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Edition : May 2010

From the Editor 

Foreign debt is still being an obstacleon Indonesian development.Eventhough the government alwaysstates that Indonesia foreign debt issafe with ratio 30% per GDP, butpayment burden that should becovered by Indonesian people is stillhigh.

Furthermore, there are problemsabout debt management that havenot reflected effectiveness principles,

especially on development. Manydebts are used by many actors togain their own interest. SNO May edition is trying todescribe debt problem faced byIndonesia, with bilateral debt fromGermany and Norway as example.Don Marut’s article (ExecutiveDirector of INFID) becomes headlinenews in this edition. The others newsare Indonesia’s challenges toachieve MDGs targets.

Have a nice reading!

HEADLINE NEWS

Foreign debt ‘mafia’?

Written by Don Marut

The Jakarta Post, 05/09/2010 - President Susilo Bambang Yudhoyassigned the judicial mafia taskforce to pay attention to certain arsusceptible to corruption such as the police, the judiciary, the AttorGeneral’s Office, illegal logging, tax evasion and land ownersObservers said that there should be special attention paid to foredebt corruption. Is there really foreign debt corruption?

A study by the National Development Planning Agency (Bappenas)“the Strategy to Promote the Performance of Foreign Aid” (2004) fo

indications of project-seeking activities both bydonor agencies and government agencies implementing loan-funprojects. The study revealed that although there were some succesprojects, the absorption level was still low and many of the projectsnot achieve the maximum benefits as planned.

There were two main causes why the loan-funded projects could achieve the maximum benefits. First, the ownership of the implemenagency was low, or they had no sense of responsibility for the succof the project. Second, there were mutual interests between the stathe implementing government agencies and the staff working in donor agencies. The staff in the government agencies needed forefunds for projects in their ministries in order to get more bud

allocated as matching funds from the annual state budget. The bigthe budget allocation meant more income for the staff in the ministrOn the other hand, the staff in the creditor agencies needed more lofor Indonesia. The more loans there were, the more the overhead cofor the creditor agencies would be, which meant job security for the sin the creditor agencies. The additional or higher income for government staff and the job security for the staff in the credagencies to some extent become the major purpose of the contractnew loans, rather than for promoting economic growth and povreduction in Indonesia.

Foreign loans also involved brokers that were suspected of beinvolved in illegal activities, and companies that did not perf

according to the contracts. The following cases are two of many cathat are suspected as involving the “mafia” in the contract andimplementation. First, the German warship debt. In 1992, Indonepurchased 39 ex-East Germany warships from Germany. The warswere old and designed for cold water and short-range operations.purchase and repair (in fact, totally overhaul) these old and almwrecked ships, Indonesia signed several loan contracts with GermaThe reparation and overhaul of most parts of the ships were donGermany and in Indonesia. During the contract process, Indonesia Germany used third parties. The broker from Germany was later foto be involved in various illegal activities related to public funds frand the illegal weapons trade. Various researches and public me

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investigations, both in Germany and in Indonesia, proved that thships were not needed by the Indonesian Navy, as a modern Navy. victims in the case were the three national news weeklies in Indone(Tempo, Editor and Detik) that exposed the unusual transactions, whwere banned in 1994. Until now, Indonesia is still paying the debGermany, while only few of the ships are still used by Indonesian Nathough with low operational capacity. The Indonesian people have

to relinquish opportunities to enjoy a better life since the governmhas had to repay the debts incurred by irresponsible actors from bcountries.

Second, the Norwegian wave power plant on Baron Beach. In 1994,Indonesia and Norwegian governments signed a loan contractdeveloping a wave power plant on Baron Beach, Yogyakarta. implementer of the project was a Norwegian company, called IndoThe government of Indonesia borrowed money from Norweggovernment to pay the Norwegian company to implement the projThe implementing agency from Indonesian side was the Agency forAssessment and Application of Technology (BPPT). The BPPT paidtotal amount to Indonor but, in fact, there was no project at

implemented in the field. Up to now there has been no indication of activity on the development of a wave power plant on Baron Beaalthough the project has been counted as completed. Today, Indonesian government is paying the debt, with interest, to Norwaya project that never existed.

