[Marinir] Indonesia Digest ; No:19.05 ; 31- 05 - '05

[Yap Hong Gie]

INDONESIA DIGEST
 Indonesia's complex Issues in a Nutshell
By : Ms. Wuryastuti Sunario
Published by: TBSC-Strategic Communication
No.: 19.05 - Dated: 31  May 2005
In this issue:

MAIN FEATURE:

PRESIDENT BOOSTS INDONESIA'S IMAGE IN USA, JAPAN and VIETNAM

NEWS AND BACKGROUND:

1.      Tourism  and Aviation:

Indonesia's Tourism lacks convincing Communication Program
More Cruise Ships call on the Moluccas
Indonesian Airlines Restructure Routes and Cut Services
Lion Air signs Purchase Agreement for 60 Boeing 737Aircraft
Indonesia-Singapore agree on Fifth Freedom Rights

2.      Politics and Security:
Terrorist bombs explode in Poso, Central Sulawesi, killing 22
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MAIN FEATURE:

PRESIDENT BOOSTS INDONESIA'S IMAGE IN USA, JAPAN AND VIETNAM

One thing all agree: President Yudhoyono has formidable stamina. And aides, 
Ministers and journalists following the President's overseas visits are 
required to show even more of the same.  In an exhausting 2 days' visit to 
the United States, the president was given 18 official appointments to which 
another 8 were added, to which again the President casually added three more 
impromptu engagements, one with Patsy Spears, widow of slain teacher Rick 
Spears, shot in Papua in 2002, second was a visit to Seattle to meet 
Microsoft' Bill Gates, and third an unscheduled incognito stop at a Borders 
bookshop, which had security guards in a flap, reports Kompas daily.

Having left Jakarta on 24 May, the President's two day visit to the United 
States included a Meeting with President Bush in the Oval Office in 
Washington, a meeting with Vice-President Dick Cheney, meetings with the 
House of Representative, Senators, a number of Cabinet Ministers, the 
Attorney General, The US Chamber of Commerce and Industry, the US-Indonesia 
Community, United States-ASEAN Council, and CIA Director. Additionally, the 
President had one-to-one meetings with CEO's of large American Multinational 
corporations investing in Indonesia, among whom CEO Catterpilar, James Owen; 
CEO AES, Paul Hanravan; Vice President Altria Corporation, Donald Nelson; 
Vice President Merillynch, Jerome P. Kerney, CEO Paiton Energy, Ronald P. 
Landry, and CEO's of Exxon Mobil and Freeport Mining, as well as a meeting 
with Former State Secretary, Henry Kissinger.


Departing the USA, on 28 May the President and entourage arrived in Hanoi 
for a 2-day visit in Vietnam, and from 31 May to 3 June, President Yudhoyono 
is scheduled to continue with a state visit to Japan before heading home, 
where a pile of problems already await his decision.

>From all accounts, it seemed that President Yudhoyono had managed to capture 
the hearts and respect of many Americans, not only of President Bush 
himself, but also of individuals like Patsy Spears and Bill Gates.

Bush praised Yudhoyono for "great courage"

In Washington, Reuters reported that President George W. Bush praised the 
president of  Indonesia on Wednesday for "great courage" in leading his 
country through the tsunami disaster, and both leaders pledged stronger 
military ties.


Bush, who is pressing for greater democratic reforms in the Middle East and 
greater understanding of the United States in the Muslim world, said 
Indonesia, which has the world's largest Muslim population, could play a key 
role in achieving these goals, continued Reuters.

In an Oval Office appearance with Indonesian President Susilo Bambang 
Yudhoyono, Bush said: "Indonesia will play a large role, and a significant 
role, in helping us understand that great religions should co-exist in a 
peaceful way."
Indonesia last year was devastated by the Indian Ocean tsunami. "You showed
good, great courage," Bush said. "And it's been our honor to work with you 
to help save lives and to bring people, order out of the chaos that ensued 
after the terrible disaster."

Susilo, a U.S.-trained former general who last year became the first 
directly elected president of Indonesia, said he would like stronger 
cooperation with the United States on education, economy, and 
counterterrorism.

The leaders discussed normalizing military relations. Washington has 
previously said fuller military ties required accounting for violence in 
East Timor in 1999 and prosecution of the killers of two Americans in remote 
Papua in 2002.

