and created Eve.'
'Wait a moment', the engineer cut in. 'Before God created Adam and Eve he had to deal with the chaos and confusion that reigned over the surface of the earth. His work for six days was really that of an engineer.'
At this point Feisal lost his patience. 'You're both wrong', he said. 'Who do you think created the chaos and confusion? Abri of course!'
No ambition
During a meeting of Asean parliamentarians, an Indonesian parliamentarian belonging to the Abri fraction stood up to introduce himself. 'I was born a member of Abri. I have lived all my life a member of Abri. And I hope to die a member of Abri'.
From among the Singaporean delegation someone was heard to remark in astonishment: 'How is it possible to be a politician with so little ambition?'
Correction
A prominent Jakarta daily carried the front page headline: '50% of senior officials are corrupt criminals'.
Of course that afternoon the editor was called in by the Information Department and by Abri Headquarters in Cilangkap. He was scolded and asked to rectify the news immediately. Otherwise his publishing licence would be revoked.
The next day the newspaper carried its correction. It read: 'Our headline yesterday that "50% of senior officials are corrupt criminals" contained an unfortunate misprint. It should have said "50% of senior officials are not corrupt criminals". We hereby trust that yesterday's headline has been corrected'.
Not us!
A stern sergeant was brought in to a primary school in Lospalos, East Timor, as a relief teacher. This time he edified the grade 3 class about the revolutionary struggle of the Republic of Indonesia against the Dutch in 1945. Afterwards, in order to test how well they had learned the lesson, he asked in a big voice: 'So tell me, who pulled down the red-white-and-blue flag on the Orange Hotel in Surabaya?'.
In fear and trembling the students replied as if with one voice: 'Not us, sir!'.
Shares
The taipan Liem Sioe Liong was interviewed by a big private television station about his huge business empire. The interviewer asked him to tell the story of Indofood.
Uncle Liem replied: 'That started during the revolutionary war long ago. Our soldiers were short of food and I had the idea to set up a cheap food factory'.
'Who owns the shares, sir?', the journalist asked. Uncle Liem nodded: 'As it happens I own them all'. The journo then went on: 'What about Indocement?' 'Oh that one, I own all those shares myself.' Still not satisfied, the journalist asked: 'What about Indomobil?' 'I own them all.'
At last the journalist asked: 'And what about Indonesia?' Uncle Liem replied quickly: 'In that one I went fifty-fifty with Mr Suharto'.
Goro-goro.
Inside Indonesia 54: Apr-Jun 1998
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Peaceful change, now!
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We, more than one hundred Indonesian and non-Indonesian non-governmental organisations (NGOs) participating in the International NGO Forum on Indonesian Development (Infid), are deeply concerned about the ongoing economic turmoil in Indonesia which many fear may lead to political turmoil as well. We believe that the crisis of confidence in Indonesia's leadership has become so acute that efforts to stabilise the rupiah without simultaneous steps toward political reform will be ineffective.
We call upon the government of Indonesia and Abri to refrain from applying repressive measures against those who increasingly and peacefully make use of their right to freedom of expression.
We also call upon the pro-democracy groups and the Indonesian people in general to join in efforts to peacefully and in a constitutional way prepare for immediate political change in Indonesia.
Furthermore, we urge the International Monetary Fund and the government of Indonesia to immediately release the full terms and conditions of the agreement between them, and to establish a social impact assessment team, including representation from leading Indonesian NGOs, to monitor the impact of the reform package on the country's most vulnerable groups.
We urge the International Monetary Fund and the World Bank to examine the social and environmental costs of all economic reforms proposed, to minimise the impact on the urban and rural poor, women and children, migrant workers, tribal and upland communities, and the unemployed, estimated as at least seven million by the end of 1998.
We urge the members of the Consultative Group on Indonesia (CGI) to use their leverage not only to see that the Indonesian government implements economic reforms but to also impress upon the government of Indonesia that economic reform without political reform will be insufficient to stem the loss of international confidence in Indonesia.
Jakarta and The Hague, 13 January 1998.
Asmara Nababan Eva Phillips
Inside Indonesia 54: Apr-Jun 1998
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How to love a country in a time of crisis
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Indonesia has been brought to its knees by a small club of crony capitalists, says GOENAWAN MOHAMAD. The IMF deal offers hope because it will weaken their grip on the economy of 200 million other Indonesians.
I was brought up with a belief that 'Indonesia is inside you'. In other words, things that hurt the country also hurt you, at least psychologically. But this patriotic talk may sound bloated and empty to many, especially because often I forget to ask myself which Indonesia I am talking about.
Trying to figure out how to love the country in this time of anger and frustration, I gradually came to the conclusion that there is not one single Indonesia. The rupiah crash of 1998 is a testimony that what you see are actually two different countries, an Indonesia of dollar debtors and an Indonesia of the deprived. This is a point I would like to suggest, in response to nationalist flag-waving arguments against the virtue of inviting a foreign institution like the IMF to bail out Indonesia from its current mess.
Golf club
The 1998 crisis is a costly lesson of how not treat the country like a putting green. Someone told me that The Economist sees an analogy between the Asian way of managing national economies and the way people meet, play and do business with each other in a golf club. I never play golf, so I am not sure how apt is the description. But Indonesia's large foreign debt indicates that there is something 'clubby' in the manner Indonesia's major economic players circulate billions in currencies from one place to another.
To be sure, there are conflicting stories about Indonesia's foreign debt. One estimate says that more than half of the foreign borrowing belongs to the private sector. The Wall Street Journal gives a different picture. According to this newspaper, a closer examination of the composition of Indonesia's foreign debt shows that a much larger portion is owed by the government or guaranteed by the government for state-owned enterprises than previously thought.
Whatever the truth is, it is easy to imagine that there are no more than 200 people (out of 200 million) involved in the deal. They are a coterie of top government people and business leaders. Theirs is the Indonesia that is now being pressed to grab as many dollars as possible to service the debt. Accordingly, the dollar has been in high demand, and its exchange rate has climbed to a menacing height. The result is our current slump, sending millions of people down to the poverty line and insolvency.
Distant neighbours
Given the political format of the country, the other Indonesia - the Indonesia of the deprived - has no way to influence the course of events, although it is fast becoming a vast territory of victims. Apparently, the two Indonesias, one belonging to 200 people, and the other to the 200 millions, are like distant neighbours who hardly care for each other.
