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Down to Earth No. 41, May 1999

An alternative development strategy

Farmers, workers, indigenous peoples, fisherfolk, NGOs, students and academics are coming together to formulate people-centred, environmentally sound development strategies to replace the obsolete, bankrupt and abusive money-centred practices of the Suharto era. It is vital that the international community - and especially the lending agencies - listen to and understand what these people's movements are saying and put their interests first. They must move away from the current strategies which support Jakarta-based elites' control over land, natural resources and communities. These policies also put the interests of private international capital first and are leading to further debt-dependency. Only then can lending agencies hope to play a constructive role in the rebuilding of Indonesia's economy and promote democracy in Indonesia.

In this supplement we describe some of the recent developments among the people's movements and highlight some of their ideas and demands for the future.

One year after Suharto was pushed from power, Indonesia remains in political and economic turmoil. The IMF/World Bank rescue plan has not worked and poverty is spreading. Civil unrest is breaking out in many regions. Since Habibie's surprise decision to "let go" of East Timor, calls for independence in West Papua and Aceh are becoming more insistent. Attempts to placate other resource-rich regions drained by Jakarta by introducing new legislation on regional autonomy are unlikely to succeed.

Amid the confusion, more coherent voices are beginning to make themselves heard. People's movements are emerging as a political force, demanding a say in how people's lives should be run and their futures decided. The alternative development strategies they are promoting are based on democratic principles which put Indonesia's millions of rural and urban poor at the centre of policy-making. They are based on equity, the return of land resource rights to local communities, the wise management of natural resources and the guarantee of human rights. They also demand that the army get out of politics and stop intervening in civilian life.

Alliances between students, farmers and workers as such are nothing new in Indonesia. Even during the brutality of the Suharto era, protests against land-grabbing, pollution, urban development, forest destruction, over-fishing and other violations of people's rights were frequent. They were met with bureaucratic, military or police intervention, intimidation and torture. Some 'ringleaders' were jailed or in some cases, murdered or 'disappeared' by the military, acting on behalf of the Suharto regime. But the protests helped keep the sufferings of ordinary people in the public mind and fuelled the discontent which eventually forced Suharto out.

Riau sues Habibie for US $22.5 billion

In Riau, the oil-rich province in eastern Sumatra, there have been strong demands for local control over resources for some time. American oil multinational Caltex has been exploiting Riau's oil for five decades and local people feel they have benefited precious little from the revenues, while suffering negative impacts of the operations. Caltex exploits Riau's giant Minas field which produces around 750,000 barrels of oil a day -- about half of Indonesia's daily crude oil ouput.

In April this year a local community organisation took the unprecedented step of suing the government for US $22.5 billion in compensation for lost oil revenues. The defendants are President Habibie, Mines and Energy Minister Kuntoro Mangkusubroto, the state oil company Pertamina, PT Caltex Pacific Indonesia and the Homes Affairs Minister. The plaintiffs are the "people of Riau" represented by Tabrani Rab, university lecturer and chairman of the Institute of Social and Cultural Studies in the province. He says that Habibie had promised in July 1998 to give a 10% share of oil revenues to the people of Riau within two months. The plaintiff's primary demand was to bring to halt oil exploitation by Caltex and Pertamina. A secondary demand was freedom for Riau province to exploit local natural resources, or to form an independent state. (AFP 13/4/99)

Students attack Caltex

On April 21, around 1,500 students staged a protest at the Caltex complex in Riau, demanding the government keep its promise to give the province 10% of revenues. The students set fire to company vehicles, and wrecked an office. At least 11 students were reported to be injured when troops broke up the protest. The students said they would return if the promise was not kept. (Jakarta Post 21/4/99; Kompas 21/4/99)

Now people's movements are gathering strength from the new-found freedom to organise, to speak out about the wrongs of the past and make demands for the future. New alliances are being forged. The first nation-wide congress of indigenous peoples in Indonesia was held in March; the first national congress of the United Federation of Indonesian Farmers FPSI was organised the previous month.

Farmers and indigenous peoples are also recognising that they have many grievances in common and are starting to work together to develop alternative strategies. Students and NGOs are assisting the development of their movements with practical help as well as with valuable moral support. At the same time they are working out their own role in this period of transition and deciding how best they can serve the interests of the majority of Indonesians. There is also much talk among NGOs and academics about civil society in Indonesia and what role it should take in shaping the future of the country a debate which has not been possible for three decades.