Indonesia is an ally in the U.S. war against terrorism, but the government 
faces a population that opposed the wars in Afghanistan and Iraq.

"I do hope that in the future, we are moving ahead for fully  normalizations 
of the military-to-military relations," Susilo said, pledging to make more 
military reforms.

"President Yudhoyono explained to me the process of military reform in 
Indonesia and the climate in Indonesia that is now more conducive to 
democratic life. And I believe what he said, and I give my support and 
praise for what he has done" said Bush commenting on Yudhoyono's speech. The 
Indonesian president also explained measures taken in the economy, the 
building of infrastructure and the reconstruction and rehabilitation of 
tsunami-ravaged Aceh and North Sumatra.

The military embargo for the sale of arms to Indonesia and the International 
Military Education and Training Program (IMET) was placed after the shooting 
down incident of two teachers in Papua in 2002, among whom was Rick Spears, 
which the US blamed on the Indonesian military.

As a direct result of the president's visit this time, the US agreed to 
reactivate the exchange of education and training of military personnel, 
while a partial lifting of the embargo allowed the sale of non-lethal 
equipment to the Indonesian military, such as telecommunications equipment, 
Kompas reports.


Hard Power provokes Resentment, Soft Power charms and Disarms

Reported but not quite elaborated by the Press was Yudhoyono's most 
interesting advice to America as the world sole superpower. This he gave 
during a speech to the US-Indonesian Community, where President Yudhoyono 
received much standing ovation. He first broke the ice by introducing 
himself, mentioning his name in full. "I feel it necessary to say my name 
because a few months ago, I was introduced by someone as President Yoko Ono" 
he said to laughter from the audience.

The following is an excerpt of the transcript of the speech as received 
through the apakabar Internet group:

 "I should like to share a few thoughts on a question, that many of my 
American friends have asked me: what should be America's role in the world? 
How should America engage the world?

Well, let me say this.  The United States wields enormous power and 
influence in world affairs.  It is referred to as the only remaining 
superpower in the world, the only country able to project its power anywhere 
around the globe. The United States has the world's largest economy, has the 
world's largest defense budget, has world's largest spending on 
intelligence, and has the world's largest diplomatic machinery.  It also has 
nuclear weapons and is a permanent member of the UN Security Council. And 
its sense of nationalism today, particularly since 9-11, is highest than it 
has ever been.

The usage of  America's enormous power, therefore, is a matter of great 
interest to the rest of the world . The present and future world order will 
be determined by how America uses that enormous power at her disposal, and, 
more importantly, how she SHARES and allocate her resources to promote peace 
and prosperity .

America's enormous power is a source of security to some, and insecurity for 
others.
That is why, I think it   is important for the US to project and emphasize 
more of its SOFT POWER.  The US has no shortage of soft power: in terms of 
culture, values, sports, entertainment, business, education, science and 
technology, living standard, media, the US has tremendous appeal to the 
international community.  Remember: the use of soft power charms and 
disarms.
Hard power, on the other hand,  if it is used incorrectly, provokes 
resistance and, sometimes, resentment.

America's engagement with the world has strongly emphasized democracy, but 
perhaps there is a more important theme: GOVERNANCE. Governance, in my view, 
is the ideology of the 21st century. With governance, democracy thrives; 
without it, democracy fails.  If the world is to change for the better, it 
will require MORE than the expansion
of democracies, it requires the greater employment of governance.

America's engagement with the world should also stress on TOLERANCE--  not 
just freedom, but also tolerance.

I would venture to say that in some cases, tolerance is more important than 
freedom.
It is tolerance that sets us free.  It is through tolerance that we can 
attain genuine peace.  It is tolerance that protects freedom, harness 
diversity and delivers progress.
It is tolerance that makes openness manageable.  In fact, I would even 
venture to say, that in the affairs between states and within state, the 
real division is those who embrace tolerance and inclusion, and those who do 
not.
And when it comes to tolerance, no one has a monopoly. Whether you are big, 
medium or small, we all can learn from one another.

We in Indonesia would also like to see the flowering of MULTILATERALISM on 
the international scene-so that we may see the grandeur of American 
leadership.  For a leader does not work alone.  A leader works with and 
through others. We would like to see America leading a multilateral global 
partnership, for peace and development.

