Indonesia's total external debt is over US$130 billion. Much of this money should by rights be owed by the estate of the late General Suharto himself. Ranked by Transparency International as the most corrupt dictator of modern times, he is reckoned to have stolen up to $31 billion. But Suharto was not the sole culprit of this corruption. What of the Western governments and companies that encouraged him to run his country into massive debt?
The UK's contribution to this story is particularly unhappy. $1.4 billion of Indonesia's overall debt is owed to the UK; and the vast majority of it is for arms; tanks, water cannons and Hawk ground-attack aircraft supplied by the UK government from the 1970s onwards.
In October 2007 Jubilee Scotland started a campaign to get the UK government to drop the debt; we threw ourselves into it with a week-long daylight fast and vigil just round the corner from Alastair Darling's constituency office. As Chancellor, Darling, we figured, had the power to cancel the debt. The debt is owed to the UK Export Credit Guarantee Department (ECGD); this department guaranteed the arms exports of the 80s and 90s, and took over collection when Indonesia defaulted (during the 1997 crisis). The ECGD is an arms-length government department, but in practice Ministers have wide powers to make ad-hoc arrangements for it. So if the debt was to be dropped, Darling would have to agree it.
Our vigil resulted in a meeting with Darling, at which he stressed that the UK debt policy "had not changed one jot" from how it was before. We interpreted this as meaning that the UK Government still had an open and positive attitude towards proposals for debt cancellation; but given that we were in fact trying to /change /that policy, to expand it to include Indonesia's arms debts (a very different case than the debt cancellations to meet anti-poverty targets which had been the focus of the 2005 G8 Summit), perhaps we should have understood him to mean: "we have no intention whatsoever of acceding to your demands...".
The second problem was that the Government was determined to be extremely intransigent on this issue - and remains so. Indonesia's debt is /performing/; it is being repaid to the ECGD. For human rights to trump commercial interests takes a miracle. However, we knew from studying Nigeria's debt write-off in 2005 that this conundrum can be bypassed when campaigners and politicians in the debtor country start to question why they are repaying such a debt. Nigeria's debt only came onto the creditors' agenda once the Nigerian Senate began contemplating repudiation. In our case, this meant that progress on cancelling Indonesia's debt would have to come through political developments in Indonesia. It is beyond Jubilee Scotland's competence to suggest what Indonesians' attitudes should be towards their debt, but through campaigning in partnership, and sharing what we have learnt and done with our partners, perhaps we can offer something that Indonesian campaigners can find useful for their own purposes.
From Scotland, we went to London, where Down To Earth arranged for Ardi to speak at a forum on Human Rights, and finally to a meeting with ECGD itself, where Ardi raised the spectre of Indonesia repudiating its debt - something which would result in a great loss to that department. Wise colleagues tell us that to meet with the officers of the ECGD is no significant thing: the Department enters "listening mode", it is said, in order to avoid having to do anything. However, it still seemed powerful to bring this department, so central to arming Indonesia under Suharto, together with an angry and eloquent representative of those who seek recompense.
The campaign to cancel Indonesia's odious debt is, I suppose, still in its infancy. Much will have to change before the UK will admit that these debts are actually unjust, odious. We look to Norway, which succeeded in having debts owed to it from the developing world cancelled, under similar circumstances, but only after a decade of campaigning. For Jubilee Scotland and Jubilee Debt Campaign, we have made strong links with our counterparts in Indonesia, and we have raised public and political awareness of Indonesia's odious debt burden. We see it as the start of a long, attritional, campaign to put right the UK's odious support to an odious regime.
Contact: David Milway, david@jubileescotland.org.uk
website: www.jubileescotland.org.uk