Wednesday, March 22, 2006

Jakartass has not retired, contrary to the possible misreading of yesterday's posting. This happened to be number 672 of those posted in 2 calendar years and I thought it needed a little commemoration.

So thanks for all your kind words which range from "That's a damm pity. I was just getting used to you and your gang in my life and now you're on your way out." ... which I'm not ... to "Happy birthday! Keep bloggin."

This I will with a bit of bar gossip which I've picked up today, not that I've been in a bar for a while you'll understand.

It's been a matter of happenstance, sublime synchronicity or 'just one of those things' which has seen the eruption of simultaneous demonstrations against American interests here in Indonesia.

Freeport in Papua has long been known, since the days of Henry Kissinger, Nixon and the Suharto family, to benefit all but the 'primitives' of Papua. Recent protests seem justified if one has any empathy for the local population. That 400 more troops are being sent there does not augur well for the stability of the province.

Last week's demonstration underscored the hatred many Papuans feel toward Indonesian soldiers and police in Papua. The remote province is home to a decades-long separatist rebellion and has seen scores of rights abuses by Indonesian troops.

On the other hand, it has also been reported that the troops guarding Freeport are being replaced by police.

Another attack on an American mining venture took place on Sumbawa at a workers' camp owned by Newmont Mining Corp. However this hasn't deterred the company.

"I am confident things are improving in Indonesia; if the deposits can bring the return on investment we need, we'll build mines," said Robert Gallagher, Newmont's recently appointed head of Indonesia and Australian operations.

And then there's the recent deal between Pertamina, the state oil company, and Exxon (aka Esso) to develop the Cepu oil field in East Java. Local demonstrators attempted to block roads in the area with no reports of violence. Many commentators feel that allowing Exxon to be the lead managers in the project, expected to produce around 165,000 barrels per day, accounting for around 20 percent of Indonesia's total daily output, is unpatriotic.

Others point to Pertamina's history of massive corruption and laugh, although they should be aware of the lawsuit against ExxonMobil on the grounds that they were co-sponsors of state terrorism in Aceh.

In 2001, the Washington-based International Labor Rights Fund filed a lawsuit against the energy behemoth, claiming the Mobil half of the conglomerate in the 1990s paid and supported Indonesian military troops that committed human rights abuses in the war-torn province.

Representing eleven unnamed residents of Aceh who say they or their husbands were brutalized by troops underwritten by Exxon Mobil, the ILRF maintained that under the Alien Tort Claims Act and Torture Victims Protection Act, the oil company and its Indonesian subsidiary could be held liable for the murder, torture, sexual crimes, and kidnapping conducted by these soldiers.

As part of a joint venture with Pertamina, Indonesia's state-owned oil and gas company, Exxon Mobil - which owns 35 percent of this enterprise -operates a major natural gas facility in this province in northern Sumatra.

Forbes advises its readers to invest in Indonesia.

The headlines (about Condi Rice's recent visit) will focus on global terrorism and the pivotal role Indonesia plays as the world's largest Muslim nation. (Not true. It was Open Sesame Street.)

A second great reason to be more fully engaged with Indonesia is trade and investment. It is a triple play of fostering higher economic growth and income in Indonesia, jobs and growth for America, and maintaining America's influence in the region, which is being undercut by powerful Chinese economic diplomacy. In fact, we need to pay more attention to Indonesia than the Chinese do. (Open Sesame?)

So, there we have it. The Americans want to foster economic growth in America by ripping off Indonesia's gold and 'liquid gold' before the Chinese do. And they've been coming here for years in high-powered delegations to do just that.

So why are there demonstrations against these developments?

Is it the thought of a repressive military presence to 'protect' the facilities?
Possibly in the case of Papua.

Is it the anticipated environmental destruction?
Doubt it, except in Papua.

Indonesians prefer Chinese investors?
Not true, although any employer is better than none!.

Is it the anticipated economic boom?
Possibly, in the case of Cepu.

Or could it be something else, a mini coup d'état as it were?

The following is the bar gossip of various expats, more influential (= better paid) than Jakartass.

Freeport, Newmont and Exxon are in Indonesia because Suharto and his cronies, including his political grouping Golkar, allowed them to be. Since Suharto's ouster, there have been major manoeverings for the shares. Those involved include Yusuf Kalla, the Vice President and leader of Golkar, and Aburizal Bakrie, currently Minister for Social Welfare, before which he was Co-ordinating Minister of the Economy.

The Bakrie family have fingers in many pies and have done since their company was started in 1942. The following was written in 1992.

In a country where big business is dominated by ethnic Chinese, Indonesia's Bakrie group has attained a prominent position by using its status as an indigenous company and its political connections to gain foreign partners.

Those partners include such names as the Kuwait Investment Office, the emirates' London-based investment arm; the International Finance Corp., the private-sector affiliate of the World Bank; Freeport McMoRan Copper & Gold Inc. of the United States; Mitsubishi Kasei Corp. of Japan; and BHP Pty., Australia's largest company.

Analysts find it hard to fathom the group's health, however, because of its complex ownership structure. Aburizal Bakrie, whose family controls the group, said recently that there are 40 companies in the Bakrie empire and 13,500 employees, mainly in Indonesia.

Bakrie's shares in Freeport were sold to Suharto's main man, Bob Hasan, who was lent the money, by Freeport (eh?) to buy them. When he defaulted, the shares reverted to Freeport who are now being pressured to release a further block of shares and/or give a bigger return to Indonesian investors

Last month, Vice President Jusuf Kalla said that the government should revise a profit-sharing contract with the New Orleans-based mining giant to give Indonesia a bigger slice of revenue while commodity prices soar.

This is, of course, the same Jusuf Kalla who, with the help of the miltary, has investments in Central Sulawesi, generally in power plants.

A University of Berlin anthropologist Georg Elwert raised an analysis of "markets of violence". He said behind every series of violence, there is always an economic interest, and therefore, the atmosphere of fear must be maintained.

"A particular cost-effective form of mobilizing troops is to create fear. Hence, propaganda acts as an important instrument of production. From an economic perspective, this can give a point to what would otherwise be pointless violence. The fear of retaliation by the victims leaves no option open but to join an army or support it for one's own protection. Fear of revenge stabilizes the system?.

A destabilised system would presumably benefit the local business empires who are keen to have a bigger bite of Indonesia's wealth pie. A destabilised Indonesia could see the eventual overthrow of SBY with his replacement by Kall and his cronies already embedded in Golkar, the 'natural' governing party, who traditionally have had the miltary's backing.

Are we seeing another attempted return to the good old bad days?

Bar pundits offer this for your pondering.


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