There are many other cases that indicate fraud and the involvemena “mafia” in the area of foreign debt, both from the Indonesian side the creditor agencies side. As a result, the poor of Indonesia havsacrifice opportunities to climb out of poverty, misery and destitutsince the government budgets that are expected to support their effto be free from poverty are used to repay the foreign debts that haverelation at all with the national development agenda. These cases sh

that there are foreign loans that are made not to support developmprograms, but to fulfill the business interests of the “mafias”, both fcreditors’ side and the Indonesian government side. The actors fromcreditors’ side do not care whether the debts violate the rights of people in the debtor countries; they care only about the job securitthe agency’s staff and the profits for the “mafias”. If the governmentsnot cancel these debts, it will mean that the governments too protecting the “mafias”.

The writer, the executive director of the International NGO ForumIndonesian Development (INFID), is doing research and advocacyforeign debt and economic justice.

Study on Is Indonesian’s Debt to Norway Illegitimate?

INDONESIA UP DATE  MDGs ACHIEVEMENT

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Maternal health targets hard to accomplish

The Jakarta Post, 04/14/2010 -  To achieve improved maternal health, in pursuit of the MillenniumDevelopment Goals (MDGs) involves overcoming several hurdles, with the maternal mortality rate still at2.28 per 1,000 live births. The National Development Planning Agency aims at 1.02 per 1,000 by 2015. NinaSardjunani, National Development Planning Agency deputy minister for human resources and cultural

affairs, said that this fifth objective as part of the MDG cluster of social objectives could not be achieved by2015. “The target to reduce maternal mortality rates by three-quarters between 1990 and 2015 is off track,”she said on Monday during a public discussion on MDGs in Jakarta. The high maternal mortality rate inIndonesia is caused by several factors, including the fact that delivery is not always handled by professionalhealth workers and gender inequality. Other factors cited as causing the high maternal mortality are lack of transportation, lack of easy access to proper facilities, giving birth too often or at too young an age, and thepatriarchal attitudes entrenched in the culture.

Full Text  (The original text is in Indonesian Language)

Thousands people in East Sumba are threatened by starvation

Tempo Interaktif, 03/19/2010 - ”Thousands people in East Sumba Regency, East Nusa Tenggara, arethreatened by starvation. The cause of starvation is harvest failure that happened in 121 villages,” said EastSumba Regent, Gideon Mblijora, in Kupang, Friday (19/3). 2010 identification told us that 121 villages willexperience food scarcity. This disaster happened because of low rainfall. “The last rainy day was on the endof January,” said Gideon.

Full Text (The original text is in Indonesian language)

Corruption Crushes Indonesia's NTT - Out of 105 corruption cases, only 18 of them werebrought to court.

Viva News, 05/10/2010 - The Indonesian Corruption Watch (ICW) urged the Anti-graft Commission (KPK)and the Law Mafia Eradication Task Force to probe into an alleged corruption case in East Nusa Tenggara(NTT). “[Corruption] is the one that has destroyed NTT,” ICW Coordinator Danang Widoyoko said in Jakartaon Sunday, May 9. The International Director for NGO Forum on Indonesian Development Don K Marut saidout of 105 corruption cases, only 18 of them were brought to court. “KPK and the Law Mafia Eradication TaskForce haven’t stepped into NTT. Hopefully it would be able to get to officials in Jakarta,” he said. Meanwhile,Widoyoko assumed it is the corruption allegation that puts NTT in the 31st position in the list of 33 provinceswith the highest level of prosperity. Marut said there were three parties responsible for the downfall, whichare the bureaucracy, the authorities and the contractors. The bureaucracy and the authorities were said to behaving worked together with the contractors for personal gain. “Regional projects were later hamperedbecause all they could think about is themselves,” he said. According to him, one of the indications is the highinfant mortality rate in the province. “If Indonesia wants to lower the rate, they should start from NTT”. Themortality rate in NTT has reached 31 for every a thousand deliveries. The number is higher than the nationalaverage rate of 27 for every a thousand births. The data obtained by the Indonesian Budget Center (IBC)shows the Provincial Budget of NTT was not used for goods and public services-related activities. “Fifty-ninepercent of the budget was spent on things that are irrelevant to goods and public services program,” IBCDirector Roy Salam said.

