US media hooked on eurozone crisis

Deutsche Welle, 28 June 2012

Examining US media reports on Europe’s economic crisis for DW's Transatlantic Voices column, Julian Jaursch argues that today's coverage has to be viewed in the context of the previous global economic downturn.

Julian Jaursch is a freelance journalist based in Berlin. He holds an MA in Political Science/TransAtlantic Studies from the University of North Carolina at Chapel Hill.

Why for Zeus' sake does the American media even care so much? It is Greece, after all: A country with an economy roughly the size of Washington's and about as diverse and interesting as Idaho's. A country with an economic output 50 times smaller than that of the US. A country that prior to the global economic crisis was virtually non-existent in American economic news.

Since then, papers and TV shows have been full of Greece. The New York Times ran articles on the country's financial situation as early as 2008, the Wall Street Journal has been covering every bailout since then, NPR tried to explain what happens if Greece defaults and CBS recently aired a piece on how the European debt crisis sent the Dow Jones plummeting. Even Stephen Colbert, the outspokenly patriotic and US-centered TV character whose international coverage is called "Un-American News," took on the Greek debt crisis. Discussing the dismal situation of Greece's economy in May 2010, he joked that the Greeks had laid off the oracle of Delphi and that she had never seen it coming.

Cause and effect

The examples give some of the reasons for the strong media interest. Precisely because of the global economic downturn, the news media cares. The crisis has shown quite plainly that the economies around the world are interconnected. What happens in one country has repercussions for citizens in many others, for instance via fluctuations on the stock markets or effects on the banking sector. Moreover, it is not just Greece that is making headlines today: Because Spain, Portugal and the rest of the eurozone are struggling as well, the effects are even bigger.

According to news value theories, events gain a certain news value if they have some intrinsic characteristics. Europe's economic woes did just that for the US: While the continent is geographically not very close to the US, it is still intimately connected to the US for historic, political and economic reasons (news factor proximity) and its troubles are bad news (negativity) that in some way affect the US economy (relevance). Add to that the already heightened sensitivity to economic topics due to the global financial crisis (established topic) and it becomes clear why US media and its recipients paid so much attention to Europe. Egotistical, yet genuine, concern about the US economy might have led to the increased coverage.

Playing the blame game

But is it really just that? Or could the coverage also try to mask the US' own economic weaknesses? After all, US reporting, especially some opinion pieces in print and television media, has been quite harsh. There was talk of European "grandiosity" and the "fiction" of the European economic model. European pension systems were closely scrutinized along with the continent's demographic problems. The very values and work ethic of Greeks, Spaniards or Portuguese were questioned. A "Eurosocialist" system that instituted a single currency, but no fiscal union was lamented. Generally, Europe's debt problems and the inherent issues of the euro system were pointed out, repeatedly and vigorously, along with some well-meant pieces of advice from afar. 

Julian Jaursch

Such foreign reporting comes at a time when America's own economy is not exactly doing well, either. Memories of bank and auto bail-outs are still fresh in people's minds, the unemployment rate is at roughly eight percent (eurozone: 11 percent), the economy is only growing moderately and, most importantly, the country's debt-to-GDP ratio is much higher than the EU's, according to Eurostat and the IMF. Still, President Barack Obama has not grown tired of referring to Europe's struggles when talking about the reasons for the slow recovery in the US.

Focusing on the eurozone's failures certainly leaves less time to discuss the US' own debt problems, social security systems or demographic development. It also leaves less time to investigate whether downgrades by American rating agencies - or mere threats thereof - were always justified. Moreover, the fact that an American bank helped obscure Greece's sovereign debt issues in the first place is but a footnote today.

Europe on their mind

Yet, despite American media's intense coverage of Europe's economic misery, there is no distraction campaign to conceal domestic economic problems. Surely, on a political level, Obama will continue to subtly blame the eurozone's struggles for some of America's own hardships. It might even be a standard item of his reelection campaign strategy - anything to take the wind out of the Republicans' sails who say that Obama alone messed up the economy.

Two circumstances lead to the conclusion, however, that coverage is driven by concern rather than by efforts to mask US problems: One regarding the quantity of reporting, the other regarding the quality.