In particular, the international community expects America to lead in the 
efforts, to meet the Millenium Development Goals, which includes the goal to 
half the number of people living in poverty by 2015. The Millenium 
Development Goals has a unique uniting value, because it is not determined 
individually by a particular power, rather it is set collectively and 
democratically, by the community of nations.

I think, I also speak for the international community in expressing the 
hope, that the United States will remain open to students from all over the 
world.

I know, it is the natural instinct of Americans to want to change the world. 
What I would like to tell you is, that the best way for America to change 
the world is to share your knowledge with the world. Remember: this is 
coming from a President, who graduated from Webster University in Kansas.

The United States is still the number one choice for Indonesian students, 
who want to study abroad. And I am glad that today President Bush affirmed 
his desire, to see more
Indonesian students studying in America.

My final advise to America relates to something that my father taught me and 
a well-known virtue of Asian cultures.  It is called: patience.

Everything about the American culture is super fast-just like globalization, 
just like the ATM machine.  But the world is a big supermarket, where 
everyone runs on different speed.  The world also has different clocks. In 
such a world, patience, combined with perseverance, can be just the key to 
unlock the many problems of our world.

So be brave, America, but also be patient.

So these are my two-cents worth of advice to America" concluded  President 
Yudhoyono.

(Sources: Kompas, Reuters, AFP, SCTV, apakabar at yahoo.com)         (Tuti 
Sunario)
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NEWS AND BACKGROUND:

1.      Tourism and Transportation :

Indonesia's Tourism lacks Crisis Communication Program

In the TOURCOM Conference held by the World Tourism Organization (WTO) in 
Bali on 20-21 May, the Indonesian government was criticized on the dearth of 
information supplied to the WTO website, on the earthquake and tsunami 
disaster in Aceh and North Sumatra and related recovery efforts.   For, it 
is in providing accurate and acceptable information, that the world will 
better understand the actions that have been taken and trust will be 
restored for tourists to travel again to Indonesia. The Tourcom meeting was 
organized to assist countries affected by the December natural catastrophe 
to regain its tourism market share. The Conference was attended by delegates 
from 20 Asia-Pacific countries.

A number of recommendations made include:
 (1) that tourism officials and the private sector work more closely 
together to lobby for increased support for the tourism sector at the 
highest level of government;
(2) Tourism destinations in Asia-Pacific should increase the flow of 
information to the media in good times as well as during crises, and work to 
develop specialized media contact and good databases.
(3) To increase emphasis on tourism communications, Tourism Authorities 
should organize a dedicated communications section, establish the post of 
communications officer to handle media enquiries, disseminate positive news 
about the destination, and deal with crisis communications.
(4) More communications on the recovery of the effect and recovery 
post-tsunami disaster need to more widely disseminated to allay irrational 
fears and misperceptions of potential tourists, particularly in the area of 
health and safety, and the current operational status of affected 
destinations.
(5) When a crisis strikes it is essential to communicate in an honest and 
transparent way, to work as quickly as the media to put the crisis in 
context by providing plenty of background information on the destinations, 
and maps which show the actual extent of the problem as well as where it is 
still safe to travel.


Cruise Ships call again on the Moluccas

Bisnis Indonesia writer Hilda Sabri reported that the town of Ambon, capital 
of the Moluccas is back on cruise ships itineraries. Last 18 February, the 
MS Columbus sailed into Ambon with 234 passengers from Darwin, Australia. 
With peace restored on the islands, the Moluccas may now look forward to 
more cruise ships calls in the coming months. In May MS Cristal is scheduled 
to call on Ambon, before proceeding to Manado and the Philippines.

During the ship's 4-hour sojourn, cruise ship passengers usually visit the 
village of Waai and traditional markets in the town of Ambon. Most popular 
souvenirs are local handicrafts made of cloves, seashells and textiles. 
Tourism is the fifth revenue earner for the Province after fishery, 
forestry, agriculture and mining.

Indonesian airlines restructure routes and cut services

Just when things were looking bright for Indonesia's low-cost airlines, with 
domestic demand on the continuous upswing, the government raised the price 
of aviation fuel, or avtur, three times this year. In January, Avtur price 
increased 10% to Rp. 3,765 a liter. In March Pertamina raised it again with 
21%, on top of which a 10% tax was slapped, so that the present price is Rp. 
5,000 a liter, while starting 1 June avtur is again to be increased to Rp. 
5,600/liter.

