Indonesia/East Timor News Updates - January 2, 2009
===================================================

* Mediocre prosecution sees ex-spy walk free
* Muchdi's acquittal, 'worst New Year gift'
* Yudhoyono vows vows to solve murder case after 
ex-spy's 
* Killer on loose?
* PKS rally snarls Central Jakarta
* Muslims in Bali demand US stop Israeli aggression
* Domestic violence on the rise in South Sumatra
* LBH slams government, Lapindo for sloppy response
* Elections will boost economy: SBY
* Foreign investors dominate Indonesia stock market
* Timor shift defied advice

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Mediocre prosecution sees ex-spy walk free

Jakarta Post - January 2, 2009

Dian Kuswandini, Jakarta -- Former top spy Maj. 
Gen. (ret) Muchdi Purwopranjono walked free on 
Wednesday after a court found him not guilty of 
masterminding the 2004 murder of noted human rights 
activist Munir Said Thalib.

In response, assistant attorney general for general 
crimes Abdul Hakim Ritonga promptly said 
prosecutors would appeal the much-decried verdict.

The prosecution, which had sought a 15-year prison 
sentence for the former State Intelligence Agency 
(BIN) deputy chief, has 14 days in which to file an 
appeal, he added.

The South Jakarta District Court acquitted Muchdi 
of all charges of soliciting and premeditating the 
murder, and ordered prosecutors to release him from 
detention immediately.

"The defendant has not been proven legally and 
convincingly to have ordered and planned the 
murder," presiding judge Suharto told the packed 
courtroom. "The court will thus restore the 
defendant's rights in relation to his dignity and 
moral status."

The ruling was greeted by hundreds of Muchdi's 
supporters chanting the national anthem, while 
hundreds of Munir's supporters shouted in anger at 
Muchdi. A scuffle almost broke out, which police 
managed to defuse by dispersing the crowd.

The prosecution failed to prove Muchdi had 
recruited former Garuda pilot Pollycarpus Budihari 
Priyanto to kill Munir, the panel of judges ruled.

Munir was found dead from arsenic poisoning on 
board a flight from Jakarta to Amsterdam on Sept. 
7, 2004. Pollycarpus was later sentenced to 20 
years in prison for the murder.

"Despite the evidence of call data records (CDR) 
that show calls made between the defendant's and 
Pollycarpus' phone numbers from Sept. 1 to Sept. 
30, 2004, there is no other data to prove it was 
really the defendant who made the calls," judge 
Haswandi said.

The judges added prosecutors also failed to clarify 
the defendant's motive for murdering Munir.

Prosecutors alleged Muchdi killed Munir out of 
revenge for the latter's role in leading an 
investigation into the abductions of 13 activists 
by special army forces under the command of Muchdi 
in 1997 and 1998. Muchdi was discharged from his 
prestigious post following the probe.

"The prosecution only based this motive on the 
testimony of Munir's wife, Suciwati, but was unable 
to demonstrate the defendant's sense of revenge," 
Haswandi argued.

---------------------------------------------------

Muchdi's acquittal, 'worst New Year gift'

Jakarta Post - January 2, 2009

Abdul Khalik and Dian Kuswandini, Jakarta -- The 
acquittal of former top spy Maj. Gen. (ret) Muchdi 
Purwopranjono of all charges in the murder of human 
rights activist Munir Said Thalib has incensed 
rights activists and observers.

They said the verdict, handed down Wednesday by the 
South Jakarta District Court, insulted the people's 
sense of justice and gave credence to public 
perception that the country's legal system and law 
enforcers, including police, prosecutors and 
judges, lacked credibility.

"It is the worst New Year's gift from law enforcers 
to the people in their struggle for justice and 
human rights," rights group Pijar Indonesia said 
Thursday in a statement. "The verdict threatens the 
country's human rights defenders by implying you 
can walk away after killing them," it added.

The court decision has buried the truth of the 
mystery behind Munir's murder, in which the 
judiciary was expected to uncover a "political 
conspiracy" involving the State Intelligence Agency 
(BIN), Pijar said.

Setara Institute executive director Hendardi said 
the ruling preserved the legal impunity of certain 
officers in Indonesia, particularly military 
generals accused of rights abuses. "We can see 
clearly the judges were under political pressure 
from those who wanted the case closed," he said.

