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Indonesia Handbook 2004

Indonesia Handbook 2004

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  • The 1945 Constitution
  • The National Flag
  • The Coat of Arms
  • The National Anthem
  • State Organs
  • General feature
  • Banking
  • Insurance
  • Investment
  • Foreign AFFAIRS
  • Youth, Sport, and Drugs Abuse Control

INDONESIA 2004 an official handbook


Front cover: Modern buildings of Bank Indonesia in Jakarta (front), and ancient buildings of Prambanan Temple in Yogyakarta (back)

All material contained in this book may be freely quoted provided that the source is acknowledged.

Prepared by: Proyek Peningkatan Pelayanan Informasi Publik TA 2004 Direktorat Media Informasi Tercetak Lembaga Informasi Nasional Jl. Medan Merdeka Barat, 9. Jakarta 10110 INDONESIA



Supervisor Editor-in-Chief Managing Editor Executive Editor Associate Editors

Writers Coordinator Writers

Photography Art Design & Layout Cover Design Secretariat

: Roem Lintang Suharto : Amsal Asagiri : Nana Sunara : Bagio Prihatono : Totok Saptogondo Jamalem Subangun Sedia Barus : Maria Sri Margini : Zulfa Basier Wiwiek Satelityowati Fasekhah Yane Erina Nusirwan Ifnaldi Jaka : Indar Ritawani : Brontho Dwiatmoko : Suandi Tanjung : Theresia Luciana M.M Jose rizal


2004 is the thirty-fifth official handbook in the series prepared and revised each year by the National Information Agency, a government institution dealing chiefly with operational activities in the field of information. This 2004 edition, which covers events up to October 2004, gives a factual account of administration and the national economy of Indonesia. It features the activities of many of the national institutions, and the part done by the Government in the life of community. This handbook does not claim to be comprehensive. But the factual and statistical information it contains has been compiled from official and other authoritative sources. The issuance of this book is in coincidence with the inauguration of President Susilo Bambang Yudhoyono and Vice-President Mohammad Yusuf Kalla -the first President and Vice-President of the Republic who were elected by direct popular vote. The editors sincerely hope that this book can assist the readers in keeping track of the progress of the world's largest archipelagic republic.

November, 2004

The Editors


CONTENTS FOREWORD CONTENTS LAND AND PEOPLE Land • Geographical Features • Climate and Weather • Rivers and Lake • Fauna and Flora • Indonesian Standard Time • Exclusive Economic Zone People • Languages and Dialects • Race. the State Philosophy iv v 1 1 10 17 17 18 22 23 26 40 49 49 v . Culture and Ethnic Groups • Population Growth Rate • Religions HISTORY Ancient Time The Period of Hindu Kingdoms The Period of Islamic Kingdoms European Influences National Movements General Elections STATE AFFAIRS Pancasila.

Postal Services and Telecommunications Mining Maritime Resources and Fishery Manpower Tourism Culture POLITICAL AFFAIRS Domestic Affairs Foreign Affairs • The Bali Concord II Information.The 1945 Constitution The National Flag The Coat of Arms The National Anthem State Organs • The People's Consultative Assembly • The Presidency • The House of Representatives • The State Audit Board • The Supreme Court • The Constitutional Court • The Regional Representatives Council • The Indonesian Presidents REGIONAL DEVELOPMENT THE LAW ECONOMY General Features Banking Insurance Investment Manufacturing Industry and Trade Small and Medium-Scale Enterprises and Cooperatives Agriculture Forestry Transport. Communications and Mass Media 51 58 58 59 60 79 85 90 90 102 105 106 113 120 124 130 134 143 148 152 158 161 164 164 168 173 vi .

and Drug Abuse Control Environment DEFENCE AND SECURITY Security Problems 178 178 181 185 190 194 200 203 206 209 213 218 vii .SOCIAL AFFAIRS Social Welfare Religious Affairs Education Science and Technology Health Housing Women Empowerment Youth Sports.

The Indonesian archipelago forms a crossroad between two oceans. Sumatra and Kalimantan. the most fertile and densely populated island. consists of five main islands and some 30 smaller archipelagoes. Sulawesi 189. therefore. Because of its strategic position.9 million sq km and a sea territory of 7. totalling about 17.000 are inhabited.981 sq km which forms part of the world's second biggest island of New Guinea. Indonesia's cultural.LAND AND PEOPLE LAND Indonesia. 1 . The name "INDONESIA" is composed of the two Greek words: "Indos" meaning India and "Nesos" meaning islands.187 sq km. the Pacific and Indian oceans and a bridge between two continents. which consists of a land territory of 1. together with the small islands in between. Jambi The Indonesian archipelago is divided into three divisions.216 sq km and Papua 421. The other islands are smaller in size. Kerinci Mountain. social. Its estimated total area is 9. the largest archipelago in the world to form a single state.508 islands and islets of which about 6. The island of Java.8 million sq km (including Exclusive Economic Zone _EEZ). Java 132. political and economic patterns have always been conditioned by its geographical position. Kalimantan or two-thirds of the island of Borneo measuring 539. Indonesia's five main islands are: Sumatra is about 473.606 sq km in size.9 million sq km. Asia and Australia.460 sq km. stand on the Sunda Shelf which extends from the coast of Indonesia's land area is generally covered by thick tropical rain forests where fertile soils are continuously replenished. GEOGRAPHICAL FEATURES The territory of the Republic of Indonesia stretches from 6°8' north latitude to 11°15' south latitude and from 94°45' to 141°65' east longitude.

8 million sq km (including Exclusive Economic Zone _EEZ). GEOGRAPHICAL FEATURES The territory of the Republic of Indonesia stretches from 6°8' north latitude to 11°15' south latitude and from 94°45' to 141°65' east longitude. the most fertile and densely populated island. Java 132. the Pacific and Indian oceans and a bridge between two continents.000 are inhabited. stand on the Sunda Shelf which extends from the coast of Indonesia's land area is generally covered by thick tropical rain forests where fertile soils are continuously replenished by volcanic eruptions like that on the island of Java.606 sq km in size. The lava ejected has a high degree of fertility. Gorgeous Uluwatu.9 million sq km and a sea territory of 7. The Indonesian archipelago forms a crossroad between two oceans.Indonesia. which consists of a land territory of 1. The island of Java. Its estimated total area is 9. Asia and Australia. Because of its strategic position. Indonesia's cultural. in the evening 2 . Sulawesi 189. political and economic patterns have always been conditioned by its geographical position.460 sq km. social. The other islands are smaller in size. The island of Java has 112 volcanic centers of which 15 are active. Kalimantan or two-thirds of the island of Borneo measuring 539. therefore. Indonesia's five main islands are: Sumatra is about 473. The name "INDONESIA" is composed of the two Greek words: "Indos" meaning India and "Nesos" meaning islands.187 sq km. the largest archipelago in the world to form a single state.9 million sq km.216 sq km and Papua 421. together with the small islands in between.508 islands and islets of which about 6. The Indonesian archipelago is divided into three divisions. Sumatra and Kalimantan. totalling about 17.981 sq km which forms part of the world's second biggest island of New Guinea. consists of five main islands and some 30 smaller archipelagoes. Bali.

rivers are very important for irrigation means. varying with the altitude. for instance the Bengawan Solo. the Musi. Ciliwung and Brantas Rivers. Batanghari. and Kampar Rivers in Sumatra. RIVERS AND LAKES Besides the great number of mountains and hills. not bordered by coral reefs as in the case of the island of Sulawesi. Indragiri. Kalimantan and Papua. This characterizes the weather of Indonesia. inland and mountain areas: 26°C. Barito. CLIMATE AND WEATHER Indonesia's climate and weather is characterized by an equatorial double rainy season. Indonesia has an average relative humidity between 70 percent and 90 percent. Mahakam. 3 .An additional advantage of the island of Java is that its coastal plains are not edged by wide swamps as in the case of Sumatra. Average temperatures are classified as follows: Coastal plains: 28°C. They serve as substantial transportation means in certain islands. Intervening periods are transition months in which the weather will be mixed. The displacement of the latter circulation is closely related to the north-south movement of the sun and its position at a certain period with regard to the earth and the continents of Asia and Australia. and Rajang Rivers in Kalimantan. and Memberamo and Digul Rivers in Papua. Land and People Humidity and temperatures are vary according to the season but temperatures are affected additionally by time of day. These factors contribute to the displacement and intensity of the Inter-Tropical Convergence Zone (ITCZ) being an equatorial through of low pressure. height above sea level and proxim ity to the sea and exception. there are still many rivers scattered throughout the country. higher mountain areas: 23°C. Its variation is caused by the equatorial circulation (Walker circulation) and the meridional circulation (Hardley circulation). The dry season is from June to September and the rainy season from December to March. In Java. with a minimum of 73 percent and a maximum of 87 percent. the Kapuas. On the island of Sumatra there is plenty of evidence of past volcanic activities. although the ejected material contained acid which is of less fertility compared with Java. while the prevalence of the West monsoon and the East monsoon (the rainy and dry seasons) are characterizing Indonesia's climate. Indonesia's monsoon-type climate changes approximately every six months although in recent years weather patterns have been somewhat disrupted as part of global changes in weather.

Similarly.A number of unique lakes are also found in some islands. which occur in Papua. closest to Papua. 4 . Towuti. lack the major part of the latter's fauna. Sumatra. Weber's (a line drawn and passing through the sea between Maluku and Sulawesi) and Lydekker's (a line drawn at the edge of the Sahul shelf. the Paniai and Sentani Lakes in Papua. such as the Toba. Poso. which skirts the western border of Papua and the Australian continent) although some of them prefer to characterize the zone itself as a "subtraction-transition zone. lay on the Sahul shelf. Maninjau and Singkarak Lakes in Sumatra. Scientists represent this situation in terms of three faunal lines Wallace's (a line drawn from south to north through the Lombok and Makassar straits. but Papua and the Australian continent at that time. Bekantan (Nasalis larya-tus wurmb). are not found in the Oriental Region. FAUNA AND FLORA FAUNA Within the Indonesian archipelago lies one of the most remarkable zoogeographical boundaries in the world. This may be the result of the ancient presence of a deep strait between Kalimantan and Sulawesi and the depth of the Banda Sea so that this group of islands may never have been connected with either shelf during the glacial period. Sidenreng. All of them are located amidst of islands. In that glacial period. The region between these two shelves (Maluku. The bulk of Oriental fauna does not occur in Sulawesi. although it is only 50 km from Kalimantan across the Makassar Strait." Endangered one-horned rhino (Rhinoceros sondaicus) that can be found only at Ujung Kulon National Park in West Java (above). the Tempe. Limboto and Tondano Lakes in Sulawesi. the marsupials. Java. This original geographical segregation explains why the typical oriental fauna species found in Java. Sumatra and Kalimantan are completely lacking in Papua. and the islands. Sulawesi and the Lesser Sunda Islands) has another type of fauna. such as Seram and Halmahera. and Kalimantan lay on the Sunda Shelf and were joined to each other and to the mainland of Asia. which dates back to the glacial period when the sea level fell worldwide. ending at the southeast of the Philippines).

For example. 35 are extinct. is very dependent on primary forest habitat. eastward of Java. For example. the PPA in cooperation with the World Wildlife Fund (WWF) has established "Orang Utan Rehabilitation" Projects in Bohorok and in Tanjung Putting reserve. is found only in Kalimantan and its surroundings (above). and more being proposed. the orangutan (Pongo pygmaeus). Therefore. In order to safeguard and protect wildlife in Indonesia. found only in Sumatra and Kalimantan. comprising Komodo. The extinction of many species of animals was probably due to normal ecological and evolutionary processes related to such factors as shifting sea levels. A gorgeous peacock. reaching a length of 2 to 3 meters. for retraining illegally captured orangutans for life in the wilderness. now this kind of bird is decreasing in number (below). in Sumatra and Kalimantan respectively. climatic changes and habitat alterations. off the west coast of Flores. The Komodo dragon (Varanus komodoensis) which is the largest lizard in the world. which emphasizes the conservation of the entire ecosystem. There are at present 320 natural preserves and natural parks in Indonesia. Padar. 20 still survive and 20 are extinct in Java but found elsewhere in Asia. to protect their habitat. out of at least 75 species of mammals known as fossils. At the present stage of Indonesian social and economic development. The PPA has adopted the modern natural conservation practice. Information obtained from the paleontological record reveals that the number of species known today is much smaller in the past. This is necessary. 5 . has its home in the Komodo group of reserves. wildlife is considered as being incapable of caring for itself.belonging to the monkey species. the Directorate of Nature Conservation and Wildlife Management (Direktorat Perlindungan dan Pengawetan Alam) or PPA as abbreviated has set the target of designating about 10 percent of land as preserve areas. and Rinca Islands. in Java. as it is often not possible to preserve wildlife without its habitat. The more recent process of extinction of certain animals in Java may have been closely related to human influences on the ecosystem.

many interesting animals are worthy to note. Ornamental Fish Indonesia is also known for its ornamental fish species which are now being exported to the United States. kingfishers. and also exotic species of fishes. three kangaroo (Dorcopsis mulleri) from Papua. Some parts of the Indonesian archipelago are still unexplored and open for botanical and zoological surveys and discoveries. roaming the forest of Sumatra and Kalimantan. Other endemic mammals of Sulawesi are the giant pam civet (Macrogalidia musschenbroeki). a species of tarsier (Tarsius spectrum). Japan.Due to its geographical isolation from other land masses for a longer period than the other major islands. two species of the megapode birds. Papua and Maluku areas are rich in colorful birds. Sulawesi has a unique fauna comprising many endemic species and many variations thereof. eagles. the largest of all civets. and many others. which are noted for their enormous beak topped by a bony casque. fresh-water dolphin (Orcaella brevirostris) from Mahakam River in Kalimantan and the proboscis monkey also from Kalimantan. Among the many species of birds in Sulawesi. elephants (Elephas indicus). These ornamental fish species which are known for their colorful shape and beauty include: the Amphiprion fish. the Mentawai macaquel and leaf monkey Mentawai (Macoca pagensis and Prebystis potenziani) only found on the Mentawai Islands. mollusks and other aquatic animals living both in salt and fresh water. the red colored Labridae and the Coris Aygula species found in plenty around the Bali strait. are very interesting. ranging from the great flightless cassowaries (Casuarius-casuarius) to brilliantly plumaged birds of paradise of the family Paradiseidae and Ptilinorhynhidae (more than 40 species altogether) and many numbers of the parrot family. Other members of the Oriental fauna are the hornbills of the family Bucerotidae. The babirusa or pigdeer (Babyroussa-babyroussa) and the anoa. such as the banteng (Boss Javanicus). the small number of one-horned rhinoceros (Rhinoceros sondaicus) found only in the Ujung Kulon reserve in West Java. the maleo fowl and the Sulawesi shrubhen. a forest-dwelling dwarf buffalo are among the interesting endemic animals of Sulawesi. tortoises. and the very small number of remaining Java tigers (Panthera tigris Sondaica). and Germany. Besides. the Sumatran tigers (Panthera tigris Sumatrae). and several forms of the Sulawesi macaque (Cynopithecus niger). thousands of species of insects. turtles. herons. hawks. 6 . and many kinds of lizards and snakes. off the west coast of Sumatra. the Dascyllus. crabs. In addition there are the great variety of birds including egrets.

covering the Malay Peninsula south of the Isthmus of Kra. Fishes living solitary are the Triggerfishes or Balistidaes. P. Miles and the Radiatas. saprophytes and lianas. People used to dive for these shells for their iridescent colors and make of them beautiful ornamental articles and jewelry. found in Indonesian waters are the Ptrerois-zebra. The Heniches acuminatus have very long back-fins exceeding their body length and the Monish idol or Zanclus canescens can have a size of 20 cm. The Acarthuridaes and Paracunthurus hepatus fishes are very attractive due to their specific bleish color. The series of successful experiments have given rise to the establishment of several pearl cultivation companies in the country. Pearl shells are found plentifully in Maluku. For the most part the Melanesian region is covered by the luxuriant growth of the characteristics tropical rainforest vegetation. a type of ever-wet vegetation containing a large number of timber species harboring various kinds of epiphytes. the Maluku and Aru islands are the habitat of these species. but the Forcipiger longirostris and the Rostratus fish are characteristic for their long snouts. P. examining their patients or pecking the body of other fishes. Pamancanthus imperator.Doctor fishes or Labroidae dimidiatus are ornamental fishes. the Philippines and the whole of Papua New Guinea and Papua except the Solomon Islands. The Peacock fishes called so after their long fins. The Chaetotontidae have small beaks. Pearls Shells Pearl oysters found in Indonesia are the Pictada maxima. Indonesian pearls are in great demand because of their large size and superb quality. too many to be mentioned. which behave like doctors. Rusellii. all of them belonging to the Scorpanidae family. P. