Monthly Political and Economic Analysis Vol. II, No. 5, May 2005 Political Party Internal Conflicts 1 3 7 14 18 21 SCANDAL AT THE ELECTION COMMISSION Toward A New Asian- African Strategic Partnership Research Note: Piracy in Southeast Asian Water Reasons - Impacts - Measures: A Neutral Supervisory Analysis Editor’s Note Scandal at the Election Commission: Just A Tip of the Iceberg? Bank Mandiri Case, A Struggle to Create A New Banking Image Report on Discussion: Democratization in the U.S. and Indonesia: Between Hope and Reality 31
Transcript
M o n t h l y P o l i t i c a l a n d E c o n o m i c A n a l y s i s
Vol. II, No. 5, May 2005
Political Party InternalConflicts
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3
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14
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SCANDAL ATTHE ELECTION
COMMISSIONToward A New Asian-
African StrategicPartnership
Research Note: Piracy inSoutheast Asian WaterReasons - Impacts -Measures: A NeutralSupervisory Analysis
Editor’s Note
Scandal at the ElectionCommission: Just ATip of the Iceberg?
Bank Mandiri Case,A Struggle toCreate A NewBanking Image
Report on Discussion:Democratization in theU.S. and Indonesia:Between Hope andReality
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Vol. II, No. 5, May 2005 | PostScript 1
is published monthly by The Habibie Center. @2004 by The Habibie Center. All Rightsreserved. Unless stated otherwise, all views expressed in reflect the views of theeditorial staff. Inquiries on circulation and editorial correspondence should be addressed to
As the northern hemisphere is well into spring season, Indonesiaalso experiences a spring time of a different kind. The fight againstcorruption seems to be blooming throughout the country. If last
year, there was a strong anti-corruption drive in the regions thatimplicated many regional chiefs and legislators, this time the officials inthe national state bodies have to be careful not to be touched by the longarms of law. The bribery scandal at the General Elections Commission(KPU) and the revelation of scandalous non-performing loan procedureat Bank Mandiri, the largest bank in the country, seem to occupy publicattention lately. While we are saddened by the fact that prestigious,esteemed institution such as the KPU, which has successfully carried outlast year’s complex parliamentary and presidential elections, has to beinvolved in such a shameful act, we are delighted to see that finally thedrive against corruption has reached an unprecedented level. We arealso heartened to see that the unhealthy banking practices, which wehave been so accustomed to in the past and which have been partlyresponsible for the economic difficulties that we are facing, are now beingcombated. We are aware that it may be way too early to suggest thatthings will improve soon, but at least a momentum has been gained andwe should never stop.
On a more somber note, many major political parties that havecompleted their congresses are facing internal conflict. We watch withconcern that our political figures are too engrossed in power struggle, atthe expense of the interest of their own constituent, let alone the generalpublic. We also observe a pattern that those parties whose old incumbentfigures were aiming to maintain their position tend to be in a moreconflictual situation than those whose old figures were opting to stepdown and seek an alternative position in the party. We are hopeful thatthe conflicts in these parties can be resolved soon because we believe thatpolitical parties are important in the development of our democracy.
Last month, leaders from Asian and African countries met in Jakartaand Bandung for a summit commemorating the Golden Jubilee of theBandung Conference of 1955. The summit produced the Declaration ofthe New Asian-African Strategic Partnership. While we are delighted tosee that the summit was able to bring together many countries in thedeveloping world, and foment the desire to establish a closer relationshipamong countries in the two continents, we strongly urge that thesecountries come up with more credible plan on how the strategicpartnership can be achieved. This is important because many nations inthe two continents are still facing many pressing problems such as poverty,spread of HIV/AIDS, internal conflicts, and bad governance.Additionally, collectively the developing nations also have to facechallenges posed by globalization which sometimes reflects a new formof colonialism.
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In this edition, we also carry the excerpt of discussion held at theHabibie Center in conjunction with the launching of a CD on “Lessonsin Democracy,” in cooperation with the U.S. Embassy in Jakarta, andIFES (International Foundation for Election Systems). The discussion wasaimed at comparing the much longer experience and experimentationof American democracy with the newfound Indonesian democracy. Themain points implied by the speakers in the discussion are the need tocontinuously consolidate our democracies, and to reform the democraticstructure as well as develop the democratic culture. But perhaps one ofthe most important conclusions from the discussion is that democraciesmust be developed according to local context, and while we can learnfrom each other’s experiences, variations in local circumstances dictatethe substance of each democracy.
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P O L I T I C S
The General Elections Commission (KPU), an important state bodywhich have been applauded for organizing one of the most complexelections in the world, was recently marred by a scandal involving
one of its members, Mulyana Wira Kusumah. Mulyana was arrested byofficers from the Corruption Eradication Commission (KPK) as he wasattempting to bribe Khairiansyah Salman, a Supreme Audit Board (BPK)auditor in a hotel in West Jakarta area on the evening of April 8. He wascaught red-handed with traveler checks valued at Rp. 150 million, whichwas actually the second installment since the whole amount of briberywas valued at Rp. 300 million. The apparent objective was to ensurethat the BPK audit on KPU finances would not put the commission at adisadvantage.
The BPK discovered a number of significant deviations from the KPUbudget. One of the largest was on the procurement of ballot boxes, in theamount of Rp. 57.5 billion. Other irregularities covered the purchase offingerprinting ink, ballot printing, information technology, and envelopes.In its finding submitted to the the House of Representatives (DPR), theBPK found indications of irregularities by various means, including pricemarkups, import tariff evasion, inappropriate selection of privatecontractors, and duplicate procurement of goods. There are indicationsof KPU members’ involvement in those practices.
The arrest of Mulyana sent shockwaves through several non-government organizations, as he was previously known as legal aid andhuman rights activist, a lecturer in criminology at the University ofIndonesia and generally regarded as one of the “cleaner” members ofthe KPU.
Mulyana was TrappedEggi Sudjana, one of Mulyana’s lawyers, told that his client was
trapped by the KPK working in cahoots with the BPK. “The meetingwas just a trap set by the KPK and the BPK to apprehend my client. It isnot allowed under the Criminal Procedures Code. I will submit a requestfor a pre-trial hearing against the false procedures used to arrest myclient, “Eggi argued.
Separately, deputy KPK chairman Erry Riyana Hardjapamekasinsisted that the arrest did not contravene any legal procedure, saying
SCANDAL AT THE ELECTIONCOMMISSION:
JUST A TIP OF THE ICEBERG?
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his commission has special privileges to investigate major graft suspectsas stated in Article 12 of Law No. 30/2002 on the KPK. Erry said theKPK charged Mulyana with bribery based on Law No. 31/1999 oncorruption eradication, which carries a prison sentence of between oneand five years as well as a fine of up to Rp. 250 million if the accused isfound guilty.1
The KPK has strongly denied allegation that it has engineeredMulyana’s arrest. “The move was related to the task of the KPK toeradicate corruption. The KPK will carry out its duty independently andprofessionally by upholding the law,” Erry told state news agency,Antara. Erry also denied allegations that the KPK has politicized thecase.
Just a Tip of the Iceberg?The arrest of Mulyana could taint the reputation of other KPU
members — Nazaruddin Syamsuddin, Ramlan Surbakti, ChusnulMar’iyah, Valina Singka Subekti, Anas Urbaningrum, Daan Dimara andRusadi Kantaprawira as well as Minister of Justice and Human RightsHamid Awaluddin, a former member of the KPU.
Mulyana was in charge of procuring poll booths and boxes. OtherKPU officials were Chusnul Mar’iyah, who was in charge of the provisionof ballot papers and information technology equipment, Valina SinkaSubegkti in equipment distribution and ink, Hamid Awaluddin in votercards, and Ramlan Surbakti in voter card validation.
About the possibility that Mulyana’s scandalous is just a tip of theiceberg, former president Abdurrahman “Gus Dur” Wahid said Mulyanais just a simple and low profile person who has been caught in a biggerconspiracy. “He is a person with a simple life. He does not have money.He still rents his house. Because of this, Mulyana could not possibly havehad a traveler’s check for the amount of Rp300 million,” he was quotedas saying by detikcom online news portal.
Meanwhile, former justice minister Muladi said Mulyana might haveyielded to the temptation of corruption and unwittingly become a martyrfor the crimes of a bigger group. “For an academic whose salary wassmall, sitting in the KPU must have been very tantalizing. PerhapsMulyana was not strong enough to resist. He is presently in a very strongposition in the eyes of the law. He is also a lecturer in criminology; heought to know about the bribery action. I want him to frankly revealwho was behind this incident,” Muladi was quoted as saying by detikcom.
Deputy speaker of the People’s Consultative Assembly (MPR) A.M.Fatwa said Mulyana must not become the sole casualty in the briberycase. “Hopefully this could lead to the opening up of more distant andwider cases in KPU.” Fatwa urged Mulyana to go ahead with his planto fully reveal all details of the case. “We are very supportive of that and
Mulyana must dare to do that. Because this is definitely linked to thepublic interest, so this case must be open and transparent,” Fatwa said.
Prominent lawyer Adnan Buyung Nasution, who served as a memberof the KPU in 1999, said he was certain that all incumbent KPU memberswere involved in the practice of giving bribes to BPK. He said Mulyanacontributed only Rp. 30 million of his own money to the Rp. 300 millionbribes that put him into trouble. “The total sum of the money was notMulyana’s own funds. But Mulyana went along and gave some becausehe was asked to contribute an amount of money,” the lawyer was quotedas saying by detikcom.
Faisal Riza Rachmat, chairman of the Forum for Action and Studieson Democracy (Fosad), said the fact that none of KPU’s members hadstepped forward to request the postponement of Mulyana’s detentionindicated they wanted to make him a scapegoat. “No way could theKPU chairman and members have been unaware of what was done byMulyana. Furthermore, the Rp300 million reportedly came from them.They obviously want to absolve themselves and wash their hands of thematter. In fact, the lobbying done by Mulyana was clearly to cover themistakes of the KPU,” Faisal was quoted as saying by detikcom.
The Coalition of NGOs for Clean and Quality Elections said Mulyanawas merely the “executor” of the alleged bribery attempt, so the KPKmust reveal the background of the incident and investigate other KPUmembers. Coalition chairman Hermawanto said the KPK should arrestall members of the KPU, not only Mulyana.
Mulyana Speaks UpMulyana claims he was acting under orders from KPU chairman
Nazaruddin Syamsuddin. Mulyana‘s lawyer Eggi Sudjana had said thatthe deal of his client with the BPK official was made at the request ofNazaruddin. His client admitted he only carried out Nazaruddin‘sinstruction to make a deal with the BPK official. “Mulyana was orderedby Nazaruddin to bring the money,” Eggi said, adding that Mulyanadid not make the deal directly with the BPK official.
In a statement read out by his daughter in front of the Central JakartaSalemba Penitentiary where he is being detained, Mulyana says he madethe decision to give bribe money to a BPK auditor because the threatenedagency had demanded he do so. Without naming any specific individual,the statement directly fingers top KPU officials as responsible for thealleged crime.
But, Nazaruddin has consistently denied any knowledge aboutneither the bribe nor meetings with any BPK auditors, while other KPUofficials have stayed silent. “That is totally groundless. Mulyana has nevermentioned my name as the one who has instructed him orally or inwriting to go to BPK office,” Nazaruddin said. Nazaruddin also deniedthe election commission had washed its hands of Mulyana’s case. Heclaimed that the KPU would help all of its members. “I could understandMulyana’s feeling that he has been abandoned by the KPU family. But
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we are really paying attention to this case. We are really responsible forMulyana as long as he is in the KPU.” 2
Thanks to KhairiansyahOne name that was rocketed into the news was that of Khairiansyah
Salman, the BPK head of the sub-commission in charge of auditing theKPU procurement of logistical supplies. Ironically, earlier BPK chiefAnwar Nasution said Khairiansyah was not a hero, but rather a “hick”,and thus he planned to impose a sanction on Khairiansyah, becauseAnwar felt that Khairiansyah was acting on his own initiative, and notseeking the approval for his plan from Anwar.
Legislator Al Muzammil Yusuf, deputy chairman of the Islam-based Prosperous Justice Party (PKS), said Indonesia must give thanksto Khairiansyah. “The honesty and courage demonstrated by this BPKofficial are still rare in Indonesia. We must give appreciation to him,” hewas quoted as saying by detikcom.
Muzammil said Khairiansyah’s action would become an importantmomentum to give moral courage to other officials and institutions toexpose similar cases of bribery. “Because in other countries, success indemolishing corruption cases has been very closely connected to givingprotection and appreciation to brave witnesses, who honestly exposecases,” he said. He suggested that Indonesia should promote civil servantswho expose corruption cases, so that in the future state institutions willbe led by those who set a good example to their subordinates. Muzammilalso mentioned that the “strong leadership” of the President is badlyneeded to help Indonesia tackle corruption,” he was quoted as saying byAntara.
President’s Commitment to Combating CorruptionPresident Susilo Bambang Yudhoyono said the investigation into
alleged graft in the KPU should be conducted seriously, objectively andintensively. “Most importantly, it should be done objectively andintensively.”3
Presidential spokesperson Andi Malarangeng told the press at theState Palace that the President supports the steps being taken by KPK incarrying out its mission. “The President always supports the steps takenby the KPK to combat corruption in Indonesia insofar as the steps aresupported by the necessary evidence. Corruption eradication is one ofthe President’s priorities. So the success of the KPK is also the success ofthe administration.”
For sure, every one of us should respect the achievement of the KPUin organizing last year’s parliamentary and presidential elections. It wasan admirable achievement. But we should not let down our guard incombating corruption wherever it occurs.(yul)___________________________________
2 http://www.antara.co.id/en/seenws/?id=2632
3 ANTARA News, Apr 20, 2005
Vol. II, No. 5, May 2005 | PostScript 7
No mule would be fool enough to knock into the same rock twicelet alone thrice or even more. But look into Indonesian bankingcircle. They have been bumping into the same case for many times
and there seems to be vicious enjoyment of the rush of adrenaline eachtime the banking bad apples and some diabolic debtors have to play hideand seek with the law authority. As if the story would never end, realizingthat big culprits almost always won in each notorious race, even some ofthem managed to get away with the money they stole into neighboringcountries, mainly Singapore, it prompts potential criminals to try by anywhich way he/she can to steal from banks’ faults. From the BLBI (theCentral Bank’s Liquidity Assistance) case of evaporating of Rp. 160 trillionfund involving the so called ‘black conglomerates,’ to the Golden KeyGroup (GKG) case springing up from a man named Edy Tansil who hadcrookedly sucked a $600 million worth of Bank Pembangunan Indonesia(Bapindo) credit to fund an unfeasible project costing the state of Rp. 1,3trillion. Bapindo was one of the ‘red plate’ banks which the state mergedwith other state banks to establish the huge PT Bank Mandiri Tbk. And itis Bank Mandiri which is now entangled in, again, allegedly non-performing loan or even, possibly, pending to the ongoing AttorneyGeneral’s Office investigation, bad debt cases.
Ridiculously enough, Edy Tansil engineered his Rp. 1,3 trillion ‘megaproject’ in a small, oppressively close room littered with books, but withthe help of the ‘magic’ invisible hand of some important people that thecompletely unworthy project got the credit, a huge one. But the importantpersons allegedly facilitated the stream of the credit denied anyinterference. Tansil was caught but again, with the help of a wardennamed Dudung, he fled. He left a number of victims in his trail, mainlythree directors of Bapindo while the head of the Bapindo branch whichhad gushed out the credit ended his life in a horrible demise in his cell: hedied with all of his body turned blue. “Since the Bapindo era to the presentMandiri the fate of our banking world has never been taken care ofproperly and professionally,” said Revrisond Baswir, an economicobserver as quoted by Suara Karya.1 Bank Dagang Bali, Bank Globaland BNI are other cases which recently let up and spread out stinkyaroma of gross violation of prudent banking principles.
BANK MANDIRI CASE:A STRUGGLE TO CREATE
A NEW BANKING IMAGE
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1 Suara Karya, May 9, 2005
THE ECONOMY
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It looks likely that banking authority, according to Baswir, is inawkward position regarding the allegedly involvement of companiesowned by some ‘big guys’ in the Bank Mandiri non-performing loan case.Coordinator Minister of Economics Aburizal Bakrie has two companies,PT Bakrie Telecom, a cellular operator, and coal mining PT Arutmin.The coal mining company got a credit of $40 million in 2003, allegedlywithout a proper feasibility study and is in dwindling financial condition.Meanwhile, the cellular company got a credit of $472 million in 2003 butlately rumor mentioned about the worsening of its performance,something the Corporate Manager Communication of Bakrie Group, LaluMara Satriawangsa, denied strongly. He pointed out that Bakrie Telecomis working normally, and has no problem with the debt payment toMandiri. Another top guy who has been linked to the Bank Madiri caseis Vice President Jusuf Kalla who is a prominent businessman and hasan affiliation to PT Semen Bosowa Maros
South Sulawesi owned by businessman Aksa Mahmud. Bank Mandiripoured as much as Rp. 1,22 trillion on the cement company in 2002. Buta close person and staff of the vice president, Alwi Hammu, denied clearlyof his boss’ doing anything with the loan scam. The loan itself is not non-performing because a restructuring process is now underway. There arealso conglomerate Bob Hasan with his PT Kiani Kertas, ex ManpowerMinister and conglomerate Abdul Latif with PT Alatif Nusa Karya andPT Lativi Media Karya. The fund received by the PT Alatif Nusa Karyain 1999 is now being restructured, and as for the PT Lativi Media Karya’sdebt of 2001 Bank Mandiri puts it in provision.2
So far Bank Mandiri’s reported non-performing loan involved 28firms—22 of which have a total of Rp. 2,2 trillion loan—and has put atoll on some. But cases of only five companies have so far been filed tothe Attorney General’s Office with a possible state loss of Rp. 1 trillion.They are PT Siak Zamrud Pusaka’s with a debt of Rp. 24.78 billion, PTLativi Media Karya’s, PT Arthabhama Textindo’s, PT ArthatrimustikaTextindo’s, and PT Cipta Graha Nusantara’s (CGN). CGN got a Rp. 166.5billion loan with a 100% provision—interesting enough to know that thedebt for CGN had been allegedly available on one-day-only process3; itslawyer, Frans Hendra Winarta, denied however and said that his clienttook three months to process the loan.4 In anyway the Attorney General’sOffice (AGO) has detained three high officials of CGN—its presidentdirector, its director, and its commissioner—as well as the presidentdirector of PT Siak, but nothing happens to the leaders of PT Lativi MediaKarya which has fallen into the same situation—a 100% loan provision.5
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2 Suara Karya, ibid
3 Ibid
4 Kompas, May 11, 2005
5 Suara Karya, loc cit
Vol. II, No. 5, May 2005 | PostScript 9
What actually happens to Bank Mandiri?It’s still too early to say something about it, pending to the ongoing
investigation by the law authorities. But around midnight of May 12,2005 a press release came up from the Director and Company’s Secretary,Nimrod Sitorus, saying that the report by the Supreme Audit Agency(BPK) on which basis the investigation founded on, mentioned aboutthe sound footing of Mandiri’s internal system albeit the need to payattention to some matters, concerning the disobedience on technicalprocedure. According to Sitorus, from 22 companies the agency audits,with a total debt of 12,2 trillion (US$1,29 billion dollars) 82.1% of whichis in performing status per December 2004. This is in accord with theresults of audits by the public accountant Ernst & Young on FinancialAccountancy Standard Principle. Bank Mandiri, he said, has beenregularly audited by public accountants, states the amount of credit itfunnels, including the bad debt and those which has to be restructured,in the ‘info memo’ during the Initial Price Offering (IPO) in 2003. “Forthis then Bank Mandiri denies the allegation that it does not pay attentionto the bad debt matters,” Sitorus said.6
AGO however had already named three top Mandiri officialsincluding Presiden Director Eduardus Cornelis William Neloe as suspectsin the reported giant state-owned bank’s lending scam. The two othersare Vice President I Wayan Pugeg and Director for Corporate BankingM. Sholeh Tasripan. The Office’s spokesman R.Jogie Soehandojo said inhis press conference on May 11, 2005, that investigators’ evaluation onwitness’ testimonies and indications found during their investigation ledthem to believe strongly that the three are connected to the process ofthe bank’s credit given to the companies which was doctored to turnedit into non-performing one even bad debt. A deliberation by theinvestigating team came to a recommendation to turn their status fromwitness to suspects. The Deputy Attorney General for Special CrimeHendarman Supandji had also requested a travel ban for the three to theAttorney General on May 10. Soehandojo pointed out that the threesuspects might be charged for offences under the Corruption EradicationLaw No. 31/1999 which stipulates a possible punishment for 4 years tolife.7 The AG decision came exactly a month after the AGO announcedon April 11 the beginning of the investigation into the likely fraud in theloan channeling by Bank Mandiri. Neloe has been summoned twice forexamination, Tasripan four times and Pugeg six times.
