JEMAAH ISLAMIYAH

NEXT GENERATION RADICALS IN INDONESIA

Jacob Zenn

Asia Times, June 12, 2013

JAKARTA - Driven by strong exports and buoyant domestic markets, Indonesia is projected to be among the world's top 10 economies by 2025. While the future looks bright for Southeast Asia's largest economy, a growing tide of religious intolerance threatens to undermine those gains. Where officials have in the past attributed religious violence and terrorism to foreign influenced groups, now the threats to stability are more clearly homegrown.

In the late 1990s and 2000s Jemaah Islamiyah (JI) was the main threat in Indonesia. The radical group attacked foreign tourists in Bali in 2002 and 2005, the Australian embassy in Jakarta in 2004, the J W Marriott hotel in Jakarta in 2003 and 2009, and the Ritz Carlton hotel in the capital city in 2009.

JI was largely considered a Malaysian import to Indonesia, with most of the extremist group's key members having fought in Afghanistan against the Soviet Union in the 1980s or in the 1990s with the Taliban again its domestic rival the Northern Alliance. Most of JI's key members are now either in prison or have been killed by Indonesia's elite counter-terrorism force, Detachment 88 (or Densus 88).

In November 2012, one of JI's Indonesian-born and bred members, the Poso native Upik Lawanga (aka Taufiq Buraga), was captured trying to cross from East Kalimantan, Indonesia to Sabah, Malaysia, on the island of Borneo. Lawanga was allegedly involved in the beheading of three Christian students in Poso, church bombings in nearby Palu in 2005, the two hotel bombings in Jakarta in 2009, and suicide bombings at a mosque in a police compound in Cirebon and a church in Solo in 2011.

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INDONESIA AND HUMAN RIGHTS

DEMOCRATIC INDONESIA’S NO-MAN’S-LAND OF HUMAN RIGHTS

Budiono Kusumohamidjojo

The Jakarta Post, April 20, 2013

It has been almost 15 years since reformasi brought about a constitutional change to Indonesia, leading to shifts in various walks of life. High hopes were hedged on the comprehensive Article 28 of the amended 1945 Constitution, which promised better respect and protection for human rights, particularly for the powerless masses, prone as ever to the abuse of the powerful few.

Abuse, oppression, subjugation, torture and murder carried out under the New Order are still experienced by some. Discriminated groups, women and children have become the more soft targets of arbitrariness, while the state stays put and carries out the duties of government by omission.

We cannot help but ask from time to time whether the democratization process that was supposed to put an end to a more than three decades of authoritarianism deserves democracy as its end result. Soeharto ruled with a strong hand, always firm against those critical of his policies. Rebuilding the economy, improving the lives of the masses and helping the victims of grave misgovernment by former president Sukarno were too dear to Soeharto to let them become sidelined by intellectuals and elites, many of whom pretended to be defenders of the people.

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INDIA’S AND INDONESIA’S POLICY DILEMMA

INDIA JOINS INDONESIA FACING HEIGHTENED POLICY DILEMMA: ECONOMY

Shamim Adam

Bloomberg, December 26, 2012

Central banks in Indonesia and India, with the worst-performing currencies among Asian emerging markets this year, will face more challenges in 2013 as they balance inflation risks with the need to boost growth.

The Reserve Bank of India must deal with “conflicting cues” from elevated prices and an economic slowdown, complicating policy decisions even after it recently signaled there is room to lower interest rates, Mizuho Corporate Bank Ltd. economist Vishnu Varathan said. Indonesia’s inflation may be at the upper end of the central bank’s targeted range, forcing it to raise borrowing costs “aggressively,” according to HSBC Holdings Plc.

Demand for higher wages, reduced government subsidies and greater capital inflows may drive up price pressures in the world’s fastest-growing region. Bank Indonesia refrained from raising rates this year even as the currency slumped and costs accelerated, while delayed reforms and infrastructure bottlenecks in India have spurred the most rapid inflation among the largest emerging nations.

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INDIA AND ASEAN DISPUTES WITH CHINA

A GOLDEN OPPORTUNITY FOR INDIA TO LEAD

Umesh Pandey

The Bangkok Post, December 24, 2012

The gathering of Asean leaders in New Delhi late last week was unprecedented in the history of India and the 10-member Southeast Asian grouping, and marks a new beginning to a relationship that could be crucial for the development of the two regions.

