INDONESIA: Indofood's nine-month profit falls 30%

31 Oct 2003
Source: just-food.com

Indonesia’s Indofood, the world’s largest instant noodle maker, has reported a 30% fall in net profit for the first nine months of 2003, compared to the year-ago period.

Indofood, which is 48% owned by Hong Kong-listed First Pacific Co, reported net profit of 453.5bn rupiah (US$53.4m) for the nine-month period to 30 September, compared to 651.9bn a year earlier.

Nine-month revenue, however, rose 10% to 12.98trn rupiah, while operating profit increased to 1.39trn rupiah from 1.33trn a year earlier.

The company said the lower net profit was due to increased interest expenses and lower foreign exchange gains, reported Reuters.

Besides making instant noodles, Indofood also owns the world’s largest flour miller, Bogasari Flour Mills, and has interests in cooking oil, plantations, food seasoning, snacks and baby food.

‘Deforestation in Indonesia Worst in the World’

October 28, 2003 11:57 PM,

Laksamana.Net - Indonesia has the worst rate of deforestation in the world, losing about 3.8 million hectares of forests every year, a report said Tuesday (28/10/03).

State news agency Antara quoted Forest Watch Indonesia (FWI) director Togu Manurung as saying most of the destruction is tasking place in Papua province, where forest concessions have been granted to 15 companies.

He said Papua loses 600,000 cubic meters of wood every month, much of it due to illegal logging.

"If 1 cubic meter is equivalent to $100, then Indonesia suffers a loss of $7.2 million per year due to illegal tree-felling," he was quoted as saying.

Manurung expressed concern over the dire lack of action taken by the government and parliament to save Indonesia’s last remaining forests. "The government and the House know about this [problem], but they have not come up with a solution to it," he said.

He predicted that Indonesia's lowland forests will disappear in the next 18 years if no effort is made to reduce deforestation.

Last month, Manurung said foreign illegal logging mafias had joined forces with crooked Indonesian cooperatives and officials to plunder Papua’s rainforests.

A report released in February 2002 by the World Resources Institute (WRI), Global Forest Watch (GFW) and FWI said corruption and lawlessness were fuelling the epidemic of illegal logging in Indonesia.

The report said forest cover fell from 162 million hectares in 1950 to only 98 million hectares in 2000. It warned that lowland forests had almost entirely gone from Sulawesi and were likely to disappear in 2005 from Sumatra and in 2010 in Kalimantan.

Much of the illegal logging has been linked to the Indonesian Defense Forces, which by its own admission obtains 70% of its annual budget from “a range of sources”.

Some of these sources are legitimate businesses and foundations. But some of the money allegedly comes from sources such as illegal logging, extortion, drug dealing and prostitution. The military also provides security services for multinational companies such as gold mining giant Freeport and oil giant ExxonMobil. Some soldiers also profit by moonlighting as contract killers.

Critical non-government organizations, such as the Australia West Papua Association, say Papua has become the military’s main source of illegal funds, with concessions being mapped out and allocated to a handful of powerful generals.

World Heritage Sites
The government has proposed that three national parks in Sumatra be declared world heritage sites in an effort to save them from further illegal logging.

The three are: Gunung Leuser National Park (850,000 hectares in Aceh and North Sumatra provinces), Kerinci Seblat National Park (almost 1.4 million hectares in West Sumatra, Jambi, Bengkulu and South Sumatra provinces), and Bukit Barisan Selatan Park (365,000 hectares in North Sumatra).

Kerinci Seblat National Park head Listya Kusumawardhani on Monday expressed hope the proposal would be accepted and lead to greater efforts to stop illegal logging.

Vanishing Rivers
A local government official on Saturday said three rivers in Kolaka district of Southeast Sulawesi province had dried up due to deforestation.

The disappearance of the Kumoro, Tongana and Pelambua rivers means nearby farers don’t have enough water to irrigate their fields, said Pariama Mboy.

He said the loss of water could not be separated from the overexploitation of forests, which have for years been mined for nickel and subjected to illegal logging.

Tigers on the Rampage
Earlier this month, reports said Sumatran tigers have killed 14 people in Sumatra’s Riau province so far this year due to loss of habitat caused by rampant illegal logging and forest encroachment.

Several of the victims have been illegal loggers.

Indonesia hunts terror suspects

Police in the Indonesian city of Bandung are carrying out an intensive search for two of South East Asia's most wanted terrorist suspects.

Azahari Husin and Noordin Mohammed Top are suspected of involvement in the Bali and Marriott hotel bombings.

Police believe they escaped capture during a raid on Wednesday, and road blocks have been set around the city.

Police said they found four bombs in a house where the men were hiding.


The two suspects - both Malaysian nationals - escaped during the raid on the house on Wednesday because authorities feared they would detonate explosives they were wearing.

Police spokesman Zainuri Lubis said officers were "thoroughly combing" the Bandung area, but he tried to calm public fears.

"This is not a massive manhunt, but we are on full alert because what we are doing in Bandung is similar to trying to catch a big fish without muddying the waters," he said.

Mastermind

Azahari and Noordin are believed to be members of the Jemaah Islamiah militant Islamic group, which several governments have linked to Osama bin Laden's al-Qaeda.

Azahari allegedly helped build one of the bombs used in the Bali nightclub bombings last year, which killed 202 people.

He is also accused of masterminding the August bombing of Jakarta's Marriott hotel, in which 12 people died.

Noordin is suspected of helping to finance the Bali attack and of helping to build the Marriott bomb.

Police started to move in on the two men after they arrested two other terrorist suspects - identified as Ismail and Tohir - near Bandung on Wednesday.

Both of them were wanted in connection with the Marriott bombing and allegedly said they were working with Noordin and Azahari.

Along with Azahari and Noordin, authorities are still looking for six other Bali bombing suspects.

14 people have so far been detained in connection with the Marriott bombing, but no one has yet been charged.

Indonesia to send women gymnasts to China for training

www.chinaview.cn 2003-10-31 15:21:42


JAKARTA, Oct. 31 (Xinhuanet) -- The Indonesian Gymnastic Association will send its women athletes for a 15-day training program in Beijing as a preparation for the biennial Southeast Asia (SEA) Games in Vietnam, a local newspaper reported on Friday.

Involving 13 women gymnasts, the training program will focus ontechniques in rhythmic group, reported Kompas newspaper.

"They will join exercises together with Chinese athletes who have participated in world-class tournaments," association's secretary general Asep Sulaeman was quoted as saying.

The Indonesians, who will depart on Friday, will learn from China the choreographic arrangement in rhythmic gymnastics, he said.

In the men's gymnastics, Indonesia has also sent a team for a training program in Romania since October 25.

The 22nd SEA Games will run in December in Hanoi, involving tenmember countries of the Association of Southeast Asian Nations (ASEAN). Enditem

Indonesia brings another JI leader to trial

A local leader of the Jemaah Islamiah terror network has gone on trial in eastern Indonesia for allegedly smuggling arms and explosives for use against Christians.

The state Antara news agency reports Nizam Kaleb went on trial under an anti-terrorism law in the Central Sulawesi provincial capital of Palu.

The agency described him as JI chief for the Palu district.

The trial at Palu shed new light on the network's involvement in Muslim-Christian violence in Central Sulawesi.

Welfare minister Yusuf Kalla said this week that JI could have been involved in recent deadly attacks on Christian villagers in the area.

The al-Qaeda-linked JI is blamed for the Jakarta Marriott hotel blast which killed 12 people in August and the Bali bombings which killed 202 people in October last year.


31/10/2003 17:23:15 | ABC Radio Australia News

Transnational education, highly relevant in Asian region

Dewi Anggraeni, Contributor, Melbourne, Australia

To call education an industry, then to go ahead marketing it, often brings out strong opinions from those who are decidedly against it.

The concept that education is a human right, and as such should not be a commodity, however, is becoming less attainable every day.

Very few things, in fact, evade becoming a commodity these days. Putting the polemics aside, let us face the fact that in a number of developed countries, education is even an export commodity. We are well and truly in an era of transnational education.

In the 17th IDP (International Development Program) Australian International Education conference held in Melbourne last week, nobody among the approximately 1500 delegates from over 35 countries, including Australia, openly questioned this accepted fact. Instead, panels and speeches discussed and explored ways of making the education industry more competitive and more attractive to prospective clients.

Delegates from exporter countries listened attentively to suggestions from importer countries. On the converse, those from importer countries were in the position of being able to pick and choose which institutions best met their needs.

To accept the premise that education is an industry obviously has some advantages. Suppliers become more attuned to the needs of buyers -- and they are kept alert and motivated to continuously improve the quality of their products.

Only 20 years ago, students from developing countries who came to study in a developed country, be they full-fee payers or scholarships recipients, would just have to overcome their culture shock privately and quietly, adjust to the country's often different teaching and learning methods -- even curriculum contents, or sink.

While this treatment may be good for the soul eventually, it is no longer ideal for today's world, where immediacy is the key word; where what you learn must be able to be used immediately, which usually means that while you are studying, you are actually forging an income-earning tool, which is presumably ready to use when you graduate.

Today, transnational education providers who participate in a business worth billions of dollars have to offer a great deal more than just home-country syllabi. They have to be culturally sensitive, acutely aware of the clients' expectations and standards vis-a-vis their own, take note of compatibility of qualifications (which will facilitate recognition all round) and be up-to-date with various other aspects which never bothered them in the past.

One of the providers of distance education, the University of Southern Queensland for instance, has put together a new course of Comparative Law and Business after taking their clients' needs into consideration. In their MBA program, students have been taught the Australian legal system, including the business regulatory environment, as part of their study. However, as many of the students do not live in Australia and may not necessarily work in Australia, it is considered that they need to learn about other legal systems as well.

The conference has proven that the transnational education industry has become very relevant to us in Asia, as we are an importer region. A research study by IDP Education Australia, Global Student Mobility 2025: Global Competition and Market Share, predicts that in 2025, the Asian region will represent 93 percent of the demand for Australian international higher education, Australia being one of the major English-speaking destinations sought by importer countries in Asia.

Export of transnational education is no longer confined to movement of students from their home country to the supplier country. Program delivery can take place anywhere, University of Southern Queensland being an example. The growth of National-Plus schools in Indonesia, where students are given the national as well as the International Baccalaureate curricula indicates that transnational education is already a reality.

Given the situation we must not be shy in telling the providers what we want. And to be able to do that we urgently need to crawl out of our usual complacency and begin organizing and planning. The danger glaring us in the face is the dreaded cultural marginalization, either developed overseas where the students are studying, or in our own country where the program is being delivered.

The high costs of transnational education may also contribute to the deepening and widening of the gap between the rich and the poor. If those who have enjoyed transnational education are proven more capable to compete in the job market, they will eventually dominate the more lucrative-paying positions, while those who cannot afford transnational education will have to take the lower-paying jobs.

A well-planned scholarship program may help tamper this social problem, seeing that an overhaul of the whole national education system seems less viable in the immediate future.

There is no doubt that education is a crucial part of the country's reform process and transnational education is here to stay. Make the best of it.

`A leader must not let people suffer'

Some say that the numerous and complex problems faced by Indonesia stem from the country's leaders. They have been accused of incompetence and a lack of goodwill. What then makes a good leader? Three youths respond to the Youth Pledge Day by sharing their criteria for an ideal leader with The Jakarta Post.

Agung, 24, is a student of the Bogor Institute of Agriculture (IPB). He lives in Bogor:

It is really difficult to describe the criteria for an ideal leader.

A leader must not let the people suffer in misery. The leader must side with the poor, their objective is to boost the people's welfare.

However, I'm not sure if there is such person in our country.

What we see now is highly-ranked officials competing for money and power, instead of accommodating the people's needs.

I feel hopeless. Next year's direct presidential elections will not guarantee that we will have an ideal leader.

It is impossible to expect drastic change in such a chaotic situation. It will take years to improve it.

I really hope that things will be improved by the leaders and from the grass roots. I guess our chaotic situation is the fault of a selfish government and indifferent people.

Adi, 20, has been working in his father's company since graduating from senior high school. He lives in Bonang, Tangerang, with his family:

An ideal leader is one who can stop the conflicts in some areas of this country. They must be able to curb the separatist movement, terrorist threats and others.

Most importantly, the leader must be able to improve the people's welfare to alleviate the gap between the rich and the poor.

Equality in all aspects of life must also be a consideration. A good leader would erase discrimination.

I really hope that there is such a figure, who has the competency to lead the country.

General elections are not guaranteed to result in a high-quality leader. I think our chance of a really good leader being elected is only one percent.

Under the leadership of President Megawati (Soekarnoputri), the country's problems are only becoming more extreme.

Eka, 18, is on the administrative staff of a company in Radio Dalam, South Jakarta. She resides in Pondok Aren, Tangerang, with her family:

I think an ideal leader is the one that cracks down on corruption at all levels. This must be the first priority. They must also be competent enough to safeguard the country from internal security problems.

Above all, whoever the leader is, they must highlight education as a crucial priority. Today, access to education is still discriminative as low-income families have no access at all to education. I hope that someday youths here will enjoy free education.

Let's hope for a better future leader.

-- Leo Wahyudi S.

Indonesia plans bonus for civil servants

JAKARTA (AFP) - The Indonesian government is planning an annual bonus for its hundreds of thousands of civil servants to boost their morale, Finance Minister Budiono said Thursday.
"We have to accommodate that in the 2004 state budget," the state Antara news agency quoted him as saying of plans to pay a 13th month bonus from next year.

The minister said the proposed bonus, which would be discussed in talks with parliament about the 2004 budget, would be the first step in efforts to improve the welfare of civil servants.

Civil servants are often poorly paid and some resort to charging illegal fees to supplement their income. They have also received tongue-lashings from President Megawati Sukarnoputri over their performance.

INDONESIA WOULD STAND FIRM IF SUPPORTED BY PILLARS, POLITICIAN SAYS

Friday, October 31, 2003 12:00:44 PM

Jakarta - Indonesia would stand on solid rock if it is supported by a coalition of its main pillars -- the nationalist group, religious group, the military and the police, a politician has said.

Without the support of these pillars, the country might snap, senior politician of the Indonesian Democratic Party-Struggle (PDIP), Amin Arjoso, said here Friday.

"This country could be strong if it is supported by a coalition of the PDIP, Nation`s Awakening Party (PKB), United Development Party (PPP), the military and police," Amin said.

Senate Blocks Military Aid to Indonesia

by Jim Lobe
October 30, 2003

U.S. military training to the Indonesian Armed Forces will be banned until its officials cooperate with investigators probing the ambush and killing of staff from an international school in West Papua province last year, according to amendments passed by the Senate.

The change to the 2004 foreign-aid bill that will ban training for Indonesian army officers comes two weeks after President George W. Bush announced he was ready to resume normalize military ties with Indonesia.

Senators who co-sponsored two amendments that were approved unanimously by the upper house said military ties should not return to normal at least until the Indonesian military (TNI) cooperates fully with a Federal Bureau of Investigation (FBI) probe into last year's fatal ambush of the staff of an international school in Timika in West Papua province.

Two US schoolteachers and one Indonesian were killed in the incident in which eight other US citizens were wounded, including a six-year-old girl.

Both US investigators and the Indonesian police have suggested that members of the TNI were responsible for the ambush, possibly in retaliation for the refusal of Freeport McMoRan, the owner of the world's largest gold mine, to continue paying the armed forces for security.

The first amendment, sponsored by Republican Sen Wayne Allard, bans Indonesia from receiving training under the State Department's International Military Education and Training (IMET) program, for which the administration had tentatively allocated some 600,000 dollars, unless Bush "determines national security interests" justify a waiver.

The second amendment, proposed by Democratic Sen Russell Feingold, states that "normalization" of military relations between the two countries cannot resume until there is "full cooperation" with the FBI and the individuals responsible for the murders are brought to justice.

The Feingold amendment also states as a matter of policy that "respect of the Indonesia military for human rights and the improvement in relations between the military and civilian population are extremely important for the future of relations between the United States and Indonesia."

Last July, the House of Representatives, which also expressed concern about the TNI's cooperation with the FBI, also voted to strip money for IMET training for Indonesia in its version of the foreign-aid bill, so conditions on IMET funding for 2004 will almost certainly be included in the final version of the bill to be submitted to Bush in coming weeks, Congressional aides said.

Both amendments represent a setback to the administration, which has seen Indonesia, the world's most populous predominantly Muslim nation, as a key ally in its "war on terrorism" as well as an important target of the al-Qaeda terrorist group and other radical Islamist organizations for recruitment and training of militants.

Initially, the administration was frustrated by the attitude taken by the government of President Megawati Sukarnoputri, until the bombing just over one year ago of a nightclub on the predominantly Hindu island of Bali killed more than 200 people, including almost 90 vacationing Australians.

The attack was blamed on the Islamic group Jemaah Islamiyah, which Washington believes is linked to al-Qaeda. Since the incident, Jakarta has cracked down hard on the group and cooperated much more closely with the United States, Australia and regional security forces in tracking suspected militants.

The administration, which has made little secret of its desire to renew military ties with the TNI, particularly since the Sep. 11, 2001 terrorist attacks on New York and the Pentagon, has wanted to reward Megawati's government for its changed attitude.

Last year, the Pentagon provided the TNI with four million dollars in counter-terrorism training and non-lethal equipment, while Congress also agreed to lift some restrictions on other military aid and training.

But actual delivery of some of that assistance has been held up by Congress since the Timika ambush. While Jakarta initially blamed rebels, police investigators, bolstered by the FBI, concluded that the evidence pointed instead to TNI units.

Deputy Defense Secretary Paul Wolfowitz, who served as US ambassador to Jakarta in the 1980s, has long favored normalizing military ties with Indonesia and particularly in renewing training programs for TNI officers.

"I believe exposure of Indonesian officers to US (military personnel and practices) has been a way to promote reform efforts in the military, not to set them back," he said last year.

But lawmakers remain unconvinced, noting that hundreds of Indonesian military officers had been training in IMET and similar programs since the 1960s, but there is little evidence of a change in the institution's abusive practices.

In addition to the Timika incident, Congress has also expressed concern about the counter-insurgency campaign in Aceh province, launched against rebels there after peace talks collapsed last May.

Wolfowitz has himself stated several times over the past several months that Jakarta should seek a political settlement to the conflicts in both Aceh and West Papua.

But Bush created considerable confusion just two weeks ago on the eve of his own visit to Bali. "I think we can go forward with (a) package of mil-to-mil cooperation because of the cooperation of the government on the killings of the two US citizens," he said in an interview with Indonesian television, adding that "Congress has changed their attitude."

That was immediately challenged by puzzled lawmakers on Capitol Hill who had been negotiating with the administration over language to be included in the 2004 foreign-aid bill that would take account of their concerns. Three days later, a senior administration official, who talked with reporters on background, said that Bush had misspoken.

"Progress in building a broader military-to-military relationship with Indonesia," the anonymous official said, "will be pinned on continued cooperation from Indonesia on the investigation into the murders" of the schoolteachers in Timika.

IMET funding has long been a litmus test of military relations between Washington and Jakarta. Congress first voted to restrict IMET training for the Indonesian armed forces after they massacred more than 100 unarmed civilians in the capital of East Timor in 1991.

All military ties were subsequently severed by the Clinton administration when the TNI and militias under its control ravaged East Timor after its inhabitants voted overwhelmingly for independence in a United Nations-organized plebiscite.

Congress subsequently voted to tie all US military aid, training and sales on the TNI's implementing far-reaching reforms in its human rights, economic and institutional practices, including its subordination to civilian authority and its prosecution of officers responsible for the violence in East Timor.

Although virtually all of the conditions were ignored, the Bush administration prevailed on Congress to lift them after 9/11.

(Inter Press Service)

Cases of piracy at sea leap, Indonesia worst

( 2003-10-31 10:39) (Agencies)


Piracy on the high seas has reached record levels and Indonesian waters are the most dangerous in the world, an ocean crime watchdog said Friday.

The International Maritime Bureau, or IMB, said the number of reported ship attacks leaped to 344 in the first nine months of this year, 26 percent more than the 271 recorded in the same period in 2002.

