INDONESIA DIGEST Indonesia's complex Issues in a Nutshell By: Ms. Wuryastuti Sunario Published by: TBSC-Strategic Communication No.: 03.07 - Dated: 25 January 2007 In this issue:
MAIN FEATURE: INDONESIA DISCONTINUES CGI MEETINGS FROM 2007 NEWS AND BACKGROUND: 1. Tourism and Transportation: 2007 Tourism Budget up; dedicated Convention Directorate formed Adam Air Jetliner disaster caused by Structural Failure? 2. Health, Culture and the Environment: Jakarta culls One Million Fowl, Bans Backyard Farming from 1 February UNICEF: Indonesian Women need greater Access to Higher Education ------------------------------------------------------------------------------------ MAIN FEATURE: INDONESIA DISCONTINUES CGI MEETINGS FROM 2007 In a surprise statement on Wednesday, 24 January, - only hours after meeting the International Monetary Fund (IMF) delegation led by Managing Director Rodrigo de Rato, - President Yudhoyono announced at the Palace that Indonesia will discontinue meeting donor countries grouped in the Consultative Group on Indonesia (CGI) starting immediately this year 2007. For the past 15 years Indonesia was obliged to explain its development plans to CGI for assessment and criticism by the Group, reports Suhartono for the Kompas daily. "I think (we) need to end the CGI forum in 2007. CGI is no longer needed," Yudhoyono was quoted by Antara news agency as saying, as reported by the Jakarta Post. The Annual CGI meeting, which comprises 32 members including the International Monetary Fund (IMF) and the governments of Japan and the U.S., were used to brief lenders on Indonesia's economic agenda and borrowing needs. According to President Yudhoyono, Indonesia is currently capable of handling its foreign debt without involving the lenders group. "It is important for us to be more independent in drafting our development plan," he said, further adding that Indonesia will also steadily cut its foreign debt in order to create a healthier state budget". The CGI was established in 1992 to replace the Inter-Governmental Group on Indonesia, or IGGI, which was formed in 1967 to help the country resolve its overseas debt. The IGGI was led by the Netherlands, while the CGI is chaired by the World Bank and Indonesia. The Kompas daily further reported the President as stating that: "We have been able to do all that (drafting the national development plan and clearing debts with IMF) without involving CGI. Last year, we already changed the format of the meeting, to be different from former years". While, in connection with the meeting with the IMF delegation, the President confirmed that Indonesia will no longer ask for loans from any institution including IMF. Yudhoyono also asked that the call on the President by the IMF delegation not be misinterpreted by the media as though the government plans to ask for more loans from IMF. The arrival of the IMF delegation at the Palace had elicited protests and demonstrations. "We have no intention to be in debt again with the IMF", said the President after his meeting with IMF Director Redrigodo Rato, at which were also present Coordinating Minister for the Economy Boediono, Bank Indonesia Governor Burhanuddin Abdullah, Finance Minister Sri Mulyani Indrawati and Minister for National Planning/Head of the National Planning Board, Paskah Suzetta. "Since Indonesia has cleared all debts with IMF, Indonesia has become an equal partner of the organization. This situation differs from times previously when we were still in debt. This means that we must be more self-reliant, and that we must plan our own financial needs to meet our own targets" said the President. The IMF delegation came to Indonesia to express the organization's appreciation that Indonesia had repaid all debts last year, which debt was supposed to be cleared by 2010 only. In October 2006, the government and Bank Indonesia paid out the last installment of US Dollars 7.8 billion debts to IMF. With the closure of the CGI meetings, President Yudhoyono urges that the planning of the national budget be done more meticulously and more prudently. The President similarly instructed all government agencies at national, provincial and district levels to form their individual development plans to aim at attaining the correct targets, and in accordance to such priorities as set in the National Budget for 2007. Indonesia's Development to depend less on Foreign Debts Bloomberg explained that Indonesia, which under former President Suharto's 32-year rule depended mainly on overseas loans and aid to fund its budget deficit, began selling debt locally in 2002, reducing the need for borrowing from government and multilateral institutions. The government had $77 billion of overseas debt. The country's central bank in October paid IMF loans four years ahead of schedule. The Washington-based institution had arranged a $25 billion package between 1997 and 2003 to help rescue Indonesia's banking system and rehabilitate the economy by restructuring private and government debt after the 1997 Asian financial crisis. Apart from the IMF, the other creditors include the Asian Development Bank, which has $11 billion of loans outstanding, while Indonesia owes the World Bank about $8.8 billion. "There are only three important creditors: Japan, ADB and the World Bank,'' Finance Minister Sri Mulyani Indrawati said in Jakarta. "It's better if we talk bilaterally with them, so we can hear their concern directly on a one-on-one basis,'' she said. "And we don't have to hear any concern from other countries that have often been not relevant.'' Asian governments had complained about the IMF's handling of the Asian crisis. In return for aid, the IMF asked governments to cut spending, raise interest rates and sell state-owned companies. The IMF arranged about $100 billion to bail out