Not a very long time ago, the theory was that the 'Asian miracle' was due to what MIT's economist Lester Thurow described as 'communitarian capitalism' that was different from, and preferable to, US capitalism. He was speaking of the Japanese and Korean models. Today the Asian crisis suggests there is nothing 'communitarian' about the system. The clubby cooperation between private corporate groups and government institutions (with the support of open handed banks) breeds complacency at best - and the public, including shareholders, are kept in the dark. They are even intimidated not to ask questions. Sooner or later the next stage arrives, which is a corrupt system of crony capitalism.
Indonesia of the dollar debtors is precisely a system of this kind. It is a country where nobody seems to care about accountability. Bankers have lost their capacity for judgment and never call a loan; they even take bribes from borrowers, with the result that companies accumulate a large amount of bad debt. The Indonesia of the dollar debtors is also a country where project costs are marked up by up to 50% to make it possible for corporate executives to bring millions of illegitimate greenbacks to their personal account. At the end of the day, it is the national economy that bears the brunt. The first victims are always the weakest.
Unholy alliance
The trend is made worse because the 'unholy alliance', as senior economist Sumitro Djojohadikusumo calls it, goes further up, involving people close to the most powerful seat in the republic. Last year, for instance, there was high-powered pressure on both private and state banks to give loans to the 'national car' project, and the scared bankers followed the order without doing normal checks on the investment plan.
Today you read the story of Steady Safe, a taxi company that received a US$265 million loan from the once-prestigious Peregrine Investments Holdings Ltd in Hong Kong. Two years ago Yopie Wijaya, the taxi man, took Tutut, the First Daughter, as his business partner before he knocked at Peregrine's door for money. Today the Hong Kong-based company has collapsed; the loan is bad.
An economist friend once told me of the different impacts between two acts of embezzlement. One is when somebody takes money from the state treasury - he steals US$15 million and it is bad, but that's all. The other is when a powerful person sets up a monopoly-based company - he makes the same amount of money, but the result is a highly distorted market. This unchecked rent- seeking practice has grown to such a colossal proportion that it has made Indonesia a country financially bloated and institutionally damaged.
Obviously, this is not the Indonesia that I, for one, would care to defend. In fact, this is the Indonesia that many have been trying to do away with; it is the real culprit of our painful downturn. Regrettably, reform-minded people both inside and outside the government have no real power to get rid of it. Hence the significance of the IMF deal.
IMF
The IMF package agreed by President Suharto is no panacea for good governance. But the way I see it is that it is not only about US$43 billion in money. In itself it is not a promise of political reform, but it may lead to the weakening of political patronage.
To be sure, it is imposed by a foreign institution; it is also painful, and it is not perfect. But from the hardship it entails the people will have a better argument to urgently demand more symmetry of sacrifice from the powers that be. In short, the IMF deal is a sad, if not 'evil', necessity. To use nationalist rhetoric against the package may bring Indonesia back to the apologists of ersatz capitalism and its dubious achievements.
As a concluding note, let me draw an analogy from a more dramatic event in history. Following the defeat of 1945, the Japanese were put under an American-imposed constitution. Most Japanese took it as a chance to build a more democratic society, which was to them preferable to the nationalistic flag-waving 'Nippon'. The rest was their own determination to make the experiment a success.
Goenawan Mohamad is a senior journalist and a poet. He edited Tempo, the news weekly that was banned in 1994. This appeared in the Jakarta Post on 25 January 1998.
Inside Indonesia 54: Apr-Jun 1998
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From go-go to yo-yo
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GERRY VAN KLINKEN traces the spectacular financial events that paralysed the country's business and political elites.
In business as in politics, Indonesia is ruled by a tiny elite. Ninety-five percent of the country's huge private foreign debt of US$80 billion, according to independent economist Kwik Kian Gie, is owed by just 50 wealthy individuals. In January the rupiah fell to a quarter of its old value against the US dollar. This meant that, when converted to rupiah, their foreign debts just became four times larger. The economic slump that went with the exchange rate shock often caused their income to plummet as well. They were simply unable to pay even the interest on their loans.
Few among Indonesia's 200 million shed tears over the pain these 50 individuals were suffering. To be super-wealthy, and to have political connections to thank for your wealth, is to be on the wrong side of a strong egalitarian tradition in Indonesia that goes back to the revolution of 1945. Will the present upheaval bring about a less elitist system? Who knows. It would be an unusual revolution, triggered by the global market rather than by the Indonesian people.
Friendly
Indonesia has experienced high economic growth almost without interruption since the beginning of Suharto's New Order in 1966. All the so-called macro- economic indicators emerged from the house of horrors of the mid-1960s and stayed friendly for decades. Growth of around 7% a year, inflation below 10%, a currency exchange rate that slipped against the US dollar at a slow, controlled speed of around 5% a year, healthy reserves of foreign cash, strong export growth. You name it, the economists were happy with it.
Then in May 1997 global speculators attacked the Thai currency, and to their delight it collapsed. By July, they had also gone to work on the Philippine, Malaysian, and finally the Indonesian currency, all with great success. National banks fought back at a cost of billions of dollars, but in vain. On 14 August Indonesia abandoned the managed exchange rate. Under attack it had slipped from Rp 2,400 to the US dollar to Rp 2,640. Once floated, it fell to nearly Rp 2,800. At the time, these seemed like major falls.
To save precious foreign reserves, Indonesia's government said in September it was putting on hold 15 mega-projects in the 1997/98 budget. They ranged from toll roads to power plants and often belonged to the president's children. But the huge cancellation was not only bad for the superwealthy. It signified a slowdown that, some economists said, had already forced Indonesia into recession.
The International Monetary Fund had almost slipped into obscurity. It now found a dramatic new lease of life. In August it announced a big rescue package for Thailand. By October, the Hong Kong stock market had taken sharp drops, and the South Korean currency was also in a shambles. Everyone except Malaysia's Mahathir, who preferred to talk national dignity, seemed to be talking IMF rescues.
Indonesia's rupiah had slid to Rp 3,680 to the US dollar when a package was announced to save it on 31 October. It was among the largest ever put together - US$23 billion from the IMF, plus second-line assistance totalling US$20 billion, to be disbursed over three years subject to continuous reviews. From then on the mood acquired an apocalyptic air, and foreign correspondents wrote about almost nothing else.
