Also: WP: Bush Backs Continuing Military Ties With Indonesia; EIU: Indonesia/US: Better relations promise rewards

East Timor: Activist groups urge White House to press Yudhoyono on justice issue

Washington, May 25 (Lusa) - More than 50 international organizations have appealed to US President George Bush to use a White House meeting Wednesday with Indonesian President Susilo Bambang Yudhoyono to press for justice for victims of atrocities committed in formerly occupied East Timor.

In a letter to Bush, 53 human rights, religious and labor groups urged the US leader not to resume military cooperation ties with Jakarta until it cleaned up its domestic human rights record and punished those responsible for crimes against humanity in East Timor.

The White House has confirmed Bush would raise the justice issue with Yudhoyono in talks Wednesday.

The resumption of bilateral military relations, largely suspended since an Indonesian army massacre in Dili in 2001, was also expected to be on the White House agenda.

The activist organizations said recent appointments and promotions in Indonesia belied Washington's view that under Yudhoyono Jakarta was taking significant steps to improve respect for human rights.

In their letter to Bush, they also said that a bilateral Truth and Friendship Commission recently established by Jakarta and Dili appeared aimed to "guarantee impunity for violations of human rights rather than to encourage justice".

JP/SAS

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The Washington Post

Thursday, May 26, 2005

Bush Backs Continuing Military Ties With Indonesia

By Michael A. Fletcher Washington Post Staff Writer

President Bush said yesterday that it makes sense for the United States to maintain close military ties with Indonesia, despite the objections of human rights activists who say such coordination should be withheld until Indonesia does more to address human rights abuses by its military.

"We want young officers from Indonesia coming to the United States. We want there to be exchanges between our military corps -- that will help lead to better understandings," Bush said after a White House meeting with Indonesian President Susilo Bambang Yudhoyono. Bush added that Yudhoyono "told me he's in the process of reforming the military, and I believe him."

The United States restricted military aid to Indonesia in the early 1990s because of human rights abuses. Congress cut it off altogether in 1999 to protest the Indonesian army's role in orchestrating militia violence in East Timor. But the Bush administration has been eager to restore military ties with the country by resuming some "military-to-military cooperation" and providing money for military and anti-terrorism training.

In the days before the meeting, religious and peace groups called on Bush to "refrain from promotion of military assistance to Indonesia's still brutal armed forces."

"We find troubling ongoing human rights violations by Indonesia's security forces, especially in conflict areas, widespread impunity for crimes against humanity and other serious violations," the activist groups said in a letter to Bush published by the East Timor and Indonesia Action Network.

The activists said military abuses continued in Aceh and West Papua, provinces in which separatists are fighting the government. They said the government has not punished officers who committed atrocities in East Timor when it voted for independence from Indonesia in 1999.

Three years ago, two U.S. schoolteachers in the province of West Papua were shot to death. An FBI investigation led a U.S. grand jury to indict a pro-independence guerrilla, but he has not been captured.

Although U.S. officials have pressed Indonesia about the human rights abuses, they are eager to have that nation's full cooperation in their efforts to combat Islamic extremists. Indonesia, the world's most populous Islamic nation, is composed of more than 17,000 islands with populations whose hundreds of ethnicities and many religions sometimes clash violently -- providing ample opportunity for terrorist groups such as al Qaeda to take root.

The nation has been the site of several horrific terrorist attacks in recent years, including the 2002 bombings in Bali that killed more than 200 people.

The United States, citing a security threat, yesterday closed all of its diplomatic missions in Indonesia until further notice.

In the meeting, Bush also promised Indonesia continued help in recovering from December's tsunami, which killed at least 125,000 Indonesians and left more than 37,000 missing and a half-million homeless. The United States has provided more than $850 million in direct aid, and private efforts have raised many millions more.

"I'm proud of the response of the United States government and her people. Our United States military was on the scene with an aircraft carrier," Bush said later, at a White House reception in honor of Asian Pacific American Heritage Month. "And we had sailors and Marines working around the clock to show the people of your part of the world that our hearts are big, that we care about people from all walks of life, that the compassion of America runs deep and strong."

Yudhoyono, who was elected president in October, said his nation deeply appreciates the help from the United States. Speaking at the reception, Yudhoyono said: "America has every reason to be proud for what your government, your heroism and your volunteers have done for the tsunami victims."

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26 May 2005

Indonesia/US: Better relations promise rewards

COUNTRY BRIEFING

FROM THE ECONOMIST INTELLIGENCE UNIT

Indonesia’s president, Susilo Bambang Yudhoyono, was given the red-carpet treatment when he arrived in Washington on May 25th, reflecting a marked improvement in relations between the US and Indonesia. Both countries can gain strategically by establishing closer diplomatic ties, but Indonesia stands to gain economically and militarily if Mr Yudhoyono and the US president, George W Bush, can set aside the differences which have strained bilateral relations in recent years. A resumption of military-to-military contact and greater US investment in Indonesia are the two biggest prizes, but these require faster progress on reform than Mr Yudhoyono has delivered thus far.