Thailand, Indonesia and South Korea. Critics, including Nobel laureate and former World Bank chief economist Joseph Stiglitz, said IMF's policies needlessly deepened the region's recession. Thailand in 2003 made the last payment of the $12.3 billion it drew from the IMF. "Indonesia has been building on important efforts in the past few years. Part of those efforts were the programs of the IMF,'' the Fund's Managing Director Rodrigo de Rato said at a briefing in Jakarta. "I think those programs were useful at that time. But right now Indonesia is in another situation, and in a more healthy one,'' reported Karima Anjani and Wahyudi Soeriaatmadja for Bloomberg. (Sources: Kompas, Bisnis Indonesia, Jakarta Post, Bloomberg) (Tuti Sunario) ---------------------------------------------------------------------------------- NEWS AND BACKGROUND: 1. Tourism and Transportation: 2007 Tourism Marketing Budget up; dedicated Convention Directorate formed Director General for Tourism Marketing and Promotion, Thamrin B. Bachri recently disclosed that Parliament had agreed to allocate a budget of Rp. 158 billion for international tourism marketing 2007 spending, of which Rp. 20 billion is earmarked to promote five priority destinations for 2007, reports Erwin Nurdin for Bisnis Indonesia. The five priority regions are West Sumatra, North Sulawesi, South Sulawesi, West Nusatenggara and East Nusatenggara, that support the promotion of Bali and Yogyakarta. Despite the fact that the Marketing budget for the Department has increased 44% from the Rp. 110 billion obtained last year, this amount is still far from the minimum requirement of Rp. 600 billion that Indonesia needs to be able to compete internationally, said Thamrin. "Nonetheless, we will strive to achieve the targeted 5.5 million international arrivals this year". In the latest development, Culture and Tourism Minister Jero Wacik, on Monday, 22 January installed Surya Dharma as the new Director to head the newly formed Directorate of Meetings, Conventions, Incentives and Exhibitions (MICE), in the Directorate General of Tourism Marketing and Promotion. The new Directorate is tasked to increase conventions and meetings by 50% in 2007, to reach 300 this year, said Minister Wacik. This is up from some 200 conventions held in 2006 in Indonesia's main conventions destinations of Jakarta, Bali and Yogyakarta. In his first comments as Director for Meetings, Incentives, Conventions and Exhibitions, Surya Dharma said that his immediate action will be to improve present MICE potentials in the country, before actively plunging into international promotion and marketing. Before this, Surya Dharma held the position of Chief of the Sub-Directorate for Tourism Investments. Adam Air jetliner disaster caused by Structural Failure? Preliminary findings of the National Committee for Transport Safety, KNKT, concluded that two most probable reasons for Adam Air Boeing 737-400 disappearance were: Structural Failure and Abnormal Weather Conditions, said Chief Investigator, Frans Wenas to Bisnis Indonesia's Hendra Wibawa. The plane, with 102 passengers and crew on board was on a routine direct flight between Surabaya on Java and Manado in North Sulawesi on 1 January, when it inexplicably disappeared from the radar screen at the Makassar Air Traffic Control tower. (See also Indonesia Digest 02.07) Until today, 24 days after the accident, the exact location where precisely the plane had gone down still remains unknown, although hundreds of pieces of aircraft debris have been found washed along the beaches of Majene and Pare-Pare in South Sulawesi. Nonetheless, advanced technological equipment on the US Navy Ship Mary Sears and the Indonesian Navy vessel KRI Fatahillah, as well as satellite scanning have detected images of large metal pieces, possibly of a plane's fuselage, in the Makassar Straits at a depth of 2,000 meters below sea level. This finding will be developed further, said Transport Minister Hatta Rajasa, after which it will be assessed whether it is at all possible to salvage the fuselage and the bodies of the passengers. Although, at this depth, the Minister admits Indonesia does not possess the technology to raise the wreckage from the bottom of the sea. A Singapore search and rescue team that was one of the first to scour the Straits of Makassar to locate the aircraft, has returned to Singapore, since the ship's sonar equipment have been found unable to penetrate to a depth of over 1,500 meters below sea level. In the latest development, the USNS Mary Sears is reported to have received signals from the missing plane's black box, which is supposed to be at a depth of over 2,000 meters. Meantime, upon its preliminary findings, KNKT, recommended three actions to be taken by the government. These are firstly, that the Transport Minister reprimands Air Traffic Control (ATC) personnel to be more watchful, referring in particular to ATC Makassar staff. Secondly that pilots, - in this case in particular Adam Air pilots - control the aircraft speed when the plane meets with turbulence, and thirdly that Principle Maintenance Inspectors (PMI) of all airlines take note of the complaints mentioned in aircraft log books, especially those that had been noted down repeatedly. Meanwhile also, in order to improve and ensure airline safety in Indonesia, the Civil Aviation Watch, PAUKI, recommended two important actions to the government and Parliament. These are: firstly that KNKT become an independent Board similar to the Civil Aviation Board (CAB) in the United States, and be empowered to objectively assess, not only operators, but also regulators and regulations. Secondly, airline operators be obligated to submit routinely their financial audits through Standard Uniform Accounts. Because, it is through such audits that the independent Board may detect whether airline safety has been jeopardized in favour of gaining more profits. 