Dubious
Why this sudden collapse? Those in power only blamed foreign speculators. Indonesia's 'fundamentals', they said, remained strong. Most economic columnists agreed. But their inability to predict the catastrophe cast serious doubts on all the orthodoxy that passes for economic science.
More critical observers began to ask what these 'fundamentals' really amounted to. Perhaps the speculators were not creating a new problem from the outside but feeding, like vultures, on something rotten within. Perhaps Indonesia's lovely macro-economic indicators did not give the whole picture. 'Indonesia no longer has fundamentals', said a common joke.
Kwik Kian Gie, for one, had long spoken about the more dubious 'micro- economic' indicators. By this he meant the grubby details of how state banks give unsecured loans to friends of the regime, and how the Suharto family and friends won monopolies on everything from newsprint to cigarette cloves. Economist Hartoyo Wignyowiyoto said only half-jokingly that Indonesia was a 'mafia' economy, and went on: 'I have observed mafia systems all over the world. They only end when the godfather disappears'.
Even more important than the 'mafia' economy, and certainly not unrelated to it, was the towering foreign debt. Critics who had warned that Indonesia's foreign debt was nearing the Latin American levels before its spectacular collapse in the early 80s were for years seen as spoil-sports by enthusiasts for the 'Asian miracle', among them the World Bank. When the speculators divined correctly that there was a problem, no one was ready for them.
Debt
If high debts had been a problem while times were good, they became simply impossible after the rupiah began its nosedive in July 1997. For a start, no one knew how much foreign debt there was.
The government was indignant when the French analyst firm Indosuez said in December it could be as high as US$200 billion, with three quarters of it owed by private firms and a third due for repayment in the next three months. (The amount is equal to Indonesia's entire gross domestic product!) But the government's own figures had by early February crept up from US$118 to US$137 billion. And it did agree a lot of it was short-term debt - typical of a bubble economy.
Back-of-the-envelope calculations showed that when converted to rupiah, the additional short-term private debt caused by the drop in the rupiah's value alone was larger than the total number of rupiahs in circulation.
Every Indonesian man, woman and child now bore a debt of Rp 7 million - for it is they who will ultimately be asked to pay it back. None of the IMF measures made any provision for lightening Indonesia's foreign debt burden. Indeed the new loan added to it.
Quagmire
IMF packages never vary. The world over, in exchange for help, they sternly demand government belts tightened and markets opened to foreigners. Yet success is by no means assured. About half the time, despite the added pain, they fail to lift the target economy out of its quagmire.
The 31 October package had several components, none surprising except perhaps for their vagueness. The national budget had to show a surplus of 1% of gross domestic product, the current account deficit (measuring the amount by which exports fall behind imports) had to be reduced to 3% of GDP within two years, semi-private monopolies on all food imports and distribution except rice had to be removed, import tariffs on chemicals and some other commodities were to be reduced, and the banking sector had to be cleaned up by liquidating non- performing banks. Perhaps more conditions were kept secret.
Suharto had asked for IMF help but he was obviously reluctant to play ball with them. Their recipe attacked the heart of a system upon which, like it or not, millions depended. The budget surplus demand would do nothing to combat rising prices and unemployment and would thus contribute to unrest around the country. Besides, applying the IMF scalpel to monopolies and banks meant damaging Suharto's family business empire and this would hamper his ability to play traditional money politics with the elite.
Caught between a rock and a hard place, the government searched for ways to evade costly IMF demands. Less than two months after postponing the 15 mega- projects, most were quietly given the go-ahead to continue anyway. When Suharto's son and his half-brother openly challenged a government decision on 1 November to close their banks, which were among the 16 it considered in breach of the rules, the action against them was half-hearted at best.
Budget
Almost as if it cared for democracy, the global currency market now began to focus less on the economy than on the president. It reacted negatively to almost anything he did or didn't do. If Suharto was ill (as he was again in December after an exhausting world trip), the rupiah dropped. If he hesitated on IMF demands, it dropped. If he indicated he wanted the big-spending Habibie for vice-president, it dropped. When Finance Minister Mar'ie Muhammad came to ask them for a roll-over of private debt, top business leaders in the USA only wanted to know who would succeed Suharto. Throughout December, the rupiah fell from Rp 4,000 to about Rp 6,000 to the dollar.
On 6 January Suharto read out a draft 1998/99 budget that failed to meet the IMF requirement to show a surplus. It was also based on wildly optimistic exchange rate and growth projections. The currency market, unconcerned by the view that a budget surplus may actually be bad for Indonesia, allowed the rupiah to sink to a quarter of its pre-crisis level against the US dollar: Rp 10,000. Almost worthless. It even touched Rp 17,000 to the dollar before oscillating around the Rp 10,000 mark in mid-February.
Not only foreigners were now dropping the rupiah, but Indonesians rushed to sell their own currency - especially those with dollar debts falling due soon. With debts far larger than what they owned, most large companies were by mid- January technically bankrupt.
The IMF was not amused with the budget. It pressured Suharto to once again cancel the 15 mega-projects. President Clinton, betraying that he was the real power behind the IMF screen, urged Suharto in a telephone call from Air Force One to get serious about the IMF demands. Prime Ministers of other donor countries followed suit, including Australia's John Howard. On 15 January, while IMF Director Camdessus stood over Suharto with his arms folded in true colonial style, Suharto signed a new IMF agreement that was in most respects even harsher than the earlier one.
The amount promised in aid (actually a loan, with interest, that would add to Indonesia's already huge burden) remained the same. The 1% budget surplus condition was relaxed to a 1% deficit. But the list of demands had now grown to 50 points. This time, the subsidy for diesel, lifeblood of a modern economy, was also to be cut substantially. Smaller, more inefficient banks would have it tougher as their minimum capital was forced up.
Moreover, monopolies and cartels handling commodities other than foods were also to be removed - cement, plywood, and paper were the most important. Tommy Suharto's monopoly on cloves (used in kretek cigarettes) was to go. More sectors were to be opened up to foreign ownership, including the lucrative oil palm industry. The shadowy Reforestation Fund, widely misused by bureaucrats wanting easy cash, was to go into the national budget for all to see. No more state money was to be sunk into the nepotistic 'national car' (Tommy Suharto) and the wasteful aircraft manufacturer IPTN (Habibie).
Political crisis
For Suharto it must have been a nightmare. Just as he needed all his energy to ensure opponents did not hinder his reelection as president in March, he was asked to do the impossible with an economy he no longer understood, by foreigners he no doubt detested.
