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Amin Rais’ Thought on Religion(Islam) and Politics

Book Title  :  Mengupas pemikiran agama dan politik sang pahlawan reformasi (Analyzing Amin Rais’ Thought on Religion and Politics)

Author  :  Akh Muzakki.

Chapter I  Introduction

The first chapter of the book is introduction in which the writer wrote about the background and context of Amin’s thought.  He also wrote about his theoritical approach.

Chapter II  About Religion (Islam)

Social Tawheed as a base of social justice

Tawhed is an Arabic word means oneness.  This is the central idea of Islam.  Tawheed means monotheism.  For Amin tawheed means unity of godhead,  unity of creation,  unity of mankind,  unity of purpose of life.  Unity of godhead means people must purify their belief from superstitions and misleading belief.  As a consequence of the first one,  people must believe that there a unity of creation.  Universe is god’s creation.  Further consequence is unity of mankind.  Then unity of purpose of life.  With tawheed man will be free and equal.  Thus there is no priesthood or rabbihood in Islam.

For Amin a muslim is a secular person if he/she believes that Islam is only about rituals and spiritual things like prayer,  alms giving,  fasting etc.  He /she is no different from secular people since his/her thought on social reality is secular.  In politics his/her behavior will also similar.  He/she will neglect morality and ethics.  He/she will think that the end justifies the means.  So it is clear that Islam for Amin is an ideology.

In Amin’s view,   characteristics of tawheed people :

1.Tawheed people will deny all but god.

2.Tawheed people have complete trust on god.

3.Tawheed people have total commitment to devote everything he/she does to god.

4.Tawheed people develop good deeds.

5.Tawheed people take criteria of good and bad only from god’s guidance.

Tawheed will free people from dependency on other people.  Tawheed brings spirit of egalitarianism and freedom from all kinds of oppression and bondage other than god.  Tawheed gives insight that social environment must be perceived as instrument to realize devotion to god.

Therefore,  according to Amin Rais,  all social problems like economic backwardness,  intellectual stagnation,  social degeneration etc are rooted in the decadence of tawheed.

The concept of tawheed is developed on idea that the central idea of Islam is justice.  Amin said explicitly that the first commandment of Islam is justice,  after that do good and avoid evil.  That is why Islam rejects discrimination based on race,  gender,  religion,  and language to build a comprehensive social justice.

For Amin Islam must be functional in the society.  Therefore implementing social justice is imperative.  Eliminating imbalances in the society like conglomeration,  monopoly,  oligopoly etc is a must.  Eliminating takhayul and khurafat (believe on superstition) , bid ‘ah (misleading belief) is not enough.

There are two ways to implement social  justice.  First by giving alms to the needy.  Believers must spend a portion of their money to give alms to needy people.  But this is just emergency measure.  Second way is by rebuilding the social system that creates injustice.  People need to restructure the economic and political structures.  Amin realizes that this is a long and difficult struggle because this effort will collide with political interests.  Political and economic elite will surely try to preserve the status quo.  The Holy Koran gives example from history.  There was a conflict between Moses and Pharaoh.

Amin believes if social tawheed is neglected,  followers will leave religion because religion is not capable to solve their social problems.  What happened in the West with Christianity is an example.  Islam is under three threat.  First is crisis of relevance.  Islam has no relevance to daily problems of the society.  Second,  there will be non Islamic or even anti- Islam ideologies because Islam cannot offer solution to their problems.  Third,  secularism will grow if Islam fail to solve social problems.

But Amin rejects the idea of leftist Islam by Hassan Hanafi.  He thinks that it will block introduction of the substance of social spirit that Islam bring.  he worries that someday there will be rightist Islam,  Marxist Islam,  Maoist Islam,  Castroist Islam,  Leninist Islam etc if we accept the idea  of leftist Islam.

Sharia as a system

Sharia is universal principles that deducted tawheed into a system of religious teaching which is a way of life for moslems.  Therefore, an Islamic community will not adopt any system but sharia.  Sharia regulates all aspects of individual as well as community life,  in ritual and social matters.  Amin believes that Islam is open to any input as long as they comply to the Koranic paradigm.  In Amin’s opinion the holy Koran rejects outside intervention because it is already perfect.

Amin’s concept on democracy is similar to Maududi’s.  he believes that if a concept or thought is not based on divine revelation,  it will make mistakes.

Amin is sure that sharia is a set of god’s commandment that will bring true happiness if it is applied correctly.  Sharia is the platform for any moslem society.  Since society changes rapidly sharia must be able to adjust to those changes.  Therefore there must be innovations (tajdid)

Amin thinks that the Holy Koran is not a book of law but it is a source of law.  Therefore there must be flexible comprehension to its principle to be able to meet the changes and problems of society.  Sharia is larger than law.  It is a comprehensive system.  It is a platform for a comprehensive constitutional law,  administrative law,  public law,  private law,  and even international law. But Sharia provides the basic principles only.  There are three points that cannot be changed because they are decisive to human being.  First,  explicit and definite regulations.  Rules on alcoholic drink,  riba (excessive interest) and gambling are definite.  Second,  directive principles.  Examples are cancellation of involuntary transaction and man as protector to woman.  Third,  limit to human activities.  Examples are wills must not exceed on-third of total asset,  marriage must not exceed for women,  and divorce to woman must not more than three times.  Those element are permanent.  They neither need any amandmend nor modification.

On the other hand there are elements of sharia that may receive modifications to keep up with current events.  Elements not explicitly exposed in the Holy Koran are open to modifications.  There are several methods to modify that must be carried out by experts.

Amin’s thought on Islamic law,  especially on those explicitly written in the Holy Koran,  is very rigid.  If an issue is exposed in the Holy Koran,  we cannot make different interpretation.  It is clear that Amin is a fundamentalist moslem,  in terms that he embraces his religion really as it is written.

As to issues not explicitly written in the Holy Koran,  Amin agrees to reinterpretation as long as they stick to principles of truth and justice.  for example about payment of due to poor people (zakat).  Today’s obligation of paying 2.5% of income is not fixed.  It is not based on the Holy Koran but interpretation of ulama (Islamic scholar) of the past.  Therefore we may change it to adjust to current situations.   We may apply greater number.  For professions that bring great income we may apply 10% or even 20%.

He believes that there were limited number of profession in the past while today there are many of them.  In addition he is sure that we pay due to keep justice and fair distribution of wealth.

His opinion on innovation (tajdid) in Islam is that we have to renew our comprehension on Islam.  How we understand and apply its principles.  There are five agendas.  First,  renewal of faith (aqidah).  It means purification of Islam from non Islamic beliefs.  Second,  renewal of Islamic theology.  The objective of this action is to make Islam relevant to problems of society.  Third,  renewal of science and knowledge.  This is important because development of science and knowledge affects the basic of ethics and morality of individual and society.  Fourth,  renewal of organization and management to meet current changes.  Fifth,  renewal of work ethos.

He admits that there two kinds of Islam.  One is ideal or original Islam and the other is historical Islam.  Ideal Islam is in theory while historical Islam is in reality.  There are deviations ans superstitions in historical Islam.  For example worshiping saints and certain tombs.

For Amin it means degeneration of belief  that will obstruct dynamics and creativity.  Furthermore there will be socio-political degeneration.  For instance moslem will tolerate exploitative,  tyrannic,  absolute kingdoms.  therefore injustices are common in moslem societies while Islam strive for justice.  Islam after the Prophet died fell into such practices.  Sultanate and kingdoms were nepotistic and oppressive.   Socio-political situations at that time was contrary to principles of equality and justice in Islam.  That’s why it is urgent to renew Islamic thinking.

Chapter III The concept of state

In his opinion political activity is not a monopoly of a certain party.  Anybody can take part,  including moslem.  It is an integral part of a moslem’s life.  But it must be legal,  constitutional,  transparent,  democratic and based on morality.  For him the elite leadership of society and state is no longer in the hands of ulama or mullah but ion the hands of those who have expertise.  This principle is based on the Prophet’s statement that any matter must be handled by those who have expertise and skill to manage it.

In his opinion source of authority is god,  not people.  He thinks that Islam can accept republic as long as people’s aspiration comply with the Holy Koran.  If it is against the Holy Koran,  even though it is the decision of the people,  Islam cannot accept it.  Islam can accept dialogue,  republic and democracy if the final parameter is ultimate truth from god.  He does not believe in “Vox populi vox dei” (People’s voice is god’s voice).  People’s decision might  be based on desire.  Therefore it is not ultimate truth.  He thinks that the Latin proverb is just an expression to underline the importance of people’s sovereignty but it is not ultimate truth.  He gives an example that in the US alcoholic drink is legal.  This is a proof that people’s decision is not always comply with god’s revelation.  Thus people’s decision is not always right.  So in his opinion god’s sovereignty is absolute while people’s sovereignty is not.

This divine perception has strong influence on his judgment to socio-political reality.  He believes that moslem must possess critical and corrective attitude and must always based his political activities on god’s revelation.

Uncritical,  uncorrective attitude that comes from fear to power means “political syirik“.  Syirik is an Arabic word that means worshiping something besides god.  This term is used to describe polytheism.  It means a compromise attitude of an individual who search support from human rather tahn from god.  Excessive respect or praise to leaders or cult that lead to uncritical attitude is an example.  Therefore,  according to Amin,  to respond to “political syirik” we must hold to “political tawheed“.  main characteristic of political tawheed is public must not have cult on their leaders.  Personal cult will make leader consider himself as little god.

Political struggle must meet several requirements.  First,  it must possess moral courage.  People must not be afraid to tell the truth.  Second,  it must be consistent.  Third,  it must have clear political concept.  Fourth,  it must possess mass support.  Fifth,  it mus possess clear vision.

When they are in power,  moslem must put public interest as number one and power must be managed widely.  Absolute power will make public loose initiative and afraid of making reform.  Consequently injustice and abuse of power will be considered as normal.  Therefore power must be limited by law.  Amin accepts democracy because there is no absolute power.

Platform of state

The platform of a state is the Holy Koran and moslem tradition.  There are several basic principles.  First is justice ( al adalah).  A state must provide justice in law,  social and economic.  This principle rejects exploitation.  There must be equality of opportunity and equality of result.  In law,  all members of society must be equal.  There mus be no exception.  In moslem tradition even Fatima,  the daughter of the Prophet Muhammad,  was equal before the law.  In social economy,  distribution of wealth must not create extreme disparity to avoid hatred among many groups in society.  Wealth must nmo0t be distributed among the rich only.  In short,  justice must be for all aspects of life.

Islam is religion of justice,  based on god’s revelation in the Holy Koran.  Man are ordered to create justice,  to give rights,  and to forbid evil deeds.

Second is freedom and equality ( al musawah).  Amin does not deny that there are natural differences in wealth,  social status,  power etc,  but the state must provide equality before the law.  Besides,  people must have freedom of speech,  freedom of religion,  freedom from fear,  and freedom of welfare.

Third is brotherhood (al ukhuwah).  The state must make sure that all citizen unite.

Fourth is democracy (al syura).  Authority must conduct dialogue with the people about their interest.  It is mandatory for any ruler to assure people’s political rights.  People’s participation is assured.  There is no place for authoritarianism,  despotism,  tyranny and dictatorship.  Absolute monarchy is contrary to Islam.

Fifth is transparency and accountability (al mas’uliyah) and mandate (amanah).  He thinks about clean and grand coalition to manage the state.  This coalition must be anti corruption,  collusion and nepotism.  Any ruler must be responsible to the people.  Impeachment to ruler who failed to accomplish their duty is legal in Islam.

In his opinion sharia does not discuss to detail as to aspects of institution,  technical and procedure of state management.  It means that moslem may create different form of state that fit to their conditions.  The most important thing is the state will implement those principles.

Significance of state

There are two objectives of state : implementation of religion and fulfillment of people’s needs.  These two objectives are just temporary objectives toward the final objectives : ultimate happiness in the hereafter.  Implementation of religion is achieved through legislative principles while fulfillment of people’s needs is achieved through policies.

Th state is the one who implement law enforcement and sharia.  The state is also an instrument of sharia.  The state must maintain order of law,  politics,  morality etc.

Implementing sharia is devotion to god almighty.  Devotion and submission to god is number one duty of mankind.  managing  a state is a devotion to god as long as its operation is within the sharia.  Therefore moslem must pay attention to operation of state.  Muslim must control the state to make sure that it comply to sharia.

As to the second objective of a state,  sharia allows rulers to adopt any method to achieve people’s prosperity.  The only limit is those methods must not contrary to Islam.

An important agenda for a state is securing its own natural resources.  The state must guard its natural resources not to be exploited by certain group of people only for their own prosperity while neglecting people’s interest.  For this reason he strongly opposed exploitation of Indonesian natural resources.

Chapter IV Relationship between Islam and state

He does not agree with revolution because it will affect the present condition.  he believes that a system may retain its form but its significance must be changed gradually.  And if there is a consensus to change the form,  it must be based on a common will for a common interest.

He admits that revolution,  in some specific cases,  may become a solution.  But a revolution,  if it fail,  will invite chaos ans suffering.  Therefore we must avoid revolution and support democracy.

Politics and dakwa have functional relationship.  They both try to implement morality.  Dakwa is an organized effort to free human being from all kinds of traditional,  animistic,  irrational cultures.  In the Holy Koran it is written that human being are khalifah (vicegerent) of god on earth.  Tawheed will drive human being toward an islamic order.

He believes that dakwa comprises all aspects of human life,  including politics.  So politics is a part of dakwa.  Politics is not contrary to dakwa,  if it is carried out properly.  Politics is a dominant factor in determining many aspects of life.  So politics ideally become an integral part of a moslem’s life.  Politics must be controlled to comply to god’s revelation.

Since politics is part of dakwa a moslem’s activities in politics must comply with certain rules.  He must not use violence or coercion.  Politics must be based on morality and ethics of tawheed. thus he gives no place for secularism.

When moslem win the power he got must be dedicated to god.  This is based on a Koranic verse that a moslem’s prayer,  life and death are dedicated to god.

He believes in what he called high politics which possess three characteristics.  First,  each political position is people’s mandate as well as god’s gift.  Second,  each political position contains accountability to human as well as to god.  Third,  political activities must be based on brotherhood.  There is no border of ethnicity,  race,  religion,  social background or descendant.  High politics rejects any kind of discrimination.

His paradigm focuses on substances rather than on form.  he believes that Islam never determine a specific state that must be built by moslem.  The substance is implementation of major principles of Islam,  especially justice as the most important one.  He gives example of unjust practices in Indonesia that provoked public unrest and violence in many places.

He elaborate further that there are two kinds of justice :  productive justice and sistributive justice.  The first one is public right to access all productive assets.  The second one is a condition in which all result of production process can be distributed equally in the society.  it is urgent to find an operable distribution system.

He identified three obstacles to implement the reform.  First,  the macro political system in moslem countries are not conducive to Islamic aspiration that demand democracy to implement principles of equality,  justice and brotherhood.  Second,  existence of strong domination of Western intellectuals in moslem countries.  This condition creates inferiority complex among moslem.  Third,  there is a dichotomy of intellectual and ulama (Islamic scholar) that impede the rise of Islam.

Amin Rais,  however,  according to Masykuri  Abdillah,  is a supporter of structuralist approach which focuses on transformation of socio-political institutions.  This approach also stresses on using political parties or interest groups to channel moslem interests.

As he grew up in Muhamadiyya community Amin is very close to scripturalist.  Take his view on law of inheritance,  for example.  He thinks that moslem must comprehend the verse as it is written.  Another example is his view on the issue of secularisation and secularism.  He opposes both which draw a line between the world and the hereafter,  sacred and profane.

In Islam there is no separation between religion and politics.  There is no line between religious and profane.  Thus Islam is a way to manage all aspects of life,  including politics.  He considered the Prophet Muhammad as a husband,  father,  statesman,  leader and general.  Islam ordered moslem to carry out Caliphate duty :  creating prosperity to achieve prosperity in the hereafter.

Amin rejects the idea of seperation between religion and politics by Ali Abdul Raziq,  a moslem scholar.  He said that Raziq’s idea will reduce religion into a private matter only and not as a base to solve community problems.

He believes that the state is the most important institution to implement sharia and implementing sharia means devotion to god.  But he stated that there is no such thing as Islamic state.  There is no such concept in the Holy Koran.  There is no order to build an islamic state.  The most important thing is the values.  As long as a state create justice,  egalitarianism,  and avoid exploitation of people,  then it is a good state.  It is better than a state with islamic label but does not implement isalmic values.  In short,  Amin focuses on ethics and values rather than on formal form of state.

In Indonesian context Amin thinks that the state ideology Panca Sila (the five principles) is not contrary to islam.  If all principles are applied properly,  Indonesia will implement Islamic values.  It means that Indonesia is Islamic.  On the contrary,  even if a state uses Islam asits constitution but not implemented properly,  it is not an Islamic state.  for example Saudi Arabia.  For Amin Saudi Arabis is not an Islamic state because absolute monarchy is contrary to Islamic values.  In the era of the prophet Muhammad leaders were elected.

Therefore in Amin’s opinion Islam as a moral base is mnuch more important than Islam as a formal base.  Implementation of Islam is not limited to narrow interpretation like wearing veil,  hard punishment for adulterer and thefy etc.  A state may become Islamic without Islamic label.  On the contrary a state with islamic label may be not Islamic.

In his opinion the hoily Koran is not a book of law but it is a flexible,  adaptative source of law.  On an interview with Tempo magazine he stated that islamic state does not suit to Indonesian context because Indonesian society is plural.

He accepts democratic state because it sprinciples are not contrary to Islamic values.  He believes that if democracy is implemented properly,  it will work for the benefit of moslems too.  It also means that Amin Rais is open to pluralism

Chapter V  Reflection and recomendation

In this chapter the writer thinks that Amin Rais is inconsistent.  In 1987 he launched the idea of high politics but then in 1999 he founded Partai Amanat nasional (national mandate party).  he also thinks that Amin as a scripturalist but also as someone who stresses on substance of Islamic values.

Opinion of a former President

Book Title :  Gus Dur Menjawab Kegelisahan Rakyat (Gus Dur Answers),  Jakarta,  Indonesia,  2008.

Abdurrahman Wahid a.ka. Gus Dur is the former President of the Republic of Indonesia.  This book is a compilation of his articles that he wrote for Kompas daily since 2001 to 2006.  That’s why there is no single topic of the book.  Here is the main points of his ideas.

Islamic State.

The topics are organized into four chapters.  The first one is about religion and power.  Gus Dur wrote that in Islam there is no concept  of Islamic state. In muslim history there is no clear ideas about changes of leadership.  There is no ideas as to the size of state.  The Prophet left no clear examples about the structure of the state.  Thus it is only a dream of some people. Furthermore,  they perceived in on the institutional aspect only.  The ideas on how to realize it is not clear either.

Resistance of Islam.

In the next article he also wrote about resistance of moslem to Western colonialism in Indonesia especially in the 18th century.  They opposed and endorsed at the same time.  Those who focus on sharia (Islamic law) endorsed those in power based on reasoning that “sixty years of oppression is better than a moment of anarchy”.

On the other hand,  those who focus on tharekat (Islamic mysticism) opposed colonial rule.  Consequently there had been many rebellions in many places.  They thought that the rulers broke the law,  especially religious law,  therefore they had to oppose.  That is why many tharekat leaders were tortured and even murdered.

