EUROPEAN JOURNAL OF SOCIAL SCIENCES ISSN: 1450-2267 · EUROPEAN JOURNAL OF SOCIAL SCIENCES ISSN: 1450-2267 Volume: 43 Issue: 2 Editorial Advisory Board ... European Journal of Social

EUROPEAN JOURNAL OF SOCIAL SCIENCES

ISSN: 1450-2267

Volume: 43 Issue: 2

Editorial Advisory Board Leo V. Ryan, DePaul University Richard J. Hunter, Seton Hall University Said Elnashaie, Auburn University Subrata Chowdhury, University of Rhode Island Teresa Smith, University of South Carolina Neil Reid, University of Toledo Jwyang Jiawen Yang, The George Washington University Bansi Sawhney, University of Baltimore Hector Lozada, Seton Hall University Jean-Luc Grosso, University of South Carolina Ali Argun Karacabey, Ankara University Felix Ayadi, Texas Southern University Bansi Sawhney, University of Baltimore David Wang, Hsuan Chuang University Cornelis A. Los, Kazakh-British Technical University Teresa Smith, University of South Carolina Ranjit Biswas, Philadelphia University Chiaku Chukwuogor-Ndu, Eastern Connecticut State University M. Femi Ayadi, University of Houston-Clear Lake Wassim Shahin, Lebanese American University Katerina Lyroudi, University of Macedonia Emmanuel Anoruo, Coppin State University H. Young Baek, Nova Southeastern University Jean-Luc Grosso, University of South Carolina Yen Mei Lee, Chinese Culture University Richard Omotoye, Virginia State University Mahdi Hadi, Kuwait University Maria Elena Garcia-Ruiz, University of Cantabria Syrous Kooros, Nicholls State University Indexing / Abstracting European Journal of Social Sciences is indexed in ProQuest ABI/INFORM, Elsevier Bibliographic Databases, EMBASE, Ulrich, DOAJ, Cabell, Compendex, GEOBASE, and Mosby.

EUROPEAN JOURNAL OF SOCIAL SCIENCES

http://www.europeanjournalofsocialsciences.com Aims and Scope European Journal of Social Sciences is an international peer-reviewed academic research journal, which has a particular interest in policy-relevant questions and interdisciplinary approaches. The journal serves as a forum for review, reflection and discussion informed by the results of recent and ongoing research. It adopts a broad-ranging view of social studies, charting new questions and new research, and mapping the transformation of social studies in the years to come. The principal purpose of European Journal of Social Sciences is to publish scholarly work in the social sciences defined in the classical sense, that is in the social sciences, the humanities, and the natural sciences. The research that is published may take a theoretical or speculative model as well as statistical and mathematical. Contributions are welcome from all fields which have relevant and insightful comments to make about the social sciences. European Journal of Social Sciences also aims at providing a unique forum for discussing the fundamental challenges for policy, politics, citizenship, culture and democracy that European integration and enlargement pose. The journal emphasizes the publication of work that engages with issues of major public interest and concern across the world, and highlights the implications of that work for policy and professional practice. It particularly welcomes articles on all aspects of European developments that contribute to the improvement of social science knowledge and to the setting of a policy-focused European research agenda. Examples of typical subject areas covered include: Policy-Making and Agenda-Setting; Multilevel Governance; The Role of Institutions Democracy and Civil Society; Social Structures and Integration; Sustainability and Ecological Modernization; Science, Research, Technology and Society; Scenarios and Strategic Planning; and Public Policy Analysis. European Journal of Social Sciences is interdisciplinary bringing together articles from a textual, philosophical, and social scientific background, as well as from cultural studies. The journal provides a forum for disseminating and enhancing theoretical, empirical and/or pragmatic research across the social sciences and related disciplines. It engages in critical discussions concerning gender, class, sexual preference, ethnicity and other macro or micro sites of political struggle. Other major topics of emphasis are Anthropology, Business and Management, Economics, Education, Environmental Sciences, European Studies, Geography, Government Policy, Law, Philosophy, Politics, Psychology, Social Welfare, Sociology, Statistics, Women's Studies. However, research in all social science fields are welcome. European Journal of Social Sciences realizes the meaning of fast publication to researchers, particularly to those working in competitive and dynamic fields. Hence, it offers an exceptionally fast publication schedule including prompt peer-review by the experts in the field and immediate publication upon acceptance. The editorial board aims at reviewing the submitted articles as fast as possible and promptly include them in the forthcoming issues should they pass the evaluation process. The journal is published in both print and online formats.

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European Journal of Social Sciences

Volume: 43 Issue: 2

Contents The Factors Influencing Changes of Ideo-Symbolic Sculpture Style of Sima and Vihara in Luang Prabang 93-101

Supasana Sangsurin Volatility Transmission between Stock Markets, from Dot-Com Crisis to Global Financial Crisis: A Multivariate Garch Approach 102-118

Vítor Gabriel and José Pires Manso History of the Phinphat Luang Prabang Ensemble 119-128

Thanawat Bootthongtim Opinions of Families with Pre-School Period Children Toward Computer Games 129-136 Şengül İlgar and Nihat Topaç

Social Impact from the Activities of Illegal Artisanal Mining: Studies in Sumbawa 137-150

Salim HS, Idrus Abdullah and Muhammad Sood Model of Bumn Privatisation through New Common Stock and Its Implication towards Financial Performance Period 2005-2012 151-159

Ibnu Khajar The Relevance of Vocational Education Policy in Semarang, Indonesia 160-168

Sundarso Choice of Law in the Settlement of Troubled Bank (Bank Century Case Study) 169-178

Zainal Asikin, SH, SU Greeting Terms in Jordanian Arabic: New Classifications 179-189

Abdullah A. Jaradat, Wael Zuraiq and Mohammad Ababneh Legal Protection Rights Society in Local Regulations Spatial Plan in West Nusa Tenggara (NTB) 190-201

H. Arba, SH and M. Hum

European Journal of Social Sciences ISSN 1450-2267 Vol. 43 No 2 May, 2014, pp.93-101 http://www.europeanjournalofsocialsciences.com

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The Factors Influencing Changes of Ideo-Symbolic Sculpture

Style of Sima and Vihara in Luang Prabang

Supasana Sangsurin Faculty of Fine and Applied Arts

Khon Kaen University, Khon Kaen, Thailand E-mail: [email protected]

Abstract The study of the factors influencing changes of ideo-symbolic sculpture style decorated on Sima and Vihara in Luang Prabang was conducted by studying the basic information of temples, Simas and Viharas, and the restoration. The target group of 16 Sima and Vihara was studied with the research objectives. The study results found were that the styles acllaised into the following periods; 1) Lan Xang-Luang Prabang Kingdom from 1353- 1778, 2) Under the Siamese Dominance from 1779 - 1893, 3) Under the French Colonization from 1894 - 1954 and 4) Lao Kingdom and Lao People’s Democratic Republic from 1955 – 1994. The factors influencing changes are included 1)the history, consisting of politics and monarchy, and dominion, 2) Society and Culture, consisting of The social and cultural status of Luang Prabang and Religion, Belief and Tradition, and 3) Art Influence from Other Cultures, consisting of art influence from other cultures, education and restoration. Keyword: Sima, Vihara, Luang Prabang, Laos.

1. Introduction Sima and Vihara in Luang Prabang are samples of identity architecture representing the history connecting and relating to beliefs and ideo-symbolic from the past. These are resulted from the faith and the concept of people in the past who saw artistic values, including building styles or decorating components by creating sculpture works on doors, windows, poles, pillars or prof of the roof, gables, Bai Raka (tooth-like ridges on the sloping edges of a gable), and etc. (Wibooon Leesuwan, 1978) All of such showed people’s kindness who had faith and belief in Buddhism which led to the idea of creating these works. Thus, Sima and Vihara became valuable for their lifestyles, suitable for a place of important Buddhist rituals parallel with social development and relations between people in the society, integrating with local culture and craftsmen. The works then were latent with beliefs and concepts of the creation and architecture connected with Buddhism. Importantly, they were symbols of the remained period in the present time which showed the cultural relation between the kings or city rulers and residents, as for the embodiment the governing authority. (Somsak Srisantisuk, 2001) This fact is in accordance with historical theory of Franz Boas, who aimed to study the structure or related content and the holistic system, cultural study by using historical methods which was a retrospective look at the problem relied on the dimension of time. It was diachronic study, the study of events across time from one period to another period of time, to find the cultural growth itself, together with the surroundings culturally formatted for development and variation according to the nature of the local and time. Hence, it was leanred that a certain society’s culture has its own creativeness or borrowed and diffused that it didn’t grow from its own self. Though, it would successively develop according to

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the local where it arrived. The historical methods would acknowledge the culture from simple forms to complex ones. (Niyapan Wansiri, 1997)

The architecture creation in Laos can be seen from the construction of temples and religious buildings, such as monk’s dwellings, tripitaka hall, monk’s eating hall, stupa covering Buddha image, Sima and Vihara. Besides the unique identity of Laos, it remains influences of artistic styles integrated with the local styles from the neighboring countries or nearby kingdoms.

The study of the change of ideo-symbolic and style of sculpture of Sima and Vihara in Luang Prabang is conducted based on the periods of time 16 samples of Sima and Viahara. It is classified into 4 periods, under the historical context, political administration and social and cultural contexts of Luang Prabang. The study is to understand the signification process, concept, communication, and interpretation from the sculpture styles appeared by mainly holding the political history as the key in grouping Sima and Vihara into 4 periods.

The 1st Period: Lan Xang-Luang Prabang Kingdom from 1353- 1778 (425 years) is consisted of 1) Vihara in Wichunalat temple, 2) Sima in Sangalok temple, 3) Sima in Xiang Thong temple, 4) Vihara in Pakkan Khammongol temple, and 5) Vihara in Sirimongkolxaiyaram temple. The decorations were of sculpture that emphasized on the space on the upper structure, such as the gable apex, Naga’s caruncle-like gable, and Hang Hong at the gable. For the center structure, the sculpture of pillars or prof of the roof and crafted wooden doors were more important than other decorations. The platform or front structure, especially the window arches and banisters, was not found any sculpture decorated.

The ideo-symbolic sculpture showed the traditional belief, for example the naga sculpture which was related to the spiritual belief and ancestor belief. The king was compared as a god in the cosmology of Brahman-Hindu before Buddhism came, such as Meru Mountain, and adhered to the beliefs in the legendary and local literature.

The 2nd Period: Under the Siamese Dominance from 1779 - 1893 (114 years) is consisted of 1) Sima in That Luang temple, 2) Vihara in Ahamutamathanee temple, 3) Sima in Jumkongsurintaravas temple, 4) Sima in Sibhuddabata temple, and 5 Sima in Pa Huak temple. The decorations were sculpture emphasizing mainly the upper structure, similarly to the first period except that the center gable apex under the roof. The Sima in this period was influenced by Ratankosin style that it was not common to decorated with a gable, such as those in Pa Huak temple and Sribuddhabata temple. The center structure, in the part of sculpture of prof of the roof and wooden crafted doors, can be seen that it was clearly developed and changed from the first period due to the importance given to the door façade and added windows. This might be because of the changes of style and structure of Sima from a thick to a translucent one. However, the area above the windows and banisters were not appeared any decorating sculpture. The front or platform appeared that it was common to decorate with a round relief animal sculptured door-keeper. The ideo-symbolic sculpture showed the political significance since it was under the colonization. Influenced by Ratanakosin style, both the architecture structure and sculpture style, the belief of the king was used in the form of symbols to decorate the religious places, as well as three headed elephant, the Buddha’s throne, and Buddhist symbols. It was considered that the king was the king emperor.

The 3rd Period: Under the French Colonization from 1894 - 1954 (60 years) is consisted com 1) Sima in Phra Srimahathatvoravihara temple, 2) Sima in Hosiangvoravihara temple, and 3) Sima in Sansukaram temple. The sculpture as decorating component in this 3rd period was more obvious. It can be seen that upper and center structures were fully decorated, except some of the window arches and banisters. However, there were animal relief sculpture and naga banister added into both parts. This can be said that the decoration in this period developed and represented the changes obviously, and importantly the Sima and VIahar styles were absolutely of Luang Prabang royal craftsmen.

Even though it was under the French colonization, the ideo-symbolic sculpture in the aspects of Buddhism and arts became of traditional Lan Xang style once again. It was circulated and restored since France wanted Lao Buddhism to separate from the Siamese. This period also emphasized on the


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king emperor centralizing the administration similar to the cosmology of Buddhism. Local literature and Pannasa Jataka were accessed in Lao style even better.

The 4th Period: Lao Kingdom and Lao People’s Democratic Republic from 1955 - 1994 (37 years) is consisted of 1) Sima in Manorom Sattaram temple, 2) Sima in Ponxai Chanasongkam temple, and 3) Sima in Nongkoonsikoonmuang temple. The areas decorated with sculpture work were in all three parts since the upper structure of the roof and the center structure of Sima and Vihara. The ideo-symbotic sculpture and styles were fully placed on the architectural components even though the banister sculpture was partly appeared. The door-keeper relief sculpture had been popular continuously since the 3rd period. The observations were obviously seene that Simas in all three temples in this period were re-constructed to replace the old degraded Simas. The old Simas were of integrated styles with larger structure and size.

The state leader put an emphasis on the renovation and maintenance of Buddhism and developed the country’s culture in architectural style but remained its unique identity. Even though the architectural structure was large and integrated with ideo-symbolic sculpture style decorated in religious place, there was still the clarity of Buddhist cosmology and Lao nation.

The social and political changes caused the simple way of life of people in Luang Prabang, their concept and symbols changed since it was hard to avoid under the globalization and current social context. By far the local art and culture had faced difficulty to avoid the trend of social changes according to the period of time of objectivism that came in directly and indirectly which most people thought it was proper. The change was about the replace of a new instead of an old one, especially the society changed due to the political change, such as Laos, which had been through the state of war and colonization, the Buddhist architectural construction was still under the conditions and political factors. The society, culture and economy were all part of determining attitudes and concepts in designing which resulted in the arts connected to religious beliefs that had changed thoroughly.

From above reasons and significances, I would like to study about the factors that influenced the changes of ideo-symbolic sculpture decorated on Sima and Vihara in Luang Prabang which changed in each significant historical period of time according to the social, cultural and political contexts. Currently, i have found that the ideo-cymbolic sculpture used to decorate Sima and Viahara have significantly changed. It can be said that the impacts or factors are those caused the changes according to the study results as follows. 2. Results The factors influenced the changes of ideo-symbolic sculpture style decorated in Sima and Vihara in Luang Prabang, Lao People’s Democratic Republic from 1353 t0 1994, from the historical data analysis, construction record, renovation, and current status of Sima and Vihara, can be summarized as follows: 2.1. The 1st Factor: History

2.1.1. Politics and Monarchy The results explain that the creation of art work, especially the architecture connected to religion, appeared the ideo-symbolic sculpture in the decoration and changed from time to time. In lunag Prabang of Lao People’s Democratic Republic, the factors caused changes were the ruling class, which means the king and city rulers. The ideo-symbolic sculpture style decorated on Sima and Vihara are samples reflecting the process of political changes occurred in Laos. Sima or Vihara and the sculpture style decorated changed and developed thoroughly and became more complex, such as, the change of style of Sima in Pa Huak temple and Sribuddhabata temple. The changes happened in each period of time reflected the development of political power that centralized the power into the central government or the capital and the management within the social organization according to the more systemized structure and function. During the time out of war, the King put emphasis on Buddhism.


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The city rulers or the kings thus were able to control labors and skilled craftsmen to create these Simas and Vihara, which means that the Buddhist kings were prominent than the others. Specifically the Buddhist state or kingdom had been developed to be great within the kingdom by believing that a religion should be the foundation to support such concept, such as, Luang Prabang of Lan Xang kingdom. This fact is in accordance with the Structural Functionalism Theory of Malinawski who saw that ideo-symbolic sculpture style was an cultural output, which was not considered as a work of any individual. However, it was still connected to the social and environmental contexts. Therefore, the image of ideo-symbolic sculpture decorated on Sima and Vihara, besides acting as embellishment to completer the religious places, it also acts as a medium to tell Buddhist stories which reflected social images in various aspects, especially the cultural concept that represented societal perspectives and values during the period of time when the creators or patrons and craftsman group were included. (Niyapan Wanasiri, 1997)

Sima and Vihara constructed in Luang Prabang during the 1st period to 3rd period (1353-1954) were found to be supported by the kings or city rulers, royal family members and Buddhist monks. However, after the liberation from French colonization in 1955 and became Lao Kingdom respectively, the feudalism’s role and duty was reduced. This resulted that the Sima or Vihara constructed or renovated during the 4th period (1955-1994) were not limited within the support of the superiors, but expanded into the group of people who held political power during that time. Hence, it caused the change of ideo-symbolic sculpture style decorated on Sima and Vihara into various styles by not following the traditional belief and became more of socialist or nationalist. The areas of decorated sculpture on all three parts, including the upper structure or the roof and the center structure or the Sima and Vihara, the ideo-symbolic sculpture style were placed fully over the architectural structure, even though it appeared some part of the banister sculpture. The door-keeper relief sculpture was still commonly constructed thoroughly from the 3rd period. The observations were obviously seen that Simas in all three temples in this period were re-constructed to replace the old degraded Simas which degraded and destroyed by natural disasters. The style of Simas was integrated with larger structure and size, such as those Simas in Manoromsattaram temple, Nongsrikoon and Ponxainasongkram. The new state leader put an eemphasis on the renovation and maintenance of Buddhism, as well as the country’s cultural development. The architecture style remained its own unique identity even though their structure was large and integrated but contained the clarity of Buddhist cosmology and Lao nation. (Nosang Saiwongduen, Interview on Match 10th 2012) This differs from the previous periods when Kings or leading class held an absolute power in administrating the community through religious rituals. Therefore, the religion in Laos during the ruling system change even though it was Brahma or Buddhism which culturally influenced from India, people in general accessed to religions with limitations due to that religion was about holiness. It was kept secret and used as an expression of high class people only. Thus, the state and party that emphasized on Buddhism became the most important factor in coordinating the society with diversity to go on the unprecedented same direction. The role of rulers as religious protectors was more politically important. 2.1.2. The Colony The change when Laos was colonized by Siam, the significance of cosmology was reduced since the country received influence of Sima style from Bangkok. Such ideology in Thai Kingdom was used to change the use of Buddha’s throne as the center of the universe instead, which could be said that it was Buddhist symbolism concept, including the Buddhist wheel of law, Buddha images in different postures, such as enlightment posture, Buddha’s first sermon posture, and retreat in the forest posture, stupa arch and Bodhi Tree. (Pichaya Sumjinda, 2012) The use of such Buddhist symbols is the expression or communication their concept according to the social and cultural conditions of Luang Prabang people during that time. However, the main concepts of Karma and the accumulation of virtue were not derogated, but they turned out to be more obvious. The Simas in Luang Prabang were reconstructed during the country was under the French colonization, including those in


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Nongsrikunmuang temple, Ponxaichanasongkram temple, Manotomsattaram temple, Phrasrimahathat temple, and Hosiangvoravihara temple.

During 1893 – 1954 Laos was under the colonization of France. Due to the need of the colonist country to know and understand Lao society and culture to make it easy to administrate and understand local wisdom, this time Buddhism of Laos was the Siamese style. In 1929, France initiated to restore Buddhism in Laos, such as they declared provisions to preserve archeological sites, antiquities, temples, Buddha images and stupas. (Sila Weerawongse, 2001) France gave support by establishing school of Buddhist teaching and sent Lao Buddhist monks to study in Cambodia. Therefore, France attempted to change Buddhism of Laos to differ from the Siamese’s, or to have its colony hold Theravada Buddhism, following of Indochina-French. (Grant Evans, 2006)

With the conditions and political variables, it caused cnages among many things including the art and culture. Lan Xang - Luang Prabang kingdom has a long history and connection with the neighboring countries. The kings or city rulers attempted to centralize the conutry’s administration by sending the royal family members to act as local commissioner and received absolute power to control the provinces for kingdom’s security since 1881. (Bunheng Buasisangpaserd) This fact is in accordance with the cultural study using the theory of Raymond Williams, an English Marxist anthropologist, which was about hegemony that focus on the ideology rather that physical fighting. People under the rule are ready to be controlled which means that a culture of a certain group that is stringer would be able to conquer that society. That culture would be powerful in indicating lifestyle of people in the society. The cultural analysis in each period must compare with dynamic which is non-stationary process that there shall be any group acts as the main culture. The social actions are unification clash with the remaining of the past and new things. (Thanakrit Yiamkamonworachat, 2008)

Even though in the past the political situation domestically and internationally has changed through time and resulted in the change of sculpture style decorating on Sima and Viahara, there is one thing remains and is inherited if the story of nationhood or traditional culture. 2.2. The 2nd Factor: Society and Culture

2.2.1. The Social and Cultural Status of Luang Prabang The results reveal that Luang Prabang people do not specifically adhere to the cultural preservation, though they have to be aware of local and community culture, as well as the world’s cultural trend. Thus, they have to considerate the ways that remain and the ways that change following the world’s trends which would create the connection with the use of current trend. Lunag Prabang owns local cultural heritage that encourages the shared awareness of the locals. To reflect the meaningful cultural heritage of valuable traditional way of life whenever the local culture plays a role the people would have shared awareness and brings back the local wisdom. Thus, the local cultural identity is a mechanism that helps create a common awareness in the local. All art works, including the ideo-symbolic sculpture, is a cultural heritance from generation to generation, however, culture changes always. The study to inherit a culture has to be learning and changing all the time since the cultural values happen from culture being absorbed into life until it become a lifestyle associating with meaningful and valuable relations. This is in accordance with the anthropologist concepts, such as France Boas, who sees arts with a point of view that arts is a small element of a culture which answers a personal need. The opportunity to see and experience arts in various societies make the anthropologists start to see arts as a universal phenomenon that deeply connected to the culture. Arts is forms like music, dance, drawing and sculpture exist in the traditional society and indigenous society are obvious evidence that human needs to produce or create in what give them satisfaction and enjoyment in life, and there is not a society that make light of expression of aesthetics emotion. (Prasert Silratana, 1999)

The culture of a society that constantly changes and contains diversity is connected with the local perspectives, tradition and religion, as well as the religious literature.From the study of ideo-symbolic sculpture, temples that have been renovated after whether the domestic and international


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wars, mostly they turned to look at the significance of the nearby surrounding. For example, in Nongsikunmuang temple, the sculpture of wooden crafted doors and windows were found to be stories about the ten incarnations of the Buddha which is significantly connected to the way of life of people who practice the moral principles of the Buddha from the ten lives. However, in the past the crafting of door and windows were to express the power conveyed on the ideo-symbolic styles or the use of other culture, such as, the Khan angel standing on animal attendants or carrying vehicles or the concept of door-keeper who protects the doors and windows. Currently, Buddhism in Laos is reviving with the trend of globalization that pays attention to the economy rather than the politics. Though, Luang Prabang sees the cultural significance since it owns cultural heritages that originated concepts and way of life under the influence of Buddhism. 2.2.2. Religion, Belief and Tradition Any type of arts created all significantly aim to answer the need of the related people following their religious beliefs in art forms and shapes, including the symbols. For example, the components of architecture work are symbols or the duplication of the universe decorated similar to a world which is complete in itself, such as gables, the style of mountains surrounding Mount Meru, Naga Styles, and the wooden sculpture crafted in various forms that contain the three world “Triphum” belief.

Even though Theravada Buddhism belief does not teach its followers to connect and adhere to supernatural magic, the Buddha history and Jataka would normal mention about the underworld, human world and heaven, and interest in nature. The beliefs towards all beings thus were mentioned, such as the Buddhist universe that has Mount Meru as the core and this mountain is the center of all animal lived in Himavanta forest. All of these have been appeared in religiou based and cultural art works that deeply rooted in the society. The concept following the religious symbol theory of Clifford Geerts says that religion is a symbol system that acts as a vehicle of consciousness or concrete thinking and emotion. This symbolic system is able to create the atmosphere of emotion and inspiration to the human by claiming to some great regulations related to the purposes of living. This study sees that the ideo-symbolic sculpture is a medium conveying religious stories. It is a symbolic system created for the righteousness or the right of the ruling class. It explains the causes of social class difference and act as a tool to instruct people to have awareness, faith and follow the power of such righteousness. (M.R. Akin Rapeepat, 2008) Belief and religion are closely connected, based on the belief thus it was developed to become a religion the later stage. Every religion needs to have belief and faith as components which might be the belief in gods, power of gods, karma and karma results, the belief in reincarnation or the opposite. However, it does not mean that every belief would always be improved to become a religion.

The sculpture decorated on Sima and Vihara in Luang Prabang, whether they are in Luang Prabang, Tai Lue, Xiang Kwang and Ratanakosin styles, they all represent the meaning of “universe” in Buddhism which is the belief in a culture that acts as a strategy for human to be acknowledged of the advent of the universe or India where Lord Buddha enlightened and taught about his teaching. Thus, the human then created something to represent the world that they would be living in happily like in heaven by expressing them through the ideo-symbolic sculpture decorate don Sima and Vihara. 2.3. The 3rd Factor: Art Influence from Other Cultures

2.3.1. Art Influence from Other Cultures It was found the ideo-symbolic sculpture style decorated on Luang Prabang architecture generated in 1353 – 1994 were influenced by the neighboring country’s cultures mixed with their local and traditional styles. The styles, patterns and ideo-symbols influenced and inspired from other sources of arts were connected with Lan Xang-Luang Prabang kingdom, and at the same time the craftsmen of Luang Prabang were inspired to create a new style as it became the unique identity of this area. This can be seen that the style is unique and such difference depends on the art influences of certain religion they received and borrowed with any cause or factor. At the same, local craftsmen might integrate the


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new art style with the traditional one and it became unique. This process happened like this, similarly to the concept and belief in sculpture. Sometimes the concept of subject culture might not be appropriate or compatible to the local people’s cognition thus it must be suitably adjusted or change in order to be consistent. (Surapon Damkul, 2004) It was found that the pattern in art works appeared mostly were the style inherited from the previous styles. However, they were more developed. In the meantime, new styles and pattern also appeared, such as the leaf pattern in western arts that might be influenced through the late Ayudhaya art. Besides, there was also the pattern of floralcone-shaped which was expected to be influenced from late Ayuddhaya period. This could be said that it was the period has the maximum development of Lanna art before it collapsed. However, it was noted that there was not any pattern influenced from Burma even though Lanna was colonized by this country for a long time. In the 24th Buddhist Century which was the period of country’s restoration, Lann was a colony country to Bangkok. In the first half century, some patterns of decorate work of Lanna still maintained the same style and constantly developed from previous Lanna styles. Later on in the last half of the 24th century which was the period of the political power and relations with Bangkok, the Lai Kham art appeared the influence of Ratanakosin art, as well as Chinese art, entered and mixed with Lanna styles.

Lanna kingdom was a prosperous kingdom in the northern region of Thailand, which include Chiang Mai, Chiang Rai, Naan and Lampang. The art styles were traditional arts similar to those of Lan Xang-Luang Prabang kingdom, and the relations between Lanna and Lan Xang in the beginning period were both friendly and hostile. However, in the latter, they had a good relationship which might be because people in both kingdoms were close in terms of their race, language and culture. It can be seen that both Lanna and Lan Xang kingdom shared common characteristics, including the literature, characters and language. In these two kingdoms, the culture was perennially transmitted. After that, there was the integration that originated Lao artists truly and inherited the aesthetics, changing and developing from ideo-symbols into beautiful ornaments. This is consistent with the theory of cultural diffusion of German School led by Wilhelm Schmidt (1868-1954) and Fritz Graebner (1877-1934). This school owned the concept that in general humans disliked invent their own culture, but they liked to borrow the neighbor’s culture (uninventive habit). The destination culture might be similar to the original culture in terms of quantity or style. It might be because of the migration or the concept that emphasized on cultural “borrowing” the culture rather than cultural “invention.” 2.3.2. Education and Restoration Besides other factors related and caused changes, the educational system in arts is as important as other factors because to study arts, not only the gift needs to have, but also the skills and proper theoretical study. The educational system open to teach about arts thus must be improved together with social changes, especially the society in Luang Prabang which could be said that it it the center of education in the northern Laos and able to produce educational and religious personnel. Luang Prabang is also cultural attractive tourist city that has role in art and culture. The institutes that teach arts needs to adjust the context of their course and time to be consistent with social context due to the art movement that is intering int the contemporary or reaching to the new imagination. Therefore, the effects to happen would be positive and negative. The positives are that they will make the art educational system developed to be more modern and consistent with the social changes. The course will be higher improved and the expression styles and new techniques will be applied. Art institutions will be established to produce art personnel through development process following the period of time in the way it connects to every subject, or it could be called “local wisdom.” Art and education within and without school system are all about the understanding of art creative style and aesthetics. (Prawet Wasi, 1993) To understand the aesthetics, one must learn and study about all kind of art work. The sculpture is a part that requires practices based on delicate art principles on selecting what would attract eyes and minds to make people favor and it is a personal choice to choose what they like or see if it is beautiful. Currently, the art work and craftsmanship have been increasingly improved and seem


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to be different from the past obviously. The growth of techniques, ability to adjust and accuracy, concepts and characteristcs invented lead to deep changes and threaten to traditional crafts connected to the beauty of all arts. 9Sodchuen Chaiprasat, 2000)

Another important factor is the restoration which is the integration between an art to another kind of art during a period to another period. The expression of identity using meaningful components and styles, from the evidences of traditional art work, could be seen only from the physical results, but they lack of a thinking process. (Pia Aon Panfongped, interview on March 10th 2012) The crafts or artists who create work attempted to apply parts that are of Luang Prabang society and culture to mix with the concept of creative work since they saw the importance of new creation rather than imitating the traditional forms. Thus this caused changes. (Surachai Jongjit-ngaam, 1999) In the same time, the preservation based on Buddhism methods, when capitalist system played more roles, the restoration and change of religious places all made the work to be unnecessary larger even though the craftsmen skill were not that profession together with the intervention of commercial Buddhism and tourism, thus it made the inheritance was not meant to be for Buddhists to be aware of trinity and the accumulation of virtue, as well as for the merit, as in the past. 3. Summary Luang Prabang, even though there were revolutionary events that change the country’s ruling system, the people were socially involved for a constantly long time. This can be told about the prosperity of Buddhism and people participation from then until now. The main principle that needs to be considered is the cultural diversity and trends used as a force to develop the society and generate trust to people or creating unity and social security, especially the socialist concept when it was used in social and political context. The administration of Lao PDR which its core is Buddhism also needs to be adjusted properly. This can be obviously seen from the change of from monarchy and social classes to socialist regime, though they still see the importance of religious institution and use it beneficially to unite the nation into one. (Buakai Penprajan, 2008) The changes happened from the socialist regime, the loss from war state, and the open for external culture and new economic mechanism bringing the country to capitalism are significant factors leading to carefully proceed the policy in order to generate the state security and unity of people in the country by presenting through the symbols or ideo-symbols and others. (Ministry of Information, Tourism and Culture, 2000)

The sculpture decorated in Luang Prabang architecture was technically transmitted from traditional art skills, except there was change of concept that influenced the new contemporary style, especially the Sima and Vihara that were restores and renovated, from the traditional belief to religious belief, and from the religious belief to the ruling system and the nationalism. The obvious changes and unimpeded or traditionalism are the door and window arches of Sima and Viahara, according to the traditional styles, they appeared after the renovation. These doors present the stories from the religious ideology and beliefs that are socialist realism emphasizing the nationalism. The animal door keeper sculpture was constructed in varied styles. From the restoration, they were changed in both the styles of decoration, content of the story and materials used, such as from the clay roof tiles to rhombus white cement roof tiles. The front area was squash-shaped channels in the front structure of Lanna style gable (หนา้บนัแบบมา้ต่างไหม) as the closure of gable and then decorated with stucco motifs of Prathaipetch or adding ruangpueng or Kongcute style with wooden craft and Prathaipetch work. Also, the prof roof was also changed from wooden crafted style to mold limed style. The other important part, such as the gable apex or Sattaburipun, related to the ideology of King, was appeared in the crest of the roof of renovated Sima and Vihara, as well as their structure that was in integrated and larger styles.


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References [1] Ministry of Information, Tourism and Culture. (2000). (2543). History of Laos (Primebal

period – present).Vientiane: State Publisher. [2] Grant Evans. (2006). A Brief History of Laos. Translated by Dusadee Heymond. Chiang Mai:

Silkworm. [3] Thanakrit Yiamkamonworachat. 2008. Signification of Respect Buddha Image: Case Study

of Pra Bang and Other Buddha Images in Luang Prabang Society during 1975 to present.Bachelor of Arts, Chiang Mai University.

[4] Narin Pudla. (1997). Religo=ious Building Construction Work, Kokmaa Village in Mahasarakham Provicne. Master of Arts Thesis. Mahasarakham University.

[5] Prawet Wasi. (1993). Local Wisdom and Rural Development. Bangkok: Amarin Printing Group.

[6] Wiboon Leesuwan.(1978). Village Arts. Second Print. Bangkok: Odien Store. [7] Pitchaya Sumjinda. (2012). ASEAN Studies Seminar 2012-2013 Handbook.January 24-25,

2013. [8] Buakai Pengprajan.(2008). The Restoration of Bailan Scipture during the New Economic

Mechanism Period.Master of Philosophy Thesis in Thai Studies. Mahasarakham University. [9] Boonheng Buasisangpraserd.(1995). History of Lao Arts and Culture 2: Luang

Prabang.Copy. [10] Niyapan Wanasiri. (1997). Social and Cultural Anthropology, Thammasat University

Publishing. [11] Prasert Sinratana. (1982.). The Understanding of Arts. Bangkok: Odien Store. [12] Sodchuen Chaiprasat. (2000). Art Critics. Bangkok: O.S. Printing House. [13] Somsak Srisantisuk. (2001). The Study of Society and Culture, Concept, Methodology and

Theory. Faculty of Humanities and Social Sciences: Khon Kaen University Publisher. [14] Sila Weerawong. (1957.).Laos Chronicles.Vientiane: Ministry of Education. [15] Surapon Damkul. (1997).Laikham Art Decoration of Buddhist Building in Lanna during

the 2oth Buddhist Century. Research, Library of Chiang Mai University. [16] Surachai Jongjit-ngam. (1999)Yodia Pattern in Lampang: Connection of Thai-Burma in Lanna

Kingdom.Bangkok [17] M.R. Akin Rapeepat. (2008). Culture is SignificationL Theory and Methods of Clifford

Greezt.Bangkok: Sirindhorn Anthropology Center [18] Anintra Putchot. (2004). Policy Relation Between Education and Economic Development in

Laos under the New Economic Mechanism 1986-2000.: Center for Research on Plurality in the Mekong Region, Khon Kaen University.

[19] Pia Aon Panfongfad. Former Royal Luang Prabang Craftsman. Interview on April 11th 2011 and March 16th 2012.

[20] Nosang Wongduen. Division of Archeology. Luang Prabang. Interview on April 14th 2011, March 15th 2012, and March 11th 2013.


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Volatility Transmission between Stock Markets, from Dot-Com

Crisis to Global Financial Crisis: A Multivariate Garch Approach

Vítor Gabriel UDI – Research Unit for Inland Development, PEst-OE/EGE/UI4056/2011

Project Financed by Foundation for Science and Technology (FCT) Ministry of Education and Science Polytechnic Institute of Guarda, Portugal

E-mail: [email protected] Tel: +351271220120; Fax: +351271220150

José Pires Manso

NECE – Research Unit in Business Sciences R&D Centre Funded by the Multiannual Funding Programme of R&D Centres of FCT Portuguese Foundation for Science and Technology, Ministry of Education and

Science University of Beira Interior, Portugal E-mail: [email protected]

Tel: +351275319600; Fax: +351275319601

Abstract This paper investigates the impact of the global financial crisis on the volatility transmission across world´s stock markets. With this objective, twelve European and non-European markets were selected, representing over 62% of the global capitalization, and the period from 4th October 1999 to 30th June 2011 was chosen. To investigate the volatility transmission process, the multivariate GARCH VECH is considered, in order to identify the direction and the magnitude of volatility spillover and see whether the global financial crisis led to changes at that level. The results showed that the own-volatility shocks and the cross-volatility shock effects were more pronounced in bear markets sub-periods. Moreover, the own and cross-volatility shocks showed a significant increase during the global financial crisis, putting markets at higher exposure to lagged market events. Keywords: Global financial crisis, international stock markets, spillover effects,

multivariate GARCH. JEL Classification Codes: C32, C58, G15

1. Introduction The global economy has witnessed profound and rapid changes, involving an economic and financial interdependence growth among countries, reflected in the flows of goods, services and capital. According to Fabozzi (1995), technological developments, institutionalization and liberalization of financial markets contributed to financial globalization. There is ample factual evidence that markets have become more interconnected, with regard to cross-border trade and capital flows, during the last decades (Forbes and Chinn, 2003). As international markets become more integrated, the information generated in a market may affect other markets in a deeper way. It therefore seems reasonable to assume that cross-border links between markets, both commercial and financial, created conditions for the transmission of shocks across markets.