"This is the highest number of attacks for the first nine months of any year since the IMB Piracy Reporting Center began compiling statistics in 1991," said IMB director Captain Pottengal Mukundan.

Pottengal said there had also been an alarming rise in violence, with pirates using dangerous weaponry like sub-machine guns and rocket propelled grenades.

It said 20 crew had been killed compared with six in the same period in 2002. Cases where guns had been used jumped to 77 from 49, and knives from 99 to 115.

"This increase in violence is of great concern. Despite all the information now available on piratical attacks, there are hardly any cases where these attackers are arrested and brought to trial.

"It is only when the pirates face a greater risk of getting punished that we will begin to see a reduction in these figures," he said.


Indonesian waters again topped the list, with the most attacks at 87 for the first nine months of the year. Bangladesh was second with 37 attacks.
Attacks in the Malacca Straits, one of the most strategically important passages of water in the world, jumped to 24 from 11 in 2002. Thirty percent of the world's trade and 80 percent of Japan's crude oil is transported through the narrow corridor between Malaysia and Indonesia.

The IMB also warned recently that politics could be behind some attacks on ships.

It said separatist rebels from Indonesia's Aceh province could be behind a surge in attacks on oil tankers in the strait.

In July it reported three attempted boardings in less than a week, with pirates firing automatic weapons at two gas tankers and an oil tanker.

Western intelligence agencies and maritime security experts have gone further. Some have linked al Qaeda, or militant groups associated with it, to piracy in Indonesia's waters.

Some experts say al Qaeda showed its nautical strategy and sophisticated seaborne attack capability by bombing the Limburg oil tanker off Yemen in 2002 and U.S. warship USS Cole in 2000.

Jemaah Islamiyah, a group whose goal is to create an Islamic state enveloping Malaysia, Singapore, Indonesia and the southern Philippines, has also been identified by experts as capable of hijacking a supertanker and exploding it in the strait.


African waters too are highlighted as dangerous, particularly off the coast of Somalia.
Attacks in waters off Nigeria soared 300 percent to 28 from nine in 2002.

By contrast the IMB said the record of countries such as Ecuador, Guyana, Malaysia and Thailand had shown a marked improvement. It said Malaysia had had no incidents in the last three months.

It also reported a decrease in hijackings.

Indonesia nabs 2 more suspects in Marriott bombing

Friday, October 31, 2003 at 03:49 JST

JAKARTA — Indonesian police said Thursday they have arrested two more suspects of the deadly bombing at the JW Marriott Hotel in Jakarta in August, which killed 12 people and injured 150 others.

Police spokesman Soenarko said Tohir alias Masrizal alias Masud, 29, and Ismail alias Ari Kumala, 28, were arrested Wednesday in front of a shopping mall in the West Java coastal town of Cirebon, bordering Central Java Province. (Kyodo News)

http://www.japantoday.com/e/?content=news&id=277405

Pirate attacks on the increase

Thursday 30 October 2003 7:09 PM GMT

Pirate attacks are at an all time high with Indonesian waters accounting for 25% of the total heists, a maritime watchdog said.

The International Maritime Bureau (IMB) said that in the first nine months of the year 344 attacks or attempted attacks on ships at sea, at anchor or in port were reported worldwide compared to 271 in 2002 and 253 in 2001.

“This is the highest number of attacks for the first nine months of any year since the IMB began compiling statistics in 1991,” Pottengal Mukundan, London-based IMB director said in a statement, AFP reported.

“There is a clear increase in the use of guns and knives in the attacks,” he added.

Toll rises

The number of crew killed increased to 20 as compared to six in 2002. The number of attacks using guns rose to 77 from 49, the London-based IMB said in a report by its Piracy Reporting Centre in Kuala Lumpur.

So far this year 43 crew members are listed as missing.

The IMB said "the increase in violence is of great concern," and identified Indonesia, Bangladesh, Nigeria and the Malacca Straits between Indonesia and Malaysia as trhe prime hunting grounds of modern day brigands.

Indonesian waters were the most buccaneer-prone with 87 incidents in which 85 seafarers were taken hostage and two killed.

Rocket launchers

In one case in August, eight pirates armed with machine guns and a grenade launcher opened fire and boarded the Malaysian registered "Penrider" tanker from a fishing boat.

They sailed the ship into Indonesian waters and took the master, chief engineer and a crewman hostage, leaving the ship to continue its passage.

The trio were later released after an undisclosed ransom was paid.

Bangladesh was ranked second for piracy with 37 attacks, Nigeria third with 28, while the Malacca Straits, the world’s busiest shipping route, saw 24 attacks.

AFP
By

SMALL SALARIES NOT MAIN CAUSE OF CORRUPTION, SAYS MINISTER

Thursday, October 30, 2003 10:13:10 PM


Jakarta - Small salaries are not the main cause of corruption within Indonesia`s bureaucracy, Finance Minister Boediono said here Thursday.

"It is not true that the small salaries of civil servants are the reason that corruption is so rife in Indonesia," the minister said at a function to mark the 57th anniversary of Financial Day here on Thursday.

While the state still lacked the financial capability to pay higher civil servants` salaries, what Indonesian civil servants were now receiving was not very low compared to their peers in Vietnam, China or India, he said.

No visa for Indonesia

Posted Thu, 30 Oct 2003

Indonesia will allow tourists from 20 countries to obtain visas on arrival when its new visa policy, hotly contested by the tourism industry, comes into force in December, it was announced Tuesday.

The government, which currently gives visa-free entry to tourists from 60 countries, will from December 1 require most of them to buy visas either before or when they enter the country.

The policy has sparked protests from the tourism industry, which is still struggling to recover from the impact of the Bali bombings on October 12 last year.

Tourists from 20 countries and Taiwan will be able to obtain visas on arrival, said immigration office spokesman Ade E. Dachlan. "The visa-on-arrival facility will last only for 30 days but can be extended," the state Antara news agency quoted him as saying.

The countries are Argentina, Australia, Brazil, Britain, Canada, Denmark, Finland, France, Germany, Hungary, Italy, Japan, New Zealand, Norway, Poland, South Africa, South Korea, Switzerland, the United States and the United Arab Emirates.

Tourists from eight countries and two regions will not need visas at all because their governments give Indonesians similar privileges. They are Brunei, Chile, Malaysia, Morocco, Peru, Singapore, Thailand, the Philippines, Hong Kong and Macau.

Tourism suffered another blow with the regional outbreak of Severe Acute Respiratory Syndrome earlier this year. An August 5 hotel bombing in Jakarta also unnerved some travellers.

Foreign tourist arrivals in August were 368 217, a 13 percent decline on the previous year.

AFP

Britain strengthens its terror warning for Indonesia

Britain has strengthened its warning of possible terror attacks in Indonesia, saying Westerners face a "high general threat" throughout the country.

The latest embassy advisory for the first time names the al Qaeda-linked Jemaah Islamiyah (JI) terror group as the leading threat.

The embassy, advising against non-essential travel to Indonesia, says it continues to receive information that indicates terrorists are planning further attacks.

Indonesia's top security minister, Susilo Bambang Yudhoyono, warned 10 days ago that fugitive JI suspects are determined to commit further attacks soon.

Security at Jakarta hotels, offices, apartment blocks and other premises has been tightened markedly since the bombing of the J W Marriot hotel which killed 12 people in August.


30/10/2003 19:05:29 | ABC Radio Australia News

Indonesia arrests one of most wanted

30.10.2003 - 06:45
JAKARTA (Reuters) - Indonesian police have arrested one of the most wanted men in Southeast Asia, a key suspect in
the August 5 bombing of the U.S.-run Marriott hotel in Jakarta, a senior officer says.

The man, identified only as Tohir, was among two people arrested on Wednesday, national police chief General Da'i
Bachtiar told reporters. He had previously said Tohir was among Southeast Asia's top five most wanted militants.

"We have detained two people, Tohir and Ismail," Bachtiar told reporters. He added that Tohir was one of those who was
ready to be part of a suicide squad to attack the Marriott hotel.

Earlier, the official news agency Antara reported the arrest was made at a hotel in Indonesia's West Java town of
Cirebon. It said police had also seized bomb materials from the suspects.

More than two dozen people have already been detained in connection with the suicide car-bomb blast at the Marriott that
killed 12 people and wounded 150.

One bomber was believed to have died in the Marriott blast. He was driving the car that was packed with explosives and
blew up in the forecourt of the hotel.

Astro eyes Indonesia as next target market

By B.K. SIDHU

ASTRO’S next stop is Indonesia. After its resounding success in Malaysia and Brunei, Astro All Asia Networks plc is believed to be eyeing Indonesia as its next target market for regional expansion.

Sources said Astro is “working with some partners in Indonesia” and is expected to offer content similar to what is now available here to the Indonesian market.

It is unclear who its partners are, but sources said there was a concerted effort to venture into new markets to realise Astro's long-term vision of becoming a regional broadcasting hub.

A unit of Astro, Astro Entertainment Networks Ltd (AENL), had last month entered into an exclusive licensing agreement with Hong Kong based-TVBI Company Ltd to offer TVB’s Chinese language drama serials for the Indonesian market.

Under another deal, AENL – incorporated in Mauritius – also plans to develop and aggregate drama serials in Bahasa Indonesia for the Indonesian and other South-East Asian markets.

Asked on regional expansion after Astro's listing ceremony yesterday, group chief executive officer Ralph Marshall said: “Astro would continue to look for opportunities in line with its overall plan and vision of becoming a regional broadcasting hub.”

He said the focus was on developing Malay and English language content; that was where it had invested in the past and would continue to make significant investments in the future. Astro is in a position to lend expertise and content since it has established itself as a well-known brand in the broadcasting arena.

“Astro's strength lies in its branding and its management team which has managed to steer the company although the initial years were tough,” an industry expert said.

Besides Marshall, who has been with the company from the onset, its core team comprises chief financial officer Rohana Rohzan, chief operating officer David John Butorac, radio operations executive director Borhanuddin Osman, marketing and publications executive director Chia Boon Lim and Celestial Pictures Ltd CEO William Pfeiffer.

Celestial, a wholly owned subsidiary of Astro, has rights to the world's largest Chinese film library, also known as the Shaw Brothers library, in Hong Kong.

Besides offering direct-to-home services in Brunei via a 48.9% stake in Kristal-Astro Sdn Bhd; Astro operates two radio stations in Calcutta and has an ISP (Internet service provider) licence in India.

Indonesia's Islamic parties in talk of alliance

By Shawn Donnan in Jakarta
Published: October 29 2003 12:48 | Last Updated: October 29 2003 12:48

Indonesia's long-fractured Islamic political parties are in talks over the creation of a coalition that could help unseat an increasingly vulnerable President Megawati Sukarnoputri at elections next year.

Representatives from five Islamic parties are expected to gather in a Jakarta hotel next Wednesday for what they insist remain informal discussions.

However, the meeting raises the prospect that the often-divided Islamic vote in Indonesia may unite behind a single presidential candidate at a crucial point next year, further endangering Mrs Megawati's already diminishing re-election prospects.

Mrs Megawati was kept from the presidency after the last election in 1999 after Islamic parties united to oppose her candidacy. She ascended to her nation's leadership in 2001 after the impeachment of Abdurrahman Wahid.

Since then, parliamentary and presidential elections have been separated. Voters will cast ballots in April next year for parliament and vote directly on the presidency in July.

Most political analysts believe that no single candidate will garner the majority needed in that July ballot to avoid a second round that would feature the top two vote-getters.

That has prompted presidential hopefuls to begin casting around for support outside their parties and possible coalitions. Besides the Islamic parties, preliminary approaches have also taken place between members of Mrs Megawati's Indonesian Democratic Party of Struggle and the country's other major secular party, the Golkar party of former strongman Suharto.

In what he has called a bid to "switch the political rhythm," Parliamentary Speaker Amien Rais, the candidate of the National Mandate Party (Pan), has been leading efforts to unite the Islamic vote.

"The point is to replace Megawati," he told reporters last week. "If she comes forward and wins again, I believe there will be no changes."

The prospects for an Islamic coalition remain fragile, though. Members of other Islamic parties, including the United Development Party of Vice President Hamzah Haz and the National Awakening Party of Mr Wahid, stressed Wednesday that next week's planned talks were only preliminary.

That highlights a longstanding feature of Islamic politics in Indonesia. Indonesia is home to more Muslims - almost 200m - than any other country in the world and Islamic parties garnered about a third of the vote in the country's only two real democratic elections, in 1955 and 1999.

But the Muslim parties have long been divided by diverging personal agendas, rivalries, and differing interpretations of Islam even.

"They have been talking about [a coalition] for 40 years now," said Rizal Mallarangeng, a prominent political analyst and advisor to Mrs Megawati. But "they can never agree amongst themselves about what the fundamentals are that they are fighting for."

Additional reporting by Taufan Hidayat

Indonesia To Sell BII To Kookmin Bank, Temasek

Wednesday October 29, 8:07 PM

JAKARTA (Dow Jones)--The Indonesian Bank Restructuring Agency said Wednesday that a consortium led by South Korea's Kookmin Bank (060000.SE) and Temasek Holdings Pte. Ltd., the Singapore government's investment arm, has won a bid to buy a 51% stake in PT Bank Internasional Indonesia.

The consortium raised its offer for the stake from a bid submitted earlier this week, Sumantri Slamet, an IBRA deputy chairman, told reporters. Kookmin-Temasek beat the only other bidder for the BII stake - a consortium led by Bank Panin, a medium-sized Indonesian bank, and Austria's second-largest bank, Raiffeisen ZentralBank Oesterreich AG (RZO.YY).

IBRA didn't disclose the exact financial terms of the deal, but said the offer valued BII - Indonesia's sixth largest bank - at 1.2 times book value of 68 rupiah ($1=IDR8,530) a share. Given that the bank's outstanding shares total 47.8 billion, the consortium will pay around $230 million for the stake, analysts said.

The agency is still detailing a sales and purchase agreement with the consortium, and the central bank must also review the sale before it becomes official.

News of the deal came shortly after an announcement of of a lending scandal at state-owned Bank Negara Indonesia.

Police have detained two senior executives of the bank, and are questioning at least nine other employees, over allegations of a $200 million fraud involving letters of credit.

The U.S. dollar rose to an intraday high of IDR8,600 on the Bank Negara news, but fell almost 1% to IDR8,530 on the Bank Internasional sale.

Indonesian stocks closed down 0.4% on profit taking. The Jakarta Composite index is up 47% since the start of the year.

Temasek may later move to merge Bank Internasional, the former lending arm of Indonesia's Widjaja family, with Bank Danamon, Indonesia's fifth largest bank, analysts said. Temasek led a consortium which bought a 51% stake in Bank Danamon from IBRA in June for around $370 million. Combining the two banks would create an institution only slightly smaller than PT Bank Central Asia, Indonesia's third largest bank.

But a business plan submitted by Kookmin-Temasek as part of their bid didn't mention any intention of merging the two banks, Sumantri said.

The Kookmin-Temasek consortium must hold the BII shares for three years before selling them to another party, IBRA said.

IBRA has sold two other banks since the Asian crisis. In March 2002, a consortium led by U.S. investment firm Farallon Capital paid $531 million for a 51% stake in Bank Central Asia. In November last year, Malaysia's second largest bank Commerce Asset-Holding Bhd bought a 51% stake in mid-sized Niaga Bank for $115 million.

ASIA DEBT: Indosat Bond Lifts Mood For Indonesia Assets

Wednesday October 29, 6:28 PM

By Shen Hong
A Dow Jones Newswires Column

SINGAPORE (Dow Jones)--PT Indonesia Satellite Corp.'s well-received $300 million global bond sale marks a turning point in investor sentiment for depressed Indonesian assets, but individual credit strength will remain a big factor for future corporate debt issuance from the country.


Indosat's quasi-sovereign nature and the business it is in, telecommunications, were two features which shifted investor demand in its favor, analysts said. Timing too was a big plus. It is the first major international bond deal out of the country since an upgrade of the sovereign ratings earlier this month.

Indeed, said a banker involved in the deal, "It's the first genuine global deal from Indonesia since 1997 and therefore is a test case for investors from the U.S. and Europe. It serves as a benchmark for the sector."

Indonesia's second largest telco, Indosat priced its seven-year bond at par on a 7.75% coupon late Tuesday, tighter than the originally targeted 7.75%-8.25% range. The revision in price followed heavy subscription for its original $200 million offer. The deal was increased to $300 million at the last minute.

The ease with which Indosat sold the bond contrasts with the efforts of two other fellow Indonesian borrowers in September.

Coming to market just after a deadly bomb attack in Jakarta in August, miner PT Aneka Tambang and gas utility PT Perusahaan Gas Negara struggled to draw investors. Demand for Antam's $200 million bond was poor but it managed to raise the amount it sought. But for PGN, demand was so poor for its maiden global issue it had to cut the deal to $150 million from the originally planned $200 million.

Reflecting how the mood has changed over Indonesian assets, Indosat's bond deal drew a large proportion of investors outside of Asia. Previous corporate dollar bonds went largely to local investors.

Non-Asian Investors Took Half The Issue

According to people familiar with the deal, European investors took up around 35% of the bond, while those from the U.S. composed 15% of the total. The rest were scattered across Asia, they said.

Investors who didn't manage to get a share of the issue swarmed into the secondary market Wednesday, pushing the bond to trade as high as 101.13 at its debut.

Propelling demand has been the persistent search for yield among institutional investors and Indonesia's sovereign upgrade earlier this month.

"The search for yield is still a general theme right now, so any kind of ratings upgrade will benefit such transactions," said a credit analyst with a U.S. bank in Singapore.

Earlier this month, Standard & Poor's Ratings Services raised Indonesia's foreign-currency rating to B with a stable outlook, up from B-, commending it for improved fiscal conditions, stronger external liquidity and growing economic stability.

"On the macro level, everybody is now expecting a decent recovery in the U.S. and faster growth in Asia, so the risk appetite is pretty high. So the overall environment for high-yield bonds is more conducive," said a credit analyst with another U.S. bank in Hong Kong.

"But when you need to add high-yield risks into your portfolio, there are only two risks here in Asia: Indonesia and the Philippines. And I would say that Indonesia is a good risk, while the Philippines is a bad one," said the Hong Kong-based analyst.

Moody's Investors Service has assigned a (P)B2 rating with a stable outlook on Indosat's bond, while S&P rated the debt B+, also with a stable outlook.

Indonesia's improving outlook may continue to underpin future debt offerings from the country, but analysts were quick to caution against undue optimism over the country's credits because of Indosat's certain unique characteristics.

3-4 More Indonesian Corp Bonds In Pipeline

Another three or four new bond offerings from Indonesian companies are in the debt pipeline, aimed at a year-end target, said a fund manager at a European bank in Singapore.

"People like Indosat not only because it's a good credit but also because it has a quasi-sovereign nature," said the fund manager, adding the Singapore government's significant presence in the company also boosted confidence among investors.

Singapore Technologies Telemedia, a state-owned company, has a 42% stake in Indosat, while the Indonesian government has 15%.

"On a micro level, there are also two main reasons for Indosat's success. One is that it has Telkomsel as a good precedent. If you want Antam or PGN, there's no precedent," said the Hong Kong-based analyst.

PT Telekomunikasi Selular, or Telkomsel, is Indonesia's largest mobile phone company.

"The other reason is that there's nothing better than telecom if you want credit exposure in Indonesia. The sector has universal standards, is not country specific, and is easy to understand for offshore investors. A lot of people didn't understand the businesses of PGN and Antam," he said.

"So going forward, a case-by-case experience may still apply to different corporate credits from Indonesia," he added.

The global bond is part of Indosat's larger refinancing exercise, involving bonds denominated in both U.S. dollars and rupiah, as well as a syndicated rupiah bank loan. Indosat is seeking to raise 2.5 trillion rupiah ($1IDR8,575) through the rupiah-denominated bond offering.

The company will use the proceeds from both bonds to partly refinance its consolidated debt of around US$900 million. Plans to merge its wholly owned cellular units, PT Indosat Mobile Multi Media and PT Satelit Palapa Indonesia, or Satelindo, into the parent company next month will help consolidate the debt of the three companies, making it easier to refinance the borrowing.

