ASEAN has pivotal role in Beijing's regional integration plans

Want China Times, Staff Reporter 2015-03-29

Xi Jinping, right, meets President Joko Widodo of Indonesia at the Great
Hall of the People in Beijing, March 26. (Photo/Xinhua)

The 2015 Boao Forum for Asia, currently underway in China's southern island province of Hainan under the theme "Asia's New Future: Towards a Community of Common Destiny," has revealed a good deal about China's continuing role in forming this community and the basis on which it can be established, according to Duowei News, an outlet run by overseas Chinese.

The sub-forums held at the forum laid out China's blueprint for the community, according to the website.

There have been six main topics of discussion at this year's forum, including macroeconomic policy, regional cooperation, industrial transformation, political security and social welfare, with 77 formal discussion sessions. There has also been much talk of China's Asia Infrastructure Investment Bank (AIIB) initiative, as well as the New Silk Road Economic Belt, the 21st Century Maritime Silk Road plans, East Asian economic integration and the much touted "new normal" for China's economy.

This year's Boao Forum has coincided with the end of the two sessions in China–the annual meetings of the National People's Congress and the Chinese People's Political Consultative Conference–and the deadline for application to be a founding member of the AIIB on March 31. China has taken advantage of this convenient timing to discuss these concepts at length. In the middle of all the discussion centered on China however, the forum also played host to a discussion session entitled "ASEAN Community: A New Starting Point for Integration" at which foreign minister Wang Yi gave a speech. This has led many to speculate on Beijing's reasons for lending such importance to this session.

Quiet changes at the Boao Forum

That China was willing to give the floor to this session, during such a high-profile diplomatic event for the country, suggests that ASEAN integration is key to China's interests in the region and to its own trade initiatives.

Asia accounts for 60% of the world's population and according to an estimate by the Asian Development Bank, by 2050, Asia will make up 51% of the global GDP. However, it is not yet clear how regional integration will play out through this time frame. In recent decades Asia has witnessed unprecedented economic growth, increased regional trade and direct investment as well as economic and social exchanges between countries. This is not just on the economic front, but also in terms of security, in dealing with terrorism and pirates. Political and military cooperation is also starting to make headway, according to Duowei.

Compared with Europe, Africa or South America, however, Asia has traditionally been held back by geographical issues, which have prevented institutionalized cooperation, with only informal meetings between leaders and ministerial-level summits. There is also a need for an effective negotiation mechanism in Asia. Beijing clearly hopes that its new initiatives can resolve this.

At the national level, the ten countries that make up ASEAN have undergone different paths of political, cultural and economic development, but as an organization, they make up a collective of 600 million people, linked by river ways as well as maritime and overland routes, stretching through Eurasia to the Pacific. This is of strategic importance for China's planned "Belt and Road" initiative, as ASEAN countries serve as the gateway to the 21st Century Maritime Silk Road. ASEAN countries were also among the earliest initiators of economic integration in Asia, setting out first from preferential trade conditions, to free trade agreements, until they eventually formed an economic community.

This is not the first time Beijing has dedicated a platform to talks between ASEAN countries. Beijing sees ASEAN as a testing ground for its ambitions to implement its strategic entry into Eurasia and so has played a key role in facilitating integration within the organization. From 1991 onward, after then foreign minister Qian Qichen visited the 24th ASEAN leaders' summit as a guest at the invite of host country Malaysia, China's cooperative relationship with the organization began in earnest. This led to regional economic cooperation initiatives surrounding the Mekong river and the Gulf of Tonkin and China subsequently played a role in facilitating negotiations over the ASEAN Regional Comprehensive Economic Partnership (RCEP) and its predecessor.

President Xi Jinping invited the Indonesian president, Joko Widodo, on a state visit on the eve of the forum from March 25-28. On March 26 the two leaders issued a joint statement announcing that they would strengthen the strategic partnership between their countries. The joint statement also reaffirmed Beijing's support for ASEAN's role in regional integration as well as for the ASEAN+3 mechanism - talks between ASEAN countries, South Korea, China and Japan. As Indonesia is often perceived as the major driver behind ASEAN, the move is likely another sign of the importance Beijing is placing on the organization.

The idea of a "Community of Destiny" was first mentioned in a report from the 18th CPC National Congress in November 2012. The concept also featured in Xi's speech at the 2013 Boao Forum, held in April of that year. Xi also mentioned the concept while meeting with Laotian president Choummaly Sayasone in August of 2013 and in a speech at the Indonesian congress in September of the same year. On each occasion he stressed the importance of ASEAN to this community of destiny.

Li Keqiang, right, meets Joko Widodo at the Great Hall of the

People in Beijing, March 27. (Photo/Xinhua)

Related Article:

Indonesia and China eye further infrastructure cooperation

Indonesia and China eye further infrastructure cooperation

Want China Times, Xinhua 2015-03-29

Li Keqiang, right, meets Joko Widodo at the Great Hall of the People
in Beijing, March 27. (Photo/Xinhua)

China and Indonesia pledged more infrastructure construction and investment cooperation during a meeting between Premier Li Keqiang of China and President Joko Widodo of Indonesia on Friday.

The Chinese government will encourage more reputable companies to invest in Indonesia and participate in the construction of high-speed railway, metro rail and port industrial parks, Li said.

He called on the two countries to conduct production capacity cooperation, through which China will help Indonesia turn its abundant resources into the material for industrialization development, and to increase two-way trade and investment.

Joko echoed Li, saying Indonesia hopes to strengthen cooperation with China in areas including energy, maritime industry, agriculture, aviation and tourism.

He welcomed Chinese investment and voiced support for the establishment of the Asian Infrastructure Investment Bank (AIIB), saying he hoped the AIIB could contribute to the region's economic development.

Indonesia officially joined the China-proposed AIIB in November 2014, making it a founding member.

With regards to China-Association of Southeast Asian Nations (ASEAN) relations, Li hailed the positive role played by Indonesia in promoting the sound development of ties.

Li said China was ready to work with ASEAN to maintain the peace, development and prosperity of east Asia.

After meeting at the Great Hall of the People in Beijing, Li and Joko also attended a bilateral economic cooperation forum, on the sidelines of which companies from the two countries signed around 30 deals worth US$40 billion, according to Suryo Bambang Sulisto, president of the Indonesian Chamber of Commerce and Industry.

Sulisto told the forum that China's investment in Indonesia's mining and maritime industry would bring good benefit to the country and Indonesia hoped to take advantage of China's economic growth.

Li said the two countries both had big populations, which means huge markets. They are complementary in terms of different industrialization processes. The two sides should combine China's advantage of technology and capital with Indonesia's advantage of market and resources to promote a coordinated upstream and downstream development.

The premier also pledged to encourage Chinese companies to increase investment to Indonesia.

Joko said Indonesia had demand for high-speed railway, port, airport, power plant and industrial parks. Indonesia will provide a good investment environment for Chinese companies.

Joko was invited by President Xi Jinping for a state visit. He will also go to Boao, in south China's Hainan province, to attend the annual Boao Forum for Asia conference.

Joko also met with Xi and top legislator Zhang Dejiang.

Fortune Ranks Surabaya Mayor Risma Among World’s Greatest Leaders

Jakarta Globe, Mar 27, 2015

Surabaya Mayor Tri Rismaharini. (JG Photo/Yudek)

Jakarta. Surabaya Mayor Tri Rismaharini has been named as one of the world’s 50 greatest leaders by American business magazine Fortune.

Risma, as she is popularly known, is ranked 24th on the list, above Facebook founder and CEO Mark Zuckerberg, Xiaomi’s CEO Lei Jun and Nigeria’s Finance Minister Ngozi Okonjo-Iweala. She is the only Indonesian included.

“Elected as Surabaya’s mayor in 2010, Rismaharini has transformed her city of 2.7 million people into a new kind of Indonesian metropolis, one that celebrates green space and environmental sustainability,” the magazine said.

Other notable leaders included were China’s Xi Jinping, India’s Prime Minister Narendra Modi, European Central Bank President Mario Draghi and Apple CEO Tim Cook, who is ranked top of the list.

In February last year Risma was named world mayor of the month by the City Mayor Foundation.

Risma, who has a degree in architecture, rose to fame in 2005 as the head of the Surabaya park department which is responsible for rejuvenating the city’s parks and developing more green spaces.

The mayor has been praised for her hands-on approach to the city’s problems, such as picking up trash along the roadside or getting out of her car and directing traffic.

But not everyone has been happy with her performance. Last year, she received both praise and criticism for closing down Indonesia’s biggest red light district, also known as Dolly. She sent sex workers back to their home towns with a small amount of money to start new businesses.

Surabaya Mayor Tri Rismaharini. (JG Photo/Yudek)

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Why Bloomberg Loves Indonesia

Double-Digit Reasons: Financial news provider tight-lipped on its domestic growth figures

Jakarta Globe, Dion Bisara, Mar 26, 2015

File photo of Bloomberg chairman Peter T. Grauer taken in 2012. He met with GlobeAsia again in an interview on March 26, 2015. He said the company had expanded its news footprint in Indonesia ‘a little bit’ to better cover news, data and analysis ‘on Indonesia and from Indonesians,’ an investment that has reaped ‘solid double-digit growth.’ (GA Photo)

Jakarta. Bloomberg, the world’s biggest provider of financial data and news, is reaping the benefit of it expansion in Indonesia in the past three years, having seen its business grow by double digits with more banks, mutual funds and corporate treasuries signing up for its dealing platform.

Bloomberg Business News grew by more than 12 percent last year, with an average of double-digit growth over the last 10 years, according to company data.

Bloomberg chairman Peter T. Grauer told GlobeAsia in an interview on Thursday that the company remained upbeat about the growth potential in Indonesia.

“The areas we’ve been particularly focused on here revolve around the mutual fund market, [and] we [are] quite proactive with our Instant Bloomberg Dealing platform in the forex market,” he said.

“We have expanded our news footprint a little bit so we can cover local news better, and we’ve seen benefits from that investment in seeing solid double-digit growth in our business here.”

The company launched Instant Bloomberg Dealing, a chat-based platform for foreign exchange traders, in 2013, and more than 40 local banks have signed up for foreign exchange and money market trading.

They join more than 100 global banks across 46 countries that use the platform for trade negotiations, execution and processing.

The instant dealing platform complemented Bloomberg Fxgo, a multi-bank trading platform offering commission-free electronic foreign exchange trading.

“We are seeing that as Indonesia’s economy continues to grow, so does the market for news, data and analysis on Indonesia and from Indonesians,” Grauer said.

Bloomberg added 5,660 desktop terminals last year, reaching a global installed base of 324,399, putting the company’s 2014 financial market revenue at an estimated $8.5 billion per year, according to a report from business market researcher Burton-Taylor International Consulting.

Bloomberg said that 18 percent of its revenue came from Asia. No specific data for Indonesia on terminal subscriptions, market share or revenue was given.

Bloomberg is the market leader in providing global financial market data services, with 32 percent market share last year, followed by Thompson Reuters at 26 percent.

Grauer was in Jakarta for a 24-hour visit on Thursday to attend the second annual Indonesian Fund Managers Association (Aprdi)-Bloomberg Indonesia Fund Awards to recognize the nation’s best mutual funds — “one of the key markets for Bloomberg in Indonesia,” Grauer said.

The country’s mutual fund assets under management grew by 19 percent last year to Rp 228 trillion ($17.5 billion).

Grauer said that Bloomberg remained committed to providing financial education, setting up the Bloomberg terminal in classrooms at nearly 800 universities and business schools worldwide.

In Indonesia, schools including Prasetiya Mulya Business School, the University of Indonesia, Gadjah Mada University and Diponegoro University are installing Bloomberg terminals to simulate real-world trading environments for their students.

GlobeAsia subscribes to the Bloomberg news service and terminal.

GlobeAsia

Li Keqiang reaffirms AIIB cooperative stance

Want China Times, Xinhua 2015-03-25

Li Keqiang, right, meets Takehiko Nakao in Beijing, March 23. (Photo/CNS)

The Chinese premier, Li Keqiang, on Monday reaffirmed cooperation between the Asian Infrastructure Investment Bank (AIIB) and existing financial institutions.

The AIIB will take an open and inclusive attitude and be complementary to existing development banks, said Li at a meeting with the president of the Asian Development Bank (ADB) Takehiko Nakao .

The AIIB will strengthen the region's communication, social and economic development, Li said.

Nakao said the ADB was ready to cooperate with the AIIB.

Speaking of the support of the ADB for China's social and economic development, poverty reduction and regional economic cooperation, the premier pledged further partnership with ADB and called on it to play a bigger role in poverty reduction and development.

Britain, France, Germany, Italy, Luxembourg and Switzerland recently applied to join the AIIB as founding members, which already had 27 prospective founding members.

Nakao is in Beijing for the annual meeting of the China Development Forum, a platform for business and academic leaders to interact with China's top decision makers and economic planners.

This year's meeting has attracted more than a hundred CEOs from international corporations, experts and scholar, and leaders of international organizations.

Sri Mulyani Indrawati, managing director at the World Bank. 

(File photo/Xinhua)

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World Bank welcomes AIIB initiative: managing director

Want China Times, Xinhua 2015-03-23

Sri Mulyani Indrawati, managing director at the World Bank. (File photo/Xinhua)

The World Bank welcomes the Asian Infrastructure Investment Bank (AIIB) and will closely cooperate with the China-proposed institution, the institution's managing director Sri Mulyani Indrawati said Sunday.

"Any new initiative that will mobilize funding in order to fill infrastructure gap is certainly welcome. World Bank really welcomes the AIIB initiative," Indrawati told Xinhua in an exclusive interview.

She dismissed worries that the AIIB will compete against World Bank or existing regional development banks, saying that the global need of infrastructure is huge and the market is large enough. "What's important is whether you are going to be able to match the funding with the need of infrastructure," said Indrawati.

"We will definitely open for cooperation with AIIB. Even now, we are working very closely in the beginning and looking at the setting, principle and framework of this institution," she said.

Indrawati said the World Bank will work to support and make sure that AIIB can live up to the expectation of many countries in the world who really want to see infrastructure to develop in a better and sustainable way.

"By working with us, it's going to show and prove that they (AIIB) are adopting the same principle like other international institutions, for example, like the World Bank," said Indrawati.

The AIIB aims to become an international financial institution providing support to infrastructure projects in Asia, and is expected to be established by the end of this year.

The bank has had 27 prospective founding members. Britain, France, Germany, Italy, Luxembourg and Switzerland have applied to join the AIIB as a founding member.

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AIIB to have zero tolerance for corruption: official

Joko Heads to Japan, China to Make Investment Push

Jakarta Globe, Novy Lumanauw & Carlos Paath, Mar 22, 2015

Indonesia's President Joko Widodo, left, walks with China's President Xi Jinping.
Joko left for a state visit to Japan and China on Sunday. (AFP Photo/ Greg Baker)

Jakarta. President Joko Widodo kicks off a seven-day state visit to Japan and China on Sunday, a trip he hopes will to drum up foreign investment and cement bilateral ties between Indonesia and the two Asian economic giants.

The president, first lady Iriana Widodo, and senior government figures arrive in Tokyo this evening and will stay until March 25, before moving on to Beijing and returning to Jakarta next Saturday.

At a press conference at Halim Perdanakusuma Airport in East Jakarta today, Joko said he hoped the trip would be of benefit to Indonesia.

“The government is committed to developing this country and to run a good, clean administration,” he said. “We want to speed up infrastructure development, stimulate investment and boost the maritime industry.”

Foreign Affairs Ministry spokesperson Arrmanatha Natsir said the main purpose of the visits was to improve economic cooperation and trade with Japan and China.

On top of meeting government representatives, Joko is scheduled to attend business forums in both countries where he will inform business leaders of investment opportunities in Indonesia, the Foreign Affairs Ministry said.

Joko will be accompanied by Foreign Affairs Minister Retno LP Marsudi; Coordinating Economic Minister Sofyan Djalil; Indonesian Armed Forces (TNI) Chief Gen. Moeldoko; Cabinet Secretary Andi Widjajanto; and Chief of the Indonesia Investment Coordinating Board (BKPM), Franky Sibarani.

Indonesia’s imports from Japan rose 17.8 percent to $19.25 billion between 2009 and 2013, according to data from the Trade Ministry. Over the same period Indonesia’s exports to Japan climbed 9.3 percent to $27.1 billion.

KPK Signs Memorandum of Understanding Over Natural Resources

Jakarta Globe, Mar 19, 2015

The KPK signed a Memorandum of Understanding with several government
bodies to increase oversight of the Indonesia's natural resources. (Antara Photo)

Jakarta. The Corruption Eradication Commission, or KPK, on Thursday signed a memorandum of understanding with related government ministries and institutions to boost corruption eradication in Indonesia’s natural resource sector.

“Signing this MoU is like a way for the KPK to look into each ministry and to help solve any natural resources-related problems they might have within them,” acting KPK chairman, Taufiqurrachman Ruki, told news portal detik.com.

KPK deputy chairman Johan Budi said new regulations would likely result from the MoU. He was unable to give a time frame or provide further detail.

“In this 2015 MoU we included the marine and plantation sectors,” he said. “Those two sectors were not included in 2014’s MoU. The ministries will make an action plan after the signing and we will monitor it.”

The purpose of the document is to beef up anti-corruption oversight of the country’s natural resources, from hydrocarbons to marine stocks.

“The MoU has to be realized,” President Joko Widodo said. “We should work together on eradicating corruption in the sector — it could lead to eradicating corruption for good.”

Indonesia, Netherlands Organize Harm Reduction Talks at UNODC

Jakarta Globe, Natasia Christy, Mar 11, 2015

A casket carrying the body of Ang Kiem Soei, a Dutch national executed by
firing squad on Jan. 18, seen in an ambulance on the prison island of
 Nusakambangan, off Central Java. (EPA Photo/Bayu Nur)

Jakarta. As the Australia-Indonesia diplomatic rift over the pending executions of two drug convicts shows no signs of abating, ties with the Netherlands — which recalled its ambassador after one of its nationals was executed in January — seem to be on the mend.

On Tuesday, Indonesia and the Netherlands jointly organized a discussion on harm reduction on the sidelines of the 58th Commission on Narcotic Drugs session, at the United Nations Office on Drugs and Crime in Vienna.

At the discussion, three experts, including Edo Agustian from the Indonesian Network of Drug Victims (PKNI), discussed ways to limit the spread of HIV as a consequence of drug use, a statement on the Indonesian Foreign Affairs Ministry’s website said.

According to Edo, the Indonesian law enforcement system — with a primary focus on punishment instead of rehabilitation — has not been conducive in bringing down the number of infections.

Ambassador Rob Swartbol was called back to the Netherlands for consultations after the execution of Dutch national Ang Kiem Soei, on Jan.18. In a letter to the Dutch parliament, Foreign Minister Bert Koenders said in early February that Swartbol had returned to Jakarta.

Koenders explained that the Netherlands opposes the death penalty in principle and that one of its government’s goals is to try and get Indonesia to abolish the punishment. The minister added, however, that it was important to be represented in Indonesia at the ambassadorial level.

“I would like to investigate the possibilities to cooperate with Indonesia to fight drug-related problems,” Koenders said in the letter.

The Indonesian Foreign Ministry, in the statement posted on its website on Wednesday, said: “The cooperation between Indonesia and the Netherlands in handling drugs is not affected by the difference of opinion over the death penalty.”

According to data from the Indonesian Health Ministry, the number of people living with HIV and AIDS as a consequence of drug use grew from 186,000 in 2009 to 640,000 in 2013.

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Hong Kong's domestic workers 'treated worse than the dogs'

Many of the hundreds of thousands of migrant domestic workers looking for a better life in Hong Kong end up exposed to abuse at the hands of their employers. Zigor Aldama reports with three women's stories.

Deutsche Welle, 8 Mar 2015

Kamsiah (pictured above) was one of the 334,000 foreign domestic workers registered in Hong Kong. She is also one of the many who have suffered abuses at work. At 41, she left her hometown in Indonesia to work her way to a better life. However, she found herself in a nightmare.

"This is the second time I have worked in Hong Kong, and with my previous employers I had no problems," she said. "But this family treated me worse than their five dogs."

Kamsiah said she had to sleep with the animals and was barely fed with a daily bowl of rice with some vegetables. The pets, however, received all kinds of care from five o'clock in the morning.

"I had to get up at that hour to walk them," she said. "Then I would prepare breakfast, clean the house, do laundry, make lunch, do shopping, hang and iron the clothes, cook dinner, and then the lady would ask me to give her massages until the wee hours of the morning."

No money, no passport, no options

All that for a meager HK$3,920 ($500, 466 euros) a month, from which she had to foot the HK$2,543 fee the agency charged her during her first six months on the job.

Without passports or money, there are few places foreign workers
can go to escape abusive employers

"I escaped because they made me sign my paycheck, but refused to give me the money," she said. "I could not take it anymore."

It was almost midnight when Kamsiah took refuge in a McDonald's, one of the few places open 24 hours. "I had no money or documents because the passport was being held by the agency. I desperately waited until another Indonesian appeared," she said. "She told me about an NGO that provides assistance to domestic helpers and I went to them."

But her difficulties had only just begun as she was later arrested by the police. The family that had employed her accused her of stealing a wallet containing HK$7,300. Now, after proving her innocence, Kamsiah has filed a lawsuit for labor exploitation against her former employers.

She's not the only one. Until recently this situation went unnoticed to most Hong Kong citizens, but a particularly violent case has brought it out of the shadows. In January last year, Erwiana Sulistyaningsih showed that Kamsiah's was not an isolated case.

Case reopens debate in Hong Kong

Also an Indonesian, Sulistyaningsih was taken to the airport by her employers and forced to return to her country with just 100,000 Indonesian rupiah (around $8) in her pockets. "Do not even think about saying anything of what has happened in Hong Kong, because we will kill your parents!" they threatened.

With one day off per week, many foreign workers gather to meet in Hong Kong parks

Immigration officials let her leave without asking any questions - despite her broken nose, several missing teeth and bruises all over her body. Upon her arrival, doctors in Indonesia ordered her immediate admission to a hospital where they discovered that she had suffered brain damage due to repeated blows to the head.

On February 10, a Hong Kong court found her employer, Law Wan-tung, guilty of 18 separate charges of abuse, for which she will serve six years in prison. This case reopened the debate on the employment and living conditions faced by foreign domestic workers.

Protection laws go unenforced

"The problem is that the law itself discriminates against migrants working as maids in Hong Kong," said Mabel Au, Amnesty International's China director. "First there is the obligation of living with those who employ them, and, secondly, a rule stipulating that if they do not get a job in the two weeks following the termination of their previous contract they should leave the city. But the worst is that laws theoretically passed to protect these women from abuse are not implemented."

Au said an intricate web of mafia-like organizations profit from those women thanks to a lack of supervision by government authorities.

Grace said she didn't see any options other than signing a work contract

Labor exploitation starts when workers have to sink themselves in debt to pay large amounts of money to agents and continues when they arrive in Hong Kong where, by law, agencies arranging employment for them can only charge 10 percent of the first month's salary as service fee. That's about HK$401.

"In fact, the amount ends up being much higher," Au said. "Most of the girls are scared and have little information about legal formalities. They sign their contracts in a language they don't understand - Chinese and English - and have no idea how the sector works."

Left with nothing but debts

Such practices, Au added, mean the foreign workers are often paid less than the minimum wage and unable to report how they are ripped off by agencies and employers. The workers' passports are also confiscated upon arrival "leaving them vulnerable and fully exposed to abuse."

Grace knows that well. Originally from the Philippines, she signed a labor contract to work in Hong Kong but her employer's family sent her illegally to Dalian, in northeastern China. Without her passport and unable to speak any Chinese, she didn't know what to do, so she signed a work contract. After having worked there for a while, the employers refused to pay her and sent her back to Hong Kong with just 200 RMB ($32, 30 euros) in hand.

She has filed a lawsuit against the family who employed her, but said she's not very optimistic about the outcome. Grace said doesn't think she will be able to pay the 40,000 pesos ($903, 832 euro) in debts she contracted in the Philippines with the employment agency.

Ex-Akil Aide Gets Five Years in Palembang Bribery Case

Jakarta Globe, Erwin Sihombing, Mar 06, 2015

Jakarta. The Jakarta Anti-Corruption Court on Thursday sentenced Muchtar Ependy, an ex-aide of the disgraced former Constitution Court chief justice Akil Mochtar, to five years in prison for giving false testimony to investigators.

“[The court] sentences the convict to five years in prison and to pay a Rp 200 million [$15,400] fine, or serve an additional three months in prison,” Judge Supriyono said on Thursday.

Muchtar, who helped transfer a Rp 19.8 billion alleged bribe from Palembang Mayor Romi Herton to Akil to settle a 2013 election dispute in the city in his favor, was proven guilty of providing distorted information during the investigation and trial. He had denied having been involved in the money transfer.

Muchtar was also found guilty of influencing a number of witnesses, including Romi; the mayor’s wife Masyito; the mayor’s driver Srino; and Iwan Sutaryadi, an official at the Jakarta branch of the West Kalimantan Development Bank, to give false statements about their — and his — involvement in the transaction.

The court cases against the mayor and his wife are continuing.

Corruption Eradication Commission (KPK) prosecutors had demanded a seven-year prison term for Muchtar. His case is one of a number of election-rigging cases involving Akil, who has already been sentenced to life in prison for corruption.

Budget Watchdog Backs Up Ahok’s Claims of Budget Manipulation

Fitra says the City Council’s version of the budget is mostly about spending — and little of it authorized by City Hall

Jakarta Globe, Lenny Tristia Tambun & Yustinus Paat, Mar 06, 2015

Governor Basuki Tjahaja Purnama, left, is sticking to his guns in his battle

 against the City Council’s attempt to sneak unauthorized spending programs

into the city budget. (Antara Photo/Muhammad Adimaja)

Jakarta. The education sector has the most unsanctioned programs in the 2015 Jakarta budget, accounting for nearly half of the programs inserted or inflated by the City Council, an antigraft watchdog says.

The Indonesian Forum for Budget Transparency (Fitra) says the budget for the capital’s education office has gone up by Rp 5.3 trillion ($411 million) after it passed the council’s deliberation process.

The city administration had previously proposed an annual budget of Rp 78 trillion, but the council’s approved version came out at Rp 90 trillion, signalling that the councilors added more programs and inflated others.

Fitra’s advocacy manager, Apung Widadi, says his group has studied both versions and concluded that the council’s version is filled with markups and programs not sanctioned or even needed by the city.

“The council’s [version] is more procurement [than programs],” Apung said. “It doesn’t reflect what the people actually need, like programs to alleviate poverty or prevent kids dropping out of school. Instead, what the council is proposing is the procurement of such and such.”

Apung cited the procurement of uninterruptible power supply equipment as one such unnecessary expenditure, an example often cited by Jakarta Governor Basuki Tjahaja Purnama to describe what he sees as the kind of massive budget manipulation that occurs during legislative deliberations every year.

Last year, the city was forced to spend nearly Rp 330 billion to provide UPS machines for 55 schools across the city.

The schools say they neither need nor asked for the devices, whose price tag of Rp 6 billion each is highly inflated from retail listings of no more than Rp 20 million.

“Who proposed [these UPS machines]?” Apung asked. “If the schools really need [a Rp 6 billion machine] they might as well rebuild their schools from scratch or [the government] can build more schools and create better access to education.”

This year, the council inserted similar UPS procurement funding for dozens of urban ward and subdistrict offices in West Jakarta, but listed the price at less than Rp 4 billion.

Another dubious project involving the city’s education sector is the Rp 10.2 billion construction of a wing at State Junior High School (SMPN) No. 97 in Utan Kayu, East Jakarta. The government in 2013 already spent Rp 8.1 billion for the same wing and ended up with just the foundation and structural skeleton to show for all that money.

The Rp 10.2 billion proposed this year is meant to finish the whole structure.

The project was included in the city administration’s original proposal, and Basuki acknowledged that some of his own staff at City Hall might have also been involved in manipulating the budget.

However, he insisted that the program was scratched off before City Hall submitted the budget to the City Council — where it somehow found its way back in.

“Yes, some [city officials] are still behaving badly and pushing their luck,” the governor said. “We will comb the budget more thoroughly, both versions [from City Hall and from the City Council].”

City public housing office chief Ika Puji Lestari claimed that she has taken the construction project out of her office’s budget. “I’ll check with my staff. If [the project] is still there, we’ll drop it,” she said.

Basuki has drawn the ire of councilors for refusing to submit their Rp 90 trillion version of the budget to the Home Affairs Ministry, submitting instead what the cheaper version proposed by his administration.

Incensed, the City Council voted overwhelmingly last week to launch an inquiry into his administrative “deviation” — a process that could potentially lead to Basuki’s impeachment.

The Home Affairs Ministry has tried to mediate the spat but Basuki has refused to be cowed. A mediation talk between City Hall officials and councilors on Thursday descended into a heated war of words.

Lucius Karus of the Concerned Citizens for the Indonesian Legislature (Formappi) said the Home Affairs Ministry should have been more supportive of Basuki’s efforts to expose the budget manipulation instead of simply getting the budget finalized and quelling the tensions.

“The mediation effort focuses too much on instant solutions,” he said.

City Officials Jailed for TransJakarta Bus Procurement Graft

Jakarta Globe, Erwin Sihombing, Mar 06, 2015

Newly purchased TransJakarta buses at a depot in Jakarta. Many of the
 ostensibly new vehicles, imported from China, were found to be faulty,
prompting a corruption probe. (Antara Photo/Dhoni Setiawan)

Jakarta. A Jakarta court has convicted and sentenced two former city officials to up to five years in prison for their roles in the corruption-riddled procurement of buses from China.

The Jakarta Anti-Corruption Court on Friday sentenced Drajad Adhyaksa, the former secretary of the Jakarta Transportation Office, to five years in jail, and Setyo Tuhu, the head of a committee in charge of appointing suppliers of buses for the TransJakarta network, to four years.

Both men were also fined Rp 250 million ($19,250).

The sentences were more lenient than the 10 years that prosecutors had sought for Drajad and nine years for Setyo.

The judges cited as mitigating factors its argument that the pair, both of whom were heavily involved in the procurement process, “did not enjoy” the Rp 54 billion embezzled from the project.

The pair did, however, conspire to rig the tender, awarding to transportation firms Ifani Dewi, Korindo Motors and New Armada Group the contract to procure buses from Chinese manufacturer Zhongtong.

The Rp 1.5 trillion procurement project was meant to boost the capacity of the city’s TransJakarta bus network, popularly known as the busway.

However, many of the buses delivered to TransJakarta were subsequently found unfit for use. Among the faults discovered among the ostensibly brand-new vehicles were broken and missing components, rusted frames, substandard parts, and, it later transpired, a tendency for fires to break out in the engine bay.

Udar Pristono, the transportation office chief at the time of the procurement, is due to stand trial soon in the same case. The Attorney General’s Office has also charged him in a similar case in 2012, when the city purchased articulated buses worth Rp 150 billion. The buses, the AGO alleges, did not meet the specified standards.

The AGO has also confiscated several assets under Udar’s name, which has thrown his sizeable personal fortune into the spotlight.

Among the properties seized are four condominium units at the Aston Bogor tower, south of Jakarta.

AGO officials have also confiscated a house at the Bogor Nirwana Residence estate as well as another in Bintaro Jaya.

Udar also owns two apartment units in Kuningan, South Jakarta, and another in Bali.

Udar is currently awaiting trial. He tried last month to have the charges against him dropped through a pretrial motion, but the court denied his motion.

Jokowi Pleads for ‘Harmony’ Between KPK, Police

Jakarta Globe, Fana F.S. Putra & Ezra Sihite, Mar 04, 2015

The police in the past few weeks have been digging up cold cases against
 all four KPK commissioners and dozens of investigators, amid heightened
tensions between the two groups. (Antara Photo/M. Agung Rajasa)

Jakarta. President Joko Widodo has said that he wants harmony between the Corruption Eradication Commission and the country’s other law enforcement agencies, a move that many say undermines the credibility of the antigraft body and provides impunity for corrupt law enforcers.

Speaking in an exclusive interview with BeritaSatu TV aired late on Tuesday, Joko said it was important for the antigraft agency, known as the KPK, to cooperate with the National Police and the Attorney General’s Office.

“They must go hand in hand, help each other. They must create a synergy in the fight against corruption. This must be the focus,” he said. “If these cooperations are established … there are a lot of things we can do to combat corruption. But if [each institution] follows its own ego, working alone, not sharing

information, then this is what happens.”

Joko was referring to tensions between the KPK and the National Police spurred after the former charged Comr. Gen. Budi Gunawan, formerly Joko’s sole pick for police chief, as a suspect for bribery and money laundering on Jan. 12.

Since then, police have been digging up cold cases against all four KPK commissioners and dozens of investigators.

The sudden onslaught of cases brought by the police, some of them a decade old and all leveled on dubious grounds, has raised accusations of a retaliation by the police against the KPK over the Budi fiasco.

The now suspended KPK chief Abraham Samad has been charged with allegedly helping a prominent graft convict receive a reduced sentence last year in exchange for political backing from the convict’s party to support Abraham’s alleged bid to become vice president.

In a separate case, the South Sulawesi Police charged Abraham with document forgery after he allegedly falsified a document to help a woman, Feriyani Lim, apply for a passport in 2007.

Suspended KPK deputy chief Bambang Widjojanto is accused of compelling witnesses to commit perjury in an election dispute case that he handled as a lawyer in 2010.

Tensions eased after Joko dropped Budi’s nomination and appointed current police deputy chief Comr. Gen. Badrodin Haiti as his sole candidate for the post.

But Joko also suspended Abraham and Bambang from active duty, replacing them with three interim chiefs one of whom also temporarily replacing former deputy chairman Busyro Muqoddas, whose term expired last December.

Joko admitted that the interim chiefs were named based on their ability to quell tensions with the police.

“The KPK and the National Police must be saved as law enforcement institutions. This is the problem I have to sort out. But we realize that there is no policy or decision that can satisfy all,” he said.

KPK investigators and staffers were among the people who are unhappy with Joko’s decision, calling the interim chiefs “ghosts who are afraid of the police.”

The interim leaders submitted their case against Budi to the Attorney General’s Office on Monday, with interim chairman Taufiequrachman Ruki saying the KPK had “lost” in trying to go after the controversial police general.

Ruki was referring to a ruling last month by the South Jakarta District Court in a pretrial motion filed by Budi, which found that the KPK’s naming of Budi as a suspect was invalid.

Interim KPK commissioner Johan Budi appeared to hint on Monday that handing over Budi’s case to the AGO was done largely to stop the wave of retaliatory attacks by the police against the KPK.

“The situation inside the KPK is uncomfortable … because of all of these [police] summonses. Therefore, steps must be taken quickly by the KPK,” he said at the AGO headquarters in South Jakarta.

Another interim KPK commissioner, Indriyanto Seno Adji, said the handover was the legal option that “carries the least amount of risk” for the KPK.

The development has sparked anger from antigraft activists and supporters of the KPK, which has a 100 percent conviction rate against every individual it has ever named a suspect throughout its 12-year history.

Attorney General H.M. Prasetyo has already indicated his office will not pursue the case against Budi, potentially emboldening corruption suspects to file pretrial motions to have charges against them dropped before they are even indicted in a court.

“Everyone is entitled to their own opinion,” Prasetyo said of the controversy surrounding the hand over. “But we have a mechanism to follow.”

In an indication that the handing over of the case to the AGO was nothing more than a bargaining tool, police deputy chief Badrodin said they would likely drop all pending investigations into KPK commissioners and investigators except Abraham and Bambang.

Meanwhile, State Islamic University rector Komaruddin Hidayat dismissed Joko’s harmony argument, saying that the National Police and the Attorney General’s Office are rife with corruption.

“The police’s impact on the fight against corruption is nothing compared to the KPK’s,” the scholar said.

On Wednesday, dozens of former KPK commissioners and advisers visited the KPK office, expressing disappointment with its current leadership.

“All KPK alumni agree [that the KPK] should lodge a case review [to the Supreme Court on Budi’s case]. If not, then there will be a huge problem for Indonesia’s legal system,” former KPK adviser Abdullah Hehamahua said.