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The interconnection between different markets has been, for a long time, an important topic of study for market players, regulators and researchers. Several works studied the co-movement of returns, the dynamic linkages and the volatility transmission between markets.

In the last decade, several episodes of crisis marked the financial markets. The two most striking episodes were the Dot-Com crisis and the global financial crisis. The latter was considered by some authors as the most severe crisis since the Great Depression and the first global financial crisis (Claessens et al., 2010; Bekaert et al., 2011; Lin and Treichel, 2012). Although this crisis had its origin in the United States, in the subprime credit sector, it would affect the global stock markets, with many stock markets describing more pronounced crashes than those of the United States. The current financial crisis provides therefore a good reason to reassess the volatility transmission mechanisms between international stock markets.

Since the first studies on international volatility transmission, developed by Bollerslev (1986) and by Eun and Shim (1989), most empirical studies are focused on the analysis of mean relations between different markets. It was in the 1990s that some academics started paying attention to modeling interactions. In this sense, the studies of volatility transmission in monetary markets (Engle et al., 1990), have been extended to international stock markets, among which, chronologically, the works of Hamao et al. (1990), Lamoureux and Lastrapes (1990), Susmel and Hamilton (1994), and Koutmos Booth (1995), Kim and Rogers (1995), Booth et al. (1997), Chan et al. (1997), Kanas (1998), Chou et al. (1999), Reyes (2001), Edwards and Susmel (2003), Hassan and Malik (2007), Li (2007) and Harju and Hussain (2008) stand out.

Different methodologies have been employed to analyze volatility transmission, which can be classified into three categories (Diranzo and Soriano, 2006). The first category is the designated autoregressive conditional heteroscedasticity models, at univariate and multivariate forms, inspired by the work of Bollerslev (1986), who formed the basis of the framework of volatility transmission. The second category is the so-called regime switching models, which assumes that volatility behavior can be conditioned by structural changes (Lamoureux and Lastrapes, 1990; Susmel and Hamilton, 1994; Susmel and Edwards, 2003). The last category develops the stochastic models and has been introduced by Taylor (1982). In its simplest form, it considers the volatility as an observable variable.

In order to investigate the volatility transmission process, a set of twelve international stock indices and a multivariate conditional heteroscedasticity GARCH VECH model were selected.

The remainder of the paper is organized as follows: section 2 presents information about the data and a summary of the key statistics; section 3 presents the chosen methodology, section 4 presents the empirical results, while section 5 shows a summary of the key findings.

2. Data and Summary Statistics To analyze the volatility transmission of daily returns between stock markets indices were selected representing the international markets, particularly European indices, non-European, developed and emerging, according to the classification used by Morgan Stanley Capital International. The set of developed markets included European and non-European markets. In the European continent, markets of Germany (DAX 30), France (CAC 40), UK (FTSE 100), Spain (IBEX 35), Ireland (ISEQ Overall), Greece (ATG) and Portugal (PSI 20). In the set of developed markets outside Europe, were chosen U.S. (Dow Jones), Japan (Nikkei 225) and Hong-Kong (Hang-Seng). For emerging markets, were selected Brazil (Bovespa) and India (Sensex) were chosen.

The data used in this study was obtained from Econostats and cover the period from 4 October 1999 to 30 June 2011, which in turn was subdivided into three sub-periods. To analyze the Dot-Com crisis, the period from 04/10/1999 to 31/03/2003 was considered. For the latest crisis episode, which began in the U.S., with the subprime credit crisis, and that would have a new epilogue with the sovereign debt crisis, considered the day of 01/08/2007 as the date of emergence. For many authors, including Horta et al. (2008), Toussaint (2008), and Naoui et al. (2010), this day was seen as the time when the financial markets were surprised by the subprime crisis with the rising rates of Credit Default


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Swaps. In addition to the sub-periods of crisis, a third sub-period was also considered, designated quiet sub-period, on the delay of 01/04/2003 to 31/07/2007, which corresponded to a general increase of global stock indices.

The time series in the level form were transformed as series of returns, through the application of the expression 1ln tt PP , where tP and 1tP represent the closing values of a particular index in

days t and 1t , respectively. Table 1 presents some descriptive statistics of each series of returns in the three sub-periods considered, including the mean, the standard deviation, the asymmetry and the kurtosis, but also the ADF, Jarque-Bera, Ljung-Box and ARCH-LM statistics, and respective probabilities.


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Table 1: Descriptive Statistics, Jarque-Bera, ADF and ARCH-LM test results in each sub-period

ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

Dot-Com

Mean -0,00159 0,00002 -0,00067 -0,00090 -0,00031 -0,00061 -0,00047 -0,00058 -0,00023 -0,00094 -0,00077 -0,00050 Stand. Dev. 0,01732 0,02054 0,01848 0,02034 0,01394 0,01450 0,01621 0,01706 0,01226 0,01524 0,01199 0,01709 Skewness 0,19667 -0,51869 0,07598 0,08432 0,11184 -0,04717 -0,25462 0,12481 -0,32263 -0,05208 -0,35467 -0,42406 Kurtosis 6,86158 5,74251 4,15651 4,04117 4,33980 4,37674 5,18774 3,32982 4,54360 3,98860 5,06416 7,29690 Jarque-Bera 532,35163 303,77985 48,07453 39,30778 65,19346 67,28602 178,27541 6,04498 98,90022 34,91577 168,32593 677,78731 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ADF (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ARCH-LM 4,78582 0,44596 9,62223 11,02103 5,32009 10,55689 2,42957 6,23767 5,33018 2,73411 3,63347 5,31608 Prob. (0,00000) (0,98330) (0,00000) (0,00000) (0,00000) (0,00000) (0,00050) (0,00000) (0,00000) (0,00010) (0,00000) (0,00000)


Quiet

Mean 0,00088 0,00108 0,00056 0,00082 0,00029 0,00045 0,00073 0,00074 0,00061 0,00047 0,00070 0,00123 Stand. Dev. 0,00974 0,01540 0,00852 0,00925 0,00651 0,00696 0,00911 0,00798 0,00870 0,01042 0,00582 0,01425 Skewness -0,51602 -0,35159 -0,26161 -0,27716 -0,26048 -0,35941 -0,39105 -0,33769 -0,87734 -0,35734 0,13243 -0,94351 Kurtosis 6,14263 4,02281 4,03048 3,70569 4,24676 4,99718 4,59130 4,59264 9,48970 4,51171 5,98635 12,12360 Jarque-Bera 377,92700 53,21472 46,13575 27,81510 63,06650 155,62450 108,59610 103,37060 156,11140 96,57989 310,47510 2998,24900 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ADF (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ARCH-LM 9,84627 3,22570 4,24381 9,16237 2,53503 7,09474 3,17326 3,35463 3,20455 4,86838 1,89414 18,67095 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00020) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,01010) (0,00000)

Global Financial Crisis

ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX Mean -0,00139 0,00015 -0,00038 -0,00003 -0,00006 -0,00007 -0,00004 -0,00037 -0,00110 -0,00058 -0,00062 0,00020 Stand. Dev. 0,02110 0,02157 0,01827 0,01694 0,01589 0,01621 0,02157 0,01898 0,02136 0,01927 0,01539 0,01970 Skewness -0,14016 0,09567 0,14445 0,21786 0,04696 -0,04249 0,16468 0,12892 -0,45098 -0,80704 -0,02445 0,21001 Kurtosis 5,02526 9,23434 8,65830 9,57230 10,27634 8,71452 8,98703 9,82585 7,23413 9,17291 11,02768 9,49248 Jarque-Bera 169,30040 1575,59600 1300,04100 1757,08900 2144,63400 1322,85000 1456,09500 1889,68000 759,02620 1648,75500 2610,06300 1714,31300 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ADF (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ARCH-LM 7,97466 28,79062 13,56396 17,42443 23,58806 18,01107 19,85638 7,84351 14,85801 24,28582 10,49567 4,33322 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000)


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The descriptive statistics analysis allows the conclusion that only in the quiet sub-period all indices showed positive average daily return. In the remaining sub-periods, only the BOV, in the first, and the BOV and the Sensex, in the third, showed positive average return. Moreover, all sets of returns showed signs of deviation from normality assumption, since the coefficients of skewness and kurtosis are statistically different from a normal distribution. To investigate the existence of autocorrelation in the returns series, the Ljung-Box test was applied (robust in the presence of heteroscedasticity), whose results are presented in Table 2 (in Appendix). The statistics of this test show the existence of autocorrelation in several indices. This fact is more evident especially in the last sub-period.

With the aim to test the stationarity of the series of returns, the traditional ADF test was applied. The null hypothesis states that the series had a unit root, ie, that the series were integrated of order 1, given the alternative hypothesis that the series had no unit root. The results of testing the stationarity, in the three sub-periods, are shown in Table 1. In all cases the ADF test statistics are smaller than the significance level of 1%, rejecting the null hypothesis of integration. So, we can conclude that the series of returns are stationary.

Figure 1 shows the daily returns of the twelve stock indices, in the entire period, evidencing that volatility tends to concentrate in certain moments.

Figure 1: Returns of international stock markets in the sample period 1999-2011

-.12

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

ATG_CLOSE_R

-.15

-.10

-.05

.00

.05

.10

.15

00 01 02 03 04 05 06 07 08 09 10

BOV_CLOSE_R

-.12

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

CAC_CLOSE_R

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

DAX_CLOSE_R

-.12

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

DJ_CLOSE_R

-.100

-.075

-.050

-.025

.000

.025

.050

.075

.100

00 01 02 03 04 05 06 07 08 09 10

FTSE_CLOSE_R

-.15

-.10

-.05

.00

.05

.10

.15

00 01 02 03 04 05 06 07 08 09 10

HANG_SENG_CLOSE_R

-.15

-.10

-.05

.00

.05

.10

.15

00 01 02 03 04 05 06 07 08 09 10

IBEX_CLOSE_R

-.15

-.10

-.05

.00

.05

.10

00 01 02 03 04 05 06 07 08 09 10

ISEQ_CLOSE_R

-.16

-.12

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

NIKKEI_CLOSE_R

-.12

-.08

-.04

.00

.04

.08

.12

00 01 02 03 04 05 06 07 08 09 10

PSI_CLOSE_R

-.15

-.10

-.05

.00

.05

.10

.15

.20

00 01 02 03 04 05 06 07 08 09 10

SENSEX_CLOSE_R


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The second sub-period, running from 2003 to 2007, was relatively calm compared to the other sub-periods, which were marked by high volatility and turbulence, suggesting that the returns are characterized by clusters of volatility. Considering the entire period, the year of 2008 revealed the highest concentration of volatility as a result of the global financial crisis. The presence of conditional heteroscedasticity (ARCH effects) in the series of returns was confirmed by the LM test results, which was applied to a first-order autoregressive process. The results of these tests are presented in Table 1. Only the index BOV, in Dot-Com sub-period, showed no evidence of existence of conditional heteroscedasticity. In all other cases, the LM tests indicate that, for a significance level of 5%, the series of returns exhibit conditional heteroscedasticity. This conclusion is confirmed by the LB2 test results, for lags 4 and 12.

The presence of ARCH effects in the series justifies the use of multivariate GARCH model, to analyze the volatility transmission among the twelve markets.

3. Methodology The main objective of this study is to analyze the spillover effects between international stock markets. To this end, a multivariate GARCH model was estimated. To filter the auto-covariance structure in the series of returns we used an autoregressive vector, expressed as follows:

m

ststst YACY

1 (1)

Where tY is a column vector 112 , representing the daily returns of the twelve markets; C is

a column vector 112 , representing the deterministic component, sA are the matrices of coefficients

1212 , m is the number of lags and t is a vector of residuals, designated in the VAR terminology

by innovations or shocks. Where 1s to ATG, 2s to BOV, 3s to CAC, 4s to DAX, 5s to DJ, 6s to FTSE, 7s to HANG, 8s to the IBEX, 9s to the ISEQ, 10s to the NIKKEI,

11s to the PSI and 12s to the SENSEX. The optimal lags selection by the Akaike and Schwarz information criterium were 1, 1 and 3,

for the Dot-Com, quiet and global financial crisis sub-periods, respectively. To estimate the conditional variance and the contagion effects, we turn to the representation of

Bollerslev et al. (1988), applying the multivariate GARCH model, with a diagonal VECH specification. The diagonal VECH model can be written as follows:

p

jjtj

q

jttjt HvechBvechACHvech

1111 ´ (2)

Where tH concerns the matrix of conditional variances and covariances

According to Scherrer and Ribarits (2007), understanding the matrix becomes easier when it comprises more than two variables, as in the case studied. The diagonal VECH representation is based on the assumption that the conditional variance depends on the squared lagged residuals, and the conditional covariance depends on the crossed and lagged residues and on lagged covariances of other series (Harris and Sollis, 2003). In the equation of the model, A and B are matrices of coefficients,

with size 12112

1 NNNN , and C is a vector of constant terms, with size 1121 NN .

The diagonal elements of matrix A 12,123,32,21,1 ,,,, aaaa measure the influence from past

innovations on the current volatility, ie the own-volatility shocks, while non-diagonal elements jiaij when determine the cross product effects of innovations in the lagged co-volatility. The

diagonal elements of matrix B 12,123,32,21,1 ,,,, bbbb determine the influence of past volatilities on

current volatilities, or the own-volatility contagion; the non-diagonal elements jibij when measure

the cross product effects on the current co-volatilities, i.e. the cross-volatility spillovers. There are two important issues to consider in the estimation process of this model. The first is

the number of parameters to be estimated, the second is the imposing constraints on the model, to ensure the assumption of positive semi-definite among the conditional variance-covariance matrix (Goeij and Marquering, 2004). To reduce the number of parameters in the estimation procedure, Bollerslev et al. (1988) and Goeij and Marquering (2004) suggest the diagonal version of A and B


108

matrices. According to Bauwens et al. (2006), the conditional variance-covariance matrix, in the diagonal VECH model, is positive semi-definite if all parameters of A , B e C matrices are positives. The conditional variance and covariance matrix can be derived, expressing the model in terms of the Hadamard product or by imposing conditions, using Cholesky orthogonalization. 4. Empirical Results The VaR methodology has proved its importance as a risk management tool, providing an indication of the maximum potential loss incurred by an investor in a portfolio, for a given confidence level (Best, 1998; Dowd, 2002).

The MGARCH (1,1) diagonal VECH model estimates for global financial crisis, Dot-Com and quiet sub-periods are presented in tables 3, 4 and 5 (the first two in the Appendix), respectively.

During Dot-Com crisis some of the estimated coefficients revealed no statistical significance, especially in matrix A . In particular, the NIKKEI index, in which none of the coefficients, at the intersection with the other indices, turned out to be statistically significant, at a significance level of 5%. In the quiet sub-period, compared with the previous sub-period, the number of coefficients with statistical significance increased, although this number is much lower than what was found in the last sub-period.

In terms of own-volatility coefficients jiAij to, , in the Dot-Com sub-period, the conditional

variance of ATG and SENSEX indices appear to be most affected by own-shocks, although, in all cases, the own-volatility shocks have statistical significance, at a significance level of 5%. In terms of the cross-volatility effects jiAij to, , some of the parameters revealed no statistical significance.

With this regard, a special mention to the NIKKEI index, in which none of the parameters have statistical significance, at the significance level of 5%. The magnitude of the crossed shock is weaker in the pair ISEQ-NIKKEI (0.0019) and stronger in the pair DJ-ATG (0.0827). It should be noted, also, that in the case of ATG, BOV, DJ, FTSE, PSI and SENSEX indices, own-volatility shocks were larger than the cross-volatility shocks, the reverse occurred in the remaining indices, somewhat contradicting what would be expected.

In the quiet sub-period, the conditional variances of SENSEX and IBEX indices were more affected by own shocks. However, this type of shocks was statistically significant in all indices, at a significance level of 5%. The cross-shocks magnitude was weaker in DJ-NIKKEI (0.0071) and stronger in FTSE-IBEX (0.0730). Considering the set of indices studied, the highlight was the IBEX index, in which all the cross-shock effects with the remaining indices have proved to be statistically at a significance level of 5%. In the opposite direction, and for the same significance level, six of the cross-shocks between the HANG index and its peers revealed no statistical significance, as did five pairs of cross-shocks involving NIKKEI and SENSEX indices. Comparing own-volatility shocks with cross-volatility shocks, it was concluded that the first type of shocks had higher expression levels only in DJ, ISEQ, NIKKEI, SENSEX and PSI.

For the global financial crisis sub-period, all estimated coefficients were statistically significant at the significance level of 1%, with the exception of the NIKKEI-DJ set, which only revealed statistical significance for the significance level of 5%, whereby both the effects of own and cross shocks showed statistical significance. The own-shocks recorded particular magnitude in ISEQ (0.1643), PSI (0.1623) and NIKKEI (0.1580), whereas the cross-shocks had higher expression in ATG-PSI set (0.1158). It should also be noted that in DJ, ISEQ, NIKKEI, SENSEX and PSI indices, the own-volatility effects were larger than the cross-volatility effects. These results are in line with those obtained in other studies, such as Worthington and Higgs (2004) and Saleem (2008).

Comparing the global financial crisis and the Dot-Com sub-periods, it appears that a large part of the coefficients that reflect the effects of own-shocks have increased. Only ATG, Sensex and BOV indices did not describe this evolution. For the cross effects coefficients, only the pair ATG-NIKKEI did not increase. The comparison of the most recent sub-periods reveal an increase of all cross-shocks coefficients, without exception, while only the own-shocks coefficients of IBEX and SENSEX indices didn´t increase. In turn, the comparison between the first two sub-periods reveal that, in general, the Dot-Com sub-period own effects coefficients showed a higher value, except in IBEX index. The same happens with 70% of cross effects coefficients. These facts allow the conclusion that, in general, the


109

cross-volatility shocks and the own-volatility shocks are higher in crisis phases, corresponding to decreases in indices values, compared with phases of rising, as seen in the quiet sub-period. Moreover, the values of volatility shocks (own and cross) recorded in the last sub-period an expressive increase, conveying the idea of a greater exposure to the markets lagged events, occurring in the own-market, but especially to shocks occurring in other markets, due to the severe financial crisis started in the U.S. subprime sector and the sovereign debt crisis, directly involving some of the eurozone countries. Table 5: Estimates of the coefficients of variance covariance equations in the Global Financial Crisis sub-

period

Cij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEXATG 0,000

(0,017) BOV 0,000 0,000

(0,014) (0,001) CAC 0,000 0,000 0,000

(0,000) (0,000) (0,000) DAX 0,000 0,000 0,000 0,000

(0,000) (0,000) (0,000) (0,000) DJ 0,000 0,000 0,000 0,000 0,000

0,023 (0,000) (0,000) (0,000) (0,000)FTSE 0,000 0,000 0,000 0,000 0,000 0,000

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) HANG 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,018) (0,006) (0,003) (0,013) (0,006) (0,002) (0,004) IBEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,006) (0,000) ISEQ 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,014) (0,001) (0,000) (0,000) (0,000) (0,000) (0,014) (0,000) (0,000) NIKKEI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,151) (0,035) (0,001) (0,002) (0,057) (0,006) (0,005) (0,012) (0,054) (0,000) PSI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,009) (0,000) (0,000) (0,090) (0,000) SENSEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,086) (0,009) (0,006) (0,009) (0,036) (0,006) (0,003) (0,011) (0,011) (0,044) (0,011) (0,003) Aij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

ATG 0,109

(0,000)

BOV 0,086 0,086

(0,000) (0,000)

CAC 0,089 0,084 0,095

(0,000) (0,000) (0,000)

DAX 0,082 0,077 0,079 0,080

(0,000) (0,000) (0,000) (0,000)

DJ 0,097 0,089 0,093 0,079 0,106

(0,000) (0,000) (0,000) (0,000) (0,000)

FTSE 0,092 0,083 0,089 0,076 0,087 0,087

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

HANG 0,085 0,077 0,087 0,069 0,081 0,077 0,074

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

IBEX 0,089 0,085 0,092 0,079 0,096 0,086 0,081 0,107

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

ISEQ 0,109 0,094 0,105 0,084 0,104 0,100 0,080 0,112 0,164

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

NIKKEI 0,060 0,080 0,094 0,084 0,062 0,068 0,071 0,093 0,095 0,158

(0,005) (0,002) (0,000) (0,000) (0,011) (0,000) (0,000) (0,000) (0,004) (0,000)

PSI 0,116 0,098 0,102 0,088 0,101 0,104 0,104 0,109 0,109 0,075 0,162

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,004) (0,000)

SENSEX 0,095 0,091 0,093 0,082 0,084 0,083 0,086 0,084 0,091 0,072 0,099 0,113

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,004) (0,000) (0,000) Bij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

ATG 0,896

(0,000)


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Table 5: Estimates of the coefficients of variance covariance equations in the Global Financial Crisis sub-period - continued

BOV 0,879 0,904

(0,000) (0,000)

CAC 0,881 0,887 0,877

(0,000) (0,000) (0,000)

DAX 0,884 0,894 0,893 0,896

(0,000) (0,000) (0,000) (0,000)

DJ 0,878 0,893 0,879 0,897 0,889

(0,000) (0,000) (0,000) (0,000) (0,000)

FTSE 0,881 0,890 0,881 0,896 0,887 0,888

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

HANG 0,891 0,901 0,890 0,913 0,878 0,897 0,924

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

IBEX 0,876 0,867 0,871 0,881 0,870 0,876 0,889 0,858

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

ISEQ 0,863 0,858 0,857 0,875 0,860 0,858 0,860 0,842 0,822

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

NIKKEI 0,841 0,813 0,811 0,821 0,833 0,861 0,899 0,811 0,762 0,804

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

PSI 0,825 0,839 0,840 0,848 0,838 0,832 0,842 0,824 0,829 0,826 0,761

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) SENSEX

0,890 0,884 0,881 0,886 0,891 0,886 0,891 0,886 0,862 0,861 0,853 0,898 (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

Notes: The log likelihood function is maximized using Marquardt’s numerical iterative algorithm to estimate optimal parameters. Values between parentheses show probability values.

The estimated coefficients of the variance-covariance matrix are presented in Tables 3, 4 and 5

(the first two shown in Appendix). The results are consistent with those obtained from similar studies, including those of Theodossiou and Lee (1993), and Higgs and Worthington (2004), with all non-diagonal coefficients in the lagged conditional variance to show up positive. In addition, most also proved to be statistically significant. Only three coefficients in Dot-Com sub-period revealed no statistical significance at a significance level of 5%. In the remaining sub-periods, all coefficients were statistically significant at a more demanding significance level of 1%, giving a clear indication of the presence of high persistence in volatility. The lowest values of own-volatility effects spillovers, in each of the three sub-periods, are related to ATG 6802,01,1 b , IBEX 6957,08,8 b and PSI

7614,011,11 b , respectively. In turn, the higher values of the own-volatility contagion effects, in the

three sub-periods, belonging to IBEX 9029,08,8 b , HANG 9609,07,7 b and HANG

9241,07,7 b , respectively. These values mean that the volatility in IBEX, HANG and HANG

markets, on the first, second and third sub-periods, respectively, had a stronger impact on their own future volatility compared to what happened in other markets.

The significance of the overwhelming majority of coefficients ijb ji when provides

evidence of the presence of high and positive volatility spillovers effects between markets. Estimates of persistence of lagged and cross volatility are in many cases greater than 0.8, especially in the last two sub-periods. This supports the idea of persistence volatility originated in each market.

The sum of the lagged coefficients of ARCH and GARCH effects iiii ba was, in all cases, in

the global financial crisis sub-period, greater than the sum of the coefficients recorded in the first sub-period. The comparison with the second sub-period, reveals that the superiority was observed in 10 cases. In turn, the comparison of the sum of the non-diagonal coefficients ijij ba , shows a marked

superiority of the last sub-period compared to the previous ones, in 100% of cases over the first sub-period and 88% over the second. The calculated values, especially those related to the global financial crisis, are very close to unity, supporting the assumption of stationary covariance and persistent volatility.

Table 6, in the appendix, presents the normality test, the unit root test and the Ljung-Box test applied to the results of the standardized residuals of the model. Due to the nature of the financial


111

series, the estimation results are not normally distributed. However, given the skewness and the kurtosis statistics, we conclude that the standardized residuals are closer to the normal distribution than the original series of returns. For its part, the ADF test results suggest that all series of the standardized residuals are stationary, in each of the three sub-periods. Table 7 (in appendix) provides the estimates from the Portmanteau Box-Pierce/Ljung-Box statistics for the system residuals, considering the Cholesky of covariance Orthogonization method, in the three sub-periods. Both the Q-statistics and the adjusted Q-statistics show that the null hypothesis of no autocorrelation cannot be rejected, at a significance level of 5%, except for lags 11 and 12, in quiet sub-period. Thus, we conclude that the evidence of autocorrelation disappeared from the system residuals. There is a reason to believe that the MGARCH (1,1) diagonal VECH model absorbs much of the inertia of the ARCH and GARCH effects. Since all equations of the estimated models provide an adequate description of the data, we conclude that the conditional equations are correctly specified. Moreover, the used model ensured that the conditional variance and covariance matrix is positive, semi-definite, fulfilling the compulsory conditions given by the estimated model. 5. Summary and Conclusions This study investigated the volatility transmission process between twelve international stock markets, over the period from 1999 to 2011. A multivariate conditional heteroscedasticity model was estimated to identify the sources and the magnitude of spillover effects.

In the Dot-Com and in the Quiet sub-periods all own-volatility shocks showed statistical significance. The same happened with the own-volatility and the cross-volatility shocks in the global financial crisis sub-period.

The estimation results allow the conclusion that, in general, the own-volatility effects and the cross-volatility spillovers are higher in the two sub-periods of crisis, corresponding to a fall in the value of the stock markets. Moreover, the own and cross volatility shocks showed a significant increase during the global financial crisis sub-period, conveying the idea of greater exposure to the lagged market events occurring in the market itself, but especially the shocks in other markets, due to the severe financial crisis in the U.S. subprime sector and to the sovereign debt crisis in the eurozone. The high significance of the coefficients of the variance-covariance equations provides evidence for the presence of high and positive volatility-spillovers between markets. The lagged and crossed volatility persistence estimates are in many cases greater than 0.8, in particular during the last two sub-periods, supporting the idea of persistence in volatility originated in each market.

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Appendix Table 2: Ljung-Box test results in each sub-period


Dot-Com

LB (4) 31,62000 2,99760 5,10160 2,21400 1,11130 13,93500 3,73210 2,01220 11,54800 0,93960 26,11100 11,97500 Prob. (0,00000) (0,55800) (0,27700) (0,69600) (0,89200) (0,00800) (0,44300) (0,73400) (0,02100) (0,91900) (0,00000) (0,01800) LB (12) 44,46400 20,44800 23,24600 19,43700 7,31810 28,41200 18,29500 15,99200 19,59200 10,41300 35,36600 16,81400 Prob. (0,00000) (0,05900) (0,02600) (0,07900) (0,83600) (0,00500) (0,10700) (0,19200) (0,07500) (0,58000) (0,00000) (0,15700) LB2 (4) 157,87000 4,82590 99,83200 198,12000 99,65800 188,49000 12,67100 68,06300 114,07000 20,66800 86,18300 84,70400 Prob. (0,00000) (0,30600) (0,00000) (0,00000) (0,00000) (0,00000) (0,01300) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) LB2 (12) 163,19000 7,09460 405,41000 570,20000 178,63000 484,19000 47,41900 236,28000 132,73000 47,07300 113,58000 108,35000 Prob. (0,00000) (0,85100) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000)

Quiet


Global F. Crisis


Note: Values between parentheses show probability values.


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Table 3: Parameter Estimation for the Diagonal VECH (1,1) model in the Dot-Com sub-period

Cij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEXATG 0,000

(0,000) BOV 0,000 0,000

(0,529) (0,073) CAC 0,000 0,000 0,000

(0,028) (0,373) (0,000) DAX 0,000 0,000 0,000 0,000

(0,044) (0,203) (0,000) (0,000)DJ 0,000 0,000 0,000 0,000 0,000

(0,172) (0,087) (0,006) (0,002) (0,003) FTSE 0,000 0,000 0,000 0,000 0,000 0,000

(0,096) (0,413) (0,000) (0,000) (0,024) (0,000) HANG 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,186) (0,517) (0,175) (0,106) (0,160) (0,277) (0,045) IBEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,074) (0,290) (0,000) (0,000) (0,032) (0,000) (0,175) (0,000)ISEQ 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,199) (0,281) (0,019) (0,023) (0,221) (0,011) (0,346) (0,046) (0,007) NIKKEI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,312) (0,723) (0,379) (0,399) (0,355) (0,424) (0,293) (0,480) (0,793) (0,062) PSI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,137) (0,218) (0,003) (0,007) (0,147) (0,039) (0,339) (0,001) (0,303) (0,503) (0,006)SENSEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,293) (0,320) (0,225) (0,157) (0,359) (0,181) (0,093) (0,292) (0,426) (0,705) (0,174) (0,000) Aij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSE

ATG 0,211

(0,000)

BOV 0,038 0,088

(0,443) (0,018)

CAC 0,065 0,021 0,050

(0,004) (0,240) (0,000)

DAX 0,061 0,033 0,048 0,057

(0,007) (0,115) (0,000) (0,000)

DJ 0,083 0,070 0,049 0,051 0,093

(0,034) (0,009) (0,000) (0,000) (0,000)

FTSE 0,068 0,025 0,065 0,072 0,060 0,080

(0,022) (0,299) (0,000) (0,000) (0,002) (0,000)

HANG 0,059 0,022 0,032 0,034 0,060 0,031 0,063

(0,093) (0,482) (0,039) (0,006) (0,010) (0,175) (0,002)

IBEX 0,061 0,020 0,042 0,049 0,045 0,057 0,037 0,048

(0,024) (0,198) (0,000) (0,000) (0,002) (0,000) (0,057) (0,000)

ISEQ 0,078 0,049 0,055 0,056 0,046 0,062 0,037 0,059 0,075

(0,096) (0,161) (0,001) (0,001) (0,078) (0,001) (0,227) (0,002) (0,001)

NIKKEI 0,062 0,013 0,017 0,021 0,024 0,027 0,026 0,014 0,002 0,053

(0,145) (0,670) (0,258) (0,210) (0,159) (0,292) (0,203) (0,406) (0,931) (0,004)

PSI 0,078 0,039 0,046 0,045 0,037 0,046 0,036 0,062 0,037 0,018 0,082

(0,036) (0,108) (0,001) (0,004) (0,094) (0,010) (0,215) (0,001) (0,182) (0,523) (0,000)

SENSEX 0,073 0,061 0,045 0,068 0,050 0,035 0,070 0,043 0,053 0,013 0,054 0,136

(0,146) (0,122) (0,048) (0,008) (0,210) (0,132) (0,008) (0,093) (0,177) (0,657) (0,040) (0,000) Bij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

ATG 0,680

(0,000)

BOV 0,689 0,794

(0,132) (0,000)

CAC 0,742 0,795 0,896

(0,000) (0,000) (0,000)

DAX 0,784 0,773 0,890 0,893

(0,000) (0,000) (0,000) (0,000)

DJ 0,679 0,804 0,865 0,896 0,852

(0,001) (0,000) (0,000) (0,000) (0,000)

FTSE 0,720 0,770 0,856 0,823 0,800 0,837

(0,000) (0,004) (0,000) (0,000) (0,000) (0,000)


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Table 3: Parameter Estimation for the Diagonal VECH (1,1) model in the Dot-Com sub-period - cotinued

HANG 0,767 0,804 0,868 0,883 0,859 0,816 0,894

(0,000) (0,005) (0,000) (0,000) (0,000) (0,000) (0,000)

IBEX 0,776 0,839 0,902 0,885 0,861 0,849 0,830 0,903

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

ISEQ 0,703 0,730 0,830 0,831 0,783 0,816 0,805 0,802 0,801

(0,000) (0,001) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

NIKKEI 0,719 0,814 0,879 0,887 0,933 0,799 0,868 0,886 0,799 0,900

(0,002) (0,104) (0,000) (0,000) (0,000) (0,001) (0,000) (0,000) (0,298) (0,000)

PSI 0,652 0,732 0,820 0,826 0,823 0,797 0,775 0,785 0,762 0,775 0,788

(0,001) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,018) (0,000)

SENSEX 0,732 0,778 0,817 0,789 0,771 0,790 0,835 0,802 0,781 0,859 0,784 0,835

(0,001) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,015) (0,000) (0,000)


Table 4: Parameter Estimation for the Diagonal VECH (1,1) model in the Quiet sub-period

Cij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX ATG 0,000

(0,004) BOV 0,000 0,000

(0,127) (0,013) CAC 0,000 0,000 0,000

(0,000) (0,003) (0,000) DAX 0,000 0,000 0,000 0,000

(0,001) (0,009) (0,000) (0,000) DJ 0,000 0,000 0,000 0,000 0,000

(0,088) (0,007) (0,000) (0,000) (0,004) FTSE 0,000 0,000 0,000 0,000 0,000 0,000

(0,002) (0,012) (0,000) (0,000) (0,005) (0,000) HANG 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,093) (0,348) (0,017) (0,002) (0,443) (0,068) (0,013) IBEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,000) (0,005) (0,000) (0,000) (0,000) (0,000) (0,035) (0,000) ISEQ 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,037) (0,211) (0,001) (0,002) (0,130) (0,003) (0,133) (0,000) (0,000) NIKKEI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,384) (0,660) (0,079) (0,024) (0,545) (0,264) (0,012) (0,032) (0,162) (0,010) PSI 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,004) (0,143) (0,002) (0,009) (0,157) (0,003) (0,064) (0,005) (0,157) (0,153) (0,004) SENSEX 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000

(0,042) (0,262) (0,011) (0,032) (0,570) (0,072) (0,172) (0,038) (0,210) (0,127) (0,079) (0,000) Aij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

ATG 0,049

(0,000)

BOV 0,040 0,052

(0,004) (0,001)

CAC 0,038 0,029 0,041

(0,000) (0,001) (0,000)

DAX 0,039 0,027 0,044 0,052

(0,000) (0,006) (0,000) (0,000)

DJ 0,026 0,029 0,018 0,027 0,031

(0,034) (0,001) (0,007) (0,000) (0,001)

FTSE 0,042 0,031 0,046 0,052 0,027 0,061

(0,000) (0,004) (0,000) (0,000) (0,003) (0,000)

HANG 0,031 0,015 0,016 0,013 0,011 0,012 0,022

(0,004) (0,187) (0,023) (0,071) (0,340) (0,195) (0,000)

IBEX 0,072 0,033 0,065 0,069 0,038 0,073 0,023 0,120

(0,000) (0,026) (0,000) (0,000) (0,001) (0,000) (0,036) (0,000)

ISEQ 0,044 0,024 0,037 0,040 0,027 0,039 0,033 0,063 0,069

(0,003) (0,109) (0,000) (0,000) (0,023) (0,001) (0,035) (0,000) (0,000)

NIKKEI 0,014 0,010 0,018 0,021 0,007 0,014 0,037 0,045 0,036 0,046

(0,220) (0,558) (0,061) (0,033) (0,563) (0,275) (0,000) (0,004) (0,035) (0,000)

PSI 0,008 0,028 0,031 0,038 0,030 0,036 0,015 0,047 0,026 0,023 0,044

(0,390) (0,046) (0,000) (0,001) (0,037) (0,002) (0,170) (0,004) (0,062) (0,111) (0,001)

SENSEX 0,065 0,036 0,046 0,049 0,018 0,047 0,036 0,063 0,038 0,048 0,059 0,133

(0,007) (0,137) (0,001) (0,003) (0,487) (0,015) (0,123) (0,014) (0,095) (0,060) (0,014) (0,000)


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Table 4: Parameter Estimation for the Diagonal VECH (1,1) model in the Quiet sub-period - continued

Bij ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX

ATG 0,912

(0,000)

BOV 0,872 0,879

(0,000) (0,000)

CAC 0,890 0,893 0,892

(0,000) (0,000) (0,000)

DAX 0,889 0,903 0,893 0,897

(0,000) (0,000) (0,000) (0,000)

DJ 0,898 0,934 0,911 0,907 0,939

(0,000) (0,000) (0,000) (0,000) (0,000)

FTSE 0,873 0,869 0,869 0,868 0,897 0,848

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

HANG 0,902 0,918 0,930 0,924 0,913 0,907 0,961

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

IBEX 0,795 0,800 0,808 0,817 0,789 0,786 0,829 0,696

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

ISEQ 0,855 0,876 0,883 0,868 0,863 0,863 0,883 0,789 0,849

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

NIKKEI 0,911 0,892 0,915 0,892 0,914 0,884 0,934 0,809 0,867 0,940

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

PSI 0,936 0,889 0,888 0,867 0,892 0,864 0,925 0,807 0,874 0,924 0,900

(0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)

SENSEX 0,821 0,830 0,844 0,795 0,831 0,803 0,850 0,730 0,809 0,838 0,803 0,776

(0,000) (0,000) (0,000) (0,000) (0,002) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000) (0,000)



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Table 6: Diagnostic tests on the standardized residuals of the GARCH-VECH model