If the American media reported from Europe as a distraction, this would require very little coverage of the US economy and its problems. This is not the case - quite the contrary. Reports about the jobless numbers, poverty rates, the debt ceiling, gas prices or the stock market abound not only in financial news outlets. Therefore, the fact alone that there is a lot of coverage on Europe's problems does not mean that the US media ignores domestic issues. Still, a closer look at America's own pension system or demographic development could not hurt, either.

Concerning the quality of reporting, those stereotypical and hyperbolic, sometimes even flat-out wrong, articles on the European economy are offset by a much larger number of rather dry economic coverage. For the most part, reports try to make sense of what is happening, explain economic jargon or introduce the American audience to those affected across the pond. It is remarkable here that economic journalism might become much more widely consumed because of the crisis. Similarly noteworthy is the fact that US media cannot get around including EU actors in their reporting anymore. Before the crisis, the Union was mostly shunned in US media due to its complex and seemingly distant and dull nature.

It's the economy, stupid

The global financial crisis, which began and played out largely in the US, has arguably intensified the American public's awareness of economic topics. From bailouts to financial reforms, people around the nation were affected by that downturn. So if the collapse of a single investment bank can be the start of a downward spiral for the US economy, what will happen if an entire currency area collapses? Such economic concerns rank highest among Americans' worries and what worries the people, worries the papers.

Editor: Rob Mudge

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“…. The coffers of the United States, which is erroneously considered the most fiscally sound nation in the world, have been empty for some time. The national debt, in large part due to the skullduggery of the Illuminati-owned Federal Reserve System and its IRS collection agency, will become manageable when that System is dissolved.  The various currencies, especially dollars, have no foundation—daily transactions involving billions of dollars and other currencies are merely information passed from one computer to another and they far exceed the money to back them.  The “new” foundation for currencies will be a return to an old one, where precious metals was a set standard for exchange, and “old fashioned” bartering once again will be an excellent way for nations and communities to conduct some business. ….”


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Indonesia website takes aim at corrupt officials

MYsinchew, Foreign  2012-06-26

JAKARTA, June 26, 2012 (AFP) - An Indonesian website listing crooked officials and individuals has joined the war against graft in one of Asia's most corrupt nations, its founders said Tuesday.

Korupedia.org, which so far lists 108 graft convicts, has received nearly 2 million Internet hits in the week since it was launched, some from hackers trying to bring it down, they said.

The website is similar to IPaidABribe.com, an Indian site launched in Bangalore two years ago.

"Since the official launch last Tuesday we recorded around 1.9 million visits from across Indonesia, most of them from Jakarta," said Suwandi Ahmad, the website's developer.

"We have also had cyberattacks nearly daily. I'm pretty sure it's by people trying to ruin our database," said Danang Widoyoko, one of the founders and also head of the independent Indonesian Corruption Watch.

"A corruption case reported in a newspaper only impacts for one day, but the data on our website will last forever. If you want to find some information about the family of your future spouse check our site," he said.

Korupedia.org lists names, photographs and details of convictions, such as amounts embezzled and sentences received.

"The website at least metes out social punishment, which will hopefully act as a deterrent and help end the culture of corruption in this country," Widoyoko added.

A Gallup poll released in October last year found that 91 percent of Indonesians believe corruption in government is widespread, compared to 84 percent in 2006.

President Susilo Bambang Yudhoyono has won two elections on promises to tackle graft in one of the most corrupt countries in Asia, but critics say he has failed to make any genuine difference to the culture of graft and impunity.

Transparency International, the anti-global graft body, ranked Indonesia 100 in a list of 183 nations in its Corruption Perception Index last year, making it more corrupt than India.

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G20 summit: Barroso blames eurozone crisis on US banks

EC president says European leaders have not come to Mexico to receive lessons on how to handle the economy

guardian.co.uk, Patrick Wintour in Los Cabos, Ian Traynor in Brussels and Helena Smith in Athens, Monday 18 June 2012

José Manuel Barroso at the G20 summit. Photograph: Bertrand Langlois/AFP
/Getty Images

The opening day of the G20 summit was threatening to deteriorate into a fractious row between eurozone countries and other non-European members of the G20, notably the US, as EU commission president José Manuel Barroso insisted the origins of the eurozone crisis lay in the unorthodox policies of American capitalism.

