Rice popped into Indonesia, Papua pops back in the news

Activists want more details on Rice's visit

Strong words from human rights activists and grumbles from lawmakers greeted U.S. Secretary of State Condoleezza Rice on the second day of her two-day visit to the country on Wednesday.

Rights activists questioned whether Rice had sought Indonesian support for the signing of a Bilateral Immunity Agreement (BIA) during her trip to Jakarta.

Under the agreement, all American citizens -- be they members of the U.S. military corps, diplomats or businesspeople -- would enjoy immunity from prosecution by the International Criminal Court (ICC).

Separately, dozens of legislators refused to attend a meeting hosted Wednesday by the Indonesian Council on World Affairs, which featured Rice as the keynote speaker, in protest against what they said was "ambiguous" U.S. foreign policy.

Only 10 out of 40 legislators invited to the event showed up.

"The U.S. only gives empty promises to Indonesia. They promised to supply military spare parts and equipment (to Indonesia) last year, but to date this has not materialized," said legislator Djoko Susilo of the National Mandate Party (PAN), who was among those who boycotted the meeting.

Another legislator, Permadi of the Indonesian Democratic Party of Struggle said he did not attend the event because "I don't want to listen to a U.S. lecture about democracy."

Rice's visit and a changing U.S. foreign policy

Secretary Rice's visit to Indonesia aimed at sending a message that U.S. policies toward Indonesia are not only about cooperation in fighting terrorism -- which for the last 4-5 years has become the cornerstone of all other U.S. policies in East Asia.

The U.S. now wants to reiterate the importance of the other aspects of the relationship, particularly in the economic field, now that one of the sticking issues -- the ExxonMobil deal -- has been finalized. Private investors might be encouraged by this development, as this could indicate that Indonesia is able to implement laws and agreements.

It is also good that the U.S. pays a great amount of attention to support Indonesia's budding democracy, by providing support for the legislature, political parties and decentralization efforts; which are all critical to democratic consolidation in Indonesia. Support for education, especially at the tertiary level, is equally important.

The idea of establishing a fund for supporting the education of future Indonesian leaders is also critical for future U.S.-Indonesian relations. This should include support for Muslim educational institutions.

Improvements of military-to-military relations are important for their symbolism and have been timely. The efforts to reform the Indonesian military are continuing. The U.S. could encourage them to continue with these efforts, including the improvement of the organizational structure, education and training, as well as on the issue of accountability of past abuses.

U.S. policy on East Asia for too long have been focused on North East Asia. That is valid since that is where the main issues are. But East Asia has become one, and U.S. relations with Southeast Asia are also important, especially if she expects ASEAN to be the driving force for regionalism in East Asia.

The writer is Vice Chairman, Board of Trustees, and senior fellow of Centre for Strategic and International Studies (CSIS), Jakarta.

Follow Condi And Exxon Into Indonesia

Secretary of State Condoleezza Rice's visit to Indonesia this week is hopefully the start of a much closer and broader relationship. This would be great news for Indonesia, America, the Asia-Pacific region and global investors.

The headlines will focus on global terrorism and the pivotal role Indonesia plays as the world's largest Muslim nation, though the vast majority of its population is more moderate and secular than the small number of Islamic extremists. Fair enough. For this reason alone democratic Indonesia warrants America's greatest attention, which has been sorely lacking. If we win in Iraq and lose ground in Indonesia, are we really better off?

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

The nation, which is three times the size of Texas but has the world's fourth-largest population, is rich in natural resources, has a talented and young population, and is strategically positioned to benefit from Asian growth. As a relatively young democracy and developing economy, it lacks two important ingredients for economic growth: capital and a fiscal system to allocate it wisely.

Let's focus on oil and natural gas. The energy sector could dramatically jumpstart the Indonesian economy and stock market, while unleashing resources for badly needed education, health care and infrastructure. Right now, it is far below its potential.

The way that oil production has been handled over the past few years is worse than a blunder and is close to a crime. Indonesia has 10 billion barrels of proven and potential oil reserves and 180 trillion cubic feet of proven and potential natural gas reserves. Nevertheless, Indonesia, Asia's only member of OPEC, became a net importer of oil in 2004.

Help is on the way. After five years of tough negotiations, ExxonMobil and Pertamina have finally signing a joint-operating agreement this week. ExxonMobil has operated in Indonesia for a century and invested $17 billion in the country. The company also agreed to explore the dormant Cepu area years ago and, by using advanced technology, found 600 million barrels of proven oil reserves and 1.7 trillion cubic feet of gas. Prepared to invest $3 billion to develop the project, it has been waiting for two years to move forward, as Indonesia's state-owned energy company, Pertamina, waited for a better deal. Meanwhile, Indonesia's oil-production levels have fallen to less than 900,000 barrels per day!

At peak production, Cepu would provide the government of Indonesia with about $2 million per day in revenue, add 180,000 barrels per day in production and eliminate gas shortages in East Java. There are other projects that could move forward and, in total, could lead to a rising economic tide that would lifts all Indonesian people. Moving ahead with these projects would jumpstart the economy and bolster the confidence of foreign investors and capital markets. This is certainly a better option than sharply raising interest rates, a move that chokes economic growth and makes badly needed capital even more expensive.