As airlines are required to pay in full before refueling, the companies are 
now reeling. A number of airlines, such as Bouraq, Pelita Air Service, 
Mandala and kartika Air have started to cut services. Bouraq airlines has 
let go of 8 aircraft and now  flies with one only; while Star Air has 
definitely decided to stop operations starting 1 June, reports Media 
Indonesia.

In similar quandary, Garuda Indonesia, has taken a different policy, namely 
to add a fuel surcharge on air tickets starting 1 June. For flights to and 
from Australia and New Zealand the surcharge will be US$ 35 per passenger, 
up from the former US$25. On Middle East flights an additional US25 will be 
charged, up from US$ 12, while the surcharge on the Japan route will be 
US$28, up from the former US$17. On the routes to China the surcharge will 
be US$30, up from the former US$15.

Garuda has also restructured its domestic, and a number of international 
routes.  On the busy Jakarta-Balikpapan sector, flights are increased from 4 
to 5 times daily, as are the Jakarta-Pekanbaru flights. 
Jakarta-Makassar-Manado flights will  increase to 11 times weekly, up from 7 
times weekly, whereas, Jakarta-Banjarmasin flights will be reduced from 18 
times to 13 times weekly.

On the international route, Denpasar-Perth will increase to 14 times weekly, 
up from the former 10 times weekly, and Jakarta-Jeddah increase from 4 times 
to 6 times weekly.


The precarious situation has been caused not only by the rising fuel 
costs, - fuel being a hefty 30% to 35% of an airline's operational costs,- 
but also by the increasingly unhealthy competition among the too rapidly 
growing number of domestic airlines, on the one hand, but not compensated by 
the decrease in domestic passengers, on the other.

In response to the plight of the aviation industry, Hatta Rajasa, Minister 
for Communications said that he has urged the Minister of Finance to waive 
the 10% tax on aviation fuel for airlines, as well as cut down on other 
levies, while state-oil company, Pertamina, has been urged to allow airlines 
a one-month credit.

Further,  to create healthier competition among airlines, Minister Rajasa 
has agreed that the Indonesian Commercial Airlines Association, INACA , 
decide on a Reference Fare Sheet, for airlines to abide to the minimum as 
well as ceiling fares determined.

The government will also review the law on minimum availability of aircraft 
for an airline to be given an operational license. If until today, the 
minimum requirement is 2 aircraft, this will be increased to a minimum of 
five.  Indonesia today counts 28 airlines. But the government has given 
warning to 10 operators to operate according to agreement, or else these 
will have their licenses revoked.

Lion Air signs Purchase Agreement for 60 Boeing 737Aircraft

Therefore, it comes as a surprise, that amidst the gloom in Indonesia's 
aviation industry, the Indonesian airline Lion Air on Friday, 17 May signed 
a nearly four billion dollar deal with Boeing to purchase 60 new generation 
737 planes.

AFP reported that the signing ceremony took place at the US Chamber of 
Commerce office in Washington, where visiting Indonesia's President Susilo 
Bambang Yudhoyono had earlier pledged reforms to draw investments critical 
for economic growth in the vast archipelago.

The Boeing-Lion Air agreement include a combination of the next generation
737-800s and the proposed 737-900X aircraft, with the Indonesian carrier
expected to take delivery of the planes in 2007.

According to Boeing, the new planes are economical to operate and "with the 
fuel prices going up, it is very crucial," Boeing told AFP after the 
signing.

Meanwhile, Lion Air President Rusdi Kirana said the "next generation" Boeing 
planes could help the company "save 100,000 gallons of fuel per airplane per 
year with improved performance and low maintenance costs."

He said the company planned to have at least 45 jets in its fleet by 
year-end based on the "enormous potential" for air travel in the Indonesian 
archipelago of 230 million people. "Only 20 over million people use air 
travel now," he said.

The airline flies to 50 cities in Indonesia and offers services to 
Singapore, and Kuala Lumpur and Penang in Malaysia.

Currently, Lion Air operates 18 MD-82s and six 737-400s and five MD-90s on 
lease from Boeing. The airline recently purchased four more MD-82s from 
Continental Airlines.