Dot-Com

Skewness 0,22237 -0,61188 0,09672 0,12735 0,01734 -0,16500 -0,10443 -0,19434 -0,19376 0,06551 -0,29830 -2,70023 Kurtosis 4,56834 6,33916 2,93340 3,74168 3,44964 3,53169 3,45717 4,23148 4,20236 3,34162 4,44826 39,71327

Jarque-Bera 93,78701 446,35510 1,47698 21,70306 7,17758 13,81975 8,91569 58,85265 56,32028 4,72434 86,58428 48597,65

000 Prob. (0,00000) (0,00000) (0,47783) (0,00002) (0,02763) (0,00100) (0,01159) (0,00000) (0,00000) (0,09422) (0,00000) (0,00000) ADF -28,29275 -28,37411 -29,59555 -28,81262 -30,14081 -29,42735 -29,97683 -28,45631 -29,63429 -28,57568 -27,67099 -27,29664 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000)

Quiet

ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX Skewness -0,22130 -0,30538 0,00627 -0,15147 -0,10704 -0,14850 -0,08355 -0,10524 -0,11687 0,00867 0,70270 -0,35158 Kurtosis 3,94603 3,96870 3,24688 3,90597 3,41032 3,24575 3,79960 4,57993 14,82817 3,37599 7,54454 4,59026

Jarque-Bera 48,90697 58,79434 2,73972 40,91283 9,60318 6,66213 29,91601 113,89800 6517,39000 6,35131 1014,48700 135,5468

0 Prob. (0,00000) (0,00000) (0,25414) (0,00000) (0,00822) (0,03576) (0,00000) (0,00000) (0,00000) (0,04177) (0,00000) (0,00000) ADF -32,27776 -32,68586 -33,05687 -31,09518 -31,96085 -31,66335 -33,51869 -32,92535 -32,47675 -31,30732 -32,94617 -31,58542 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000)

Global F. Crisis

ATG BOV CAC DAX DJ FTSE HANG IBEX ISEQ NIKKEI PSI SENSEX Skewness -0,01344 -0,25131 -0,17357 0,20672 -0,12565 -0,44728 -0,11657 0,06253 -0,10860 -0,25010 -0,07608 2,23790 Kurtosis 3,74090 3,49137 3,71741 4,27117 4,54273 4,70027 4,70428 3,88429 4,73950 4,53312 4,33623 3,01804

Jarque-Bera 22,19230 19,94806 25,64528 72,14153 98,64243 149,02930 119,46620 32,20316 124,07330 105,00090 73,02425 30636,82

000 Prob. 0,00002 0,00005 (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) ADF -30,60785 -30,28959 -30,73575 -19,37373 -31,04783 -29,26061 -32,12447 -31,54238 -30,63840 -30,54590 -31,11473 -30,26337 Prob. (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000) (0,00000)

Note: Values between parentheses show probability values. Table 7: Portmanteau tests for autocorrelations in the Dot-Com, Quiet and Global Financial Crisis sub-periods

Dot-Com Quiet Global Financial Crisis Lags Q-Stat Prob. Adj Q-Stat Prob. df Q-Stat Prob. Adj Q-Stat Prob. df Q-Stat Prob. Adj Q-Stat Prob. df

1 71,646 1,000 71,731 1,000 144 55,236 1,000 55,287 1,000 144 138,596 0,611 138,739 0,608 144 2 247,166 0,961 247,666 0,959 288 255,560 0,916 255,984 0,913 288 272,196 0,740 272,616 0,734 288 3 417,731 0,680 418,838 0,666 432 393,513 0,908 394,323 0,903 432 392,265 0,915 393,058 0,911 432 4 539,850 0,857 541,536 0,845 576 566,416 0,604 567,871 0,587 576 530,374 0,913 531,738 0,907 576 5 709,653 0,601 712,347 0,573 720 726,163 0,429 728,364 0,406 720 683,911 0,829 686,073 0,814 720 6 861,154 0,521 864,929 0,485 864 896,779 0,213 899,937 0,193 864 805,282 0,924 808,199 0,913 864 7 989,398 0,656 994,242 0,615 1008 1054,609 0,150 1058,800 0,130 1008 931,708 0,958 935,545 0,949 1008 8 1125,453 0,707 1131,594 0,661 1152 1177,871 0,292 1182,986 0,257 1152 1054,093 0,982 1058,950 0,976 1152 9 1267,797 0,707 1275,467 0,653 1296 1319,377 0,319 1325,685 0,277 1296 1222,315 0,928 1228,748 0,909 1296

10 1380,392 0,867 1389,407 0,827 1440 1516,445 0,079 1524,602 0,060 1440 1366,502 0,916 1374,439 0,890 1440 11 1507,634 0,914 1518,323 0,879 1584 1674,093 0,057 1683,878 0,040 1584 1514,132 0,894 1523,764 0,858 1584 12 1633,903 0,947 1646,407 0,919 1728 1820,538 0,060 1831,975 0,040 1728 1628,223 0,957 1639,286 0,936 1728


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History of the Phinphat Luang Prabang Ensemble

Thanawat Bootthongtim Faculty of Fine and Applied Arts

Khon Kaen University, Khon Kaen, Thailand E-mail: [email protected]

Abstract The results indicated that history of The Phinphat Luang Phabang Ensemble. The first era ranged from B.E. 1330-2250: Luang Phabang Era. Fa Ngum had brought art and cultural from Khmer. The first era was the origin of the Phinphat Luang Phabang Ensemble pattern, and then a lot of improvements were managed such as applying a Kaen instrument into the ensemble, applying dignity system for musician.Started in B.E. 2529: the new imagination era. The government had agreed to open its borders; therefore, rules and obligations deregulated. Art and cultural of many fields were revived. In terms of music, rhythms were harmonized while each instrument had different role. However, the current technique was changed in terms of size of the ensemble into smaller sizes. Other kinds of instrument which contributed similar sounds were replaced the missing sounds. In terms of songs, there were Sep Noi, Sep Yai and Sacred songs. In B.E. 2538, Luang Phabang was elected to be one of the world heritages, art and cultural organizations were established such as Phra Lak Phra Lam Theater, Luang Prabang Department of Information and Culture. The organizations were to revive art and culture; however, the concept of development was mainly appointed by the government. Keywords: Phinphat Luang Phabang, Laos classical music

1. Introduction People's Democratic Republic of Laos has diversity of cultures and its history. The historical evidences can be found in the Khun Borom Myth (B.E. 1300) which well explains the country’s background. The days of the King Fa Ngum era: the first king of Lan Xang Kingdom, this was the beginning of huge development of Laos classical music of the Phinphat Luang Prabang Ensemble. According to the nation disunion within the kingdom of Lan Xang, the Kingdom was separated into 3 territories. However, Lan Xang Luang Prabang (B.E. 2250 - 2488) still held original musical pattern which was similar to the most of the musical activities practiced in the palace. In B.E. 2488, the constitution of the kingdom declared democratic governing system and monarchy. The government was located in Vientiane. King Sisavang Vong was the first king of the kingdom who dwelled in Luang Prabang. The king managed to keep the pattern of the Phinphat Luang Prabang Ensemble at the center of Luang Prabang. Until the 2nd of December B.E. 2518, Lao People’s Revolutionary Party seized state power from the king and established People's Democratic Republic of Laos which led to the big change of the history, music and context of the Phinphat Luang Prabang Ensemble as followed.

2. The Phinphat Luang Prabang Ensemble (B.E.1300 - B.E. 2250) Laos’s history could be traced firstly in Khun Borom Myth. The system of dividing the kingdom into7 regions for 7 princesses indicated the antique village administration system by the 7 princesses from all


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9 princesses. One of the princesses, Khun Lor, the king of Sawa, ruled the capital of Lan Xang. He renamed the kingdom into Xieng Thong (current capital of Luang Prabang) which was ruled by kings. The 26th king, Prince Kum Hiew, the younger brother of Prince Ngiew, also ruled the capital. Prince Ngiew had a son, Prince Fa Ngum, who was born in B.E. 1859 with physical abnormality. Elite bureaucrats agreed that the abnormality was the viciousness. They suggested Prince Fa Ngum to be floated away from Xieng Thong along the Mekong River. Khmer monk, adopted, raised and educated Prince Fa Ngum before bringing him to the King of Khmer. The Khmer king noticed the prince’s ability and intelligence; therefore, Keo Kengkanya, a princess was married to the prince as a reward. After the death of King, the prince marched his army to claim his homeland back from his uncle: Prince Kum Hiew who could not win the war, and decided to poison himself and his queen to death. Prince Ngum was presented to be the King of Xieng Thong by elite bureaucrats (Srila Veerawong, 1992.) Music in this era was affected by musical concept of Khmer which was the change after the victory over King due to the movement of Buddha image craftsmanship, blacksmiths, goldsmiths, coppersmith and including music areas such as Piphat Ensemble Musical Instruments: Ranat, Gongwong and Performing arts (Tong sueab Supamart, 1985)

Music band in Khmer era had no medley of local musical instruments; the original pattern and concept were kept to be used in royal activities which consisted of Nangnat-Ek, Gongwong, Pi and Taphon as the instruments. Music activities were kept inside the palace as it was regarded only for the higher status, such as the king and welcoming delicate guests. Mouth organ or other performances had their roles in terms of supernatural ceremony and could be a part of an entertaining performance. Naming piece and instrument still followed Khmer pattern which had none of Laos’s musical instrument names. During the time of King Sai Setthathirath (B.E. 2091 – 2114,) Buddhism and literature were highly encouraged and “Mouth Organ” an important Lan Xang instrument was practiced in Khmer Phinphat ensemble forming a significant pattern of music. Similarly, the era of King Suriya Vongsa who served his throne for 57 years (B.E. 2181 – 2238) indicated a musical practice called King’s proceedings music. This music practice was performed after the march of the king to pay respect and praise; also it was to entertain as it concentrated on performing or musical activities. This era was the beginning of bringing the inside palace musical activities to outside (Douangchampy Vouthisouk, 2013) hence, it was prosperous period for Laos music and performance. After the separation from Vientiane in B.E. 2256, bureaucrat staffs were assigned to respond for the importance of palace music and performing. Ranks and titles were assigned to musicians and actors who held skills to serve the king. Phra thammasat luang scripture, which explains ancient Laos’s constitution, mentioned about three main responsibilities of governors and bureaucrat staffs in Lan Xang according to music and performance (Term Wiparkpojnakij, 1987)

1. Pra Lakorn was the group responding for plays. 2. Pol Suk Kwa was the group responding for human – monkey classical masked ballet. 3. Pol Suk Sai was the group responding for ogre classical masked ballet.Each group

contains musicians, singers and actors. Moreover, musicians had roles in Royal Barge Procession such as Debbamontri, Muntri, Kham

Pheng Xai and Xai Phong Nok (Phothisane, 1998.) Until the time of King Sai Setthathirath the Second (B.E. 2241 – B.E. 2250) Lan Xang Kingdom had a significant turbulent causing separation into 3 kingdoms: Lan Xang Vientiane, Lan Xang Luang Prabang and Lan Xang Champasak. However, traditions and culture are not separated, and duties related to music and performances were still operated by musicians, singers and actors all over Luang Prabang and Vientiane. (Chalermsak Pikulsri, 2007)

3. The Phinphat Lan Xang Luang Prabang Ensemble (B.E 2250 – B.E. 2488) The reign of King Suriya Vongsa (B.E. 2181 – 2238) was prosperous due to righteous governing which led Lan Xang to stability and peace. Architectural literature, arts and international trading development were boosted. However, after King Suriya Vongsa, Lan Chang was in crisis and therefore was divided


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into 3 kingdoms. For Lan Xang Luang Prabang, many reigns ruled the kingdom, yet there were inside and outside political conflict causing the beginning of Lan Xang Luang Prabang Kingdom have no development in terms of Laos music as of evidences while music could be learned and understood from the art evidences as followings.

Mural painting in Paruag Temple which was built in Rama V (King) reign or by Phraya Srimahanam in B.E. 2404 as some mentioned (Woralak Boonyasurat, 2004) when the King Chantarathepprapakun or King Chantarat the tenth king of Lan Xang Luang Prabang Kingdom, was painted by Lan Xang craftsmen. The paintings indicated lifestyle of people in Luang Prabang many years ago including activities of the Chinese who started to have evitable roles in Luang Prabang society. (Nor-Sang Saiwongduean, 2012) Mural painting of Phinphat ensemble in Pa Huak Temple was Luang Prabang people Phinphat ensemble pattern in the past which was practiced in ceremonies and occasions. However these days Klong-Ping or Klong-Noi is included in ensemble.

Fig 1: Mural painting of Phinphat ensemble in Pa Huak Temple, Luang Prabang

Source: Thanawat Bootthongtim (2012)

Mural painting in Mai Suwannaphumaham Temple which was built in B.E. 1900 – 2000 (Woralak Boonyasurat, 2004) and was the throne of supreme patriarch Buntan; the last Laos supreme patriarch, was related to Laos music. Now the paintings are faded, and some parts of the paintings are repainted. Nevertheless, the artists were from the same family of those artists who painted mural painting in Pa Huak Temple which was painted indoor and still could be seen.

Fig 2: Mural painting of the east of Mai Suwannaphumaham Temple



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Fig 3: Mural painting of the west of Mai Suwannaphumaham Temple


Mural painting of Mai Suwannaphumaham Temple shared identical pattern of ensemble and musical instrument. Although the paint was faded, music instruments existed in the east was Pi, Klong-Yai, Gongwong 12 Melody, Taphon, Nangnat-Ek and Ching. This pattern could be found in Khmer and Thai Phinphat ensembles which comprised of 5 kinds of musical instrument of beaten instruments and blowers instruments in performing. Mural painting of the west of Mai Suwannaphumaham Temple showed musical instruments which could be Nangnat-Ek, Gongwong and Pi. A study of the faded mural painting found Taphon and Klong-Yai which were identical to the painting on the east side. After a study of physical appearance of Gongwong of both paintings, Gongwong shared the same characteristic but different to Thai and Cambodian ones which had almost full Gong almost Circle with 16-18 Melody. The paintings were half circle Gong with 12 to 14 Melody combined to be Gongwong. The purposes of these characteristic could be due to the different objectives and duties such as Gongkoo, Gongrang, Gongwong-Lek and Gongwong-Yai.

Lai Fokkum pattern was found in Xiang Thong Temple which was built in the period of King Sai Setthathirath in B.E. 2102. Before moving the capital city to Vientiane, Laos ruler including King Sisavang Vong supported Xiang Thong Temple in terms of painting the indoor and outdoor parts of the temple with Gilded Lacquer. This kind of pattern with black color background was called Puen Ruk, while red background was called Puen Chad. Cattle skins were used in craving into patterns then it would be put over the wall. The wall would be coated with Num Ruk which would stick to the craved area of the skin, after that golden leaves were applied. This method created a pattern called “Lai Fokkum.’ Pattern designs in indoor area contained pattern that related to arts performing and traditional dancing according to belief. Musical instruments found were Phin, Saw, Khlui, and Ching in series of 4 duplicate patterns, a painting of traditional dancing also could be seen.

Fig 4: Gilded Lacquer of Imagination angels performing music



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Art of stained glass located in Rongmiengoj Building King Sisavang Vong, which was constructed in B.E.2505 designed by Prince Maneewong. This place was for the royal vehicles of King Sisavang Vong. After his death, the front wall was skillfully craved by the best cravers of Lan Xang: Phyaton.

Fig 5: Art of stained glass located in the back wall of Rongmiengoj Building King Sisavang Vong


Inside walls of Rongmiengoj Building, there were stained glasses telling stories including pieces about angels performing music. This piece was a story happened before Buddhist era when angels see off Buddha, and Phra Panja-Sing-Khon performing the Phin. The picture consisted musical instruments such as Phin Saw-O, Saw-E, Ching, Khlui, Pi-Nae and Glong-Banthoh. One of the angels who had 4 arms performed the Phin and 2 Glong-Banthoh in the same time.

Besides, art of stained glass was discovered at the outdoor walls of the red chapel. Each side was decorated by mosaic, and connected into pictures telling stories on pink walls. Most pictures explained lifestyles of Luang Prabang people in varied ways.

Fig 6: Art of stained glass about Phra Lak Phra Lam Performance music



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Fig 7: Art of stained glass of musical instruments: side view and back view


Stained glass pictures reflected the perfection of palace music band who held all kinds of instruments: beaten instruments, stringed instruments and blowers instruments. All kinds of instruments found in this period were recorded as evidence of murals. Murals in Pa Huak Temple indicated 2 groups of music instruments: Beaten and blowers. Beaten which were Taphon, Nangnat-Ek, Gongwong, Glong-Yai and Glong-Ping while blowers group were Pi. The band in picture was Luang Prabang Palace Phinphat Ensemble who performed in ceremonies and performances. These days this kind of stained glass is also found in Chiang Thong Temple. The evidence had age difference of 70 years. The picture showed stringed instruments such as Phin, Saw-E, Saw-O and there were blowers were Phin, Saw-E and Saw-O then blowers such as Khlui and Pi-Nae were also identified in the royal band. This period was one of the most prosperous periods of the Phinphat Luang Prabang Ensemble which had 3 complete characters of Beaten, stringed, and blowers. 4. Laos Kingdom Phinphat ensemble (B.E. 2488 – 2518) In B.E. 2496 after the liberation according to Geneva Accord, Laos government administered the entire Laos, and the constitution defined democracy and monarchy under the constitution. The government was located in Vientiane, and the king was in Luang Prabang. At that time, King Sisavang Vong became the first king while Prince Suwannaphuma was the first prime minister of Laos Kingdom until B.E. 2518 when people revolution party supported by Soviet Union and Vietnamese Communist overthrew democracy system. Prince Souphanouvong, People Revolution Party leader, overthrew democracy and monarchy under the constitution which was supported by France and United States of America. People's Democratic Republic of Laos was declared as a country on December 2nd, B.E. 2518 when Phinphat Luang Prabanghad had not been changed from original era; however, evidences were indicated as followings.

Bas Relief on the front wall of Mai Suwannaphumaham Temple in B.E. 2496 which was renovated by applying ashes and Rug tree resin, and gold leaf along the wall. This art work described stories of Bodhisattva and Luang Prabang lifestyle by The Paiton cravers, royal craftsmen of King Sisavang Vong.


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Fig 8: Bas Relief on the front wall of Mai Suwannaphumaham Temple


Bas relief indicated musicians performing musical instruments and activities of Luang Prabang people. Instruments were Mor lam, Mor khaen, Ching, Saw-O, Glong-Yai, Nangnat-Ek, Gongwong and Glong-Ping this was a complete Phinphat band of Luang Prabang era.

Music instruments in a museum (old palace) were colonial arts together with Lan Chang arts. Outside the museum was a monument of King Sisavang Vong. After B.E. 2518, this place became a museum.

Fig 9: Luang Prabang Phinphat Musical instrument in a museum


According to the artwork of Luang Prabang Phinphat in the museum, the musical instruments in the palace had significant relationship with Lan Na traditional music. Not only Pi-Nae in Xaing Thong Temple stained glass, but also many kinds of Glong that show relation to Lan Na. Glong-Ew and Glong-Tengthing in Ethnic Lanna were instruments in Phatgong Ensemble. In addition, bas relief of Nang Kaew dance on the ceiling of the room Phabang old palace was found. Both sculptures were evidences of music and music band. Respectively, Laos Kingdom had affected by Kingdom of Lanna musical instruments and music ensemble pattern in terms of Laung Prabang royal activities.


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Fig 10: Bas relief of Nang Kaew Dance on the ceiling of the room Phabang old palace


The artwork was การติดขมุ on the ceiling in the room Phabang old palace; the artwork contained the performing of Nang Kaew dance and Nangnat-Ek, Glong-Ping, Glong-Yai, Saw-E and Ching. This activity was before the change of the governing system. Music and performing were still continued their roles and were supported and developed. In B.E. 2447 the period of King Sisavang Vong in the Kingdom of Lan Xang Luang Prabang, Lao traditional music was highly regarded for restore. The king supported music and art performing so that practicing the activities could be seen in the area of the palace. The prince Thong Suk learned Laos music skill including Phinphat skill from experts. The prince also studied Khmer and Thai traditional music. (Onjan Sudadung, 2013)

During the reign of King Sisavang Vong, music teachers from the west or Kru Kaew, a Vietnamese musician from Chaing Mai (Onjan Sudadung, 2013) who formerly came to the land to visit his relatives serving the king in Luang Prabang. The prince once acknowledged the arrival of the Metal horn expert; he invited the musician to work in the palace. This was the new era of Luang Prabang musical development; also musical experts were provided salary as token of appreciation the same way as Thai Military Band. 5. The Phinphat Luang Prabang Ensemble (B.E. 2518 – 2529) In the beginning of the change of governing system in B.E. 2518, the government reviewed its concept, statuses of citizens, belief, ceremonies then considered these activities as credulity or blind faith including Phinphat Luang Prabang. The change was also covered music, songs, belief, traditions, culture such as paying respect the musical teachers and instrument ceremony. According to social theory, the ceremonies were useless for the society while people still believe that having the ceremony was needed because it connected to Buddhism. Although it was prohibited to have the ceremony, some musicians arranged the activity in a very small scale. (Chalermsak Pikulsri, 2007)

When Laos governing started to have less tension, Prince Souphanouvong stepped down from the president of the nation, and President Kaisorn Promviharn took over the position. Rights restriction was abolished, and collapse of the communist and cold war led B.E. 2529 less stress. Ceremonies had fewer limitations, for example, the possibility of holding ceremony for paying respect to teachers. Laos started to open its boarder and reviewed country development policy under the name of NEM (New Economic Mechanism.) The movement led the country to improvement and better living for its people. Moreover Laos increased emphasis on international relations such as Thailand, Myanmar, Asian member countries, America, European countries and western countries. Lao who migrated or lived aboard were invited back to homeland. Art and culture, traditions had little limitations and were


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supported. Theater renovation and Phra Lak Phra Lam masked play were brought back including the Phinphat Luang Pabang ensemble. After the revolution in B.E. 2518, the building was not used until B.E. 2533 the committee agreed under the speech “without culture, there is no nation” (Tongjan Suksawat, 2011) Cultural renovation was studied by Pumee Wongvijit under the supervision of Prince Souphanouvong the first president of the country. The palace was not belonged to the king anymore but belonged to the people. Traditions and cultures renovation was highly regarded as the country aim. Dancing and music were brought back in Phra Lak Phra Lam Theater until today. 6. The Current Phinphat Luang Prabang Ensemble Phinphat Luang Prabang ensemble continued its progress and development along with the nation governing in monarchy after Laos people revolution party had its major mission which was to renovate art and culture. The revolution happening in a very short period of time caused art and culture including the Phinphat Luang Prabang ensemble since B.E. 2518 was gradually renovated. Art and culture renovation in communist countries had adapted their policies for the concept of conservation and expansion of music. People's Democratic Republic of Laos reviewed its outcomes in terms of trading, investing and culture causing less restriction.

Improvement of the Phinphat Luang Prabang ensemble was evitable due to political, social and cultural change. In Luang Prabang inner part, the Phinphat Luang Prabang ensemble or Lao original music band number increased. Most of the bands were for hotel business, home stays and restaurants. New generation of musicians focused on traditional dance songs and famous songs such as Lao Duang Duen and Daung Jumpa. Each Phinphat ensemble had 3 patterns in establishing the band.

Music band of royal Laung Prabang old musicians Music band of those interested Music band of government organization

The Phinphat Luang Prabang Ensemble started in the reign of King Fa Ngum, and until now it had been through many considerable events. Firstly, the change of governing system affected prosperity development and the Phinphat ensembles. The role and importance of Phinphat which was one of the symbols of former governing system were decreased. The lifestyle of music listeners had to adapt according to the new concept of governance including music taste and awareness. Nowadays, for Laos people, the Phinphat was regarded as the music only played in ceremonies and for the government assigned tasks. After the era of new imagination, the idea of communism had less tension leading to the era of renovation of art and culture. Second, unsupportive economic status caused a small number of jobs for the ensemble. Forming an ensemble or hiring one was very difficult since musicians needed permanent jobs unlike the musicians in the past that could become musicians in the palace and receive titles. Thirdly, musical knowledge management had not received attention from the new generation. Only a few teenagers paid attention original Laos music, and educational management system was not so supportive. There was no original Laos music class, musical note printed records, or audio media and video. Finally, information collecting of the Phinphat Luang Prabang Ensemble for conservation purpose and development required more supports from the related organizations. The information could be lost and damaged in terms of information from the individuals or evidences comparing to large number of information in the past. Musicians who had worked for the king were very difficult to find.

Even if there were national, political and governmental the art and cultural awareness concept these days, it was only the concept in terms of business not education. Knowledge management in patterns of medias and documents, texts, support from the government, individuals, and organizations therefore could be parts of collecting information and manage the knowledge of the Phinphat ensemble.


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References [1] Chalermsak Pikulsri. (2007). Lao Classical Music Before Political Charge in 1975. Khon

Khaen: Center for Research on Plurality in the Mekong Region (CERP), Khon Kaen University.

[2] Douangchampy Vouthisouk. (2002). Phin Phaat Ensemble of Luang Prabang Lao People's Democratic Republic: A Case Study of Phin Phaat Ensemble of Ban Phonphaeng. Master of Arts (Music), Graduate School, Mahidol Univerisity.

[3] ______ (December 4, 2013). Interview. Deputy Director-General. Ministry of Information, [4] Mhuean Aon. (April 7, 2012). Interview. The former painter in Luang Prabang. The Lao

People's Democratic Republic. [5] Nor-Sang Saiwongduean. (April 7, 2012). Interview. The Official of cultural department, the

cultural department. Luang Prabang, Lao PDR. [6] Onjan Sudadung. (February 12, 2013). Interview. The Musician. Chiang Man, Luang Prabang,

The Lao People's Democratic Republic. [7] Sila Veerawong. (1992). History of Laos. (Sommai Premjith, translator). Department of

Sociology and Anthropology, Faculty of Social Sciences, Chiang Mai University. [8] Souneth Phothisane. (2006). Laos Study. Mahasarakham University Publishing. [9] ______ (1996). The Nidan Khun Borom: annotated translation and analysis. Ph.D.( School of

History, Philosophy, Religion & Classics), The University of Queensland. [10] Term Wiparkpojnakij. (1987). History of Laos. Bangkok: The Foundation for Promotion of

Social Sciences and Humanities Textbooks Project. [11] Tong sueab Supamart. (1985). Chronicle of Laos, 8thset, archives and chronicles. Bangkok:

Business Organization of The office of Kurusapa. Culture and Tourism, Vientien. [12] Tongjan Suksawat. (November 17, 2011). Interview. The Director of Theatre Palukpalam,

Luang Prabang, The Lao People's Democratic Republic. [13] Woralak Boonyasurat. (2004). Architecture appreciation in Luang Prabang. Bangkok: Muang

Boran Publishing


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Opinions of Families with Pre-School Period Children Toward

Computer Games

Şengül İlgar Corresponding Author, Istanbul University, Hasan

Ali Yucel Education Faculty Department of Primary Education Division of Preschool Education, Istanbul, Turkey

E-mail: [email protected] Tel: +90-535-3962696

Nihat Topaç

Istanbul University, Hasan Ali Yucel Education Faculty Department of Primary Education Division of Preschool Education, Istanbul, Turkey

E-mail: [email protected] Tel: +90-555-3771137

Abstract In today’s world where technology is advancing rapidly and inevitably surrounding the people, its importance related to preschool period is undeniable. Numerous studies have revealed that children spend quite a lot of their time with computers, particularly computer games. The purpose of this study is to research general attitude and opinions of families with preschool kids on computer games. This is a qualitative research that examines the opinions of families with preschool kids toward computer games. Sample of the study are 11 fathers and mothers living in Istanbul with preschool kids. Semi-structured interview has been developed by researchers and used as a means of data collection. In interview analysis, descriptive analysis technique has been used that complies with qualitative data analysis. Findings of the research reveal that parents find the time spent with computer games appropriate and do not experience crisis or problems in abandoning the game. The most commonly played game type was shoot the target games while brain teasers and line/drawing games were the least preferred types. We have observed that parents try to intervene by talking and banning and also in case of insistence they draw the child’s attention somewhere else. Keywords: Preschool education, Computer games, Family

1. Introduction Today’s education aims to raise individuals who are able to use technology, catch up with technological innovations, have easy access to knowledge, classify, serve and share knowledge. Child’s access to knowledge in preschool education is realized through games. Game is of great importance particularly in preschool child development.

Children learn things themselves by trying during games and get rid of the pressure from the adult and outer world. They develop personal and social skills they need, accelerate cognitive emotional development through game (Rozan, 1997; Cheng, 2001). Teaching through game is quite important at this point.


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Today’s children spend most of their time in front of computers, with technological devices and playing computer games (Kafai, 2001). Using computer in preschool period may contribute to development of hand-eye coordination, consolidation of learning and development of decision-making skills. However, it must be used under adult guidance and limited to a short time (Oktay, 2002).

Game software may contribute to mental and affective development of students as they teach rules, create competitive setting and they are also entertaining (Akkoyunlu, 1998). Hitchcock and Noonan (2000) emphasized in their study that computer software is an important means of developing academic skills. Şahin and Yıldırım (1999) have related the educative degree of an educational game to how well its software is structured. Educational games are divided into two groups. Real life simulation games enable the user to assume roles they are accustomed to in real life by giving scenarios directly related to real life. Academic games may teach exercise, practice, revision, problem solving strategies (Şahin&Yıldırım, 1999).

It can be stated that educational computer games have been designed in consideration of the strong teaching potential of computer games developed with integration of game features into computer. Teaching from computer games or game-based learning may be modeled as below.

Figure 1: Game-based learning model (Garris, Ahlers and Driskell, 2002; Joanneum

From a popular perspective, computer games seem to evoke mixed reactions. On one hand, many are troubled by the violent themes that constitute certain games, and some are concerned with the intensity of involvement and amount of time that youth devote to playing computer games and to being able to find and use information (Garris, Ahlers & Driskell, 2002).

Ricci et al. (1996) proposed that instruction that incorporated game features enhanced student motivation, which led to greater attention to training content and greater retention.

It is known that playing computer games with violent content causes aggressive behavior in children and youngsters (Kars, 2010). However, labeling computer games as good or bad is related to their content and time spared for playing them (George & Comerci, 1996).

When studies on this topic are reviewed; in their research named “Effects of Rotational Play Feature on Electronic Games on Student Motivation: The Incredible Machine Case”, İnal, Sancar & Çağıltay (2005) examined the effects of single user and rotational play features on motivation of children. In the study covering 56 students between the age of 7 and 13, vast majority of the children stated that they liked more the single user part and found rotational play much more poorly designed in comparison to single user feature. Girl-girl competition among students is lower than boy-boy and boy-girl competition and girls are more inclined to cooperation, which may be helpful to trainers in group-forming during rotational games. The study also found out that younger learners need more explanation about how to use the game and more guidance during the game. In their study called “Science Teaching (Physics, Chemistry, Biology) Through Games”, Budak, Kanlı, Köseoğlu and Yağbasan (2006) stated that using various science games in learning science or consolidating previously learned subjects would make science learning easier and more entertaining. Garris, Ahlers and Driskell (2002) revealed that students playing education content “Bottom Gun” developed their


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periscope using skill more than those students who did not play this game and received traditional education. Viadero (1999) carried out a study on 237 students in two primary schools in California, emphasizing the importance of spatial skills in learning. They concluded that piano lessons specially integrated with computer games might help students to understand mathematics. In their study named “The Effects of Feedback Strategies in Education Software on Learning Process of Children between 5-7”, Özdener and Yıldırım found out that success level of students who were trained through education software with feedback based on the literature knowledge was higher than the other group.

In today’s world where technology is advancing rapidly and inevitably surrounding people, its importance related to preschool education is undeniable. Computer games are one of the games preferred by children in this period. Parents are occasionally worried about these games. The goal of this study is to examine the views of families with preschool children on computer games. 2. Method This is a qualitative case study. Qualitative study is defined as a study where qualitative data collection methods such as interview and document analysis are used and a qualitative process is followed in order to reveal perceptions and events in a natural environment in a realistic and integrated manner (Yıldırım & Şimşek, 2005, 39). 2.1. Study Sample

The study was carried out with data obtained from 11 fathers-mothers with preschool children, specified with purposeful sampling.

The study sample comprises 11 fathers and mothers who live in Istanbul and have preschool children. Fathers and mothers were selected from the selected institutions on a voluntary basis. 2 of the 13 fathers and mothers who were asked whether their children played computer games answered the question negatively, so the study resumed with 11 fathers and mothers. Code names and several features of the sample parents are given in Table 1. Table 1: Demographic Features of Parents in the Study

Code Name Education Age Job Sema Bachelor’s Degree 46 Doctor Nihal Associate Degree 33 Tourism Professional Dilek Doctorate 36 Academic Member Beyza Doctorate 40 Academic Member Seyhan Doctorate 35 Research Assistant Nesli Bachelor’s Degree 33 Architect Ahmet Doctorate 38 Academic Member Özge Associate Degree 30 Tourism Professional Mehmet Doctorate 40 Academic Member Osman Bachelor’s Degree 44 Doctor Gül Associate Degree 38 Nurse

The study sample comprises 3 fathers, 8 mothers. 3 have bachelor’s degree, 3 associate and 5

have doctorate degree. 2 are doctors, 2 are tourism professionals, 1 is a nurse, 1 is an architect, 1 is a research assistant and 4 are academic members. 7 are between 30-39 years old while 4 are 40 or older.

2.2. Data Collection Instrument and Data Collection

The data were collected with half structured interview form comprising demographic information questions and open-ended questions designed by the researchers. The most frequently used qualitative method is interviewing. The most basic method used during the interviews was oral communication. The qualitative researchers using the interview method should have the training on features,


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preparation and realization process of this method. The most important facility of the half structured interview technique is that it provides more systematic and comparable information as the interview can be completed pursuant to the previously designed interview protocol (Yıldırım & Şimşek, 2005).

Before the interviews, 3 preschool institutions in Istanbul were specified in order to select the families to be interviewed. 11 volunteer fathers and mothers whose children played computer games were included in the interview. Three open-ended questions were asked to the families. The interviews were done face to face, one to one. Each interview took 40 minutes. The interviews were recorded on tape recorder and analyzed. Data were analyzed with descriptive analysis. 2.3. Data Analysis

Descriptive analysis method was used while analyzing the obtained data. The purpose of descriptive analysis is to transform raw data into a form that the reader is able to understand and use if necessary. In descriptive analysis, the data obtained is summarized and interpreted according to the previously specified themes. Direct quotations are frequently used in order to reflect the views of the persons interviewed or observed (Altınışık et al. 2001; Yıldırım & Şimşek, 2005). The factors that make descriptive research reliable are familiarity with research area, the chance to gather information through face to face interviews and observation, return to the field for confirmation of the collected information and gather additional information (Yıldırım and Şimşek, 2005). In this study, direct information was obtained from the participants and the data was evaluated. Views of the participating families are given in quotations. 3. Findings Families gave various responses to the questions that were asked in order to understand general attitude of the families with preschool children to computer games. After these responses were analyzed with descriptive analysis technique, similar responses of each question were transformed into an article, categorized and placed in a table. The number of occurrence of each category in the responses is written beside the sentences. Table 2: Responses of the Families to the Question “How much time does tour child spend on computer

games?What are your opinions about the time he/she spares for computer games? (Does it make a crisis?)”

Time Children Spend on Computer Games / Related Questions f

He plays maximum 1 hour. Time is enough. No problem occurs. 2 He plays too much if he finds the chance. We cannot control. He causes crisis. 1 Does not exceed 1 hour. This is too much. I have difficulty in convincing to stop. 2 Plays for about 2 hours. Leaves the game by himself. Time is appropriate. No crisis occurs. 2 Plays for 1 hour only at the weekends. It’s too much. I have difficulty in convincing to stop. 1 Plays maximum for half an hour. Would rather watch the players. Time is appropriate. No crisis occurs. 2 Plays for 1 hour a week. Does not need playing. Time is appropriate. No crisis occurs. 1

As can be seen on Table 2, families gave various responses to the question “How much time

does your child spend on computer games? What are your opinions about the time spent? (Does a crisis occur?)”, related to the time their children spent on computer games, whether it was appropriate and crisis occurred or not while leaving the game. 9 of the parents stated their children played computer games everyday while 2 said their children played only at the weekends. 7 parents thought the time their children spared for computer games was appropriate and sufficient while 4 parents stated that the time was excessive. Moreover, 7 parents who stated that the time spent was appropriate also said that they had no crisis or trouble in leaving the game while the 4 parents who stated that the time was excessive also added that they lived a crisis. Responses from some parents are as follows (code names are used instead of names).


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Beyza: “30-35 minutes a day. Actually I think that it is too long. I sometimes intervene, which causes a crisis. He is satisfied after playing longer than 1 hour and he leaves by himself.”

Gül: “(…) He plays maximum 1 hour at the weekends. I could not cope with it on weekdays so I said only weekends. I brought a limit. Some crisis occur, he tries to persuade me to play longer when his game is not finished. I switch it off when he sometimes becomes obstinate.”

