-Cavet Lector- <A HREF="http://www.ctrl.org/">www.ctrl.org</A> -Cui Bono- from: http://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- The End of the Nation-State Indonesia Is Falling Apart The forces of dis-union are spreading around the world. SINGAPORE - The Indonesian military, discredited by widespread human rights abuses and overstretched by having to deal with multiple separatist and sectarian conflicts, may no longer be able or willing to control the forces that threaten to fragment the world's fourth most populous nation, some officers and analysts say. They worry that the army and police - far from being poised to take power from the first democratically elected government in Indonesia in decades, as Indonesian news organizations have reported recently - will not be effective in restoring peace and maintaining order in such violence-prone regions as the Moluccas and Aceh because many of their combat and crowd-control units are poorly trained, disciplined and paid. While there have been signs of tension between President Abdurrahman Wahid and senior military officers over how to handle the restive regions and generals accused of human rights excesses, military morale is also being eroded by open disagreements between conservatives and reformists in the army. Major General Agus Wirahadikusuma, a leader of the reform group that wants to make the armed forces more professional and take them out of Indonesian politics, said last week that the Indonesian military was in no position to mount a coup. ''That kind of thing is no longer fashionable,'' he said. ''And besides, can we really fight against the people?'' Referring to the capital of the Moluccas in eastern Indonesia, he added: ''We can't even take care of Ambon. How can we launch a coup?'' Morale in the Indonesian security forces has reached an all-time low, Alan Dupont, director of the Asia-Pacific security program at the Australian National University's Strategic and Defense Studies Center in Canberra, said Sunday. ''Fear that the army might stage a military coup,'' he said, ''has been supplanted in recent weeks by a diametrically opposed concern: that a weakened, demoralized military leadership has been sapped of the will to take decisive action in situations where legitimate military force is required to restore and maintain law and order.'' The failure of the security forces to halt the fighting between Muslims and Christians in Ambon, ''suggests a lack of commitment rather than a lack of manpower or resources,'' Mr. Dupont said. Both Ambon and predominantly Muslim Aceh, Indonesia's westernmost province where many Acehnese have been demanding independence, are reported to have been peaceful over the past few days, as Muslims celebrated the religious festival of Eid al Fitr that marks the end of the fasting month. But two Indonesian policemen were killed, and two others wounded, by suspected separatist guerrillas in Aceh on Saturday, the official Antara news agency reported Sunday. Residents and military officers in both regions are pessimistic about prospects for an early settlement. ''What we have now is a vicious conflict rapidly spiraling out of control with both sides wanting to take revenge for past attacks and wipe the other out, while the military is stuck in the middle,'' said Richard Mowat, the regional coordinator of the medical aid group Medecins Sans Frontieres in the Moluccas and one of the few foreigners left in Ambon. Adding to the military's morale problem is the feeling among many serving and retired officers that the army is being unfairly blamed by the government for human rights abuses, when in fact troops are being put in situations where they have to kill or be killed because of the government's failure to advance political solutions to the violence. In an implicit rebuke to the military, President Wahid declared during a recent visit to the restive easternmost province of Irian Jaya, ''I am officially conveying my apology for the human rights violations in Papua, Aceh, Ambon and other provinces.'' For more than three decades under former President Suharto, the military wielded almost unchecked power in many parts of the country, insisting that strong rule was essential to hold the world's largest island-nation together. Reflecting a view that is widely held in the military, a former army chief of staff, Rudini who like many Indonesians uses only one name, said Mr. Wahid's government was not consistent on the issue of human rights. ''The government says it is against human rights abuses, but it says nothing when a soldier is found hung on a tree or when a major's throat is slit open,'' he said. ''Why does the government keep quiet on these things?'' Colonel Syarifuddin Tippe, one of two Indonesian army commanders in Aceh, said that the military and guerrillas of the Free Aceh Movement were ''heading for a bloody confrontation, because the political elite have not found a solution to the Aceh problem.'' He said that things would get worse after the fasting period ended. ''If we kill a separatist, they will kill one of us in brutal revenge attacks. That will only incite the troops to crack down harder. Both sides will be crying out for blood.'' In Aceh, Mr. Wahid's government hopes to set peace talks on track by