As Europe's leaders came under intense pressure to act decisively to cure the euro's ills, and a campaign gathered pace to relax some of the austerity programmes laying waste to countries burdened with unsustainable debt levels, Barroso insisted that Europe had not come to the G20 summit in Mexico to receive lessons on how to handle the economy.

When asked by a Canadian journalist "why should North Americans risk their assets to help Europe?" he replied: "Frankly, we are not here to receive lessons in terms of democracy or in terms of how to handle the economy.

"By the way this crisis was not originated in Europe … seeing as you mention North America, this crisis originated in North America and much of our financial sector was contaminated by, how can I put it, unorthodox practices, from some sectors of the financial market."

After the Greek election at the weekend, which may have shifted the terms of the debate over how to shore up the euro, world leaders meeting in Mexico focused on the European crisis amid strong signs of big trouble brewing in Spain.

Madrid's 10-year cost of borrowing went through the 7% barrier on the bond markets for the first time in the single currency era, the level at which borrowing becomes unaffordable. The Spanish government demanded intervention from the European Central Bank.

Spain's prime minister, Mariano Rajoy, is expected to ask for up to €100bn in eurozone bailout funds for Spain's stricken banks at a meeting of eurozone finance ministers in Luxembourg on Thursday, senior Eurogroup sources said. Voicing exasperation with the European response to the debt crisis, Robert Zoellick, the outgoing American head of the World Bank, warned the G20 summit in Mexico of a growing rift between the Europeans in charge of the bailouts and the IMF.

"The world's waiting for the Europeans to say what they want to do," said Zoellick. He predicted a showdown between the IMF and Europe by the end of the summer in the absence of any decisive action.

Barack Obama was expected to press Germany's chancellor, Angela Merkel, in Mexico on Monday night on the issue of eurobonds – the pooling of liability for single currency countries' debt. But there is no chance of Merkel agreeing to underwrite the debt of other European countries for the foreseeable future.

Fresh from his victory in the Greek election, the centre-right leader, Antonis Samaras, promptly tabled demands for a softening of the draconian austerity programme that Greece has to implement for the eurozone bailout.

Samaras, the prime minister-designate pledged to stick broadly to the Greek bailout terms but added: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."

Politicians and officials in Brussels and Germany appeared to suggest that the new Greek leader's demands could be at least partly satisfied by extending the repayment schedule on the bailout loans or lengthening the target deadlines for cutting the budget deficit.

There were also reports that the terms underpinning Ireland's bailout could also be relaxed, giving Dublin a much longer repayment schedule on the loans. The talk of rescheduling the Greek bailout terms surfaced quickly on Sunday night, with the German foreign minister, Guido Westerwelle, suggesting the Europeans could alter the timings. That triggered a row in Germany among the political class over the pros and cons of going easier on Greece.

In Brussels, the respected Bruegel thinktank said: "It is now increasingly clear that the [Greek] programme is severely off track. The [Samaras] victory doesn't change this fact and it has become unavoidable to open a discussion about the shape and form of a new Greek programme. This is a fact now broadly acknowledged by policymakers and in particular by German officials who have openly discussed the possibility of stretching fiscal targets."

Martin Schulz, the German social democrat who presides over the European parliament, added: "The new Greek government will be able to count on our constructive cooperation in possible fine-tuning of its reform strategy and economic targets. If Greece sticks to its commitments, the EU can examine what could be done further to solve the crisis."

From Mexico, however, Merkel appeared to dismiss any easing of the Greek conditions. "The new Greek government has to implement the commitments entered into by the country. The programme framework has to be kept."

The eurogroup source said that Samaras was expected to show up in Luxembourg on Thursday for the meeting of eurozone finance ministers which will grapple with Spain and how to respond to the Greek election results.

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Islamist Morsi Wins Egypt Presidential Vote

ABC News, by Maggie Michael, Associated Press, CAIRO June 24, 2012

Egypt's election commission has declared Mohammed Morsi of the Muslim Brotherhood the winner of Egypt's first free elections by a narrow margin over Ahmed Shafiq, the last prime minister under deposed leader Hosni Mubarak.

The commission said Morsi won with 51.7 percent of the vote versus 48.3 for Shafiq.

A huge crowd of Morsi supporters in Cairo's Tahrir Square erupted in cheers and dancing when the result was read out on live television.