Özge: “I let him play when I’m tired because I have a rest, too. I know it’s not right but it happens. He plays for about half an hour. I think 1 hour is too long. I am in favor of communication. There he is alone while playing. He is not in communication with anyone, fixed and hypnotized. I concentrate when I play. (…) My child should not be left behind. He does not stop when he should, but I warn, which causes a crisis.”

Dilek: “Actually he can play in a controlled way. At the beginning we were telling him to stop when the minute hand came to 12. Now he knows and stops by himself. He does not exceed maximum 1 hour. I know that is enough. He tests us and forces the limits. His father warns him with the pretext of limited internet. He finds it insufficient because he is sometimes lost in games. He accepts when we are strict about the time so no crisis occurs.”

Mehmet: “I resisted for along time against bringing technology home. However, I realized that the child gets behind technology and I bought an Ipad. As he spends the whole day at school, I let him play for 1 hour at home, then he gets bored and I play real games with him. He does not play computer games as he spends time with me. He plays less as we spend more time together at weekends. We go out for a walk so that he does not get lost in games indoors. He plays for 1-2 hours a day, which I think is not long. Crisis occurred at the beginning, but not anymore.” Table 3: Responses of the Families to the Question “What kind of computer games does your child

frequently play?What is the content of the games?”

Type and Content of the Games Children Play f Target Shooting 6 War/Soldier/Strategy Games 5 Race Games 5 Clothing Games 4 Line/Painting Games 3 Brain Teasers 2

As can be seen on Table 3, families gave various responses to the question “What kind of

computer games does your child frequently play? What is the content of the games?”, related to the kind and content of the computer games that the children played. All parents gave more than one response to this question. Target shooting games are the most frequently played game type, which is followed by strategic games with war and soldier content. Then comes the race games and clothing games. Brain teasers and line/painting games are the least preferred game types. Responses of some parents to this question are as follows:

Beyza: “He plays memory, pair finding, drawing, difference finding, and clothing games. He chooses the games himself. I or his sister helps. We don’t interfere in his selection. He does not choose games above his level.”

Nihal: “He plays car race, siege, Angry Birds. We don’t let him play warfare games, which he would play if we let him.”

Sema: “He likes puzzles and making 3D cities. He prefers clothing, king games, toy soldiers and mega power games.”

Seyhan: “As a rule, killing games are forbidden. For fight games, we check the type of the fight, whether it is sportive or harmful. If it is harmful with violent content, we warn the child not to play again. He rather plays tank games. He plays strategy and target shooting games.”

Dilek: “He prefers action games. He likes games with music, race and action probably because he is a boy. We have loaded the games. He chooses himself but we have the control.”


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Table 4: Responses of the families to the question “Do you try to convince to stop playing a game that your child has chosen but you do not approve (for example warfare game) ? If yes, what would you do?”

Do you Intervene in a Game that You do not Approve? How? f

I do Talking/Forbidding if he insists 5 Diverging his attention somewhere else 4 I don’t He prefers the games I play 1

I believe that what is forbidden looks more inviting 1

As seen on Table 4, families gave various responses to the question “Do you try to convince to

stop playing a game that your child has chosen but you do not approve (for example warfare game)? If yes, what would you do?”, related to their intervention in the games played by their children. Some of the parents said they did not intervene while vast majority said they did. Intervention styles are talking, forbidding in case of insistence, diverging the child’s attention somewhere else. There is also a parent who did not intervene having the idea that what is forbidden looks more inviting and remarkable. Some of the responses to this question are as follows:

Osman: If he insists on playing a game, I choose with an appropriate content. He feels bad if it is something bad.”

Ahmet: I would begin by trying to explain and convince him to quit by offering options. I would buy a pet in order to direct his attention somewhere else. I would put forward alternatives.

Mehmet: “I would take him out or offer another game. If we train him to distinguish right from wrong, it will not be a trouble anymore and he will choose the right.”

Özge: “We haven’t intervened in her selections up to now. She prefers the games that I play. That is probably because she is a girl. A boy would choose fight games.”

Dilek: “I don’t tell him not to play because I think that what is forbidden will look more attractive. I would explain why I don’t like the game.”

As can be seen, parents say that time spent on computer games is appropriate and they do not experience any problems or crisis in quitting the game. The most frequently preferred game type is target shooting games while brain teasers and line/drawing games are the least popular ones. Parents intervene by talking, forbidding in case of insistence, diverging the child’s attention somewhere else. 4. Discussion and Suggestions The study examined the general attitude of families with preschool children on computer games; opinions of the families were taken about the time that children spend on computer games, type of the games they played and family intervention in the games.

Time spent on computer games by children of the families in the study are close to each other. Only 2 of the 11 children in the study play only at the weekends while the others play 1-2 hours everyday. Most of the families said that the time their children spend on computer games is reasonable while a little less than half said it was too much. However, the rate was much lower in Pack’s (1999) research. In his research on 3155 children aged 2-18 named “Kids and Media at the New Millennium: A Comprehensive National Analysis of Children’s Media Use”, Pack (1999) reported families saying that their children spent 70% of their time on computer games at home. 9% of those children played computer games for more than 1 hour. The study also reported that girls spent 8 minutes a day on computer games while boys spent 31 minutes.

The families also reported that they had trouble in time management but a little less than half stated that it resulted in a crisis. Most of the families stated that they had trouble in time management and occasionally had conflicts. It is known that conflicts in preschool period mostly end up in favor of the child as the age gets smaller. In such cases families may be trained to diverge the child’s attention somewhere else before or without going into any conflict with the child.


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Target shooting games are the most frequently preferred game type. We can say that there is a hidden feeling of competition in target games. Target games are followed by war/soldier/strategic games. Race games are preferred equally with war/soldier/strategic games. We can also say that there is a hidden feeling of competition in those games. We may also consider that children try to reveal virtually the aggression potential they carry inside themselves. If this potential is not revealed in a controlled way, it may be misused by persons outside the family. Therefore, parents should be by their children while selecting and playing games, which would be of great importance as parents could make explanations about the negative perceptions that the game might evoke and guide their children. Besides, frequency of brain teasers is quite low. Awareness of families should be raised because perception, attention, decision-making and creativity skills of children can be developed easily and rapidly through computer games. Though some of the families in the study say that technology cannot be isolated from daily life, it is striking that they do not direct their children to brain teaser in game selection. Under such circumstances, computer cannot go beyond being a means of entertainment.

It is seen that parents intervene when their children play or want to play a game that they do not approve of. There are mainly two intervention types. More than half of the intervening families say that they try to convince by explaining. They deprive the child of the game when their explanation fails. They are usually inclined not to accept the deprivation or banning. They give a fight to win the child. Families should be consistent and determined in such cases. Some of the intervening families said that they tried to diverge the child’s attention to another game or somewhere else. This is one of the effective intervention methods. It would be appropriate to make the children forget and pull them to another setting without having a conflict. However, two parents said that they did not intervene in the type of the game. One of them said the child played the same games as the parent, which is a good example to how important being a model is. Families may be instructed that being a model is one of the most effective methods of making the child acquire a behavior. Akçay and Özcebe’s (2012) study examining the computer game habits of preschool children and their families found out similar findings to those of this study. Akçay and Özcebe (2012) found out that 78.1% of the families generally and always restricted their child’s playing computer games while 61% generally restricted their child’s playing computer games with violent content. Families reported that 48.8% of the children played computer games with violent content 1-2/3-4 times a week. The frequency of a child’s playing computer games increases as the frequency of the family’s playing increases.

The other non-intervening parent said that forbidding would solve nothing and on the contrary make the action more attractive. We can think that the child would understand his/her own mistake and correct it. The parent should not stay indifferent to this process but guide the child without making him/her aware of it. According to Tuğluk (2011), the parents can stop being a forbidding authority in their children’s computer use and instead direct their children to educative games, enable them to learn and have fun simultaneously. They may be helpful in active learning process of their children by buying useful computer programs. References [1] Aydın, E. & Dilmaç, B. (2004). “Matematik kaygısı. İçinde M. Gürsel (Ed.), Eğitime ilişkin

çeşitlemeler”, (s.231-241), Eğitim Kitabevi, Konya. [2] Akkoyunlu, B. (1998). “Bilgisayarları müfredat programlarındaki yeri ve öğretmenin rolü”,

Hacettepe Üniversitesi Yayınları, Ankara. [3] Akçay, D. & Özcebe, H. (2012). “Okul Öncesi Eğitim Alan Çocukların Ve Ailelerinin Bilgisayar

Oyunu Oynama Alışkanlıklarının Değerlendirilmesi”, Çocuk Dergisi, 12, 2, pp.67-71. [4] Altunışık, R., Coşkun, R., Yıldırım, E. & Bayraktaroğlu, S. (2001). “Sosyal bilimlerde

araştırma yöntemleri”, Sakarya Kitabevi, Adapazarı. [5] Cheng, D.P. (2001). “Difficulties of Hong Kong Teachers Understandingand İmplementation

Of Play İn The Curriculum”, Teachingand Teacher Education, 17, pp.857-869.


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[6] Garris, R Ahlers, R. ve DriskelL J.E. (2002). “Games, Motivations, And Learning: A Research And Practice Model”, Simulation & Gaming, 33,4, pp.441-467.

[7] George, D. & Comerci, M.D. (1996). “Efforts By The American Academy Of Pediatrics To Prevent And Reduce Violence And İts Effects On Children And Adolescents”, Pediatrics, 73,2, pp.398-410.

[8] Hitchcock, C. & Noonan, M. (2000). “Computer-Assisted Instruction Of Early Academic Skills”, Topics in Earlychilhood Special Education, 10,3, pp.208-217.

[9] İnal, Y., Çağıltay, K., Sancar, H. (2005). “Elektronik Oyunlardaki Dönüşümlü Oynama Özelliğinin Öğrenci Motivasyonuna Etkisi: The Incredible Machine Örneği”, TBD Bilişim Kurultayı, (150-153), Ankara.

[10] Kars, G.B. (2010).” Şiddet İçerikli Bilgisayar Oyunlarının Çocuklarda Saldırganlığa Etkisi.” Yayınlanmamış yüksek lisans tezi, Ankara Üniversitesi Sağlık Bilimleri Enstitüsü, Ankara.

[11] Kafai, Y. B. (2001). “The educational potential of electronic games: From games -to-teach to games-to learn. Playing by the rules”, http://culturalpolicy.ucihicago.edu/conf2001/papers/kafai.html downloaded in May 11, 2013.

[12] Oktay, A. (2002). “Yaşamın sihirli yılları. Okul öncesi dönem”, Epsilon Yayınevi, İstanbul. [13] Özdener, N. & Yıldırım, Y. (2006). “Eğitim Yazılımlarında Kullanılan Geri Bildirim

Stratejilerinin 5-7 Yaş Çocuklarının Öğrenimi Üzerindeki Etkisi. Marmara Üniversitesi Atatürk Eğitim Fakültesi 1.Uluslararası Okul Öncesi Eğitim Kongresi Bildiri Kitapçığı”, Ya-Pa Yayınları, İstanbul.

[14] Pack, C. (1999). “Kids and media at the new millennium: A comprehensi ve national analysis of children’s media use, a report of the kaiser family foundation”, The Henry J. Kaiser Family Foundation, November 1999. Online at www.kff.org or by calling 1-800-656- 4KFF.

[15] Rozan, N. (1997). “Yaratıcı toplum olma yolunda çağdaş eğitim”, ÇYDD Yayınları. İstanbul. [16] Ricci, K., Salas, E. & Cannon-Bowers, J. (1996).” Do Computer-Based Games Facilitate

Knowledge Acquisitionand Retention?”, Military Psychology, 8,4, pp.295-307. [17] Şahin, T. Y. & Yıldırım, S. (1999). “Öğretim teknolojileri ve materyal geliştirme”, Anı

Yayınları, Ankara. [18] Tuğluk, M. N. (2011). “Okul öncesi eğitimde teknoloji ve bilgisayar kullanımı, G. Balat (Ed.)

Okul öncesi eğitime giriş, (224-237)”, Pegem Akademi Yayınları, Ankara. [19] Viadero, D. (1999). “Research Notes”, Education Week, 18, pp.31-33. [20] Yıldırım, A. & Şimşek, H. (2005). “Sosyal bilimlerde nitel araştırma yöntemleri”, 5. Baskı,

Seçkin Yayıncılık, Ankara.


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Social Impact from the Activities of Illegal Artisanal Mining:

Studies in Sumbawa

Salim HS

Idrus Abdullah

Muhammad Sood Lecturer at the Faculty of Law, University of Mataram

Abstract The purpose of this study is for the knowing of (1) the social impact of the mining activities of the people on social, economic and cultural condition of artisanal miners, (2) the negative impact of the activities of illegal artisanal mining, (3) the potential identifying owned by artisanal miners, and (4) determine the attitudes and views of artisanal miners against efforts should be made to empower them, whether in relation to the mining techniques are good ( good mining practices ) as well as those related to legal empowerment.

Research methods, is presented below. This type of research is empirical research. The approach used, namely the sociological law approach. The number of samples studied as many as 100 people. Location research covering are district Lantung, Lape, Lopok, Plampang, and Empang. Technique for field data collection is in-depth interviews with the respondents. Analysis of the data is qualitative.

The results of the study are presented below. Social impacts of artisanal mining activities, including (1) increased income artisanal miners, (2) increased children's education of artisanal miners, and (3) increased social relationships of artisanal miners with various ethnic in Indonesia. The negative impact of local mining activities, including (1) the destruction of the environment, (2) contamination of rivers, (3) the occurrence of landslides, (4) destruction of the forest, (5) erosion, (6) the road becomes damaged, (7) accidents, and (8) conflict fellow miners. Potentials will be developed artisanal miners in the future, include (1) agriculture, (2) basic food business, (3) efforts in the field of mining, (4) miner or stone-makers, and (4) work in the field of farm. Empowerment models that desired by artisanal miners are the training of good extractive (good mining practice) and training in the field of mining law. Keyword: The social impact of artisanal mining

1. Introduction Sumbawa is a district that is rich in natural resources. The natural resources are including gold, silver, copper and manganese. Natural resources are spread in several districts in Sumbawa, such as districts Ropang, Lape, Lopok, Empang, Plampang and Lantung. Natural resources are managed by the mining companies, such as PT Newmont Nusa Tenggara, PT Intam, PT Sumbawa Million Kingdom, and there is also managed by artisanal miners. Artisanal mining activities are activities undertaken by the community to explore, exploitation, processing and refining on natural resources in the form of gold, silver, copper and manganese. The activity was carried out in a simple way and uses very little


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investment. Mining activities conducted by the, spread on some districts in Sumbawa. Location of the artisanal mining covering districts Lape, Lopok, Empang, Plampang and Lantung.

The positive impact of artisanal mining activities are carried out by people is increasing people's welfare and reduce unemployment, due to the results of exploration and exploitation produces quite a lot gold. However, beyond that, the artisanal mining activity has caused a negative impact on society and the environment. Negative impacts, namely the occurrence of landslides, the landscape becomes damaged, and even many of the people who died. People who do the processing and refining of gold and copper was using mercury. Even in the processing and refining was not pay attention to environmental sustainability.

Artisanal mining activities are carried out without the mining permission of the Government Sumbawa. Meanwhile, Sumbawa regency government cannot do empowerment, coaching, supervision and enforcement of laws against the unlicensed miners, because there are no local regulations governing artisanal mining license (IPR) or a mining business license (IUP).

If it is allowed, there will be environmental damage that quite alarming, but on the other hand, artisanal miners must also be empowered, so that they no longer carry out illegal mining activities.

The purpose of this study is to determine (1) the social impact of the mining activities of the people on social, economic and cultural condition of artisanal miners, (2) the negative impact of the activities of illegal artisanal mining, (3) the potential identifying owned by artisanal miners, and (4) determine the attitudes and views of artisanal miners against efforts should be made to empower them, whether in relation to the mining techniques are good ( good mining practices ) as well as those related to legal empowerment. 2. Literature Review Normatively artisanal mining activity is an activity performed by the locals. To be able to carry out these activities, the artisanal miners must obtain permission from the authorities. Name of the permissions granted to artisanal miners are artisanal mining license (IPR). IPR is:

“Permit to carry out mining operations in the area of artisanal mining with area and investment that limited.”1 Officers are authorized to issue the IPR is Regent. While the requirements to apply for a permit

it, include: (1) administrative, (2) technical, and (3) financial. While that can apply to get the IPR are only the locals.2 There are three classifications of local residents, namely (1) individual, (2) group, and / or (3) the cooperative.

Meanwhile, artisanal mining activities carried out by artisanal miners in Sumbawa had not received permission from Sumbawa Regent. Sumbawa Regent himself cannot give permission to artisanal miners because the regulation on IPR and IUP not determined yet. So that the activities carried out by artisanal miners today without the guidance and supervision of Sumbawa district government, so that activities is doing cause environmental and social impacts of culture that quite alarming.

To prevent that, then miners peoples must be empowered. Empowerment is not only in the technical field of mining per se but also from the legal aspect.

The study examines the “Model Miners Empowerment of the People: As Academic Manuscript preparation instruments Sumbawa regulation of the mining”, has never been done by other researchers. However, a lot has been done are related to gold mining without permission. This has been done Iskandar Zulkarnain, et al, and Mochamman Ahyani. In addition, this study also presented the results of research-conducted by researchers in other countries, relating to the implementation of the mining activities, such as research results Talia Larisa Vela Vargas de Eiden, Yurdi Yasmi, William Holden, and José G. Vargas-Hernández. 1 Article 1 paragraph 10 of Law No. 4 of 2009 on Mineral and Coal 2 Article 47 of Government Regulation No. 23 Year 2010 on Implementation of Mining Operations Minerals and Coal


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Iskandar Zulkarnain , et al , which presents the results of research on potential disputes in the mining area Pongkor and Cikotok . In this study, has been presented a source of disputes and causes of the dispute. The results of the study, presented below.

“There are three main actors involved in the birth of a dispute in the mining area and Cikotok Pongkor. Three actors including: mining companies (PT Antam) Tbk, Local communities, and illegal diggers (Peti). Based on the three main actors, then there are three types of disputes that occur in mining areas. The third type of disputes, includes (1) a dispute between the company versus the public, (2) disputes between companies with illegal mining, and (3) disputes between local communities with illegal miners. There are five factors causing disputes between the company and the community, namely (1) stagnates communication between the company and the community, (2) a decrease in society arable land due to the transfer of the ownership, (3) the recruitment system of nepotism, (4) community development program (community development) partial, and (5) the gap between the government and the company officials. There are four reasons that can be categorized as a source of dispute between the company and miners, namely (1) tricks play by security forces, (2) local illegal miners are entitled to participate in the exploitation, (3) miners newcomers feel daring exploit, and (4) the difference in perception between companies and government officials. There are three factors that are considered a source of dispute in the dispute between the people with illegal mining, namely (1) miners entrants and their network were controlled public lands, (2) miners of migrants and their networks did violence acts to the public, (3) the resistance of the people against immigrant miners”.3 In this study also offered three models of dispute resolution between the three actors, namely:

a. Aspects of regulation; b. Aspects of community development; and c. Aspects of operating rights4

Mochammad Ahyani has conducted research related to “The Effect of Gold Mining Activity Against Land Damaged Condition In Mining Area People in Bombana Southeast Sulawesi”. The results showed that:

“The level of damage to the soil at the site of gold mining suffered the level of severe damage and cause physical environmental impacts such as soil degradation. The loss of nutrients needed by the plants growth, reduced in surface water discharge, high traffic of vehicle has made road easy damage, air pollution, and socio-economic impacts. Socio-economic impacts, many people move from growers became gold miners and many immigrants who come for mining so that it can lead to conflict, the fear of some people because of the potential erosion from gold mining”.5 Mochammad Ahyani also has proposed measures that need to be done to avoid the

environmental impact is to use soil conservation technology and law enforcement through legislation that is clear, transparent and accountable as well as the active role of community involvement.

Larisa Talia Vargas de Vela Eiden, has conducted research entitle “Environmental Policy Under Political Transition: The Peruvian Mining Sector and The Yanacocha Goldmine”,, dissertation at Fakultät der Friedrich - Wilhelms Rheinischen - Universität zu Bonn. He suggested four categories of environmental dispute that occurred in the implementation of the mining activity in Peru. The fourth category is presented below.

3 Iskandar Zulkarnain , et al ., “Potential Dispute in Mining Regions : The Case Pongkor and Kurai”. ( New York:

Competitive Research Issues Indonesian Institute of Sciences , 2003) , p . 90-97 4 Ibid, p. 98. 5 Mochammad Ahyani , “Effect of Gold Mining Activity Against Damage Condition On Land People Mining Areas in

Southeast Sulawesi strategic industries”. Master of Science Thesis S2 Environment Graduate Program, University of Diponegoro, Semarang 2011, p . xii.


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“The first, one is soil and water resources pollution (e.g. rivers, underground waters, and lakes), provoking the death of cattle and fisheries, and originated by the mining operations. Soil and water pollution occurs within the mining complex and adjacent areas. Danger of pollution of the sources of water for human consumption has emerged as a problem in the last years.

A second, kind of conflicts refers to the spill of toxic substances originated as by-product of the mining operations in populated areas. There have been threats and actual accidents with consequences for human health (e.g. mercury, cyanide, arsenic).

A third, type of conflict has a socio-economic character and relates to the land problem originated by the entrance of MYSRL in the region. During the period 1993-1996, there were few discordant voices on MYSRL activities. The conflicts were mainly about the company buying the land of the local peasants (campesinos) at very low prices; and

Four, over the cultural and social changes emerging from the attitudes and behavior of the newcomers (e.g. difference with local salaries, growing criminality)”.6 There are four categories of disputes that occur in the implementation of the mining activity in

Peru. The fourth category, include: a. Pollution of water and soil resources (such as river water, underground water, and lakes),

dying livestock and fish, which is caused by the mining operations; b. Toxic materials used in mining operations scattered, that have impact to the public health; c. Low prices of land paid by mining companies; and d. The socio-cultural changes in attitudes and behaviors resulting from newcomers, (such as,

for example, the salary difference with local communities, increasing crime rate). 3. Methods This type of research is empirical research. The approach used, namely the sociological law approach. The number of samples studied as many as 100 people. Location research covering are district Lantung, Lape, Lopok, Plampang, and Empang. Technique for field data collection is in-depth interviews with the respondents. Analysis of the data is qualitative. 4. Results and Discussion 4.1. Social Impact of People Mining Activity

Artisanal mining activity is an activity performed by the locals to carry out exploration and exploitation of natural resources, in the form of minerals containing gold and manganese. Artisanal mining activities undertaken by the community, has been conducted since 2005 until now (2013). Based on the results of interviews with the respondents, that the mining operations carried out by the respondents, namely in 2010 (50 %). Factors causing the number of respondents did the artisanal mining activities in 2010 was due to have been discovered mineral resources , in the form of gold mining area Labaong, sub-district Lape / Lopok (40 %). In addition to these locations, the community also has mining operations in other locations, such as Gapit, Teluk Santong, Lantung, Mira Plampang land, and Rinti, District Ropang. Meanwhile the types of minerals that are exploited by society are gold (85 %) and manganese (15 %). Types of rocks most widely taken by people are gold (85 %). Gold is the expensive metal, shiny yellow, usually made jewelry. Gold has a very high economic value, because every gram of gold taken by the public will make money ranging between IDR 300.000 to

6 Larisa Talia Vargas de Vela Eiden, “Environmental Policy Under Political Transition: The Peruvian Mining Sector

and the Yanacocha Goldmine”, Inaugural - Dissertation zur Erlangung Der der Doktorwürde Philosophischen Fakultät der Friedrich - Wilhelms Rheinischen - Universität zu Bonn , 2006, p . 274.


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IDR 500.000/gram. Meanwhile, the number of respondents who took manganese is few, that is 15 people (15 %). Manganese is a silvery white metal, usually hard and brittle. Manganese is very little taken by society because the selling price is low, i.e. IDR 5.000/kg and buyers is certain people. Meanwhile which encourages people to make gold and manganese mining illegally are presented in the following table. Table 1: Incentives Factor of Respondents Taking Stone

No. Incentives Total Percentage 1. To increase the income of the family 62 62% 2. Want to be rich 4 4% 3. Want to change the fate 21 21% 4. Failure harvest 5 5% 5. Enterprises Sideline 1 1% 6. Participate follows friends 1 1% 7. Not Working 1 1% 8. Family Necessity 3 3% 9. Buyer Demand 1 1%

10. Pleasure 1 1% Total 100 100%

Data Sources: Primary Data Processed

There are two main causes of respondents do the artisanal mining activities, i.e. (1) increase the family income, and (2) change the fate.

The most dominant view factors that encourage the respondent to conduct mining activities of the people are the increasing family income (62 %). Increased family income conceptualized as increasing of the work outcome or income of someone which obtained to meet the needs of his family. This means that this family originally was having a job or income, but the results obtained are not sufficient to meet the needs of family life. When analyzed from respondents work, the work of the most dominant respondents, namely the farmers (46 %). Work as farmers are highly dependent on climatic conditions and water resources. So they want to change the livelihood of agriculture become gold mining activities. This is caused by taking gold will increase their revenue. Meanwhile, another view mentioned the causes of they conduct mining activities of the people, i.e. want to change the fate (21 %). The change of fate conceptualized as a condition or improvement of one's fate, which was originally a mediocre life, but with the mining activities, their fate will be transformed into the sufficient life or their life better. In the Qur'an states that:

“Verily Allah does not change a people until they change themselves”.7 Given these incentives, the respondents have tried as much as possible to do the exploitation,

processing and purification of natural resources, which turned gold and manganese. Gold that obtained by respondents ranged from 1 to 1000 grams. Of the eighty- five

respondents (85 %) who took the gold, then the gold results obtained respondents most dominant, which is 101-200 grams (22 %), followed by respondents who earn between 1-10 grams of gold (17 %). Of the 85 respondents who had been interviewed, then there is one respondent who earn more than 1000 grams of gold. This respondent had engaged in exploration and exploitation, since 2005 until now (2013). Meanwhile, respondents who took the manganese between 100-500 kg (6 %), while that obtained between 1501 to 2000 grams, only 1 (1 %).

Income derived by respondents from taking gold and manganese ranged from IDR 1,000,000 to IDR 430.000.000. However, of the 100 interviewed respondents, the most dominant amount of income received after the sale of the gold and manganese were obtained, i.e. IDR 1.000.001 to IDR 10,000,000. This means that the gold obtained ranged from 3 grams to 50 grams. Meanwhile, there was one respondent who earn a sizeable income, i.e. IDR 430.000.000. The fantastic sufficient income was

7 See Qur'an Surah Raad verse ( 79 )


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obtained since from 2006 to 2013. Meanwhile, the money raised has been used to finance or purchase three things, which include (1) object, (2) education, and (3) health. Objects that have been purchased by respondents, include (1) home furnishings (14 %), (2) motorcycles (16 %), (3) building a house (16 %), (4) car (3 %), (5) meet the daily needs (53 %), (6) trailers (4 %), (7) capital for mining again (4 %), (8) made for excavation (4 %), (9) fix the motor (1 %), (10) debt (1 %). Of the ten types of uses, the most dominant use of the money is meets the daily needs. The daily needs such as, for example, buy rice, fish, soap, coffee, sugar and others. This means that the gold results obtained by respondents are not too much. Even the respondent argued that if the relevant obtained 1 gram of gold alone, then money treated just to buy the above mentioned requirements. While the use of second-and third- largest money, i.e. buy a motorcycle (16 %) and buying furniture (14 %). In addition, money obtained by respondents from the local mining activities had also been used to finance the education of their children. Education costs, including (1) contribution to the school, which ranges from IDR 100.000 to IDR 500.000 (2 people: 10 %), (2) tuition fees paid by the respondents, ranging from IDR 100.000 to IDR 1.500.00 (10 people: 48 %), (3) equipment and school uniforms (38 %) in the amount ranging from IDR 100.000 to IDR 1.000.000. In the meantime, the respondent argued that the money earned was used to buy a laptop for their children which school at the level high school. Laptops were purchased for IDR 5.800.000.

The most predominant of use the money is to meet daily needs. Besides being used for the purchase of goods and the cost of education, the money earned respondents also used for other expenses. The costs, including (1) held a marriage, (2) circumcision of children, (3) treatment of sick family, and (4) compensation to the parents.

Mining activities are carried out by artisanal miners, not only have a positive effect on the level of income of their own but the activities has an effect on social relationships between artisanal miners with various tribes in Indonesia. As many as 83 % of respondents consider that they make acquaintance or friendship with another person or various tribes, while 17 people (17 %) were never acquainted with others. Based on the above data, the 83 % of respondents have a social relationship with the various tribes in Indonesia. Tribes, including: (1) Sasak, (2) Sunda, (3) Minahasa, (4) Mbojo, (5) Ambon, (6) Java (7) Bugis, (8) Banjar, and (9) Dayak. There are nine causes of the respondents had made relation with other tribes in Indonesia. The ninth cause of it, include: (1) they become technicians in making gold / manganese, (2) they have the capital, (3) they can help take away the stone, (4) has a pit, (5) employees, (6) fellow miners, (7) learning processing the stone together, (8) the buyer, and (9) the mediator. Meanwhile, 17 % do not have a relationship with the tribe or other residents. 4.2. Negative Impact of Mining Activities Illegal People

Although artisanal mining activities are carried out by local people make a positive impact, as noted above, but mining activity does have a negative impact. The negative impact is an unfavorable influence on the artisanal miners and to the social environment. The results showed that as many as 65 people (65 %) do not know the negative impact of artisanal mining activity, whereas 35 (35 %) know the negative impact of artisanal mining activities.

Legally, that any mining activity carried out by the people must obtain permission from the authorities. The competent authority for issuing IPR is the Regent / Mayor. Meanwhile who could submit IPR are just locals.8 The locals population is the person or persons who inhabit a place, whether it is the village, village or other and / or the people who reside in artisanal mining areas. There are three classifications locals, namely:

1. Individual; 2. Groups; and / or 3. Cooperative.

8 Article 47 of Government Regulation No. 23 Year 2010 on the Implementation of Business Operations for the Mining

of Minerals and Coal


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Individual is a person or an individual who filed the IPR to the authorities. The group is a collection of people or consisting of two or more people who apply for IPR to the authorities. Cooperative is a business entity consisting of individuals or legal entities of cooperative with the activities based on the cooperative principle as well as the movement of economics people based on the principle of the family.9

Based on the results of the study indicate that artisanal mining activities carried out by the locals do not get permission from Sumbawa Regent (97 %), but three (3) respondents who said that he got permission from the village head (3 %), it can be seen in table this follows. Table 2: Mining Permit Ownership N: 100

No. Mining Permit Ownership Total Percentage1. Have 3 3% 2. None 97 97% Total 100 100%


When examined this table, then it all view can be said to unauthorized (illegal) because the village chief is not a competent authority for establish IPR raised by local residents. IPR is only authorized to issue by the Regent / Mayor. Even the people themselves have never submitted an application to the Regent (98 %), but only 2 % who have view that they ever filed a police aspiration to Sumbawa, so that they can be nurtured and given permission to perform local mining activities. However, aspiration is conveyed to the municipal police have no meaning at all because their aspirations were never submitted to the Regent.

The existence of IPR is granted by the Regents to the population have a positive effect, because of the presence of the IPR, the community can be nurtured and given it capital aid. But in reality, the public was never notified by the Government of Sumbawa about positive and negative impacts of mining without a permit. The positive impact is a good influence to change the lives of the artisanal miners. The negative impact is an unfavorable influence on the artisanal miners and to the social environment. The results showed that as many as 65 people (65 %) do not know the negative impact of artisanal mining activity, whereas 35 people (35 %) know the negative impact of artisanal mining activities. The negative impacts of the people are presented in the following table. Table 3: Negative Impact N: 35

No. Types of Negative Impact Total Percentage1. Destruction of the environment 17 49 2. Polluted rivers because it uses mercury 4 11 3. Landslide 5 14 4. Accident 2 6 5. Destruction of forests and fields 1 3 6. Erosion 2 6 7. Damaged Roads 1 3 8. Conflict fellow miners 3 8 Total 35 peoples 100%


There are eight negative impact of mining activities without a permit, which includes: a. The destruction of the environment; b. Polluted rivers ;

9 Article 1 paragraph 1 of Law No. 25 of 1992 on Cooperatives


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c. Landslides ; d. The destruction of forests ; e. Erosion ; f. Roads damaged ; g. Accidents ; and h. Conflict fellow miners.

Eighth impact of the above can be divided into two kinds, namely: a. Impacts to the natural and artificial environment ; and b. Social environment.

Environmental damage is a change directly and / or indirectly to the physical, chemical, and / or biological environment that goes beyond the standard criteria of environmental damage.10 Environmental damage is the damage caused by artisanal miners because artisanal miners have been digging or making holes for shooting rocks contained in the bowels of the earth. If the holes that have been dug which do not contain gold, was left gape and no attempt to close it, as a result, both humans and animals will search for a living or will eat grasses they will fit into the gape holes, which in turn will lead to disaster for them instead .

Artisanal mining activities not only for the sheer exploitation, but also followed by processing and refining. Processing and refining are mining activities to improve the quality and utilize minerals and associated minerals acquire. The way that is done by artisanal miners to process and purify rocks obtained is using Trailers. Trailers placement usually always near the river. Philosophy of Trailers placement near the river is to facilitate in making the water for filling the engine driving of Trailer. In the processing and refining is using mercury (Hg). Mercury is a liquid substance, such as lead.11 Benefits of mercury for artisanal miners are in order to separate the gold bearing rocks that do not contain the gold. So the end result is will looks just gold alone. However, the use of mercury will affect to the occurrence of pollution to the surrounding rivers, even will impact to sea.

Another impact of artisanal mining activity is the occurrence of landslides. Landslides, i.e. fall and slide down the ground. Based on interviews with respondents, that when shooting rocks at Labaong, have occurred landslide in District Lape and Lopok. This is due to the people who do the excavation in the earth's surface, while the other miners are above the earth's surface. So, the land suddenly dropped to the earth's surface. As a result, about 100 to 200 people died. In fact, the deceased was left buried in the ground and never lifted.

Artisanal mining activities not only in land property right, or the right to use the concession, but can also be done in the forest. Forest area is a particular region designated and / or assigned by the Government to be protected as permanent forest. Forest is defined as an ecosystem entity in the form of lands comprising biological resources, dominated by trees in their natural environment, which one another cannot be separated.12 To change the function of the area or entering the area must be approved by the Ministry of Forestry. However, in reality many artisanal miners were performed activities in the forest area. As a result, many trees were felled by artisanal miners in order to look for rocks containing gold, which in the end it becomes damaged forest areas, causing erosion and flooding.

Artisanal mining activities would also cause erosion. Erosion is the process of erosion of the surface by a force that involves the removal of objects, such as running water. The rocks-removal taken by the artisanal miners will occurrence of soil erosion. Soil erosion is a destruction and removal of land partly or wholly from the bowels of the earth to the earth's surface.

Legally it was determined that who can apply for a mining permit people were locals, but in reality illegal mining activities in Sumbawa is mostly done by people from all over and tribes in Indonesia. The tribes who a lot do illegal mining activities in the district Sumbawa is derived from Sasak, Mbojo, Sunda, Makassar and Manado. As a result, the roads to and from the mining area

10 Article 1 Paragraph 17 of Law No. 32 of 2009 on the Protection and Management of Environmental 11 Ministry of Education and Culture. Big Indonesian Dictionary, (Jakarta: Balai Pustaka 1989), p . 12. 12 Article 1 paragraph 2 of Law No. 41 of 1999 on Forestry


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became damaged. Road conceptualized as land transport infrastructure that includes all parts of the road, including complementary buildings and equipment intended for traffic, which is at ground surface, above ground, below ground and / or water, as well as on the surface of the water, except railroad, lorries road, and the way of the cable.13 Damaged roads are roads that are no good anymore.

