[Marinir] Indonesia Digest: No: 39.05 ; 12-11-'05.

[Yap Hong Gie]

INDONESIA DIGEST
Indonesia's complex Issues in a Nutshell
By: Ms. Wuryastuti Sunario
Published by: TBSC-Strategic Communication
No.: 39.05 - Dated: 12 November 2005
In this issue:

STOP PRESS:

TOP TERRORIST LEADER DR. AZAHARI SHOT DEAD IN EAST JAVA  SIEGE

MAIN FEATURE:

THIRTEEN NEW FUEL AND GAS PLANTS INAUGURATED

NEWS AND BACKGROUND:

1.      Tourism and Transportation:
Nine-months visitor arrivals down

2.      Health, Culture and the Environment:
No final Decision yet on Bali's Geothermal power plant

3.      The Economy, Trade and Industry:
October Year on Year Inflation 17.8%
Bali's Tuna Exports Up 41%
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STOP PRESS:

TOP TERRORIST LEADER DR. AZAHARI SHOT DEAD IN EAST JAVA  SIEGE

On 10 November, Thursday morning, Chief of Police, Sutanto confirmed that
one of two persons killed during police siege on a house in the hill resort
of Batu, East Java, was indeed the body of the most wanted terrorist in
Indonesia: Dr.Azahari. This is known for a fact based on finger prints
identification and personal items found, such as his spectacles.
Nonetheless, DNA tests will still be made for further confirmation and
support as "second opinion".

The dramatic raid started On Wednesday, 9 November, at around 15.00 hrs West
Indonesia Time, following confirmation that Dr. Azahari and a group of
terrorists were holed in at a house named "Villa Nova" at Jalan Flamboyan in
Batu. The Police had apparently already stalked the house for four days. On
Wednesday morning, when one man was seen leaving the house, Police tailed
him to the town of Semarang in Central Java, where he met with the terrorist
accomplice ring leader: Malaysian national Noordin M. Top. When Police
surrounded the group to arrest Noordin, he managed to escape by motorbike
shooting and threatening to kill people around him.  Later, the Police
informed that the courier from Batu had carried with him a bomb devised by
Azahari. The courier had also confessed that Dr. Azahari was indeed at Villa
Nova in Batu, the house that was being stalked by the Police. The Semarang
Police passed the information immediately to those at Batu. And, with this
certainty now confirmed, the Police stormed the house.

Seeing the Police closing in on the house, the men inside began to shoot,
also throwing explosives at the Police. Fire contact was maintained for
almost two hours, during which time the Police repeatedly called to those
inside to come out and surrender themselves since the area was completely
surrounded. Instead, a large explosion from inside the house was heard,
completely blowing off its roof. Then all was quiet. And thus ended the
dramatic siege that closed the life of one of the most wanted terrorists:
Dr. Azahari. Dr. Azahari is a Malaysian national, wanted for the death of
hundreds of innocent lives through a number of bombings in Indonesia, that
were exploded at Christmas 2001, the Bali bombings in 2002 and 2005, the
bomb at Marriott Hotel in Jakarta, and others.

Chief of Police, Sutanto, confirmed that after Police had sterilized the
house from explosives (30 bombs were found inside the house, 10 bombs had
been thrown at the Police and one was carried to Semarang - all devised by
Azahari and friends) - two bodies were found. One body was shattered into
pieces, since the man had apparently blown himself up. This was the body of
Arman, a terrorist on the wanted list, known to be expert in devising
explosives, close assistant to Dr. Azahari. The other was the body of Dr.
Azahari himself, found relatively intact, with bullet holes through his
chest.Police surmise that Dr. Azahari was first shot through the heart by
Police fire, then blown up by the suicide bomb detonated by Arman.

Upon confirmation of the death of Dr. Azahari, President Yudhoyono
congratulated Police Chief Sutanto and the Indonesian Police for work well
done. However, adding further instructions that the Police continue to seek
the arrest of Noordin M. Top and step up vigilance for possible terrorist
attacks.

Further finds and documents at the site at Batu confirmed that Dr. Azahari
was equally responsible for the most recent bombings in Bali, at Jimbaran
and Kuta on 1 October.  Identity Cards of the two suicide bombers at
Jimbaran were found at Batu. A video tape was also found where both the
Jimbaran bombers as well as the Kuta bomber had stated their convictions,
that blowing themselves up would ensure for them a place in heaven, informed
Chief of Police, General Sutanto.

Two other maps found showed that the terrorists had planned to plant bombs
in three towns in East Java before the end of the year, and a map of Jakarta
where they planned to explode bombs at schools and churches early in 2006.

Batu is a beautiful hill resort above the town of Malang in East Java, a
favourite refuge for domestic tourists. Houses here are usually rented out
to visitors for weekends or for monthly stay. Neighbours confirmed that the
house that the Police stormed was rented for three months by a group of very
pleasant and polite university students, who said that they needed the cool
air and quiet environment of Batu to finish their final university thesis.

(Sources: ANTV, SCTV, Kompas, Media Indonesia)
(Tuti Sunario)
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MAIN FEATURE:

THIRTEEN NEW FUEL AND GAS PLANTS INAUGURATED

On 28 October President Yudhoyono inaugurated thirteen oil and gas projects
that together are expected to increase Indonesia's total oil output by
69,700 barrels of oil per day,1,530 million cubic feet of gas per day, and
16.600 tons of LPG per day.