Barclays Capital, Goldman Sachs, and ING were co-bookrunners for Indosat's bond.

Indonesia Bank Rakyat To Raise $490M In IPO

Wednesday October 29, 5:59 PM

JAKARTA (Dow Jones)--PT Bank Rakyat Indonesia (RKI.YY) is set to raise around $490 million by selling a 40.5% stake, the deal's underwriters said Wednesday, in the country's largest initial public offering since the 1997-98 Asian financial crisis.

UBS AG and Indonesia's Bahana Securities received offers from institutions for 65 billion shares in the state-owned bank this week ahead of the official subscription period between Nov. 3-5. A total of 4.76 billion shares are on offer, with some 381.18 million shares, or 8%, reserved for retail investors and bank employees.

The strong demand for Bank Rakyat's IPO allowed the bank to fix the price for the shares on offer at 875 rupiah each ($1=IDR8,580), the upper limit of previous price guidance given to investors, Pandu Djajanto, a government spokesman, told reporters. The offer price is equivalent to 1.4 times book value, a better price than the government received at its July sale of a 20% stake in Bank Mandiri, Indonesia's largest bank. That offer garnered $320 million and was priced at book value.

Bank Rakyat's offer was timed to coincide with a reawakening of foreign investor interest in Indonesia. The Jakarta Composite Index is up almost 50% since the start of the year amid a return of political stability here, which has helped the local currency to strengthen against the U.S. dollar, and allowed interest rates to fall.

Two-thirds of the demand for Bank Rakyat shares came from foreign investors, underwriters said.

Investors ignored a lending scandal at state-owned Bank Negara Indonesia which surfaced this week as the government launched its Bank Rakyat IPO. Police arrested two executives at Bank Negara, the nation's second-largest bank, and are questioning at least nine others, amid allegations of a $200 million fraud involving letters of credit. The government said Wednesday it will decide what action to take against the bank's management at a meeting slated for December, after the end of the Muslim fasting month. Meanwhile, shares in the bank have fallen 45% in the three days since the allegations surfaced.

By comparison, Bank Rakyat, Indonesia's fourth-largest bank, lends mainly to farmers and small businesses, and has only a small portion of loans with corporations, making it less likely to be involved in fraud which plagues much of Indonesia's banking system, analysts say.

"Investors are looking at specific company fundamentals, rather than the whole banking sector," said Chris Wong, a fund manager with Aberdeen Asset Management in Singapore, which subscribed to the offering. "The microlending sector where (Bank Rakyat) operates is growing. That's what people are looking at."

Indonesia plans to raise more funds from IPOs of state-owned companies to help reduce its budget deficit this year, including the sale of a minority stake in public natural gas utility Perusahaan Gas Negara in November.

The Indonesian Bank Restructuring Agency also announced Wednesday the sale of a 51% stake in PT Bank Internasional Indonesia (BNII.JK) to a consortium led by South Korea's Kookmin Bank (060000.SE) and Temasek Holdings Pte. Ltd., the Singapore government's investment arm.

The consortium raised its offer for the stake from a bid submitted earlier this week, Sumantri Slamet, an IBRA deputy chairman, told reporters. IBRA didn't disclose the exact financial terms of the deal, but said the offer valued Bank Internasional, Indonesia's sixth-largest bank, at 1.2 times a book value of 68 rupiah per share. Analysts said the deal would raise around $200 million for the government.

Indonesia's government decided to cut back Bank Rakyat's IPO from an initial plan to sell up to a 45% stake in the bank.

"It's not because of bad demand, but the government already got the target amount it was looking for," I Wayan Alit Antara, a senior executive at Bank Rakyat, told Dow Jones Newswires. Earlier this month, the government said it hoped to raise between $400-$500 million through the issue.

PRESS RELEASE:S&P Mulls Bk Negara Indonesia Alleged Fraud

Wednesday October 29, 4:59 PM
Following is a press release from Standard & Poor's:

SINGAPORE (Standard & Poor's) Oct. 29, 2003--Standard & Poor's Ratings Services said today that it is studying the rating ramifications for P.T. Bank Negara Indonesia (Persero) Tbk. (Bank BNI, foreign currency: B/Stable/B; local currency B/Positive/B) of an alleged fraud involving letters of credit supposedly issued by the bank.

Media reports have alleged that some bank staff members had fraudulently issued letters of credit amounting to about Indonesian rupiah (Rp) 1.7 trillion (US$202 million).

In the event the whole amount has to be written off, it would be the equivalent of a substantial two-thirds of the bank's net profits for 2002. In addition to the obvious immediate impact of any write-offs on the bank's financial position, the matter also raises questions about the integrity of internal risk controls.

Nevertheless it should be pointed out that the ratings assigned to the bank already take into consideration that the rated entity has much room for improvement in its risk management systems.

Bank BNI's investigation of the case is continuing.

Standard & Poor's will seek additional details of the matter and is likely to comment on the situation again.

Additional information is available at www.standardandpoors.com.

Helicopter Crash in Indonesia Kills 7

JAKARTA, Indonesia (AP)--An air force helicopter crashed at an air strip on the southern outskirts of the Indonesian capital on Wednesday, killing all seven people aboard, officials said.

The chopper came down at Atang Sanjaya military airstrip in Bogor, around 40 miles south of Jakarta, said a police officer who spoke on condition of anonymity. All seven people were killed, the police officer said.

No other details were immediately available.

INDONESIA TO FORM INVESTMENT PROTECTION TEAM

Wednesday, October 29, 2003 2:19:32 PM

Jakarta - The Indonesian government will form a team to protect domestic and foreign investments, Investment Coordinating Body (BKPM) chairman, Theo Toemion, said here Wednesday.

"A presidential decree on the setting up of the team will be finalized today (Wednesday)," Theo said after his meeting with President Megawati Soekarnoputri.

The team will be chaired by the head of state, he said, adding that ministers will be appointed as team members.

Indonesia Telkom Won't Complete '02 Re-Audit By End-Oct

Wednesday October 29, 2:12 PM

JAKARTA (Dow Jones)--State-owned PT Telekomunikasi Indonesia (TLK) won't be able to finish the re-audit of its 2002 accounts by the end of this month as initially planned, Telkom President Commissioner Bacelius Ruru told reporters Wednesday.

"I expect that Telkom will finish the re-audit by the first week of November," he said, adding that Telkom still has to complete details of the re-audit.

He didn't elaborate.

Telkom earlier said it needed to make a number of adjustments to its previously-issued financial statements for 2002. It said the adjustments would affect components in its financial statement as well as footnote disclosures.

The company said it expects these adjustments would affect information presented both according to local and U.S. accounting standards.

Telkom had appointed PricewaterhouseCoopers (X.PWC) to re-audit its 2002 financial statement.

The U.S. Securities & Exchange Commission had rejected Telkom's earlier filing for 2002 as it wasn't audited by an auditing firm recognized in the U.S., and asked Telkom to refile the its statement by July 15.

Telkom failed to meet the deadline but so far the U.S. SEC hasn't sanctioned Telkom.

According to Telkom's earlier reported 2002 results, approved by Indonesia's stock market regulators, Telkom had a net profit of 8.345 trillion rupiah ($1=IDR8,578), almost double that in the previous year.

Indonesia's Telkom to post stronger Q3 on mobiles

Reuters, 10.29.03, 12:44 AM ET

By Harry Suhartono

JAKARTA, Oct 29 (Reuters) - Indonesia's largest telecoms company, Telkom (nyse: TLK - news - people), is expected to report stronger underlying quarterly results as its mobile business grows but a weaker bottom line after a boost a year ago from a stake sale.

Analysts said PT Telekomunikasi Indonesia Tbk's results on Thursday could show revenue growth of more than 13 percent for the third quarter and recurring profit growth of around 35 percent.

But its net profit could drop by more than two-thirds after last year's figure was inflated by the sale of a 12.72 percent stake in its main cellular unit, Telkomsel, to Singapore Telecommunications Ltd for $429 million.

Agung Prabowo, an analyst at Mandiri Sekuritas, said Telkom's cellular business would be its main growth driver.

"Although its fixed-line sector is still growing, it would not be as strong as the cellular business," he said.

Indonesia, the fourth most populous country, has a penetration rate of just seven mobile phones per 100 people, compared with Thailand's 30 percent and 36 percent in Malaysia.

Telkom controls 53 percent of the cellular market while PT Indonesia Satellite Tbk (Indosat) (nyse: IIT - news - people) has 31 percent, according to a Citigroup report.

Many analysts forecast Indonesia's cellular sector will grow around 30 percent this year, and Telkomsel is likely to grow in line with the overall market.

That will help keep its profits rising into next year, when analysts expect its net earnings to grow 22.6 percent over forecast 2003 profits, according to Reuters Research.

SHARES SURGE

Third-quarter net profits should come in at around 1.40 trillion rupiah ($165.4 million), according to the average of two analysts polled by Reuters, compared with 4.21 trillion a year earlier. Stripping out the stake sale reduces last year's figure to around one trillion rupiah. Most analysts forecast only the company's full-year figures.

Tjandra Lienandjaja, head of research at GK Goh Securities, said third-quarter net profit should come in around 1.89 trillion rupiah, assuming its earnings equalled half of its first-half results.

Telkom shares have risen 59.7 percent since the beginning of the year, outpacing the Jakarta Composite Index's gain of 49.3 percent, on Indonesia's improving economic indicators, lower interest rates and stronger rupiah.

The rise is despite the company's failure so far to complete an audit on its 2002 results, which was requested by the U.S. Securities and Exchange Commission because regulators did not recognise Telkom's auditors.

Many analysts prefer Telkom to its main rival, Indosat, whose shares have risen by a quarter this year.

"Telkom has better prospects given the continued strong growth at Telkomsel, which we believe has the potential to surprise the market on the upside, while its competitors sort out their internal funding and operational issues," Citigroup said in a recent research report.

However, analysts say Indosat has potential to outperform Telkom in the short-run as investors speculate on the success of of a restructuring at Indosat, which aims to merge several units to become a leaner company.

Third-quarter revenues should be around 7.01 trillion rupiah, up 13 percent from a year earlier, said Prabowo, based on the company's full-year forecast for 6.2 trillion rupiah net profit on 26 trillion rupiah of revenues.