He seemed to trust no one except his daughter Tutut. He did not consult before announcing several major policy decisions, which then caused confusion all round. The Golkar machine, as if flying on automatic pilot, calmly nominated the 76-year old for a seventh five-year term in office, and would not answer questions about a succession.
Predictions of unrest proved right. Even during the fasting month Ramadan, but especially after it in February, food riots broke out all over the country. Chinese forced to raise prices found their shops stoned and looted all over Java, as well as in Sulawesi and islands further east. These young looters were being asked to pay for the misdeeds of the 50 or so super-wealthy dollar debtors. But they had little idea who to blame, so they took it out on shop keepers.
Decisive reforms were called for. Only a new government could deliver them. Yet for even the most visionary opposition leaders the challenge was mind- boggling. How could they bring together the contradictory wishes of the dissatisfied poor on the one hand, and all-powerful global currency traders on the other, to turn around a deep-seated elitist system?
Even God seemed against them. An opposition alliance gained shape that brought together secular leader Megawati Sukarnoputri with Islamic leaders Amien Rais and Abdurrahman Wahid. But Abdurrahman Wahid, better known as Gus Dur and the best hope of bridging the traditional divide between secular and Islamic politics, had a serious stroke on 19 January.
Gerry van Klinken edits 'Inside Indonesia'.
Inside Indonesia 54: Apr-Jun 1998
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Chronology of crisis
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1997
May: Thai currency attacked by speculators.
July: Malaysian, Philippine, Thai and Indonesian currencies all slump.
14 August: Indonesia abolishes its system of a managed exchange rate. The rupiah plunges.
16 September: 15 budgeted mega-projects postponed.
8 October: Indonesia says it will ask the IMF for financial assistance.
31 October: Indonesia's IMF package is unveiled. It provides for as much as US$40 billion in aid.
1 November: Sixteen banks closed as first step in IMF package. Causes rush on other banks & panic all round. IMF later admits it was a mistake.
5 November: IMF approves a US$10 billion loan for Indonesia as part of the massive international package.
The 15 mega-projects are quietly reinstated about this time.
12 November: IMF Director Camdessus visits Jakarta, reveals much more reform is planned, and aid is subject to 3-monthly reviews.
5-15 December: Suharto takes 10 days rest after a 12-day world tour, misses ASEAN summit.
9-12 December: Finance Minister asks for debt roll-over in Washington, but gets none.
1998
6 January: Indonesia unveils an expansionary 1998/99 budget, contrary to IMF demands of a budget surplus. The rupiah loses half its value over a five-day period.
9 January: Ratings agency Standard & Poor downgrades Indonesia's currency to 'junk bond' status.
10 January: Suharto once again postpones the 15 mega-projects.
10 January: Megawati Sukarnoputri announces she is ready to become president. Amien Rais had made a similar announcement in September. They appear on several platforms together to denounce Suharto.
12 January: Former cabinet minister and economic guru Sumitro Djojohadikusuma says Indonesia needs a new government.
15 January: IMF Director Camdessus stands over Suharto while the latter signs a new IMF agreements.
January till mid-February: Anti-Chinese food riots take place in at least a dozen places throughout Java, three in Sulawesi, and in Sumbawa and Flores.
11 January: All but 22 of the 286 companies listed on the Jakarta stock exchange are technically bankrupt. Property companies are the worst.
21 & 27 January: National Economic and Financial Resilience Council chaired by Suharto announces a raft of reforms, but the rupiah does not recover.
27 January: Government announces a moratorium on repaying debts and interest, and promises to guarantee all obligations entered into by commercial banks.
9 February: Suharto foreshadows the government will institute a 'currency board' system to peg the rupiah to the US dollar. The IMF, World Bank, and Bill Clinton think it won't work, and threaten to cut off aid.
(16 February, 1998)
Inside Indonesia 54: Apr-Jun 1988
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Reefs alive!
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Tomas Tomascik, Annmarie Janice Mah, Anugerah Nontji & Mohammad Kasim Moosa, The ecology of the Indonesian seas, Singapore: Periplus, part I (ISBN 962- 593-078-7, 642pp), part II (ISBN 962-593-163-5, 745pp).
Reviewed by IAN DUTTON
The long-awaited 'wet' additions to the Ecology of Indonesia series, published under the Environmental Management in Indonesia program of the Canadian Development Agency in partnership with the Indonesian Ministry of the Environment, arrived in Jakarta bookstores late in 1997. That they were well worth waiting for is evidenced by the difficulty many of us experienced when we returned to those stores to obtain second and third copies as gifts during the recent festive season. 'I'm sorry sir, but you will have to wait until new stocks arrive' was often the response of bookstore employees intrigued why anyone could want to buy two books that look more like door stops than a good read!
As anyone who has endured the experience of trying to locate information on the marine and coastal resources of Indonesia will appreciate, these books are much more than a good read. They are indispensable guides to the treasure house of Indonesia's marine estate. Both volumes are of immediate relevance to the rapidly emerging national interest in managing these resources. They are essential for anyone who shares that interest.
Under the leadership of Dr Tomascik, the four distinguished authors and other expert contributors have produced a single book that had to be divided into two parts. Part One begins by introducing the geology and oceanography of Indonesia's seas, before moving on to a series of chapters on coral reefs and the environmental factors that sustain them.
The emphasis on coral reefs is appropriate. Indonesia is a global centre for marine biodiversity. Their current parlous state is due to ignorance, over-exploitation and lack of management attention. It is especially appropriate that such a comprehensive analysis of the world's most diverse and extensive reefs first appeared in the International Year of the Coral Reef (1997).
Part Two begins with more reviews of specific reef types and then diversifies into reviews of seagrass, mangrove and pelagic systems. The book concludes with a timely analysis of threats to marine and coastal resources, integrated coastal zone management needs and possible approaches.
Numerous case studies, maps, diagrams and photographs help break up the text. The index and bibliography are comprehensive.
Despite the writers' obvious efforts to express complex concepts simply, non-native English speakers and especially non- scientists will find much of the text hard going. Hopefully, researchers and managers will now go to work to make its vast store of knowledge more readily available to decision makers, resource users (including developers), and the Indonesian coastal community whose lives depend on maintaining healthy seas. This work will then have achieved its truly remarkable potential.
