Go-Jek goes regional | Reflections on Reformasi | Anti-terrorism action | Indonesia Intelligencer (May 19-25)
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Business
Go-Jek goes regional: The Indonesian ride-hailing service has confirmed weeks of rumors that it’s expanding into Southeast Asia after Uber left the region last month. Go-Jek says it’s investing US$500 million to start operations in Vietnam, Singapore, Thailand, and the Philippines in the coming months, rivaling Singapore-based Grab, the only other major player in the region.
The Perry Warjiyo era: Following the retirement of Agus Martowardojo, Bank Indonesia on Thursday appointed Perry Warjiyo as governor of the central bank. In his first comments after being sworn into office, Perry pledged to take more pre-emptive measures to ensure economic stability. His short-term priority is to stabilize the rupiah, which has been trading at over 14,000 per US dollar in the last few weeks — its weakest performance since 2015.
Route into rebound: A market rout in Indonesia has been the talk of the business pages lately, but there’s cause for optimism as the Jakarta Composite Index on Thursday closed up 2.7% after foreign investors returned to the market the day before, following 21 straight days of outflows. The trend seems to be on the upswing due to signs of consumer spending rebounding and negative concerns about Indonesian stocks subsiding.
Insurance against total foreign control: The Finance Ministry has issued a regulation limiting foreign ownership of insurance companies to 80%, valid for old and new companies. The ministry argues that the regulation will not discourage business expansion as there is ample room for growth in the country’s insurance industry.
25% biodiesel rule: The Energy and Mineral Resources Ministry says that it will be mandatory for biodiesel to contain at least 25% bio-content by 2019. The regulation is expected to double Indonesia’s consumption of fatty acid methyl ester (FAME), which is used to make biodiesel and of which locally sourced palm oil is a raw ingredient. The government is pushing to reduce oil imports and soak up excess palm oil supply.
Garuda’s sub-economy class: Starting May 28, passengers can book Eco Basic class seats on flag carrier Garuda Indonesia, a new class designed to be cheaper than economy as ticket holders will only receive “minimal” services (including no seat choice or overhead luggage space). Eco Basic is expected to be attached to 44 routes with 12 seats per flight. Garuda expects to raise its seat occupancy rate by 10% with this strategy.
Recommended reading
Trump’s Indonesian partner thought this would be more fun (Bloomberg) Indonesian tycoon Hary Tanoesoedibjo once took pride in his business dealings with US President Donald Trump. But, as detailed here, the MNC Group chairman is learning about all many complications that come with that relationship, including numerous controversies and accusations of conflicts of interest (most recently Trump getting cozy with China as a result of their partnership), all leading to him reconsidering his own political ambitions.
Indonesia’s path to prosperity lies in manufacturing (Global Times)
History suggests manufacturing is an inevitable step to achieve high and sustainable economic growth for sizable developing countries if they aim to converge with high-income countries. As evidenced by the East Asian economic miracle and the recent rise of China, manufacturing is generally more productive and better able to absorb large numbers of low-skilled labor from the agriculture sector.
Indonesia’s Reformed Economy Can’t Quash Inequality (South China Morning Post): Just two decades on from the Asian financial crisis and the fall of Suharto, the Indonesian economy has passed the trillion-dollar milestone and entered the G20. Yet ways to redistribute its wealth remain stubbornly elusive
Politics
New legal weapons in war on terror
Since last week’s horrific attacks, pressure has been high on parliament to pass a revised version of the 2003 Anti-Terrorism Law. Disagreement over the revision’s definition of terrorism had been a sticking point, but that debate was resolved on Thursday leading to its passage today (May 25).
The bill expands law enforcement’s ability to take preventative action against terrorist attacks, such as allowing suspects to be detained up to 21 days based on preliminary evidence and arrest any members of a group deemed a terrorist organisation by the government. It also criminalizes Indonesian citizens who join or attempt to join militant groups overseas such as ISIS and opens the door to military involvement in counter-terrorism operations.
Read also - Does Indonesia need a tougher anti-terrorism law? (The Conversation): Argues “A stronger security approach will likely be counterproductive in eradicating terrorism.”
Gerindra courts Democrats
Jakarta Vice Governor and Gerindra party member Sandiaga Uno recently met with Democratic Party leader Agus Yudhoyono (son of former president Susilo Bambang Yudhoyono) to discuss a possible coalition between their two parties in the 2019 election.
Such a partnership would likely see Agus named Gerindra chairman Prabowo Subianto’s running mate. Prabowo still needs to form a coalition with at least one other major party in order to meet electoral threshold requirements to make his candidacy official. However, the Democrats have been non-committal so far, at times suggesting they were considering aligning with Jokowi’s ruling coalition and even forming a coalition to field their own presidential candidate.