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DEMOCRACY AND HUMAN RIGHTS

23 NGOs strive for dispersing Satpol PP

Primair Online, 17/04/2010. 23 NGOs that gather together as Komite Pembubaran Satpol PP  strive for dispersing Satpol PP because of violence during condemning poor-people. Riot between Satpol PP andKoja (Tanjung Priok) people several days ago become the main case that used for reference. “During their action, Satpol PP is prefer to serve investors that build commercial infrastructure, so that they have to

condemn people and public infrastructure,” said Agi Fariaksa, Komite Pembubaran Satpol PP spokesmanfrom LBH in press conference in Kontras Office, Jakarta, Saturday (17/04). Komite Pembubaran Satpol PP  consists of ANBTI, ARMP, Arus Pelangi, Bingkai Merah, Hammurabi, IKOHI Jabodetabek,Imparsial, INFID, JCSC, JRMK, Kasum, KM Raya, Kontras, KPI, KSMT, LBH Apik, LBH Jakarta, PRPJakarta, Sebaja, Sebumi, Senja, SRMI, and UPCI.

Full text : (The original text is in Indonesian language)

NGO Urges US Government Not To Lift Kopassus Embargo

The Jakarta Globe, 13/03/2010. Human Rights Watch has called on the US government to rethink any

plans to lift a 12-year ban on training the Indonesian Army’s Special Forces, stressing that training shouldonly be conducted if Indonesia takes sufficient steps toward accountability and reform to deter futureabuses. The entire Kopassus unit is banned from receiving US military education or training, followingallegations of their involvement in a number of atrocities in restive provinces. The ban will only be lifted if the government takes adequate legal steps to deal with the officers allegedly involved in human rightsabuses. However, Leahy was quoted by the Washington Post as saying that: “we know there are somewho favor resuming aid to Kopassus, but US law requires the government of Indonesia to take effectivemeasures to bring Kopassus members to justice.”

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INFID ACTIVITIES

Discussion : “Indonesia – US Relationship During Obama Administration”

INFID, with United States of America Embassy Jakarta,held discussion in INFID office on 14 April 2010.Participants of this discussion are NGOs from differentbackground and media. Topic of the discussion is“Indonesia – US Relationship during ObamaAdministration”. Mr. Sheldon W. Simon, from ArizonaState University, and Mr. Michael Anderson, from theembassy office, are speakers of this discussion.

Speakers discussed about Indonesia – USArelationship from Indonesia independence until present(2010). This long period is divided into three mainperiods: Indonesia independence and RenvilleDeclaration, during Soeharto administration, and after Soeharto administration (reformation era).

There are many statements, questions, and also

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recommendations from participants during discussion.Those are covered discussion about projection of thefuture Indonesia – USA relationship, Indonesia – USArelationship in military, how to fight against terrorismand its threats to democracy, migrant worker, Obama’splan to visit Indonesia, and US’ economy interest inIndonesia.

Workshop : Open Forum on CSO Development Effectiveness, Yogyakarta 3 – 5 Mei 2010

As a part of global consultation, Indonesia held consultation in Yogyakarta in 3-5 May 2010 by INFID,

INDIES, AGRA, and YAKKUM. Consultation was attended by many organizations from various sectors, suchas transparency, gender, health, and also populist organization like farmers and doctor. The main objective of this event is to formulate development effectiveness principles based on CSO’s perspective. In 3 and 4 May2010, participants have identified principles and values that become base for CSO activities. The agenda of the third day is multistakeholder dialog between CSOs, government representatives, and some donor agencies. The main goal of dialog is to make an open communication space about developmenteffectiveness, especially in Indonesia.

INFID stands for the International NGO Forum on Indonesian Development and was established in June 1985.

INFID is an open and pluralistic network of NGOs from Indonesian and various member countries of the Consultative Group forIndonesian (CGI) as well as of International organization with an interest in and commitment to Indonesia

More information please visit: www.infid.org