2. Health, Culture and the Environment: Jakarta culls One Million Fowl, Bans Backyard Farming starting 1 February With the death of a 19-year-old woman from West Java on Friday, Indonesia today counts a total of 62 persons who have died from the bird flu in Indonesia, the Ministry of Health said on Saturday (20/1/07). In an urgent bid to contain the spread of the disease, the government further announced that it will expand the ban against backyard poultry farming to 9 regions, that was at first to take affect in three provinces only, reports Reuters as quoted by Indonesia's Trade and Investment News issued by the Coordinating Ministry for the Economy. Dr. Muhammad Nadirin at the ministry's bird flu center, told Reuters that the woman was sick since January 11 and was admitted to the Garut General Hospital on January 17. "Six days before she got sick she had contact with a sick chicken that, according to the agriculture department's rapid test, was also positive for bird flu." On Thursday (18/1/07), Minister of Health Siti Fadilah Supari said the government will extend a ban against backyard poultry, which previously would apply to the province of Jakarta only starting February 1, will now include eight other provinces that had reported human infections. The eight other provinces are West Java, Banten, North Sumatra, West Sumatra, Lampung, Central Java, East Java and South Sulawesi. "There must be special zones for poultry away from residential areas," she told reporters, adding the measure would eventually be enforced in all the country's 33 provinces. The nine provinces have agreed to issue bylaws in a follow-up to the national policy since legislation on Regional Autonomy stipulates that actions related to health issues are the jurisdiction and the responsibility of regional authorities, while the national government's authority is limited to outlining policies only. Its implementation will depend on the particular situation and conditions within each region for as long as contact between fowls and humans are limited. The Health Minister further explained, that although scientists in Bali have found cats and dogs infected with bird flu, no indications have as yet been found of any patient having become ill with the H5N1 virus because of close contact with these animals. Until today, all patients in Indonesia have become infected because of wrong handling of infected poultry. Meanwhile, Minister for Internal Affairs has similarly urged regions to tightly supervise and control the traffic of the poultry trade between regions, control markets, ban the slaughter of fowl outside specified slaughter houses, increase sanitation, vaccinate chicken and other fowl, keep records on Avian Flu cases in each village, and improve facilities where infected patients are treated. In the capital city of Jakarta, Governor Sutyoso vowed to cull one million fowl, including chicken, ducks, geese, and quails, that are found roaming free or farmed in backyards, in order to completely free the capital city from this deadly disease, found both in animals as in humans. All other feathered birds, such as parrots, pigeons, song birds or other fowl must obtain a special health certification from the community animal health authorities before the deadline on 1 February. Fearing that their children may be infected, Jakarta's local communities have responded positively by voluntarily bringing their chicken and other fowl for checking or slaughter. UNICEF: Indonesian Women need greater Access to Higher Education Launching Unicef 2007 Report on the State of the World's Children, Gianfranco Rotiglioni, UNICEF Representative to Indonesia recently urged the government to continue efforts to advance gender equality. The most important issues to improve gender equality are greater access for women to higher education and to economic opportunities, improved reproductive healthcare, and the eradication of root causes to sexual exploitation. "Interventions in these areas will bring practical benefits to women and society" said Gianfranco. Barriers to achieving gender equality in education in Indonesia include early marriages, gender-biased textbooks, gender stereotyping, and unreliable data. Rotiglioni warned that women and girls in Indonesia would remain vulnerable to sexual exploitation and trafficking if programs were not carried out to address the problems of poverty, poor education and the inability to make a good living, reports the Jakarta Post. "This feeds back into access to education. If we can ensure that children, especially girls, attend schools, they will later be better able to support themselves and become less vulnerable to traffickers and exploiters," he said. Rotiglioni said Indonesia had achieved overall good progress toward gender parity in net enrollment at the primary and junior high school levels. However, access to education for girls becomes increasingly limited as they go on to higher levels of study. The Unicef report finds that empowering women and eliminating discrimination produces a positive impact on the survival and well-being of children. It also says that when women are empowered, children and families prosper, because empowered women have a bigger influence over key decisions that can improve their lives. In her opening speech to the launch, Minister for the Empowerment of Women, Meutia Hatta Swasono, said that elimination of gender discrimination and the empowerment of Indonesian women will benefit positively both the women as well as improve their children's welfare, since healthy and educated women who are empowered, will raise healthy, educated and confident children, reports Kompas daily. 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