Munir's widow, Suciwati, who was a witness during 
the trial's last hearing, expressed shock at the 
verdict, saying she and Munir's supporters would 
immediately go to the National Police headquarters 
and the Attorney General's Office to discuss the 
next steps to take.

"I have already lost my husband, and now I lost 
justice. The outcome is being watched by the 
international community to see how seriously 
Indonesia enforces the rule of law," she said, her 
voice quivering with emotion.

"This is very painful. Something that I feared has 
now come to pass. Today's ruling proves that 
Indonesian justice still sides with human rights 
abusers."

Usman Hamid, a prominent rights activist and a 
close friend of Munir's, slammed the "poor 
prosecution" as one of the reasons for Muchdi's 
acquittal.

He cited prosecutors' failure to present tapped 
conversations between Muchdi and Pollycarpus 
Budihari Priyanto, who was sentenced to 20 years in 
prison for the murder, during the trial to 
strengthen their case against the defendant.

"I don't understand why they didn't present the 
voice records. We witnessed how scared the 
prosecutors were during the trials," said Usman, 
who chairs the Commission for Missing Persons and 
Victims of Violence (Kontras), founded by Munir.

Kontras also expressed disappointment at 
prosecutors' failure to view the Munir case as a 
conspiracy, thus resulting in a missing link 
between Pollycarpus and Muchdi.

This turned the focus of the investigation on 
Muchdi as an individual, particularly his motive 
for murdering Munir, thus blocking out the alleged 
involvement of other suspects, Kontras said.

Presidential spokesman Andi Mallarangeng said 
President Susilo Bambang Yudhoyono would summon 
National Police chief Gen. Bambang Hendarso Danuri 
and Attorney General Hendarman Supandji for 
clarification of the case and verdict.

Muchdi, a former BIN deputy chief, was released 
from detention on Wednesday evening, and later held 
a charity event to show his gratitude for the 
verdict. "(The ruling) is a present for Indonesia," 
he said.

Muchdi, currently deputy chairman of the Greater 
Indonesia Movement Party (Gerindra), has long 
claimed he was a "victim of foreign intervention" 
in the Munir case.

His lawyer, Wirawan Adnan, said the defense team 
would sue Suciwati, Usman and other activists, 
including Hendardi and Poengky Indarti, for 
dragging Muchdi into the case.

---------------------------------------------------

Yudhoyono vows vows to solve murder case after ex-
spy's acquittal

Financial Times - January 2, 2009

John Aglionby in Canggu and Taufan Hidayat in 
Jakarta -- Susilo Bambang Yudhoyono, Indonesia's 
president, has vowed to uncover the orchestrators 
of the murder of one of the country's most 
prominent human rights activists after a former 
senior spy was acquitted of planning the crime.

Muchdi Purwoprandjono, a former Indonesian deputy 
intelligence chief, was found not guilty on 
Wednesday of charges that he assigned an agent to 
poison Munir Thalib, who died on a flight to 
Amsterdam in September 2004. The murder and the 
willingness of authorities to investigate it has 
become a barometer for accountability and the rule 
of law in democratic Indonesia, where many of 
former dictator Suharto's former elite remain 
influential.

Andi Mallarangeng, a presidential spokesman, said 
Mr Yudhoyono, a former Suharto-era general, was 
committed to solving the killing of Munir and would 
summon the police chief and attorney-general to 
prepare the best way forward.

"The president's instruction to the police and the 
prosecutor's office is that they must solve this 
case and bring those responsible to trial," Mr 
Mallarangeng said.

Mr Yudhoyono is under pressure to bring the 
perpetrators to justice because he made it one of 
his pre-election promises in 2004. Indonesians go 
to the polls in April and July in legislative and 
presidential elections respectively.

Usman Hamid, who replaced Munir as head of the 
Commission of Missing People and Victims of 
Violence, said after Wednesday's verdict: "Today 
the judiciary failed to deliver justice and that 
means not only did the president's authority fail 
but also Indonesia has not passed the test of 
history."

The acquittal of Mr Muchdi will also test Jakarta's 
ties with several foreign nations, particularly the 
US, who have said the failure to convict the 
mastermind behind Munir's murder would harm 
relations with Indonesia.

Munir died of arsenic poisoning on a Garuda 
Indonesia flight from Singapore. Pollycarpus 
Priyanto, a former Garuda pilot, was sentenced last 
January to 20 years in prison for lacing Munir's 
drink at Singapore's Changi airport.

Indra Setiawan, a former Garuda chief executive, 
was jailed for a year the following month for 
falsifying letters authorising Mr Pollycarpus to 
travel on Munir's flight.

Mr Muchdi is the first two-star general or senior 
intelligence official to have been tried in a 
civilian court. Under the Suharto regime, which 
ended in 1998, the security forces were virtually 
untouchable. This trial had been seen as a test of 
how far accountability has progressed in the last 
decade.

Prosecutors alleged Mr Muchdi's motivation for 
ordering Munir's murder was the latter's unveiling 
of human rights abuses, including the abduction of 
13 rights activists in 1997 and 1998.

---------------------------------------------------

Killer on loose?

Jakarta Post Editorial - January 2, 2009

The gavel was struck three times in the courtroom 
on New Year's Eve, after the former intelligence 
deputy was pronounced a free man. The good name of 
Muchdi Purwopranjono, charged of masterminding the 
murder of a prominent activist, must be restored in 
full, a member of the panel of judges said amid the 
din and shouts of those who rejoiced, and those who 
despaired.

Now we're virtually back to zero -- who killed 
Munir? He was found dead aboard a Garuda Airways 
flight en route from Jakarta to Amsterdam, where he 
was to study law. "I'd better study now, before I 
turn 40," he told this newspaper shortly before 
departing on that fatal day -- Sept. 7, 2004.

Instead, at 39, he died of arsenic poisoning, found 
to have been administered by a friendly off-duty 
pilot who offered him orange juice. The pilot, 
Pollycarpus Budihari Priyanto was found guilty, but 
was later acquitted by the Supreme Court. He is now 
in jail for using a forged letter of recommendation 
from the State Intelligence Agency (BIN) that 
enabled him to join Munir's flight as part of the 
airline's security staff.

Finally, investigations resumed and Muchdi was 
brought to trial, implicated through his alleged 
frequent contacts with the pilot and his role in 
formulating the letter of recommendation for the 
CEO of the national carrier.

But on Wednesday the judges of the South Jakarta 
district court said none of the evidence presented 
in court was strong enough; the former pilot 
responded by saying that he would immediately enjoy 
his freedom again. "All the reasons cited for 
jailing me are the same reasons for charging 
Muchdi," Pollycarpus was quoted as saying shortly 
after the end of Muchdi's trial.

Wednesday's verdict must be respected, as Munir's 
close associate Usman Hamid said, "but it is 
difficult to accept." Following the verdict, his 
widow Suciwati said that, "I have lost Munir and 
now I have lost justice."

We support Munir's family and friends in further 
pursuing justice, by attempting to hold to account 
whoever is responsible for Munir's assassination. 
When the Supreme Court has its, the final, say, it 
is anyone's guess how it will decide, given that 
the lower court basically treated all presented 
proof as circumstantial evidence.

It will be up to legal experts to debate whether 
indeed the state prosecutors did their job, or 
whether more willpower and insight on their part 
would have probed beyond what they alleged was 
merely Muchdi's personal motivation of revenge 
against Munir.

Munir's case, as suggested earlier by President 
Susilo Bambang Yudhoyono, was, and is, a test case 
"on how much Indonesia has changed."

Munir and his colleagues intensively pursued cases 
of "state violence" -- violence involving the state 
apparatus and/or state institutions -- including 
the kidnapping of activists towards the end of 
Soeharto's rule, for which members of the special 
elite forces of the army, then led by Muchdi, were 
found guilty. Therefore prosecutors looking into 
Munir's murder looked for motives within the circle 
of security forces and their sympathizers.

But the pilot and the former intelligence deputy 
said in their defense that the charges were 
ridiculous. Moreover, a crucial witness, Muchdi's 
superior, then intelligence chief Hendropriyono, 
did not appear in court.

At the dawn of 2009, we therefore have no answer 
yet on "how much Indonesia has changed" for victims 
of violence, particularly at the hands of the 
state, nor concerning a citizen's safety and 
freedom from fear. In court, Muchdi's supporters 
wore T-shirts warning us of "foreign intervention". 
But we fear more for the safety of civilians here, 
with or without foreign interference.

As the case has not been put to rest, the ordinary 
civilian would still have to ask themself: Is it 
safe for a civilian critical of the powers that be 
to board state-run public transport? How secure are 
people working on sensitive cases involving 
security forces?

---------------------------------------------------

PKS rally snarls Central Jakarta

Jakarta Post - January 2, 2009

Jakarta -- Thousand of Prosperous and Justice Party 
(PKS) members from across Greater Jakarta staged a 
rally at the Hotel Indonesia traffic circle in 
Central Jakarta on Friday, causing traffic tie-ups 
around the area.

Kompas.com has reported the rally has held up 
busses and cars coming into the major intersection 
from the south.

Central Jakarta Police have deployed 500 officers 
to keep the peace and regulate traffic. They have 
already confiscated three containers containing 
sound systems and have both a water cannon and a 
paddy wagon in case rioting occurs.

During the rally, demonstrators set out blue 
donation boxes so passers-by could contribute.

PKS chair Tifatul Sembiring said the party 
condemned Israel's air raid attacks on Hamas in the 
Gaza Strip and urged all Muslims to join the fight 
against Israel. "We have to unite. If we don't, we 
will have failed," he said during the rally. (ewd)

---------------------------------------------------

Muslims in Bali demand US stop Israeli aggression

Jakarta Post - January 2, 2009

Hundreds of people in Bali staged a rally in front 
of the US Consulate in Denpasar on Friday demanding 
that country exercise its influence to stop Israeli 
attacks on Palestinians.

State news agency Antara reported those joining the 
rally were mostly Muslims living on the 
predominantly Hindu island and also sympathizers of 
the Prosperous Justice Party (PKS).

The rally began at the governor's offices then set 
off on a 1-kilometer march to the consulate. During 
the march protesters sang an Indonesian national 
song, "Maju Tak Gentar" (Press on bravely), while 
carrying banners bearing slogans such as "Free 
Palestine", "Stop Israeli Predators" and "Boycott 
Israeli Zionists".

The protestors also asked for donations from rally 
onlookers. They said the money would be used to 
fund humanitarian aid in Gaza. The rally went 
peacefully, but there was no response from the 
consulate siunce officials were still on their New 
Year's holiday. (and)

---------------------------------------------------

Domestic violence on the rise in South Sumatra

Jakarta Post - January 2, 2009

Khairul Saleh, Palembang -- Violence against women 
in South Sumatra rose dramatically in 2008, from 
396 cases in 2007 to 568 cases, a year-end report 
from the Palembang chapter of the Women's Crisis 
Center (WCC) has revealed.

WCC Executive Director Yeni Roslaini Izi said on 
Wednesday that cases of domestic violence topped 
the list, with 210 incidence (39 percent), compared 
to 201 in 2007; followed by sexual harassment with 
100 cases (18 percent, up from 24 cases in 2007); 
child molestation with 69 cases (12 percent); rape 
with 61 cases (11 percent) and 47 sundry cases.

Reports of human trafficking, however, dropped to 
81 cases (14 percent) from 89 in 2007.

Of the 210 domestic violence cases, abuse against 
housewives topped the list with 169 cases, followed 
by 20 cases involving housemaids, 14 cases 
involving children and seven incest cases.

The data was derived from reports filed at the WCC 
as well as from references from other institutions, 
such as hospitals, legal aid institutes and police 
stations.

However, only 60 percent of the cases were brought 
to justice and resolved psychologically; of these, 
domestic violence and trafficking cases were the 
least prosecuted.

"We have received an increasing number of 
complaints from the public," Yeni told The Jakarta 
Post.

She added that only a small number of the cases 
were brought to court thanks to her group's role as 
mediator and facilitator. Generally, victims are 
less eager to bring the cases to court, especially 
those which took place years ago.

"They consider it taboo and shameful if the cases 
are brought to court because they would be exposed 
to the public. In trafficking cases, usually pimps 
and middlemen are sent for trial," she said.

She added that the drop in human trafficking 
reports did not indicate that cases of trafficking 
had dropped but more likely that victims were 
reluctant to report the cases or had fallen under 
the radar of her organization.

Trafficking cases in South Sumatra did not only 
take place transnationally but also domestically, 
between regencies and provinces, she said.

Among the underlying factors are poverty and desire 
for consumer items among teenage girls, which makes 
them easy targets for pimps and middlemen.

"Parents should not be easily lured into allowing 
their daughters to work in cities. They must be 
sure about the agency or company recruiting their 
daughters," she said.

Yeni also cited lax supervision of recruitment 
procedures for migrant workers among relevant 
agencies in South Sumatra and the malfunction of 
state-run training centers as problems that lead to 
the exploitation of migrant workers.

"The training centers tend to only carry out their 
obligations without ensuring quality. Many training 
programs do not comply with the types of work they 
would engage in at their countries of destination," 
Yeni said.

Yeni urged the provincial administration and 
legislature to take strong measures and ensure the 
immediate passage of an ordinance on violence 
against women next year, so various approaches on 
resolving the cases could be achieved due to the 
allocation of funds for the purpose from the 
government.

"Such matters are included in the law, but can be 
facilitated by the provincial administration by 
setting aside funds through a local ordinance," she 
said.

South Sumatra legislator Fatimah Djaiz affirmed the 
ordinance would be approved by August 2009 at the 
latest.

The legislature is currently deliberating on the 
draft bylaw and by involving related parties, such 
as non-governmental women's groups, to discuss the 
draft ordinance. "We will fully support the passage 
of the bylaw," said Fatimah.

---------------------------------------------------

LBH slams government, Lapindo for sloppy response

Jakarta Post - January 2, 2009

ID Nugroho, Surabaya -- Surabaya Legal Aid 
Institute (LBH) has urged the Indonesian public to 
pressure the government and PT Lapindo Brantas Inc. 
energy company to seek an immediate resolution to 
unresolved Sidoarjo mudflow issues.

On Wednesday in an evaluation of the 2008 law and 
human rights issues, LBH Surabaya land and 
environment division head Faiq Assidiqi said both 
the government and Lapindo (owned by the Bakrie 
family) had failed to show strong political 
commitment to resolving the social aspects of the 
disaster, which had affected the livelihoods of 
thousands of Porong residents and had caused 
massive environmental damage.

The mudflow, caused by Lapindo's mining activities 
in May, 2006, had displaced dozens of families 
whose assets were destroyed and had also destroyed 
their sources of income. It had done irreparable 
damage to the environment and had destroyed dozens 
of factories where local residents were once 
employed.

Despite these impacts, however, the government and 
Lapindo had acted less than satisfactorily and had 
yet to provide comprehensive solutions to the 
issue, he said.

"It is apparently not enough for mudflow victims to 
stage protests at the disaster site, but the entire 
society should join forces to make the government 
and the energy company provide legal advocacy for 
the victims."

Faiq insisted that the mudflow victims had lost not 
only their assets but also their cultural 
environment and their ability to earn a living. 
Their children had been denied access to education 
and a healthy environment, he said.

LBH, which has provided legal advocacy for Lapindo 
victims since the time of the disaster, was 
disappointed with the government's handling of the 
issue and Lapindo's failure to provide compensation 
to victims, he said.

Faiq cited Presidential Instruction No. 14/2007 
requiring Lapindo pay compensation to residents of 
four villages in the area, and a new instruction 
requiring the government pay compensation from the 
2008 state budget to victims outside the disaster 
area, claiming both were unapplicable.

Minarak Lapindo Jaya, a subsidiary of Lapindo, has 
paid 20 percent of the agreed compensation amount 
to a large proportion of the victims, while a 
smaller group do not have required documentation of 
their damaged assets and have yet to receive 
anything.

"The deadline for the payment of the remaining 80 
percent compensation passed last August -- it was 
suspended because of the global crisis," Faiq said.

Since the disaster, hundreds of victims have been 
living in temporary shelters in the Porong market 
building, stranded, and dozens of others have 
erected tents at the gateway to the Nirwana village 
housing compound (earmarked for the victims), but 
most had yet to receive housing as construction had 
been suspended because of the economic downturn, he 
said.

Previously, the National Human Rights Commission 
recommended the government relocate affected 
villagers by providing each with 500 square meters 
of land plus Rp 10 million in cash.

Faiq questioned police investigations into the 
mudflow disaster, saying that so far two Lapindo 
executives had been named suspect, but police had 
yet to report any progress in the case.

Faiq also questioned the resolution of the Alas 
Tlogo incident which claimed four human lives in 
Pasuruan in 2007, saying that so far only marines 
involved in the shooting had been brought to 
justice, but no compensation had been paid.

---------------------------------------------------

Elections will boost economy: SBY

Jakarta Post - January 2, 2009

Aditya Suharmoko, Jakarta -- President Susilo 
Bambang Yudhoyono on Wednesday said the government 
would cushion the country against the impact of the 
global economic downturn by providing an expansive 
stimulus package and sponsoring massive 
infrastructure projects.

"We are preparing a new stimulus package," 
Yudhoyono said at a press briefing on Wednesday, 
adding the package would be in addition to spending 
planned for in the state budget.

Finance Minister Sri Mulyani Indrawati, who 
accompanied Yudhoyono at the briefing, said the 
government could add to the amount of the fiscal 
stimulus to revive businesses, which were expected 
to be hit hard by the global slump.

The package, she went on, would be taken in part 
from the surplus of the revised 2008 state budget -
- about Rp 20 trillion (US$1.76 billion). This 
amount excludes some Rp 12.5 trillion in the state 
budget for waived income tax, value-added tax and 
import duty.

Mulyani also said the government would study which 
industries were applicable for the assistance.

Indonesia, Southeast Asia's largest economy, will 
have to rely heavily on domestic consumption by its 
230 million people to stem the fallout from the 
global meltdown, which is already taking a toll on 
Indonesian exporters due to a drop in global 
demand. Domestic spending accounts for more than 70 
percent of the economy.

Yudhoyono, who faces an election this year, said 
the stimulus package would be designed to match the 
state budget and the impact on the economy, with 
the government not borrowing money from foreign 
parties unless it was to support the economy. "It's 
hard to get loans now," he said.

While remaining optimistic the economy would grow 
by more than 4.5 percent in 2009, Yudhoyono also 
called for a boost in government spending on 
infrastructure, which would mostly be carried out 
by the Transportation Ministry, the Public Works 
Ministry, the Agriculture Ministry and the Energy 
and Mineral Resources Ministry.

The Public Works Ministry and the Transportation 
Ministry have been allocated Rp 32 trillion and Rp 
16 trillion, respectively, for infrastructure 
projects.

Yudhoyono also said the government would prioritize 
job creation, fighting inflation, cutting the fuel 
subsidy, protecting the poor and ensuring 
sufficient food reserves -- issues which will 
definitely sell ahead of the elections.

The elections are seen by many as a blessing for 
the economy, with political parties and legislative 
and presidential candidates expected to spend big 
on campaigning, including for T-shirts, flyers, 
advertising, food and transportation costs for 
supporters.

Yudhoyono said he expected more optimism in 2009 
because of the boost the elections would give to 
the economy. "Elections regenerate the economy. Do 
not view 2009 with despair," he said.

The country's economy may grow by between 4.5 
percent and 5.5 percent this year, lower than the 6 
percent predicted for 2008.

---------------------------------------------------

Foreign investors dominate Indonesia stock market

Jakarta Post - January 2, 2009

Ika Krismantari, Jakarta -- Foreign businesses were 
still keen to invest in Indonesian stocks last 
year, shrugging off worries about the future of the 
bourse.

A year-end report from the Indonesia Central 
Securities Depository (KSEI) reveals that foreign 
investors accounted for the largest portion of 
investment in the Indonesian stock market last 
year, with a 67 percent share up from 66 percent in 
2007.

The figures show that foreign investors have 
confidence in the Indonesian market as liquidity 
problems in their home countries have forced them 
to invest in emerging markets, KSEI president 
director Ananta Wiyogo said recently.

"Maybe they sold their assets in other countries, 
but not in Indonesia. We are still attractive to 
them," he said.

The Indonesian stock market, whose main index and 
capitalization fell last year by 49.3 percent and 
45.9 percent respectively, will see the return of 
investment this year on fairly low share prices and 
still-attractive yields, analysts say.

Foreign investors have been able to make 15 to 20 
percent in yield from investments in the stock 
market, and will continue to look at Indonesia and 
other emerging countries as they earn less from 
investments in developed countries.

Foreign investors had left the market during the 
October collapse, but had now started to return and 
this trend is likely to continue this year, 
analysts say.

While still dominating the capital market 
portfolio, asset value held by foreign investors 
declined by 45.7 percent to Rp 646 trillion 
(US$60.07 billion) by the end of last year, from Rp 
1,191 trillion in 2007, as impacts of the global 
financial downturn impacted stock value.

Local investors accounted for 33 percent of the 
market in 2008 with stock assets worth Rp 210.2 
trillion, down from Rp 400.9 trillion in 2007.

According to unofficial reports, less than 1.5 
million Indonesians have investments in the 
Indonesian stock market.

The Indonesia Stock Exchange (IDX) has targeted to 
attract 2 million local investors last year and 
again this year.

Indonesia's largest institutional investor in the 
local stock market is the PT Jamsostek state 
pension company.

---------------------------------------------------

Timor shift defied advice

Melbourne Age - January 2, 2009

Leo Shanahan -- The government of Malcolm Fraser 
knew it was in breach of international law when it 
recognised Indonesia's takeover of East Timor -- 
but bowed to pressure from the Suharto regime and 
oil companies.

Secret cabinet papers from the 1978 Fraser 
government released by the National Archives of 
Australia show that then foreign minister Andrew 
Peacock thought the government's refusal to 
recognise East Timor as Indonesian would result in 
a boycott of Australia by then president Suharto 
and further antagonise oil companies keen to begin 
drilling in the Timor Gap.

Australia had refused to recognise East Timor as 
part of Indonesia after the invasion by Indonesian 
forces in 1975. But in an interview with The Age 
coinciding with the release of the documents, Mr 
Peacock accepted recognition may not have been "the 
moral decision".

According to East Timor's Truth and Reconciliation 
Commission just over 100,000 people were killed or 
died as a result of conflict during Indonesia's 
occupation of East Timor between 1975 and 1999.

According to cabinet submissions Australia had 
started to be regarded as an "irritating, uncertain 
and unpredictable element in the South-East Asian 
situation".

"There are signs that the patience and 
understanding of a growing group of influential 
Indonesians in the government are running out and I 
believe the point has been reached where our 
continued refusal to accept fully and formally the 
reality of the situation in East Timor could damage 
the relationship," Mr Peacock's cabinet submission 
states.

Mr Peacock argued that "the issue (East Timor) is 
fading as an international one. There is no 
likelihood of that trend being reversed" and that 
Indonesia had "made it clear that a presidential 
visit would not take place unless the Timor problem 
in our relationship had been solved".

Legal advisers alerted Mr Peacock to Australia's 
obligations under international law, including 
several UN Security Council resolutions supported 
by Australia that opposed the occupation of East 
Timor as well as article two of the UN charter 
prohibiting the use of force.

But by couching the "recognition" in less explicit 
language he thought it would be possible to "ride 
out" the legal obligations. "Because of certain 
international legal considerations about the use of 
the word 'recognises' we should avoid using it 
directly and begin with phrases such as 'full', 
'formal' or 'definitive' acceptance.

"Nevertheless, if pressed about whether this means 
'recognise' we would have to confirm that it did in 
the popularly accepted sense of the word. In saying 
this publicly we would explain that we 'recognise' 
the fact that East Timor was part of Indonesia but 
not the means by which it was brought about," the 
cabinet submission states.

One concern of the Government in not recognising 
Jakarta's control of East Timor was that without 
recognition there could be no negotiations over the 
Timor Gap and subsequent drilling of its lucrative 
oil reserves.

In a recent interview with The Age Mr Peacock said 
that while he was obliged to put forward the views 
that oil companies had made to other firms in his 
submission "it was not at any time to the best of 
my recall any influence on my decision".

A candid Mr Peacock admitted that Australia's 
decision to recognise East Timor was not 
necessarily the moral one. "There are various 
motivations for your decisions in foreign policy: 
they can be political, they can be strategic or 
defence, they can be moral. In this situation you 
had countervailing arguments.

"The political and defence question may lead you to 
one conclusion and the moral may lead you to 
another, they can sometimes tear you apart," Mr 
Peacock said.

He said he felt constantly "under siege" when 
making decisions about East Timor.

"To be frank East Timor was a loss or a no-win 
situation for an Australian government at that 
stage. If we were overtly critical as we were on 
occasions, we were criticised by those who wanted 
friendly relations and then the reverse occurred."

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Asia Pacific Solidarity Network (APSN)
Email: jamesbalowski@yahoo.com
WWW  : www.asia-pacific-solidarity.net

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