Ian Dutton, an Australian, works with the Coastal Resources Management Project in Jakarta.
Inside Indonesia 54: Apr-Jun 1998
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Friend or foe?
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In this snapshot of politics at the end of January, ARIEF BUDIMAN worries that the embryonic alliance between Amien Rais and Megawati remains vulnerable to government attack.
It was reported yesterday that a bomb exploded in Jakarta a few days earlier. The Chinese businessman Sofyan Wanandi was questioned by the military on his possible involvement. What lies behind this event?
Suharto's administration is facing both economic and political crisis. The economic crisis triggered a crisis of trust toward the regime. The personalised rule of Suharto that has given big economic benefits to his family and cronies is now under attack. Demonstrations by students and other youth organisations have occurred almost every day in Jakarta. They blatantly ask Suharto to step down, something unimaginable even six months ago. Although the number of people participating in these demonstrations is relatively small, they do reflect the feeling of most Indonesians.
Is this a sign that democracy is being born? It doesn't seem to be that easy.
Unified
Democracy is the power of the people. Its strength rests on the unity of civil society to balance the power of the state. People have to be able to participate in this decision making process to make democracy possible. To achieve this, civil society has to be strengthened.
Since several months ago, steps have been taken to unify the three largest mass organisations: Nahdatul Ulama led by Abdurrahman Wahid with its estimated 30 million constituents, Muhammadiyah led by Amien Rais with its 28 million constituents, and the Indonesian Democratic Party PDI led by Megawati with about the same number. If these three mass organisations, two Muslim and one Nationalist, could be unified, it is almost sure that the military would have a lot of difficulty continuing their repressive policies.
Megawati and Amien Rais have expressed their willingness to form such a coalition. Wahid said on 19 January that he first needed to know the terms on which the coalition would be based. All three leaders do not seem to object to form a democratic coalition. All three have also called on Suharto to step down.
Conflicts
However, unlike Thailand and the Philippines that succeeded in establishing their democratisation earlier, Indonesian society has long been divided by conflicts of a religious (Islamic versus Christian) and racial nature (indigenous versus Chinese).
The Christians and the Chinese are (somewhat overlapping) minorities of less than 10% of the population, but they are better off economically. Most of the big conglomerates are Chinese-owned, and therefore non-Muslim.
The three civilian leaders each have their own views on this matter. Megawati as the leader of the nationalist group has no problem in dealing with both Christians and Chinese.
Abdurrahman Wahid, despite leading the biggest Muslim organisation in the world, has a very progressive view in dealing with non-Muslims. Oftentimes he has been accused of betraying Muslim solidarity and of having sold out to Chinese and Christians. But so far he still retains strong support, especially from young Muslims.
However, Amien Rais is a bit different. He has become well known for his sectarian approach towards Islam. He believes that there is a danger of 'Christianisation' in Indonesia, and that Christians are trying to control the levers of economic and political power. He thinks they dominate business and have their men in cabinet and the armed forces. Amien Rais has said that the number of Christians in the state bureaucracy has to be in proportion to the percentage of Christians in society.
Military
Faced with this mounting possibility that the three mass organisations may unite, the New Order government seems to be preparing to use its military intelligence to exploit the existing religious and racial conflicts.
It started when a high ranking general made a strong statement blaming Chinese conglomerates for not being patriotic enough to bring their dollars back into the country. They were the ones to be blamed for the present crisis.
At the same time a story appeared that the financial crisis was not merely the work of market forces. It was the result of a political 'conspiracy' to destabilise the Suharto administration, in order to replace Suharto as head of state. It was said that the conspiracy was being organised by the Center for Strategic and International Studies (CSIS), a Catholic think tank that has strong connection with Chinese business.
This think tank worked closely with Suharto during the early stage of the New Order government. General Benny Murdani, the ex commander-in-chief of the armed forces and also a Catholic and once a confidante of president Suharto, is also closely associated with the organisation.
Sofyan Wanandi, the wealthy businessman mentioned earlier, together with his brother Jusuf Wanandi, are core members of the CSIS. Sofyan's alleged involvement in the bomb explosion strengthened the assumption that the CSIS has been active in destabilising the regime.
The story goes on that the IMF/ USA pressure against Indonesia is part of an international Christian conspiracy against an Indonesia with a Muslim majority. The US-dominated IMF, in other words, plays a neo-colonialist role, working together with domestic anti-Islamic forces.
By circulating this story, military intelligence firstly want to divert the people's impression that this economic crisis was the result of the president's own nepotism and cronyism. Secondly, it intends to diffuse the civilan opposition by playing off Muslims against non-Muslims. This story was later conveyed confidentialy to Amien Rais.
'Traitors'
Amien Rais seemed to rise to the bait. Last week, as quoted by the Muslim daily Republika, he made a statement saying that the economic and political crisis was the work of a political conspiracy by 'traitors to the country' who aimed to destabilise the nation. The next day Republika published the reactions of many pro-government Muslim leaders, who cheered Amien Rais on and asked the Muslim community to defend the government.
Lukman Harun, another leader within the Muhammadiyah to which Amien Rais belongs, said that Suharto was not only the head of state but also leader of the Muslims. He then made an appeal for Muslims to work together with the government against these 'traitors.' The same appeal was also launched by the commander of the army special forces, Maj-Gen Prabowo Subianto (also Suharto's son-in-law), during a get-together with Muslim ulema to break the fast in his headquarters.
It remains to be seen whether Amien Rais will now stick to his former position, namely to ask Suharto to step down and to create a coalition with the other two mass organisations. If he doesn't, then the unification of the three biggest mass organisations is in limbo, together with the prospect of democracy. The military will have succeeded in striking at the weak spot of this potential civilan united front against a repressive regime. However, everything is still uncertain. On January 25 Amien Rais and Megawati appeared together in Yogyakarta, still calling on Suharto to step down. This is, of course, very encouraging.
If Amien Rais does change his political stance after being informed about this 'Christian conspiracy against Islam and the regime', those struggling for democracy will be forced to admit that they will have to wait a little longer. The civilian coalition is still fragile. Indonesian society is still full of deep controversies, and strong civilian leaders are yet to be born.
Arief Budiman is professor of Indonesian studies at the University of Melbourne.
Inside Indonesia 54: Apr-Jun 1998
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Rare birds die in West Java
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Impoverished villagers kill huge numbers of migrating birds resting on Java's foreshores each year. JOHN McCARTHY reports.