FILE - In this Sunday, May 20, 2012 file photo, the Muslim

Brotherhood's  presidential candidate Mohammed Morsi

holds a rally in Cairo, Egypt. (Photo: AP)

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"Healing the Military Energies in our family Tree" – Jun 13, 2011 (Kryon channelled by David Brown)
“ … There’s much violence and anger throughout the world; when we look at the Middle East, we can see that changes are coming there. The West has a lot of power over the Middle East, but that power will begin to dissolve. The Muslim people of this world will begin to have their own power, and their own prosperity, and they will begin to disconnect from the Western World. This disconnection doesn’t have to be violent as violence only happens when somebody hangs onto what doesn’t belong to them....

... What Military Energy means if we use an analogy: it would be like putting grinding paste into the oil of your motor car. Once you release these energies you will begin to feel lighter as you disconnect from this reality, and, you will find it easier and easier to release any other negative emotions. Military Energies are the core of all your problems...."


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.

Yudhoyono asks all countries to adopt green economy

Antara News, Fri, June 22 2012

Rio de Janeiro (ANTARA News) - Indonesian President Susilo Bambang Yudhoyono has appealed to all countries to apply green economic policies together.

The President made the appeal at a panel discussion held on the sidelines of the UN Conference on Sustainable Development or Rio+20 in Riocentro, Rio de Janeiro, Brazil, on Thursday.

"We must switch from `greedy` economic to green economy. This is something that we need to develop in our homes, our schools, and our workplace. If citizens of the world commit themselves to change their lifestyle, then global sustainability will no longer be a mere vision but a reality," he said.

It is necessary for the global citizens to change their lifestyle as many people have become victim of their own success, he said.

The President also mentioned how the world is hit by excessive consumerism and greed.

"Now is the time for us to redefine modernity, development, and welfare. We also need to change the attitude of excessive consumption and consumerism," he said.

On the occasion, the President also warned that the world is experiencing a critical period in the lead up to the deadline for the attainment of the Millennium Development Goals (MDGs) by 2015 and the expiry of Kyoto Protocol. Therefore, it is important for citizens of the world to strengthen the commitment to sustain a global vision to ensure a sustainable future.

"Our challenge is how to ensure that the global economic problems will not divert our attention away from the target (of sustainable development) and climate change," he said.

He underscored the importance of common responsibilities to secure the future of the climate.

"Developed countries should take the lead, but developing countries must also do more," he said.

He also reminded the world community of the need to establish greater collaboration rather than to get involved in confrontation. Even better argument is needed to keep big issues, but in the end all parties must work together.

Editor: B Kunto Wibisono

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Peer-to-peer lending via the internet hits £250m

BBC News, By Simon Gompertz, Personal finance correspondent, 8 June 2012

Savings and Investment 

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Lynne Martin's money is spread
 among hundreds of borrowers, thus
reducing risk

Lending via three websites that link savers with borrowers - bypassing the banking system - has topped £250m.

The "new age" finance carries no protection for deposits, but is being tipped as a serious threat to traditional banks.

The peer-to-peer sites are led by Zopa, which has lent more than £200m since it started in 2005.

Funding Circle, specialising in business loans, has topped £34m, and RateSetter has reached £24m.

Last month the government said it would lend these sort of firms £100m to help expand their own lending to businesses.

"It's a marketplace, the eBay for money," says Lynne Martin from Hertfordshire, a foot technician in her late 50s who has been using Zopa to build up a nest egg for retirement.

Higher returns

Lynne was fed up with the returns she was getting from banks and pension plans.

So she has lent a substantial part of her savings via the website, spreading it between hundreds of borrowers and by-passing the banking system.

The interest from the latest £5,000 is 7.4% a year before tax but after taking into account Zopa's 1% charge.

That is substantially more than is available on a typical savings account at a bank.

On the other side of the ledger, Jamie Hirst from Chippenham in Wiltshire has borrowed £4,500 through Zopa to cover the cost of a revamp of his kitchen and bathroom.

The 8.4% APR he is paying is 5% less than he was quoted by his bank.

"I thought it was brilliant," he told the BBC's Your Money.

"The fact that there wasn't some fat cat taking the profits, just some guy investing 50 or a hundred quid to get a little return and doing something good for someone else."

The drawbacks

There is a significant drawback for savers: the lack of any guarantee that you will get your money back.

