World Bank report estimated that at 20-30% of Indonesian government development funds were diverted through informal payments to personnel and politicians WHY DPR DPRD /MPR/ MAHKAMA AGUNG.ETC STILL CORRUPT?NO ONE REALLY CARE ABOUT NATIONAL DEBT?WHO IS REALLY OWN INDONESIA?WE ALL KNEW THE MASTER THE DUTCH IS GONE.AND WE ALWAYS SAY MERDEKA?MERDEKA TO FOR WHAT?………………………WHATEVER.

WHAT WASTE OF SPACE………………………………………………………………………..

Indonesia—the world’s fourth most populous country
—is undergoing a devastating political and economic
crisis that continues unabated after the forced resignation
in May 1998 of President Suharto, the Army
general who ruled the country for three decades.
This Southeast Asian country—whose more than
14,000 tropical islands span a geopolitically strategic
3,000-mile zone—has become the subject of daily
headlines covering its economic meltdown, human
rights abuses, and man-made ecological disasters.
Observers predict that Indonesia will remain a “black
hole” economically, politically, and strategically for the
next decade.
The Suharto regime’s legitimacy—based on high
economic growth and backed by repressive military
force—crumbled with the economic crisis, which since
July 1997 has wiped out thirty years of material gains.
Public revelations of severe human rights abuses by
the military have discredited that institution and
spurred public demands for an
end to the military’s
controversial dual function
role, which gives the armed
forces authority in political
and social affairs. Throughout
1998, links between the
military and systematic rapes,
disappearances, torture, and
extrajudicial killings have been
brought to light.
As the Berlin Wall’s collapse
signaled communism’s demise,
the circumstances of Suharto’s
departure in should have
tolled a death knell for
the kind of unaccountable,
nontransparent, and nonparticipatory
approach to
economic development and
nation-building that his New Order regime pursued.
Suharto promoted economic growth through large-scale
exploitation of the country’s abundant natural resources
and low-wage labor. His political, social, and economic
policies were geared toward consolidating central government
and military control from the village to the
national level. His regime fostered destructive internal
migration and inter-ethnic and religious violence.
Indonesia’s collapse starkly exposed the failure of this
development model.
High-level official corruption, cronyism, nepotism, and
a disregard for the rule of law have caused abuse of
human and worker rights and unchecked ecological
destruction while enriching Suharto, his family, and his
associates. A 1997 World Bank report estimated that at
least 20-30% of Indonesian government development
funds were diverted through informal payments to
government personnel and politicians, while a high
level of “leakage” went to the ruling political faction,
GOLKAR, and senior government officials.
Government policies and programs, many of them
supported by international donors, have undermined
local self-reliance and destroyed community social
safety nets, leaving millions more vulnerable to hunger,
disease, and dispossession. By and large, government
actions have not achieved food security, sustainable land
use, improvements in health and education, respect for
human rights, accountable and transparent governance,
an independent judiciary, or other key components of
sustainable development.
Indonesia’s growth rate has plummeted from an annual
average of 7% to a projected negative 15% for 1998.
The rupiah’s current value relative to the U.S. dollar is
only 25% of what it was in June 1997, with annual
inflation at 80% and a fifth of the work force unemployed.
The threat of famine is manifest, with an estimated
89 million people subsisting on one meal per day
and half the population (100 million) living below the
poverty level.
Indonesia’s new president, B.J. Habibie, Suharto’s
protégé and vice president, has taken notable steps
regarding human rights in his attempt to establish
reformist credentials: some political prisoners have been
released, the media is more free, and government
bodies have been ordered to end discrimination based
on ethnicity, religion, and other factors. Electoral
reforms are in progress to pave the way for new legislative
elections leading to the selection of a president by
late 1999.
But these measures do not adequately address the
underlying structural problems that have brought about
Indonesia’s collapse and have fostered public outrage.
Habibie’s lack of public credibility—domestically and
internationally—and the consequent absence of stable
government are fundamental factors in the continuing
economic crisis. Popular demonstrations have begun
again in Jakarta, this time calling for the prosecution of
Suharto and for Habibie either to lower food prices or
to step down.
The smooth passing of authority from Suharto to
Habibie was not a revolution. It remains unclear
whether changes in Jakarta equal real reform or whether
the same oligarchic, corrupt system of government will
continue with a new, less repressive face.
Key Points
• Indonesia’s recent economic and
political collapse is a stark example
of the outright failure of a
development paradigm promoting
large-scale economic growth without
political, social, legal, and
environmental safeguards.
• Indonesia is facing a humanitarian
and environmental crisis that current
domestic and international efforts do
not adequately address.
• The Indonesian government has not
established a reform process that is
broadly inclusive or focused on
resolving deep, structural concerns.