Between October and March each year, large flocks of wading birds visit the north coast of West Java. At dusk during these months, hunters from villages in Krangkeng district carry nets out into the rice fields and fishponds. The next morning, after a night's work, they return carrying bundles of trussed-up live water birds. At the Cimanis bridge on the Cirebon-Indramayu road, the hunters meet bird wholesalers and the birds change hands.
Bird hunting is an economic system for a community living in the Krangkeng area of West Java. In addition to bird hunters and wholesalers, there are processors who pluck the birds, as well as the cooks and vendors who staff street stalls selling fried water birds. Although the bird marketing extends as far as Jakarta, vendors mostly sell fried birds in the night markets of the nearby cities of Cirebon and Indramayu.
These wading birds are a small proportion of more than two million shorebirds, around 100 of the world's 200 water bird species, that fly between their breeding areas in North Asia (Siberia, China, Korea, Japan) and their non-breeding areas to the south (Australia, New Zealand).
Along the way, to obtain energy for their long flights, the birds visit Southeast Asian wetlands rich in foods such as shellfish and worms. Some 30% of these waders fail to arrive at their final destination. Apart from natural hazards such as storms, the birds face human related threats.
Many key sites that shorebirds use for resting and feeding are under threat from development projects. Moreover, local people living along the route hunt an estimated 0.5 to 1.5 million shorebirds each year, including several endangered species. In the Krangkeng area, in a stretch of coast 5-10 kilometres wide and 60 kilometres long, villagers catch close to 200,000 migratory and resident water birds each year.
Poverty
The coastal villages of Krangkeng lie along a busy road serving the north coast of West Java. Here a flat coastal strip around one kilometre wide stretches from the rice paddies towards the sea. Once a belt of mangroves grew here, protecting the coast from the sea. However, following a boom in shrimp farming, the area has been converted into brackish water ponds and very little of the original vegetation remains. During the dry season salt water seeps into the wells, and fresh water has to be trucked into the villages. Due to poor irrigation works, during the wet season the area often floods, while during the dry season it is subject to drought.
Although nature in Krangkeng provides meagre resources, the main reason for poverty in the area is the lack of work for the landless and unemployed. Resourceful villagers work as seasonal labourers in the rice fields or fishponds, drive pedicabs, labour on construction sites, or move to other areas in search of work. Others have taken to bird hunting.
Local people stress that bird hunting is a very difficult and unreliable way to earn a living. Hunters have to stay by their nets all night in rice fields and fishponds. Often they are soaked by the rain, while sometimes they return home without catching a single bird.
Hunting is only a seasonal activity. Even in peak season, hunting is impossible around the full moon, so that villagers can hunt perhaps only 22 nights each month. Most hunters say that they hunt only in bad seasons, when there are no other sources of income. Yet this is still a major source of income for many people.
Surveys
In Krangkeng, local people have hunted birds since before 1945, the year Indonesia declared independence. The first written records begin only in 1979. At that time, an Indonesian researcher estimated that local people caught 1 million birds each year.
During a later more systematic survey, two researchers estimated that hunters were catching around 300,000 water birds. As the hunting threatened the viability of populations of migratory water bird species flying across East Asia, the Indonesian Directorate General for Nature Conservation (PHPA), the World Wide Fund for Nature (WWF) and the Asian Wetland Bureau (AWB - now Wetlands International) began to investigate the trade with the long term aim of finding a solution to the problem.
In 1990, a larger joint Indonesian-Australian team carried out a detailed study, concluding that hunting placed an unsustainable pressure on many species. Marketplace surveys over a few months revealed catches of 12,000 water birds from 30 species, including 90 milky storks (Mycterisa cinerea). This resident water bird is a threatened species with a world population of about 5,000 birds. The researchers also found that hunting culled about 20% of the world population of one particular species, the oriental pratincole (Glarerola maldivarum).
Later, with funding from AusAID and the support of the Royal Australian Ornithological Union and the Australasian Wader Study Group, Rusila, an Indonesian ornithologist working with AWB, commissioned further work.
A survey from 1992 showed that on average a hunter working locally catches 53 birds each week. These birds fetch prices of only Rp 200 - 1,800 (US$0.10 - 0.90 at the time). This meant that in one year each hunter earned only around US$75 from the trade. According to estimates, this makes up 44% of the family income of hunters. If these figures are accurate, then an average bird hunter lives on a yearly income of only about US$200.
On average, hunters working outside the Krangkeng area caught many more birds: up to 128 birds per week. As bird numbers fell locally, the number of hunters working outside the area increased. Bird hunters moved west to Jakarta and Merak, east to Tegal and Semarang (Central Java), south to Cilacap (south coast of Central Java), and to Lampung in Sumatra. Survey teams even found Krangkeng bird hunters as far north as Jambi and Riau in East Sumatra. A local informant told of hunters borrowing money from local wholesalers to support hunting activities elsewhere. Later hunters return, disembarking from buses with bundles of live birds or with dead birds packed in ice.
However, the number of hunters fluctuated widely. At times, in addition to those who hunt regularly, many others took up bird hunting to support their families. In 1990, a severe drought pushed many people into bird hunting, as occurred again in 1993, when the harvest failed twice. Bird hunting is also an occupation passed on from fathers to sons. As the population grows, the number of bird hunters has grown.
Wide gulf
From a national or an international perspective, bird hunting in Krangkeng degrades valuable components of the world's biodiversity - the common heritage of all humankind. But from the local perspective, migratory water birds are an 'open access' resource: all people have the right to catch migratory water birds, for, until a bird is caught, it belongs to everyone (or no-one). Poor villagers are affronted by the thought that some people and organisation would care more about the migratory birds than they would about the impoverished villagers. Hunting of water birds in Krangkeng shows the wide gulf between the conservation values most often associated with the West and the survival needs of the poor.
Bird hunting presents a difficult problem. There are no incentives for sustainable hunting. Given the pressing need of hunters to feed their families, the short term self-interest of every hunter is to catch as many birds as possible.
In the future, when bird harvesting has become a hopeless option, they will of necessity find other opportunities. As no individual hunter directly meets the cost of the declining bird numbers, that cost is shifted onto the wider world. In this respect a bird hunter is like a polluter who, by dumping toxic effluent into a river, shifts the costs of their activity onto a wider community.