Fighting for the political rights... of corruption convicts: Indonesia’s General Election Commission (KPU) plans to implement a rule, starting with the regional elections taking place in 2019, barring individuals who have been convicted of corruption from running for office. However, they are being met with resistance by the DPR (of course) but also the Home Affairs Ministry and the Election Supervisory Board (Bawaslu), which have all stated their opposition to the rule change, arguing it does not have a legal basis and infringes on the rights of corruption convicts. Nonetheless, KPU officials remain steadfast that they will put the rule in place and said they are prepared to face a lawsuit on the matter.
Setya sings: Former house speaker and Golkar chairman Setya Novanto, who was sentenced to 15 years last month for his role in the massive e-KTP graft scandal, as well as his nephew, Irvanto Pambudi Cahyo, accused five senior Golkar members of receiving bribes related to the e-KTP case as well during a court hearing on Monday. Irvanto has applied for “justice collaborator” status, which if accepted means he would receive a more lenient sentence in exchange for his testimony against suspects (Setya applied but did not receive JC status in his own case).
Modi making his way to Jakarta: Indian Prime Minister Narendra Modi will be visiting Indonesia from May 29-31 and meeting with President Jokowi. The leaders of the second and fourth most populous nations are expected to discuss topics including bilateral trade, intelligence sharing and security cooperation. One specific issue on the table is India’s plans to develop a seaport in Aceh, which would support both India and Indonesia’s larger economic and infrastructure partnership strategies in the region aimed at countering China’s hegemonic influence.
Other News and Notable Features
Fight against terrorism continues
Indonesia’s elite anti-terrorism unit, Densus 88, reported that as of Tuesday, they had apprehended 60 suspected terrorists following last week’s terrorist attacks in Surabaya and Riau (see last week’s newsletter for more details) and 14 more were killed for resisting arrest.
Radical Islamic cleric Aman Abdurrahman who is alleged to be the spiritual leader of Jemaah Ansharut Daulah (JAD), the ISIS-linked terror network believed to be behind last weeks suicide bombings in Surabaya, presented his defense statement today in court after prosecutors last week demanded that he be sentenced to death for his role in orchestrating several previous terrorist acts including the 2016 attack in Thamrin.
Following the deadly riot at the Mobile Brigade Command Center (Mako Brimob) detention facility two weeks ago, also believed to be instigated by inmates connected to JAD, the government is fast-tracking construction on a new maximum security unit at Nusakambangan Prison in Cilacap, Central Java, designed specifically to hold terror convicts (something Mako Brimob’s facility was not built for, and which analysts had warned was a major security risk). President Joko Widodo said the new unit would be completed within 3-4 months and have 500 cells. Plans to build a completely separate facility for terrorists are also under discussion.
Gov’t-approved preacher controversy
The list, seen as a way for the ministry to address concerns about radical preachers in mosques, carries no legal power but immediately ignited controversy over government interference in religion.
The Indonesian Ulema Council (MUI) have voiced their support for the list while KH Said Aqil Siroj, the chairman of Nadhlatul Ulama (NU), Indonesia’s largest Islamic organization, said the Religious Affairs Ministry should instead release a list of the relatively small number of radical firebrand preachers in the country (specifically singling out Islamic Defenders Front founder Rizieq Shihab as one).
Ahmadiyah under attack in Lombok: On Saturday, less than a week after the church bombings in Surabaya, another religious minority group in Indonesia was terrorized. A group of families belonging to the Ahmadiyah community in East Lombok were driven into hiding after a mob of locals attacked and damaged their homes with the goal of expelling the followers of the Islamic sect (officially deemed deviant by the government) for good. It followed similar attacks on the Ahmadiyah in Lombok in recent months and years of systemic discrimination against the religious minority group.
Recommended reads
How ISIS Has Changed Terrorism in Indonesia (New York Times)
One major concern had been over what ISIS fighters would do when they came home. Yet none of the terrorists involved in the past weeks’ attacks appears to have ever set foot in Syria or Iraq. The greater danger may come instead from the ISIS faithful whose illusions about the promise of the caliphate haven’t been dashed by the direct experience of hardship, discrimination, hypocrisy and corruption that fighters who went to the Middle East described when they returned. That includes deportees like the Surabaya preacher and the families who followed his teachings.
How to reform Indonesia’s deradicalisation policy (East Asia Forum)
The suggestion that the perpetrators of the Surabaya church bombing were radicalised by deportees is unsettling because the Indonesian government has rehabilitation and reintegration programs for deportees once they return to Indonesia. Deportees must undergo a rehabilitation program for one month at the Ministry of Social Affairs’ social shelters in Bambu Apus. This duration seems to be inadequate in deradicalising those deportees who have been radicalised over months or even years.