But there was an Islamic clergy named Mutammakin who introduced cultural approach to resist the colonialist.  He avoided arm conflict.  He neither clearly opposed nor endorsed. Under Suharto the tharekat movement endorsed the government while the sharia movement like Nahdlatul Ulama and PPP (Islamic political party) waged cultural resistance against the government.

As for today,  he argued taht moslem must conduct cultural and political ways simultaneously.  For non- political organizations like NU,  cultural approach is best.  They must try to promote clean behavior in government.  While political parties must strive to crewate clean poltical system.

Islam and terrorism.

He emphasized that opinions of terrorists do not represent opinion of muslims as a whole.  They are only minority.  He insisted that religion of Islam is an inspiration for development of humanity and prosperity.  Majority of muslims are sunni and in their view suicide is forbidden.

Weakening of Islam movement.

Gus Dur realized that Islam movement in Indonesia is in the process of weakening.  Mentality of ulama or muslim scholar is dependent.  They often complained that their madrassa face financial problem while the government do nothing about it.  This complaint represent weak and dependent mentality.  Now the state and bureaucracy dominate the movement for their own interests.

On leadership.

As for reform movement,  he believed taht the government has done its best to implement it.  He insisted that the government should be wise to treat the armed forces so that they will support the reform movement.

His denial to the charge of parliament

In February 1,  2001 when he was President teh parliament accused him guilty receiving fund from teh Sultan of Brunei Darussalam and fund from Bulog (state owned company which deals with rice and food distribution) but not reported it to state budget.  The parliament accused him to break the Constitution and People’s Consultative Assembly decison about clean government.

Gus Dur denied the accusation.  He argued that the charge must be based on fact thet the President “really breaks the state guilines” while the parliament only stated that the President is “suspected to play role”.  Further he wrote that there is no evidence that the President “really breaks the state guidelines”. He wrote that one day he heard that Sultan Brunei had zakat (obligatory charity for the poor) so he contacted the Sultan.  Then he received fund from someone who received the fund from the Sultan.  And that it was him who told public about the fund.  He argued that the fund is for him personally and not for the state.  He was sure that the management of the fund has nothing to do with the institution of Presidency.  He was sure that the fund was given to him personally because he is a kyai (clergyman) and therefore the fund was beyond public law.  He confessed that the fund had been given to NGO’s.

He further accused that the special committee of the parliament that worked on his case in unlawful.  He wrote that the parliament broke its own rules and regulations.  He accused taht the parliament would overthrow him from Presidential office.  This move is not based on reality and therefore it is not not just.

Finally he appealed that everyone stop political conflict because conflict would only halt reform movement and economic recovery.  He further appealed Indonesians to hold on to the state ideology Pancasila and the Constitution.

Politics and Social Change

Current events in Indonesia indicates social change.  Euphemism had change into disinformation.  For example,  in Bahasa Indonesia secured’ (diamankan)  means arrested.  In Indonesian songs today,  expressions of love are getting more and more vulgar.  In political system  orientation and scope of activities of the elite is focused on power and clique as well as personal interests.  Therefore,  manipulations,  dirty tricks and abuse of power take place.  In many places there are unfair election practices.  So,  it is imperative that the present political elite try to avoid conflict.

Law and implementation

Gus Dur also gave comment on law number 23/1992 about health and law number 4/1997 about disability.  He believes that the law is intended for him,  to prevent him to run for presidential office.  (He is in poor health)  For him Election Commission acts discriminatively to him and therefore kills democracy.  He wrote that it is not about Gus Dur but it is about supremacy of law and about equal treatment of all citizen before the law.  It is not important for him but it is important for Indonesia.  He believes that Indonesia lose an apportunity to have a strong leadership.  Indonesia, therefore,  is under serious threat of becoming puppet of strong nations.

Moral and spirituality

He wrote that Indonesian traditionalist muslims so not reject Wahdatul wujud but they accept it selectively.   They believe that the public is not fully ready to accept it. Nationalism,  sufism,  and democracy. Struggle for Islamic state had ended by Ugust 18,  1945 when political leaders signed the Jakarta charter.  Muslims had accepted pancasila (the five principles) as the state ideology.  But other streams thought that Pancasila must be influenced by Islam.  It is not important anymore to struggle for formal Islamic state but it is important to dominate the system with Islamic values.  Therefore Sufism may play an important role as a bridge between them.

On justice and reconciliation.

He believes that Indonesian people must be able to accept others who have different opinion and who disagree in politics.  He urges that Indonesians should accept ex-members of PKI (Communist Party of Indonesia).  He believs taht Indonesia need reconciliation.

On music

Indonesian music called Dangdut is getting more and more popular these days,  not only in Indonesia but also in Southeast Asian countries.  Like many other aspects of Indonesian culture,  it is ablend of many cultures. There is Malay influence.  It is based on old Malay music but then there is also Indona influence.  Then Indonesian musicians developed it by adding local and international influence.  Rhoma Irama is a wellknown musician who developed it.  Today it is different from Malaysian music.   Similarly,  it is hard to say that it is Indian music. Inul Daratista is a rising star in Dangdut industry.  A village woman from a small town in east Java,  she introduced erotic dance to Dangdut performance.  Rhoma Irama who is a devout muslim sharply criticized her.  Meanwhile Gus Dur wrote his appreciation to all kinds of music.  He saw the latest development in Indonesian music is a mature one.

On Palestine.

After Arafat gone,  if Abu Mazen or Abu Ala win the presidential election,  then the problems of Palestine won’t change.  But if young leaders win,  there will be great changes.  There are full of possibility ahead of them.  Gus Dur also appeals that the Arab and the Israeli keep on negotiating.

The Great State Robbery : The Case of Bank Indonesia Liquidity Support

The introduction of the book is written by DR Sri Edi Swasono. He wrote that the BILS scandal is the biggest bank crime in the world. It is an extraordinary conspiracy of corrupt officials with corruptors who dictates them. It is a global conspiracy to weaken Indonesia and to pave the way for territorial occupation and exploitation of Indonesia’s wealth.

Political recruitment was nepotistic and corrupt so national leadership was filled with mediocre individuals. Consequently Indonesian national leadership was weak. Some of them even suffer from inferiority complex. This condition opens the door for outside imperialistic power to rob the state.

Series of suicidal policy started in 1997 when the government accepted IMF pressures to liquidate 16 banks. This policy created uncertainty and panic among the public, so there was rush of fund from banks. Consequently banks balance in Bank Indonesia (central bank) were negative. President Suharto had no choice but to agree on Bank Indonesia to issue special bond for bank balance. But this policy was useless. Once again he was cornered. In the middle of the crisis, the government issued BILS to save banks balance.

The first phase it was issued IDR 144.536 trillion then increased to IDR 164,536 trillion. Next there was President decision no 26/1998 on government guarantee to pay all banks liability as much as IDR 57.779 trillion. After that the government created Indonesian Bank Restructuring Agency (IBRA) to take care of the guarantee. The third phase was when the government agreed to sign Master Settlement and Acquisition Agreement. This is contrary to justice, logic, and Indonesian law system. Release and discharge neglected supremacy of public law to private law. It broke Indonesian law on bank.

In short, Indonesian monetary authority failed to resist IMF pressures which worsen the situation. Their policy is not for Indonesian interest but for theirs.

Marwan Batubara wrote comprehensive analysis of the scandal in the following chapters. First he wrote about the definition and comprehension of BILS. Then about its background and chronology. Next about corruption and misuse behind it. After that about inconsistency of law enforcement. Then about those who must responsible. Next about ways to solve the problem.

Soedradjat Djiwandono, the former governor of bank Indonesia defines BILS as facilities given by BI to keep stability of payment system in the banking sector in order not to jeopardize by mismatch between revenue and withdrawal in banks in short run and the long run. There are discount, foreign exchange and overdraft facilities.

The support were given following the monetary crisis in 1997 in several phases. First during the crisis (September 1997) 54 banks were given IDR 144.536 trillion. Second, from February 1999 to May 1999, there were additional IDR 14.447 trillion. Third, there was the so called “blanket guarantee”. On May, 1999 the government issued bond as much as IDR 53.779 trillion. After that there was banking recapitalization program in which the government issued recapitalization bond as much as IDR 431.6 trillion. Including interest, the total amount may reach IDR 1.031 trillion.

But then there were corruption and misuse of BILS. The state auditory agency found abuse and corruption of BILS fund. State loss reached IDR 138.4 trillion or 95.8% in channeleing of fund and IDR 84.82 trillion or 58.7% in the use of fund.

Law enforcement is inconsistent and unfair. Settlement of shareholders’ obligation is neglecting and disrespecting the law. Release and discharge is an insult to law supremacy. R&D is Presidential instruction to release BILS debtors if they pay cash 30% of their debts and the other 70% using certificate. The President instructed attorney general to stop the ongoing investigation. R&D is against the Indonesian law. This instruction broke the principle of equality before the law, since it gave freedom to criminals. This is also an intervention of executive power to judicial power.

The mechanism of settlement of shareholders’ obligation is out of court settlement. There are three patterns : Master Settlement and Acquisition Agreement, Master Refinancing and Notes Issuance Agreement, and Promissory Notes. MSAA is asset settlement from shareholders to IBRA. The given asset must equal to the debts, without any personal guarantee. MRNIA is asset settlement that is less than the debt with personal guarantee to the same amount as the balance. Promissory notes is an agreement between debtors and IBRA to settle the debtors’ obligation with collateral.

The first agreement was signed by finance minister on September21, 1999 but at the time there was no legal base. Later the government passed several regulations but still there was no firm regulations.

Presidential instruction number 8/2002 instructed to give letter of settlement to 21 debtors since they gave their asset. Their debts amount is IDR 96.6 trillion. But later it was found that their asset was fictive. Four banks did not receive letter of settlement. Their debts is IDR 23.8 trillion. Recovery rate from them is only 9.75%.