The 13 projects inaugurated by the President at at Tanjung Jabung, Jambi
are: the APN Gas project in West Java (BP West Java), Peciko Phase IV in
East Kalimantan (Total E&P Indonesia), Betara Complex III in Jambi
(PetroChina), South West Betara Jabung at Jambi (PetroChina), West Piano at
Jambi (PetroChina Bangko), KE-40 in East Java (Kodeco); Tiaka in Central
Sulawesi (JPB Pertamina-Medco Tomori), Tanggulangin in East Java (Lapindo
Brantas), Gondang in East Java (JOB Pertamina-PetroChina East Java),
Sukowati (JOB Pertamina-PetroChina East Java), Bene Bekasap, Raiu (BOB Bumi
Siak Pusako), Salawati, in West Iran Jaya (Pertamina-PetroChina), and the
Gas and Oil Pipeline Project between Tambun-Cilamaya-Cemara in West Java.

All thirteen projects have absorbed a total investment of US$ 1.2 billion
(Rp. 12 trillion).

In his report, Minister for Energy and Mineral Resources, Purnomo
Yusgiantoro, said that the projects are in government efforts to improve
Indonesia's total oil and gas output, since today, 90% of Indonesia's oil is
produced by aging oil wells in Central and South Sumatra. Indonesia's total
oil production had dropped 5% from 1.4 million barrels/day in 1995 to the
present 1.075 million barrels a day. It is foreseen that with the production
of the Cepu Blok and Jeruk Field in East Java in 2009, total  production of
Indonesia's oil will reach 1.25 million to 1.3 million barrels output per
day.

In his address, President Yudhoyono urged Indonesians to change their past
habit of  wasting energy resources and to adopt an energy saving culture,
for, unless new veins are found in the country, Indonesia's oil reserve will
last for another 18 years only, gas another 60 years and coal another 150
years only before these reserves are also completely depleted.

For this reason, the government will issue a national energy policy aimed at
forestalling national energy crises.
(Source: Media Indonesia)
(Tuti Sunario)
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NEWS AND BACKGROUND:

1.   Tourism and Transportation:

Nine-months visitor arrivals down 5.22%

The Indonesian Statistics Bureau informs that visitor arrivals through
Indonesia's 13 main airports and seaports during January through September
2005 was down 5.22% to 3.23 million from 3.41 million for the same period
last year.
September arrivals were also down 1.24% compared to August or down 4%
compared to September last year. Largest declines were felt at the airports
of Makassar, Solo, and Padang, while increases were made through Tanjung
Pinang, Lombok, Medan and Surabaya. Arrivals through Ngurah Rai Airport in
Bali increased from 163,600 in August to 168,200 in September. No final data
are as yet available on arrivals in October after the bomb explosions at
Jimbaran and Kuta on 1 October.

With these kinds of figures, it is doubtful that the Department of Culture
and Tourism can reach its target of 6 million international visitors to the
country set for 2005. (ed.)

Culture and the Environment:

No final Decision yet on Bali's Geothermal power plant

Despite protests from Bali's provincial government and local parliament
against the construction of a geothermal electricity generating power plant
at Bali's Bedugul hill area considered sacred by Balinese, urging that
explorations be halted immediately, Minister for Energy and Mineral
Resources, Purnomo Yusgiantoro, affirmed that no final decision has yet been
taken, but the national government is still considering to continue the
project.

This statement somewhat contradicts that made by Environment Minister,
Rachmat Witoelar, who said that work at the geothermal project at Bedugul,
Bali, is temporarily halted to take into account cultural and social
objections presented by the local population. Although an environmental
study is in progress, said the Minister, nonetheless, it has not yet
included the social and cultural aspirations of the population.

Other aspects to be considered are also that felling of trees in protected
forests through areas passed by pipes to be laid out for the project must be
undertaken carefully. The Department of Forestry had already given license
for 53.9 hectares of forest clearance, of which 25.6 hectares are cleared.
Basically, however, a geothermal plant is the most environmentally friendly
electricity generator, since geothermal emissions are less destructive
compared to the burning of fossil fuel. Kamojang in West Java, is a good
example of such geothermal plant, said Minister Witoelar.

Besides concerns over the destruction of the religious value of the area,
another worry of the population is that the project may lower water levels
at Lake Buyam and Lake Bedugul and dry up the surrounding paddy fields that
these lakes now irrigate.

The Economy, Trade and Industry:

October Year on Year Inflation rate 17.8%

Indonesia's Statistics Board announced that the fuel hike on 1 October had
jacked up October inflation rate to 8.79%, bringing January-October
inflation rate to 15.65%, and Year on Year Inflation rate for October to
17.8%. This increase is way beyond the estimated inflation target in the
Budget at 8.6% for the entire year.
Bank Indonesia immediately responded by increasing BI rate by 125 base
points to 12.25%, which is at present the highest among Asian countries.

Meanwhile, the Information Center of the Department of Trade said that the
prices of  domestic basic food commodities increased by 200% after the oil
price hike took effect on 1 October compared to 12 days earlier. While
changes in price during the one day after the hike changed variably from
city to city, registering between 1%-17% in Jakara, 5% in Bandung, 11% in
Semarang, 8% in Yogyakarta and 22% in Medan. Highest increase was made in
red chilli pepper, that went up by 400% in Bandung, and 220% in Jakarta.
(Those not fond of hot spicy food have not noticed this at all! Ed.)

Bali's Tuna Exports Up 41%

Despite protests by Balinese fishermen on the hefty increases in the cost of
fuel since October, Exports of Tuna from Bali during the first 9 months of
2005 registered a significant increase of 41% compared to the same period
last year, said IGN Suteja, Head of the Industry and Trade Office in Bali.
Bali's exports of fresh and frozen tuna reached 7,606 tons this year
compared to 5,392 tons in 2004. Earnings increased 75% from 12.8 million US
Dollars last year to 22.5 million Dollars this year. Main markets were the
United States and Japan. Tuna is one of Bali's main export commodities next
to handicrafts and garments.

However, since fuel increases in October, 700 long line tuna boats have
stopped sailing out to sea.

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