Indonesia’s Prison System Is Broken (The Diplomat)
Just a quick look at the figures reveals part of the problem immediately. Indonesia has 464 prisons and detention facilities with a capacity to hold 124,006 prisoners. But, as of March 2018, the total prison population in Indonesia, including pre-trial detainees and prisoners on remand, stands at just over 240,000 – with an occupancy rate of 193 percent. In 2000, the total prison population was just over 53,000, showing a dramatic increase in the last two decades. Without the funds and the infrastructure to manage Indonesia’s ballooning prison population, it’s no wonder that the system is overwhelmed and under attack.
An end to Jakarta’s water woes? (New Internationalist): A court victory has rewarded civil society efforts to end water privatization in the Indonesian capital but many questions remain unanswered.
At the time of writing, despite the court ruling, the private contracts which should have been declared null and void, remain in force. The fear is that they could stay in force until 2023, their time of expiration, piling up public debt. On the other hand, were the government to act, there is the risk of the private companies suing the government for millions of dollars. It looks like an uphill battle, and activists are gearing up, with international support, for round two.
20 Years of Reformasi
This week marked the 20th anniversary of Suharto’s resignation and the end of his New Order Regime. We’ve rounded up a selection of the most incisive and thought-provoking features reflecting on that epochal moment in Indonesian history and the direction country has gone since then.
Twenty years of Indonesian democracy—how many more? (New Mandala)
Nevertheless, it is worth viewing contemporary predicaments from the perspective of those of us who watched Suharto resign 20 years ago. Back then, as we watched Suharto read out his speech, my friends and I mixed astonishment, excitement and relief with genuine anxiety about what was in store for Indonesia. Many expert commentators were very sceptical of the notion that Indonesia could become a successful democracy. Some urged caution, pointing to the acrimony that had dogged Indonesia’s earlier democratic experiment in the 1950s, and highlighting the under-development of civilian politics and the continuing influence of the armed forces.
Indonesian democracy exceeded most expectations back then. It might just do so again.
- Tommy Soeharto: Indonesians 'long' for a return to Soeharto rule (Al-Jazeera): Incredible interview in which Suharto’s son Tommy, leader of the newly formed Partai Berkarya (Work Party) denies any wrongdoing on the part of his father and suggests that Indonesians are longing for the strong rule of somebody like him once more (which some surveys suggest may actually be true). Tommy also argues the country should get rid of elections because they cost too much money.
Indonesia’s reformasi activists were burned, beaten, electrocuted – and they still fear for their country (South China Morning Post): Twenty years after Indonesia’s Reformasi movement started, the activists who were persecuted under the dictator Suharto warn that the country could be backsliding into authoritarianism
The Forgotten Hero Of Indonesia's Democratic Transition? Military Reform (Strategic Review) A very different take on reformasi from the viewpoint of Lt Gen (Ret) Agus Widjojo, governor of Indonesia’s National Resilience Institute.
The Armed Forces’ reform process was self-initiated in many respects, and actually preceded the political reform process that would lead to multiparty democracy and free and fair elections. The TNI agreed to terminate its “dual function” doctrine of involvement in social-political issues in Indonesia, in addition to its national defense role, and gave up its reserved seats in the House of Representatives.
The military had no involvement in steering the country’s democratic transition, and in fact, the less the TNI was involved, the more it helped contribute to the process. Indonesia’s democratic transition was left solely to the politicians, and as such, the military played the maximum role it could play in the process – mostly by staying out of it.
Broad strokes: Indonesian art and 20 years of Reformasi (The Interpreter)
Suharto’s demise not only freed the nation’s politics but also changed its art scene dramatically. Today, both Yogyakarta and Jakarta are developing reputations as contemporary art hubs in Asia, and Indonesia’s best artists are regularly showcased across the world. For the generation of artists who came of age in 1998 and are now reaching the top of their field, the days of the New Order continue provide ample inspiration, as well as cynicism.
The New Order Ended 20 Years Ago, But Indonesian Students Still Aren't Taught the Full Story (Vice Indonesia): It's the bloodiest era of Indonesian history so far, but high school history books are leaving out the worst of it.
Indonesia’s Human Rights After 20 Years of Reformasi (The Diplomat)
This culture of impunity goes back to the fact that none of the administrations from 1998 to 2018 managed to bring to justice those responsible for killing students in Trisakti University in Jakarta and in the Semanggi Tragedy, as well as the disappearance of students who fought for Reformasi in 1998. It is clear that Reformasi still has an unpaid debt to the killed and disappeared students who fought to defend the reform movement.
Indonesia at Melbourne has produced an excellent series of articles marking 20 years after Suharto including pieces about the current status of the Suharto family and the former dictator’s cronies, the post-Suharto art scene and the progress of reforms (or lack thereof) in the country’s judicial system.
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