There is still a huge amount of work to be done. A coherent response to the IMF and alternative economic development strategy is a top priority, as are the pressing problems of paramilitaries in East Timor, military violence in Aceh and the national dialogue in West Papua. At the same time, as the elections draw closer, much time will be devoted to the task of ensuring that these are as free and fair as possible.

Regional autonomy and financial control

During the years of the 'economic miracle' under President Suharto the gap between rich and poor became ever wider. Geographical disparities also grew, as the billions of dollars generated by the country's natural wealth flowed from the resource-rich islands to Jakarta and into the clutches President Suharto, his family and cronies.

Since Suharto's resignation, there have been persistent demands for action to redress the regional imbalances. Local people want more control over the resources in their areas and over the funds they generate. In some areas, like West Papua and Aceh - which have played unwilling hosts to major revenue earners Freeport and Mobil Oil - these demands are part and parcel of the call for independence from Indonesia.

The Habibie government has responded by drafting two new bills, one on regional autonomy and another on financial control. These were submitted to the Indonesian parliament earlier this year and a third bill, concerning the oil and gas industry was debated in March. None have been greeted with much enthusiasm.

The regional autonomy bill, passed in April, will bring little improvement as it does not allow for any real shift in power from Jakarta to the provinces. Provincial governors can now be elected under the new bill, (before they were merely selected by Jakarta) but their appointment still has to be approved by Jakarta. Instead, some powers are to be devolved to Kabupaten (district) and municipality level. These do not include full rights over the exploitation of natural resources which are considered too strategic to be released from Jakarta's control. Directing efforts at Kabupaten level is thought to be an attempt to contain tendencies towards separatism that might be encouraged by devolution of power at provincial level. There is concern among NGOs, too, that the bill is one-sided and fails to address the need to guarantee democratic process at the local level. Without this, they fear, district and municipality chiefs will continue to ignore the rights and interests of local communities.

The second bill, on the division of revenues between central and regional authorities, underscores the government's lack of commitment to genuine autonomy. Both this and the oil and gas bill have drawn criticism for having no clear-cut revenue sharing formula between the central and provincial administrations. Finance Minister Bambang Subianto has said the government will use a separate regulation to determine the share of income from natural resources, but there has been no sign of this yet. In the meantime vague promises of more money for the regions will do little to placate those demanding reform.

The IMF and the bottomless pit in Jakarta

Given the current economic climate, the lack of any real commitment to regional autonomy is entirely predictable. The current government is hardly likely to hand over much control over funds to the regions when it is under intense pressure to meet its debt repayment obligations and satisfy the demands of its creditors among the rich countries. The economic bail-out plan, led by the International Monetary Fund (IMF), stresses the need to utilise natural resources in order to generate income. The IMF or one of its co-lenders may even have hinted its disapproval of handing over any financial control to the local administrations. According to rumours in Jakarta "a major aid donor has pressured the central government to retain the majority of revenue from natural resources, particularly oil and gas, to ensure the government will be able to repay its debt." (Jakarta Post 29/3/99) Until this damaging approach to managing the crisis is changed, Jakarta will need to squeeze as much money out of Indonesia's natural resources as it can.

In March a group of sixteen NGOs from different regions rejected the government bills concerning regional autonomy and financial control. The NGOs, including the local branch of Oxfam, the environmental group WALHI and organisations representing Dayaks and people from Maluku, produced their Statement of Opinion on Regional Autonomy after a two-day meeting in Jakarta. They said the bills were not sensitive to the economic, political and cultural interests of people in the regions. The bills also failed to address the issue of property rights, failed to promote just and sustainable resource management and didn't adhere to the principle that local law should take precedence. The bills, said the NGOs, were also drawn up in an undemocratic way, without open participation of or consultation with the public. At the same time, the current parliament which will pass the bills, has no legitimacy.

Comprehensive legislation is needed, said the statement, to restructure the state administration as a whole, to regulate sovereignty over the resources upon which the people depend.

(Sources: Suara Pembaruan 3/3/99; AFP 30/3/99, 13/4/99; Tapol Speech at Aceh conference 3/4/99) (See also DTE 40 for more discussion of regional autonomy and West Papua.)

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