Analysts expect the company to beat its own forecast and post a full-year net profit of 6.88 trillion rupiah, still some 17.6 percent lower than in 2002, according to Reuters Research. ($1=8,465 rupiah)

Copyright 2003, Reuters News Service

Alleged JI leader goes on trial in Indonesia

Posted:1:29 PM (Manila Time) | Oct. 29, 2003
Agence France-Presse


JAKARTA - An Indonesian militant accused of leading the al-Qaeda-linked Jemaah Islamiyah (JI) terror network went on trial Wednesday for harboring a key Bali bombing suspect.

Prosecutors in their written indictment say Abu Rusdan gave refuge to Ali Ghufron, alias Mukhlas, in October 2002 - days after the nightclub bombings in the holiday island killed 202 people.

Mukhlas, who is a leading JI figure, is one of three people sentenced to death for his role in the blasts.

Rusdan "intentionally... concealed information on Bali bombing perpetrator Ali Ghufron alias Mukhlas and failed to provide information on Ali Ghufron's whereabouts to the authorities," the indictment says.

He could face up to 15 years in prison if found guilty.

The indictment also says Rusdan was appointed as acting JI emir, or leader, during a meeting at Puncak in West Java in April last year.

The trial was adjourned until Monday after defense lawyers complained they had not received copies of court documents. The indictment was not read out in court.

Supporters crowded into the courtroom. Some 10 or 15 of them who were later allowed to meet Rusdan in a holding cell kissed him on both cheeks and wished him good luck.

JI is blamed for the Bali nightclub bombings and for a series of other bloody attacks. But Wednesday's indictment was the first one in a Bali bombing trial to mention the network by name.

Rusdan told reporters he was not involved in the Bali attack. "If I had agreed I must have taken part.
But I didn't," he said, without elaborating.

Rusdan, 43, also denied that JI exists or that he had trained in Afghanistan.

"Jemaah Islamiyah does not exist as a formal organization nor does it exist as an underground organization," he told reporters.

The bearded Rusdan, wearing a white Muslim skullcap and long-sleeved shirt, appeared relaxed.

Police have said Rusdan, who was arrested in April this year, took over as JI's effective leader from Abu Bakar Bashir.

Last month Bashir, a Muslim cleric, was jailed for four years for taking part in a plot to overthrow the government but judges said there was no proof that he headed JI.

The network carried out the Bali blasts to avenge perceived oppression against Muslims worldwide.

Most of those killed were Western holidaymakers.

Three bombers have been sentenced to death and 26 have been jailed for terms ranging from life to three years.

The International Crisis Group of political analysts says JI staged some 50 bombings or attempted bombings in Indonesia starting in April 1999.

Indonesia Shares Down Midday On Pft-Taking; BNI Falls 10%

Wednesday October 29, 1:36 PM

JAKARTA (Dow Jones)--Indonesian shares are lower midday Wednesday as further profit-taking in select blue chips pushed the main index slightly lower, dealers said.

They added that overall market sentiment remains cautious with many investors continuing to take profit despite gains in equity markets across the region.

The Jakarta Stock Exchange Composite Index was down 0.1%, or 0.700 point, to 626.152. The main index opened 0.4% higher.

Decliners lead gainers 62 to 33, with 76 stocks unchanged.

Volume is 630 million shares valued at 358 billion rupiah ($1=IDR8,578).

Dealers said profit-taking in stocks, which have performed well since the start of the year, is leading the decline. Profit-taking has become more frequent in recent weeks because Indonesia's stocks have risen almost 50% since the start of the year.

Cement maker Indocement Tunggal Prakarsa has fallen 1.3%, or IDR25, to IDR1,875, and consumer goods producer Unilever Indonesia is down 0.8%, or IDR25, to IDR3,200.

Bank Negara Indonesia is still succumbing to selling pressure, falling 10%, or IDR10, to IDR90 amid allegations of a $200 million lending scandal at the bank.

Police confirmed Tuesday they had arrested two of the bank's executives in connection with the scandal, which revolves around the issue of allegedly fictitious letters of credit. The BNI affair could hurt sentiment toward banking stocks, traders said.

Shares in Indonesia Satellite Corp. have risen 1.8%, or IDR200, to IDR11,550 after its American Depositary Receipts in New York rose 1.6% to $13.17.

Dealers expect the market to remain flat or slightly lower the rest of Wednesday.

Bank Rakyat Indonesia/IPO: Largest Since Asian Crisis

Wednesday October 29, 11:23 AM

JAKARTA (Dow Jones)--Bank Rakyat Indonesia has set its price for an initial public offering of a 45% stake in the bank at 875 rupiah ($1=IDR8,580) a share, a source at the bank told Dow Jones Newswires Wednesday.

The price is at the top end of the range the government set for the IPO, reflecting strong demand from investors during a two-week roadshow, which ended this week.

At this price, the 45% stake will raise more than $500 million for the government, which would make it the largest IPO since the 1997-98 Asian crisis. By comparison, Bank Mandiri's IPO earlier this year raised around $320 million.

Indonesia's government said late Tuesday an initial offer of a 36% stake in BRI, or 4.24 billion shares, was 10 times oversubscribed ahead of the official subscription period in the first week of November. Indonesia has said it will offer a further 9% of BRI, or 1.05 billion shares, if investors show strong demand for the first tranche.

Further details on the IPO offering were not available.

The government had hoped to sell the IPO at between IDR700 rupiah and IDR875 a share.

INDONESIA PRESS: Govt To Fire BNI Directors; Loan Scandal

Wednesday October 29, 9:52 AM

JAKARTA (Dow Jones)--The Indonesian government will fire president director of state-owned PT Bank Negara Indonesia (BBNI.JK) along with at least two other directors later this year following an allegation of a lending scandal in the bank, reports the Koran Tempo daily.

The daily quotes an unnamed government official as saying that the directors will be fired during an extraordinary shareholders' meeting in December.

The police confirmed Tuesday that two senior Bank Negara employees have been detained by police amid allegations of a $200 million fraud involving letters of credit. Police questioned nine other senior officials at the lender Tuesday, said police spokesman Brig. Gen. Soenarko.

BNI's board of directors has denied any responsibility for the affair. The bank is expected to brief the media about the case sometime this week.

Newspaper Web site: http://www.korantempo.com

Indonesia to give visa-on-arrival facility to 20 nations

JAKARTA, Oct. 28 (Xinhuanet) -- Indonesia will give the visa-on-arrival facility to 20 countries, the immigration office announcedTuesday.

The decision was made during a meeting on political and security affairs on Sept. 9, the immigration office's spokesman, Ade Dachlan, said.

"The visa-on-arrival facility will last only for 30 days but can be extended," he was quoted by state news agency Antara as saying.

The 20 countries include Argentina, Australia, Brazil, Britain,Canada, Denmark, Finland, France, Germany, Hungary, Italy, Japan, New Zealand, Norway, Poland, South Africa, South Korea, Switzerland, the United States and United Arab Emirates.

The facility will be granted in December, pending the issuance of a presidential decree, he said. Enditem

Indonesia to give visas on arrival

October 28, 2003

Indonesia would allow tourists from 20 countries, including Australia, to get visas on arrival from December, when a controversial new visa policy comes into force.

The government currently allows visa-free entry to tourists from 60 countries.

From December 1, it will require most to buy visas before or when they enter the country.

The policy has sparked protests from the tourism industry, which is struggling to recover from the impact of the Bali terrorist bombings on October 12 last year.

Immigration office spokesman Ade E Dachlan said tourists from 20 countries and Taiwan would be able to obtain visas on arrival.

"The visa-on-arrival facility will last only for 30 days, but can be extended," the state Antara news agency quoted him as saying.

The countries are Argentina, Australia, Brazil, Britain, Canada, Denmark, Finland, France, Germany, Hungary, Italy, Japan, New Zealand, Norway, Poland, South Africa, South Korea, Switzerland, the United States, and the United Arab Emirates.

Tourists from a further eight countries and two regions would not need visas at all because their governments allowed Indonesians similar privileges. They are Brunei, Chile, Malaysia, Morocco, Peru, Singapore, Thailand, the Philippines, Hong Kong, and Macau.

Tourism suffered a further blow with the regional outbreak of severe acute respiratory syndrome earlier this year. An August 5 hotel bombing in Jakarta also unnerved some travellers.

In August, 368,217 foreign tourist arrived in Indonesia - a 13 per cent decline on the previous year.

Accused militant goes on trial in Indonesia's Sulawesi

28 Oct 2003 10:08:07 GMT

JAKARTA, Oct 28 (Reuters) - Indonesian prosecutors in the Central Sulawesi city of Palu brought to court on Tuesday a man accused of being the treasurer of a militant cell and supporting terror activities, local media reported. Antara, Indonesia's national news agency, said prosecutors identified the man, Fajri, as the treasurer of a Jemaah Islamiah branch that covers Sulawesi and Borneo islands.

Jemaah Islamiah (JI) is a Southeast Asian Muslim militant network blamed for attacks in the region including last year's Bali blasts that killed 202 people, mostly foreign tourists.

Prosecutors said Fajri held money for his cell and helped hide a Bali bombing suspect. Police arrested Fajri last April.

Indonesian authorities have said JI had military camps in Central Sulawesi's Poso regency, site of bloody Muslim-Christian clashes that have killed 2,000 since 1999.

There had been a period of calm in the province after a peace deal reached in late 2001, but mysterious gunmen this month attacked predominantly Christian villages near Poso, killing at least 10 people.

Police have been reluctant to link the recent incidents to any specific group but the country's leading newsmagazine, Tempo, reported this week the attackers had been trained in a JI-run camp in the Sulawesi jungles.

The head of Indonesia's counter-terrorism board told Reuters on Tuesday the link was still fuzzy but said some JI members were now moving to Poso to avoid the intensifying hunt for them.

"The link is still unclear but we have heard from the intelligence agency that there was a JI training camp," said board coordinator Ansyaad Mbai, who is a police general.

"In Java, many of them have been caught so their colleagues now go to remote places. One of them is Poso," he said.

Prosecutors will bring to court on Wednesday a man called Abu Rusdan, who, police believed, replaced Abu Bakar Bashir as the leader of JI five days after the Bali blasts on October 12 last year. However, the specific charge against Rusdan centres on helping to hide the top controller of the Bali bombing operation.