Strategic aims

From the US’s perspective, improving relations with Indonesia—the world’s most populous Muslim nation—will provide a public-relations boost for the Bush administration. Mr Yudhoyono’s trip was arranged in part to help the US underline that its war on terrorism is not a war on Islam. The popularity of Indonesia’s president is sufficient that he can support this message without jeopardising his domestic political backing, making him a valuable ally. Although Indonesia opposed the US’s campaign in Iraq it has played a significant part in the battle against terrorism—particularly since the October 2002 Bali bomb attack—helping prosecute the US’s campaign against terrorist organisations such as Jemaah Islamiah, which has suspected links to al-Qaida.

That said, the US’s poor image in Indonesia will need to be improved before Mr Yudhoyono will feel completely comfortable about backing the US. The Bush administration made some amends by providing extensive and timely relief to the Indonesian province of Aceh after it was devastated by an earthquake and a tsunami last December. Nonetheless, this hasn’t compensated for anger in Indonesia about the US’s support of Israel against the Palestinians, for example, or about its prosecution of the war in Iraq. Only three days before Mr Yudhoyono’s trip, some 7,000 people rallied outside the US embassy in Jakarta, protesting the alleged desecration of the Quran by US interrogators in Guantanamo Bay. On May 26th the US thought it necessary to close its embassy and other diplomatic missions in Indonesia, citing an unspecified “security threat” to US interests in the country.

From Indonesia’s point of view, Mr Yudhoyono’s trip will enhance Indonesia’s diplomatic image internationally. This might pay dividends with regard to the country’s influence in local forums, such as the Association of South-East Asian Nations (ASEAN), in which Indonesia’s role has never been commensurate with its economic size and demographic weight in the region.

Military assistance

There are more specific goals driving Indonesia’s bid to improve relations with the US. In particular the Indonesian armed forces, known by the initials TNI, have long been pushing for the normalisation of military links between the two countries. Although the US provided extensive military support to Indonesia during the Cold War, this was restricted in 1992 after 270 protesters were killed by the TNI in East Timor, and it was suspended completely following further violence there in 1999 in which over 1,500 people died. The TNI, starved of funds and in need of modernisation, has for some time sought a resumption of US military assistance to gain access to advanced hardware and technology.

Arguably, the US stands to have a greater role in helping reform the TNI if military relations are normalised, as well as gain more influence over the military operations of a potentially powerful ally in the Asia Pacific region (not to mention the chance of winning lucrative arms-sales contracts). But influential lobby groups in the US Congress, representing a range of non-governmental organisations concerned about the TNI’s human rights record, remain opposed to the resumption of military assistance. This made it unlikely, even before Mr Yudhoyono left for Washington, that the US would contemplate a full and immediate resumption of military ties.

The lobbyists’ complaints have not stopped the limited reintroduction of joint programmes, though. In March the US readmitted Indonesia to its International Military Education and Training programme (in which, incidentally, Mr Yudhoyono—a retired general—was trained), while the aid programme to Aceh necessitated the lifting of the US’s ban on the export to Indonesia of parts for the Hercules C-130 transport aircraft. From May 10th-13th Indonesian marines and US Navy Seals also undertook joint anti-terrorism drills. Following Mr Yudhoyono’s visit, the US has said it will upgrade formal military relations to allow the export of non-lethal equipment, such as transportation vehicles and communications devices. Regarding a complete normalisation, however, the most Mr Bush would allow was that both sides were working towards this goal.

The US’s reservations stem from the partial nature of the reforms Mr Yudhoyono has implemented. Important steps have been taken to de-politicise and regulate the TNI. In last year’s elections, for example, the TNI lost its 38 reserved seats in the legislature, removing an important part of its political influence. In April 2005 it was also announced that that the armed forces would withdraw from their business interests by 2007, ahead of the 2009 deadline stipulated in a military bill endorsed by the legislature last year. By withdrawing this source of funding the TNI will be subject to more civilian control, as it will be dependent solely on the government’s budget allocations.

However, issues concerning the military’s accountability for the violence in East Timor, and for the killing of two US citizens in Papua in 2002, are unlikely to be resolved quickly. Although in their recent meeting Mr Bush did not mention these matters to his Indonesian counterpart, the US has often cited their resolution as a prerequisite for re-establishing full military links.