Indonesia-Singapore agree on Fifth Freedom Rights

Communications Minister, Hatta Rajasa, disclosed that during a recent 
informal visit to Jakarta last week, Singapore Transportation Minister, Yeo 
Cheow Tong had agreed that Singapore extend to Indonesia fifth freedom 
rights for Indonesian airlines to eight cities in Asia and five in Europe. 
These will be utilized in the first instance by Garuda Indonesia and 
Merpati, reported Bisnis Indonesia. Fifth freedom rights allow Indonesian 
carriers to embark and disembark passengers in Singapore before flying on to 
third country destinations.

In exchange, the Indonesian government had agreed to an additional 15% seat 
capacity on Singapore's low-cost carrier to destinations Bali and Jakarta. 
Details are being worked out by Senior Officials of both countries.

In fact, Singapore had earlier requested for increased capacity for its LCC 
to four cities, namely Jakarta, Surabaya, Denpasar and Medan. However, the 
government must also consider the interest of Indonesian carriers. These 
decisions will be reviewed every three or six months. Another area of 
cooperation between the two countries will be joint tourism promotion by 
both parties.

Balidiscovery.com  further informs that currently, Singapore Airlines and 
Valuair operate 126 flights each week between Singapore and Jakarta, with 42 
weekly flights between Singapore and Denpasar flown by Singapore Airlines.

 Garuda Indonesia - the Indonesian flag-carrier currently operates 234 
flights each week to Singapore and is expected to use the expanded "fifth 
freedom" rights for onward flights to regional destinations, such as Hanoi, 
Shanghai, Beijing and Bangkok.

3.      Politics and Security:

Terrorist bombs explode in Poso, South East Sulawesi, killing 22

On Saturday, 28 May at 08.15 local time a bomb exploded in the traditional 
market of the small and remote town of Tentena by Lake Poso. At that early 
hour the market was filled with housewives buying daily needs for their 
homes. Within half-an-hour, a second explosion ripped several shops some 75 
meters from the first explosion. Both bombs killed 22 people, injuring more 
than 53.

Several days earlier, the American Embassy in Jakarta and the American 
Consulate General offices in Surabaya and Medan were closed for business 
"for an indefinite period". Upon press inquiries, Chief of Police General Da'I 
Bachtiar disclosed that Indonesian intelligence had discovered a lay-out map 
of the American Embassy in Jakarta, which, most likely was the reason for 
the closure of the Embassy and Consulates.

When President Yudhoyono was given the news in Hanoi, where he just arrived 
for a State visit, he said that he was both angered and saddened. His visit 
to the United States, Vietnam and Japan were in efforts to improve Indonesia's 
image abroad to attract investments. In America he had explained that 
Indonesia is now a country that is both politically stable and economically 
recovering. However, the explosions in Poso may now undermine those very 
efforts. Indeed, the President further conceded, that the government had 
received information of possible terrorist strikes in the near future, but 
where they would actually strike was not clear. That is the reason why 
security at and around foreign embassies and strategic buildings had been 
strengthened.

The President, however, would meanwhile entrust the thorough  and immediate 
investigation  of the bombing to Vice President Jusuf Kalla and security 
officials. However, when the officials are unable to overcome the situation, 
then the President would immediately return home and cut short his visits to 
Vietnam and Japan.

Meanwhile, VP Jusuf Kalla on Television explained that this was not a 
"horizontal conflict" of race and religion amongst the local population, but 
that this was clearly a terrorist act by persons from outside the region.

On 30 May, the Police informed that they have detained three people who were 
seen among the crowd near the sites of the explosions. According to Metro 
TV,  the three are actually prisoners , detained in connection with earlier 
bombings and killings, who, for unknown reasons, were allowed to roam free 
by the jail warden. The jail warden, therefore, has also become suspect. 
Meanwhile, out of the 22 casualties, two males remained unidentified and 
unclaimed by relatives, causing Police to suspect that these may very well 
be the suicide bombers.   VP Jusuf Kalla has promised the public that the 
heinous perpetrators would be caught soon.

In the latest development, Parliament has urged President Yudhoyono to issue 
a Presidential Decree that terrorism in Poso and any remaining horizontal 
conflict be resolved comprehensively and in the shortest possible time.


For your comments and further inquiries, please e-mail to: 
tbsc-strategy at indo.net.id