A Jakarta court found Bashir guilty of treason and sentenced him to four years in jail early in September but rejected the state prosecutors' charge that the preacher was the JI chief.

INDONESIA TO INCREASE COOPERATION WITH TAJIKISTAN

Tuesday, October 28, 2003 3:13:44 PM

Jakarta - Indonesian President Megawati Soekarnoputri on Tuesday expressed her wish to increase the country`s bilateral cooperation with Tajikistan, formerly under the Soviet Union.

"We have agreed to make the necessary moves to increase our bilateral cooperation," Megawati said after her meeting with Tajikistan President Enomali Sharifovich Rahmanov.

Enomali arrived here late Monday for a five-day visit.

Criticism in Indonesia over suspended jail term for newspaper editor

An international journalists' group has criticised an Indonesian court decision for imposing a suspended jail term on the editor of a newspaper for insulting the country's President, Megawati Sukarnoputri.

A Jakarta court on Monday found the editor of Indonesia's Rakyat Merdeka daily guilty of libel.

He was given a suspended six-month jail term and one-year probation.

In a statement, the Committee to Protect Journalists, says it is appalled that Indonesia is using arcane colonial laws to criminalise journalists.

The 34-year-old editor says he will appeal the conviction.


28/10/2003 22:51:31 | ABC Radio Australia News

Commercial Court badly needs full societal support

Sebastiaan Pompe, IMF Residence Legal Advisor , Jakarta

The editorial of The Jakarta Post on Oct. 21, 2003 describes the commercial court system as bankrupt. It argues in favor of promptly enacting the Bankruptcy Law Amendment and "of changing the rules of the game". This means, according to the editorial, that procedures must be more clear-cut, and proceedings more accountable and transparent.

It is clear that the commercial court has considerable problems of various sorts and I fully support the general drift of this editorial. It is critical that the new Bankruptcy Law is enacted promptly as envisaged in the government White Paper. It will put an end to the insecurity that comes from a Bill pending endlessly in Parliament, and it includes some useful new features that should enhance the effectiveness of bankruptcy proceedings. Also, it is useful to continue enhancing mechanisms of transparency and accountability, as the editorial proposes.

At the same time there are some aspects that the editorial perhaps fails to fully capture, and which are mentioned here to add some depth and perspective.

First, the editorial says that rules must be changed to make the court more accountable and transparent. It is not certain that this is an issue that can be resolved by new rules alone. In fact, judging just by the rules, the commercial court continues to be the most advanced and prominent experiment in judicial reform in the country. Of all courts in the land, the commercial court has the most accountable and transparent regulatory set-up.

To give some examples, all commercial court decisions are accessible to the public and in fact published (Himpunan Putusan Pengadilan Niaga dalam Perkara Kepailitan by Tatanusa). It is the only court with dissenting opinions, so the individual position of judges can be identified. Dissents have in fact been issued. The decisions are analyzed and commented upon, which comments are accessible on the internet (Hukumonline.com -- Bappenas banner).

It is the first court in the land to introduce ad hoc judges, by which professional standards and accountability are enhanced. It is the only court with standard operating procedures, which are accessible on the internet, and which aim at pinning down procedures with standard forms and fixed administrative routines which are both published and available on the internet (Book: Mahkamah Agung RI: Pedoman Pelaksanaan Administrasi Penyelesaian Perkara Niaga (2003); Website: Hukumonline -- Bappenas banner: MOCCA).

Reality is however, that these various incisive measures of transparency and accountability have failed to generate the expected responses. This is not just an institutional problem, as in fact civil society has failed to respond also. The private legal professions, the universities, the NGO's (with some, but few, exceptions) do not use the transparency measures such as published decisions to conduct solid legal analysis. They have not triggered public debate, or made it an issue in law journals, etc. The transparency has failed to generate structured academic debate, which is the necessary support infrastructure for systemic court decisions. The various efforts in this area continue to be largely sponsored by donors and hence are brittle.

The state fails to respond equally. Until recently, there has been no noticeable effort by the Judiciary or the Government to make performance assessment of court decisions part of the career development of judges. Basically, the quality of the decisions does not seem to matter much for judicial career development, and accountability serves no clear purpose. The issue therefore is less whether accountability systems throw up enough data, but whether and how such data are used by civil society and the judicial administration to assess judges.

All legal systems require constant adjustments and improvements, indeed sometimes radical overhauls. But in this area the principal problem resides less in the set of rules and procedures as than in the way they are being applied.

Second, it is not hard to agree with the editor's observation that ongoing and structured professional education is necessary. Here again, the commercial court has served as pilot for reform for the judiciary as a whole. The first 16 commercial court judges were specially selected and exposed to a very rigorous training program over a period of five years.

They were trained infinitely more, and more intensively, than any other judge in the land. The training was provided by the Indonesian government, and a whole range of donors including the IMF-Dutch TA, the World Bank, AusAid and various others. Special training manuals and reference works were developed in the process. The training was so heavy at times that it threatened to interfere with court sessions.

The views expressed in this article are his own and do not in any way reflect those of the IMF.

EXCLUSIVE/Indonesia Indosat: Follows Upsizing

Tuesday October 28, 2:20 PM

By Shen Hong
Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--PT Indonesia Satellite Corp. (IIT) has received $800 million in orders for its planned $300 billion global bond, a personal familiar with the situation told Dow Jones Newswires.

This new indication of firm demand for the bond by Indonesia's second-largest telecommunications company follows Indosat increasing the size of the issue by half Monday from its earlier proposal and tightening the indicative coupon for the seven-year bond.

The company expects to price the bond at 7.75%, the person said. The company tightened the indicative coupon from an initial 7.75%-8.25% range due to strong demand.

Pricing is expected to take place Tuesday.

The planned bond is part of Indosat's larger refinancing exercise, involving bonds denominated in both dollars and rupiah, as well as a syndicated rupiah bank loan. Indosat is seeking to raise 2.5 trillion rupiah ($1=IDR8,550) through the rupiah offering.

The company will use the proceeds from both bonds to partly refinance consolidated debt of around US$900 million. Plans to merge its wholly owned cellular units, PT Indosat Mobile Multi Media and PT Satelit Palapa Indonesia, or Satelindo, into the parent company next month will help consolidate the debt of the three companies, making it easier to refinance the borrowing.

Singapore Technologies Telemedia owns a 42% stake in Indosat, while the government has 15%.

Moody's Investors Service has assigned a (P)B2 rating with a stable outlook on the proposed bonds, while Standard & Poor's Ratings Services rated the bonds B+, also with a stable outlook.

Fresh violence hits Indonesia's restive Sulawesi island

2003-10-28 / Associated Press /

Unidentified gunmen shot and killed a Christian villager on Indonesia's Sulawesi island yesterday, the latest in a series of attacks in the region that was wracked by religious violence between 1999 and 2001.

The attack came as a media report blamed the al-Qaida-linked Jemaah Islamiyah terror group for recent attacks against Christians in the province to mark the anniversary of last year's Bali bombings. Police, however, denied the report.

Police Lieutenant Colonel Abdi Darma said assailants shot and killed a Christian man early yesterday as he tended his cocoa plot close to the town of Poso in central Sulawesi. The attackers fled to nearby jungles, he said, declining to give more details.

Escalating tensions

At least 12 Christians have been killed in Sulawesi province over the last two weeks, raising fears of a return to the communal bloodletting that left more than 1,000 people dead between 1999 and 2001.

Tempo weekly news magazine reported that Jemaah Islamiyah, the shadowy group blamed for last year's October 12 Bali bombings, was behind the fresh outbreak of violence. The blasts killed 202 people, mostly foreign tourists.

"It was for the anniversary for the Bali bombs," an alleged senior member of the group told the magazine.

But police Brigadier General Soenarko said the killings "had nothing to do with the ... Bali bombing ... or Jemaah Islamiyah."

A senior Indonesian intelligence adviser, speaking on condition of anonymity, also said the recent Sulawesi killings were perpetrated by Jemaah Islamiyah to rouse its fighters into further violence.

Indonesian police and intelligence assessments often conflict with each other.

Police have arrested 14 suspects in the Sulawesi attacks, and shot and killed six others they claimed were also involved. They have so far failed to reveal a motive for the attack.

Philippine connection

Last week, Indonesian authorities said the weapons used in the killings were smuggled in from the Philippines, the southern part of which is home to a long-running Muslim separatist insurgency and neighbors Sulawesi island.

About 90 percent of Indonesia's more than 210 million people are Muslims, making it the world's most populous Islamic country. Christians, Hindus and Buddhists make up the rest.

Jemaah Islamiyah, which allegedly has cells across Southeast Asia, is fighting for a regional Islamic state. It has been blamed for bombings in the Philippines and failed terror plots in Singapore.

INDONESIA NEEDS YOUTHS WHO WANT TO MASTER SCIENCE, MINISTER SAYS

Tuesday, October 28, 2003 2:34:12 PM

Padang - Indonesia is in need of youths who want to master science and technology, Education Minister A Malik Fadjar said here Tuesday.

Aside from mastering science and technology, he said the youths should continue to develop discipline and moral values to keep the nation`s unity and integrity.

"As future national leaders, the youths are required to have scientific and technological capabilities," Malik Fadjar said in his written address, read by representative of Padang city mayor, OS Yerli Asir, during the 75th anniversary celebration of Youth Pledge Day here.

Indonesia Hot Stock: Bank Negara Plunges A Further 10%

Tuesday October 28, 11:53 AM

JAKARTA (Dow Jones)--Shares of PT Bank Negara Indonesia, the country's second largest bank by asset size, tumbled further to a six-month low Tuesday amid allegations of a $200 million lending scandal.

At mid-morning, BNI shares were down 10 rupiah ($1=IDR8,585), or 9.5%, at IDR95 on much heavier than normal volume of 10.5 million shares. That brought the stock's total losses over the two days since the allegations surfaced to 27%.

Local media reported Indonesian police had detained two executives of the state-owned bank on suspicion of creating fictitious letters of credit amounting to around $200 million. A travel ban was imposed on six other people.