Up to now there are eight debtors whose settlement was given to IBRA, 30 debtors whose settlement was given to police and attorney general, and there are more people involved. There are 65 suspects but only 16 stand for trial. Out of those sixteen, three are free, two are sentenced to four and eight years, five persons are sentenced for life and five years but they ran abroad. There are eight persons who ran abroad. Based on this fact Marwan came to a conclusion that the attorney general is not serious, not transparent. The verdict is also arousing his suspicion that there is judicial corruption.

There are eighty Bank Indonesia officials who neglected supervision, firm action and preventive actions have been investigated by the attorney general but only three stand for trial. They were sentenced to three years and two and a half years of imprisonment respectively. At the supreme court they were sentenced to one and a half year of imprisonment.

Judicial institutions have produced unjust decisions. They are not serious in handling the BILS cases.

Presidential instruction number 22/2002 is the peak of unjust practices. It focused only on asset recovery and neglected law enforcement. It also broke the principle of equality before the law and separation of power because it intervened the judicial power.

The President instructed coordinating Minister of economics, Minister of law and human rights, Minister of state-owned companies, attorney general, chief of police, and chief of IBRA to take necessary steps to settle shareholders’ obligations according to MSAA, MRNIA and promissory notes. Those who have done their obligations were given letter of settlement. For those who are in the process of settlement will be given time to settle their obligations. For those who are not willing to settle their obligations within the time limits will be given firm actions , that will be coordinated among chief of police, chief of IBRA, and attorney general. But the investigations of public law aspects were terminated. They were considered to have done their obligations eventhough they paid in cash only 30% of their debts and would pay the rest by giving their assets. The attorney general then stopped the investigations on ten suspects of the BILS case because they were given letter of setlement from IBRA.

The Presidential instruction is clearly against the 1945 Constitution and MPR (People’s Consultative Assembly) decisions, law number 31/1999 on eradication of corruption, law number 8/1981 about public law, law number 5/1991 on attorney general, private law, the principle of equality before the law, and the principle of law certainty.

Bond for recapitalization is a systematic way to steal people’s money. This policy is intended to make banks recover from liquidity crisis. But there are several abuses. First abuse is government bond. IMF insisted that the government must give bonds to improve equity and capital adequacy ratio of banks. Kwik Kian Gie said this is illogical because the government who had helped them is given punishment by paying them using bond. Therefore it is an abuse. The government must pay trillions of Rupiah for its interests plus hundreds of trillions of rupiah up to 2021.

Second abuse is, the bond is not revoked eventhough the banks are now in good conditions. Third abuse is, the bond is not revoked when the banks were sold. Fourth abuse is, the sale of banks are not transparent. Fifth abuse is, banks were sold although minimum price is not met.

In 2002/2003 from total domestic debts of 643 trillion IDR, the burden of bond payment is two-thirds of it, and one-fourth of it come from BILS policy. It is a blunder, a heavy burden. In 2004 interest payment was IDR 62.486 trillion, consist of 24.374 trilliopn for foreign loan and 38.111 trillion for domestic loan. Total loan payment was 134.433 trillion IDR. It was 101.69 % of development budget.

Up to May 2004 the government had issued 640 trillion IDR, consequently the government must pay about 40-50 trillion IDR annually.

Who must be responsible ?

The first to be responsible were debtors of BILS. Then former President Suharto and his ministers. Next are officials of bank Indonesia. After that IBRA. Then former President Megawati and his minsters for giving release and discharge to debtors. Then IMF for dictating Indonesia to take suicidal policies such as liquidating banks, taking tight money policy, privatizing state-owned companies, and recapitalizing banks. In short policies dictated by IMF are not for Indonesian interests but for their own.

Crime of debtors.

There are many ways of manipulation and abuse of BILS. First they manipulated financial report so that it is difficult to know the real conditions of their banks. The most common manipulation is by manipulating transactions to avoid legal lending limit. Second is by using BILS fund for the interests of their business group. They gave 20.36 trillions to their affiliates. Then there is suspicions that they bought US dollars so they weaken rupiah. Then they also marked up the amount of rushed funds. They also manipulated their debts into dollars so they can claimed the government to pay their debts based on Frankfurt Agreement. They took advantage of the high BI rate by withdrawing their funds from abroad to be deposited. This investment is very profitable.

In the settlement phase they used fake and undervalue assets. The total collateral they gave to IBRA was said to be IDR 132.77 rillion but the commercial avlue is only IDr 12.29 trillion. It means that the mark up value is IDR 120.5 trillion. In reality the take over of asset is deceptive because teh management of those asets are still in their hands.

Role of Bank Indonesia and IBRA.

Policies of BI are temporary, individual, subjective and erratic. They are not firm in law enforcement. Their policies are not transparent. BI gave BILS to banks that broke banking law. Besides that, BI officials gave 100 billion IDR to YPPI foundation that later gave it to some member of parliament to amend BI law.

IBRA did not apply principle of prudent in managing assets of debtors. They were wrong in the asset valuation, when they gave trillions of government bond to banks without appropriate control to make sure that they will return, and when they sold the assets of debtors in very low price. Their performance is poor in settlement of debtors’s obligation, settlement of banking obligations such as non performing loans, and in divestig government shares in banks to return state money.

Role of IMF in BILS case.

On October 1997 IMF agreed to give US $ 9.709 billion to teh government of Indonesia on several conditions. The government must implement economic reform policies like privatization, increasing subsidy, fianncial liberalization, and banking rewform. IMF intervention in Indonesian economic policy is not only in financial sector but also in other sectors such as asset recovery, privatization of state-owned companies, investment and deregulation and foreign trade, even in social security, decentralization, and law reform and environment. The consequence is hard-Indonesian economy was decreasing. Tight money policy resulted in economic stagnation. The liquidation of sixteen banks made public panic and rushed their funds from banks. Consequently banks suffered from liquidity crisis and needed support. IMF, World Bank and ADB pressed the government to take over companies’ foreign debts as much as US $ 1,099 billion or approximately IDR 9.8 trillions. This policy resulted in the weakening of Rupiah and further weaken the ability of private sector to pay their foreign debts.

The worst policy dictated by IMF is when the government issued bonds to recapitalize banks. IMF stated that banks needed capital adequacy ratio of at least 8% to stay healthy. The government then gave IDR 431.6 trillion plus interest that must be paid annually. The total amount of interests, if paid on time, will be IDR 600 trillion. So the total amount will be IDR 1.031 trillion. So the state must bear very heavy burden. The state budget must pay about 40-50 trillion IDR each year.

IMF also forced the government to sell recapitalized banks. On March 2002, 51% of government shares in BCA was sold for IDR 5 trillion. At the time BCA had recapitalization bond as much as IDR 60.9 trillion. By paying 5 trillion the buyer can have 9 trillion annually from interest.

In the closing chapter Marwan Batubara appeals the government, the parliament, and judicial institutions to take ten steps.

1. Settle BILS case according to law in an objective and just process that is pro public intersts.

2. Cancel presidential instruction no 8/2002 about release and discharge and review all unjust decisions about BILS case.

3. Ask IMF responsibility for pushing the Indonesian government during crisis to take policies that are detrimental to Indonesian economy.

4. Create breakthrough to quicken the settlement process of BILS case by creating ad hoc tribunal.

5. Attorney general should resolve the BILS case and force the actors to stand trial.

6. Take over all asset of debtors who have not paid their debts.

7. Investigate thoroughly all government officials involved in the BILS.

8. Try to recover the state money given through BILS case.

9. Stop subsidy to banking sector through interest of recapitalization bond.

10. Stop selling government shares in recapitalized banks, until the government managed to revoke all recapitalization bonds in banks.

The final chapter of the book is written by several experts like  Kwik Kian Gie,  Aviliani,  Frans Herndra Winata,  Fadhil Hasan and Hendri Saparini.

The BILS case remain the hottest issue in Indonesian politics today.

Indonesia, Amin Rais and Globalization

Amin Rais, no doubt, is one of the initiator of the reform movement in Indonesia known as reformasi in Bahasa Indonesia (Indonesian language). He was born on April 26, 1944 in Surakarta (Solo). He passed from Muhamaddiyya elementary school, junior high school and senior high school, in his hometown. He also studied in Mamba’ul Ulum and Madrassa al Islam in Solo. After that he continued his study at International Relations Department, Gadjah Mada university, in Yogyakarta. He also studied at Tarbiyya department of Sunan Kalijaga Insitute of Islamic Studies in Yogyakartas where he achieved his bachelor. Then he continued his study to United States where he got his master degree from Notre Dame University in 1974 and his Ph D degree from Chicago University in 1981. In 1978-1979 he studied at Al Azhar university in Cairo, Egypt. After Soeharto fell from his office he established Partai Amanat Nasional (national mandate Party) and he became the chairman. In 1999 he became the chairman of Majelis Permusyawaratan Rakyat (People’s Consultative Assembly). He failed when he ran for presidential election in 2004 and since then he went back to Yogyakarta to teach. Today although he is no longer the chairman of National Mandate Party, he remain one of the prominent persons in Indonesian politics. Recently he just launched his book - Agenda mendesak bangsa - Selamatkan Indonesia (Urgent Agenda - Save Indonesia) . Here is the abstract of his book.

Chapter I : History repeats itself.