organizing a meeting of about 400 Acehnese representatives in neighboring North Sumatra Province late January or early February. Jakarta has offered outlying regions autonomy, but ruled out independence, fearing that Aceh and some other resource-rich provinces might follow East Timor in breaking away from Indonesia. Although Mr. Wahid and his vice president, Megawati Sukarnoputri, visited Ambon last month and appealed for peace between warring Muslims and Christians, no lasting truce is in sight. This has increased concerns that conflict between Muslims and Christians will spread to other parts of Indonesia, where about 90 percent of the 210 million population professes adherence to Islam. International Herald Tribune, Jan. 10, 2000 The Miracle of Long Division How to Understand Stock Splits More is more, more or less. The simplest tricks are the best. Here's a good one. You run a pizza parlour which cuts its pizzas into four slices, but in a moment of inspiration you decide to double the number of slices to eight. Suddenly you discover people will pay more for the same size of pizza. In the equity markets, this is called stock-splitting. Over the past decade or so, US companies have announced between 300 and 500 stock-splits annually. There are plenty of good, unexciting reasons why the board might decide to increase the number of shares in issue. Retail investors, for example, tend to buy shares within the range $20 to $40. Companies want to attract retail investors because they hold on to the stock, reducing share price volatility. But if the shares trade at too high a price the company looks expensive to these buyers; too low and it comes into the category of "fallen angels" - stocks that may be cheap for unsavoury reasons. In a bull market, companies that wish to keep their share price in an optimal trading range split more often. Between 1990 and 1995 there were just over 2,500 stock splits on the US market. In the three years from 1996 to 1998 there were nearly 2,200, including 840 in 1998 alone. Last year, fewer than 500 stock splits were announced, but they included blue-chips such as General Electric and IBM and multiple splits by technology companies such as America Online. This essentially cosmetic transaction has attracted unusual investor interest partly because of academic research indicating that companies that split their stock outperform their peers in the 12 months following the announcement. Investors had already noticed that the shares of companies that heralded a split beat the market by 3 per cent or more in the days surrounding the announcement. David Ikenberry, a professor of finance at the Jones Graduate School of Management at Rice University, and his colleague Sundaresh Ramnath, take this observation further with their latest work, based on analysis of stock-splits between 1988 and 1997. Their research indicates that overall returns for stocks of companies that announced a split exceeded the returns for the rest of the market by 9 percentage points in the 250 trading days following the announcement. Companies splitting their stock also tended to beat expectations with their next set of earnings. The split is supposed to signal good times ahead. Rick Escherich of J.P Morgan advises corporate clients to consider a split only after a "permanent increase in earnings and stock price" and to avoid doing so if bad news is imminent. "Companies do take the signalling part of it seriously," he says. "No one wants to send a false signal." More interesting to the academics was the apparent underreaction of the market. "The utter simplicity of the stock-split was very appealing," says Prof Ikenberry. "The tax situation isn't changing, the labour market situation isn't changing, the nature of the business isn't changing, you only have this cosmetic transaction. We wanted to know, does the market figure it out?" It does now. In the past few years a strange share-trading sub-culture has grown up around stock splits. Web sites, newsletters and day-trading "investor education" programmes promise to teach the secrets of trading on stock-split announcements. Some sites alert their clients to the latest split speculation by pager. A two-for-one split from a fast-growing company now looks to some investors like a signal that the share price will double. A 3 per cent rise after a stock-split announcement looks modest. The reverse also applies. If speculation suggests a company will split its shares and the board decides not to, investors sell the stock. At the moment, the stock split looks like the sort of self-fulfilling prophecy of which speculators dream, but the excesses of minute-by-minute trading on potential share-splits may defeat one of the objects of the exercise for the companies themselves. Far from stabilising the share price, the routine share-split now seems to encourage volatility. Conservative cooks may in due course prefer to stick with the four-slice pizza, to be consumed in comparative peace, rather than encourage a feeding frenzy for the eight-slice pie. The Financial Times, Jan. 10, 2000 3�` ----- DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselytizing propagandic screeds are not allowed. Substance�not soap-boxing! 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