Another impact from unlicensed artisanal mining frequently occur accidents, either in the making or purification. Implementation of artisanal mining activities, especially when did the rocks-removal not always go well, but often fellow miners give rise times of conflict, which is called the mining conflict. Mining conflicts are conflicts that occurred in the execution of mining activities. Mining activities are activities to conduct a common investigation, exploration, construction, exploitation, refining and sale of natural resources, in the form of minerals, a collection of minerals, rocks, ores and coal. In the implementation of artisanal mining applies the law of the jungle that means who is powerful so they wins. So, in the implementation of the mining activities is always used a bouncer (bodyguard). This bouncer duty is to keep the holes that have been opened by artisanal miners. Many cases the miners often invade or take stones in the holes that have been opened by other miners before. Moreover, hole that had been opened that contain gold are good, so that other miners would take it in droves. From there arises a conflict between the miners with the other miners. Even between village officials with the miners. 4.3. Potential of Miners People

Potential respondents conceptualized as the ability which has the possibility to be developed and commercialized in the future. The potentials or the efforts that will be developed by the respondent in the future are presented in the following table. Table 4: Efforts Will Do by Respondents N: 100

No. Efforts That Will Do Respondents Total Percentage1. Employers in the mining field 15 15 2. Miners or making stone 12 12 3. Entrepreneur in the field of animal husbandry 7 7 4. Fishermen 5 5 5. Teachers 4 4 6. Employers Basic commodities 16 16 7. Farmers 32 32 8. Members of Political Party and Parliament 2 2 9. Workshop 1 1 10. Drivers 1 1 11. Motorcycle driver 1 1 12. Opens TPQ 1 1 13. Don’t Know 1 1

Total 100 100 Data Sources: Primary Data Processed

If the data noted above, there are five types of work or effort developed by the respondent in the future, which includes (1) agriculture; (2) basic commodities business; (3) efforts in the field of mining; (4) miners or rock-remover; and (5) the entrepreneur in the field of animal husbandry. Farming is a business that will be made respondents in agriculture field (cultivate the land). 32 % of respondents believe that they still want to be a farmer. This means that the major effort that will be developed by the respondent in the future is agriculture. However, when analyzed from the respondents work, then 53 % of the respondents are farmers. Meanwhile, 16 % of respondents wanted to expand its business, which is the staple food business. Groceries are a business venture that is developed by volunteers, to

13 Article 1 paragraph 4 of the Law of the Republic of Indonesia Number 38 Year 2004 on the Road


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buy and sell nine basic. The nine basic commodities include: rice, sugar, coffee, kerosene, cooking oil, candy, cigarettes, soap, cups, plates, and other. Even more interesting from the answers of the respondents is who wants to be an entrepreneur in the field of mining.

Entrepreneur in mining is a person who initiative or attempting or doing work related to mining. Mining venture or mining business is:

“Activities in the framework of the mineral concession covering each stage of the general investigation, exploration, feasibility study, construction, mining, processing and refining, transportation and sales, as well as post-mining activities.”14 To conduct mining activities, the prospective employer must apply for a business license,

whether the IPR, IUP and IUPK. In order to get IPR license, the prospective employer must apply for permission to the Regent, while for employers IUP, then they must apply to the Regent/Mayor, the Governor and the Minister. As for getting permission IUPK, then the question must apply to the Minister of Energy and Mineral Resources. Meanwhile, 12 % of respondents thought that he wanted to be a miner or a rocks-taker containing gold. This means that the person concerned would still like to make an effort to take and process the rocks that contain gold or manganese. Of course the efforts only temporary or incidental. What is interesting from the view of the respondents is want to develop business in the field of animal husbandry. Farm business is a job for initiative or doing farm business. Farm business is raising and breeding livestock business. The person called a breeder. Breeders are those who work farming. Farming is the effort to preserve and breeding areas, such as, horses, cattle, buffalo, sheep, and others.

Although only 27 % of respondents, argued that businesses developed in the future, is the mining business, but when respondents asked about “whether they will carry out mining activities in the field of folk”. Mining activities are incidental activities, but based on interviews with the respondents that in the future they will still do the artisanal mining activities (50 %), while the other, as many (50 %) no longer conduct mining activities, it can be seen in the following table. Table 5: Still Doing Taking the Stone N: 100

No. Still Doing Stone-Removal Activity Total Percentage1. Still 50 50% 2. Not again 50 50% Total 100 100%


Based on the above data, 50 % still develop the mining business in the future. Things drives them perform mining activities, include:

a. Holes dug still contains gold (liquid); b. To provide for the family needs; c. Costs of education; and d. There’s no other work.

Meanwhile, 50 respondents (50 %) no longer want to do the artisanal mining activities. There are five reasons respondents no longer conduct mining activities in the future, which include (1) the location of its mines had not containing gold, (2) the cost of stone-removal and cost of trailer is greater than the amount of gold obtained, (3) has not been found the point which contained gold, (4) busy with other matters, and (5) there are no buyers. 4.4. Attitudes and Views of Miners People towards the Model of Empowerment

Community artisanal miners are expecting attendance of Sumbawa district government in the implementation of the mining activities, during this time the Sumbawa district government had never 14 Article 1 paragraph 6 of Law No. 4 of 2009 on Mineral and Coal


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done activities related to improving their quality. Based on the results of interviews with the respondents, they are approved to be given training (85 %), while not approving only 15 people (15 %). There are two types of training desired by artisanal miners, they are:

a. The training for the management of natural resources; and b. The training related about Law.

The types of training for the management of natural resources desired by the respondents are presented in the following table. Table 6: Types of Training N : 85

No. Types of Training Total Percentage1. How to take a good and safe stone 62 73 2. How to processing the stones in order to not damage the environment 50 56 3. Knowing the types of rocks containing gold 2 2 Total 104 131


There are three types of training desired by the respondents, namely (1) how to take a good and safe rock, (2) how to process the stones in order to not damage the environment, and (3) the type of rock that contains gold.

Based on the attitudes and views, the research team in collaboration with the Department of Mines and Energy Sumbawa has been providing training to artisanal miners. The training has been carried out in Sumbawa on 18-19 October 2013. Number of participants who attended training are 35 people. There are four items were presented to the participants related to good mining, which includes:

a. Permit of Mining Activities Management15; b. Mining areas16; c. Mines Seen From Environmental Aspects17; and d. K3 Basics of Health and Safety Mining18. In addition, respondents also wanted training in the field of law. Total of 85 people (85%) held

the opinion to approve training in mining-law. This can be seen in the following table. Table 7: Type of Training Mining Law N: 85

No. Training Mining Law Total Percentage1. Artisanal mining license 58 68 2. Mining business license 6 7

3. Mine management system that’s good and meets the community's sense of justice

24 28

4. Sanctions 1 1 5. Forestry 1 1 Total 90 105%


15 Agus Salim , “ Mining Permit Activity Management “ , paper presented at the Training of the Good Mining Practice

and Law in Sumbawa , dated October 18 to 19, 2013, p. 2-4 . 16 Iwan Setiawan, “Mining Area“ , paper presented at the Training Good Mining Practice and Law in Sumbawa , 18-19

October 2013 , p . 12-13 17 Ihwanuddin Lutfi, “Mines Seen From Environmental Aspects “ , paper presented at the training Good Mining Practice

and Law in Sumbawa Regency , 18-19 October 2013 , p . 3-4 18 Mochlis Dompasanow, “Fundamentals of K3 Mining Health and Safety “ , paper presented at The training Good

Mining Practice and the Law In Sumbawa , Date October 18 to 19 , 2013, p. 1-20 .


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There are five types of training willing by the respondents, which include (1) artisanal mining license (IPR) (68 %), (2) the mining business license (IUP) (7 %), (3) good mining management system and sense justice community (28 %), (4) sanctions (1 %) , and (5) forestry (1 %). The type of law training that is most dominant desired by artisanal miners, namely training related to artisanal mining license (IPR) (68 %).

Based on the above view, the research team has conducted training in the field of mining law. The training was attended by participants numbering 35 people. The training conducted in Sumbawa on 18-19 October 2013. There are four training materials in the field of mining law submitted to the artisanal miners, which include:

a. The People's Mining license; b. Mining business license; c. Mining management systems in Indonesia; and d. The EIA of Environmental Permit Requirements

IPR is a license to conduct mining operations in the area of the people mining area with limited area and investment.19 Who could apply IPR is just local. The local population is the person or persons who inhabit a place, whether it is the village, village or other and / or the people who reside in artisanal mining areas. There are three classifications locals, namely individual, group, and/or cooperatives. Officers that authorized to issue the IPR is Regent/Mayor. Mining business license (IUP) is “a permit to carry out the mining business”. IUP is license granted to the permit holder to carry two mining activities, which include:

a. Mining of minerals; and b. Mining of coal. Mineral mining is a mining of mineral collections in the form of ore or stone, outside the

geothermal, oil and gas, as well as ground water. Coal mining is the mining of carbon precipitate that contained in the earth, including shale, peat, rock and asphalt. Meanwhile, the types of IUP that given to perform two activities namely: (1) IUP Exploration and (2) IUP Production Operation.20 IUP Exploration is a business license granted to undertake activities, which include (1) a general investigation, (2) exploration, and (3) feasibility study. IUP Production Operation is an operating license granted after the completion of an IUP Exploration to undertake production operations. Who can apply for IUP Mineral and Coal, namely: (1) business entity, (2) cooperative, and (3) individuals?21

Indonesia's mining management system are pluralistic, this is due to a wide range of contracts or mining licenses currently. There is a contract or valid mining permits based on Law No. 11 Year 1967 on Basic Provisions of Mining and there is license enforced based on Law No. 4 of 2009 on Mineral and Coal. Contract or mining permit system which applicable based on Law No. 11 Year 1967 on Basic Provisions of Mining, covering works contracts, agreements coal mining works (PKP2B), mining concessions (KP) and artisanal mining license (IPR). While the form of mining licenses in force by Law No. 4 of 2009 on Mineral and Coal include the People Mining Permit (IPR), the Mining Business License (IUP) and Special Mining License (IUPK).22

Other material presented in training is about EIA of Environmental Permit Requirements. EIA (environmental impact analysis) is the study about the significant impacts of a business and/or planned activities on the environment which necessary for the decision-making process regarding business and/or activity.23 The things that are presented by the presenter include (1) understanding the EIA, (2) significant impact criteria, (3) the EIA mandatory business criteria, (4) the EIA procedure, and (5) the closing.

With the training of the mining law, the artisanal miners have known about:

19 Article 1 paragraph 10 of Law No. 4 of 2009 on Mineral and Coal 20 Article 36 of Law No. 4 of 2009 on Mineral and Coal 21 Article 38 of Law No. 4 of 2009 on Mineral and Coal 22 Salim HS, Mineral and Coal Law, (New York: Graphic Rays , 2013) , p . 1-4. 23 Article 1 paragraph 11 of Law No. 32 of 2009 on the Protection and Management of Environment ( UUPPLH ) ,


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a. Procedures to obtain people mining license; b. Procedures to obtain a mining business license; c. Mining management system; d. Could develop the business in the mining sector; and e. Understand the types of licenses and sanctions.

Meanwhile, the causes of the respondents did not approve held of the training mining law, in particular IPR and IUP, namely because:

a. Has no benefit; b. Pose a conflict; and c. Did not dare make their own decisions.

5. Conclusions and Recommendations 5.1. Conclusion

a. The social impact of illegal artisanal mining activities are (1) increased revenue artisanal miners, (2) increased education of children artisanal miners, and (3) increasing social relationships artisanal miners with various tribes in Indonesia.

b. Negative impact of illegal artisanal mining activities, including (1) the destruction of the environment, (2) contamination of rivers, (3) the occurrence of landslides, (4) destruction of the forest, (5) erosion, (6) the road became damaged, (7) accidents, and (8) conflict fellow miners.

c. Potentials will be developed artisanal miners, including: (1) agriculture; (2) basic commodities business; (3) efforts in the field of mining; (4) miner or stone-makers; and (5) work in the field of farm.

d. The desired empowerment models of artisanal miners are the good mining practices and training in the field of mining law.

5.2. Recommendations

a. It should be held training about good mining practices and training in the field of mining law;

b. It should be arranged an academic paper of Sumbawa Regency Regulation of the People's Mining License (IPR) and the Mining Business License (IUP); and

c. Should be arranged a practical book about the People's Mining License and Mining Business License to facilitate artisanal miners do the maintenance and implementation of People's Mining License and Mining Business License.

Refferences [1] Ahyani, Mochammad, 2011. “Effect of Gold Mining Activity against Conditions Land Damage

in Mining Area Provincial People in strategic industries Southeast Sulawesi”. S2 Thesis Program Master of Environmental Science, Postgraduate, Universitas Diponegoro, Semarang.

[2] Adler, Rebecca, dkk, 2007. “Water, Mining, and Waste: An Historical and Economic Perspective on Conflict Management in South Africa”. Journal Economics of Peace and Security Journal. Volume (Year): 2 (2007). Month: 2 (June).

[3] Alting, Husein, 2006. “Recognition and Protection of Public Land in North Maluku Dynamics Perspective in the Era of Decentralization Law”. Graduate School Dissertation of Brawijaya University, Malang.

[4] Dompasanow, Mochlis, “Fundamentals of K3 Mining Health and Safety”, paper presented at the training Good Mining Practice and the Law in Sumbawa, Date October 18 to 19, 2013.


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[5] Eiden, Talia Larisa Vela Vargas de, 2006. “Environmental Policy Under Political Transition:The Peruvian Mining Sector and The Yanacocha Goldmine”, Inaugural-Dissertation zur Erlangung der Doktorwürde Der Philosophischen Fakultät der Rheinischen Friedrich-Wilhelms-Universität zu Bonn.

[6] Holden, William, 2005. “Indigenous Peoples and Non-Ferrous Metals Mining in the Philippines”. Source: The Pacific Review, Volume 18, Number 3, September 2005.

[7] Lutfi, Ihwanuddin, “Mines Seen From Environmental Aspects”, paper presented at the training Good Mining Practice and the Law In Sumbawa, Date October 18 to 19, 2013.

[8] Moleong, Lexy J, 1989. Qualitative Research Methodology. Bandung: Rosada Karya. [9] Salim, Agus, “Mining Activity Management Permit”, paper presented at the training Good

Mining Practice and Law in Sumbawa, on 18-19 October 2013. [10] Salim HS., dkk, 2005.“Soci -Juridical Study of the Legal Status of Forest Area Elang Dodo,

District Ropang, Sumbawa regency”. Cooperation between PT NNT with the Center for Public Policy and Acceleration of Regional Autonomy (PKD - PRODA) West Nusa Tenggara.

[11] Salim HS, 2008. Forestry Law Basics. Jakarta: Sinar Grafika. [12] Salim HS dan Idrus Abdullah, 2009. “Settlement Pattern Mine (Case Study to the dispute

between ethnic communities Samawa with PT NNT) “. Research Institute of the University of Mataram. Mataram

[13] Salim HS., 2010. Indonesian Mining Law. Jakarta: RajaGrafindo. [14] Salim HS, 2011. Settlement of Land Dispute in the region of PT Newmont Nusa Tenggara ( A

case study of the disputes between communities Samawa by PT Newmont Nusa Tenggara ). Dissertation Doctoral Program of Law, Faculty of Law Brawijaya University Malang.

[15] Salim HS, 2013. Mineral and Coal Mining Law. Jakarta: Sinar Grafika. [16] Salim HS, Idrus Abdullah dan Muhammad Sood, 2013. “Empowerment Model of Miners

People : As an Academic Paper Drafting Instruments of Regulation Sumbawa About Mining District”. Research Institute of the University of Mataram. Mataram.

[17] Setiawan, Iwan, “Mining Area”, paper presented at the training Good Mining Practice and Law in Sumbawa, on 18-19 October 2013.

[18] Vargas-Hernández, José G., 2007. “Co-Operation and Conflict between Firms, Communities, New Sosial Movements and the Role of Government V. Cerro De San Pedro Case”. International Journal of Social Economics. Year: 2007 Volume: 34

[19] Yasmi, Yurdi, 2007. “Institutionalization of Conflict Capability in The Management of Natural Resources (Theoretical perspectives and empirical experience in Indonesia)”. PhD Thesis Wageningen University, Wageningen, the Netherlands.

[20] Zulkarnaen, Iskandar, dkk., 2003. “Potential Disputes in Mining Regions: The Case Pongkor and Kurai”. Jakarta: Issues Competitive Research Institute of Science Indonesia.

Legislation The Philippine Mining Act of 1995

Republic of Indonesia.Law on Mineral and Coal.Law No. 4 of 2009. Gazette of the Republic of Indonesia Year 2009

No. 4.Supplement to Statute Book No. 4959.


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Model of Bumn Privatisation through New Common Stock and

Its Implication towards Financial Performance Period 2005-2012

Ibnu Khajar Economics and Management Department

Uiversitas Islam Sultan Agung, Semarang, Indonesia E-mail: [email protected]

Tel: +62857-33696740

Abstract Megginson, Nash and Randenborgh (1994) confirmed that there had been an improved financial performance on BUMN in Indonesia. The performance of BUMN was influenced by the basic model of privatization (Santoso, 2005). This research was intended to acknowledge and analyze; how was the model of privatization of State-Owned Enterprises (SOEs) in Indonesia?; what was the new common stock or divestment?; how was the price of stock of IPO in SOEs in Indonesia?; What were over-value or under-value?; and how was the financial performance (return on sales, return on equity) of SOEs in Indonesia pre-privatization and post-privatization? The research employed paired sample T Tes of statistic analysis. It aimed to seek for the difference of the financial performance pre-privatization and post-privatization. The research showed that (1) All SOEs were privatized by issuing new stock; (2) four privatized SOEs experienced under-value, and the other one had over-value; (3) two SOEs had better financial performance at post-privatization compared to pre-privatization. Keywords: IPO, privatization, over and undervalue, return on sales and return on equity.

1. Introduction State-owned enterprises (SOEs) (in Indonesia namely BUMN) is a business entity in which partly or all ownership owned by government of Republic of Indonesia (Indonesian Language Encyclopedia). Government of Indonesia has made some fundamental regulation change related to ownership of some SOEs in Indonesia. It means that the shares can be owned by public.

Critics appeared related to the existing monopoly or certain regulations for supportive competition (Act. No. 5 1999). The government was considered to be business actors as well as regulator. Therefore, privatization was meant to cope with such problem (privatization is intended to resolve the issue). It was meant to improve efficiency and also profitability. Currently, there were thirteen industrial companies which have been privatized (listed in Table 1) Table 1: Privatized BUMN Period 2005 – 2011

No Industry Listing 1 PT Wijaya Karya (WIKA) 29-10-2007 2 PT Jasa Marga (JSMR) 12-11-2007 3 PT Bank BTN (BBTN) 17-12-2009 4 PT Krakatau Steel (KRAS) 10-11-2010 5 PT Garuda Indonesia (GIAA) 11-02-2011

Source: BUMN (SOEs) on-line Directory


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SOEs, either a business or non-business one, have similar features with other kinds of companies. Their success on achieving the objective is mostly influenced by their internal conditions such as marketing, production, resource, and capital. External factor also plays important role for the success of SOEs such as competition, macro economy, technology, and global issue. However, external factor has less influence irrespective of the type of the company either public or private sector. Meanwhile, the internal factor will be highly influenced by the change of company control from government to private sector. Megginson, Nash, and Randenborgh (1994) mentioned that State-owned enterprises (SOEs) often experienced loss. Mostly, they focused on maximazing the labours and developing remote areas. These enterprises were often unprofitable. However, due to their vision and mission which is non-market oriented, they tried to keep running. To overcome this challenge, government provided subsidies for inputs or all losses. In the long run, if this continuously happened, and these SOEs were unprofitable, this became burden for government. To solve this problem, privatization and divestment were considered to be done. Having the companies privatized, it was intended to improve the performance of the enterprises. It was expected that the management of the companies could be controlled better by non-government bodies. The study showed that the performance of companies were improved after the privatization.

The concept of privatization was focused on the interest of the company for its development. To develop the company, capital was required. One of the ways to have the capital was through gaining new stock. Privatization model in the form of divestment only resulted on the transfer of stock from government to private sector. It is due to the stock purchasing would be delivered to APBN (Nation’s Budget Revenue Expenditure) and would be used for yearly budgeting. In the short run, this became the treasury. However, in the long run, this would give APBN loss due to the less demand for deviden.

The existing amount of cash flow in the privatization is influenced by stock price in the primary market (IPO). There are two possibilities. First, the stock price is exceedingly cheap, namely underpricing. Second, it is too expensive called over-pricing. Under-pricing happens due to the less optimum of the budget gained from privatization. There are many factors influencing under-pricing or over-pricing at IPO. Febriana (2004) mentioned that under-pricing is influenced by auditor reputation, underwriter, company age, solvency, and profitability. It has been known that privatized SOEs are those who have huge asset and reached decades of age. 2. Literature Review 2.1. State-Owned Enterprises (SOE)

State-owned enterprises (SOEs) is a business entity in which partly or all ownership owned by the government of Republic of Indonesia. The firm can be in the form of non-profit firm aimed to provide goods or services for community. Some SOEs in Indonesia, the government has significantly changed the ownership status. It means, the company stock can be owned for public. The purpose of this SOE is to give more contribution to national economy and the national cash flow, earn more profit, meet the need of society, stimulate business activities and give assistance and protection for small and survival enterprises. 2.2. Privatization and Divestment

Privatization focuses on the property rights. Private sector has the right as the owner of the businesses. It means, the stock is sold in the domestic and international market, or the private placement (Team BEJ, 1996: 335-336). Privatization is often called denationalization. Kompas (24 March 2002) mentioned that:

1. Privatization is defined as the transfer of control of a company to management of the private owners. This means that the majority of the shares owners of the firms are changed.


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Hence, there is a government control change. The government has no longer become the actors, but as the regulators and policy makers. Then, the managers will be responsible to the new owners.

2. Privatizing BUMN means that the stock purchasing from the govermnent to private sector (domestic or foreign)

3. The placement of the government stock is meant not only to earn profit for the sake of Nations’s Budget Revenue Expenditure (APBN), but also to improve the performance of the SOEs themselves, to accelerate good corporate governance, to open better access for international market, and transfer knowledge and best practice for SOEs, and also to have better work culture condition.

4. Meanwhile, divestment is the process of selling off a portion of a business unit or corporate asset (Harianto, Sudomo, 1998:779).

The last category of privatization is used by Indonesian government in May 1997 to privatize five SOEs. They are PT Semen Gresik, Indosat, Tin Mine, Telkom Indonesia, and PT Bank BNI 1946. These five SOEs shares were sold no more than 35% of the total shares (Team BEJ: 1996:341). 2.3. Go Public

Public Offering or sometimes called Go Public or IPO (Initial Public Offering) is an activity of offering or other securities in which executed by the Issuer (the go public company) to the public based on certain procedures and regulations set by the Capital Market Law. Public Offerings include main activities. They are the initial period when the securities market are offered to investors by the capital owner and Issuer warrantor through appointed selling agents; allotment of shares that investors allocate order. This effects the number of available stock available such as recording stock (listings). That is when the stock is began to trade on the Exchange.

Companies that conduct public offering can gain several benefits. They can obtain relatively large funds and get them all at once. Usually, these funds are used to develop the business (expansion), improve the capital structure and increase subsidiary participation or acquire other companies, pay off some debts, add capital, have relatively low cost of going public, have relatively easy process; and make the issuers easily well-known by the public (go public is a promotion media) for free. Besides beneficial for companies, public offerings also provide benefit for society to participate and have the company's shares and obtain various shareholder rights. The same opportunity will be given to the employees to participate in company's own shares. 2.4. Overpricing and Underpricing of IPO

Stock price of the initial offer is an indicator of the success of the IPO. If the number of shares offered remains steady, then the funds received from the IPO is largely determined by the initial price. There are two possibilities that could happen to the stock price after the offering. The IPO price is greater than that of the initial price traded on the secondary market. This share price condition is called overpricing. In contrast, if the price is lower than that of the secondary market, then the condition is called underpricing (Kusuma, 2001:61).

Underpricing is a condition that the stock price of the IPO is lower that that of the secondary market. Basically, the pricing share is determined by an agreement between the issuer with underwriter. Meanwhile, the stock price in the secondary market is the result of market mechanisms that is based on the existing supply and demand (Febriana, 2004:13-14).

The phenomena of overpricing and underpricing are an interesting topic in the literature of finance. The condition should not occur because the IPO price should reflect all available information prior to the IPO issuers with underwriters while spreading information prospectus to various investors. Prospectus is information about the issuer's financial and non-financial condition. According to


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Trisnawati (1999) prospectus information is one of the main information resources used by investors to decide whether they want to invest in the listed companies in the stock market. 2.5. Company Performance

Performance measurement is one of significant factors for a company. These measurements can be used to assess the success of the company and be a basis for planning the company's reward system (Secakusuma, 1997:8).

Kaplan and Norton (1992:14) have tried to measure the company's performance by considering four aspects. They are financial perspective, customer, process of internal business, and learning and development. The idea on balancing the measurement of the financial and non-financial aspects was then called Balanced Scorecard.

This research focused on the financial and operational performance such as how the performance of the State Owned Enterprises after the privatization and divestment. One indicator of financial performance is the level of profitability. This level showed whether the company's goal has been achieved or not. The better the financial performance is, the better for the shareholder. This condition will determine the stock price and the subsequent prosperity of the shareholders (maximizing stockholder wealth). Husnan (1998:336) stated that fundamental analyst tried to predict future stock prices. It was confirmed that there was a strong relations between the company's ability to generate profits with stock prices, the increase of profit and stock price. This means that there was a positive impact on stock prices. 2.6. Theoretical Framework

Particularly, enterprises, and generally, the industry, either as a profit-oriented business organization or as production agents are expected to always have a good performance. This research did not specifically discuss how to create good performance. However, it focused on comparing the financial perfomances of enterprises classified in State-Owned Enterprises (SOEs).

The performance measurement in this study refered to the work resulted by the work of Megginson, Nash, and Randenborgh (1994:422). It was stated that in assessing the performance of companies, two (2) proxies can be used. For instance, financial performance indicators of profitability aspects: (1) return on assets (ROA) which is the ratio of net income to total assets; and (2) return on equity (ROE), which is the ratio of net income to equity. Financial ratios are a fundamental variable in the study.

Figure 1: Conceptual Framework

Before Privatization After Privatization

Financial and Operational Performance

Return on assets Return on equity

0 2 1 -2 -1

PRE PRIVATIZATION POST-PRIVATIZATION

PRIVATIZATION & DIVESTMENT

PROGRAM

Financial and Operational Performance

Return on assets Return on equity

3. Research Methods 3.1. Types of Research

This study is a causal research. Zukmun (1991) mentioned that the objective of such research is to identify causal relationship between variables, and to explain its relations. Hence, this study is also


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refered to an explanatory research which is aimed to explain the relationship between variables through hypothesis testing (Singarimbun, 1989:5). 3.2. Population and Sample

The population of this study was all companies including in SOEs which were classified as go-public companies. There were 170 companies. The sampling method used was purposive sampling. There were:

1. The Privatized SOEs period 2005 – 2012 2. The availability of the financial statements before and after two-year go public

Based on the above criteria, there were 5 SOEs which have been privatized. They were T Wijaya Karya Tbk, PT Jasa Marga Tbk, PT Bank BTN Tbk, PT Krakatau Steel Tbk, and PT Garuda Indonesia Tbk. 3.3. Data Collection Techniques

Primary and secondary data were used in this study. Documentation technique was employed to gather the data. Primary data was gathered by conducting interview with several officers of BAPEPAM and Jakarta Stock Exchange and other practicioners from capital market. Secondary data was obtained through written or printed data such as balance sheet, profit/loss, and other records on financial report from companies listed in the Jakarta Stock Exchange. 3.4. Operational Definition of Variables

Every variable is operationally defined as follow: Return on Assets (ROA) Return on Assets (ROA) is an indicator of financial performance of the profitability aspect. It measures how many net income in rupiah earned from one rupiah of company’s sale. It is measured by comparing the net income and the total asset. Return on Equity (ROE) It is an indicator of financial performance of profitability aspect. It measures how many net income in rupiah earned from one rupiah of its own capital. The formulation of this measurement is the comparison of the net income and equity. Table 2: Definition of Research Variable

No Variable Concept Formula Scale

1 Return on Sales (ROS)

An indicator of financial performance of the profitability aspect. It measures how many net income in rupiah earned from one rupiah of company’s sale. Sales

IncomeNet ROS

Ratio

2 Return on Assets (ROA)

It is an indicator of financial performance of profitability aspect. It measures how many net income in rupiah earned from one rupiah of a company’s asset Assets Total

IncomeNet ROA

Ratio

3.5. Technical Analysis

Refering to the conceptual framework, there were financial ratios as the financial performance indicator; Return on Sales, Return on Assets, Return on Equity, Sales Efficiency, and Net Income Efficiency. Then, these indicators were assessed before and after the privatization of the program. These ratios should be able to measure and analyze either qualitatively or quantitatively. The data gathered were processed using Statistical Product and Service Solutions (SPSS). The descriptive analysis was used to analyze and describe the data. Then, Paired Sample T test was employed. It means that two similar samples were used but they were treated differently.


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4. Result and Discussion 4.1. Results

Model of SOEs Privatization Period 2005-2012 Five SOEs that were privatized period 2005-2012 were PT Wijaya Karya Tbk, PT Jasa Marga Tbk, PT Bank BTN Tbk, PT Krakatau Steel Tbk, and PT Garuda Indonesia Tbk. There were some questions on the government policy of privatization whether they used the pattern of the issuance of new shares, or divestment. It could also be possible that the government used both new shares issuance and divestment. Under Dan Over Value Table 3 illustrates the result of the fifth initial return calculation of the privatized SOEs period 2005 – 2012 based on the above formulation. Kusuma (2011: 65) calculated over and underpricing as follow:

100% x

price Issue

price Issue - pricemarket Initial

Table 3: Initial Return Calculation

No Emiten Listing IPO Price (Rp) Initial Price IR (%) 1 PT Wijaya Karya Tbk. 29-10-2007 420 560 33 2 PT Jasa Marga Tbk. 12/11/2007 1700 2050 21 3 PT Bank BTN Tbk. 17-12-2009 800 840 5 4 PT Krakatau Steel Tbk. 10/11/2010 850 1270 49 5 PT Garuda Indonesia Tbk. 11/2/2011 750 620 -17

Source: Processed data a. Under and Overvalue PT Wijaya Karya Tbk Table 3 shows that the IR was 33%. It had a positive number. It means that the shares of PT Wijaya Karya IPO experienced undervalue. Issuers were at the unfavourable position because the IPO proceeds were less than that of they were supposed to be. Investors who were successful in buying the shares at the time of the IPO which directly sold the shares in the primary market was ensured to have substantial gain about 33% in less than one month period. In general, the underwriters were also benefited from the shares because IPO shares that experienced undervalue were also having oversubscriptions (shares offered by the issuer in the IPO were less than the demand). The underwriters only took a little or no risk to buy the stocks which were not sold in the IPO. b. Under and Overvalue PT Jasa Marga Tbk Table 3 shows that the IR was 21% meaning that it had a positive number than that of the shares of PT Jasa Marga when IPO experienced under value. Issuers in the unfavorable position because the IPO proceeds were less than they were supposed to be. Investors who were able to buy shares at the time of the IPO, that were later, they sold the shares directly were ensured to have substantial gain of about 21% in less than 1 month. In general, the underwriters also benefited from a little more IPO shares that have also experienced oversubscriptions and undervalue (shares offered by the issuer in the IPO were less than the demand). The underwriters only took slightly risk or not at all to sell the unsold shares. c. Under and Overvalue of PT Bank BTN Tbk Table 3 shows that IR was 5% due to the stock had a positive rate of PT Jasa Marga. The IPO underwent undervalue. Issuers were in the unfavorable position because the IPO proceeds were less than they were supposed to be. Investors, who were able to buy shares at the time of the IPO, and later, in the primary market, they were able to sell their shares directly would have substantial gain of around 5% in less than 1 month. In general, the underwriters also benefited from a little more IPO shares that


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have also experienced oversubscriptions undervalue (shares offered by the issuer in the IPO were less than demand). The underwriters took only slightly risk or not at to buy unsold stock at IPO. d. Under and Over Value PT Krakatau Steel Tbk Table 3 shows that the IR was 49%. It had a positive number than the shares of PT Krakatau Steel when IPO experienced under value. Issuers were in the unfavorable position because the IPO proceeds were less than they were supposed to be. Investors, who were able to buy shares at the time of the IPO, and then later in the primary market were able to sell their shares directly, they received substantial gain of about 49% in less than a month. In general, the underwriters also benefited from a little more IPO shares that have also experienced oversubscriptions undervalue (shares offered by the issuer in the IPO were less than the demand). e. Under and Over Value PT Garuda Indonesia Tbk Table 3 illustrates that the IR was -17%. Since it had a negative number which made the shares of PT Garuda Indonesia at the time of the IPO experienced overvalue. Issuers were in a better position because of the IPO proceeds were much more than they were supposed to be.

Investors, who were able to buy shares at the time of the IPO and then could sell directly on the primary market shares will certainly lose a lot of money (loss) at around 17% in less than 1 month. In general, the underwriters were also in a position to have no benefit from the IPO stocks which experienced overvalue and undersubscriptions (shares offered by the issuer in the IPO were more than the demand). The underwriter took the risk by buying the unsold shares in the IPO. Financial SOEs Performance Table 4 illustrates the overall financial performance of the five companies and their stock price whether they were over or undervalue 4. Table 4: Summary of Financial Performance nnd Stock Price of All Emiten

EMITEN ROA (%) ROE (%)

IR (%) Before After Growth Before After Growth

PT. Wijaya Karya, Tbk. 3,23 3,48 7,74 19,52 13,49 -30,89 33 PT. Jasa Marga, Tbk. 3,54 5,84 64,97 14,31 13,67 -4,47 21 PT. Bank BTN, Tbk. 1,06 1,21 14,15 16,38 1,21 -14,41 5 PT. Krakatau Steel, Tbk 3,68 2,40 -34,78 8,49 8,19 -3.53 49 PT. Garuda Indonesia, Tbk. 4,13 3,51 -15.01 18,90 8,19 -56,67 -17

4.2. Discussion

4.2.1. State-Owned Enterprises Based on the sample of the research, there was no SOEs that executed divestment. All of them issued new shares in the privatization. This condition was ideal since privatization was conducted to increase the capital. It did not mean to sell shares of ownership for the sake of the shortfall. If this happened, the equaity of the company in post-privatization (issuer) would have been bigger compared to that of pre-privatization and had bigger opportunity to run the company. For instance, PT Garuda used the budget from IPO to renew its armada such as buying new Air Bus or Boeing.

Three out of five SOEs in the research were found to have the profitability improvement seeing from the ROA condition after privatization. Meanwhile, the other two was found to have profitability decrease. They were PT Krakato Steel and PT Garuda. These were due to their inefficiency in running the business after the privatization. The budget resulted from IPO did not meet the expectation of the share holders. Seeing the ROE, the profitability level was found to be worse. All SOEs, as the objects of the research, were found to have ROE decline. This condition showed that the budget resulted from the IPO was not efficiently used by privatized SOEs.


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These findings were expected to be useful for interest bodies who have authority in dealing with state owned enterprises in Indonesia such as to evaluate and improve performance. It is undeniable that all companies face high competition. Nevertheless, some improvements could be made for better performance. In fact, during the privatization, all state- owned enterprises received funds from the public and were expected that the funds could be used for their competitiveness. Hence, they could face the competition in the market and have better performance.

The decline of performance will be worse since there will be paralel decrease of performance in the share price. The worse the performance is, the cheaper the price of the stock will be. It means that the value of the company will be cheaper and more open opportunities for other companies to take over the shares such as other more powerful partie like investors or foreign governments. It is known that SOEs usually operate in a strategic field due to its capacity to meet the needs of wider community. If it is taken over by foreigners, it means that community will be very dependent on them. In the long run, this condition is threatening Indonesian. This could even endanger the integrity of the nation and the state. 4.2.2. Overvalue and Undervalue SOEs Based on the sample of the research, most SOEs were privatized during the under-value condition. There were only one SOEs experiencing overvalue. It was PT Garuda Tbk. Four SOEs experienced under-value at IPO and was interpreted to be the loss for the issuer (government RI). This was due to the budget gained from the IPO was lower than that of the overvalue. Undervalue was interpreted as cheap purchasing stock. If the price of the stock increased, the IPO budget would be higher and the issuer (government RI) could earn more.

This empirical evidence could be interpreted that the government of Indonesia, in the privatization process had offered cheap shares in the market. There were many factors influencing this condition.For instance, the condition of macro and micro economy. In the future, it is expected that the government will have conducted a research deeper prior to the privatization program. Hence, the IPO SOEs will not be undervalue 4.2.3. The Financial Performance Post-Privatization At the post-privatization era, there were two out of five privatized state-owned enterprises experienced profitability (ROA) and was statistically significant. They were PT Jasa Marga and PT Bank BTN. Meanwhile, PT Wijaya Karya was found to have statistically insignificant increase. However, PT krakatau Steel and PT Garuda Indonesia experienced statistically insignificant decline.

Having seen from the profitability (ROE), the five privatized SOEs seemed to be statistically insignificant in decline. The empirical evidence confirmed that there was relation between overvalue company with financial performance (ROE). The overvalue companies during the privatization had lower performance (ROE) compared to those privatized company having undervalue.

5. Summary and Concluding Remark State-Owned Enterprises in Indonesia have been privatized in the period 2005-2011. There were no company that has conducted divestment. This means that all companies issued new shares that have increased the equity after privatization. State-owned enterprises, which were privatized in 2005-2011, were mostly undervalue. It means that the issuers (government Indonesia) gained loss due to the IP budget was lower than it was supposed to be.

Two State-owned Enterprises in which privatized in 2005-20011 had an improved financial performance (ROA) compared to the period before the privatization. Five State-Owned Enterprises were found to have financial performancc (ROE) decline. However, it was found to be statistically insignificant. The greatest financial performance (ROA) decline happened when SOEs experienced over-value during the IPO.