He wrote that what happened  in Indonesia over the past several decade of 20th century and the 1st decade of 21st century, in many ways, is just repetition of our experience during colonial period. the difference is merely in format. Long time ago they used to occupy us using military power while today they use other power. To some extent we lose economic sovereignty that weaken our political, diplomatic and military power. He appeals us to learn from the lessons of history. He cited a Spanish philosopher George Santayana who said that ‘those who fail to learn from the lessons of history are doomed to repeat them’. He further wrote that the Dutch East Indies company and the Dutch government could exploit Indonesia for more than three centuries due to mechanism of corporatocracy. The Dutch East Indies company could occupy Indonesia because the Dutch government gave full support , including military support. Banks also supported it. So did mass media so that stories about colonization had been distorted. Black sides of colonialism never revealed. Intellectuals also gave their support. Snouck Horgroje was an adviser to Dutch viceroy Van Heutsz. He gave his advice on how to conquer Aceh where fifty thousand to one hundred thousand people killed. The local elite also gave their support. Sultan Amangkurat I and II from Mataram opened the way for the Dutch company. At the end of 17th century Paku Buwono I gave even greater concessions to the Dutch. By 1755 territory of Mataram kingdom had been seized by the Dutch, and only small part remained. The consequences of long colonial rule also damaged our mentality and mindset. We have mentality of inlander (literally means native people but with pejorative meaning) who have inferiority feeling. At present the Indonesian elite bowed down to corporatocracy powers so that they destroy our economic sovereignty.

Chapter II : Weakening Globalization.

Globalization is a process of rising interconnection among many societies so that events in a country will influence other societies. Globalization refers to rising economic integration among nations, mainly through trade and finance. Consequently forces of market and financial centers break through national boundaries and smash economies that are not ready. IMF insisted that free market economy assumes efficiency through competition and division of labor and will lead to better access to capital flow, latest technology, cheaper import and wider export market. World Bank stated variations of view on globalization. One sees it as a process of impoverishment of the world’s poor and enrichment of the world’s rich and damaging environment. The other see it as the best way to develop universal peace and prosperity. The core is a process of sharing world economic activities by three activities : international trade, foreign direct investment and flow of capital market. Jan Aart Scholdt describes five definitions of globalization in literature : 1.globalization as internationalization as seen in international activities encompassing boundary of each individual country that will create inter dependency regarding mainly trade and capital. 2.Globalization as liberalization refers to process of erasing various political restrictions so that world economy will be more open and unlimited. 3.Globalization as universalisation of information, communication and transportation of other activities of world society. 4.Globalization as westernization that means the spread of the West’s modernity structure regarding capitalism, industrialism, bureaucratism, etc at the cost of local cultures. 5.Globalization as deterritorialisation that means reconfiguration of geography, so that social sphere no longer defined by territorial map, distance and territorial boundaries.

Three pillars of globalization : IMF, World bank and WTO are based on ideology of Washington Consensus designed by John Williamson. There are ten recommendations for developing countries : 1.Fiscal policy discipline. 2.Redirection of public spending subsidies. 3.Tax reform. 4.Interest rate that are market determined and positive in real terms. 5.Competitive exchange rates. 6.Trade liberalization. 7.Liberalization of inward foreign direct investment. 8.Privatization of state enterprise. 9.Deregulation -abolition of regulation tat impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions. 10.Legal security of property right. The three pillars of globalization are very powerful. Jim Garrrison who wrote America as Empire : Global leader or Rogue Power ? stated that they dictated the direction of globalization, which rule to obey, which country to be awarded and which country to be punished for resisting them. The United States with three hands of globalization wants to integrate all national economies into one free market while Washington Consensus wants ‘to break down national barriers to trade, end protectionism, expand free markets and free zones and allow capital to flow anywhere with minimal restraints or regulations. John Rolston Saul in his book The Collapse of globalization, wrote that promises of globalization like : -authority of nation states fade away. -those nation states may collapse. -power lies in the global market in the future. -economy, not military, that shapes events. -global economic market, if let free, will reach international economy equilibrium. -boom and bust will end. -free market will push trade that will in turn improve world economic growth. -prosperity will wipe out dictatorship and replace with democracy. -the new democracy will erase narrow nationalism, irresponsible racism and political violence. -in economy, substantial market growth needs bigger corporations. Big corporations make bankruptcy impossible and assures international stability. -leaders of trans-national corporations will lead civilizations for market control. -world corporations will become a kind of state and their dominance will not easily penetrated by local prejudices. These conditions will lead to good government and debt -free government and history will indeed be dead.

Globalization and economic imperialism.

Dr Mahathir Mohammad, former prime minister of Malaysia, reminds us about the danger of neo-colonialism when he said:”neo-colonialism is not a fancy term carried by President Sukarno. It is real. We feel it as we come under the control of agencies owned by our former colonial masters”.

He further reminds us that if Asian countries want to develop they have to change their mindset to be truly free and sovereign. Amin agrees with him.

Since foreign economic expert said that the most productive economic system is market-friendly ones, some of us echoed the appeal that our economy should be market-friendly. They forget that market just search for profit. Joseph Stigliz reminds that the invisible hands theory is not real.

Globalization is in fact economic imperialism. There are three characteristics. First, there wide gap of prosperity between colonial countries and colonized ones. Second, the relationship between the colonial and colonized are exploitative. Third, colonized countries lose sovereignty in its widest sense. The present condition is no similar. By the end of 1990’s 20% of the world population in developed countries enjoyed 865 of world income while 20% of the lowest only got 1% of the world income. 1,3 billion people or 1/6th of the world population earn less than one dollar a day. Per capita income in more than 80 countries in 1990’s are lower than in 1980’s.

Noam Chomski reminds :”globalization that does not prioritize the right of people will very likely degenerate into a form of tyranny, perhaps oligarchic and oligopolistic, based on concentrations of tightly-largely unaccountable top the public”. James K Galbraith said that economic and social gap in the globalization era is a perfect crime.

Exploitative economic relationship in the globalization era basically lead to concept of “one-size-fit-all golden strait jacket” of Thomas Friedman that comprise of :low payment for labor to control inflation rate, privatization of state owned companies to global security market s, erasing tariff and quota
so that good may fully penetrate state boundaries, prioritizing production of export goods and opening all economic sectors to foreign ownership.

This concept is of course beneficial to strong states at the cost of weak ones. This system will eventually fail. Advance countries like US, UK, France, Japan, and Canada give billions of dollars to support their agricultural products while developing countries are under heavy pressures to ope their markets. Indonesia was pushed by WTO to receive US chicken, consequently thousands of local chicken breeder went bankrupt. Indonesia also had to receive sugar, textile, and many other commodities. No wonder that Henry Veltmeyer wrote that globalization sponsored mainly by US is economic imperialism.

Globalization based on new economic model or neo liberalism went smoothly for big countries interests. One of the doctrine is to drive countries to integrate their economy into a single global economy. The doctrine comprise of : trade liberalization, deregulation of production, capital and manpower, and downsizing state role, regarding mainly economic and social development program.

The main objective of the structural reform is to minimize role of state and replace it with private institution and release economic powers from regulations so that market economy moves freely with minimum control.

George Bush said :”the forces of economic and political freedom could flourish, vanquishing the enemies of freedom and obstacles such as government regulations, capital controls and restrictions on the movement of goods and capital.

Among US elite there are new conservatives who established Committee on the Present Danger, whose dream of American foreign policy is imperialistic. They are Donald Rumsfeld (former defense secretary), William Kristoll, Irving Kristoll, and academicians like Richard Pipes, Paul Wolfowitz, Richard Perle.

George Soros in The Bubble of American Supremacy, reminds us that what happened in America today is a combination of market fundamentalism and religious fundamentalism. Jim Garrison, chairman of the state of the world Forum reminds us, in America as Empire : Global Leader or Rogue Power ? that US has changed from a republic into an empire. He further predicts that one day America will decline.

Exploitative economic relationship and imperialism create gap and erase sovereignty of weak states. Indonesia is one of those victims.

Chapter III : Internal Sharp Criticism.

Criticism to globalization come from within like Joseph Stiglitz who won Nobel prize in economics in 2001, John Perkins who wrote Confessions of an economic hitman, NGO activists like Naomi Klein, Susan George, Arundhati Roy, Tariq Ali, Stephan Lendman, Chalmers Johnson, Noam Chomski, James Petras, Walden Bello, Howard Zinn, Kenneth Galbraith and many others.

Joseph Stiglitz wrote three books on globalization : Globalization and Its discontents (2002), The roaring Nineties : seeds of Destructions (2003), and Making globalization work (2006). In his first book he wrote that free- market economy never result in efficiency because there is asymmetrical informations of market.

Stiglitz corrects IMF’s theory that economic openness and liberalization are panacea. Sates that open to free trade, and deregulate their markets and privatize state- owned companies suffer from economic and social setbacks.

Developing countries become victim of hot money that rise real estate but then when investment market change, their money is pulled and result in bust. Boom and bust.

Stiglitz said that privatization never take into account the importance of corporate culture, under estimate problems of building the needed institutions and that many government cannot create just regulations.

Sustainable development needs not only liberalization and privatization but also programs to ensure all segments of society take advantage of globalization.

IMF neglects impacts of wealth distribution. By demanding financial austerity, driving liberalization, IMF erase legitimacy of many governments.

Stiglitz said that United State’s control over world bank and IMF is too strong, consequently they become instruments of Us foreign policy that push developing countries.

World Trade Organization reflects gap and hypocrisy of developed countries. They push developing countries to open their markets for their products, but they closed their markets to developing countries, especially in agriculture and textile products.

They push developing countries not to give subsidy to farmers. US talks about excellence of competitive market but protects its industry of aluminum and steel when they are under threat.

US push for liberalization of financial sector but oppose liberalization in general, include construction and maritime.

In his book, Making Globalization work, Stiglitz wants to save capitalism through market reform.

He wrote about paradox of plenty and oil curse. natural resources make nations lazy, unproductive, and lowering manufacturing industry, agriculture and decrease export. Corruption make situations worse.

Stiglitz praised China, India and Malaysia who can develop their economy without following Washington Consensus and take globalization selectively. Globalization in east Asia shows good result. Over the past thirty years they grow six percent annually while in Africa they decrease by 0.2 % per year.

Stiglitz said that oil, gas and mining companies try to assure governments of developing countries to gain as little profit as possible while helping them find foolish reasons that gaining little portion is better.

If governments of developing countries are sure that most profit are for those companies and the host countries get minor portions, developing countries like Indonesia have no future. Those companies become a state above a state.

