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Solidarity with Indonesia

October 3rd, 2005

Most people have made up their minds already about the way the US, Australia and other Western countries should respond to terrorism, and I’ve stated my own views plenty of times, so I’ll focus on a different issue.

The latest terror attacks, although directed at foreign tourists, are first and foremost an attack on Indonesia and the Indonesian people. It seems pretty clear that Bali is a favoured target in part because the local population is largely (though by no means entirely) non-Muslim and the killers regard any of their fellow-citizens who do not share their religious beliefs as worthy of death. Their aim, along with groups like the unlamented Laskar Jihad is to promote civil war and the overthrow of democracy in Indonesia, so that they can implement their idea of an Islamic caliphate.

Fortunately their actions have been counterproductive. The Iraq war has been highly unpopular, but the great achievement of JI has been to make themselves even more unpopular. The Indonesian people have, with few exceptions, rejected terrorism and radical Islamism and the Indonesian government has responded effectively. In both the Bali and Jakarta bombings, there have been numerous arrests and convictions. It’s unfortunate that they couldn’t nail Abu Bashir for his most serious crimes, but it was better to stick to the rule of law than to make this evil man a martyr by violating it (and of course a conviction would have been much more likely if his main lieutenant, Hambali, had been handed over to the Indonesians, instead of being held by the US ).

The outcome we’ve seen is all the more impressive when we remember that only a few years ago, Indonesia was a corrupt dictatorship riddled with religious/ethnic strife in Ambon, Aceh and other places.

Whatever our differences with Indonesia, this is a time for solidarity with its governmetn and people.

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  1. October 3rd, 2005 at 22:46 | #1

    There is every reason to believe that Indonesian interrogation techniques are more “robust” than those of the US. However it seems there was sufficient gleaned from him under US methods to nail Bashir. By not allowing Hambali to testify, via videolink, the USA seems to be swimming against its own current.

  2. Katz
    October 4th, 2005 at 00:23 | #2

    Nevertheless, it remains to be seen whether the enthusiasm of millions of impoverished Indonesians for democracy will survive a major rise in petro-chemical products, especially kerosene, which is a mainstay of the domestic economies of Indonesian households.

    The Iraq fiasco makes it easier to persuade Indonesians that the costs they must endure are a product of American adventurism against fellow Muslims.

  3. October 4th, 2005 at 02:04 | #3

    A rise in the price of kero may put the average Indonesian villager off voting? Gosh, unable to afford kero for their lantern, the Indonesian people cannot see their way to the polling booth? Does Indonesia hold elections in the dark?

    Impoverished some Indonesians may be, but likely to abstain from voting just because a commodity goes up in price? Come on Katz!

    The fiasco in Iraq is a versatile propaganda tool. However it is not required to convince Indonesians of anything. In a country where “newspaper article” & “government approved” are synonymous phrases, little or no outside “evidence” is required to rather successfully convince the general population of anything you choose.

  4. Katz
    October 4th, 2005 at 08:35 | #4

    SATP, pay strict attention now, this may be examinable.

    The issue isn’t WHETHER Indonesians vote, it’s WHO they may vote for.

    I’m sure ex-President Suharto would be fascinated by your penetrating insights into the malleability of the Indonesian public through the medium of “government approved” “newspaper articles”. Where were you when he needed just the right form of words to assure his continued control of the country he ran for almost 40 years?

    Edited slightly. Until things cool down, please avoid direct personal criticism of other commenters – JQ

  5. roberto
    October 4th, 2005 at 08:45 | #5

    The issue of the kerosene price is a result of the Gov’t long term position of subsidising the price.

    The price rise is due to the Gov’t’s need to become fiscally responsible and put the price somewhere close to market value.

    This has been brought about by the lack of international investment in the exploration and production of oil in Indonesia.

    Up until a few years ago, Indonesia was a net exporter of oil, and held the ‘Chairpersonship’ of OPEC.

    What will probably happen (if the issue of kerosene price does take hold) is that there will be a number of very violent demonstrations around the place, but in the end things will settle down.

    Indonesia has a history of such violent demonstrations, and it is robust enough to handle this problem too.

  6. Katz
    October 4th, 2005 at 10:10 | #6

    “The price rise is due to the Gov’t’s need to become fiscally responsible and put the price somewhere close to market value.

    “This has been brought about by the lack of international investment in the exploration and production of oil in Indonesia.”

    Are you arguing that, after the restoration of conditions that are conducive to international exploration of oil in Indonesia, such a flood of oil will flow, the market price of kerosene Indonesia will plummet to acceptable levels for Indonesian consumers?

    This conclusion seems to be based on at least two unstated assumptions:

    1. If the oil that may be discovered in Indonesia is sold on the world market, it will be sufficient in quantity to tip the balance between supply and demand in favour of appreciable lower prices worldwide.