In the future, the similar study is expected to be conducted by adding more financial performance indicators and period of research. It needs also to consider extreme economic condition


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such as financial crisis in 2008. This kind of condition also influences the company profitability to reflect its normal condition. References [1] Ancok, Djamaludin. (1993). Measuring Scale Technique. Yogyakarta: Center for Population

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Finance, January. [5] Ghozali, Imam, dan Castellan. (2002). Non-Parametric Statistics. Semarang: Board Publisher

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The Relevance of Vocational Education Policy in

Semarang, Indonesia

Sundarso Public Administration Dept. Diponegoro Univeristy Semarang, Indonesia

E-mail: [email protected] Tel: +62857-33696740

Abstract This paper is focused on analysis of the relevance of Vocational Education policy development in the city of Semarang, Indonesia. This research aims to find out the development of vocational education in the city of Semarang, Indonesia whether it will be able to: 1) improve the quality of YOUR CMS, 2) increase the relevance of CMS graduates with market needs and 3) reconstruct the four education policy framework developed by Yin Cheong Cheng Ming Cheung Wing if it is not match with the actual condition of vocational education in Indonesia. The research utilizes qualitative research, the selection of type of informant conducted in purposive, test the validity of the data was tested with triangular method, analysis of the data by the method of comparison, comparing the condition of a phenomenon field with four models of education policy framework Yin Cheong Cheng Ming Cheung Wing and moderate withdrawal conclusion generally use inductive logic. The results showed that the development of the vocational education policy in the city of Semarang was right, because it can improve the quality of vocational education and increase the relevance of vocational education graduates with the market needs. Keywords: relevance, development, vocational education policy.

1. Introduction The educational vocation for the interests of the developed countries or industry is expected to reawaken economy lethargy since the 1980s. It produces power skilled and cheap of education vocational in accordance with the needs of a market in advanced countries are expected to reduce the costs of surgery an industry that will be an impact on their national economic recovery. For developing countries including Indonesia, the convention of education vocational means an increase in the number of workers skilled required by market/industrial the impact of absorption enhancement of manpower and an increase in income people to it is necessary to improve the quality of vocational school.

The results of research and educational training vocational show that training and education vocational between the states of being one with other countries is still seen trading from the perspective of distinction both theoretical and practical. Vocational education and training (VET) has relevance for economic growth, but this relationship is not linear so every country must decide the level of VET that must be developed, depending on the level of development and demand skills he will need. In Asia, vet contributes towards the development of human capital (human capital development and economic growth) (Tilak, 2002). School with the nature of vocational in Czechoslovakia and China becomes increasingly important because of the development of socialist (Panmaoyuan, 2007).

The implementation of vocational education in Indonesia still meets some problems. In most of vocational education’s curriculum in Indonesia are generally less complete. The role and involvement


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of the business and industry sector in the development of the curriculum has not been realized optimally. A learning process has generally compliant in giving portions on practicum class. Authentic method using some instruments such as rubrics and portfolio has not revealed on its execution (Yusufhadi: 2009). Accordingly, this research aims to analyze the implementation of vocational education in the city of Semarang, Indonesia whether it could:

1. Improve the quality of vocational education 2. Increase relevance vocational education graduations with market needs 3. Reconstruct the four education policy framework developed by Yin Cheong Cheng

Ming Cheung Wing if it is not match with the actual condition of vocational education in Indonesia.

2. Literature Review 2.1. Public Policy Concept

According to Islamy (2001:20), the policy countries are a series of actions established and enforced by government has a purpose or goal oriented in the interest of all people. Policy taken becomes does not have the meaning if without some element of coercion to executor or users policy so as to be obeyed to be implemented. It is in line with the opinions of Easton that defines policy as “the authoritative allocation of values for the whole society” (Islamy, 2001: 19), containing the meaning that the policy containing the value of compulsion to the people that is lawfully can be conducted by government as policymakers.

Groundless opinion of several experts above (Islamy ( 2001: 20 ), Easton in Islamy: 2001 ) hence writers concluded that: public policy is a series of an act done or not performed by the government, which has a particular purpose oriented to the interests of the public ( society ) and aims to address the problem, fulfilling a desire and demands all members of society. The success of the policy is very depended by from the backing of the factors influencing the process of the policy. 2.2. Theory of Public Policy Implementation

Substantially, public policy has been in a system where policies created include a reciprocal relation among three elements, i.e. public policies, offender policies and environmental policies. The policy is a series of interconnected choice made by government officials and formulated into a range of issues while the offender policy is the individual or group of individuals who have a role that can be influenced and influence policy. Based on opinion it can be identified that indicates the presence of influence policy mechanism between the market policy, policy itself and environment policy.

Analysis of educational policy in Hong Kong used a framework for the analysis of educational policies of Yin Cheong Cheng and Wing Ming Cheung, the framework (1995). The framework consists of four analytical frameworks, i.e. 1) background and the basic principles; 2) process of policy formulations; 3) implementation of policies and 4) effect of education policy. Lack of a comprehensive special framework for analysis education policy will result in tight restrictions in the discussion and development of education policy. These evidences are not only occurred in Hong Kong but also in several countries in Southern Asia and Pacific (Cheng and Cheung, 1995). The general framework built by Cheng and Cheung (1995) is figured out as follows:


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Figure 2.1: A framework of analysis education policy Yin Cheong Cheng dan Wing Ming Cheung

Frame one Analysis of background and

underlying principles

Frame two Analysis of policy

formulation process

Frame threeAnalysis of educational policy

implementation (gap between implementation and planning)

Frame forAnalysis of educational

policy effect

Policy outcomes

Educational outcomes

Formulation of educational policy objective

Short-term Intermediate -Long-term

Problems in educational system

Limitation in resources

Political development

Economic development

Social transformation

Cultural development

External competition and challenges

Other

Educational policy

implement ation

Educational policy

formulation Planning

process Action-plan

Boundaries: Scarcity of resources and

resources allocation Time boundary Political and environmental

boundaries

According to the framework, there are four frames used to analyze educational policies. Firstly, the framework focuses on analysis of bacgrounds, policies’ problems and principles that are important in formulating the next stages. Secondly, the framework is used to investigate the purpose of policies, planning process and various problems in implementing the concept. Thirdly, the framework concerns on analyzis of policies’ implementation and identify the gap between the implementation of and planning. Fourthly, the framework focuses on studies of policies implication including hidden policies in different level as shown by the figure above. 2.3. Antonio Gramsci: School and Education

According to Gramsci (in Infed, 2010) school played an important role in the analysis of modern society.

The school system is just one part of a system of hegemony ideology in which the individual has been socialized to maintain the status quo. He did not write a lot in the notebook against the school system but what she wrote is basically criticism against the increasing specialism that happens in the school system italy and he proposed the form of education that is more comprehensive. 2.4. Paulo Freire: Critical Awareness and Education like Banking

Critical consciousness is the result of identification through the 'generative' theme, which Freire identified as 'the representation of icons that have a strong emotional impact in daily life of learners.' In this way individual consciousness helped end ”silent culture” where socially take spoil and menginternalisasi the negative image of themselves created and propagated by an oppressor in a situation extreme poverty. Freeing participants Didik of violence where results therefrom is the main purpose of consciousness critical.

The concept of education ala banking as of an instrument used to oppress society as a whole, where these principles as follows helpdown this:

a. Teachers teach and students are taught b. The teacher knows everything and students don't know anything about it. c. The teacher thinking, students think. d. The teacher spoke and students to hear by obsequious.


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e. The teacher disciplined and students more discipline. f. Choose and carry out his choice of teachers and students to comply. g. The teacher intervened and students have illusions acting through the act of the teacher. h. The teacher choose the contents of the program and students ( which is not consult ) adapt. i. Teacher wellformed authority science by authority or its own he set in opposition to

freedom students. j. Teacher is the subject of a learning process, while the student is an object of economics.

2.5. Neoliberal

Structural adjustment policies (SAP)/structural adjustment policies arises from two bretton woods institutions, the international monetary fund (IMF) and the world bank. SAP is a change of policy applied by the IMF and World Bank (bretton woods institutions) in developing countries. Policy changes are requirements to get new loans from IMF or World Bank, or to obtain lower interest rates on loans that exist. Requirements applied to ensure that money loaned to be used in accordance with the purpose of a whole loans. Structural adjustment policies made with the purpose of reducing imbalance fiscal developing countries. SAP is supposed to enable developing countries to become more economy oriented market. It is then force them to focus on trade and production so can increase their economy (Greenberg: 1997: pg.85-93). Structural adjustment policies/SAP includes:

Spending (budget), also known as a gesture of hard. The focus of economic output and exports directly against the extraction of resources. Devaluasi currency Trade liberalization or raising import and export restrictions. Increasing stability investment (with the complement of foreign direct investment with an

opening stock market domestic). Balance the budget and not overspending. Remove controls prices and subsidies countries. Privatization, or the release of all or part of a company belonging to the country. Increase the rights of foreign investors vis-a-vis national law. Improving governance and fighting corruption.

2.6. Previous Research

Based on various reports about the previous research education vocational diberbagai upfront, the regions of the globe his innovation can be mapped on this following table: Table 2.1: Previous research on the implementation of education vocation in various countries

No A Research

Journal Researcher Previous study findings

Comparison with the research done by the writer

1.

The position of the importance of the issue of higher education vocational in pedagogic (2007)

Panmaoyuan

1. School with the nature of vocational become increasingly important because the development of socialist.

2. Vocation education and public education identical in meaning the theory and principle and that issues education vocational can be solved with research of public education.

3. Higher education, vocational not spatially vocation and complex content and is directly connected with the various departments of national economy.

1. Different, in Indonesia especially in improving the quality of human resources.

2. Different, separated by firmly between public education and vocation

3. Higher education, vocational vocation in nature in the form of education diplomas are (D1-D4 and education a specialist / sp.)


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Table 2.1: Previous research on the implementation of education vocation in various countries - continued

2.

Efficiency and “vocationalism” as the management of the principle of education industry in the united states (2009 )

Philipp Gonon

1. According to Kliebard the basis for school curriculum of “vocationalism” in the united states has been laid in 1920, with efficiency as primary criteria.

2. The aspect of efficiency also dominant in the question whether a system of an apprentice must be introduced through the company in training skill combined with instruction vocational school. It shows that industrial main problem is incompetence and the level of competence at work low constitutes the cause of serious economic losses in America.

1. Different with Indonesia, vocational curriculum is intended development of students in a mastery of competency skills certain.

2. Generally, vocational curriculum in Indonesia also does not concern on preparing students in facing the labor market.

3.

Education and training in countries was elected a member of the European Union (2007).

Tanja Weigela, Martin Mulderb and Kate Collins

1. Emphasizing competence fee-based improving performances in society, organization and education training.

2. Competence now have moved beyond the scope of native to education and training and go over to the development of strategies company (core competence), management competence of human resources and innovations.

3. Now, the concept of competence widely used in the development of vocational education and higher education and has been adopted by many member countries of the European Union.

1. The same, by conducting competence competition of students, the performance of vocational education will be increasing

2. Recently there is a tendency to be the same, especially in competence by sector in inventing of the tools converter of premium to gas and another.

3. In Indonesia this not visible yet.

2.7. Conceptual Framework

Based on literature review, the conceptual framework of the research is tabulated as follows:

Figure 2.2: Conceptual Framework

Neoliberal Education Ten basic principles of Washington Consensus especially in terms of free market, privatization, deregulation and reducing government budget for social purposes (i.e. education and health) are known as Neoliberalism (Friedman and Hayek in Harvey, 2010). The implication of Neoliberalism in the fields of vocational education in developing countries: 1) The government cuts the budget of

education, hence, some responsibility of educational funding is charged into the community.

2) Education is managed as an industry which is input, process and output are existing. Outputs of this kind of education are skilled and cheap workers to fulfill demand of industry in develop countries.

3) The standard of qualification and competency test are set and conducted by develop countries.

Critical Education by Gramscian: 1) Concept of comprehensive school by

Gramsci (1971) is in line with John Dewey and Sneden (in Gonon, 2008); Edward W.Said (2009).

2) The school should be more democratic. Supported by / in line with his opinion freire (1970), Mc.Apple (n.d), Mc.Laren (n.d) and Girouk (n.d) Frederickson (1984), Azyumardi Azra {in Sanaky (2010)}

Frerian : 1 ) Critical consciousness by Freire

(1970), in line with the idea of Gramsci (1971), (Thorton, B, in Watson, B.( 2006 ), Kencheloe (1993, 1999 2006)

2 ) Critical education by Freire (1970), in line with John Dewey (1897), Peter Mc.Laren (1980), Giroux (n.d ), Castells (n.d), Azyumardi Azra in Sanaky (2010)

Education After combining education concept promoted by Gramscian and Frireian, this section will compare the result with Neoliberal education as follows: 1. The school will be more

comprehensive and not have high specialization.

2. The school will be more democratic. 3. The education is oriented to the

environment. 4. The school will be able to empower

the environment to cover the lack of government educational budget.

5. The standard of qualification and competency test are set and conducted by the government and academicians.


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3. Reaserch Method 3.1. Research Design

This research utilizes qualitative method, i.e. research method focused on analysis of the behavior of objects (as opposed to experimental methods) where researchers as a point of instrument (Sugiyono 2001: 5). The objects of this research are Department of Education of Semarang City, Local Government of Semarang and Vocational School of SMKN 2 Semarang City. Informants of this research are head of Department of Education of Semarang City and several staffs of education principal in Semarang city; hence, total number of informants is 12. 3.2. Analytical Techniques

This research uses analytical techniques introduced by Miles and Hubberman (1984), which basically involves three strands of activities after data collecting, i.e. data reduction, data presentation and conclusion. Data that have been collected, either in form of sound recordings or written data are reduced by doing a simplification, sorting and mapping (similarities and differences). Reduction of data from recording, photos and secondary data are persisted during the period of study. Presenting the data means showing various data that has been retrieved as simple and selective information, so the data will be easy to be interpreted. Conclusion of the study will answer the question whether vocational education policy has been appropriate and implemented in a good way. 4. Result and Discussion 4.1. Result

Vocational education is relevant to be developed in the city of Semarang, Indonesia due to these several reasons:

1. The government of Semarang as local government must be consistence in implementing and developing the policy of central government regarding vocational education already stipulated in various way of legislation.

2. The dynamic of Semarang as the capital city of Central Java province is demanding the presence of high skill vocational school graduations.

3. The existence of excellent vocational schools is really needed by parents who want to send their child to vocational school. It is because they hope will be easier for their child to reach a good job after finish their study.

Regarding the policy in improving the quality of vocational education, Head of Educational Department of Semarang City has explained as follows:

The government of Semarang City realized that the vocational education has been allowed to be developed, but it must be qualified. Then, how to increase the quality? The first step is by improving the infrastructure of school including the quality of teachers. Teachers from high school who teach Indonesian language, English, mathematics or other basic subjects, but do not have much lecturing time are moved to the vocational schools. This is important especially in minimizing cost of vocational schools because they do not need to pay lecturers for basic subjects since the teachers receipt salary from government. Moreover, in order to escalate the quality of teachers, it becomes necessary to conduct trainings or seminars in some basic topics such as curriculum and information technology.

Regarding the competence of vocational schools’ students, the Head of Education Department mention as below:

The number of vocational education, I guess, is more than enough today. The urgency is not in adding the number of school, but in increasing the number of programs. For example, although there are many repair shops specialized in motorcycle, the vocational school still do not have a program that is specified in motorcycle. This is because motorcycle is still a part of automotive program. Nowadays,


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we develop vocational schools that promote local economy, i.e. we open agriculture vocational schools in Gunungpati-Mijen, Semarang, since majority of the residences are farmers.

In addition, another respondent i.e. Mrs. Kusniyati SST Par, staff of schoolmistress in the field of development stated as follows:

Vocational schools are more appropriate than high schools to be developed in Semarang due to several reasons. First, the vocational schools are more focus in enhancing skills; therefore, the graduations could apply for job according their skill. Graduates from vocational schools have some different than the students graduating from high schools who usually have more general knowledge so lacking needed for the work force. Second, the development of Semarang as a metropolitan city is followed by the growth of the company /industrial developments. Industrial sectors today prefer to employ vocational graduates to high schools even college graduates. This is because vocational graduates have applicative knowledge and they can accept the lower salary standard. Third, vocational graduates who do not want to work yet, they also can continue their study to university or college. Therefore, vocational graduates are more flexible than the counterparts.

Mr. Sri Suwarno, SPd, vice head of curriculum, another respondent from SMKN 2 Semarang, said the same thing as follows:

PSG is a learning system where students not only learn in their respective school but also study and work practices in corporate and industrial (DUDI). The vocational graduates are not facing any difficulties in implementing PSG because they already have memorandum of understanding (MoU) with their partners (DUDIs). In addition, the vocational schools together with the local government also already have a system that can evaluate the practice of PSG annually. This condition shows a good coordination among stakeholders, i.e. vocational schools, DUDIs and the governments in order to increase the quality of vocational graduates. 4.2. Discussion

Discussion of the relevance of vocational educational in Semarang city will be analyzed from the perspective of the bureaucrat, the educational practitioners and the author. 4.2.1. Bureaucrats Perspective When author did the interview with the bureaucrats in Educational Department, Semarang City, the author stated that government policy in vocational education is not relevance and applicative. The author argument was resisted by Drs. Sukali, MM. he argued: “implementation of the vocational education in Semarang city has a high level of relevance. The vocational education always adapts to market demand (demand driven) in order to support economic development. Sustainability between users of education graduates (DUDI and Government agencies) and education providers (SMK) is matched between the employee and employers became the basis of organizing the education Commissioner. The success of organizing education Commissioner can be seen from the level of the quality and relevance of the number of graduates and suitability of the absorption line of work with the chosen field of expertise and practiced.” This statement is also supported by other bureaucrats in Educational Department, Semarang City, i.e. Drs. Bunyamin m. Pd. (Head of Educational Department) and Dr. Nana Storada, MM. (Coordinator of Monitoring and Evaluation). 4.2.2. Educational Practitioners’ Perspective Educational practitioners especially teachers have an important role at learning process. They play a role in changing the characters of students, where students generally can be said (in the extreme) is still zero in knowledge and skills after graduation should be transformed into a student who mastered knowledge and skills adequately. The teacher has strong knowledge and good skills in his teaching, therefore they very understand in relevance/urgency/importance about education which they gave to students.


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4.2.3. The Author The author has some critics for the existing conditions. Adjustment to people needs or the market goes slow especially to open the competences of the particular because of teachers expertise is still lack, like departments still lack at IT-based teachers and of course that infrastructure requires high cost (competency expertise/heavy equipment Department). Teachers have a strong knowledge and skills teaching, therefore they are very understanding relevance/urgency/importance students in education need. The authors looking for competencies of vocational schools’ teachers in Semarang and have created a map of the competence of teachers, this resulted is could not supervise the lack or excess of competence in a specific expertise on the school level or city level. 5. Conclusions and Recommendations The relevance of educational policy development Commissioner in Semarang is just right, because it can improve the quality of vocational education and increase the relevance of vocational education graduates with market needs. The precision of the development Commissioner of education policy reinforced by the argument: 1) Education Commissioner always adapts to market demand (demand driven) in order to improve the absorption of graduates, 2) Sustainability between users of education graduates (DUDI and Government agencies) and education providers (vocational education) have no matches (match) between the employee and employers, they can improve effectiveness and efficiency in implementing the education policy, 3) holding of education quality and the relevant Commissioner can increase the amount of absorption of graduates and shorten the waiting period, 4) development of Semarang as the metropolitan city is followed by growth of company/industry that is tremendously demanding the availability of skilled labor in a sizable amount, 5) SMK is flexible Education for graduates who want to work cannot continue to lecture at colleges because they besides provided lessons are also provided with skills of a group of subjects that are common which can be used to take the test entry in PT (College). References [1] Asian Development Bank (1991) Technical and Vocational Education and Training. Manila. [2] Brockmann, Michaela & Linda Clarke & Philippe Méhaut & Christopher Winch (2008),

Competence-Based Vocational Education and Training (VET): the Cases of England and France in a European Perspective. London: Publised Online, Vocations and Learning, 1: 227–244.

[3] Dunn, William, N,(1981) Pubic Policy Analysis, An Introduction, London : Prentice Hall, Inc. [4] Edward III, George C.( 1980), Implementing Public Policy, Penerbit : Congresional Quarterly

Press, Washington DC. [5] Finch & Crunkilton, (1999) Curriculum Development in Vocational and Technical Education,

Planning, Content, and Implementation. United State of America: Allyn & Bacon A Viacom Company.

[6] Gonon, Ph. (2000). Education, not democracy? The apolitical Dewey. Studies in Philosophy and Education, 19(1–2), 141–157.

[7] Gonon, Philipp, (2009) Efficiency’ and ‘Vokasionalisme’ as Structuring Principles of Industrial Education in the USA” , Published online: 5 November 2008, Vocations and Learning, 2:75–86.

[8] Grath, Simon Mc and Salim Akoojee, (2009), Vocational education and training for sustainability in South Africa: The role of public and private provision International Journal of Educational Development, 29, p. 149–156.

[9] Grindle, Merilee S, (1980), Politics and Policy Implementation in the Third World, Penerbit: Princeton University Press, Ney Jersey.

[10] Institute of Technology & Education, Bremen University (ITB) Working Group, (2008), Vocational education and training in Europe Analternative to the European qualifications


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framework?, Bremen : Emerald Group Publishing Limited, Journal of European Industrial Training, Vol. 32 No. 2/3, pp. 221-234.

[11] Karmel, Tom (2007), Vocational Education and Training in Australian Schools, The Australian Educational Researcher,Volume 34, Number 3, p.101-118.

[12] Moleong Lexy J, (1999) Metodologi Penelitian Kualitatif, Cetakan X, PT Remaja Rosdakarya, Bandung.

[13] Panmaoyuan, (2007), The Important Position of the Issue of Higher Vocational Education in Pedagogy, Chinese Education and Society, vol. 40, no. 3, pp. 11-26. Translation © 2007 M.E. Sharpe, Inc., from the Chinese text. Pan Maoyuan, "Gaodeng zhuanyuejiaoyu wenti zai jiaoyu xue shang de zhongyao diwei, " Renmin iutnan [People's Forum] (1957), pp. 3-16. Translated by Ted Wang.

[14] Sugiyono, (2001), Metode Penelitian Administrasi, Bandung : Penerbit Alfabeta. [15] Supriadi, Dedi, Editor, 2002, Sejarah Pendidikan Teknik dan Kejuruan di Indonesia,

Membangun Manusia Produktif, Jakarta: Departemen Pendidikan Nasional, Direktorat Jenderal Pendidikan Dasar dan Menengah, Direktorat Menengah Kejuruan.

[16] Supriyadi, (2001), Studi Satuan Biaya Pendidikan SD, SLTP, SMU dan SMK, Jakarta : Biro Keuangan Sekjen Depdiknas.

[17] Tilak, Jandhya G., (2002), Vocational Education and Training in Asia The Handbook on Educational Research in the Asia Pacific Region (eds. John P Keeves and Rye Watanabe, Kluwer Academic Publishers).

[18] Tse, K.K., (1982) “Analysing education policies of Hong Kong”, A Perspective of Hong Kong Education (in Chinese), Wide Angle Publishing Co., Hong Kong.

[19] Tyack, D., & Justice, B. (2003). Vocational Education in the U.S.—Some Historical Perspectives. In J. Oelkers (Ed.), Futures of education II—Essays from an Interdisciplinary Symposium (pp. 179–196). Bern: Peter Lang.

[20] Weigel, Tanja, Martin Mulder and Kate Collins, (2007), The concept of competence in the development of vocational education and training in selected EU member states, The Netherlands Journal of Vocational Education and Training Vol. 59, No. 1, pp. 53 – 66.

[21] World Bank, (1998), Education in Indonesia From Crisis to Recovery Education Sector Unit, East Asia and Pacific Regional Office.

[22] Yin Cheong Cheng and Wing Ming Cheung, A framework for the analysis of educational policies, International Journal of Educational Management, Vol. 9 No. 6, 1995, pp. 10-21.

[23] Zajda, J. (editor),(2010), Globalisation, Ideology and Education Policy Reform, Dordrecht, Heidelberg, London, New York: Springer.


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Choice of Law in the Settlement of Troubled Bank

(Bank Century Case Study)

Zainal Asikin, SH, SU Corresponding Author, Lecturer at the Faculty of Law

University of Mataram

Abstract This study aims to analyze and seek legal basis on bailout of Bank Century which have failed to pay or unable to pay its debts (savings) of its customers, and whether the bailout relief in accordance with applicable law in Indonesia? To examine these issues then the research was conducted by cases approach and normative research methods criticizing Act No. 40 of 2007 in conjunction with Act No.10 of 1998 conjunction with Act No 37 of 2004.The conclusion is government has taken actions that are inconsistent with the principles of banking law and law firm which provides assistance to the bank bailouts that had failed to pay. Bank Century is supposed dissolved or declared bankrupt as conducted to the companies that have trouble paying debts. Keywords: Choice of Law, Problem Bank

1. Introduction More than a year of legal issues of Bank Century has been sticking in the community and become a political consumption. The issue that criticized regarding the bailout by the government and Bank Indonesia (BI) incorporated in the Financial System Stability Committee (KSSK), and the Deposit Insurance Agency (LPS) of Rp. 6.7 trillion, a sizable aid disbursed by the government (BI, KSSK and LPS) to the a bank that had failed to pay were categorized systemic impact, which in the subsequent development of Bank Century changed its name to Bank Mutiara1

The emergence of legal issues with regard to the bailout of Bank Century it is a natural thing given the government action considered contrary to the principle of law applicable in the banking law (Act No.10 of 1998). On one side of the managers of Bank Century convicted of criminal acts assessed banking, on the other side Bank Century was saved that suspected by breaking law ways.

As we know that other causes of the collapse of Bank Century is a scam by the owners and management with embezzling customer’s money. They are Robert Tantular, Member of the Board of Directors Dewi Tantular, Hermanus Hasan and Laurance Kusuma and Shareholders are Hesham Al Warraq Thalat and Rafat Ali Rijvi. Wiping was done in several ways. First, utilizing a fictitious mutual fund products issued by PT Antaboga Delta Securitas Indonesia being sold shrouded in Bank Century. Second, channeling number of fictitious loans2. Third, issuing a Letter of Credit (L /C ) fictitious. The mode is the owner of Bank Century makes the company on behalf of others to their group. Then they apply for a loan, without proper procedures and sufficient guarantees they easily get credit. Even there is a credit of Rp. 98 billion is liquid only in 2 (two) hours. Assurance they added only securities that turned out to bulging. In addition Tantular also move the post misuse of authority and disburse funds in

1 Development of Bank Century changed its name to Bank Mutiara 2 Depri, Corporate Accountability Crime of Crimes in the Field of Banking (Bank Century Case Study), Journal of Srigunting, January

12, 2013, p.1.


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foreign currency deposits of Rp. 18 Million U.S. Dollars without permission the owner of funds, Budi Sampoerna. Robert Tantular also extended credit to PT Wibowo Wadah Rezeki of Rp. 121 billion and PT Accent Investindo of Rp. 60 Billion. These disbursement procedures allegedly do not conform. Robert Tantular also violates Letter of commitment because does not returning the securities of Bank Century abroad and increases the Bank's capital.

While on the other hand the Government has a different view of the condition of Bank Century is in default. Although the bank manager has been criminal wrongdoing, that Bank Century cannot be treated with plain ordinary normative approach, namely the closure of legal action (either through liquidation or bankruptcy action), because it is considered normative acts harmful to the economic development of Indonesia or feared systemic impact. A government action which emphasizes economic approach is then triggered legal issues and considered ambiguous or ambivalent. On the one hand, the managers of Bank Century has taken legal action (criminal law) to whom it has been considered embezzlement or corruption, but on the other side of the institution (Bank Century) made economical approach that ignores the principles of banking law and bankruptcy law. 2. Problem Formulation Based on the above, the authors conducted an analysis of the Bank Century case in perspectives corporate law, banking law and bankruptcy law, to address the problem:

a. What is the legal action the most appropriate for Bank Century that had failed to pay? b. Is the Bank Century bailout action comply applicable legal principles?

3. Research Methods

a. Research Type: This study is a normative study with a review of some regulations related to bank defaults. For those reasons, the study of the Act No.10 of 1998 concerning Banking Law and the Act of Bankruptcy becomes the main focus in research.

b. Material law: Legal material collected consists of primary legal materials (legislation crustaceans), secondary legal materials (such as library materials and relevant legal documents)

c. Approaches: In conducting the research approach used statute (statutory approach) and cases approach.

4. Results To determine the extent to which governments implement applicable legislation, decision to disburse related bailouts to Rp. 6.76 trillion for Bank Century. Is there any violation indication of legislation will be analyzed as follows: 4.1. Bank Century Case

On November 13, 2008 Bank Century experienced a state cannot pay the demand of customer funds or commonly referred to as clearing lose. This situation gave rise to panic or rush to withdraw funds at Bank Century. Furthermore, on November 14, 2008 Bank Century management report the incident and come to apply for emergency funding facility to the Committee on Financial Sector Stability (KSSK) and then on November 20, 2008, Bank Indonesia (BI) make the determination of the status of Bank Century into a fail banks.

Finance Minister Sri Mulyani as held by the Chairman of the Committee on Financial Sector Stability (KSSK) held a meeting for the discussion of the fate of Bank Century, in the meeting, Bank Indonesia (BI) is represented by the Governor of Bank Indonesia Boediono held by the data through October 31, 2008 said that adequacy ratio capital Adequacy ratio (CAR) of Bank Century was minus 3.52 percent up, the agenda of the meeting, among others, to discuss the impact it will have or will


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arise whether to have a systemic impact, such as in technical terms is called a bank run or run on the bank. Seemingly Bank Century in the meeting should be treated as a failed bank to be liquidated and later in the meeting decided to hand over the Bank Century to the Deposit Insurance Agency (LPS).3

Keep in mind, the controlling shareholder of Bank Century is Rafat Ali Rizvi and Hesyam Al Warraq.The majority shareholder Robert Tantular. After the merger there was no improvement. From 2005 to 5 November 2008, the bank entered intensive supervision alternating BI. The cause is exposure to the securities of foreign exchange (forex) bulging or unrated worth U.S. $ 203 million, as well as non-productive assets worth Rp 477 billion, which suppresses the bank's capital.

As a follow-up of intensive supervision BI require banks selling securities its currency cash by the end of December 2005. However, the bank filed a settlement proposal through a guarantee scheme cash (asset management agreement / AMA), and approved BI on February 21, 2006. Then BI also asked banks increase the capital of Rp. 500 billion. This request met the owner of the bank amounted to U.S. $ 10.5 million and U.S. $ 14.85 million. Last bank rights issue and reap Rp. 442 billion.

But all was in vain; Bank Century is getting stuck so it makes special surveillance on 6 November 2008. Based on the examination runs (assessment) BI per 30 September 2008, the capital adequacy ratio (capital adequacy ratio / CAR) dropped to 2.35 percent. This condition is also exacerbated by the decline in public confidence in the banks, especially large depositors, such as Sampoerna and PT Timah, which attract deposits between July 2008, and continues to be a massive withdrawals (rush). In the span of November to December 2008, total deposits were withdrawn at Rp. 5.67 trillion. Under these conditions, the Bank Century into a bank default.

The question is to a company that fails to pay its debts, whether the remedy is more appropriate? Is the Bank Century can do for bankruptcy, or liquidation? Lawsuit or action against the law ?4 4.2. Bank Liquidation

In Burgerlijke Wetboek (BW) used the term outbinding (dissolution) and Vereffening (settlement). Whereas the Common Law system used the term'' winding up "in addition to" liquidation".Liquidation is an action to dissolve a company or legal entity.

As for the reasons for the dissolution of a corporation governed by Law 40 of 2007 on Limited Liability Company.In Article 142 it is determined that the dissolution of the company occurs:

a. Decision by the AGM; b. Since the founding period specified in the articles of association has expired; c. By court order; d. The revocation of bankruptcy by the commercial court decision that had to have permanent

legal force, the Company's bankruptcy estate is not sufficient to pay the cost of bankruptcy; e. Because the bankruptcy estate company that has been declared bankrupt in a state of

insolvency as stipulated in the law on Bankruptcy and Suspension of Payment; or f. For the revocation of the business license of the Company so requires the Company to

liquidate in accordance with the provisions of the legislation. In the event of dissolution of the company as set forth above, then:

a. Shall be followed by the liquidation conducted by a liquidator or curator; and b. The Company is not able to perform a legal act, unless required to settle all the affairs of

the Company in order liquidation. If dissolution occurs based company GMS and the founding period specified in the articles of

association has expired or the revocation of bankruptcy by the decision of the commercial court did not appoint a liquidator and the AGM, the Board of Directors to act as liquidator.

3 Bank Century case Aspects Of Corporate Law, October 1, 2009, sandipieceofmind.blogspot.com 4 Dr. Sudirman Sidabukke, SH, CN, M.Hum, In the case of Bank Century Civil Construction, Repository, Ubaya.ac.id


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If dissolution occurs with the revocation of the company's bankruptcy, the commercial court at once decided the dismissal curator with the provisions of the law on Bankruptcy and Suspension of Payments of debt.

Dissolution of the Company does not result in the Company losing legal status until the completion of the liquidation and the liquidator liability is accepted by the AGM or the courts). Since the liquidation of the Company on any outgoing mail included the words "in liquidation" after the name of the Company.

Directors, the Board of Commissioners or 1 (one) or more shareholders representing at least 1/10 (one tenth) of the total shares with voting rights, may propose the dissolution of the Company to the GMS. AGM decision on dissolution begins from the moment the decision set out in the AGM.

Dissolution of the Company occurs by operation of law when the founding periods of the Company are set out in the articles of association ends. In a period of at least 30 (thirty ) days after the founding period of the Company ended the AGM set the appointment of the liquidator. Directors should not be new legal actions on behalf of the Company after the establishment time period set forth in the Company's articles of association ends.

District court may dissolve the Company at the request of the prosecutor by reason of the Company violate the public interest or the Company acts that violate laws and regulations.

Request interested parties by reason of a defect in the deed of the law; request of shareholders, the Board of Directors or Board of Commissioners by reason of the Company is unlikely to continue.

In a period of at least 30 (thirty) days from the date of dissolution of the Company, the liquidator shall notify all creditors of the dissolution of the Company by way of announcing the dissolution of the Company in the newspapers and the Official Gazette of the Republic of Indonesia; and dissolution of the Company to the Minister to be recorded in the register of the Company that the Company is in liquidation. Notice to creditors in the newspaper and the Official Gazette of the Republic of Indonesia as referred to (Article 147).

A liquidator settlement obligation in conducting the Company’s assets in liquidation process includes the implementation:

a. Recording and collection of wealth and the Company's debt; b. Announcements in newspapers and the Official Gazette of the Republic of Indonesia

regarding the distribution of assets from liquidation plan; c. Payments to creditors; d. Payment of the remaining assets from liquidation to shareholders; and e. Other actions that need to be done in the implementation of settlement wealth.

In the event that a liquidator estimates that the Company's debt is greater than the Company's assets, the liquidator of the Company shall file for bankruptcy, unless legislation otherwise, and all known creditors of identity and address, agreed settlement is done outside of bankruptcy.

Creditors may submit an objection to the plan of distribution of assets from liquidation at the latest within a period of 60 (six) thirty days from the date of the announcement in the State Gazette. In case the appeal was rejected by the liquidator, a creditor can file a lawsuit to district court within the period of 60 (sixty) days from the date of rejection.

Creditors who filed the bill in accordance with the time period referred to above was rejected by the liquidator, creditor can file a lawsuit to district court within the period of 60 (sixty) days from the date of rejection.

Creditors who have filed bills can be filed through district court within a period of 2 (two) years from the dissolution of the Company was announced. Creditor filed a bill that includes the residual assets from liquidation which has been distributed to the shareholders.

In terms of residual assets from liquidation proceeds remaining assets were distributed to the shareholders. Shareholder is obliged to return the remaining assets of the liquidation proceeds.

How about Bank Liquidation?


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In 2008 UUNo.10 Article 55 states that Bank Indonesia may impose an administrative sanction to the bank cannot meet its obligations to revoke the business license of the bank concerned. Other administrative sanctions may include: monetary penalties, written warning, down grading of banks, the prohibition to participate in the activities of clearing, freezing of certain business activities, either for a particular branch or to the bank as a whole, and the subsequent firing of the bank board appointment of a replacement until a General Meeting of Shareholders or Members Meeting Cooperative lift replacement fixed with the approval of Bank Indonesia.

In Government Regulation No.25 of 1999 regarding the revocation of business licenses, Dissolution and Liquidation of Banks define liquidation of the bank as a whole acts as acts of settlement rights and obligations of the bank as a result of the revocation of the business license and the dissolution of the legal entity of the bank. Liquidation chosen to complete the process of ending the civil and legal entities of banks is to protect bank customers and prevent social unrest and economic turm oil.