The heads of government were in the Indian capital to commemorate the 20th anniversary of engagement by once-introverted India with Asean. The timing and location were significant given the backdrop of rising tensions between various Asean members and China and between India and China.

The disputes in the South China Sea have been amply documented. Vietnam, the Philippines, Malaysia, Brunei and Indonesia all have claims that overlap those of China, and sometimes those of each other as well.

India and China have had border issues for decades, and lately Delhi has grown extremely wary of the growing might of the world’s second largest economy. The last straw came with the issuance this year of new Chinese passports with maps showing parts of northeastern India as Chinese territory.

In this respect New Delhi was not alone, as the ambitious Chinese mapmakers also managed to anger the Philippines, Vietnam, Taiwan and possibly others.

Therefore, the meeting last week took on added significance. Many heads of government held bilateral talks with the Indian leaders, and expectations are that the two sides discussed ways to increase bilateral and multilateral cooperation, apart from raising the issue of the rising power of China.

In fairness, China has seldom been the aggressor and even in the 1962 war with India, which by the way India lost, China withdrew its forces from Indian territory. But that was then — China at the time was still not rich enough to support an all-out campaign of aggression against a large neighbour, while today things are very different.

China has the world’s largest foreign-exchange reserves, estimated at $3.3 trillion. It is the darling of all investors (except perhaps the Japanese lately), and has been spending heavily on upgrading its military power over the past decade. To top this off, nationalist propaganda has been on the rise, something that was very much evident from the protests and boycotts of Japanese products over the disputed Senkaku islands, which China refers to as the Diaoyu chain.

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COAL IN INDONESIA

COAL’S SLIDE POSES BROADER RISKS FOR INDONESIA

Wayne Arnold

Reuters, September 11, 2012

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Coal’s slide poses a problem for Indonesia. As the biggest exporter of coal used for generating power, the country’s fortunes might seem directly tied to China and India’s economic slowdown. In fact, exports account for only a sliver of GDP. The bigger risk is that falling demand spooks foreign investors, undermines a provincial boom, and hurts poor workers.

It’s tempting to see coal as king in Southeast Asia’s largest economy. Indonesia exported 309 million metric tons of the stuff in 2011, according to the World Coal Association, making it the world’s largest exporter of the thermal coal that powers Chinese and Indian power. Slowing demand meant Indonesian coal exports fell 13 percent from May to June.

However, the link to Indonesia’s economic fortunes is not straightforward. Coal accounts for only about 14 percent of Indonesia’s exports and 4.4 percent of GDP. A 30 percent increase in foreign direct investment in the second quarter suggests the country’s growing population and rising incomes remain compelling.

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INDONESIA: SLOWING GROWTH?

INDONESIA LOSING ITS FOOTING?

Tan Sri Lin See-Yan

The Star, April 21, 2012

SINCE Susilo Bambang Yudhoyono (SBY) came to power, I have been a fan. Mind you, Indonesia remains today a nation full of problems: political, economic and social. His reputation was built on sustaining a predictable regulatory environment.

Despite its problems, Fitch re-rated Indonesia in December 2011 with an investment-grade credit after 14 years in junk status, followed by a similar move in January 2012 from Moody's Investors Service. Indonesia, like many in Asia, expects sluggish global demand to slow its rapid growth, to 6.43% in the first quarter of 2012 after posting GDP growth of 6.5% in 2011, the quickest pace since the 1997-98 currency crisis.

During my last visit in March, I gathered investors are still flocking to Indonesia simply because there is a deep affiliation that “tomorrow will be better than today” and today is pretty good so far. Indonesia must realise that a good reputation is fragile. It is built over years but can be destroyed overnight.

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INDONESIA

JAKARTA CRECE SIN FRENO

El PIB de Indonesia se elevará un 6,5% este año en medio de la recaída de la crisis financiera mundial

Fernando Cano

El País (Negocios), 6 de noviembre de 2011

La economía indonesia no para de mejorar. Los últimos datos del banco central hablan de un alza del PIB del 6,6% en el tercer trimestre y de un crecimiento anual idéntico para 2011. La industria manufacturera se ha convertido en el verdadero motor de la producción industrial con una subida del 6,1% entre abril y junio, con alzas de dos dígitos en sectores como la automoción, bienes químicos, metales y tabaco. En plena recaída del comercio internacional y ante la probable contracción de Europa y Estados Unidos, el país aumentará este año un 25% sus exportaciones.

La primera economía del sureste asiático -y la quinta del continente después de China, Japón, India y Corea del Sur- ha sido una de las más dinámicas del mundo en la última década, con un crecimiento medio del 5,2%, y ha sido de las pocas que crecieron en 2009 -un 4,6%-, mientras las principales economías mundiales entraban en recesión. Con un tamaño similar al de España, Indonesia basa su rendimiento en un dinámico sector exportador y en su boyante consumo interno.

Con 240 millones de habitantes, la clave está precisamente en la fortaleza de su mercado interno. La diferencia con los países de su entorno como Tailandia, Vietnam, Singapur o Malasia es que la demanda doméstica representa casi un 60% de todo su PIB, y las exportaciones, solo un 17%. Los bajos niveles de desempleo, que este año llegará al 7,1%, sumado a los controlados estímulos fiscales para superar la crisis han mantenido el crecimiento del gasto de los hogares y de los niveles de crédito. Esta coyuntura ha permitido contener el frenazo del comercio internacional y la inestabilidad financiera mundial.

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INDONESIA AND THE EU CRISIS

DEBT CRISIS AND THE FUTURE OF EUROPE: IS INDONESIA SAFE?

Winarno Zain

The Jakarta Post, November 5, 2011

The Greek drama surrounding its debt crisis is still unfolding, and it is clear by the day that the crisis is more severe than expected.

The resolution of the crisis will take several years and will be very costly and the magnitude of that cost will be beyond the financial ability of the eurozone governments.

Efforts to make decisions to resolve the crisis are facing the risk of being obstructed by policy paralysis resulting from political uncertainties that grip several euro countries.

All these were evident after eurozone leaders finished their summit on Oct. 27 in Brussels. They claimed to have crafted a “comprehensive policy” to contain the European debt crisis. But markets think the policy lacks meaningful details and leaves many questions. It reflects the daunting task of the eurozone leaders.

The problem is getting more serious as the amount of Greek debt that needs to be written off turns out to be larger than previously forecasted. In July, it was estimated that a 21 percent write down of Greek sovereign bonds would be sufficient to give some relief for the Greek government. But the Greek economy deteriorated rapidly, as austerity measures have caused a deeper recession than expected.

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INDONESIA: No. 10 IN 2020?

INDONESIA – THE RISING STAR

Cecilia Kok

The Star, October 29, 2011

It may not be getting as much attention from the world as China and India, but make no mistake, every business expert and economist are well aware of the economic potential of Indonesia.

With renewed vigour after the 1997/98 Asian Financial Crisis, that the tiger economy is now roaring back, emerging as a star performer in the region and drawing international interest.

The latest endorsement came from renowned economist and New York University professor Nouriel Roubini (aka Dr Doom or Dr Realist.) Roubini told the Jakarta Globe over the week he was impressed by what he saw the moment he stepped foot on Indonesia, and that he was bullish about the country's economy because of its overall policy framework and its government's commitment to reform.

Roubini was quoted as saying: “They know what needs to be done and there's a willingness to do it and at a speed that it needs to be done.”

Resource-rich Indonesia, with a population of about 245.6 million, is the largest economy in South-East Asia. According to the World Bank, the country's gross domestic product (GDP) or the total value of goods and services produced in its economy was worth US$706.6bil in 2010. This made it the fifth largest economy in Asia, and the 18th in the world.

Roubini believes Indonesia could rise to be the 10th largest economy in the world by the end of the decade and the sixth largest by 2030. The country's huge domestic consumption, low debt levels and young demographics are among some of the main factors in its favour.

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FROM CHINA TO SOUTHEAST ASIA?

CHINA'S MANUFACTURING EXODUS

Denise Tsang

South China Morning Post, October 17, 2011

As overseas buyers flood China's largest and most established trade show, the Canton Fair, change is afoot in the world's largest exporter.

Relentless inflation in production costs and wages had forced many manufacturers to relocate production from the Pearl River Delta or Yangtze River Delta to Southeast Asian countries such as Vietnam and Indonesia, some buyers said at the 110th China Import and Export Fair at the weekend.

They said moving offered a solution for manufacturers, who had limited room to raise costs for buyers at a time of a possible double-dip recession in the United States and European Union, China's largest trading partners. It also came at a time when Beijing's policy was to force factories to upgrade or migrate.

Despite the economic turmoil abroad, the trade fair, held each spring and autumn in Guangzhou since 1957, was packed with visitors from across the globe on Saturday, the first day of a 15-day show.

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