Jakarta has gone some way to resolving the East Timor issue—for example by recently admitting a UN legal team investigating the TNI’s alleged abuses there, which it had earlier refused to admit on the grounds that its mission was redundant. Mr Yudhoyono has also pledged to extend the accountability of the TNI. But the Economist Intelligence Unit does not expect the Indonesian authorities to make much progress on these issues, and thus the resumption of military relations is likely to necessitate a softening of the US stance.

Aid and investment

Aid from the US in the aftermath of the tsunami will continue to be crucial to the rebuilding process in Aceh. Mr Bush promised during the recent summit that US$400m of a total of US$950m pledged by Washington for relief and reconstruction would be made available immediately. (During a trip to Aceh earlier in the month, a US deputy secretary of state, Robert Zoellick, also pledged US$245m for a highway construction project in the province.) But enhancing US trade with and investment in Indonesia is arguably more important in the long term.

A trade and investment framework agreement, formalising the bilateral economic relationship, was signed as long ago as 1996, but progress on economic ties since then has been slow—not least because of the Asian Financial Crisis of 1997-98. The US continues to be Indonesia’s second-most-important export market (after Japan), buying around 15% of its exports, and according to US figures it ran a US$8.1bn trade deficit with Indonesia last year. In terms of foreign direct investment (FDI) it is important too: more than 300 US companies have investments in Indonesia worth more than US$7.5bn (of an estimated stock of inward FDI of US$58bn in 2004).

FDI into Indonesia plummeted after the financial crisis, and it has been hard work winning it back. From a peak of US$6.1bn in 1996 FDI turned negative (as investors withdrew capital) in every year from 1998 until 2003, barring a tiny rise in 2002. FDI only just scraped past US$1bn in 2004. Investors’ main concerns have been pervasive corruption, confusion over the rule of law, and a perceived lack of security. Gaining the confidence of foreign investors is a key goal of Mr Yudhoyono on this trip (during which he will also go to Japan). It was significant, for example, that in Washington he met executives from the US firms Merrill Lynch, Conoco, Newport, ExxonMobil, and Philip Morris before he met Mr Bush.

Securing more US investment in Indonesia’s ailing energy sector is a key aim. Rising demand, waning output and falling exports mean that Indonesia is becoming a net oil importer: in the first quarter it had a net oil trade deficit of US$1.37bn, after registering a US$3.73bn shortfall in 2004. New investment is needed to stave off further decline in the oil industry, but this is being deterred by contractual and legal uncertainty. It is a positive sign, then, that the US has agreed to restart the bilateral energy dialogue, which has been suspended since the financial crisis. Representatives of the two governments and the oil and gas industry are scheduled to discuss Indonesia's still uncertain legal safeguards, tax reforms and production-sharing arrangements.

Mr Yudhoyono is also due to offer around 50 oil and gas blocks to US and Japanese investors during his trip. These investors will feel happier about ploughing their money into these projects if Mr Yudhoyono demonstrates he is a more capable reformer of the legislative and judicial environment for FDI than his predecessor. To some extent he has done this already.

In the most positive sign that the government is taking steps to improve the business climate, two major disputes concerning large foreign investors are on the brink of being resolved. The first concerns the extension of ExxonMobil’s contract to develop the Cepu oil and gas field in Central and East Java. The Cepu field holds Indonesia's largest untapped reserves of crude oil, estimated at 600m barrels, and is crucial to reviving oil production. ExxonMobil has invested US$450m in developing the field but its concession runs out in 2010. The company has argued that a longer contract is required to justify the further investment of US$2bn needed to exploit Cepu's reserves. The state-owned oil company, Pertamina, had opposed extending ExxonMobil’s contract but after negotiations were restarted last month the government looks likely to do so. Another dispute concerning the purchase by a Mexican concrete company, Cemex, of an Indonesian firm looks likely to be resolved amicably—a welcome turnaround after Cemex threatened to withdraw altogether from Indonesia.

Reform prospects

Despite reforms of the military and the environment for foreign investment, and Mr Yudhoyono’s stated commitment to eradicate corruption and ensure greater judicial transparency, strong caveats must accompany optimism that governance will improve, owing to the deep-rooted nature of the problems the administration is trying to address. It is hard to overestimate how widely corruption infiltrates public life, in particular. Mr Yudhoyono’s domestic political clout is also limited—his own Democratic Party controls only 10% of seats in the lower house—reducing his ability to push through reforms against entrenched vested interests.

While Mr Yudhoyono remains president, progress in relations with the US—which to some extent is dependent on progress in these reforms—is therefore likely to be slow, but steady. Importantly, the domestic reforms he has begun to implement demonstrate that he is a man with whom the US can do business. In contrast with his ineffective and unapproachable predecessor, Megawati Soekarnoputri, he has shown that he has the will to implement the kind of reforms the US has called for. If this progress continues, an improvement of relations between Indonesia and the US can be mutually beneficial.

SOURCE: ViewsWire Asia (full publication)