For that reason in liquidation experienced several phases: the first begins with the revocation of the bank concerned, the second, followed by dissolution of the legal entity of the bank, the third ended with the completion of the rights and obligations of the bank in liquidation.The whole process of implementation of the rights and obligations of the settlement of the liquidated banks implemented by the liquidation team. In Act No. 24 of 2004 regarding LPS in conjunction with Government Regulation 3 of 2008 on the Amendment Act 24 of 2004 conjunction Law 7 of 2009 concerning Stipulation of Government Regulation 3 of 2008, that the monitoring of the implementation of the liquidation conducted by the Deposit Insurance Corporation previously held by Bank Indonesia. Therefore Liquidation Team shall be responsible to the LPS, not to Bank Indonesia.

As a result of liquidated banks are as follows: a. Stewardship bank switch hands so that the Liquidation Team Director and the

Commissioner may not represent the interests of the bank; b. If the bank until liquidation difficulty was caused by the fault of the shareholders,

directors or commissioners, then they should be responsible for their personal property. c. Liquidation team may cancel the agreement that the agreement made within 1 year

before the bank is liquidated, the agreement is considered detrimental to the interests of property and creditor banks.

Furthermore liquidation tasks of the team are as follows: a. Negotiate with creditors; b. Perform various actions related to sales, debt collection and billing of bank liabilities;

In addition to the above, customers also benefit from the liquidation of assets due to the completion of the liquidation of troubled banks by giving customers a higher order than the order of creditors as creditors in the bankruptcy settlement. According to the provisions of Article 54 paragraph (1) of Law LPS, the orders of payment obligations to its creditors in the liquidation of the bank are:

a. Replacement over bailout payment of salaries payable; b. Reimbursement for payment of employee severance bailout; c. Fee cases in court, the auction fee payable, and office operating costs; d. Rescue Costs incurred by the Deposit Insurance Corporation and / or payment for

insurance claims to be paid by the Deposit Insurance Corporation; e. Tax payable; f. Portion of savings depositors are not paid bail and deposits from depositors are not

guaranteed; g. Rights of other creditors.

From the above discussion it is clear that the liquidation of the company, the company was not necessarily have trouble paying debts, but liquidation is done because the dissolution of the company was done because the time period of the founding of the company is over and the company has violated the law and should be done and his property divided by the liquidation team liquidator in the process of liquidation.If the company's assets are not sufficient then performed for bankruptcy.


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4.3. Bankruptcy Banks

The question that first arises is: can banks sentenced to bankruptcy? In the article 2, paragraph (1) of Act 37 of 2004 on Bankruptcy and Suspension of Payment is

set on the parties to file a bankruptcy petition, namely: 1. Debtor itself; 2. A creditor or more; 3. Prosecutor or prosecutor; 4. Bank Indonesia if debtors are Bank; 5. Securities and Exchange Commission if the debtors are securities companies, stock

exchanges, clearing house and guarantor, and completion Guarantor Institute; 6. Finance Minister when the debtors are insurance companies, reinsurance, pension funds

and State Owned Enterprises. It is clear that the provision of legal entities in the form of banks can also actually dropped

bankruptcy decision, because the banking law does not explicitly ban found about it. But it ethical and sociological interpretations that justify the bankruptcy of the bank is necessary to watch out for, studied and taken into account for the ills of society.

Bankruptcy justifies the existence of the bank will block the fraudulent activities of the "white collar criminals", that is by setting up a banking institution and collect funds from the public (with the lure of high interest), then the public money was used in the spree by owners/ bank manager then they filed bankruptcy. Can imagine how extremely dissatisfied society if bankruptcy is given "place" in the banking institutions.

Negative consequences for the picture above, the authors argue that the liquidation or bankruptcy of a bank should not be allowed or not granted, if filed by the debtor or trustee bank. But otherwise if the condition of the company (bank) has been so severe, it is in the public interest that the bank may be requested from bankruptcy by the creditors or by the prosecutor.

As noted earlier, if the debtor is a bank, it can file for bankruptcy only by Bank Indonesia. The reason of these provisions is that a lot of money in the bank that society must be protected. If banks can be easily applied by any creditor bankruptcy, then public confidence in the bank can be lost. In addition, the filing of a bankruptcy petition against a bank, it is feared will be a rush (depositors in the bank filed immediately flocked lining up to take his mistress). This can result in a rush to other banks.

Similarly, the bank creditors, banks also cannot file a bankruptcy petition against him. It is very important to prevent the shareholders cannot to bankrupt the bank in an attempt to avoid responsibility for the creditors, including depositors of the customer.

As already noted, Bank Indonesia is the only party authorized to file a bankruptcy petition against the bank. If connected with liquidation, Bank Indonesia has two powers, namely:

a. Revoke business licenses and ordered the bank to bank directors to convene a general meeting of shareholders to dissolve the bank and formed a team of liquidation;

b. Exclusive Authority to file for bankruptcy to the bank. In connection with the exclusive authority to file for bankruptcy by Bank Indonesia to banks,

Sutan Remy Sjahdeini not agrees with granting exclusive authority to Bank Indonesia. Sutan Remy Sjahdeini found that the creditor is actually able to experience and feel the immediate circumstances of the debtor does not pay, so the bankruptcy petition against the bank should still be submitted by the parties under the Bankruptcy Act and PKPU entitled to file for bankruptcy, with a record of the application may be filed after the application is approved by Bank Indonesia.5

Bankruptcy has better prospects and more certain than the liquidation because: a. Settlement is done through the bankruptcy court so that a prudent, while liquidation

through court.

5 Sutan Remy Syahdeini, Bankruptcy Law, Understanding Faillissement Verordening conjunction with Law 4 of 1998, p

140-141


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b. Decision bankruptcy by the Commercial Court can be implemented even if there Appeals or judicial review, whereas there is no liquidation so there is no firmness settings when starting the implementation of the liquidation.

c. In bankruptcy is no provision for temporary measures to protect the property which is the object of bankruptcy of possible abuse by those who master it before the bankruptcy decision handed down, while in liquidation, while the action is not known.

d. In bankruptcy, receivership which handles bankruptcy estate should be independent and have no conflict of interest with the debtor or creditor and the curators supervised by the supervisory judge, while in liquidation, liquidation of property management is done by a team of liquidation without the supervisory judge that seem less prudent.

e. Bankruptcy known in peace efforts if agreed between creditors (unsecured creditors) and the debtor and endorsed the Commercial Court, the bankruptcy will be lifted so that the company returns to normal operation, while liquidation is not known peace.

f. In bankruptcy there is no revocation of the bank by Bank Indonesia and the dissolution of the bank by the general meeting of shareholders in advance, whereas in liquidation, the second legal action was a condition that the liquidation could be implemented.

g. Chances in bankruptcy revocation and dissolution of a legal entity is only done if the property is in a state of bankruptcy insolvency occurs due to the failure of peace efforts between concurrent creditors to debtors.

h. In bankruptcy, Bank Indonesia responsibilities lighter because supervision, management, and settlement of the bankruptcy estate carried out by the supervisory judge, while the liquidation, dissolution liquidation of banks and implementation supervised by Bank Indonesia.

i. Handling problem banks through bankruptcy frees Bank Indonesia from the public due to the implementation of bankruptcy claims are the responsibility of the Commercial Court.

j. Empirical evidence suggests that the settlement through liquidation is "unfinished settlement." An example is the liquidation of 16 banks, which until now (August 2004) has not been demonstrated optimal results despite the past 5 (five) years.

Adrian Sutedi found a solution to the problem banks through bankruptcy should not be taken by reason of:

a. Process of liquidation and insolvency set out in the Bankruptcy Act and PKPU not applicable to banking institutions for banking institutions already have rules about the process of liquidation and insolvency separate more detailed and complete as lex specialis,

b. Role of the curator in bankruptcy will eliminate the role of banks and Bank Indonesia intervention to troubled banks were bankrupted, which require special expertise for its completion ,

c. Bankruptcy banking institutions may endanger the position of the bank itself and other banks, can even jeopardize the position of Bank Indonesia ,

d. Protection of the interests of depositors society as concurrent creditors in bankruptcy be prioritized so that the public confidence in the banking institutions to be reduced with the result that could destabilize the broader financial state,

e. Implementation of the Bankruptcy Act and PKPU with a very simple procedure to troubled banks may lead to confusion and legal uncertainty, and may lead to further opportunities for corruption and can be misused for personal gain by the bank owner’s bad faith.

In addition, the liquidation in bankruptcy does not directly result in a dissolved company. If the liquidation is over, the company can come back to life after rehabilitation. It is not applicable to banking institutions, which if their business licenses revoked and the bank dissolved, then the bank cannot operate anymore.


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According Rudhy Prasetya, the consequences for the liquidation of the bank are6. a. If using the Banking the Act all banks' assets liquidated and distributed to the customers

in order of priority. b. If using the Bankruptcy Act and PKPU, then the assets is liquidated only partially, that is

the extent of customer deposits and bills of the creditors. Therefore, when using the bankruptcy, the Bank Indonesia's intention to distribute all the assets of the bank is not reached.

Based on the previous descriptions, it can be seen that the settlement is not necessarily profitable liquidation of bank customers, and the completion of the bankruptcy is not necessarily detrimental to bank customers. Both the settlement has advantages and disadvantages of each. According Ramlan Ginting, bankruptcy has the advantages of liquidation, namely: 7

a. Settlement is done through the bankruptcy court so that a prudent, while liquidation through court.

b. Decision bankruptcy by the Commercial Court can be implemented even if there Appeals or judicial review, whereas there is no liquidation so there is no firmness settings when starting the implementation of the liquidation.

c. In bankruptcy is no provision for temporary measures to protect the property which is the object of bankruptcy of possible abuse by those who master it before the bankruptcy decision handed down, while in liquidation, while the action is unknown. 4. In bankruptcy, receivership which handles bankruptcy estate should be independent and have no conflict of interest with the debtor or creditor and the curators supervised by the supervisory judge, while in liquidation, liquidation of property management is done by a team of liquidation without the supervisory judge that seem less prudent .

d. Bankruptcy known in peace efforts if agreed between creditors (unsecured creditors) and the debtor and endorsed the Commercial Court, the bankruptcy will be lifted so that the company returns to normal operation, while liquidation is not known peace.

e. In bankruptcy there is no revocation of the bank by Bank Indonesia and the dissolution of the bank by the general meeting of shareholders in advance, whereas in liquidation, the second legal action was a condition that the liquidation could be implemented.

f. Chances in bankruptcy revocation and dissolution of a legal entity is only done if the property is in a state of bankruptcy insolvency occurs due to the failure of peace efforts between concurrent creditors to debtors.

g. In bankruptcy, Bank Indonesia responsibilities lighter because supervision, management, and settlement of the bankruptcy estate carried out by the supervisory judge, while the liquidation, dissolution liquidation of banks and implementation supervised by Bank Indonesia.

h. Handling problem banks through bankruptcy frees Bank Indonesia from the public due to the implementation of bankruptcy claims are the responsibility of the Commercial Court.

i. Empirical evidence suggests that the settlement through liquidation is “unfinished settlement”. An example is the liquidation of 16 banks, which until August 2004 has not shown optimal results despite past 5 (five) years.

Based on the above it is clear that the legal status of banks in liquidation of the bank had not referred to in the legislation. Therefore, the provisions of Article 2 paragraph (3) the Bankruptcy Act and PKPU not apply to banks in liquidation and the liquidation of the bank subject to the provisions of Article 2 paragraph (1) the Bankruptcy Act and PKPU, so the banks in liquidation can be declared bankrupt based on his own petition or request one or more creditors if the bank in liquidation has two or more creditors and not pay in full at least one debt due and collectible.

Banks in liquidation can be declared bankrupt by the request of its customers. In deciding bankruptcy petition against the bank in liquidation, the judge should not use such a simple proof of the

6 Ibid, 178-179 7 Jono, Bankruptcy law, Sinar Grafika, Jakarta, 2008, p. 16-17


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bankruptcy case in general, but the judge should take into consideration that the main focus in banking regulation is to protect the public funds in the bank, the lender is the party that can actually experience and feel the state does not pay directly from debitur130, through the completion of liquidation experience ever, the balance sheet of banks in liquidation, the order of priority of payment in the settlement by way of liquidation and bankruptcy and its impact on customers, advantages and disadvantages of liquidation and settlement of obligations through bankruptcy if applied in such cases, and the economic analysis of each settlement and its impact on bank customers in the respective liquidation.The resulting decision by the judge to be the most profitable decisions in the liquidation of the bank's customers.

From the above description associated with the actual condition of the Bank Century legal action should be applied to it?

Legal action should be done against Bank Century is as follows: a. Bank Century shall be dissolved in accordance with Law 40 of 2007 on Limited Liability

Company and the Law No.10 of 1998 as the Bank Century has been proven to perform unlawful acts such as exposure to the securities of foreign exchange (forex) bulging or unrated worth U.S. $ 203 million, as well as non-productive assets worth Rp. 477 billion, which suppresses the bank's capital. Bank Century utilizes fictitious mutual fund products issued by PT Antaboga Delta Securities Indonesia sold shrouded in Bank Century. Second, a number of fictitious credit channel. Then Bank Century, published a Letter of Credit (L/C) fictitious. The mode in which the owner of Bank Century makes the company on behalf of others to their group. Then they apply for a loan, without proper procedures and sufficient guarantees they easily get credit. There is even a credit of Rp. 98 billion is liquid only in 2 (two) hours. Assurance they added only securities that turned out to bulging. In addition Tantular also move the post the misuse of authority and disburse funds in foreign currency deposits of Rp. 18 Million U.S. Dollars without the permission of the owner of the funds, Budi Sampoerna. Robert Tantular also extended credit to PT Wibowo Wadah Rezeki is Rp 121 billion and PT Accent Investindo of Rp. 60 Billion. This disbursement allegedly not in accordance with procedures

b. Bank Century should be declared bankrupt, or Bank Indonesia should file a bankruptcy petition against Bank Century which was no longer able to pay the debt that has matured to its customers as mandated by Act 37 of 2004 on Bankruptcy and Suspension of Payment. Therefore, government action to bail out (providing funds gutter) is an action contrary to law and bankruptcy law because company with relief as it will protect the debtor rogue corrupt and criminal acts.

c. Bank Century has been doing acts contrary to law and threaten the interests of customers, therefore in the interest of public prosecutor may submit bankruptcy petition without waiting the Bank Century in Indonesia steps are slow to resolve the issue of Bank Century.

5. Conclusion

a. Bank Century is a bank in default or in bankruptcy law is called has failed to pay its debts or stop paying debts for doing a fraudulent conveyance, therefore legal steps that must be performed on the dissolution of Bank Century is doing and the steps followed by liquidation. If steps are not possible due to the liquidation of the debt of Bank Century has died debts outweigh its accounts receivable, Bank Indonesia had to file for bankruptcy on the Bank Century. In fact, the Attorney may submit for bankruptcy when seen threatening the public interest without waiting Bank Indonesia action.

b. Government action to bail out over the Bank Century by providing bailout funds from bank funds in LPSP is an act contrary to the banking law and bankruptcy law.


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6. Recommendations There needs to be regulation in banking law explicitly about the criteria and standards so that banks can be categorized as a bank which is systemic impact then can be given bail out action using bailout that was saved in LPSP.

References [1] Adrian Sutedi, Banking Law: An Overview of Money Laundering, Merger, Liquidation and

Insolvency, Graphic Rays, Jakarta, 2007 [2] Depri, Corporate Accountability Crime of Crimes in the Field of Banking (Bank Century Case

Study), Journal Srigunting, January 12, 2013 [3] Jono, Bankruptcy Law, Graphic Rays, Jakarta, 2008 [4] Dr. Sudirman Sidabukke, SH, CN, M. Hum. Bank Century Case in Civil Construction,

Repository, Ubaya.ac.id. [5] Sutan Remy Syahdeini, Bankruptcy Law, Understanding Faillissement Verordening conjuntion

Act 4 of 1998 [6] Legal Aspects of Bank Century, Global Education Blogger, searchglobalonline.blogspot.com.24

May 20014 [7] Bank Century case Aspects of Corporate Law, October 1, 2009,

sandipieceofmind.blogspot.com [8] Act 40 of 2007 on Limited Liability [9] Act No.10 of 1998 on the amendment of Law no. 9 of 1992. [10] Act No. 37 of 2004 on Bankruptcy and Suspension of Payment.


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Greeting Terms in Jordanian Arabic: New Classifications

Abdullah A. Jaradat Ph.D

E-maill: [email protected]

Wael Zuraiq Ph.D, Dept. of English Language& Literature

Hashemite University

Mohammad Ababneh Ph.D, The Language Center

Hashemite University, Zarqa, Jordan

Abstract This paper presents novel classificatory differences between various greeting terms in Jordanian Arabic (JA). The two classifications include marked/unmarked and pure/context-dependent greetings. The paper also reviews the Islamic teachings in this respect, where we can find rich texts that specify the type of the greeting term, the significance of exchanging greetings, the importance of initiating a greeting and responding to a greeting and who should greet who.

Furthermore, the paper provides a list of pure greetings terms, return greetings as well as the variants of both. Context-dependent greetings are those that are not pure greetings and can be used as greetings in particular condition. These terms include al-afjh ‘on health’ which is used in greeting a person performing some physical task; Gaw l-anmin ‘May Allah strengthen the winners.’ which is used in greeting a large group of people; and hanhum ‘May Allah bless you with your food.’ which is used in greeting people who are dining.

Finally, the paper posited the situation under which greetings are dropped clarifying that some situations are predictable and -in some cases- excusable. These situations can be personal due to unfamiliarity or lack of intimate feelings between the potential greeters or institutionalized by the community as in happy or sad events where the initiator – overwhelmed by emotions- drops the greeter to express what is urgent instead. Keywords: Greeting terms, Jordanian Arabic, marked/unmarked greetings, pure/context-

dependent greetings, dropping a greeting.

1. Introduction Greetings are viewed an integral constituent of the communicative competence required for any of us to be an effective member in a speech community. They are part of the core sociolinguistic knowledge that we should master in order to communicate effectively in our communities. Moreover, they are one of the first verbal expressions acquired by children and taught to foreign language learners (Duranti: 1997). Most often, greetings are thrown at the beginning of a conversation or to begin a conversation. In this sense, they are deemed the exemplary instance of opening sequences (Cutting: 2002). They are sequences since each greeting term has a corresponding response.


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In this paper, I suggest two different classifications for greetings in Jordanian Arabic relying on different criteria. The first classification involves greetings that are distinguished relying on being marked or unmarked; a criterion that is determined by the suitability and the applicability of the term in all contexts with all types of addressees regardless of various social factors including: status, age, level of education, etc. The second classification differentiates between pure greetings i.e. can only be used to perform this function and other greetings that can be used for other functions or what I termed as context-dependent greeting terms.

In what follows, I first review the previous literature on greetings that might be of significance in the field, and then I briefly review the existing Islamic literature on greeting etiquette and greetings in the Quran and Hadeeth (the speech of Prophet Mohammad) and identify some of the factors that might control this process. The rationale for this section is two-fold. First: 95 percent of the population in Jordan are Muslims who - supposedly- abide by the teachings of Islam. Second: there are clear Islamic teachings about greeting terms and greeting etiquettes. In the third section of the paper, the common greeting terms in Jordanian Arabic are introduced. The fourth section introduces the marked and the unmarked greetings, whereas the fifth section introduces pure and tainted or context-dependent greetings in Jordanian Arabic. Finally, the sixth section investigates some greeting terms that are used figuratively, that do not function as greetings in this case.

Unlike other studies, the importance of this study stems from being the first to investigate greetings from a classificatory point of view. It did not focus on the functions and the normal order of greetings and return-greetings. Besides, it is the first to talk about context-dependent greeting terms in Jordanian Arabic as well as greetings that are used figuratively. 2. Previous Studies The topic of greetings is an old-new one that has been investigated frequently and abundantly in different disciplines of linguistics including sociolinguistics, pragmatics, discourse analysis and anthropological linguistics. Accordingly, major international studies besides some significant studies in Jordanian Arabic (JA) need to be reviewed in order to give the topic a panoramic look.

Greetings are conversational routines that are attested universally. Duranti (1997) proposed six defining properties of greetings that can be applied universally. The properties are:

a. Near boundary occurrence b. Establishment of a Shared Perception Field c. Adjacency pair format d. Relative predictability of form and content e. Implicit Establishment of a Spatio-temporal Unit of Interaction f. Identification of the Interlocutor as a Distinct Being worth recognizing

However, he states that cultural differences can be easily detected with regard to the length and the content of the greetings. Ferguson (1981) writes that ‘the nature and the amount of variation are not predictable.’

Verschueren (1981) stated that greetings have significant discourse and social functions, and that their significance stems “from the fact that omitting them or failing to acknowledge them inevitably creates tensions in interpersonal relationships.’ Duranti (1992) acknowledged that greetings are sites where we can study the establishment of social relations.

Greetings were integrally and abundantly studied in discourse analysis due to the fact that they are emblematic instances of adjacency pairs: the basic building blocks in a conversation, besides being the sole instance of opening sequences (Cutting 2002; Keating and Egbert 2009; Sack 1987; Schegloff 1968). In this manner, Keating and Egbert (2009) say that ‘a greeting is an adjacency pair that is collaboratively built by at least two different speakers.’ The two expressions follow each other in a fixed order, and the production of the first by the first speaker instigates the production of the latter by the addressee. Moreover, greetings were largely viewed by linguists as verbal constructions with ‘no


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propositional content’ (Searle 1969) or ‘zero referential value’ (Youssif et al. 1976); a claim that was devalued by Duranti (1997) in his review of Samoan greetings.

Moving to Arabic, Saville-Trioke (1982) claims that greetings in some languages including Arabic ‘are far more elaborate’ i.e. prolonged than other languages. In this respect, Ferguson (1981) in his investigation of greetings in Syrian Arabic, proposed that attenuated greetings should not be treated as short forms of the elaborate forms of greetings.

Gorgis and Quran (2003) in their study of greetings and partings in Iraqi and Jordanian Arabic reiterated the previously mentioned fact that greetings assume initial position in the structure of a conversation serving as initiators. However, when not used in a conversation, they function as ‘self-initiators’ or ‘attention-getters’. Gorgis and Quran went on to differentiate between marked and unmarked greetings; a distinction that was made on the basis of whether the greeting term include extra courtesy expressions or not, in which case the courteous greeting term is the marked whereas the plain greeting term is the unmarked. Nevertheless, I believe that this un/marked criterion is misleading since it relies upon social relationships, which means the dearer the person is to the speaker, the more likely s/he would use courteous greetings. Finally, it is worth mentioning that greetings, unlike other speech acts, though typically verbally conducted, can be achieved non-verbally through gestures such as raising the right hand to the level of the head, nodding, bowing or any other special cultural gesture (Duranti 1992; Keating 2000b).

3. Greetings and Greeting Rulings in Islam Islam has clear teachings in this issue which are distilled from the two major sources of Islamic legislation: The Quran i.e. the words of Allah and the hadith i.e. the speech of Prophet Mohammad. In what follow, I will introduce the verses and the hadiths that encourage people to exchange greetings and emphasize the significance of doing so, followed by those hadiths that pinpoint the greeting etiquettes.

A Quran verse clarifies that a Muslim must return the greeting when he or she receives a courteous greeting with a better greeting or at least with its equal. The verse reads as follows:

‘When a courteous greeting is offered to you, meet it with a greeting still more courteous, or at least of equal courtesy’ Surat An-Nesa, Verse 86 The verse clearly shows that the response must be better or of equal status of the greeting itself.

In the following hadith in Saheeh Muslim (1954), Prophet Mohammad undoubtedly stated the significant role that greeting and return greeting play in spreading love and unity among Muslims:

‘May I tell you something that if you practice it you will love another, spread the salam / greetings among you / exchange greetings with each other.’ The hadith shows that spreading salam is the path to foster love between hearts besides being

an indicator of pure hearts and sincere intentions. There is no wonder then that the word salam also means ‘peace’, and is derived from the root s-l-m generally meaning ‘being safe’. Furthermore, the word as-salam is one of the glorious names of Allah. The prophet emphasized the importance of greetings in another hadith in Saheeh Muslim (1954) and Saheeh Al-Bukhaari (1980) when he answered when asked: ‘what is in Islam is best?’ that the best is:

‘To feed people and to say salam to/exchange greetings with every one whether you know him or not’ In another hadith in Saheeh Muslim (1954), the Prophet stated that exchanging greetings or

salam is one of the six rights a Muslim has upon another Muslim; the same saying applies to responding to the greeting. The hadith reads as follows:

Commonly in islam, there are six rights of a Muslim upon a Muslim: when he meets him he should give him salam, when he invites him to (to a meal), he should accept it; when…etc.


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The prophet has also stated that the person who commences the greeting is closer to Allah and his messenger, and said that any person who starts speaking without firstly giving salam should not be answered. The Prophet has also spelled out the greeting etiquette or who should greet who in the following hadith found in Saheeh Muslim (1954) and Saheeh Al-Bukhaari (1980):

A rider should greet a pedestrian, a pedestrian should greet one who is sitting, and a small party should greet a large party, a younger should greet an elder one. Finally, the Prophet has determined the greeting term that should be used in the hadith:

When any one of you decides to offer salam, he should say As-salamu alaikum. A final word that should be said here is that despite the religious background of the greeting

term mentioned above, it seems that it has lost some aspects of its religiosity for different reasons. First: it is now used by Muslims or Christians at the same footing. Second: the term appears in some varied abbreviated forms including: salam, salam alaikum, assalamu alaikum or simply wa alaikum. Third: the response can vary as well. 4. A List of the Most Common Greeting Terms and Their Responses In this section, I will present a list of the most common greeting terms and their responses as well as the variations witnessed of each in Jordanian Arabic. 4.1. ssalamu Alaikum ‘Peace be upon you (PL. MAS.)’

The term is commonly used by Jordanians of different ages to greet each other regardless of status, distance, ethnicity, affiliations, sex, etc. The term is stable i.e. its form does not change even if the addressee is singular or feminine; a fact which is distilled from the religious status of the expression. Although this expression is the most widely-used one among Jordanians, it is in fact an abridged form of the longer term favored by Islam which is assalamu alaikum wa ra matu llahi wa barakatu meaning ‘peace be upon you and Allah’s Mercy and His Blessings’, and which is still used in religious and prestigious contexts like Friday congregational speech. The response for this greeting is usually derived from the greeting itself, where the greetee wishes the greeter the same. The greeting, the return greeting as well as the variants of are listed below:

1) The greeting ssalamu alaikum, the return greeting as well as the variants of both:

G: a. ssalamu alaikum ‘Peace be upon you.’ b. assalamu alaikum wa ra matu llahi wa barakatu ‘Peace be upon you and Allah’s mercy and His Blessings.’ c. salaam ‘Peace’ d. assalamu alaikum wa ra matu llaha ‘Peace be upon you and Allah’s mercy.’

R: a. wa alaikum ssalamu ‘Peace be upon you as well.’ b. wa alaikum ssalam wa ra matu llahi wa barakatu ‘Peace be upon you and Allah’s mercy and His Blessings as well.’ c. wa ra matu llahi wa barakatu ‘And Allah’s mercy and His Blessings.’ d. wa alaikum ‘And upon you as well.’ e. hala, hala, hala ‘Welcome, welcome, welcome.’ f. ahlein ‘Welcome’


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4.2. Mar aba ‘Hello’

The term is an informal one that does not have any restrictions with regard to time or place of use. However, it has restrictions with regard to status and distance relationships. It cannot be usually used with a person in a higher status or a person whom you do not know or distant from you. The term, the response as well as the variants of both are presented in (2) below:

2) The greeting Mar aba ‘Hello’, the return greeting and the variants of both:

G a. Mar aba ‘hello’ b. Mara b ‘Hellos (PL.)

R a. ahlan wa sahlan ‘Welcome’ b. ahlein ‘Welcome’ c. mar abtein ‘Two hellos’ d. hala, hala ‘Welcome, welcome’ e. mara b ‘hellos’

4.3. SAba l-xeir ‘Good Morning’

This term as its meaning indicates can only be used in the morning. It does not have any connotation whatsoever, and it does not show any reference to sex, age, distance, etc. However, the term may be replaced with other terms that mean the same, but may include references to the sex of the addressee as in allah jsab- u b-lxeir meaning ‘May Allah give him a good morning.’ In some instances, and due to the influence of the media, the word xeir ‘good’ may be dropped and replaced with the words l-watan d-daml meaning ‘beautiful homeland’ especially when the speaker of this expression appears on the media. Find below the greeting, the return greeting as well as the variants of both:

3) The greeting saba l-xeir, the return greeting as well as the variants of both:

G: a. saba l-xeir ‘Good morning’ b. allah jsab- u b-lxeir ‘May Allah give him a good morning’ c. allah jsab-ak b-lxeir ‘May Allah give you a good morning.’ d. saba l-watan d-daml ‘The morning of the beautiful homeland.’

R: a. saba n-nur The morning of light b. saba l-ward morning of rose c. saba anwar morning of lights d. saba s-saadeh morning of happiness


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4.4. Masa l-Xeir ‘Good Evening’

The term can only be used in the period that covers the afternoon, the evening and the night, though it is mainly used in the last two periods. In a very similar manner to saba l-xeir, it does not have any restrictions on usage except for time; it does not have any indications with regard to social dimensions including sex, age, status, distance or the formality of the context. Nevertheless, the term may be modified to include an indication of the sex of the addressee as in allah jmas- b-lxeir meaning ‘May Allah give him a good evening’ or allah jmask b-lxeir meaning ‘May Allah give you a good evening.’ The greeting, the return greeting and the variants of both are given in (4) below:

4) The greeting masa l-xeir, the return greeting and the variants of both:

G: a. masa l-xeir ‘Good morning.’ b. allah jmas- b-lxeir ‘May Allah give him a good evening.’ c. allah jmask b-lxeir ‘May Allah give you a good evening.’

R: a. masa n-nur ‘The evening of light’ b. masa l-xeir ‘Good evening.’ c. masa l-anwar ‘The evening of lights.’ d. masa l-xeirat ‘The evening of goodnesses.’

5. Marked vs. Unmarked Greeting Terms in Jordanian Arabic Gorgis and Quran (2003) subcategorized greeting terms in Iraqi and Jordanian Arabic as marked vs. unmarked depending on whether they contain courteous terms or not viewing those containing courteous terms as marked and those lacking the courteous terms as unmarked. However, I think that this categorization is invalid since the existence or absence of the courteous forms are due to social factors affected the relationship between the greeter and the greetee.

I suggest that greeting terms should be categorized as marked or unmarked depending on whether the greeting term is suitable for all contexts, for all times, in all places, with different participants regardless of any social factors such as status, distance, or formality. Under these conditions, one greeting term is a suitable candidate; namely, ssalamu alaikum. The term has no social, political, or cultural associations whatsoever. The only association the term may have is religious which has become- as mentioned before- diachronic or obsolete. Thus, the term can be argued to have neutral associations. It can be used by any greeter regardless of his or her age, status, level of education, place of accommodation, occupation, or familiarity to other people. Furthermore, it can be used at all times: in the morning, in the afternoon, in the evening, and at night. It also can be used in all places: at home, at school, at the café, etc.

Another factor that might make this greeting distinct from others is its suitability to be used as a greeting and as a parting. A person getting into a gathering can greet them using this greeting, and can depart -after asking permission to leave- using the same expression preceded by the word yalla meaning ‘ok’, or ‘with your agreement’ as in the following example:


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A: ana lazm atla (I have to leave.) B: ma na gadn ‘We are still sitting’ i.e. Why should you? It is still early.A: wallah lazm atla, jalla ssalamu alaikum I have to leave. Ok, Assalaamu Alalikum

A third factor that might support this categorization is the suitability of this term to replace

other greetings; it can be used instead of good morning, good evening and hello collectively. 6. Context-Dependent Greeting Terms in Jordanian Arabic Although some greeting terms are, time-wise, context-bound such as sabah l-xeir ‘good morning’ which is used in the morning and masa l-xeir ‘good evening’ which is used in the afternoon, in the evening or at night, these terms are not targeted by this section since they are pure greeting terms i.e. they are not used for any other function.

This section targets some expressions that are not originally used as greeting terms or used as greetings in certain contexts. Hence, the term context-dependent greeting terms.

They are considered so since they meet the criteria of greeting terms that has been introduced by different disciplines of linguistics. First: they are used towards the beginning of a conversation or alone when the act of greeting takes place between a passer-by and other people. Second: these greetings are made of two parts; each is used by a different person. In this sense, they are, like other greetings, exemplary instances of adjacency pairs. Third: culturally speaking, the person who is supposed to initiate the greeting would be blamed for not doing so, and the person who is supposed to respond is to blame for not doing so. Fourth: the response or the return greeting may sometimes be accompanied by expressions that customarily appear with pure greeting terms such as ja hala meaning ‘oh welcome’ or by an expression of invitation to a meal or a cup of coffee such as tfadal, tfadal al-ada or tfadal rab ai meaning ‘get in’, ‘get in for lunch’ or ‘get in for a cup of tea’ respectively. Fifth: these expressions may be accompanied by gestures customarily used with greetings especially in situations where the two people involved in greeting are distant such as raising the hand to the level or above the level of the head. Finally, these terms are not accompanied by greetings. They cannot co-occur with greetings. One can say in this respect that these expressions are in complementary distribution with pure greetings. However, one is not to blame when using pure greeting terms instead of these terms since pure greeting terms have priority. Above all, these terms are motivated by certain contextual factors that may not be present all the times in the contexts.

In the following paragraphs, the context-dependent greeting terms will be presented and discussed. 6.1. al-afjh ‘on Health’

The term is mainly used by a passer-by who met a familiar person working on a certain task- primarily physical like plowing, building, gardening, etc. The term is originally a pray to Allah to grant the greetee the health to continue or keep on doing what she is doing. As mentioned before, the term occupies the initial position in a conversation, or can appear on its own. In addition, it is an adjacency pair that is made of an initiation that determines the response i.e. the response is predictable.

The term, its response and the variations of each are given in (1) a-f where G is greeting and R is response or return greeting.

5) 4The greeting al-afj , return greeting, and the variants of both


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a. G: al-afjh ‘on health’ b. G: jtik l-afjh ‘May Allah give you health’ c. R: ahlean Allah jafk ‘Welcome, May Allah give you health as well.’d. R: Allah jafk, ja hala ‘May Allah give you health, oh welcome.’e. R: ahlean Allah jafk, tfadal ‘Welcome, May Allah give you health, get in.’

The greeting process may end at this level, or may continue further if the greeter is not a passer-

by or if he wants to visit. The responses contain some terms that are customarily used in pure return greetings such as

ahlean and ja hala both meaning ‘welcome’. Moreover, one piece of evidence that this term is originally not a pure greeting is that it can be used to fulfill other functions in other contexts. A wife may address her husband who came late, hungry, and exhausted with jtk l-afjh ‘may Allah grant you health’ who may respond with Allah jafk- meaning ‘May Allah grant you health as well.’ 6.2. Gaw l-anmin: ‘May Allah Strengthen the Winners’

This greeting is basically used by an individual- restrictively a male- joining a large group of greetees. It is due to the large number of the greetees i.e. the speaker does not want to greet every single person in the group and shake hands with him, or to the existence of a person among the group the speaker does not want to greet that the greeter uses this term.

One piece of evidence that might be given in support of this classification is that the expression is usually followed by an inquiry after health which usually follows pure greetings. Moreover, this term occupies the initial position and might be accompanied by some gestures like raising the hand to the level of the head and/ or shaking hands with some receivers.

The response to this greeting might be one of the following three expressions: 1. gwt ja anm

‘May you become stronger as well, oh winner’ 2. gwt

‘May you become stronger as well. 3. aj Allah bl-anm

‘May Allah bless you, oh winner.’ These expressions might be followed by expressions of welcome that usually appear after pure

greeting terms such as: ahlan wa sahlan and ja hala roughly meaning ‘welcome’. Again this expression like the previous one cannot be joined to other greeting terms i.e. it

cannot be used with ssalamu alaikum or mar aba or saba l-xeir. However, one is not to blame if a pure greeting term is used instead of this contextual greeting.

Before closing this section, I present one totally new argument regarding this term; I can claim that this term is male-specific. It is rarely or completely not used by females. 6.3. Hanhum ‘May Allah Bless them with their Food’

This contextual term is used when greeting an individual or a group of people having a meal or gathering around food. The expression literally means: ‘May Allah bless them with their food’. The greeting itself clearly shows its contextuality i.e. that it is used in a specific context. It cannot be used in any other situation, and it cannot replace pure greeting terms; the opposite is quite true. Any contextual greeting, including this one, can be replaced by pure greetings.


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The response to this greeting is mnhum which literally means ‘one of them’. The response is an indirect invitation from the diners to join them; they tell the newcomers that you are one of them, those who are eating, or dinning, referring to themselves.

The greeting and the response are manipulative means to evade the diners the burden of standing, shaking hands with and welcoming the newcomer as if this greeting conforms with the established convention that states: ‘no greeting or exchanging greetings on food or while having food.’ This convention is mainly about greetings that are accompanied with shaking hands.

Finally, it is worth mentioning here that the term and its response are archaic in use, a fact that explains their inaccessibility to the young generation who may have never heard the term or understood its meaning and context of use.