Soehandojo did not mention about detention but an investigatingattorney said that there still is a possibility that three might detained asof Monday, May 16, 2005. On that day the three are obliged to come tothe AGO as suspects. One of Bank Mandiri’s lawyers, MohammadAssegaff said that his clients had received the summon of May 10, but
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6 Kompas, May 12, 2005
7 Republika, May 12, 2005
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“we are surprised to see the sudden summon as suspects”, whereas Mr.Neloe had just been examined twice and had explained that the loanwas in the correct procedure. Furthermore, the summon as suspects is incoincidence with the Annual Meeting of Stakeholders. “The question is,what is this all about?”8 Coordinator of Mandiri’s team of attorneys,Sulistio, said that he was similarly surprised. He said that there was nostrong enough basis for the AGO to make the three officials suspects.The guarantee for the credit is 125% of the debtor’s loan. “So where isthe loss for the state?”9 Meanwhile in the capital market, the shares ofBank Mandiri (BMRI) had been closed 40 point stronger on the first sessionThursday, May 12, 2005, at the level of Rp. 1700. It had been correctedsomewhat and was closed at Rp. 1690, or 30 point (1.80%) stronger thanthe price at the closing time the day before.10
Soehandojo said that based on the BPK’s investigative audit AGOwould further examine in detail five other companies connected to theBank Mandiri loan. They are PT OSO Bali Ceemerlang, PT Bakrie Telecom,PT Semen Bosowa, PT Domba Mas, and PT Batavindo Kridanusa.“What’s more in it that they will examine?” said the boss of BosowaGroup, Aksa Mahmud, who is a relative of Vice President Jusuf Kalla.He said that his firm keeps paying its interest and principal.11 ErwinAksa, the vice president of
Bosowa said he was startled to hear of his company’s implication inthe Mandiri lending scam. “If it is not performed then we cannot operate.We never break Bank Mandiri,” Aksa said. According to Aksa, in 1996PT Semen Bosowa got a credit from a five-bank syndication—BankMandiri, Bank Niaga, Bank Danamon, Bank BNI and BTN—as much asRp. 500 billion on Rp. 2000 per dollar value. The firm built its factory in1997 whereas in the middle of the year the monetary crisis hit Indonesia.The debt rocketed into Rp. 1,5 trillion or three times higher and the valueof rupiah slid down into Rp. 10,000 per dollar. Compounded with therise of fuel price and the higher tariff imposed by State ElectricityCompany (PLN) then the price of cement became so much the moreuncompetitive. “It is not our fault that our debt swell three times up; theGovernment should have its responsibility too,” said Aksa. The conditionhas been forcing the company to restructure its loan, something whichwill last until 2010.12
Bakrie Telecom’s president director, Anindya Bakrie said that sincehis company got the credit it is never behind in paying its interest andprincipal. But, he emphasized that he is ready, any time, to abide by anysummon from the AGO.11. Bakrie & Brothers’—the holding company
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8 Republika, ibid
9 Koran Tempo, May 12, 2005
10 Republika, loc cit
11 Koran Tempo, loc cit
12 Republika, May 13, 2005
Vol. II, No. 5, May 2005 | PostScript 11
of Bakrie Telecom—Senior Corporate Communication Manager LaluMara Satria Wangsa in a May 12, 2005 press release to clarify the resultof the BPK and AGO meeting the day before said that so far the Rp.548,5 billion loan received by the firm on April 2003 has been performing(collectivity 1). In the meeting BPK allegedly found that there are fourmore companies implicated in the Bank Mandiri credit deviation. BakrieTelecom, Satria Wangsa said, always met its obligation to pay the interestand the principal of its loan and the audit of Ernst & Young on itscollectivity categorized it as performing. So far the company’s debt inBank Mandiri has been decreasing to Rp. 515,8 billion as a result of itsRp. 32,7 billion principal installment in 2004 with a market based interest.13
PT Domba Mas joins the protest. Domas Agrointi Prima, thesubsidiary of PT Domba Mas Group, emphasized that there is no problemto its loan to Bank Mandiri. “So far our financial situation is in goodshape. There is no obligation to pay the debt because the company hasnot yet in operation. Our deal with Bank Mandiri stipulates that westart to pay our debt after the firm has been in operation. We areastonished to hear the AGO or BPK’s decision saying about a problemwith our loan,” said Corporate Finance Manager Domas Agro DodySetiawan Widjojo last Friday (May 3, 2005).14 Domas Agro, an agro-industry company, got an investment credit of $78,95 million in 2002, tobuild a 74 hectare complex of palm oil industry in Asahan, North Sumatra.It was the factory which Domas made as collateral to Bank Mandiri,with a value of 125% to the loan. Domas also has a deal with U.S. firmProcter and Gamble to market its future product. According to Widjojo,BPK uses the September 2004 data, while the factory will be completelybuilt in 2005 and he felt that “BPK does not know the deal betweenDomas and Bank Mandiri as well as the process of the credit status.” 15
From the latter five companies, only two have been exposed: PT OSOBali Cemerlang which received Rp. 86,2 billion and PT BatavindoKridanusa with a loan of Rp. 54,05 billion. From the expose of potentialloss, Deputy Attorney General for Special Crime Supandji would seewhich one has the high potential of bad credit, and OSO as well asBatavindo have been recommended for further investigation. Let us seeabout the case of PT Cipta Graha Nusantara (CGN) which three of itstop officials—the president director, the director and the commissioner—have been put into AGO’s detention. Its lawyer, Frans Hendra Winarta,emphasized recently that his client had met all conditions for theavailability of the $18,5 million loan contract (approximately Rp. 165billion) to buy Hotel Tiara Medan, an asset of PT Tahta Medan which isan affiliate of Bank Mandiri. It took three months for its credit applicationto be okayed by the bank on January 27, 2003. CGN has also had to
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13 Republika, ibid
14 Republika, May 14, 2005
15 Republika, ibid
12 PostScript | Vol. II, No. 5, May 2005
provide a fund of its own as much as Rp. 22,5 billion to buy the stock ofBank Mandiri’s Pension Fund Foundation and PT Pengelola InvestamaMandiri in the PT Tahta Medan. “So it is not a one-day-process credit assaid in the media,” said Winarta. He emphasized that his client might bemade accountable for the fund—which he said is performing—while itspayment due date will be in 2007. Even if the loan will become a baddebt, he said, it will not become a criminal case, much less a corruptionone, but strictly a civil case.16
Controversy has been covering the reported Bank Mandiri loan scamright from the start; with a high potential of political intermingle. Somecompanies owned by big guys have denied any wrongdoing that mightcause a potential loss and non-performing loan. Two companies ownedby Coordinating Minister for Economic Matters Aburizal Bakrie (PTBakrie Telecom) and Aksa Mahmud, the deputy speaker of People’sConsultative Assembly (MPR) and himself a relative of Vice PresidentJusuf Kalla, PT Semen Bosowa Maros, have tried to put forth proofs ofthe sound operation of their firms and nothing to worry about anythingthat might lead to non-performing loans much less bad debts. Nobodyeven mentioned about the detention of Mandiri’s Neloe and two of hissubordinates. Their suspects status and examination by the officials ofthe AGO do not automatically force them to leave their directorship;their fate have been decided in the annual meeting of Mandirishareholders on Monday, May 16. Their suspect status—an evidence ofviolation of prudential banking principles. is one of leverages for the StateMinister for State-owned Companies Sugiarto to change the topmanagement of Bank Mandiri.
Sugiarto once said that he did not want any unnecessary rush befallon Bank Mandiri for the effect on banking industry in the country wouldbe enormous. He wants to catch the fish without murk the water. Evenin the present circumstances the reported loan scam has a strongpsychological impact and has made other banks extra cautious. As soonas the Bank Mandiri case sprang up some other banks have reschedulefiles of credit proposals, even do not dare to approve any credit. They allwait for the case settles down. As said by the head of Community ofProfessional Civil Society Ismed Hasan Putro the potential bad debt inBank Mandiri may reach Rp. 5 trillion to Rp. 15 trillion. So the Rp.1,3trillion loan scam that the BPK has so far uncovered, is virtually only thetip of a iceberg. There are many big companies with indications of havingpotential of non-performing loan are still roaming free. Moreover, theun-touch debtors, said Putro, are “businessmen with a very closerelationship with the power elite or those who are close to the Palace.”17
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16 Kompas, May 11, 2005
17 Republika, May 14, 2005
Vol. II, No. 5, May 2005 | PostScript 13
On the other hand, the government seems to have made itself beresolute to eradicate anything that will make bad governance. Mandiriis the biggest state-owed bank—a merge of Bank Bumi Daya, the hugeBank Dagang Negara, Bank Exim and Bapindo in the period of 1998-1999—and it striving to become one of the flag carriers of Indonesianbusiness in the world stage. At least Mandiri would be created as aregional champion bank. Therefore, since the first process of merger andconsolidation launched in 1998, business transformation and stages ofBank Mandiri had been set up to reach the target. Apart from improvingits financial performance, step by step Mandiri bettered its service. Notonly did it increase its branch offices, it also is endeavoring to have asmuch customers as possible. To accommodate the more varied andintegrated financial industries, Bank Mandiri sets up some subsidiaries,among others Bank Syariah Mandiri, AXA (insurance) Mandiri, andMandiri Securities. To achieve all of those, Mandiri needs “a strong andtough team of management, but also clean and prudent,” said MinisterSugiarto.18 It is very important for the government to make the Mandiricase as a show window of a real and firm action without any prejudicesto make a better image of Indonesian banking industry. The replacementof Neloe will be the first serious step on that direction. Bank Mandiri isjust an example which other banks are expected to follow suit.(mus)
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18 Republika, ibid
14 PostScript | Vol. II, No. 5, May 2005
Since the beginning of the year, the public has been served with theholding of congresses of major political parties in the country. Thefirst party to hold its congress was the Golkar Party in December
2004, followed by the Indonesian Democratic Party of Struggle (PDI-P)in March, the National Awakening Party (PKB) and the NationalMandate Party (PAN) in April and the United Development Party (PPP)and Star and Crescent Party (PBB) recently in May. The Democratic Party(PD), the party of President Susilo Bambang Yudhoyono (SBY) will beholding its congress soon. There is certain pattern and tendency in theregeneration of each political party. Most of the political parties thathave held its congress ended in an internal political dispute, which ledto a rivalry among the political party figures, or even the creation of anew splinter party. The internal disputes among political parties reflectthe crisis of identity and the lack of credible ideology among politicalparties in the country.