However, unlike some areas of Indonesia, here there are no traditional adat institutions controlling who can hunt and how much they can take. In other places, over time traditional communities have developed systems to ensure that each person gets a share without depleting the resource. In Krangkeng, given the huge area involved and the flexible nature of the trade, developing such institutions would be very difficult.
Enforcement
With AusAID funding, PHPA and AWB started to educate people about the protected status of several water bird species. Soon after, this work scored an early success: villagers ceased hunting the milky stork. Then, in 1992, following attention in the national press, the forestry department carried out a raid on local bird hunters. This struck fear into the impoverished hunters and threatened local cooperation with the project. Unless local people had an alternative livelihood, law enforcement would only further marginalise poor people without solving the underlying problem, which was the ability of local people to earn an adequate living.
Outsiders can not impose a solution. The villagers need to develop solutions in keeping with their own abilities. Given the deep seated community problems in the Krangkeng area, such an outcome will only emerge over several years. To this end, in 1993, Bina Desa, a national non-government organisation experienced in working with marginal groups, placed two community workers in the area. However, following the environmental education program and the first stage of community mobilisation, the process slowed further when the project was suspended in 1994 due to lack of funds.
Later, with the support of Wetlands International, a group of teachers were able to continue environmental education. But there is a lingering need to tackle the more difficult problem: relieving local poverty and finding alternatives to hunting water birds. Without sufficient funding and institutional support, participatory approaches that try to link community development and conservation face formidable challenges. However, what other choice do we have?
John McCarthy works at the Asia Research Centre, Murdoch University, Perth, Australia. Extracted from an article in the Journal of Environment and Development vol 5, no 1.
Inside Indonesia 54: Apr-Jun 1998
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Whose tourism? Balinese fight back
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CAROL WARREN reports on developments at Padanggalak, where outside money and graft encounter strong opposition.
Largely hidden from the eyes of the overseas visitor, Bali's beaches have become a cultural and environmental battleground. In 1994, protests against the Bali Nirvana Resort development at Tanah Lot signalled the first serious challenge to the direction of tourism development by the Balinese people.
Although government rhetoric still espouses earlier commitments to 'cultural tourism', in reality development policy for Bali has become almost entirely fixed on maximising tourist numbers, foreign exchange and opportunities for graft, irrespective of environmental and cultural impacts.
Open demonstrations against the Tanah Lot development project were soon brought to a halt by military intervention and a heavy hand on the press (See Inside Indonesia, June 1995). But opposition to the changing nature of tourism and the growing domination of the island's land and economy by powerful Jakarta interests continued to seethe beneath the surface as one after another luxury resort gobbled up Bali's beaches and padi fields.
Sacred site
Mounting popular anger again reached boiling point at the end of 1997 over a strip of beach about a kilometre north of the Bali Beach Hotel in the island's premier hotel area. As with the Bali Nirvana Resort development, the most recent source of the conflict was a sacred site - not this time one as recognisable to non-Balinese as the picturesque Tanah Lot temple at sunset. Instead it was construction at the confluence of the Ayung River and the sea at Padanggalak that once again made raw Bali's experience of 'development' in late New Order Indonesia.
At Padanggalak, surrounding villages carry out purification ceremonies necessary to the well-being of their communities. At first, only passing reference to Padanggalak appeared in the Balinese press, noting the location of one more among numerous impending proyek approved since the go-ahead at Tanah Lot.
But initially low-key media coverage became more strident when a newly elected member of the Golkar faction in the Denpasar assembly, Kusuma Wardana, boldly suggested that the governor resign because of his role in the case. Wardana was from the village of Kesiman, one of several communities with ritual responsibilities for the sacred site at Padanggalak. He was also a descendent of the ruling family of Kesiman, a powerful court at the time of the Dutch conquest of Bali.
The governor, as fate would have it, was also from Kesiman, and this gave the village strategic leverage like no other. Two days after Wardana's statement, the customary or adat community of Kesiman threatened the governor with expulsion, a sanction the anthropologist Clifford Geertz once described as equivalent to 'social death'.
Expulsion may entail loss of rights to live in the community, to participate in village temple ceremonies, or to use the cemetry for funeral rights. If political criticism could be easily ignored given the top-down style of executive government in Indonesia, adat sanctions could not. The governor promptly declared that he would turn the matter over to the villageadat council. It responded with demands that the beach be returned to its original state and that the development permit be withdrawn.
No permits
Like all of the other projects that have provoked public animosity and cynicism in the 1990s, the development at Padanggalak was characterised by numerous irregularities. Reclamation works proceeded without most of the permits and procedural requirements having been completed.
No Environmental Impact Assessment (Amdal) had been conducted; no location, building or investment permits had been secured by the investors. Only a permit in principle (izin prinsip) had been issued with the governor's signature. Public comment was never solicited, and concerns expressed by the local community to the provincial assembly as early as January 1997 were never addressed.
The status of land resumed for the project was also a matter of contention. The 100 meter coastal setback zone is officially classified as state land under Indonesian law, but local customary law and religious practice regard it as adat land belonging to the community.
In this case the governor had signed over rights to the Civil Servant's Cooperative (KPN Praja) to 'benefit from' what was described as a provincial government 'asset'.
The project is actually connected to an adjacent amusement park development, Taman Festival Bali. Shares in the hotel to be built at the site are said to have been contributed to the governor's family. The dozens of grotesque billboards advertising the theme park are also thanks to a concession allocated to the governor's son.
Truce
After reclamation at Padanggalak was finally halted, Public Works Department trucks rolled for days to remove the massive earthworks that had already been put in place. Yet the outcome of this contest over Bali's resources remains unclear. The permit-in-principle has not been withdrawn as demanded by the village adat council. His own Golkar party threatened Kusuma Wardana with 'recall' from his seat in the assembly. And the governor has called on investors to 'redesign' the plan for the site. The case is officially in 'cooling down' mode. The uneasy truce is reminiscent of tactics adopted in the earlier conflict over Tanah Lot. In that case an eight month suspension to reassess the Bali Nirwana Resort development simply bought time for vested interests. They used the powers of the state to suppress organised opposition and circumvent the decree of the national Hindu organisation which was intended to prevent such developments near significant temple sites.
The fallout from Padanggalak continues to reverberate across the island. Renewed criticism of the Tanah Lot resort, and of other developments at Benoa harbour, Serangan and Pecatu - all connected with family or close associates of President Suharto - have once again become the subjects of intense public debate. As has the entire development plan for Bali which established 21 tourism zones covering a quarter of the island's land-mass.