We respect pacta sunt survanda but we forget an important clause - rebus sic stantibus ( things thus standing). It means that our agreement is no longer applicable when there is fundamental change in the context. If an agreement make one party suffer from great losses, then the party can ask for renegotiation.

Indonesian position.

Stiglitz reminds Indonesian to get rid of false understanding of globalization. He said that liberalization pf capital market is not a solution. Amin Rais insisted Indonesia to find a new agenda like land reform and investment in education and renegotiation of mining sector. This actions will make greater profit.

Malaysia, Brazil, Chile, and Norway that operate their mining sector by themselves achieve greater profit than what corporates give them. Latin American countries show how renegotiation give more profit. There is no contract that cannot be renegotiated.

There are at least four reasons for Indonesia to demand renegotiation. First, the doctrine of pacta sunt surbanda must be understood as a unity with the clause of rebus sic stantibus. If a contract is detrimental to a party, then the party has a right to renegotiate the contract.

Second, article 1(1) of the International Rights Covenant on Civil and Political Rights stated :”All peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic corporations, based upon the principle of mutual benefit, and international law. In no case a people be deprived of its means of subsistence”.

Third, interpretation of Universal Declaration of human Rights give us confidence that protecting and managing our natural resources is one manifestation of human rights. Article 3 and 4 of Universal Declaration of Human Rights ensure everyone’s right to enjoy life, freedom and security. An expert said :” each people’s right to its resources is a human right”.

Fourth, the 1945 constitution, article 33(3) :”The land, water and natural resources are controlled by state and shall be managed to the maximum of people’s prosperity”. Contract in mining of oil and gas and others are harmful to Indonesia and excessively beneficial to foreign investors.

Since the operatorship of most mining are under foreign corporations, they always mark up the cost recovery.

Most probably Indonesian leaders are narrow minded and they have vested interests. They search for profit for themselves, for their family, and for their clique and they neglected the interests of their nations.

Amin questions Exxon be given operatorship of Cepu bloc rather than state oil company Pertamina while Indonesian geologist stated that they are capable of operating the bloc.

By 2036 when contract with Exxon terminates and by 2041 when contract with Freeport ends, our mining wealth will diminish and our environment will be destroyed. Joseph Stiglitz advice is similar to Amin’s and some Indonesian leaders’.

Chapter IV : Pax Americana

Post World War II US became world leader but they went too far. Arrogance made US intervene in Vietnam and many other parts of the world. Under Clinton there was a cabal or group of intellectuals, journalists, politicians, who dreamed of a Pax Americana. Those new conservatives want invincible military supremacy and their view on international politics is identical to that of Israel.

The root is Defense Planning Guide, designed in 1992 by seven persons : defense secretary Dick Cheney, Andrew Marshall, Paul Wolfowitz, Zalmay Khalilzad, Lewis Libby, Richard Perle and Albert Wohlstetter. The main points are : US military spending must increase so that none may come close to US military anywhere in the world, preventive and preemptive strike mat be carried out anytime if it meets US global interests. US has a right to intervene to any conflict, in any place, although not in US interests directly, but of its allies to keep international stability.

In fact, preventive and preemptive strike is to protect, to expand and to ensure US economic interests, including to control oil and natural resources in developing countries. But Clinton declined it.

Then the group joined Project for the New American Century. They designed a document called Rebuilding America’s Defense. First, US military supremacy must be retained. Second, global hegemony must be kept with any means. Third, US military build up include nuclear weapons. War theater is not limited to space but also outer space and cyber space.

These neo-cons are now inside Bush administration. In 2002 White House issued a document called The National Security of The United States of America. This documents is based on RAD and and PNAC documents.

Bush Doctrine

This doctrine refers to NSS designed by neo-cons. It is contrary to morality and international law. What happened in Iraq, Afghanistan, Guantanamo are examples. Bush is similar to Hitler and Caligula.

It is not only about politics and military but it is also about economics. Chapter IV : “Ignite A New Economic era of Global Economic Growth through free markets and free trade”. It is just s repetition of Washington Consensus plus keeping environment and global weather. But US did not sign Kyoto Protocol.

NSS 2002 is renewed in NSS 2006. Political and military aspects remain and economic doctrine is confirmed especially about free trade while erasing protectionism. In short Bush doctrine is equal to globalization theory of IMF, World Bank and WTO.

Chapter II : Champion Aspirations for Human Dignity is ridiculous. It said the world has seen expansion of freedom, democracy and human dignity. Afghanistan is said to be a success story while Afghan people feel their life is much better before US occupation. Iraq is said to be a success while everybody knows that Iraqi government is a puppet.

NSS 2006 also stated that Lebanon, Egypt, African countries, Latin America and Asia (but not clear which one) are successful in keeping democracy, rule of law, free court, economic growth and improving human rights. At least a part of it is an insult to human intelligence.

Criticism to Pax America.

The US supremacy is in the brink of collapse. Today there are 4000 deaths of US soldiers in Iraq with one trillion dollar losses. If America lose in Iraq, they will lose against stronger North Korea and Iran. Second, there are internal weaknesses obvious during hurricane Katrina. The world knows that there is a part of US which is poor and under developed and has no future. When Mississippi bridge fell they revealed that 28% of all bridges are structurally deficient.

Third, US economy is weakening. The trade balance is suffering from deficits.  Foreign loan is soaring. Unemployment is also rising.

Amin is sure that the US and its allies in the near future will decline. US has passed the peak of its political, military, social achievement. It is about time for them to go down.

Amin cited Cornelius Tacitus, Arnold Toynbee. He also cited J.B Foster and R.W. Mc Chesney who wrote Pax Americana. They wrote that Pax Americana changed into Pox Americana. Amin further reminds US to be humble and to learn from history lessons.

Chapter V : Corporatocracy.

The word corporatocracy , introduced by John Perkins who wrote Confessions of an Economic Hitman, is “the new elite who had made up their minds to attempt to rule the planet”.

1.Big Corporations.

There are several differences between ordinary crime and corporate crime. First, creating law or more precisely dictating law through executive, legislature and judicature. Second, the damage and loss caused by corporate crime is much greater than ordinary crime. Third, they have political power so they always win the legal process. Fourth, they are so strong that many judges and attorneys back them instead of justice. Fifth, legal institutions like police, judiciary, and attorney do not have capability and courage to fight corporate crime. The clean ones do not have courage. Corporatocracy is beyond the reach of legal institution.

2.Government.

Actually government are stronger than corporations because they have legitimacy, military power, and legal institutions. But in reality many of them surrender to economic interests of big corporations.

The easiest way for corporations to control political power is by giving campaign fund when candidate run for public offices. Elected president then will give favor to those who had helped him/here come to power. Campaign fund remain a complicated problem in America.

There is a more effective way fir American big corporations to control government. It is by by directly controlling important posts. Dick Cheney was a CEO of Halliburton based in Dallas, Texas. Condoleezza Rice, US secretary of State, was director of Chevron. Both Bush Sr and Bush Jr used to do oil business.

It is not exaggerating to say that the real reasons behind US occupation in Iraq is ambition to seize Iraqi oil fields and to serve the interests of big corporations. The reason that associates existence of weapons of mass destruction is just a lie.

It is clear that the most important element of corporatocracy - the big corporations - cannot reach their objective without political power from governments.

3.Banking and international financial institutions.

World Bank and IMF are pillars of globalizations. Both play the role as instruments of international capitalism, maximizing profit to big corporations and preserving economic dominance of US. World Bank give long-term loans to developing nations to finance development projects like dams, roads, power stations, bridges, harbors, schools, and many other infra structures. IMF chooses which country need aid to achieve economic and financial stability and give directives (pressures) to aid-receiving countries.

Countries wanting to receive aid must apply Structural Adjustment Programs dictated by IMF and WB. They must sell their state-owned companies. They must forget about or minimize budgets for education, health, child care, pension fund, and must deregulate their economy, open their market, decrease subsidy for local industry, open national economy so that big corporations may come, decrease import barrier, give license and facility to foreign corporations to gain direct access to natural resources with cheapest price, and never fix currency rate.

Jeffrey Sachs, Jesse Jackson are among critics of their role. But the hardest critics come from Latin America. Hugo Chavez, the president of Venezuela, said that WB and IMF are tools of US imperialism. Venezuela resigned from WB and IMF on reasons that they just preserve poverty by dictating economic policies that are detrimental to public.

By 2002 Venezuela with Bolivia and Nicaragua resigned from International Center for Settlement of Investment Dispute. Then Bolivia insisted to reconstruct all contract with mining companies that used to be harmful to their interests to become profitable to them. Venezuela and Argentina did the same and now they enjoy greater profit then before.

4.Military.

Michael Chossudouski in his book America’s War on Terrorism, wrote that US military has a close tie with international financial institution and oil companies that their interests become identical. C.Wright Mills in his book The Power elite, called them the power elite. They can manipulate the public to support their ambitions. William J. Lederer wrote A Nation of Sheep to describe how easy American public be deceived by their elite. Gradually US military grow as a global oil protection service.

5.Mass media.

Mass media is the fourth estate of democracy. But now the main mass media that shape public opinion has become tools of corporate interests. Noam Chomski and Edward Herman wrote Manufacturing Consent : The Political Economy of Mass media. They stated that mass media voiced interests of big corporations. Chomski used the term propaganda to describe their effort to influence public opinion.

There are four filter to real truth. First, the size, ownership, profit orientation, lay out, manner, and head lines. NBC, ABC, CBS, and CNN are owned by General Electric, Walt Disney Companies, Viacom Inc, and AOL-Time Warner. Leaders of New York Times sit in Carlyle Group, Eli Lilly, Ford, Johnson and Johnson, and Hallmark. Leasers of Washington Post sit in Lockheed Martin, Coca Cola, Dan and Broadstreet, Gilette etc. Leaders of The Tribune sit in 3M, Allstate, Caterpillar, Conoco Phillips, Krafts, Mac Donald, Pepsi, etc.