Indonesia After Suharto
By Abigail Abrash, Robert F. Kennedy Memorial Center for Human Rights
Vol. 3, No. 34 • November 1998
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For three decades, the U.S. supported the Suharto
government’s pursuit of high economic growth and
national unity without democratic political participation,
accountability, and transparency. Until Indonesia’s
economic collapse, the IMF, World Bank, and donor
countries such as the U.S. ignored the government’s
repressive practices while consistently identifying
Indonesia as a model of economic development success.
The U.S. is now without a clear, well-established policy
for encouraging a peaceful political transition and
essential structural reforms.
U.S. policymakers, fearing the complete disintegration
of Indonesia as a nation-state, have been slow to
consider alternatives to the current Jakarta-dominated,
military-backed governance structure. A participatory
political process, involving all Indonesia’s provinces and
sectors of society on an equal footing, may be the only
means short of brute force of keeping the country
together. Such a process—like the constitutional
congresses that have occurred in other countries ending
dictatorship or colonial rule, and incorporating a truth
and reconciliation component—would allow Indonesia’s
diverse ethnic and religious communities to
exercise self-determination and would serve as an
important foundation of legitimacy for other necessary
economic, political, and legal reforms.
In the last few years, the U.S. has correctly sought to
strengthen Indonesian civil society organizations
through U.S. Agency for International Development
funding, and these groups have also benefited from new
diplomatic and practical support from U.S. embassy
and other administration officials. Yet the U.S. has
provided far greater financial, strategic, and political
support to sectors that maintain the political and
economic status quo in Indonesia: the government, the
military, and the corporate sector.
For years, the U.S. refused to suspend Generalized
System of Preferences import tariff reductions for
Indonesia despite the Indonesian government’s crackdown
on unions and its failure to implement worker
rights guarantees required to qualify for these trade
benefits. The U.S. also sponsored development projects,
trade delegations, and other economic measures that
benefited Suharto and his cronies, while promoting
industries such as pulp and paper that are strongly
linked to human rights and environmental abuses.
Today, the IMF, with U.S. backing, is struggling to push
through a $42.3 billion bailout package, which
threatens to worsen social and environmental conditions
and is failing to stabilize the economy. As of
October 1998, international financial institutions had
commenced disbursement of more than $7 billion in
bailout funds, despite the Indonesian government’s
repeated failure to comply with their conditions. U.S.
and World Bank officials admit there are no guarantees
that much of the money will not disappear into private
coffers or that aid distribution will not be controlled by
the military as a means of justifying its involvement in
civilian affairs.
Indonesian civil society leaders cite the heavy debt
burden the IMF bailout will place on ordinary citizens,
and they question the effectiveness of pumping billions
of dollars into a corrupt and unaccountable governance
structure. Meanwhile, economists engaged in designing
the rescue package have looked narrowly at the financial
indicators of the Indonesian economy, without paying
due diligence to the social and environmental impact
that these economic policy reform measures will have.
For example, with assistance
and encouragement from the
World Bank and the Asian
Development Bank (ADB),
Indonesia has since the early
1990s become a leading
exporter of palm oil. Yet, as
noted in a December 1997
report by Senator Max Baucus
(D-MT), illegal land clearing
by companies establishing
palm oil plantations was largely
responsible for the massive
1997 forest fires that
destroyed an area of rainforest
the size of Maryland and New
Jersey. These fires sent smoke
across six countries and caused
an estimated $4.4 billion in
damages to health, trade,
and transport.
Palm oil and other agricultural plantations, mining,
logging, and corporate aquaculture projects have also
been characterized by coercion, fraud, and force
exercised by the government, the military, and companies
to the detriment of local communities.
Dispossession of people from their lands has destroyed
social safety nets. Military involvement in land disputes
has moved beyond commonplace intimidation and
harassment to severe human rights violations such as
torture, disappearances, extrajudicial killings, and rape.
These policies and actions have seriously undermined
civilian support for both Indonesian sovereignty
and international donor assistance and are therefore
contrary to U.S. interests.
Key Problems
• Washington has consistently
supported the ruling corporate elite,
the military, and the status quo,
failing to balance concerns about
human and worker rights, the
environment, and sustainable
development with U.S. perceived
economic and security interests.
• The U.S. has been slow to envision
and implement a post-Suharto policy.
• The U.S.-backed international
financial bailout threatens to saddle
Indonesians with a heavy debt
burden while exacerbating negative
social and environmental conditions.
Problems With Current U.S. Policy 2
Indonesia’s economic crisis and political reform process
offer an opportunity to establish respect for human and
worker rights and the rule of law, governmental transparency
and accountability, increased local autonomy
and political participation, and expanded communitybased
management of natural
resources. Indonesians from
diverse sectors strongly and
publicly support these fundamental
changes and are calling
for an end to rampant corruption
and military dominance
in civilian life.
As a long-time supporter of
Indonesia’s status quo and a
primary backer of the international
bailout of its economy,
the U.S. is in position to
encourage peaceful political
development and genuine
rights-based reforms. Washington
can take targeted
actions, consistent with efforts
by members of Indonesia’s
civil society, to bring about the needed reforms.
