Jubilee Scotland's campaign against Indonesia's odious debt

Down to Earth No.78, August 2008

Ben Young of Jubilee Scotland writes about the on-going campaign to cancel Suharto's debt legacy to the UK.

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.



The UK's Jubilee organisations - Jubilee Debt Campaign and Jubilee Scotland - are dedicated to wiping out unjust and unpayable debts. And it looks to us that, if any debt counts as unjust, Indonesia's arms debt does. It is no exaggeration to say that many Indonesians today will be paying, through their taxes, for repayments of debts that were not only contracted through corruption of the normal state development process, but actually to buy weapons used against them.

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...".



Our campaign faced two barriers - the usual ones for development campaigners, perhaps, but they seemed particularly acute for us. On the one hand, the public did not know about Indonesia's debt. Although there is a general public awareness that the UK has an unhappy history with supporting Suharto, there is no awareness of the details. We found that some campaigners, especially those involved against the arms trade, were glad that we were taking this campaign on - it gave us another try at rectifying the past injustices, perhaps - but most people were astonished to find out about the issue at all. I myself was astonished that few people, even in political circles, knew about the famous vandalisation of the Hawk Jets bound for East Timor by Andrea Needham, Joanna Wilson and Lotta Kronlid in January 1996, something which I would have thought would be textbook stuff for all campaigners!

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.



As a way of addressing both of these problems, we invited Kusfiardi, former Co-ordinator of the /Koalisi Anti-Utang/, Anti Debt Coalition, to visit us here in Scotland and to speak to public audiences. The Joseph Rowntree Reform Trust supported us in bringing Ardi over, and in setting up the June tour. Many of the Ministers and Select Committee chairs who would be influential on Indonesia's debt are Scottish MPs; and Jubilee Scotland had a real opportunity to shift political opinion on this issue. We set up public meetings in the constituencies of Malcolm Bruce MP, Des Browne MP, Alastair Darling MP, John McFall MP, and Gordon Brown MP, in which Ardi explained how Indonesia's massive debt prevents its economic policy moving on from that which was pursued under General Suharto; Jubilee Scotland then encouraged people to join our campaign to cancel the UK's share of this debt. Adriana Sri Adhiati, of DTE and Indonesia's Green Alliance (SHI), joined us for two of the meetings, and added an ecological perspective. Despite Indonesia's great size, its political and historical significance, UK audiences public remain deeply ignorant of it, and the impression was that information was eagerly seized upon and devoured.

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