The Golkar Party elected M. Jusuf Kalla, who is also Indonesia’s VicePresident, in the party’s congress in December 2004. The party wasblanketed with an internal dispute between party members thatdemanded status quo and those who demanded former party chairmanAkbar Tandjung to step down. However, under the leadership of Kalla,the party managed to set aside the differences among cadres and haseven consolidated in order to prepare for the direct regional chiefs electionin June. An internal dispute was also evident in the IndonesianDemocratic Party of Struggle (PDI-P), with a rivalry between theincumbent group led by party chairman Megawati Soekarnoputri andthe renewal movement group led by the party’s former research anddevelopment head, Kwik Kian Gie together with party functionariesSukowaluyo Mintohardjo and Roy BB Janis. However, despite the re-election of Megawati as the party chairwoman, the internal conflict inthe PDI-P has resumed and the party is facing a break up between theMegawati group and the renewal movement group.
The condition of the National Awakening Party (PKB) is similar tothat of the PDI-P. During the PKB congress in Semarang, Central Java,in April, the party was divided into two groups between those whosupported Abdurrahman Wahid (Gus Dur) – Muhaimin Iskandar, andsupporters of Alwi Shihab – Saifullah Yusuf. The congress unanimouslyre-elected Gus Dur as the chairman of the party’s Board of Advisor andMuhaimin Iskandar was elected as the chairman of the Board of Executivethrough an election. However, the Alwi Shihab and Saifullah Yusuf group
POLITICAL PARTYINTERNAL CONFLICTS
P O L I T I C S
Vol. II, No. 5, May 2005 | PostScript 15
has rejected the result of the congress, and is planning to hold a rivalcongress in Surabaya, East Java on May 28-29, 2005. PKB official, ASHikam, stated that 1000 clerics from the Nahdlatul Ulama (NU) havebeen invited to attend the congress. The clerics are expected to provideadvice to the conflicting groups in the party, stated Hikam.1
Another party facing a split is the Star Reform Party (PBR). The partyis divided between supporters of the incumbent party chief ZaenuddinMZ and those who supported the challenger Zainal Ma’arif. ZaenuddinMZ was re-elected as the party chairman through acclamation in theparty’s congress on April 26-28, but Zainal has refused to accept theresult of the congress and has created a competing party management.
An internal conflict in the United Development Party (PPP) is alsoevident as the party is divided between supporters of the former vicepresident Hamzah Haz and Bachtiar Chamsyah, a minister in SBY’scabinet who has demanded that the party congress be carried out thisyear instead of 2007.
The National Mandate Party (PAN) elected businessman SoetrisnoBachir as its new chairman in the party’s congress on April 7-10. Eventhough former party chairman Amien Rais refused to run for partychairman, he was later appointed as the party’s Head of AdvisoryCouncil. Despite the tension in the election process of the party’sleadership board, PAN managed to keep the internal conflict low profile.
The Star and Crescent Party (PBB) is another party that managed tocontrol its internal conflict. The party held its congress on April 29 –May 1, and elected the party’s former secretary general, MS Ka’ban asthe party chairman. Former party chairman, Yusril Izha Mahendra wasappointed as the party’s Board of Advisor Chairman as he refused torun for party chairman.
Based on the congresses of the political parties, there is a certainpattern that could be observed. Political parties with a strong centralfigure and has remained to lead the political party tend to have a complexinternal conflict, such as the PDI-P with the re-election of Megawati, thePKB with Gus Dur, and the PBR with Zaenuddin MZ. On the otherhand, political parties whose central figure has stepped down manageto deal with the internal conflict and has remained united, such PAN,PBB, and Golkar. Golkar is probably the strongest party today. Chairmanof the Golkar Faction in the House of Representative (DPR), AndiMatalatta, stated that Golkar has a more qualified human resourcecompared to the other parties because it has had longer experience thanthe other parties. Furthermore, Golkar is the only party to hold aconvention for its party chairman election back in 2004. Conflictinggroups in the Golkar Party have consolidated and are preparing for thedirect district head election in June and the upcoming General Electionsin 2009.
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1 Bali Post, May 15, 2005
16 PostScript | Vol. II, No. 5, May 2005
PARTY CONGRESS RESULT
NO PARTY CONGRESS RESULT
1 Golkar Party December 16-20, 2004 Jusuf Kalla elected as PartyChairman -Golkar remains solid.
2 Indonesian March 28-31, 2005 Megawati re-elected as PartyDemocratic Party - Chairman- Party divided betweenStruggle (PDI-P) Megawati (incumbent) and
Roy BB Janis (renewal movement)
3 National Mandate April 7-10, 2005 Soetrisno Bachir elected as PartyParty(PAN) Chairman
4 National April 16-18, 2005 Abdurrahman Wahid re-electedAwakening as Board of Advisor Chairman -Party(PKB) Party divided between
Abdurrahman Wahidand Alwi Shihab’s factions
5 Star and Crescent April 29 – May 1, 2005 MS Ka’ban elected as PartyParty(PBB) Chairman- Internal conflict
solved
Another strong party that has a great potential for the 2009 electionis the Justice and Prosperous Party (PKS). Unlike other parties that areundergoing internal conflicts, the PKS seems to be very solid and strong.Deputy Director of the Centre for Strategic and International Studies(CSIS), Dr J Kristiadi, stated that unlike any other parties in the country,the PKS seems to be the only party with an ideology as a system of valuesspread throughout its cadres.2
The cause of internal conflicts in political parties is due to theimmaturity of the parties in democracy. According to Said Zainal Abidin,a lecturer at STIAN LAN in Jakarta, there are three factors that triggerinternal conflicts within political parties. First, all political parties arestill unable to carry out democracy. This condition is understandablebecause throughout its history, Indonesia’s experience with democracywas short and unimpressive. The authoritarian government in the GuidedDemocracy led by Soekarno, and the New Order have resulted in themisunderstanding of democracy among the public. The second factorthat triggers internal conflicts in the parties is the authoritarian partysystem. Even though Indonesia has applied a democratic system since1998, the administrative system of political parties remains centralistic.The third factor that causes internal conflicts in parties is the multiplepositions of the party leaders. Aside from having a position in the political
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2 Kompas, May 7, 2005
Vol. II, No. 5, May 2005 | PostScript 17
party, these party leaders also hold another position in the governmentand other state institutions. An example would be Vice President JusufKalla who also heads the Golkar Party. Chairman of the People’sConsultative Council (MPR), Hidayat Nur Wahid, was one of the figuresthat set a good example for other party chairpersons. When he wasappointed as the MPR Chairman, Hidayat stepped down from hisposition as PKS Chairman.3
Political observer from the Indonesian Institute of Science (LIPI),Sjamsuddin Haris, remarked that the internal conflicts in political partiesare triggered by political opportunism in the midst of identity andideological crises of political parties. The identity and ideology that aresupposed to keep political parties united has been replaced by individualor group political interests. Therefore, when political interests of certaingroups are not accommodated, conflicts within political parties start toappear. Meanwhile, Prof Dr Riswandha Imawan from the Gadjah MadaUniversity in Yogyakarta, shared the same opinion as Sjamsuddin, sayingthat the internal conflicts in political parties is due to the lack ofinstitutionalization of a democratic leadership mechanism among politicalparties. Riswandha further explained that political parties in Indonesiaare a group of independent community. For example, the NahdlatulUlama (NU) is the basis of the PKB, Muhammadiyah is the basis forPAN, and the urban poor community for the PDI-P.4
The internal conflicts in political parties often deal with the strugglefor position or status. The congresses held by these political parties areonly to determine the new leadership of the party. Very little about theparty’s future, as well as its vision and mission are discussed in thecongress. It is obvious that political parties in Indonesia are used as vehiclesto run for presidency or other elected positions in elections. The internalconflicts of parties only set a bad example towards the public. In general,most political parties in Indonesia are lacking ideology and facing a crisisof identity, which have caused the party to have an unclear vision andmission. Political party figures and elites have become bad role modelsfor the public and political cadres. They are too busy fighting and beingtangled in disputes only for the sake of their status, rather than developingalternative concepts to solve the stack of problems faced by thecountry.(dod)
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3 Kompas, May 7, 2005
4 Kompas, May 7, 2005
18 PostScript | Vol. II, No. 5, May 2005
The Asian-African Summit was held last April in Jakarta andBandung. More than 80 head of states attended the gathering,including the Secretary General of the United Nations Kofi Annan.
The Summit was expected not only to commemorate the Golden Jubileeof the Asian-African Conference of 1955 but also to become a greatmomentum to reinvigorate solidarity and cooperation between Asian-African countries to deal with the global challenges. These solidarity andcooperation between the two continents were reiterated on theDeclaration on the New Asian-African Strategic Partnership (NAASP)resulted from the Summit. With today’s international outlook markedby the resurgence of terrorist activities, devastating natural disasters,widening gap between the rich and poor, escalating debt and laggingdevelopment assistance, the Asian-African countries need to solve allthese problems mainly occurred in their regions. Can the NAASP beeffective enough for both continents in answering these global challenges?
Challenges for Asian-African CountriesIn the Declaration of the NAASP, Asian and African countries
acknowledged that they have attained significant political advances.1
Different from the world’s situation in the last gathering in 1955, now50 years later they have successfully combated the scourge of colonialismand consistently fought racism. As a result of the efforts over the lastfifty years, most of them are now independent, sovereign nations strivingfor the promotion of human rights, democracy, and the rule of law.
But Asian-African countries also realize that however, having madethese political gains, they are concerned that they have not yet attainedcommensurate progress in the social and economic spheres. With mostof them are developing countries, they face almost the same problemsfrom globalization that make them in vulnerable position againstdeveloped countries. Most of Asian-African countries are now strivingcontinuously to strengthen the process of their nation and state-building,as well as their social integration.