    2. If the oil that may be discovered in Indonesia is not sold on the world market, but rather channelled into satisfying domestic demand at a politically acceptable price, then the hypothetical international investors in oil exploration will accept a politically motived tax on their profits.

    Neither of these assumptions appear to me to be realistic.

  7. roberto
    October 4th, 2005 at 11:02 | #7

    Katz Says: October 4th, 2005 at 10:10 am

    “Are you arguing that, after the restoration of conditions that are conducive to international exploration of oil in Indonesia, such a flood of oil will flow, the market price of kerosene Indonesia will plummet to acceptable levels for Indonesian consumers?”

    My answer is Yes (in broad, nominal terms). I do not deny that costs such as corruption and supply chain inefficiencies will add to product costs.

    Indonesia (for a myriad of reasons) does not have the capital to fund on an ongoing basis an oil exploration programme, coupled to refining, production and distribution costs without FDI.

  8. Andrew Reynolds
    October 4th, 2005 at 12:06 | #8

    Subsidies on oil (not just kero) disproportionately assist the middle and upper income groups by subsidising the price of petrol and diesel. Because tax avoidance is rife in Indonesia amongst the same people, the effect of these subsidies represents, in the main, a transfer from the poor to the rich. Using 20% of your national budget to subsidise the rich is probably not what a relatively poor country should be doing. By corruption, some of the subsidised oil is also exported (again, by the rich) for massive gain.

  9. Katz
    October 4th, 2005 at 12:20 | #9

    According to the World Factbook, here is the ranking of Indonesia’s known oil reserves, measured in barrels, with Australia’s ranking as a point of comparison. (Indonesia is ranked 25 in the world):

    25 Indonesia 4,900,000,000 2004 est.
    26 Ecuador 4,408,000,000 2004 est.
    27 Yemen 4,000,000,000 2004 est.
    28 Australia 3,664,000,000 1 January 2002

    Thus, Indonesia, with a population of 241m has approx 25 barrels per head of its population.

    Australia, with a population of 20m has approx 180 barrels per head of its population.

    Now, Australia can hardly be considered a oil giant, but its position in terms of satisfying domestic demand is enormously secure vis a vis Indonesia.

  10. wilful
    October 5th, 2005 at 12:11 | #10

    Gah, my commetn from yesterday never appeared – but anyway the gist of it is that Katz’ arithmetic is rubbish, because Australians also consume vastly more oil per capita than Indons.

  11. gordon
    October 5th, 2005 at 12:19 | #11

    Prof. Quiggin is channeling J.Howard. On Sunday (day after bombing): ‘Mr Howard says he does not believe the attacks specifically targeted Australians but that the terrorists were trying to create instability in Indonesia.

    “This is overwhelmingly an attack on democratic Indonesia,” he said’ (from ABC website).

    I don’t think anybody knows whodunit, or, really, why. Snap out of the trance, Prof. Quiggin, and keep the mind open.

  12. Katz
    October 5th, 2005 at 12:29 | #12

    Thanks for that insightful comment Wilful.

    Perhaps the gist of the conversation between myself and Roberto eluded you.

    The figures I quote cast a shadow over two of the Indonesian oil industry:

    1. Whether a major exploration program is likely to strike an oil bonanza.

    2. Whether any oil discovered is capable of supplying cheap kerosene for the millions of Indoesians who use it, even if foreign oil explorers mightbe content to allow their oil to be sold to Indonesians at less than the world market price.

    Perhaps Wilful needs only a gentle reminder that the important issue in relation to the likelihood of determined and commercially successful oil exploration in Indonesia has very little to do with the RELATIVE volume of oil consumed by Indonesians. Rather it has much to do with the ABSOLUTE volume of oil available for exploitation.

  13. Roberto
    October 5th, 2005 at 15:35 | #13

    sorry Katz, but I too posted yesterday which didn’t appear.

    In short (my post yesterday was much longer) the issue is not so much the nominal barrels in the ground but the quality of the crude, that can be converted into appropriate motor spirits.

    The vast bulk of Australian reserves are not of a sufficient standard to enable Aust. to be completely self sufficient.

  14. wilful
    October 5th, 2005 at 15:48 | #14

    You can be as gentle as you like, but you were the one to insert per capita figures, which were misleading without the context that Indonesians consume a lot less.

    It’s perfectly obvious that Indonesia, if it was to make a major find (and I understand that it’s more prospective than Australia) would insert the additional resources into world markets for hard currency ratehr than directly subsidise local markets. However, were it to decide to subsidise local markets, which is its right as a democracy (though pretty poor policy), then it would be able to strongly influence local prices. And this is in part because Indonesians use a lot less oil than us.

  15. October 12th, 2005 at 17:19 | #15

    As a expat living in Indonesia, I can tell you that 99% of Aussies haven’t a clue about what is going on in Indonesia and why the terrorists bombed Bali.

    So what do the terrorists think? Just ask them. And this is what they say:


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