The clear public support for Wardana's ringing challenge to the governor, and the staunch determination of the Kesimanadat council, indicate a broader disenchantment with the New Order regime. Revolutionary idioms of struggle and heroism are reemerging in the language of dissidence.
The current economic crisis may curb some of the excesses of the investment binge in Bali and bring about a more transparent planning process. On the other hand, the crisis may induce a yet more voracious effort to sell off cultural and environmental resources across Indonesia.
Carol Warren teaches Asian Studies at Murdoch University, Perth, Australia.
[BOX:]
Another case
At Serangan Island, near Sanur, dredging has increased the size of the island to three times its size and has destroyed sea grasses and fisheries of the local people. It is a deeply troubling story.
From the outset, the people were intimidated with the assistance of certain members of the security forces. At one stage, according to villagers, they were threatened to make them agree to give up their land. The village adat leader, who to that point had stubbornly struggled on behalf of his village, had to give in and was pushed aside as village leader, though still supported by the community. Everything that took place was engineered to facilitate the process of freeing up the land.
That was the first wave.The second wave came after the people were finally forced to give up their land. Now their coastal area, the place upon which their livelihoods depended, is in the process of reclamation, with severe impacts.
Pan Lobeng, an elderly war veteran, depended entirely upon night fishing by lantern along the coastline now undergoing reclamation. He was on the verge of starvation because he could no longer catch fish off the beach.
'I have to buy rice on credit. If I didn't, I would have starved', said Pan Lobeng restraining emotion. Pan Lobeng's story prompted a response from the Bali Turtle Island Development Company and the provincial assembly, who promised to deal with the problem. But thus far nothing has come of it.
Bali Post, 10 November 1997.
Inside Indonesia 54: Apr-Jun 1998
Tags: Bali
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I always throw the envelope away
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ANGELA ROMANO explores the 'envelope culture' among journalists.
In the past 30 years the culture of giving journalists money has become so well entrenched in Indonesia that some journalists admit to more than doubling their income by accepting envelopes containing money from sources.
Former editor Atmakusumah Astraatmaja remembers that in the 1950s an identifiable envelope culture had not yet become well entrenched. But political and military factions financially supported the fledgling and insecure newspaper industry. Without such aid many newspapers would have been unable to pay journalists' salaries.
Older journalists remember that the number of envelopes given to journalists skyrocketed in the early 1970s. These days most sources offer envelopes because such behaviour has become habit. They assume journalists expect the money. Journalists joke: 'I never take envelopes. In fact, I always throw the envelope away. It's only the money that I keep.'
Certain desks, such as economy, are conspicuously 'wet' while others, such as foreign affairs, are considered 'dry'. A journalist based in a dry news beat such as police headquarters, may find that the envelopes, infrequently proffered, do not exceed the cost of a return taxi transport between an event and the reporter's news organisation.
On wet desks, envelopes are sometimes equivalent to several months salary. They are so ubiquitous that one reporter with a strong anti-envelope stance requested to be moved out because he was embarrassed at the number of envelopes extended. He found the stress 'wearying to the point of exhaustion'.
Headaches
The availability of envelopes has spawned a semi-criminal subculture of bodrek journalists. Bodrek are often not real journalists at all. They pose as reporters to harass sources for money. They are named after the patentedbodrek headache tablet because sources are often forced to hand over their money to avoid headaches from these bogus reporters!
Some bodrek are former journalists who have lost their jobs for various reasons but still circulate at press events. The government-sanctioned Indonesian Journalists Association (PWI) admits some may even carry an official PWI press identity card which they obtained while still legitimately employed as journalists.
Sometimes bodrek are agents or stringers for a very small newspaper which pays them next to nothing for their occasional stories, but which ensures them a press card. Such reporters can earn most of their income from envelopes. They are considered to become bodrek rather than true journalists once they use their journalistic position purely as a stratagem to siphon envelopes out of wet sources.
There are also journalists who dig for negative information about vulnerable sources and then blackmail them. Otherbodrek are not journalists but, realising the easy money to be made, masquerade as reporters in order to collect envelopes for news that they never intend to write about. Some of these pseudo-journalists obtain the business cards of real journalists and attempt to enter press conferences by falsely assuming their identity.
'Real' journalists sometimes joke that bodrek aremuntaber (short for muntah-berak, vomiting and diarrhea) because they muncul tanpa berita (emerge without news). They also refer to bodrek by using the colloquial term for prostitutes, WTS (short for wanita tuna susila, woman without morals), because the bodrek is a wartawan tanpa suratkabar (journalist without a newspaper).
The derogatory terms used to describe bodrek reflect the fine line journalists draw between acceptable and unacceptable conduct regarding envelopes. In journalistic mythology, envelopes are offered by grateful or benevolent sources, and journalists passively accept such gifts from politeness rather than personal interest, so that the handover of money is subordinate if not completely irrelevant to the main business of objective news gathering. The prime purpose ofbodrek, however, is unequivocally envelopes and not news.
Some news organisations ban their journalists from accepting envelopes, although the prohibition is not always successful. One reporter described feeling humiliated each time he attends press conferences. The PR people will not give envelopes to reporters from Kompas or the Jakarta Post, because 'they understand that journalists from those newspapers usually decline'. But they will offer him an envelope because they know that journalists from his newspaper are 'more permissive', despite the newspaper's no-envelope policy.
Practical
Most news organisations do not outlaw envelopes, usually on the grounds that they are too financially insecure to pay their journalists adequate salaries and that the envelopes are necessary for journalists' welfare. The Indonesian Journalists Association (PWI) has also taken a practical approach to envelopes. Even though the PWI Code of Ethics explicitly forbids gifts of all kinds, PWI leaders have often publicly stated that journalists may receive envelopes as long as they do not influence news.
Atmakusumah, now head of the Dr Soetomo Press Institute, says that journalists are 'very defensive' when told they must stop receiving envelopes. They know that their editors regularly accept gifts, invitations to lavish functions and all-expenses- paid luxury travel. Journalists feel they are entitled to an 'envelope' as long as their workplace role models continue to accept 'sacks' (of money).
Angela Romano is completing a PhD in journalism at Queensland University of Technology, Brisbane, Australia.
Inside Indonesia 54: Apr-Jun 1998
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