In his opening remarks of the Summit, President Susilo BambangYudhoyono highlighted poverty as the main issue for Asian-African
countries.2 He further stated that poverty is the core problem for Asian-African countries and this issue would need good governance andstrategic partnership between these two continents. Africa is the onlycontinent with increasing rate of poverty, where 40% of Sub-Saharanpeople live with income less than one US dollar per day. Asia also hassome regions whose people live in extreme poverty. Furthermore, almost25 millions people in Africa and 7.5 millions people in Asia have fallenvictims to HIV/AIDS. Millions of them lack access to clean water,adequate education and health services. It becomes worse when the factshows there have been many conflicts within Asia-Africa region. Inaddition to that many countries in these regions also struggle in the effortto create good governance.
Even though formally most of the Asian African countries are nowindependent, many adherents of the globalist school of thought havecriticized that most Asian-African countries—which are mostlydeveloping states—have not yet really liberated from colonialism. Today’scolonialism takes the forms of economic control, intellectual and culturalcolonialism. In economic sphere, most of developing countries in Asiaand Africa are now struggling to defend their rights against neo-liberalparadigm used by the developed countries. Through the InternationalMonetary Fund (IMF), the World Bank and World Trade Organization(WTO), these developed countries try to export their free market valuesinto developing countries, but due to structural causes, rather than givingeconomic welfare to these developing countries, neo-liberalism hascreated a wider gap between North and South.
We have seen how developed countries forced developing countriesto open their market for their products but not vice versa. Developingcountries have to follow the Structural Adjustment Programs made bythe IMF for liberalization, privatization and deregulation. Instead ofhelping the development of these developing and poor countries, neo-liberalism—through its MNCs as its main supporters—has helped inincreasing the debt of these countries, from US$ 9 billions in 1955 to US$572 billions in 1980 and more than US$ 2200 billions in 1998.3 Most ofdeveloping countries, especially in Africa, are trapped in a huge debt tothese international financial institutions. They already have difficultiesin fulfilling the needs of their people and the debt problem has made iteven worse.
In security sphere, we still have to admit that there are still manyconflicts occurring in some Asian-African countries. The conflicts areusually “civil war” in nature. They arise within the boundaries of a singlestate, as in Rwanda, Bosnia, Kosovo, East Timor, Sudan/Darfur, theCongo and Afghanistan. Each present a different set of circumstances
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2 Kompas, “Kemiskinan, Tantangan Utama Asia-Afrika”, 23 April 2005.
3 As quoted by Maria Hartiningsih, “Menyilakan Penjajah Memasuki Pintu Rumah”, Kompas, 20 April 2005.
20 PostScript | Vol. II, No. 5, May 2005
and conditions, but all require the world’s attention. As for Africa, it is apity to note that the world has put less attention to problems in thiscontinent rather than other part of the world. It seems that issues suchas poverty, the spread of HIV/AIDS, and armed conflicts betweencountries are still considered as low politics issues needing only limitedattention.
Toward an Effective Strategic Partnership?Would this NAASP be effective enough to handle all these issues?
Even though the Summit has produced the Declaration containing nineprinciples in furthering cooperation between the two continents towardsa New Asian-African Strategic Partnership, it still lacks concrete andcomprehensive strategies to address the pressing issues. For example, alldelegations of the Summit agreed that they have a common problem indealing with liberalization prescribed by the IMF or WTO in openingtheir markets, but they did not come up with any solutions or detailedstrategies for settling this issue. They could have urged for debtrescheduling or proposed other options to solve their unaffordable debts.They could have tried to create a mechanism how to deal with issuessuch as poverty, HIV/AIDS, or any other considered low-politics issuesin cooperation with the UN.
As Roeslan Abdulgani said, at the moment, it is difficult to buildsolidarity between Asian-African countries.4 Today’s political context isso much different from 50 years ago and Asian-African countries arefragmented and busy with their own internal problems. Asian-Africancountries have no power to get out from debt trap to the internationalfinancial institutions such as the IMF, WTO and MNCs. The number ofAsian-African countries has also increased to about 100 nations sincethen. This has resulted in increasing ideas and interests to beaccommodated. Instead of becoming a union, this could be a stumblingblock for having a united voice for Asian-African and make each countryprefer to have its own way in addressing the issue.
Rather than becoming an effective forum, the recent Asian-AfricanSummit seems to have become a nostalgic event. Indeed, there was adeclaration aimed for a new cooperation between the two continentsbut it still lacks concrete strategies that made it merely as a talking shop.The countries of these two great continents should be aware of the needto foster closer cooperation amidst the challenges of globalization, andprovide more concrete strategies in the follow-up meetings. Otherwise,the billions of rupiah of taxpayers’ money would just be wasted.(end)
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4 Cited from Kompas, “Solidaritas di Antara Negara Asia-Afrika Saat Ini Sulit Digalang”, 18 April 2005.
Vol. II, No. 5, May 2005 | PostScript 21
IntroductionOver the last fifteen years, Indonesian piracy has moved from the
remote backwaters to newspaper front pages, and even to internationaldialogues on regional security. After 9/11 the spotlight has not justfocused on multilateral approaches to deal with the transnational natureof piracy, but also the familiar nature of potential maritime terroristattacks. But putting together an effective sustained international effortto address the problem of maritime security in the region has provendifficult and controversial, as the interests of the different stakeholdersin the Malacca straits, as well as the different aspects that have to beconsidered when dealing with this topic, are controversial1. Therefore itis indispensable to analyze the current situation with having regard forall stakeholders with their interests, including the regional historical andcultural background.
The Current SituationAs the world’s largest archipelagic state with about 17.000 islands
and with an entire coastal longitude of approximately 54.700 kilometers,Indonesia is a very important maritime state and can be called thestrategic maritime heart of Southeast Asia2. The immense longitude ofIndonesian’s entire coastlines together with its territorial sea and exclusiveeconomical zone complicates controlling and providing maritime security,
which is essential for seafaring in general and for maritime transportationand global trade in particular. About 95% of worldwide goods exchangeis handled by shipping. According to the United Nations Conference onTrade and Development (UNCTAD), the estimated quantity of goodstransported at sea is about 5.8 billion square tons of raw materials andgoods worth several trillion US$3. Therefore, piracy is said to cost theworld economy about 25 billion US$ per year. Southeast Asia is a hotspotfor piracy, with more than half of all attacks worldwide taking place inthe region, most of them in Indonesian waters4.
The Malacca Straits as one of the busiest shipping lanes worldwideas well as the Singapore Straits, the Java Sea, the Makassar Straits, theCelebes Sea and other important sea lanes belong partly or completely tothe territorial waters of the Indonesian Archipelago. The Malacca Straits,as well as the rest of Southeast Asian waters and the South China Seaare traditionally areas of high piracy activity. After primary improvementin Indonesian waters in the nineties, the number of attacks steadilyincreased. This increase correlated with the political development of thecountry. After the Asian monetary crisis and the abdication of longtimepresident Soeharto in 1998, the number of pirate attacks in Indonesianwaters increased from 47 cases in 1997 to 115 cases in 19995. Comparedto 28 attacks in the Malacca Straits and 121 attacks all over Indonesia,reported by the International Maritime Bureau (IMB) in 2003, attacks inthe Malacca straits reported in 2004 increased to a number of 37 whilstattacks reported in Indonesian waters dropped. Nonetheless, with 93incidents in 2004, Indonesia accounts for more than one quarter ofpiratical attacks worldwide and continues to be the scene of the highestnumber of attacks.
The reasons for the high number of attacks in Indonesian waters areas diverse as are the socio, cultural, and political aspects of this countryof paradoxes. A high number of pirate attacks are accredited to seafarersthat earn little money with their everyday job, like crewmembers, taxiboat drivers or fisherman. Fishermen mostly suffer from a decrease inincome caused by illegal fishing and shrinking fishing resource inIndonesian waters. With piracy, those seafarers practice a veryunconventional and illegal way of incidental earning. Well-organizedand even well equipped criminal gangs that get access to strategicshipping data by improving the official’s income commit a smaller, butgrowing number of pirate attacks. Beyond a present lack of political andsocial stability, Indonesia’s corruption is in bloom, regardless to the
___________________________________
3 Michael Stehr, Piraterie und Terror auf See - Nicht-Staatliche Gewalt auf den Weltmeeren 1990 – 2004, Hans Krech, Bewaffnete
Konflikte nach dem Ende des Ost-West-Konnfliktes, Volume 16, Dr. Koester, Berlin, August 2004 (1 st ed.), p. 1.
4 Navy Hunts for Pirates, Laksamana.net the Politics and Economics Portal, Mai 16th 2005: http://www.laksamana.net/
vnews.cfm?ncat=48&news_id=7991 .
5 Herrmann, Sicherheitspolitische Bestandsaufnahme Südostasiens, in: Erich Reiter (publisher), Jahrbuch fuer internationale
Sicherheitspolitik 2000, Hamburg 2000, p. 52 (53).
Vol. II, No. 5, May 2005 | PostScript 23
government’s anti-corruption efforts. A missing social responsibility insociety and politics prevents efforts in stopping the growth of the gapbetween rich and poor, culturally according to a hierarchical statusmandated by destiny. Individuals in Indonesia, and not just those withfamine wages, are fighting on their own for a better and wealthier lifefor themselves and their families or clans. On this account, the existenceof piracy, gun running, narcotic/human trafficking and other Grey AreaPhenomenon (GAP) is not a miracle. Port authorities do not only improvetheir incomes by giving information about cargo, position and the coursesof certain vessels to organized pirate gangs, they also allow pirates tooperate with impunity. Apart from “rogue elements” within theIndonesian navy that aid Pirates in exchange for bribes and kickbacks,6
some of them are suspected to commit piracy attacks themselves as wellas customs officers and coast guards.7
At the same time, Indonesia is desperately in need of a boost inmaritime security budget and capabilities. Indonesia’s defence budgethas averaged less than 1% GDP, which means less than 2 billion US$ foran archipelagic nation of about 240 million diverse people charged withdefending some of the most important Sea Lanes of Communication(SLOCs) in the world. The 2003-2004 Military Balance lists a possible 65surface combatants including frigates, patrol boats and minecountermeasure ships. It notes that the overall serviceability of the wholefleet is low.8 According to the Economist, “the cash-strapped Indonesianavy has perhaps 20 seaworthy patrol boats, to guard an archipelago of17.000 islands.”9 On a positive note, the country is known to havepurchased a small number of patrol boats for its marine police in 2004. Itcould be concluded that the reason for the low maritime securitycapabilities is that halting piracy has never been a priority for Indonesiaand a threat by maritime terrorism is such a new phenomenon that moststates have not yet formulated plans to defend it. Moreover, there arecompeting priorities for the county’s limited maritime capabilities. Thepirate problem had been neglected for some time, as the authoritiesfocused on fighting against smuggling. As another problem, the smallIndonesian fleet tries to fight illegal fishing that costs the country billionsmore per annum than piracy does and it does not occur in the samegeographic area.10
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6 Editor Laksamana.Net, Trouble on the Borders, cit. James Frances Warren, 16. Mai 2005, http://www.laksamana.net/
vnews.cfm?news_id=4432 .