Peer-to-peer lending, as it is known, does not qualify for protection from the Financial Services Compensation Scheme (FSCS), which provides security up to £85,000 per bank, for each saver.

The peer-to-peer sites put their loan applicants through credit checks and Zopa says it divides people's savings into £10 chunks which are spread between borrowers, to minimise any risk.

On average, so far, its lenders have lost 0.5% of their money as a result of borrowers defaulting.

But Lynne Martin predicts the concept is bound to catch on more widely.

"Necessity is the mother of invention," she says.

"This is a new asset class. It's not a share and it's not a bank account."

Official support?

Lynne has support from a director of the Bank of England, Andy Haldane, who suggested in March that peer-to-peer lenders could replace High Street banks. 

Jamie Hirst has been able to borrow
 money at a cheaper rate than from
his bank

"There is no reason why end-savers and end-investors cannot connect directly," he explained.

"The banking middle men may in time become the surplus links in the chain."

Lynne is hoping the interest she is earning will help pay for her to retire to the West Country, a hope which highlights an interesting feature of peer-to-peer lending.

Much of the money has been moving across generations, from older people looking for a decent income to younger borrowers setting up in life and desperate to keep down the cost of taking a loan.

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SBY Vows to ‘Think Big’ for Developing Countries at G-20

Jakarta Globe, Muhammad Al Azhari, June 19, 2012

President Susilo Bambang Yudhoyono arrived in Los Cabos, Mexico, on
 Saturday for the seventh G-20 Summit, which brings together leaders of 20
 major economies. (Antara Photo)

          

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With the Group of 20 summit opening this week likely to be dominated by the economic crisis in Europe, President Susilo Bambang Yudhoyono will aim to get the interests of developing countries high on the main agenda, his aides say.

Yudhoyono arrived in Los Cabos, Mexico, on Saturday for the seventh G-20 Summit, which brings together leaders of 20 major economies.

“Indonesia will take advantage of this summit to encourage the creation of a more conducive climate to speed up recovery from the financial crisis, particularly in the euro zone,” Teuku Faizasyah, Yudhoyono’s special aide for international relations, said on Sunday as quoted by state news agency Antara, adding that Indonesia wouuld propose several measures.

Indonesia was one of the few G-20 economies to post strong economic growth in 2011. Last year, the combined GDP of the G-20 increased 2.8 percent, a marked deceleration compared to the 5.0 percent growth it recorded in 2010.

Yudhoyono, speaking en route to Mexico, said he expected Indonesia to play a more active role in the G-20. “The world expects that as part of the G-20, Indonesia can do something for the world,” he said.

But to able to contribute to the global discourse, he said Indonesia had to maintain strong growth at home.

Part of this, he said, was accelerating growth through developing small- and medium-scale enterprises. In Indonesia, SMEs have proven to be the backbone of the economy and could serve as a national safety net in times of crisis, he said.

Stronger cooperation between the government and the private sector was also needed, the president said.

At the same time, Yudhoyono acknowledged that Indonesia’s subsidy policy and investment climate had always been the focus of attention of G-20 states.

“We are often pressured with regard to our subsidy policy,” he said. “I will tell the G-20 that the subsidies help the very poor.”

Yudhoyono said Indonesia’s investment climate “still has to improve,” adding that the government was prioritizing infrastructure development toward this end.

However, Agustinus Prasetyantoko, an economist at Atma Jaya University in Jakarta, said Indonesia’s role in the G-20 was as a cheerleader.

“We have little bargaining power and mostly serve as a market for the products of developed countries,” he said.

Ahmad Erani Yustika, an economist at the Institute for Development of Economics and Finance, said Indonesia failed to take advantage of its place in the G-20.

“We have not used the forum to make the global economy a fair playing field. We always succumb to developed countries that push for the liberalization of our economy without fully assessing the impact to our people,” he said.

Yudhoyono, however, called on Indonesians to play a bigger role. “We have our strengths, we are developing and this should drive us to take a firmer stance on the global stage,” Yudhoyono said.

“We need to think bi g and realize that we are a regional power and can bring solutions to the table,” he added.

Additional reporting by Antara, AFP & ID/Primus Dorimulu

Ex-head of Vatican bank has archive on senior Italian and Church figures

Ettore Gotti Tedeschi, the former head of the Holy See’s bank compiled a secret dossier of compromising information about the Vatican because he feared for his life, it was claimed. 

Telegraph UK, by Nick Squires, 07 Jun 2012

Ettore Gotti Tedeschi  Photo: REUTERS/Remo Casilli

In the latest twist in a scandal which has convulsed the papacy of Benedict XVI, Mr Tedeschi reportedly gave copies of the documents to his closest confidantes and told them: “If I am killed, the reason for my death is in here. I’ve seen things in the Vatican that would frighten anyone.”

One of the documents was reportedly titled “internal enemies” and contained the names of senior clergy and powerful Italian politicians.

Other emails and letters related to “money of dubious provenance” being allegedly funnelled through the Vatican bank, according to Corriere della Sera.

Appointed in 2009, the 67-year-old banker was sacked as head of the Vatican’s bank on May 24 – the day after the Pope’s butler was arrested on suspicion of stealing confidential letters from Benedict’s desk and leaking them to journalists.

Mr Gotti Tedeschi was allegedly ousted by Cardinal Tarcisio Bertone, who as the Vatican secretary of state is the Pope’s deputy, in a dispute over efforts to improve the transparency of the scandal-ridden bank, known formally as the Institute for Religious Works.

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Mr Gotti Tedeschi appeared to have compiled the dossier as a means of him defending himself against charges of incompetency, mismanagement and possible money laundering.

The reforms were intended to clean up the Vatican’s finances so that it could be included on the OECD's “white list” of countries least at risk from money laundering and other financial irregularities.

Earlier this year the city state was listed as a “jurisdiction of concern” for money laundering in the US State Department’s annual International Narcotics Control Strategy report.

Mr Gotti Tedeschi was so fearful for his safety that he hired bodyguards and sought advice from a private investigation agency, the Italian media reported.

The sensational claims evoked memories of one of the Vatican’s darkest chapters – the mysterious death in 1982 of Roberto Calvi, nicknamed “God’s Banker”, who was president of Italy’s largest private bank, the Banco Ambrosiano.

After the bank, which had close links with the Vatican, went bankrupt, Calvi was found hanged from scaffolding beneath Blackfriars Bridge in London, amid suspicions that he had been murdered by mafia godfathers as punishment for losing money they had invested in the bank.

“Gotti Tedeschi was nicknamed ‘the Pope’s banker’ and he feared meeting the same end as ‘God’s banker,’” said Il Fatto Quotidiano, a daily newspaper with a reputation for investigative reporting.

The secret dossier allegedly compiled by Mr Gotti Tedeschi was discovered by Carabinieri police after they raided his home and office in Milan and Piacenza, both in northern Italy, on Tuesday.

He was questioned by prosecutors for up to nine hours on Tuesday and Wednesday, during which he reportedly told them: “I’m afraid for my life”.

The raid was part of a separate investigation involving allegations of bribery at Finmeccanica, an Italian defence company that has extensive interests and thousands of employees in the UK.

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(SaLuSa channelled by Mike Quinsey, March 16, 2012)
“…. Each project is underway and that will result in a sudden wealth of information reaching you. Events are such that the facts can no longer be kept hidden, and with that there will be an explosion of people coming forward to tell what they know. It may take longer where the Vatican is concerned, as it is akin to a secret society that has kept its dark secrets hidden well away. However, nothing will remain concealed for too long, as you are entitled to know the truth and the extent to which you have been deceived….”  

(Matthew channelled by Suzanne Ward, June 3, 2012)

“ ….   5. Because the dissemination of accurate information is crucial, another good indicator of the light’s progress is that mainstream media censorship clearly is on the decline. For instance, even though the Vatican is one of the kingpins under the Illuminati umbrella, it now is public knowledge that investigation into the Vatican’s financial affairs is underway. Ultimately this will lead to uncovering the cesspool of darkness in that tiny sovereign state, including that it is the international headquarters of satanic worship and a vast storehouse of stolen art treasures. …." - New !

Bank Indonesia Bailout Scandal Fugitive Arrested in US

Jakarta Globe, Rangga Prakoso,  June 08, 2012

Sherny Kojongian, a fugitive in the high-profile Bank Indonesia
 bailout (or BLBI) case, was arrested in San Fransisco, Calif.
after a decade on the run, the Indonesian police said
in Jakarta on Friday. (Photo from kejaksaan.go.id)

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A fugitive in the high-profile Bank Indonesia bailout case has been arrested in San Fransisco, Calif. after a decade on the run, the Indonesian police said in Jakarta on Friday.