Specifically, the U.S. should do the following:
•Continue to recognize publicly that Indonesia’s economy
cannot improve without political reform.
•Use all appropriate leverage to urge restraint by the
military in handling civil unrest.
•Strongly support expanded political participation and
greatly enhanced local autonomy, including full respect
for the rights of indigenous communities to ownership
and management of customary lands.
•Publicly condemn disappearances, torture, rape, arbitrary
detention, and extrajudicial killings of prodemocracy
activists, staff of nongovernmental organizations
(NGOs), and other civilians, particularly Papuans in
the territory of Irian Jaya and women and girls of
Chinese descent; investigate any connection between
U.S. military training of the Indonesian armed forces
and these abuses; and join with other donor countries
to call for comprehensive, independent, and impartial
investigations into these cases, the release of those
detained in contravention of international law, and the
prosecution of those responsible.
•Oppose additional bailout disbursements and other
financial support unless funds are tied to independently
verified Indonesian government compliance with
World Bank operational directives and other social and
environmental regulations and conditions.
•Insist that the bailout process be more transparent,
participatory, and accountable.
•Urge IMF officials to: 1) ensure that any further assistance
agreements are fully debated in the Indonesian
parliament and structured so as to enable civil society
to exercise control over the use of the funds; 2) ensure
that privatization plans for plantations and other holdings
include and benefit local communities originally
dispossessed of those lands; and 3) publicly announce
which institutions and individuals will manage IMF
funds in order to aid civil-sector monitoring and discourage
•Channel humanitarian aid through established and
accountable civil organizations, including NGOs and
religious groups.
•Support reform measures, including: 1) repeal of the
five political laws of 1985, the Anti-Subversion Law,
and other laws used to restrict political freedom; 2) free
and fair elections; 3) establishment of direct election of
the president, the national parliament, and regional
and local representatives; and 4) an end to extraordinary
presidential powers (MPR Decree 5/1998).
•Support reform of the military’s role in Indonesian
society, including an end to military involvement in:
land disputes, the establishment and protection of natural
resource-use operations, and other purported
development projects.
•Urge the Indonesian government to: 1) respect freedom
of expression, assembly, and association; 2) adopt
all necessary measures to guarantee both the safety of
human rights defenders and their freedom to operate;
and 3) ratify international human rights instruments,
in particular the International Covenants on Civil and
Political Rights and Economic, Social, and Cultural
Rights as well as the UN Convention Against Torture.
•Support consideration of Indonesia’s human rights situation
by the UN Working Group on Disappearances,
the Special Rapporteur on Torture, the Special
Rapporteur on Violence Against Women, and the
Working Group on Arbitrary Detention, which is slated
to visit Aceh, Irian Jaya, and East Timor in 1999.
•Urge Indonesian authorities to: 1) implement planned
troop withdrawals in Aceh, Irian Jaya, and East Timor;
2) open these areas to independent human rights monitors;
and 3) proceed, in coordination with Papuan civil
society, with the announced National Dialogue on
Irian Jaya.
Finally, U.S. companies operating in Indonesia should
adopt verifiable codes of conduct and the use of best
practices to ensure respect for human and worker rights,
environmental protection, and financial accountability.
Governments and consumers in the U.S. should
encourage this through selective purchasing and investment.
Governments should also legislate country-oforigin
and content labeling of imported forest products.
Successful political reform—in fact, the cohesion of the
Indonesia—depends on the government taking concrete
steps to ensure respect for human rights. This includes
establishing a high-profile plan for constructively
engaging with community leaders and other representatives
of civil society to resolve problems resulting from
decades of a centralized “security approach” to promoting
development and maintaining national unity.
Abigail Abrash is Program Director for Asia and the
Middle East at the Robert F. Kennedy Memorial Center for
Human Rights.
Key Recommendations
• The U.S. should use its leverage to
urge restraint by the Indonesian
military in handling civil unrest.
• Washington should support a process
of reform based on enhanced
political participation, expanded
regional autonomy, and a national
reconciliation process.
• The U.S. should exercise leadership
in ensuring that multilateral loans are
tied to verified Indonesian
government compliance with social,
environmental, and good governance
Toward a New Foreign Policy 3
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Indonesia: Stability and Unity on a Culture of Fear,
Asian Forum for Human Rights and Development
(Forum-Asia), Bangkok, Thailand, August 1995.
International NGO Forum on Indonesian
Development (INFID) statement, May 7, 1998.
Eyal Press, “The Soeharto Lobby” and related
articles, The Progressive, May 1997.
U.S. House Committee on International Relations,
Subcommittee on International Organizations
and Human Rights, Hearing on Human Rights in
Indonesia (Washington, DC; May 7, 1998).
Indonesia Daily News Online
Jendela Indonesia: Indonesian periodicals
KITLV Library: Daily Report of Current Events
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