7 (a) Pohl, Piraterie in Südostasien – ein Gewerbe mit staatlicher Unterstuetzung?, in: Erich Reiter (publisher.), Jahrbuch
fuer internationale Sicherheitspolitik 2001, Hamburg 2001, p. 849
8 Christopher Longton (Ed.), The Military Balance 2003-2004 (London: The International Institute of Strategic Studies,
2003).
9 Economist Staff Writer, “Going for the jugular; Shipping in South-East Asia.” The Economist Newspapers Ltd. 12 June
2004.
10 Barrett Bingley, Security Interests of the influencing States: The Complexity of Malacca Straits, The Indonesian Quarterly, Vol.
32, No. 4, p. 362. (866); (b) Stewart, Piraten. Das organisierte Verbrechen auf See, Muenchen June 2004, p. 157.
24 PostScript | Vol. II, No. 5, May 2005
Despite these capabilities, Indonesia does not seem to recognize anynecessity to gravely combat piracy. Indonesian government officialsconsistently debate the IMB reports in the numbers of pirate incidents inits waters, arguing that the problem is far less than the IMB makes it out.Indonesian officials tend to refer to piracy as a fact of life and as a part ofthe region’s culture that became common law (menurut adat) in someareas over the last 2500 years. Due to the fact that former regional piratesamongst others attacked and marauded Spaniard vessels just as the Dutchand the British East India Companies fleets and deprived the colonialistexploiters of their goods, they are revered as heroes that fought againstcolonialist exploitation,11 regardless to their real motivations. Piracy inthe Southeast Asian region, indeed, became a traditional way of makingmoney during the course of time, but seriously that is not a reason totolerate this form of present-day transnational crime in order not to beobliged taking social and legal actions to prevent and to combat it. Interms of policy, piracy, terrorism and maritime security have never beena core issue for Indonesian voters, and consequently not for Indonesia’spoliticians who tailor their influence methods accordingly.12 Calling theattention to the piracy issue means facing an additional challenge thatwill demand social and legal responsibility from the Government. Giventhat the Indonesian government contemporarily faces several domesticpolicy challenges, extra and unpopular missions hardly seem to fit in thepresent agenda.
The Stakeholders With Their InterestsSome of Indonesia’s East Asian and Southeast Asian neighbours that
have been and that currently are affected by piracy in East Asian andSoutheast Asian waters, including the Straits of Malacca, tried to addressthe problem for some time now. Japan, the world’s second largesteconomy,13 had to experience big losses caused by piracy over the lasttwenty years. Japan’s merchant fleet perforce has to pass the South ChinaSea and the Malacca Straits, trading with western nations. Until 1999,the South China Sea was also known as highly dangerous waters forvessels passing China’s coasts on their way west or the other in theopposite direction. Within 5 years, 66 Japanese merchant vessels carryingvaluable cargo had been attacked, most of them in this area.14
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11 Interview with Author, 18.04.2005.
12 Barrett Bingley, Security Interests of the influencing States: The Complexity of Malacca Straits, The Indonesian Quarterly, Vol.
32, No. 4, p. 362.
13 Embassy of the United States, Japan, 16. Mai 2005, http://tokyo.usembassy.gov/e/p/tp- 20050421-05.html .
14 Stewart, Piraten. Das organisierte Verbrechen auf See, Muenchen June 2004, p. 404.
Vol. II, No. 5, May 2005 | PostScript 25
Japan was actually one of the first countries to attempt to deal withpiracy. Understandably, Japan met a square refusal with its first patroloffer in the South China Sea and Southeast Asian waters by all littoralstates, having regard to Japan’s role as a militant aggressor in the region’shistory. The heydays of contemporary well-organized piracy in the SouthChina Sea, with its main base in Xiamen in the province of Fujian, cameto an end in 1999.
In view of its planned entry to the WTO, China’s central governmentin Beijing finally took rigorous steps to stop piracy and to eliminatecorruption in the province of Fujian.15 Regarded from an interculturalperspective, China’s actions against nuisance have not been provokedby foreign pressure, they have been the result of the country’s ownrecognition of necessity. The western countries in particular should takeinto account that, when dealing with international affairs in Asia, anation, represented by its government, would want to save its face. Thiscan also be seen as one reason why the ASEAN declared non-interferencein the internal affairs of the Member States as a fundamental principle.Probably China’s drastic measures have generated a shift of the piracyproblem to neighboring waters because the numbers of attacks inIndonesia increased in the following years, but this observation is notscientifically proven.
After the situation in the South China Sea improved, Japan triedapproaching Malaysia and Indonesia about the possibility of conductingjoint patrols in the Straits of Malacca. Japan was rebuffed several timesand forced to consider alternatives to its own troops patrolling the Straits.For a while, Japan was also thinking about buying icebreakers forchanging the route to the Arctic Ocean. In June 2004, Japan againindicated it would be seeking to influence Indonesian decision-makingon the Straits of Malacca issue by pledging assistance in the form offacilities and infrastructure. 16
Singapore is obviously the only littoral state that intends to collaboratewith Japan. “Foreign Minister Nobutaka Machimura and SingaporeForeign Minister George Yeo agreed to work to spearhead efforts forsafeguarding major waterways in the region from piracy,” a Japanesegovernment official said. Machimura and Yeo, who met on the sidelinesof the Asia-Africa Conference in April in Jakarta this year, shared theview they should cooperate to convince countries that are lukewarm tojoint anti-piracy plans to join the effort, the official said. (Kyodo News)17
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15 Stewart, Piraten. Das organisierte Verbrechen auf See, Muenchen June 2004, p. 405 – 427.
16 Barrett Bingley, Security Interests of the influencing States: The Complexity of Malacca Straits, The Indonesian
Quarterly, Vol. 32, No. 4, p. 377-378.
17 Japan Today, Japan, Singapore to tackle piracy, 15 Mai 2005, http://www.japantoday.com/e/
?content=news&cat=2&id=334865 .
26 PostScript | Vol. II, No. 5, May 2005
Singapore is the littoral state that depends most of all on maritime securityin the Straits, as the smallest littoral state is one of the world’s largestports with 800 and some 150.000 containers inside its ports on any givenday. Because it is primarily a trading nation with the Malacca Straits asa trade lifeline, Singapore is also greatly concerned about piracy.“Singapore played an active role in the drafting of the RegionalCooperation Agreement on Combating Piracy and Armed Robberyagainst Ships in Asia (ReCAAP) to be signed by 16 Asian countries.”18
The Information Sharing Centre (ICS), which is a key pillar underReCAAP, will be based in Singapore. This Centre wants to provide moreaccurate reports of incidents of piracy and armed robbery against shipsin the region.
Approximately half of the Malacca Straits lies in Malaysian territorialwaters, which makes the third littoral state one of the key players talkingabout maritime security in this very important SLOC. Malaysia is amaritime trading nation and at the same time the 10th largest tradingpartner of the United States. Malaysia and the US signed a trade andinvestment framework agreement (TIFA) aimed at breaking down tradebarriers and increasing trade between the two nations.19 Thus the MalaccaStraits is becoming even more important for Malaysia economically whichmeans that piracy is a significant issue for Malaysia. But also Malaysia’sprimacy of untouched sovereignty has always been a motivation to attendto the security problem in the straits and to welcome multinationalcooperation as long as they do not involve a compromise in sovereignty.
Except from governments, Multi-National-Companies (MNCs), ship-owners, transportation companies, and banks and insurance companiesfrom industrial countries build another group of stakeholders that isinterested in a safe and secure transportation of goods and raw materialslike oil and gas in almost all important sea lanes of communicationworldwide. This group of stakeholders can be called the commercialstakeholders. They are affiliated with each other by a similar interest inefficient, safe and secure seafaring and maritime transportation whichaccrues from the interest in maximizing profit through global productionand global trade, additionally also resulting in national economical growthfor some countries.
The IMB, a specialized division of the International Chamber ofCommerce (ICC) is a non-profit organisation, established in 1981 toprotect the integrity of international trade by seeking out fraud andmalpractice, spotting new criminal methods and trends, and highlightingother threats to trade.20 Therefore, the IMB can be regarded as the
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18 Singapore Ministry of Foreign Affairs Press Release, “Remarks in Parliament by Singapore 2nd Minister for Foreign
Affairs Mr Lee Yock Suan on Piracy in the Malacca Straits,” 11 March 2004; http://app.mfa.gov.sg/sections/press/
report_press.asp?3765 .
19 Ibid.
20 The International Chamber of Commerce, division Commercial Crime Services, International Maritime Bureau,
organisation of the commercial stakeholders. Up to now the IMB is, beyondthe UN’s International Maritime Organization (IMO), the best-knowninstitution providing detailed weekly and annual piracy reports andstatistics as well as information about piracy prone areas and warnings.Government and defence officials of some countries demur thatinsurances and shipping company owners finance the IMB. Moreover,the accuracy of the IMB’s reports on piracy and armed robbery is criticizedto “report even the theft of a screwdriver from board of an anchoringship as an act of piracy”. 21 Critics expect more accurate data from theReCAAP Information Sharing Centre that will soon be established inSingapore.
Terrorism / More StakeholdersAfter the attacks on September 11th 2001, American and other
Western officials are worried about worldwide security at land, at seaand in the air. The discussion about a potential threat by maritime terroristattacks in the Malacca Straits as one of the world’s most important SLOCsand the need of maritime security improvement in the Straits of Malaccaand other important choke points are contemporarily main issues ofseveral regional and international maritime and/or security conferences.As if the piracy issue in the Malacca Straits would not have been aromping place for stakeholders so far, the terrorist threat posed as amagnetic issue to some more interest groups. Worse case scenarios ofterrorists that destroy ports with LNG tanker-bombs or block the entireStraits by sinking a ship at a vital choke point made some other countriesaware of their high dependency on this sea-lane.
The Strait of Malacca and the Strait of Singapore, linking the IndianOcean with the South China Sea, are the shortest and thus mostimportant trading lanes between Asian nations on the one hand and theNear East, Africa and the western nations on the other hand, andtherefore are considered to be the key choke points in Asia. According toadmiral law, those straits are international shipping lanes passing throughoverlapping territorial waters, which can be passed unhampered bymerchant ships as well as warships. The over-900-km-long Malacca Straitis a maritime bottleneck with less than 3 km width at its narrowest point,the southern entrance to the so-called Phillip Channel between thesoutheastern shore of Sumatra and Singapore22. With more than 50.000vessels a year, a quarter of the world’s trade and half of its oil pass throughthese very important waterways23. Eighty percent of Japan’s and sixty
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21 Interview with Author, 11.02.2005.
22 Felix Heiduk, Kai Moeller, Maritimer Terrorismus in Suedostasien und die Regional Security Initiative, Diskussionspapier der
FG 7, SWP Berlin, July 1 st 2004, p. 3.
23 Shipping in South-East Asia, Going for the jugular, From The Economist print edition, Singapore, June 10th 2004, 16 Mai
percent of China’s oil imports pass through the Straits of Malacca,whereupon the volume of China’s oil imports are rising proportionallyto its increase in productivity and economical growth24. The situation issimilar for South Korea and Taiwan.
As a consequence of continuing growth of Asia’s economies, trafficin Southeast Asia’s most important sea-lanes will inevitably continue togrow in quantity and importance. Additionally, other neighbor stateshighly depend on merchant shipping. Hong Kong’s container harbor isthe one handling most cargo worldwide, followed by Singapore,Shanghai and Shenzen25. Obviously in any case that would make shippingin the Malacca Straits impossible, even for a short span of time, vesselswould have to take other, longer routes that would cause an increase inprices of oil, goods and raw materials which will be a significant amount.Therefore it definitely would cause a dramatic disruption of global trade.
The Malacca straits issue as well as the high number of piracy acts inthe Southeast Asian region became definitely internationally prominentafter U.S. Admiral Thomas Fargo proposed deployment of Special Forcesto combat terrorism in April 2004. With this menace the US affected themaxim of sovereignty of the littoral states Malaysia and Indonesia. Eventhough Singapore would have appreciated support from its powerfulally, the answer of the other littoral states was clear. The agreement fromJune 2004 to improve joint patrols in the Malacca Straits was necessaryto show that the littoral states are willing to face the security challengein the Straits in order to maintain the sovereignty of their territorialwaters. Thailand, meanwhile, has come up with a scheme to bypass theStrait of Malacca altogether. The government originally toyed with theidea of building a canal through the narrow Isthmus of Kra, which wouldcut over 1,000km (620 miles) off the sea route from the Middle East toJapan. But, now, it is pushing a cheaper alternative: a “land bridge”consisting of oil and cargo terminals on either side of the isthmus,connected by pipelines, roads and railways. In addition to the benefits interms of security, the scheme could cut between 40 and 60 cents perbarrel off the cost of shipping oil to East Asia. A sensible enough idea—were it not for the fact that southern Thailand is grappling with terroristtroubles of its own.26 China tried to make a counter patrol offer in June2004 in an “Asian Ally Manner”, but it received the same answer to itsapproach. Although US intelligence services have no evidence that heavilyarmed pirates attacking fishing vessels and other traffic in the vital sea
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24 Felix Heiduk, Kai Moeller, Maritimer Terrorismus in Suedostasien und die Regional Security Initiative, Diskussionspapier der
FG 7, SWP Berlin, July 1 st 2004, p. 4.
25 Michael Stehr, Piraterie und Terror auf See - Nicht-Staatliche Gewalt auf den Weltmeeren 1990 – 2004, Hans Krech,
Bewaffnete Konflikte nach dem Ende des Ost-West-Konnfliktes, Volume 16, Dr. Koester, Berlin, August 2004 (1 st ed.), p. 59.
26 Shipping in South-East Asia, Going for the jugular, From The Economist print edition, Singapore, June 10th 2004, 16 Mai
lane have ties with terror networks in Southeast Asia such as JemaahIslamiah (Jl),27 the development in the region should be observed carefully.What makes piracy significant is its highlighting of how vulnerableshipping is to violent groups regardless of motivation or ideology andhow current law enforcement methods are inadequate to address thischallenge.28 Social inequity, even though or maybe especially when it isbased on culture and status, combined with an extreme gap betweenrichness and poverty makes it more easy for terrorists to gain new recruits.
ConclusionThe stakeholders in the Malacca Straits and other important sea-
lanes in the South East Asian region is everyone with economic and/orstrategic interests in this sea area, including the pirates. In the turmoil of“legal stakeholders” who try to represent their specific interests and tostand up for them, who try to put themselves into economical, politicaland strategically favourable positions, most of them seem to forget whatit is all about. It is about pirates. And why does piracy exist? Piracyexists because nuisance exists. Different from well organized,international operating crime gangs with their ringleaders fillingrespectable positions in the region’s capitals within their normal courseof life, the main fraction of attacks in Indonesia can be accredited tonormal seafaring man who search to improve their incomes.
The most important point, which is mostly overlooked by “legalstakeholders”, is that the pirates themselves are not at first criminalelements, but also stakeholders with economical and strategic interestsin their everyday income and surviving. A closer look at the causes andthe nature of piracy would make the measures more efficient. Thecapability of the Indonesian western fleet is poor and, indeed, has to beimproved to guard the main coasts of the archipelago. But to extirpatethe pirate problem, governmental action and responsibility for the fateof its people is needed. Looking away and tolerating the grievance aswell as the existence of piracy will not make the problem disappear.
Piracy is an existing problem in Indonesia and according to the effortsof the several stakeholders listed above, its existence and consequencescannot be downplayed even if the IMB is blamed for countingscrewdrivers. One reason for neglected law enforcement for pirates inIndonesia seems to be a kind of compensation of non-existent socialresponsibility. Members of intelligences, authorities and officials knowwhere pirates live and why they pirate. Very likely pirates will continueas long they won’t get jobs, as long as they will not have anything else to
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27 Barrett Bingley, Security Interests of the influencing States: The Complexity of Malacca Straits, THE INDONESIAN
QUARTERLY, Vol. 32, No. 4, p. 367.
28 Barrett Bingley, Security Interests of the influencing States: The Complexity of Malacca Straits, THE INDONESIAN
QUARTERLY, Vol. 32, No. 4, p. 358-359.
30 PostScript | Vol. II, No. 5, May 2005
do and as long they will be idle. That is why navies and governments,NGOs and profit companies have to make global efforts in order to preventthe worsening of the situation. Help by patrol-offers, assistance in theform of facilities and infrastructure, and information sharing, will improveIndonesia’s level of defence, but it also means that there is no officialgovernmental help provided by stakeholders to improve the social system,including education, directed to address the causes of the problem.Consequently Indonesia’s government has to face its responsibility forits people as well as for the security in its territorial waters. Fighting thecauses of piracy, corruption and other excrescences of neediness is a bigchallenge, but it will be more efficient and even more sustainable ratherthan fighting the symptoms.
Vol. II, No. 5, May 2005 | PostScript 31
DISCUSSION
Moderator:One of The Habibie Center’s concerns is the development of
democracy in Indonesia. Democracy and democratization is a longprocess, and it does not only occur in developed countries, but also indeveloping countries, such as Indonesia. I agree with the statement sayingthat the reform in 1998 is a fundamental change for Indonesian politicsand we can say that the reform could be reflected as a re-democratizationfor Indonesia. Today we present three speakers to discuss democratizationin the U.S. and Indonesia in a comparative perspective, namely AlvianMuthalib, Charles Silver and Irman G. Lanti.
Alvian Muthalib (AM)We will first see how democratization appears in the U.S., and use it
as our guide and see how the U.S. is still making changes and adjustingits liberal democratic system. The ideology of democracy originates fromthe Anglo Saxon Protestant race, which first arrived in the U.S. Theyfought for their British citizenship rights that were suppressed by theUnited Kingdom. This struggle has sparked a revolution and has liberatedthem. After a long process this struggle has made the country aninternational superpower in the early 20th century. In the words ofMadeleine Albright, America is the indispensable nation you cannot livewithout.
If we observe carefully, we can see a critical change of democracy inthe U.S. political structure. It is interesting to know that the culture ofthe Americans is not derived from the native population. Instead, it camefrom Greek, Middle Eastern, and especially European culture. It is actuallya shift of culture, which is then adapted to the surrounding condition.One of the concepts that have influenced Americans during this period
Report on DiscussionDEMOCRATIZATION IN THE U.S. AND INDONESIA:
BETWEEN HOPE AND REALITY
Thursday, April 28, 2005Speakers: Alvian Muthalib (American Studies, Indonesian University)
Charles Silver (Counsellor for Public Affairs, U.S. Embassy)Irman G. Lanti (Senior Fellow, The Habibie Center)
Moderator: Siti Zuhro (The Habibie Center)
32 PostScript | Vol. II, No. 5, May 2005
was from the ancient Greeks, who introduced secular humanism. Asidefrom other strong concepts, there are actually individual factors fromthe European culture that have been developed in the U.S. This however,has created a problem, because when the U.S. Constitution was draftedin 1787, individual rights were not included. Therefore, it is wrong tosay that American institutions protect human rights. This is actually thestart of democratization, because starting from this point, the anti-federalist group began fighting for individual rights and was laterincluded in an amendment. This is the most essential point of democracyin the U.S. political system, where individual rights are included andthere are limitations on the state to interfere with the personal lives ofAmericans.
The U.S. foreign policy is no different from the basic values mentionedabove, which are individualism, democracy and capitalism. Whoever iselected as the president of the U.S. must fight for these ideologies.
Charles Silver (CS)Many people think that Indonesian is not at all like the U.S. However,
allow me to focus on several issues, and specifically observe the challengesfaced by leaders in creating and maintaining a democratic, prosperousand united nation. First, the distance between Sabang and Merauke isalmost the same as the distance between Los Angeles and Boston. Thechallenge is how to unite this vast and extensive distance. One of thesolutions is to develop land, air, and water transportation and its facilities.
The second issue in diversity. There is a similarity in the motto of theU.S. and Indonesian. The motto is Bhinneka Tunggal Ika for Indonesia,and E Pluribus Unum for the U.S., which means unity in diversity. Thisslogan reflects the reality in each country, which is comprised of differentcommunities and regions that have different backgrounds, histories andtraditions. The challenge for both the U.S. and Indonesia is how to unitethe various communities that exist in the two countries. The languagecommonality, which is the Bahasa Indonesia for Indonesians, is one of thefactors that unite the different communities. Many of you might besurprised to know that English is not the national language of the U.S.We do not have a national language. With the increasing number ofSpanish-speaking immigrants from South America, we are wonderingand discussing about the need for a national language. However, themost important issue is how to keep a nation united and how to dealwith separatism.
Another aspect of diversity is religion. America is a very religiouscountry. The percentage of Americans that regularly carry out religiousservice is larger compared to people in European countries. The U.S. isprobably the country with the largest religious diversity in the world,because all major religions exist in the U.S. However, we do not knowthe exact number of people of a certain religion because the U.S.
Vol. II, No. 5, May 2005 | PostScript 33
population census forbids questions relating to religion. In fact, there isonly one sentence in the constitution about religion.
Establishing a country from so many aspects always creates a seriesof urgent political problems. Does a country have to have a strong centralgovernment? Or does the power still remain in the regional level? Shouldthe country be a union or a federation? What happens if a certain regionhas more population than other regions? These are some of the questionsthat appeared in uniting the 13 native colonies in the U.S. Several colonieshave a more dense population compared to other colonies. In order tosolve this problem, a compromise is made by creating two institutions,one provides parliamentary seats based on the number of populationand the other provides equal number of seats for each state in the union.
Last year, Indonesia held its general elections, which involved variousinstitutions in the regional level. In the past Indonesia has implementedthe federal system, unitary state system, the constitution and many others.Now, Indonesia is carrying out another experiment by implementingthe local autonomy.
The most important thing is how to deal with the challenges facedby each of our two countries. We are convinced that the best way tosolve problems is through democracy that respects the rights of all thepeople and guarantee that their voice would be heard. In a democraticstructure, there are many possibilities that every state could developaccording to their own structure. A lesson from democracy is that agovernment will not last unless it pays attention to the people’saspirations. I would like to end this presentation by quoting WinstonChurchill who said that “democracy is the worst form of government,except for all those others that have been tried.”
Irman G. Lanti (IGL)Indonesia is a unique country because it is one of the few post colonial
countries that have adopted a governing system that is different from itsprevious colonial government. Indonesian adopted the presidentialsystem, while the colonial government of the Dutch was a parliamentarysystem. Many neighboring countries have adopted the governmentsystem of its colonial powers, such as India, Malaysia, Singapore andthe Philippines.
According to B.J. Habibie, our founding fathers were influenced bythe Declaration of Independence. In fact, based on several versions, theterm Bhineka Tunggal Ika (Unity in Diversity), which is Indonesia’s sloganwas a literal translation from E Pluribus Unum. Therefore, there areactually many things that Indonesia has adopted from the U.S. We cansee that in the reform era, the creation of the House of RegionalRepresentatives (DPD) and the House of Representatives (DPR) is amechanism which emulates the American two chambers of the Congress:the senate and the house.
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The democratic structure in the U.S. is elitist, which depends onpolitical elites. This is evident in the use of Electoral College in the U.S.presidential election. In 2000, the election of President George W. Bushas president actually indicates this elitist nature. In that election, GeorgeW. Bush actually lost in the popular vote, but won in the electoral college.Therefore, many people who criticize George W Bush often say that “hewas not even elected by most of the people”. At that time, most of thepeople voted for Al Gore. This has sparked a debate on the U.S. electoralreform.
Most of the people in the U.S. are anti-politics. The voting turn out inthe U.S. rarely exceeds 50 percent. On the other hand, the voting turnout in Indonesia has always reached around 80 - 90 percent. However,this does not mean that the people in Indonesia are so much into politics.It is just an indication that many Indonesians consider the elections as a“democratic fiesta” rather than a serious political action.
As for the substance of democracy in the U.S., we can see that ittends to be egalitarian, which is the culture of the immigrants that madeup the vast majority of the U.S. population, who are mostly traders andpeople of the lower class that tended to create an egalitarian culture.The combination of an egalitarian culture and a high economicdevelopment has resulted in a creation of a civic culture. Therefore, thepeople are completely aware of their rights and responsibility and donot ‘obey’ the government. This means that the people can say ‘no’ tothe government but still abide by the law.
If the U.S. has an egalitarian culture, then Indonesia has a mixedculture that includes an egalitarian culture, and also a feudal culture.When this mix enters the national politics, it could become problematic.How could a feudal and hierarchical culture be compatible with anegalitarian culture? This is made worse by the backward economiccondition in Indonesia. Therefore, there is no civic culture in Indonesia.But our political structure is more advanced democratically in Indonesia.Our president was elected through popular vote, which means that everyvote counts, whereas in the U.S. the president can be elected even thoughthe majority of the people do not vote for him/her.
So, the condition in the U.S. is reverse from the condition in Indonesia.The U.S. has a more democratic culture while lagging behind in itsdemocratic structure. In Indonesia, the structure is more establishedcompared to the culture.
According to Samuel Huntington in his book Third Wave ,democratization could start and democracy could be adopted withouthaving to wait for the development of the community. He rejects theolder approach to democracy that says that democracy can only beestablished if some requisites are met. These requisites include certainlevel of economic development. But according to Huntington, it wouldbe hundreds of years for democracy to be achieved if it must wait for thecommunity to reach a certain level of development. He argues thatdemocracy could be adopted through a pact between elites. Therefore,
Vol. II, No. 5, May 2005 | PostScript 35
democracy does not have to wait for the community to become affluentor rational. But Huntington has been criticized. One of the criticism saysthat while it is true that the old authoritarian regime and can be replacedby a more democratic regime, consolidation of democracy is much moredifficult to achieve in societies where the requisites of democracy are notmet. This is the case in Indonesia. Democracy in Indonesia is thus veryHuntingtonian. Hence, all the problems that we face with our democracynowadays are the symptoms of a Huntingtonian democracy.
QuestionQ: My name is Theophilus Bella, and I am an observer of democracy.
I hope that with the development of democracy in Indonesia, Churcheswill not be burn, Chinese Indonesians would not be discriminated against,and the conditions in the country would improve. However, there is oneweakness in democracy, relating to the use of money in democracy.During elections, only wealthy people are able to carry out campaignsthroughout the country. I would like to ask for clarification on how todeal with the use of money in democracy.
Q: The campaigns during the election in the U.S. is very detailed,starting from issues concerning insurance, education, health, defense andothers. Meanwhile, the campaign in Indonesia is only filled with promisesfrom the candidates, and these promises are never fulfilled. Thecommunity may be aware of democracy, but sometimes the parliamentmay not. How will democracy develop if the political elites are notdemocratic?
Q: Is it possible for our presidential system to separate the head ofstate and the head of government? How could the U.S. establish its capitalcity in Washington D.C., a small town that is not the center of economy?What are the requirements to move the center of politics to anotherlocation?
ANSWERAM: It is not possible to compare democracy in the U.S. and in
Indonesia. The U.S. has a community that is multi-cultural and multi-ethnic. Meanwhile, Indonesians are not aware of multi-ethnicity. TheU.S. comprises of various races and it acts as a melting pot for theseraces. These various races are forced to adapt to the U.S. mainstream inorder to survive in the U.S.
A democratic country is not based on cooperation and solidarity.There is no solidarity in the U.S. I have a regret of why our foundingfathers gave a great right to control to the state. This has caused Soekarnoto lead for 20 years and Soeharto for 39 years. The constitution is a conflictmanagement, and this is what we do not have in ours. It seems like ourfounding fathers are a little skeptical of western models, and have createdtheir own experiment.
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CS: The U.S. history reflects several realities because the U.S. consistsof various states. When the U.S. was first established, several states couldbe divided into two large cluster of states, which is the north and south.There are two institutions, two houses. There was slavery in the south,and the population was dense in the north. However, the southern stateslater refused to sign an agreement, which states that the capital of theU.S. be centered in the north. As a result, a compromise was madebetween the north and south and they established a capital in WashingtonDC, which is located in a border area between north and south.
As for political parties, there are no parties. The founding fathersdid not want any parties. However, with the advent of federalism andanti-federalism movements, two political parties naturally appeared,which eventually became the Republican and the Democrat parties. Therewas also the federalists, but was later replaced. There is always a thirdor other parties in American politics, but they are never too essential.
IGL: Regarding money politics, the U.S. is actually the center ofmoney politics in the world. If we observe during the election year, theflow of money used for the campaign may be greater than our nationalannual state budget. The expenses would be used to buy air time ontelevision channels, rallies, and other campaign activities. The onlydifference is that in the U.S., the fund received from the business sectorand the individual contributions must be reported. Actually, this is thesame as the requirement of the General Elections Commission (KPU) inIndonesia; however, there have been many tricks in last year’s election,such as donations from fictitious companies.
As for the KPU, I have previously explained that our democraticstructure is more developed than our democratic culture. Ourpresidential election system is more advanced than the U.S. presidentialelection system. We have been able to carry out a truly direct electionwhere individual vote counts. It is not the same as in the U.S., whereactually Al Gore won the popular vote but Bush still became presidentbecause it was determined by the electoral college. Therefore, in terms ofstructure, democracy in Indonesian is more advanced than the U.S.
As for political parties, it is not a problem whether a party is locallyor nationally based. What is important is the substance of the party. TheDemocratic and Republican parties are operating in all states in the U.S.,but the party chiefs and political figures in the regional level also makedecisions. For example, Bill Clinton, Ronald Reagan, and George W. Bushwere all governors previous to being elected president.
The Habibie Center is founded by Bacharuddin Jusuf Habibie andfamily, as an independent, non-govermental and non-profit organization.Our vision is to promote the modernization and democratization ofIndonesian society based on the morality and integrity of sound culturaland religious values. And the missions:
First, to establish a structurally and culturally democratic society thatacknowledges, honors and promotes human rights, as well as to studyand advocate issues in the development of democracy and human rights.
Second, to promote and advance effective human resourcesmanagement and the socialization of technology.
The mission serves as a platform for the strategic development of TheHabibie Center's agenda in Democracy and human rights, Humanresources in science and technology, Media and information, Maritimeresources, Socialization and dissemination of technology, Networking andcooperation.
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The logo consists of four pillars depicting the fundamentals of The HabibieCenter, namely:
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The four pillars form an integrated, harmonious, compatible dynamicand progressive ensemble that sits on a foundation of religion - the beliefin God the Almighty. The logo serves to describe the objective of the Center;to develop and achieve a self-sustainable, just and democratic society thatis grounded on religion and culture.
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