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Storm clouds: Indonesia-US relations are in for a difficult year

Far Eastern Economic Review - February 20, 1997

Nigel Holloway in Washington and John McBeth in Jakarta – February 20, 1997At a United States Air Force base near Tucson, Arizona, 28 Lockheed Martin F-16 strike aircraft stand in pristine condition. They've never flown on a combat mission but they've been caught in a dogfight of a very different kind. First destined for Pakistan, their transfer was blocked in 1990, when President George Bush couldn't certify that Pakistan did not have a nuclear weapon.

Then, last April, President Bill Clinton promised former Prime Minister Benazir Bhutto that he would find buyers for the F-16s, so that he could repay Pakistan from the proceeds of the sale. It took a lot of cajoling, but the U.S. finally found a purchaser for nine of them Indonesia.

Those nine aircraft have now become a symbol of what could be a year of difficulties for Indonesia U.S. relations difficulties which have taken on a much sharper edge since millionaire Indonesian businessman James Riady was alleged to have made campaign contributions to his old buddy Bill, whom he has known since the late 1970s.

That scandal, and the awarding of the 1996 Nobel Peace Prize to East Timor Bishop Carlos Felipe Ximines Belo and exiled independence advocate Jose Ramos-Horta, have focused both Republican wrath and renewed international attention on Indonesia.

The Indonesian Foreign Ministry has been under fire at home for not doing enough to defend the country abroad, but as Foreign Minister Ali Alatas told a recent parliamentary hearing: "It doesn't matter what the ministry does, it only takes one bullet." Or one trial. While the military is showing greater reluctance to use deadly force in mob situations, the government is demonstrating no such flexibility in prosecuting its critics.

In the lead up to next month's annual meeting of the United Nations Human Rights Commission in Geneva, U.S. based human-rights groups have been stepping up pressure on Clinton and new UN Secretary-General Kofi Annan to make human rights a higher priority.

Sighs one Indonesian diplomat: "It's going to be a challenging year. The main thrust will be human rights, but with a sub-text of East Timor, labour rights and democratization." Adds a prominent American businessman: "Timor, Riady, the F-16 sale, labour rights they're all going to create serious problems which could impact on trade and investment. Now that an accommodation has been made with China, Indonesia is going to be the whipping boy."

The F-16 transaction appeared to be going smoothly until last July, when Indonesian security forces cracked down on the opposition after the ouster of Indonesian Democratic Party leader Megawati Sukarnoputri led to riots in Jakarta. In the face of anti-Suharto rumblings in Congress, the Clinton administration decided to wait before formally notifying lawmakers of the jet sale.

In September, then Assistant Secretary of State Winston Lord said the notification would be submitted early this year. But on February 4, the State Department announced that "the administration has decided not to notify Congress at this time," while insisting it was still committed to the sale.

Why the change of heart? "Regional, bilateral and domestic political factors" are at stake, says a State Department official. Translation: With Senate hearings on campaign finance around the corner, the administration doesn't see much chance of getting the sale through.

Since October, Clinton has been dogged by Republican charges that he and his party raised millions of dollars, some of it illegally, from Asian sources on both sides of the Pacific. Some of that money, in amounts considered small by campaign standards, came either from or through Riady's associates at his Lippo business group.

Republicans want to know what Clinton may have given Riady, and possibly Indonesia, in return. Clinton admits that wrongdoing has occurred, but he has denied that the contributions affected his administration's policy towards Indonesia.

Both the Senate and the House of Representatives will be putting this assertion to the test in hearings.

One of the policy changes that lawmakers are expected to scrutinize is a decision by the Office of the U.S. Trade Representative to suspend a review of Indonesia's trading status. When Clinton came into office in 1993, he ordered the USTR to examine Indonesian workers' rights and their ability to form independent trade unions.

If Clinton judged them to be suppressed, he could revoke Indonesia's right to export to the U.S. under the Generalized System of Preferences. This would have a significant impact on Indonesia: 20% of its total exports of $7.4 billion to the U.S. in 1995 entered duty free under the GSP. Instead, the Clinton administration suspended the review in February 1994, having decided that Indonesia was moving in the desired direction on workers' rights, albeit slowly.

This year's State Department report on human rights treads carefully on the issue. It cites the large number of plant level unions in Indonesia, but quotes non-governmental organizations that argue they are merely "yellow unions" formed by company managers, not workers. Now, the administration appears to be revisiting the issue. In early February, the USTR's new Indonesia desk officer travelled to Jakarta, apparently to see whether another review may be in order.

This is where domestic politics begin to intrude. Formally, the administration is merely answering a petition from some congressmen and the AFL CIO, America's union federation, to reopen the inquiry into Indonesia's labour rights. But analysts in Washington wonder whether Clinton will heed their call because he can't afford to appear soft on Indonesia particularly at a time when Muchtar Pakpahan, leader of the unofficial Indonesian Workers' Welfare Union, is being tried on subversion charges.

Lawmakers in Washington have limited means to show their displeasure at events in Indonesia. Congress could cut off Indonesia's already limited participation in the U.S. International Military Education and Training programme, but no one thinks that's a good idea given the way it can influence how Indonesian officers approach their jobs. Consider Col. P.L. Sihombing, a 1987 IMET graduate. He's the author of a widely acclaimed human-rights handbook for soldiers operating it Irian Jaya that may soon be adopted for units all over Indonesia.

The administration is already reviewing arms exports to Indonesia. On top of postponing the F-16 sale and suspending a shipment of mortar propellants, it recently prevented U.S. manufacturers from bidding for an Indonesian contract for 70 armoured personnel carriers. It has also blocked the sale of riot-control equipment to deal with an upsurge in social and ethnic unrest. Given what the alternative could be, that's probably the most puzzling decision of all.