Policy of mass media must conform with that of corporations. Journalists must apply self censorship to survive. Once Pulitzer prize winner were fired for writing report that reveals bad sides of big corporations. Jane Akre was fired for writing reports on Monsanto. Twenty journalists were fired for similar reasons.

Second filter is corporate power to advertise or not to advertise. Corporations can push mass media not to write certain report by threatening not to advertise. Third filter is source of news. News from center of power and center of corporations are decisive. Fourth filter is flak. It is a series of criticism and threat that discourage mass media, a call from White House to journalist or editor and anti media campaign is effective way to push mass media.

It is clear that mass media are controlled by corporations so they express interests of corporations. Theory about free press that controls then executive, legislature and judiciary, in reality is just theory or illusions. Lies about Weapons of Mass Destruction of Iraq under Saddam Hussein and also Osama bin Laden are lies that can assure American people prior to American aggression to Iraq in 2001.

6.Intellectual.

An intellectual is someone who has an appropriate knowledge that he/she can absorb the phenomenon in the society, nation and state and who has commitment to defend the interests of his/her nation and is ready to bear the consequences in the struggle for justice and truth. Intellectuals have decisive role in social change, even revolution in their countries.

There are three kinds of intellectuals. first, those who dedicated their lives to truth, justice and universal humanity. They come from universities, religious communities, NGO activists, journalists, artists, and scientists and sometimes even from the military. In short they are people who follow the trail of prophets.

Second group are those who oppose change. They prefer establishment instead. They do not want any risk. They are safety players. It is impossible to expect change let alone revolution from this group.

Third group is the “neutral” ones. They do not prefer social change nor status quo. Most of them just want to wait and see. They wait for direction of wind. They wait for the winer t come out. When change happen they will quickly go to the front lines. Sometimes they call themselves pacifist intellectuals. They never oppose evil things because they think pacifism taught peace. But being passive when we observe evil things is immoral.

Today intervention of corporations to universities is greater because universities face financial problems. Corporations are ready to give financial support. Research are conducted for corporations. donations are given with certain conditions. Consequently there are many of them work for the interests of corporations.

7.Sick national elite.

Developing countries that become subordinate of developed countries are those whose leaders suffer from mental illness. In other word they have enemy within. The enemy is their psyche who feel inferior and suffer from defeatism disease. This mental condition results in inertia, confusion, and lack of self confidence.

Amin Rais worries that Indonesian leaders suffer from the same mental disorder. He remembered when Indonesia took a very long time to consider support to PLO office in Jakarta. Consequently Indonesia lose diplomatic support of about twenty Arab nations in UN on Timor case. He also noted the way the Indonesian government handle their forest. Indonesian tropical forest are dominated and exploited by illegal loggers. Indonesia is the world champion in deforestation. In 2006 the Indonesian public was surprised when three debtors of Liquidity Aid from bank Indonesia (central bank) came to state palace. Foreign domination in banking is getting stronger. foreign investors may own up yo 99% of share in Indonesian banks. By the end of 2005 foreign asset in banking reached 48,51%, government only 37,45% and the rest owned by private business, probably the expansion of foreign corporations. Central bank do not limit foreign ownership to BI investment instruments.

Slave mentality is also obvious in the way they handle mineral wealth. Freeport Mac Moran mine gold, silver, and copper in Papua since 1976. The second contract was signed in 1991 for fifty years. Amin said that the American corporation committed several crimes. First, to environment. Everyday they dispose about 300 000 tons of tailings that destroy the environment in the river Agwagon-Otomona-Ajakwa. Thousands of square kilometers of forest around Grassberg now become desert. Second, tax crime. In 1990 Amin wrote that Freeport did not pay amount of tax in accordance to their obligations because their position was only number eight or nine of highest tax payers. The following year Freeport was in the first rank. Third, ethic and morality crime by giving bribe to police and military officers. New York Times in December 27, 2005 wrote about Freeport. They even wrote the names of officers who received the bribe. Fourth is crime against humanity. Seven ethnic groups of Papua were forced to abandon their lands. Some of them shot to death. It was estimated that 160 persons died between 1975-1977 in the mien area and its surrounding. Fifth is crime of exploiting Indonesian wealth by manipulating administration and make the mining area a mysterious and secret area. Freeport’s asset is much greater than what is revealed in their official report.

Besides Freeport, there is also Cepu bloc in central Java. Its operatorship was fully given to Exxon Mobile until 2036. If Cepu bloc were operated by state oil company Pertamina, Indonesia would gain additional asset worth US $ 40 billion. Kwik Kian Gie wrote that “if after sixty year of independence there is no Indonesian capable of exploiting the bloc, there are two possibilities : all of them are bribed by Exxon Mobile or all of them still have slave mentality”. Amin said Kwik forgets the third possibility : combination of both.

Another case is the stealing of sands by dredgers from many countries who do business with Singapore. There are 54 dredgers operating around Riau. Then they sell the sands to Singapore. By 1960 the territory of Singapore was only 581,5 square kilometers but by 1980’s it became 650 square kilometers. By 2010 they plan to expand to 820 square kilometers. Where are the sands and the land come from ?

By 2001 the official data of sand export was less than 75 million cubic meters. While Singapore imported sands as much as 300 million cubic meters. The difference means that the unmonitored ones is illegal sand business with sole buyer : Singapore. The sellers are dredgers from many countries. It means billions of dollars. This business can operate well because there is protection from “strong” men from Jakarta.

Palapa satellite and Indosat are now owned by Temasekfrom Singapore. The other case are sale of large tanker from Pertamina, and Defense Cooperation Agreement with Singapore. Amin wrote that the present leaders is similar to Sultan Amangkurat I and II from Java who gave opportunity to Dutch EIC to rule over Java.

Chapter VI : State Capture Corruption

There are three ways for a corporation to conquer a developing country. First is by using brutal military power. Afghanistan and Iraq are present examples. Second is by using pressures ans threats. Third is by using subtle way, without military violence. Indonesia belong to this group. They control the economy, in fact also politics and to some extent defense, by the so called state capture corruption or state-hijacked corruption. The three pillars of government serve foreign interests.

State capture corruption is manifested in purchase of various decree and law by corporate sectors and abuse of power. Corporations through the ruling government can purchase law, dictate contract in mining, banking, education, health, water supply and others. Government is just the expansion of corporations. Consequently the state wealth, including its natural resources are exploited for many years with the help of legislation, rationalization and justification of government. This is what happen is Indonesia.

Amin is sure that Indonesian government by itself or by colution with legislature, too often facilitate and protect exploitation of Indonesian natural resources by big corporations. It happened long before SBY era.

Habibie era.

The government passed law number 7/1998 about banking. This law is more explicit in driving one agenda of Washington Consensus - liberalization of financial and trade sectors. But it was done too far, without taking measures to cope with risk.

The spirit of liberalization is written in article 22(1b) which let foreign individuals or legal body to establish general bank in partnership with Indonesian people or legal body. The article 26 (2) which let foreign citizen or legal body to buy shares of general bank directly or through stock exchange.

Under the law foreign people may own up to 99% of bank shares in Indonesia. This is much higher than in WTO which was initially 49% then 51%. Indonesia is more liberal than USA, Australia, Canada, Singapore that apply limitation to bank ownership. Consequently at present six out of ten biggest banks in Indonesia are owned by foreigners with majority ownership. They can buy those banks at price of only 8-12% of the total recapitalization and reconstruction cost paid by the government. In addition the state must pay interests of about 50 -60 trillion IDR annually until 2030. Today more and more smaller banks are acquired by foreigners.

Megawati era.

The Megawati government passed law number 19/2003 about state-owned companies. The basic concept is pro Washington Consensus than pro Indonesian people. The following are examples. first, in the general chapter of the law, point II, first paragraph, it is written :”state-owned companies are also one of significant state resources in the forms of various kinds of tax, dividend and privatization”.

From the budget perspective this sentence is wrong, because privatization is not income but cost. The sentence implicitly acknowledge that privatization is a source to finance budget deficit. This is a manifestation of Washington Consensus - macro economic stabilization, especially budget stabilization by selling state-owned companies to cover deficit.

Second, in the general chapter, point III and IV it is written about the failure of state-owned companies to meet their objectives, how global environment change due to globalization, privatization as solution and privatization does not mean state lose its sovereignty. These are all arguments of Washington Consensus about globalization - that state ownership is source of problems and failures. so the solution or reducing or erasing state ownership.

Actually the main reason for poor performance of state-owned companies is intervention from political parties and bureaucracy that make management do not comply with principles of corporate management. Ideally the solution is by erasing the intervention of elite. Temasek is a proof that state-owned companies can become competitive global player.

Third, the criteria of state-owned companies that will be privatized is like giving blank check to privatization committee - make it easy to be abused. Article 76 stated that companies must at least : (a) competitive (b) its technology changed rapidly. With these criteria, most state-owned companies can be sold.

Fourth, mechanism of privatization was carried out with minimum control of parliament. Article 79-83 give very great power to privatization committee - Coordinating Minister for economics as chairman, Minister of state-owned companies, Finance Minister, and the linked Technical Minister. Their decision is just “consulted” to parliament and do not need approval of parliament.

So there is no legal barrier to privatization. This is a big victory for Washington consensus.

Another case is when the Megawati government gave “release and discharge” to debtors worth trillions of IDR. Finance minister, chief of BPPN (agency of national banking reconstruction) minster of state-owned companies, attorney general, and coordinating minister , designed Master of Settlement and Acquisition Agreement to serve the interests of several conglomerates who owned failed banks. In essence MSAA is releasing debtors that broke legal lending limit and non performing loans or in other words stealing state money.

Salim group’s debt worth 52 trillion IDR and they gave their asset said to worth 50 trillion IDR to receive R&D. Later it was revealed that the asset worth only IDR 29,5 trillion. Then Bank Indonesia building that kept R&D documents was on fire. Losses from R&D is hundreds of trillions IDR but it is not comparable to those involving big international corporations.

SBY era.

Government broke the constitution four times in education. The 1945 constitution states that at least 20% of state budget be allocated to education but in reality they allocate only 8%. The state has no money for reforestation, armament, health etc.

Hendri Saparini said that law number 22/2001 about oil and gas management is confusing. Amin estimated that it is sold to foreigners for debt. SBY do not correct the situation. Production sharing contract is 85%-15%. It sounds good for Indonesia but operatorship holder calculate cost recovery first. This must be paid first to foreign corporation then the nett is divided. Indonesia get 85% and contractor get 15%. Kwin Kian Gie said that actually Indonesia get 58,98% and contractor get 41,02%.

Amin quoted other experts who wrote in details about Indonesia’s great losses. Details are in appendices.

Since law number 22/2001 about oil and gas is excessively beneficial to foreign corporation, some members of parliament tried to submit judicial review to Constitution Court (Mahkamah Konstitusi) in 2004. Unfortunately it is only partially amended on several articles : 12(3), 22 (1) and 28 (2). But up to the end of 2007 the government neglect the verdict of Constitution Court.

Then eight members of parliament submit material test on article 11 (2) to Constitution Court. They argued that it is contrary to the 1945 constitution, because it stated that the government shall only inform the parliament rather than talk. Unfortunately the submission was declined. The Constitution Court said that they did not have legal standing.

It is clear that Indonesia is controlled by foreigners through state capture corruption due to slave mentality. The executive, legislature, and judiciary have become actors of state capture corruption.

Foreign control is also obvious in national waters. Siswono Yudo Husodo revealed that 46,8% waters is controlled by foreign flag ship. Indonesia’s export using national ships is only 5%. telecommunication is also in foreign hands : Temasek controls Indosat, 35% of Telkom, and 98% of XL. So is otomotive business.

Law number 25/2007 about investment is a result of collusion between executive and legislature. It is the final nail on the coffin. Chapter V : treatment to investors is more liberal than that of developed countries because there is no escape clause to safeguard domestic interests.

In article 6 (1) : “the government should give equal treatment to all investors from any country ……according to law”.

This article is an application on “non discriminatory” principles of World Trade Organization. This principle forbids any country to give special treatment to domestic investors, if the treatment id not given to foreign investors. Foreign investors must not be treated differently unless there had been certain multi lateral or bilateral agreement.

Based on this article a state may be sued by foreign investor if it gives protection to traditional shops and markets that are under heavy pressures of foreign hypermarkets. State may also be sued if it give tax and credit facilities to domestic investors who want to develop national car industry, steel industry, or any other manufacture. The same thing can be applied if a state gives protection to sectors threatened by imported goods and services like agriculture, animal husbandry, textiles, shoes and many others.

On the other hand, in developed countries the non discriminatory principles is applied using escape clause to protect their domestic interests. It may be in many forms usually related to environment, health, and consumer safety. European Union, for example, applies conditions of ecolabelling and health to import products from China, accompanied by campaign that Chinese products are not safe. Indonesia applies the principle without escape clause, consequently national industry and business people find difficulty to survive, not to mention acquiring technology.

Article 7 (1) states :”the government shall not take actions like nationalization or take over of investment, except by law”. Article 7 (2) :”If government nationalize, the government shall give compensation in accordance to market value. If the government and the investor do not reach agreement, then the settlement shall be done through arbitration.

Chapter VII : Conclusion : Action Plan.

Suggestions :

* Prepare alternative national leadership who have free and independent mentality.

* Alternative leadership should be young people who have national and international horizon, and ideally should be cross-ethnic, religion, party, economic and social background.

* They must understand that power is people’s mandate and therefore must work hard for people and must be honest to them. Power is not for accumulating wealth for personal interests.

* The new leadership must promote the importance of national independence. Free and sovereign in economy, politics, law, defense and education.

* Cooperation with foreigners must be based on equality and mutual benefit. Indonesia must not become servant who serve interests of big corporations.

* The New leadership must stop being a part of state capture corruption that bring Indonesia to poverty, unemployment, and multi dimensional backwardness. State-capture corruption must end.

* State -capture corruption is the prime reason for setback so the new leadership are expected to know this.

* Economist are needed to join KPK or Commission for Eradication of Corruption in the future because they can help find economic crimes.

*All production sharing contract on oil and gas must be reexamined honestly and rationally. Renegotiation is a must.

Indonesia must respect pacta sunt survanda but must not forget the clause of rebus sic stantibus. National interest is number one, Corporate interests must not above national interests.

* Indonesia must stop ecocide or ecology killing. Corporations have ecological debts to Indonesia. All tax, profit and royalty from them is not enough to rebuild the destroyed environment.

* The new alternative leadership must establish national agency for arbitration.

* Examination to revise of all license to forest exploitation cannot be delayed because they exploit Indonesian forest excessively that Indonesian forests are destroyed.

* All holders of license to exploit forest that destroy Indonesian forest must be punished. If cabinet ministers protects them, they must be prosecuted. Even the president, if he is involved, must be prosecuted. There is no one above the law.

* There are many license holders destroy Indonesian forest. All of them must be prosecuted.

* Theft of Indonesia’s sands by foreign dredgers must be stopped, once and for all.

* Erasing debt addict is an urgent agenda. High deficit state budget must be stopped.

* The alternative leadership must stop neglecting Indonesian farmers and peasants.

* All strategic law must be reexamined. Law on mining, investment, state-owned companies, agriculture, plantations, electricity, waters, forestry, that are detrimental to Indonesia must be reexamined and replaced by more beneficial ones.

* Assuming that there are detrimental law that excessively beneficial to foreign corporations, the next house of representative must have one orientation - protect and uphold national interest. They must beat bribery.

* Mass media as fourth estate and watchdog must take over parliament’s role as social control agent if parliament is too weak to defend people’s interest.

* It is necessary to restate that executive and legislature conspiracy is obvious in legislation process and policy-making process which are ‘orders’ of corporations. The evil conspiracy operates through various financial institutions like World Bank, IMF , Asian Development Bank, economic hitmen, and economic jackals. They are public enemy number one. Not to mention high- ranking officials, slave intellectuals and politicians that defend foreign corporation’s interest.

* Renegotiation of foreign debt payment is a must - they are odious debt, and if calculated, all installments far exceeds the debts. Revision to excessive Indonesian commitment to international fora, especially WTO, is a must.

* The national leadership post 2009 must totally reconstruct Indonesia’s economic policy, from the present pro-foreign creditors and investors into pro-people and domestic investors. Equally urgent is prioritizing utilization of land, water, outer space, and natural wealth for domestic people, including native business people. Article 33 of the 1945 constitution is the basic guideline in Indonesia’s economic development.

* The national leadership post 2009 must enact law enforcement without discrimination.

Six References :

1.The National anthem is a source of inspiration to keep on uniting and developing a free Indonesia, and to fully awaken toward a great Indonesia.

2.The national flag of red and white shall be above flags of party, group and any other components. Different flags may exist but under the two colors.

3.Bahasa Indonesia (Indonesian language) as a lingua franca.

4. The National Motto : Bhinneka Tunggal Ika (Unity in diversity). None may feel superior and none may feel inferior.

5.The national armed forces and police are above all groups and shall be instrument of national unity. Their vow guarantee dedication to the whole nation, not limited to a certain group or element.

6.Panca Sila (the five basic principles) as foundation and philosophy of our state.

Soeharto in brief

The second President of Indonesia passed away on January 2008. He is the

most controversial among Indonesian Presidents since 1945. There are many

controversies about his root, his role in 1965, his policies and his corruption

cases. Here is a brief story about him.

The Family root.

There are many stories about his family. Pop magazine wrote in 1974 that

his father was RL Prawirowiyono, an official from the Yogyakarta palace. R

Rio Padmodipuro was his official name from the palace. But soeharto denied

this story and later he banned the magazine. The editor was then jailed. He

told the public that his father was Kertosudiro from Kemusuk, a small village

in the outskirt of Yogyakarta.

Several years later Tempo weekly magazine wrote similar story in the special

edition of January 2008. Rio was his father. When Soeharto was about six

years old Rio married the daughter of Jayengprakosa, a powerful official from

the palace. That is why Rio had to move Soeharto and his mother Sukirah to

Kemusuk. Later Sukirah married Kertorejo, a village official who took care of

irrigation. This is the second marriage for both of them.

Unfortunately several years later they divorced. Once again young Soeharto

had to move. This time to Wuryantoro, Wonogiri in Central Java where he

spent his student days. He lived with his aunt Mrs Prawiroharjo, wife of Mr

Prawiroharjo and sister of Kertorejo. His uncle was a low rank official who

took care of agriculture. One of his sons is Sudwikatmono who later became

a prosperous businessman when Soeharto was in power.

after graduating from high school Soeharto joined the Dutch army. But when

the Dutch colonial government collapsed he joined the Japanese army. When

the Japanese army in Indonesia was defeated and the Dutch army came back

to Indonesia Soeharto fought them.

Under Sukarno he served the nation as an army officer and once he was

posted in Central Java. In 1962 Major General Soeharto led the Mandala

operation to liberate Irian barat or the present day Papua from colonial rule.

Soeharto rose to power gradually out of severe political conflict in 1960’s.

He won the conflict with PKI ( Partai Komunis Indonesia) and in 1968 he was

appointed as acting President of Indonesia.

Economic success.

when Soeharto came to power in 1968 he inherited severe economic and

socio-political problems from Sukarno. Inflation rate reached 600%. Public

facilities and productivity were very poor.

Seoeharto then recruited ecenomic experts mostly from prestigious

Universitas Indonesia in Jakarta to become his ministers. They designed

five-year plan to build Indonesia’s economy