Although this joint venture will help Indonesia once the oil starts flowing in 2008, it is important that America not just be seen as backing big-oil and mining interests. We need a bottom-up strategy that gets into the fabric of Indonesia, village by village. Indonesians need clean water, nutrition, power, consumer products, autos, consumer financing and much more. There is no reason American businesses cannot meet these needs for Indonesia.

Indonesia has taken the brave step of opening its financial-services sector to majority investment by international investors; let's hope they also open other areas such as infrastructure and power. The most important reform to make Indonesia more attractive to international capital is to set up a transparent and clear approval process to cut out red tape and corruption. Then reinvigorate a previously announced plan to privatize some of the largest of Indonesia's 145 state-owned companies to increase their profitability and raise more government revenue. Finally, why not follow ten other countries by putting in place a flat tax to rein in bureaucracy, stymie corruption and stimulate growth and productivity.

America needs to be seen as an active and close friend of Indonesia as it continues on the track of democracy, prosperity and progress.

Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of Chartwell Advisor. He served as a director on the executive board of the Asian Development Bank during the administration of President George H. W. Bush and is the author of The New Global Investor. Click here for more analysis from Delfeld, or to subscribe to Chartwell Advisor.

Deadly protests against U.S. mine in Indonesia

Freeport defends its operations in the highlands of Papua, saying it pays millions of dollars in taxes each year and funds scores of community projects close to the mine.

Papua's separatist movement has been brutally repressed by Indonesian security forces.

Foreign journalists are banned from the region, some 2,300 miles east of Jakarta.

Unlike Indonesia's mainly Malay inhabitants, Papuans are ethnic Melanesians. Most Indonesians are Muslims, but Papuans are Christians or animists.

Four killed in anti-Freeport protests in Indonesia

Three policemen and a soldier in Indonesia's remote Papua province died on Thursday in clashes with protesters demanding the closure of a giant mine run by U.S. firm Freeport-McMoran Cooper & Gold Inc, police said.

Indonesia's President Susilo Bambang Yudhoyono said he was sending officials to the scene and his ministers would investigate issues raised in controversy over the mine.

Papuan police said students from the province's main university in the capital of Jayapura, about 500 km (311 miles) northeast of the mine, pelted policemen with stones to stop them from opening a roadblock to the city's airport.

"Three policemen have died along with a soldier from the airbase. Forty people are now being interrogated," Papua police chief Tommy Jacobus told Indonesia's Metro TV. Papua police spokesman Kartono Wangsadisastra earlier said police tried to break up the protest by firing teargas and rubber bullets.

In Jakarta, deputy national police spokesman Anton Bahrul Alam said around 19 other police officers had to be rushed to the hospital due to injuries and branded the protesters as "brutal".

"The dead victims were not only pelted. They were also stabbed. The mob were anarchists but we have control over their territory now," he said, adding officers found machetes and molotov cocktails inside the Cenderawasih University campus.

He declined to say how many civilians were hurt. Local media reports indicated some protesters may also have been killed.

Local television footage showed chaotic scenes of give-and-take between charging protesters and police, many of the latter carrying staves and plastic shields.

At one point gun-wielding anti-riot police broke into the university's compound to chase the rally leaders, while protesters showered the police with rocks.

Other footage appeared to show protesters kicking and beating people on the ground, while in other clips men in who appear to be plainclothes police are firing pistols aimed toward the protesters.

Jayapura, on the northeastern shore of Papua, is located 3,500 km (2,200 miles) from Jakarta at Indonesia's extreme eastern border.

President Yudhoyono told reporters he would send officials to Papua to check on the situation.

"I have received information from (telephone) text messages that have been twisting the condition. Let's give our security officers space to do their job," he said.

Yudhoyono said he would assign ministers to take a look at social grievances related to the mine, and act on their findings.

But he also said: "Of course, if we follow the opinions of some people who want Freeport closed now that would create legal problems. It will be difficult to explain why there is a strong reason to suddenly close it. Our national business climate will be disrupted."

The mine is Indonesia's single biggest taxpayer.

On Wednesday, one person was shot by an arrow hours after anti-Freeport protesters tried to storm a five-star hotel in Timika, the nearest town to Freeport's Grasberg mine.

There have been sporadic protests against the mine in recent weeks, both in Papua and Jakarta. A road blockade by mostly illegal miners shut down operations for four days last month.

Illegal miners often enter mining areas in Indonesia, a sprawling archipelago that is the world's fourth most populous country with huge deposits of such metals as copper, gold and tin.

None of this week's protests have affected mining activities.

Protest issues vary from illegal miners asking access to the mine area to demands like the Jayapura demonstrators for closure of the lucrative mine, believed to have the world's third-largest copper reserves and one of the biggest gold deposits.

The Freeport operation has been a frequent source of controversy over its impact on the environment, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.

Further on Papua: http://guambatstew.blogspot.com/2006/03/papua.html