BNI's board of directors denied any responsibility for the affair and the bank is expected to brief the media about the case sometime this week, the Jakarta Post said.

BNI reported consolidated net profit equivalent to about $180 million for the first half of this year, so any losses from the alleged scam could potentially dent its earnings significantly.

Traders said the allegations could also hurt foreign investor sentiment toward the country's banking sector. As part of its sales of state assets, the government hopes to sell a minority stake in BNI through the market, perhaps next year.

However, the tumble of BNI shares had little effect on Indonesian markets, partly because only a tiny portion of the bank's shares are available for trade on the stock market. The Jakarta Composite Index was up 0.5% at 631.986 by mid-morning; the rupiah was moderately weaker against the U.S. dollar, but traders largely attributed this to other factors such as month-end debt repayments by local companies.

Indonesia's success in selling other banking assets is likely to limit fallout from the BNI affair, traders said.

The government is in the process of selling a 51% stake in Bank Internasional Indonesia, which it may complete this week. BII's sale has attracted two final bids from overseas investors. Temasek Holdings Pte. Ltd., the Singapore government's investment arm, and South Korea's Kookmin Bank (060000.SE) made a joint bid, while Bank Panin, a medium-sized Indonesian bank, teamed up with Austria's second largest bank, Raiffeisen ZentralBank Oesterreich AG (R.RZO), for the other bid.

Next week, Indonesia hopes to raise between $400 and $500 million from the sale of up to a 45% stake in state-owned PT Bank Rakyat Indonesia through an initial public offering.

Temasek asked to up bid for Bank Internasional Indonesia

28 October 2003 1357 hrs (SST)

SINGAPORE : The Indonesian Bank Restructuring Agency is holding out for more money for Bank Internasional Indonesia.

IBRA was expected to announce on Tuesday whether Temasek Holdings and its consortium partner Kookmin Bank have been successful in bidding for a 51 percent stake in Indonesia's sixth largest bank.

But it is putting off its decision to give the Temasek consortium and a rival group led by Indonesia's Panin Bank more time to up their bids.

That is despite both sides already offering more than the floor price, which was set at 1.5 half times book value.

Neither consortium is saying how much they have offered in dollar terms.

But analysts estimate the 51 percent stake available is worth around 2.5 trillion rupiah, or S$515 million. - CNA

Indonesia's IBRA Sells GT Tyre, Other Companies

Tuesday October 28, 3:26 PM

JAKARTA (Dow Jones)--The Indonesian Bank Restructuring Agency, or IBRA, said Tuesday it has sold GT Tyre and GT Petrochem to Singapore's Garibaldi Century for 1.79 trillion rupiah ($1=IDR8,580).

GT Tyre and GT Petrochem, among the largest producers of tires in Southeast Asia, were among several assets pledged by Indonesian businessman Sjamsul Nursalim after the 1997-98 Asian financial crisis to help settle his debts to the government.



SingaporeAll the web





Nursalim, who has business interests ranging from the financial sector to agriculture through his Gajah Tunggal Group, owed IDR28 trillion to the government after the crisis.

The value of assets he has transferred to IBRA has fallen well short of this debt.

IBRA told a news conference that it also sold a property company PT Kota Bukit Indah, a former Salim Group company, to PT Mahadika Kapita for IDR351 billion.

Two property companies taken over from the Danamon Group were sold to local investors for a total of IDR538 billion. A catering company formerly owned by Mohamad "Bob" Hasan raised IDR235 billion, IBRA said.

Italy to Indonesia Project Bengal still a long way off

It was expected that the arrival of an Indonesian team would compensate at least partly for the non-appearance of Gucci representatives after the chief minister’s much-publicised trip to Italy in the company of the usual business associates of Alimuddin Street. The Indonesians including representatives of a multi-national group and an infrastructure development major were said to be interested not only in the power and food processing sectors but also in building townships, multiplexes, shopping centres and hotels. This cannot but lift the spirits of a government that so far has had very little to show in respect of foreign investment besides Mitsubishi in the manufacturing sector. But the new hope from Indonesia must necessarily be tempered with the thought that this was an exploratory mission conducted at the initiative of an Indonesia-based Bengali NRI whose connections with this state must be primarily sentimental. All that has happened is the signing of the minutes of the meetings that took place and the routine invitation extended to Buddhadeb Bhattacharjee to meet more industrialists in Indonesia.
It is the ground reality that matters more than sentiment. Nor does it appear that the two task forces which have been set up with commendable speed to monitor the Indonesian proposals will have much to do till something concrete emerges. The positive signal is that the Indonesian businessmen have discovered the potential for investment in areas that are likely to be protected from militant trade unionism. That still leaves the question of infrastructure in which the government’s record has been dismal. Finally, no amount of wooing of foreign investors can help West Bengal if within the country there is a persistent impression that the state’s industrial climate is far from encouraging. The Marxists may travel from Italy to Indonesia to prove that West Bengal is not all about rallies, bandhs and strikes, battered roads, traffic jams and absence of work culture. They would do better to get the basics right first, difficult though this must undoubtedly be for our friends in party and government.

Executive train derails in Indonesia's Central Java

www.chinaview.cn 2003-10-27 17:56:42

JAKARTA, Oct. 27 (Xinhuanet) -- An executive train, Argo Anggrek, departing from Pasar Turi station in East Java to Gambir station in Jakarta derailed in Indonesia's Purwadadi regency in Central Java on Monday.

A spokesman for the national train firm PT KAI Patria Supriyosoconfirmed the accident but failed to elaborate further.

"The information I received said that Pasar Turi-Gambir Argo Anggrek train derailed. But I have not received the complete information about that," he was quoted by Detikcom online news service as saying.

It is still unclear whether the accident injured the passengersor not. Enditem

Indonesia not to eliminate oil, electricity subsidies in 2004: official

www.chinaview.cn 2003-10-27 19:38:09

JAKARTA, Oct. 27 (Xinhuanet) -- Indonesian Minister of Energy and Mineral Resources Purnomo Yusgiantoro said here Monday that the targets of eliminating subsidies on oil and electricity in 2004 could not be met.

Purnomo asserted that under the current situation the subsidieson oil and electricity are still needed.

"It is impossible to reach the targets of cutting subsidies in 2004. As at the beginning of this year we tried to increase the oil price, but we failed because there was a miscommunication withthe people at that time," he said.

Although the government plans to imposed a fixed price on the oil in 2004, the minister said, subsidies for the oil must be increased.

However, Purnomo said that there would not be a rise of subsidyon electricity next year. He added that he would ask the Director General of Taxes to lower electrical price. Enditem

Editor punished for insulting Indonesia's Megawati

JAKARTA, Oct. 27 — A Jakarta court found a newspaper editor guilty on Monday of publishing material insulting Indonesian President Megawati Sukarnoputri and sentenced him to a suspended six-month jail term and one-year probation.

The case stemmed from stories in Rakyat Merdeka (Free People), a popular tabloid-style newspaper. Among other items at issue was a page-one article that carried a personal comment about Megawati after she raised fuel prices early this year.

''We decide that Supratman, the executive editor of Rakyat Merdeka, is guilty of libel against the president in the form of news reports,'' said presiding judge Zoeber Djajadi.

The 34-year-old editor said he would appeal the conviction.

His lawyer said the ruling hurt freedom of expression in Indonesia, where the press has become much freer and more outspoken since former president Suharto, who kept the media on a short leash, resigned in 1998 amid social unrest.

Rakyat Merdeka has a reputation for using strong language and provocative caricatures when it reports on domestic and international politicians. Supratman's case is not its first brush with the law.

Last month, a different Jakarta court sentenced chief editor Karim Paputungan to five months in jail, suspended for 10 months, for insulting parliament speaker Akbar Tandjung.

JI starting to regroup in Indonesia

October 27, 2003

The feared Jemaah Islamiah (JI) network responsible for the Bali bombings is beginning to regroup and launch new attacks against Christians in Indonesia to mark the onset of Ramadan, according to new reports.

Following several weeks of violence in Poso, central Sulawesi, in which 13 people died, Indonesia's respected Tempo magazine said the attacks were the handiwork of militants linked to JI.

The government and religious leaders have called for tolerance and peace during the holy month of Ramadan, during which observant Muslims must fast from dawn to dusk.

But in Poso, where Christians and Muslims have been engaged in sporadic but bloody fighting since 1998, Islamic militants recently relaunched a "jihad against Christian groups" to mark "perang amaliah", a local tradition of waging war during Ramadan.

Another man was shot dead there, although police were hesitant to blame the killing on religious extremists.

"In Poso this kind of incident can be common. We are not sure and it could be a business rivalry," Poso police chief Akbp Abdi Dharma told AAP.

Dharma said it was impossible to say yet whether JI was behind the violence and senior police intelligence officers had recently arrived in Poso in an attempt to confirm it.

But a former leader of the Laskar Mujahdin extremist group said he had no doubt the latest round of violence was prompted by JI.

Ikhwanudin, now working for an aid group in Poso, said JI militants failed in an attempt to recruit him back to the group three months before an upsurge of religious rioting earlier this month.

"I had enough. The ones who got benefits were the elites," he said.

Indonesia has moved extra forces to Poso to restore security.

But Ikhwanudin said the military, already heavily engaged against separatists in Aceh, must also be shifted into Sulawesi in greater numbers to quell the re-emergence of JI.

"Intelligence have found out that JI leaders were here, so they have to add some forces," he said. "They (the militants) are all ready to die."

The militants were using recruiters on Indonesia's main island of Java to help support the fight, he said.

"There were people from Java coming. They have been here, going into villages and summoning local friends," he said.

JAPANESE KAYAKER TO MAKE VOYAGE IN INDONESIA

Monday, October 27, 2003 2:27:06 PM

Jayapura - Japanese Satoru Hayata, 28, is planning to kayak his way from a port in Merauke district in Indonesia`s easternmost province of Papua to Sabang port in the country`s westernmost province of Aceh, a spokesman has said.

Hayata, who starts his long journey on Wednesday, is expected to complete the trip in five years, chairman of the Tokyo-based Graha Budaya Indonesia (Indonesian Culture Plaza), Seiichi Okawa, said here Monday.

Graha Budaya Indonesia is an Indonesian-Japanese cultural institution.