7. Greetings used Figuratively This section will investigate greetings that are used figuratively i.e. not used to greet others. In fact, we talk here about one term which is saba l-xeir that is used at any time of the day to blame or tell the conversationalist that what he has just said is old information or has been mentioned before as if to tell him or her ‘morning has begun a long time ago.’ Consider the following short conversation:

A: smtu u sar? Have you heard what happened? B: u sar? xabbr. What happened? Tell us. A: M tallag maratu. M has divorced his wife. B: wallah, sba l-xer. tawwak arf? By Allah, Good morning. Have you just heard this?

The conversation clearly shows that the greeting has not been used to function as a greeting

term; rather, it has been used to indicate to the addressee that what she has just mentioned is old information as if to tell her that she has a late morning.

8. Dropping Greeting Terms This section will basically investigate the attitudes towards dropping a greeting term as well as the conditions under which dropping a greeting will be considered excusable. Generally speaking, dropping a greeting is blameworthy since such a behavior represents a violation of Islamic teachings, and cultural traditions that emphasize the influence of such a behavior on the relationship between community members. However, one can say that most of the conditions under which a greeting is dropped are culturally specified and predictable.

Here, we talk about typical conditions under which exchanging a greeting is predictable, which include the following:

1. The greeters are in harmony with each other. 2. They can see each other or want to start talking to each other.

Both parties realize that a greeting is a two-sided interaction that requires the participation of both.

In other words, we are targeting situations where greetings are expected and favored. Situations where greeting exchanges did not take place due to some obstacles or conditions such as not recognizing the other party’s presence in the same perceptual field (Duranti 1992) are not targeted here. In such situations, one party can blame the other for not exchanging a greeting while the other can excuse himself by not being able to see him or her.

Going back to typical situations, we can say that they vary; some are personal while others are constitutionalized by traditions and conventions adopted by the whole community.


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A greeting can be dropped at the personal level due to the lack of intimate relationship between the people involved or due to unfamiliarity. The two parties can avoid greeting each other by simply avoiding looking at each other or- if they have strong antonym relationship- by looking at each other bluntly and not saying something.

At the community level, a greeting can also be dropped when a newcomer is eager to tell his receiver a certain piece of news that might concern him, forgetting to initiate the conversation with a greeting. The receiver on his turn can show eagerness in the new piece of news and tell newcomer to say it on the spot, or can blame him by saying tab gul salam which means ‘why didn’t you throw a greeting?’

Closely related to the previous situation, a greeting is usually dropped in situations that require certain initiating expressions such as congratulations, i.e. situations that require congratulations like success, graduation, or giving birth to a baby. The initiator in these conditions is expected to show happiness for the occasion that can be manifested by forgetting about or dropping the greeting and replacing it with expressions like mubark, mubark nnada , or jtrabba bzku which respectively mean: ‘congratulations’, ‘congratulations on success’ or ‘May he grow up in your welfare’. The speakers under these conditions will not be blamed since this behavior conforms to what the community usually does.

In condolences, the speaker can drop the greeting and replace it with some expressions customarily used on such occasions. Such expressions include aama Allah adkum meaning ‘May Allah duplicate your reward’ and a san Allah azakum meaning ‘May Allah improve/ beautify your condolences.’ One can say that due to the gravity of the occasion and the tense feelings of the two parties, usualities i.e. specifics that apply in normal situations are dropped or exempted. Pure greeting terms are not expected here since the first expressions the newcomer starts with are expected to reflect his sincere feelings in such events.

In another situation, a passer-by or a newcomer may greet a Muslim who is doing ablution with the term zamzam, the name of the sacred water well in Mecca meaning ‘I pray to Allah that you would do ablution from the water of zamzam’ i.e. to go to Mecca for Hajj or umrah, a voluntary visit to Mecca to perform some prayers. The greetee may respond with dam an meaning ‘together’ or ‘I wish you the same’. Pure greetings can be used freely in such a situation.

In normal situations, a passer-by or a newcomer who has not initiated or started his speech with a greeting might be warned by her potential greetee by saying the expression ssalam lallah meaning ‘greetings’ or ‘exchanging greetings is for Allah’ since Allah has declared that we should do this. Conclusion This paper has dealt with and unveiled some cultural-specific issues related to greetings. It has presented two sub-categorizations of greeting terms in JA. The first is between marked and unmarked greetings where the latter include the terms that are unconditionally used i.e. with no restrictions whatsoever, whereas the former include terms that are used in certain conditions. The second categorization is between pure greeting terms and context-dependent greeting terms where the latter involves terms that are not usually used as greetings and used so in certain contexts. Moreover, the paper has explored new horizons in the study of greeting terms through focusing on greetings that can be used figuratively. Finally the paper has presented some conditions under which dropping a greeting is predictable and sometimes excusable at the individual and community levels. Reference [1] Al-Bukhari, Abu Abdullah. (1980). Saheeh Al-Bukhaari [in Arabic]. Dar ja at-tura l-

arab [The House of Reviving Arab Heritage]:Beirut.


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[2] Ali, Abdullah Yusuf. (1938). The Holy Quran: Text, Translation, and Commentary. Shaikh Mohammad Ashraf: Lahore.

[3] At-Termethi, Abu Essa. (2002). Sunan At-Termithi [in Arabic]. Dar bn azm [The House of Ibn Hazm]: Beirut.

[4] Cutting, J. (2002). Pragmatics and Discourse: a Resourse Book for Students. London & New York: Routledge.

[5] Duranti, A. (1997). Universal and culture-specific properties of greetings. Journal of Linguistic Anthropology, 63-97.

[6] Ferguson, C. (1981). The Structure and Use of Politeness Formulas. In F. Coulmas, Conversational Routines: Explorations in Standardized Communication Situations and Prepatterned Speech. (pp. 21-35). The Hague: Mouton.

[7] Gorgis, Dinha and Majid Quran. (2003). Greetings and Partings in Iraqi and Jordanian Arabic: with Special Reference to English. Dirasat , 610-617.

[8] Keating, E. a. (2009). Conversation as a Cultural Activity. In D. Alessandro, The Handbook of Anthrological Linguistics (pp. 180-200). Blackwell.

[9] Levinson, S. (1983). Pragmatics. Cambridge: Cambridge University Press. [10] Muslim, Abu Hussain. (1954). Saheeh Muslim [in Arabic]. Dar ja at-tura l-arab [The

House of Reviving Arab Heritage]:Beirut. [11] Saville-Troike, M. (1982). The Ethnography of Communication: An Introduction. Oxford:

Basil Blackwell. [12] Schegloff, E. (1968). Sequencing in Conversational Openings. American Anthropologist ,

1075-1095. [13] Searle, J. R. (1969). Speech Acts: An Essay in the Philosophy of Language. . Cambridge:

Cambridge University Press. [14] Verschueren, J. (1981). The Semantics of Forgotten Routines. In F. Coulmas, Conversational

Routines: Explorations in Standardized Communication Situations and Prepatterned Speech (pp. 133-153). The Hague: Mouton.

[15] Youssouf, I, Allen D. Grimshaw, and Charles S. Bird. (1976). Greetings in the Desert. American Anthrologist , 797-824.


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Legal Protection Rights Society in Local Regulations Spatial

Plan in West Nusa Tenggara (NTB)

H. Arba, SH Corresponding Author, Lecturer at the Faculty of Law

University of Mataram NTB E-mail: [email protected]

M. Hum

Lecturer at the Faculty of Law, University of Mataram NTB E-mail: [email protected]

Abstract Spatial planning involves the various parties, one of which is public. Then as one of the interested parties, the rights and obligations of society should be organized and well protected. Therefore, this research aims to learn and understand the legal protection of the rights of the people in the Spatial Plan in West Nusa Tenggara (NTB).

This study is a normative legal study, so the approach methods used is statute approach, conceptual approach, comparative approach, and analytical approach.

The results of the study after review and analysis showed that both philosophically and juridical (constitutionally) has laid the solid basis on the protection of the people rights in various aspects of development. However, after researched and studied various legislation and regulation Spatial of Province and District / City of NTB has not been set up and protect the rights of the community well, the people rights are still ignored by the government. Therefore, the government must be willing and encouraged to re-evaluate. Keywords: Rights Protection Society.

1. Introduction Every human being is born with the right of each and every person's rights must be respected and appreciated by other. As human beings, then every human being has a desire to live together or in groups referred to as a society. In the life of society and the nation, the Indonesian nation governed by a basic norm of the most fundamental, namely Pancasila. In Pancasila there are basic values that govern human life of the Indonesian nation. These basic norms rooted in coexistence rules which agreed upon by members of the community itself that known as values, norms, or rules, or so-called law. This is the law that governs, nurturing, and protecting both individual rights and community rights. At the level of national and state life there is state laws, and the most fundamental laws for the Indonesian nation is Constitution of 1945 which is the basis of the constitution that protects the basic rights of all people, all groups, all parties.

Thus, the main basis of the legal protection of a legal subject is Pancasila as the source of all law sources as well as its philosophical basis, and the Constitution 1945 as a constitutional basis. These are the ideological and philosophical basis for the Indonesian people who uphold human values by placing the law as a commander and not the rule. The consequence is that the State shall protect human rights. Philip M Hadjon by using western concepts as the framework and basis on Pancasila,


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formulating the principles of recognition and protection of human dignity based on Pancasila and the Principles of State Law based on Pancasila.1

The rights of individuals and society as stipulated in the Constitution 1945 are as follows: a. The right to have the same status in law and government (Article 27); b. The right to association and give an opinion (Article 28); c. The right to embrace religion (Article 29); d. The right to participate in the defense of the State (Article 30); e. The Right to education and culture (Article 31); f. The right and freedom to develop cultural values (Article 32); g. Right to the economy and national welfare (Article 33 & 34).

The rights listed in the Articles of the Constitution 1945 above, will guarantee rights to individuals and community members to carry out and enjoy it. Guarantee of individual and community rights are further regulated in a variety of legislation.

Based on the above, the problem is as follows: a. How are the conceptions legal protection of the rights of individuals and society? b. How regulation and legal protection of the rights of individuals and communities in the

Spatial Plan in West Nusa Tenggara (NTB)? 2. Methods Methodology (methodology) in the commonly accepted sense is logical and systematic study about the principles that directed scientific research. Scientific research is a series of process steps which carried out in a planned and systematic manner that useful to get problem solving or get answers to specific questions. 2.1. Types of Research

This research is a normative law. As a normative legal research, the purpose of this study was to figure out, asses and understand the principles of law, legal norms and government policies. Normative legal research according to Mukti Fajar and Yulianto Achmad2 "is a legal research that lays the law as a building of norms system. The norm system referred is the principles, norms, rules of legislation, court decisions, treaties and doctrines (teachings) ". 2.2. Method of Approach

The approach methods used is the statute approach, conceptual approach, comparative approach, and analytical approach.3 Statute approach intended to learn the regulation of legislation as a basis for analysis. The conceptual approach is intended to asses the concepts in the science of law; comparative approach to comparing the one regulation of legislation with the other legislation regulation that governing the same problem; while analytical approach used to search for the meaning of the terms and concepts of law contained in the legislation regulation. 2.3. Sources and Types of Legal Materials

Sources of legal materials, namely literature (library research) to assess primary legal materials in the form of legislation regulation, secondary legal materials such as: theoretical concepts and opinions of experts, official documents, research results, and legal materials tertiary such as dictionaries terms.

1 Philipus M Hadjon, Philipus M. Hadjon, Legal protection for the people of Indonesia, Surabaya, Bina Ilmu, 1987, p. 20 2 Mukti Fajar ND. dan Yulianto Achmad, The duality of Legal Research, Normative and Empirical, Yogyakarta, Pustaka Pelajar, Cet.

I, 2010, p. 34. 3 Ibid. Hlm. 185 - 191, lihat juga Johnny Ibrahim, Theory & Research Methods Legal Normative, Malang-Jatim, Bayumedia

Publishing, p. 246 – 269.


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2.4. Technique of Collection of Legal Materials

The collection of legal materials is implemented by reviewing and analyzing the literature materials, including reviewing legislation regulation, and literature books. Furthermore also learn the official documents, the opinions of legal experts, and the results of previous legal research. 2.5. Analysis Techniques of Materials Laws

To assess the law from normative aspect (law in book), then the normative-analytical method is referenced in reviewing and analyzing the problems. Analysis of legal materials by legal interpretations is using the authentic interpretation, grammatical interpretation, historical interpretation, and extensively interpretation.4 From the analysis result then search the legal principles, the relationships between one legal principles with other legal principles, using inductive-deductive reasoning. 3. Results and Discussion 3.1. Basic Conceptions of Legal Protection of the People Rights According to the Constitution

1945

Every human both as individual or society have the basic rights that must be respected and appreciated by others. Fundamental rights of individuals and the peoples of Indonesia has been governed by a basic norm of the most fundamental, namely Pancasila. These basic norms rooted in coexistence rules agreed upon by members of the community itself that known as values, norms, or rules, or so-called law. The rule of law is further stated in the Constitution of 1945, which is the basic constitution that protects basic human rights. The fundamental rights of individuals and communities, among others: the right to live in freedom, the right to legal protection, the right to welfare and education, the right to have the same status in law and government, the right to association and give an opinion, and the human rights. Guarantee of individual rights and the public are further regulated in a variety of legislation. 3.2. Basic Conceptions of Community Rights under UUPR and its Implementing Regulations

Spatial planning is one of the law products from the State/government policy in accordance with its authority to regulate the supply, designation, use and utilization of space and natural resources. Considering the space and its resources contained within it is something that relates directly affects the livelihood of the people, therefore it needs to be regulated and protected by the state/government. As a product of law, the spatial planning really pay attention the rights and obligations of the interested parties or stakeholders, so that no one be aggrieved by one another. One of the stakeholders in relation to spatial planning is the society. Hence then the community interests, rights and obligations should be prioritized without ignoring the rights and obligations to other stakeholders.

Development in various fields of life aims to promote the welfare of the community, therefore the rights and participation of the community in development is very important. This is as form a real and purposeful community empowerment. Community participation in development planning and implementation is very beneficial to the public interest, because the ideas, concepts and aspirations of the people is very useful for the planning and implementation of development, both in urban and in rural areas. JB. Kristiadi said that the public participation in urban development may include, among others:5

a. Compliance communities in meeting their obligations, such as paying taxes and paying fees for the services they receive;

4 S. Nasution, Naturalistic Research Methods, Bandung, Transito, 1982. p. 129 5 JB. Kristiadi, dalam Juniarto Ridwan dan Ahmad Sodiki, Administrative Law Negara, Yogyakarta, UII-Press, 2003 p. 144-145.


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b. Willingness to abide the rules outlined by the city government, such as getting a building permit (IMB) before establish the buildings, dispose of waste in the space provided, and other regulations;

c. Their willingness to build and operate the facilities and infrastructure of the city; d. Their willingness to reserve the land for the construction of urban infrastructure; e. Their willingness to manage and maintain the infrastructure and facilities provided by

the government well. Further it is said in order to spur motivation communities to participate in development, the

local government should create conditions that can cause people's motivation to voluntarily participate in the development of the city, through the attitudes and policies as follows:6

a. Provides information about city development activities that can be implemented through a partnership between the government and society;

b. Foster a sense of responsibility among the residents of the city to assist the government in carrying out these activities for mutual interest;

c. Instill confidence among the public that their contribution will ultimately have a positive impact on the community and its business;

d. Provide guidance and assistance needed by the community to be able to participate; e. Provide set of regulatory necessary to ensure the mutually beneficial cooperation

between the government and society; f. The city government needs to be more open about the policies pursued, activities

undertaken by the city government, and the reasons why they are carried out, especially in the preparation of city spatial planning;

g. The city government can communicate with the public in order to provide wide opportunity for them to develop their kinds of participation;

h. The city government should establish forms of cooperation as well as other regulations necessary in order to guarantee a harmonious cooperation, balance, and harmony between the city government and the society;

i. The city governments need to improve the technical and managerial capabilities of their apparatus, increase honesty and self-discipline through inherent monitoring (waskat) in order to foster public confidence in government.

The philosophy of community participation in development, especially development planning and implementation of spatial planning is initiated with the efforts approach taken using a variety of new terminology such as: bottom up planning, participatory planning, planning of democratic grass root planning, public involvement, collaborative planning, advocacy planning, and so forth that showed the presence similarity in terms of basic philosophy, namely democracy, where members of the public should have the opportunity to participate in the decision-making process to determine their future.7

Involvement of public/community in the formation of legislation regulation, specific concerning the establishment regulated by Law No. 12 Year 2011 on the Establishment of Legislation Regulation in Section 35 determines: in preparation of Prolegda (Regional Legislative Program) province referred to in Article 34 paragraph (1), the preparation of the draft list of provincial regulations are based on:

a. Higher legislation regulation command ; b. Regional development plans; c. Implementation of regional autonomy and assistance, and d. Aspirations of local communities.

While the conception of the community rights and obligations in planning the arrangement of space according to the Law No. 26 Year 1007 on Spatial Planning (UUPR) is:

a. Article 48 (1) stated Spatial planning of rural areas is directed to:

6 Ibid. p 145-146 7 Hasni, Law on Spatial Planning and Land Stewardship, Jakarta, Rajawali Pers, 2008, p. 106-107


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1) Empowerment of rural communities; 2) Defense of local environmental quality and region supported ; 3) Conservation of natural resources; 4) Preservation of the local cultural heritage; 5) Defense of land area of perennial food agriculture for food security, and 6) Maintenance of the balance of rural-urban development.

b. Article 60 specified that the spatial arrangement, every person has the right to: 1) Know the spatial plan; 2) Enjoy the accretion value of space as a result of spatial planning; 3) Obtain adequate reimbursement for losses incurred due to the implementation of

development activities appropriate with the spatial plan; 4) Filed a complaint to the authorities against development that does not comply with

spatial planning in the region; 5) Make demands cancellation of license and termination of development that is not

appropriate with the spatial plan to the authorities, and 6) Filed a claim for compensation to the government and / or permit holder if

construction activities which are not appropriate with the spatial plan result make losses.

c. Article 60, the community also have obligations in the planning, implementation and monitoring of spatial regions. The obligations under the provisions of Article 61, in the space utilization, every person shall:

1) Obey the spatial plan has been established; 2) Utilize the space appropriate with the space utilization permit from authorized

officer; 3) Comply with the provisions set forth in the permission terms of space utilization,

and 4) Provide access to the area which by the provisions of the legislation declared as

public property. d. Public participation in the planning, utilization, and control of spatial specifically

provided for in Article 65, namely: 1) The implementation of spatial planning is held by the government by involving

the community. 2) The role of the community in the spatial arrangement referred to in paragraph (1)

implemented, among others, through: a) Participation in spatial planning; b) Participation in the utilization of space, and c) Participation in the control of space utilization.

3) Further provisions concerning the procedure and the role of the community in the form of spatial arrangement referred in paragraph :

1. Shall be regulated by government regulations. 2. In addition to the rights, obligations and community participation in the

spatial planning, also arranged about the right of people to get legal protection if aggrieved in a spatial arrangement as provided for in Article 66 as follows:

3. The public is aggrieved by the implementation of spatial planning can submit a lawsuit through the courts.

4. In the case of the community submit a lawsuit referred to paragraph (1), the defendant can prove that there are irregularities in the implementation of spatial planning.


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Furthermore, in the Government Regulation No. 15 Year 2010 on Implementation of Spatial Planning LN 2010 No. 21, TLN No. 5103 set out more about the rights, and community participation in the spatial planning, which is as follows:

1. Article 25 (1) Procedure of National Spatial Planning include: a. Process of preparing the National Spatial Plan; b. Involvement of community role at the national level in the preparation of the

National Spatial Plan, and c. Discussion of the National Spatial Plan draft by stakeholders at the national level.

2. Article 27 (1) Procedure of provincial spatial plans preparation include: a. Process of preparing the provincial spatial plan; b. Involvement of community role at the provincial level in the preparation of the

provincial spatial plans, and c. Discussion of the spatial plan draft of provincial area by stakeholders at the

provincial level. 3. Article 32 (1) Procedures of district spatial planning include:

a. Process of district spatial planning ; b. Involvement of community role at the district level in districts spatial planning , and c. Discussion of the spatial plan draft of district area by stakeholders at the district

level. While the concept of public participation in the spatial planning preparation of strategic regions

according to PP. 15 of 2010 as follows: 1. Article 53 (1) Procedure of spatial planning referred to Article 20 for the spatial planning of

national strategic areas include: a. Spatial planning process of national strategic areas; b. Involvement of community role at the national level in the spatial planning of

national strategic area and c. Discussion of the spatial plan draft of national strategic areas by stakeholders at the

national level. 2. Article 55 (1) spatial planning procedure referred to Article 20 for the spatial planning of

provincial strategic region include: a. Spatial planning process of provincial strategic areas; b. Involvement of community role at the provincial level in the spatial planning of

provincial strategic region and c. Discussion of the spatial plan draft of provincial strategic region by the stakeholders

at the provincial level. 3. Article 57 (1) spatial planning procedure referred to Article 20 for the spatial planning of

districts/cities strategic area include: a. Spatial planning process of districts/cities strategic area; b. Involvement of community role at the district/city level in the spatial planning of

district/city strategic area; and c. Discussion of the spatial plan draft of district/city strategic region by stakeholders at

district / city level. The setting of rights and participation of the community, both in the national spatial planning

and provincial spatial planning, district or cities as said above intended in efforts to provide a legal basis, as well as the law protection to the public in relation with the planning of the new spatial.

Granting authority to the community to participate in the preparation, use, and control of the spatial plan is intended to provide an opportunity for the public to participate in determining policies relating to the provision, designation, utilization and use of space and natural resources. This is in accordance with the mandate of Law Number 12 Year 2011 on the Establishment of legislation


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regulation that every establishment must involve the community. This provision is contained in Article 96 paragraph (1, 2, and 3) that determines as follows:

1) The public has right to provide the input in oral and / or written in the Formation of legislation.

a. Input in oral and / or written as referred to in paragraph (1) can be done through: public hearings, working visits, socialization, and / or

b. Seminars, workshops, and / or discussion. 2) Communities as referred to in paragraph (1) are an individual or a group of people who have

an interest in the substance of the draft legislation. 3.3. Legal Protection of Rights Society in Local Regulations Spatial Plan in West Nusa Tenggara

(NTB) No. 3 of 2010

The conception of the word in relation to the protection of legal protection is the word setting any particular case in order to get a safe place, or setting something by law that protected the legal rights and obligations. Satjipto Rahardjo, says "the law is to provide shelter protection of human rights are harmed others and the protection given to the public in order to enjoy all the rights given by law.”8 Adnan Buyung says: "protection of the law is to protect the rights and human dignity of rape which is essentially an attack on the rights of others has been violated legal norms and rules of the Act.”9

Relating to the protection of the law by the government or authorities, Philipus M. Hadjon differentiates into two kinds, namely as follows:

1. Preventive legal protection is the protection of the law under which the people are given the opportunity to file objections (inspraak) or her opinion before a government decision received definitive shape. Thus preventive protection law aims to prevent disputes.

2. Protection of repressive laws, laws which safeguard the judicial administration of the country. Protection of repressive laws aimed at resolving the dispute.”10

UUPR have laid the foundation of the legal conception of the role of the community, the rights and obligations of the community in the planning, implementation, and monitoring of spatial planning. Thus, based on the principles of the existing law, the conception UUPR participation, rights and obligations of the community must be accommodated by local a regulation that specifically regulates spatial planning.

After reading, studying and understanding the regulation setting cargo area RTRW Provinsi NTB, it can be described on the setting of the rights and obligations, and community participation as follows. In the preamble NTB Spatial Regulation No. 3 of 2010 mentions that the letter b adjustment spatial planning implemented to create order space utilization in the implementation of development in the province of West Nusa Tenggara optimally, harmonious, balanced and sustainable. This shows that the formation of the Spatial Local regulations provide the basis and direction for the preparation of planning, and setting the district and city hall, so that the implementation of development in each area be a regular, optimal, harmonious, balanced and sustainable.

Harmonious, balanced defined in this spatial planning is Harmonization, harmony, balance between the various concerns, the concerns the government on the one hand the public interest, and on the other is the private and public concerns. Therefore then, in Article 1 paragraph 38 and 39, Article 11 paragraph 4 letter g & h, and Article 72 of Regulation NTB formulate regional spatial plan of the community and its participation. Article 1 number 39 determines the role of the community is the active participation of the community in the process of spatial planning, space utilization, and control of the space utilization. While Article 72 paragraph (1) Spatial regulation NTB said: Role of society in

8 Satjipto Raharjo, Satjipto Rahardjo, Legal Studies, Bandung, PT. Citra Aditya Bakti 2000, p. 41-47. 9 Adnan Buyung Nasution, Law and Justice, Magazine, No. 1 In 1996, p. 5-10. 10 Philipus M. Hadjon, Legal protection for the people of Indonesia, Surabaya, Bina Ilmu, 1987, p. 39.


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the spatial planning is done in stages: the process of spatial planning, space utilization, and control of the space utilization.

Government's obligation to protect the rights and obligations in accordance with the duty of society is and responsibility of the State as an organization authorized by the authority to regulate and organize the public welfare of the community. Bagir Manan said: "the state or the government not merely as security or public order, but the main responsibility bearers of social justice, general welfare and prosperity of the people as much as possible.

Relating to the role of the State to the public welfare, the determination of the allocation and utilization of space NTB this is based on the role and function of the area the role and function of the region of West Nusa Tenggara is a confirmation of the position of NTB in the regional and national context. Determination of the role and function based on the existing potential, effect the external environment that can be used as opportunities in developing regions. The role and function of the region of West Nusa Tenggara as the Center for Agribusiness and Tourism, which is realized by:11

1. Revitalization of agricultural development, livestock and plantations; 2. Accelerating the development of coastal areas, marine and small islands; 3. Accelerated development of the area of tourism and culture; 4. Accelerated development of small and medium industries including cottage industries

and crafts; 5. Accelerating the development of regional infrastructure (transport, energy,

telecommunications and water resources); 6. Restoration and conservation of protected areas.

Revitalization and accelerated development of the region and the potential utilization of infrastructure, as well as the recovery of protected area conservation intended in order to achieve the objectives of national development and regional development in order to achieve the welfare of the community.

Implementation of planning and allotment of the new region of space utilization can work well as expected to be carried out of control and supervision. Settings related to community involvement in the control and supervision of the utilization of the space can be assessed from the provisions of Article 39 paragraph (2) and Article 40 paragraph (3) of Regulation Spatial NTB area. Article 39 paragraph (2) determines that the Land Use Control conducted by the Governor together with the Regent / Mayor by the aspect of community participation. In addition to supervision by the Governor was also carried out by a body and engage the public as specified in Article 40 paragraph (3) BKPRD (Planning Coordination Board regional space) in monitoring space utilization by involving the community.

Community involvement in planning, controlling and monitoring the use of space is given that the region of space that is already occupied by people, so that in the determination of the provision, designation, use of space utilization and the region to the approval of members of the public by regard usefulness, effectiveness, and efficiency of spatial use. Besides that the need for the involvement and participation of community members in planning provision, designation, utilization and use of space in order to fulfill the principle of democracy, the principle of openness and responsibility to the public. Thus, the actual preparation of the final plan must be preceded by a feasibility study and the support of community members.Because if it does not involve members of the public, the final plan will not be implemented properly.

Local regulation NTB area No. 3 of 2010 does not regulate the rights and obligations of the community. So therefore, that the regional spatial planning regulations do not protect the rights and obligations of the community as set out clearly in the UUPR. While in fact the Provincial Spatial local regulations provide the basis and direction of the local government and the City to plan provision, designation, utilization, and use of space-based efforts to protect the rights and obligations of the community within 20 (two) next twenty years.

11 Spatial regulation NTB Academic Paper.


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3.4. Legal Protection of Rights Society in Local Regulations Spatial Plan in West Nusa Tenggara

(NTB)

To determine whether the regulation Spatial a district or city reflects an openness principle, and siding with the rights and public obligations, then the following authors will examine provisions contained in the local regulations RTRW Mataram City, local regulations of RTRW West Lombok regency, and Local regulations RTRW Bima regency. 3.4.1. Legal Protection of Rights Society in Local Regulations Spatial Plan in RTRW Mataram City No.12 of 2011 After reading, observe and assess the Spatial local regulation, it can be described its presumed preference of the rights of the people. Regarding alignments Spatial Mataram City to the rights of the community can be analyzed from the following terms. Article 4 Local regulations that specify the spatial plan:

"The purpose of spatial planning is to realize the City as the City Education City, local regulation of trade and Services, Industry, and Tourism-Based Local Wisdom Supported by the Urban Infrastructure and Environmental Balance." In the explanation of Article 4 is stated that the purpose of Mataram City to realize the City

Government, Education, Trade local and Services, Industry, and Tourism is based on the function of the city of Mataram in the national constellation as National Activity Center with the role as:

1. Central government as well NTB Mataram city government center; 2. Knot collection of regional distribution of goods and services, as well as residents in NTB; 3. Central processing of agricultural products and marine; 4. Center of public service activities, such as education, health, and culture; 5. Attractiveness of cities and regulation in particular behind the cities districts in NTB

province in general; 6. One tourist destination in NTB. The purpose of this spatial arrangement will ultimately accommodate the City's vision Mataram

"Mataram City That Brought Forward, religious and cultured". To realize these goals, the government will take Mataram City policies as specified in Article 5, namely: policy and strategy development of the spatial structure of the city, and policy and strategy development of spatial pattern of the city.

The wisdom of developing City service center as intended in the Article 7 above is intended to provide the basis and direction for the implementation of regional development Mataram City forward in accordance with the interests of a pluralistic society (heterogeneous), with a variety of city issues are quite complex.

While the arrangements regarding the protection of the rights, obligations and community participation either in the planning, implementation and control and supervision of Mataram city spatial planning can be studied from several regulation Spatial Regulation city of Mataram is the following.

Setting the protection of the rights of regulation communities in the Spatial local of Mataram City under the provisions of Article 96 are: In the Spatial Planning for everyone or entity entitled to:

a. Knowing the spatial plan; b. Enjoying the value space as a result of spatial planning; c. Obtain adequate reimbursement for losses incurred due to the implementation of

development activities in accordance with the spatial plan; d. Filed a complaint with authorities against development that does not comply with spatial

planning in the region; e. Make demands cancellation of license and termination of development that is not in

accordance with the layout plan to the authorities, and


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f. Filed a claim for damages to the government and / or permit holder if construction activities are not in accordance with the spatial plan result in losses.

The existence of these peoples' rights requires that government in the implementation of the utilization of space to make it happen With the regulation of community rights in local regulation Spatial showed that peoples' rights protected by law, so if the government in carrying out the development in accordance with the layout, but violate the rights of the public, then the public has the right to object to a claim for damages even if ignored or violated because the result in losses.

In addition to the rights, the people also burdened with an obligation under Article 97 as follows: In the space utilization, every person and / or entity must:

a. Obey to the spatial plan has been established; b. Utilizing space in accordance with the zoning permit authorized officer; c. Comply with the requirements specified in the permit space utilization, and d. Providing access to the region by the provisions of the legislation declared as public

property. In general, the existence of the liability arrangements in order for people not only notice or

demand rights, but also the people obliged to obey the rules of law relating spatial planning and execution, and control. Community shall comply with the rules that have been defined spatial arrangement; the community shall utilize the space in accordance with the permit space utilization, shall comply with the provisions and licensing requirements, and shall provide access to the government if their rights are needed in the public interest. 3.4.2. Legal Protection of Rights Society in local Regulations Spatial Plan in RTRW West Lombok Regency No.12 of 2011 The arrangement of the protection of the rights and public participation in spatial planning regulations Spatial Local West Lombok can be assessed from the provisions of Article 64, which specifies the following: In the activities spatial planning, the public is entitled:

a. Participate in the planning and preparation of spatial, space utilization, and control of the utilization of space;

b. Knowing openly spatial plans Lombok western district; c. enjoy the benefits of space and / or the value of space as a result of spatial planning, and d. Getting a decent replacement over her condition as a result of the implementation of

development activities in accordance with the spatial plan. e. Make demands cancellation of license and termination of development that does not comply

with spatial planning. In addition to the rights, the community also burdened with the obligations in the provision of

planning, designation, utilization and use of space and natural resources as stipulated in Article 65 that determines each person is obliged to:

a. Obey the layout plan has been established; b. Utilize the space in accordance with the zoning permit authorized officer; c. Comply with the conditions set in the permit space utilization, and d. Provide the broadest possible access to the space expressed by legislation as public

property. Regulating the community is intended that responsibility in the planning, implementation and

utilization of space is not only the responsibility of government alone but be a shared responsibility of all parties. Obliged to obey the rules of society that has been created, utilizing the space in accordance with the spatial plan, take care of building permits, and provide the broadest possible access to the government in the implementation of regional development in the public interest.

Noting the provisions of several articles in the Local Regulations Spatial West Lombok above, shows that the Local Regulations Spatial West Lombok regulate and protect the rights and obligations


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of community.This is in contrast with NTB Spatial Local regulations that do not regulate and protect the rights and obligations of community. 3.4.3. Legal Protection of Rights Society in Local Regulations Spatial Plan in RTRW Bima Regency No.9 of 2011 To find out about setting orientation Local Regulations RTRW Bima district on the rights and participation of the community, the authors analyze some of the provisions contained in the regulations Spatial Local No. 9 of 2011.

Settings on the rights of community in spatial planning set out in Article 60. This article determines that the area developers and the public has the right to obtain incentives from the government if the planning and utilization of space was detrimental to society. Instead the government will charge a disincentive to people who violate the provisions of RTRW.

Provision of incentives and disincentives to developers by the government and community areas in accordance with Article 61 is given in the form:

a. Compensation; b. The stock; c. Development and procurement of infrastructure, and d. Award.

Incentives to the community, given in the form: a. Relief distribution; b. Compensation; c. Benefits; d. Rental space; e. The stock; f. Provision of infrastructure; g. Ease licensing procedures, and h. Award.

Furthermore, Article 64 determines that the activities spatial structuring of the public is entitled as follows:

a. Participate in the process of planning and spatial planning, space utilization, and control of the utilization of space;

b. Openly knowing spatial planning Bima; c. Enjoy the benefits of space and / or the value of space as a result of spatial planning, and d. Obtaining adequate reimbursement over her condition as a result of the implementation of

development activities in accordance with the spatial plan. Community participation in the planning and spatial planning, utilization, and control of the

utilization of space is intended to give community a chance to participate, as well as participate in determining public policy by the government. Communities are given the right to determine the designation and use of space and natural resources in their area.Giving community a chance to do this by the government by way of socialization and public consultation with community about the preparation of spatial plans for the next 20 years. This activity is carried out in addition to protecting the rights of community, as well as to implement the principles of openness or transparency in spatial planning. 5. Conclusion Based on the above description, it can be concluded as follows:

1. Basic conception of legal protection is the setting of specific things in order to obtain a safe place, or setting of things by law so that the rights and obligations protected by law. The legal


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protection is that give the shelter for human rights and legal protection to the public in order to enjoy all the rights given by law.

2. Legal protection of the individuals and society rights is philosophically reflected in Pancasila and is set constitutionally in the Constitution 1945 and the various laws and regulations, including UUPR. However, the legal protection of the individuals and communities rights in a variety of local regulation of Spatial in NTB region is not set properly.

References [1] Fajar ND, Mukti dan Yulianto Achmad, The Dualism of Law Reseach, Normative and

Empirical, Yogyakarta, Pustaka Pelajar Publishing, Printed I, 2010. [2] Hadjon, M Philipus. The Law Protection for Indonesian Society, Surabaya, Bina Ilmu

Publishing, 1987. [3] Hasni, The Law of Spatial Plan and Land Stewardship, Jakarta, Rajawali Press, 2008. [4] Ibrahim, Johnny, Theory & Methods of normative law research, Malang-East Java, Bayumedia

Publishing, 2006 [5] Law No. 26 of 2007 on Spatial Planning [6] Law No. 12 of 2011 on Establishment Legislation [7] Local Regulations RT/RW West of Nusa Tenggara Province No. 3 of 2010. [8] Local Regulations RT/RW Mataram City No. 12 of 2011 [9] Local Regulations RT/RW West Lombok District No. 11 of 2011 [10] Local Regulations RT/RW Bima District No. 9 of 2011. [11] Nasution, S., Naturalistic Methods Research, Bandung, Transito Publishing, 1982. [12] Nasution, Adnan Buyung, Law and the Justice, Magazine, No. 1 Year 1996. [13] Ridwan, Juniarto dan Ahmad Sodiki, State Administration Law, Yogyakarta, Indonesian

Islamic university - Press, 2003. [14] Raharjo, Satjipto, Legal Sciences, Bandung, PT. Citra Aditya Bakti 2000. [15] State Regulation No. 15 of 2010 on Law Implementation No. 26 of 2007 of Spatial Planning [16] The Indonesian Act of 1945.

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EUROPEAN JOURNAL OF SOCIAL SCIENCES ISSN: 1450-2267 · EUROPEAN JOURNAL OF SOCIAL SCIENCES ISSN: 1450-2267 Volume: 43 Issue: 2 Editorial Advisory Board ... European Journal of Social