It is not clear yet when the arrest was made, but Sherny Kojongian, 49, a former director with Bank Harapan Sentosa (BHS), is expected to arrive in Jakarta on June 13.

“She will be deported from San Fransisco on June 11. [When she arrives] she will be immediately escorted to the Attorney General’s Office,” Indonesia’s National Police spokesman Sr. Comr. Boy Rafli Amar said in Jakarta on Friday.

Boy said Sherny’s arrest was coordinated with Interpol, which issued a warrant for Sherny in 2002. 

Sherny fled Indonesia before she was sentenced by the Central Jakarta District Court to 20 years in prison for embezzling state money via the Bank Indonesia Liquidity Support (BLBI) bailout funds. Sherny was convicted of disbursing money to six business groups and 28 fake financing firms between 1992 and 1996. 

The court sentenced BHS commissioners Hendra Rahardja and Eko Edi Putranto to life in prison over the same case, which is believed to have cost the state some Rp 1.95 trillion ($209 million). The central bank ordered BHS to cease disbursement of the overdraft loans to the 28 firms in Sep. 1997 — an order which Sherny and the two other convicts ignored.    

According to results of audits performed by the Supreme Audit Agency (BPK), Rp 138.4 trillion, or 96 percent of Rp 144.5 trillion in BLBI bailout funds disbursed to 48 banks during the peak of the 1997 Asian financial crisis were embezzled.

BeritaSatu/JG.

Indonesia suffers first trade deficit in nearly 2 years

Asian News Network, Hans David Tampubolon and Linda Yulisman, The Jakarta Post,02-06-2012

Indonesia’s trade balance plunged into the red in April for the first time in nearly two years due to the unexpected drop in exports during the month, a national statistics agency announced yesterday.

The Central Statistics Agency (BPS) revealed that the country suffered a trade deficit of US$641.1 million in April of this year after recording a surplus of $920 million in January, $692.8 million in February and $840 million in March.

Imports rose 11.65 per cent on a yearly basis to $16.62 billion, while exports declined by 3.46 per cent to $15.98 billion during the same month, the first time since September 2009. The drop in exports had caused the first trade deficit since July 2010.

BPS statistics director Satwiko Darmesto said that the slide in exports was particularly driven by dwindling international demand for Indonesian natural commodities during the month.

"Declining demand affected coal and crude palm oil exports,” he said during the announcement, attributing the lower demand for palm oil to India and China, the largest buyers of the commodity.

Exports of mineral fuel, mainly coal, were down 6.8 per cent to $2.43 billion in April from March, while exports of fat and vegetable oil, especially palm oil, dropped by 19.21 per cent to $1.76 billion from a month earlier, statistics show.

Other commodities, such as natural rubber and copper, also suffered from slowing demand, Satwiko added.

The decline in exports was also likely caused by the fall of commodity prices in international markets since the end of this year in addition to overall weaker demand from major export destinations, Institute for Development of Economics and Finance executive director Enny Sri Hartati said.

She said that the fall in exports was partly caused by decline in orders from China, which has started to feel the pinch of the economic crisis in Europe. “This trend will continue in the future,” she added.

Apart from this, the domestic industry’s dependence on imported raw materials and intermediary goods for production would put more pressure on the trade balance due to surging imports in the future, Enny further said.

China’s economy is highly exposed to the situation in Europe, the epicenter of the current global economic crisis. China’s economy, which greatly depends on exports, expanded by 8.1 per cent during the first quarter of this year, reaching its slowest pace since 2009.

The BPS data showed that non-oil-and-gas exports to China dropped by 0.5 per cent to $2.05 billion in April from a month earlier. Non-oil exports to Japan, one of Indonesia’s top export destinations, fell by 15.18 per cent to $1.43 billion, joining the US, South Korea and the EU in the list of Indonesia’s ailing trading partners.

Exports to the EU have been slowing down since the last quarter of last year, while exports to the US and South Korea, have decelerated since the first quarter of this year. Despite the slower export growth, China, Japan and the US remained the country’s largest export destinations for non-oil-and-gas goods, settling at $2.05 billion, $1.22 billion and $1.12 billion respectively.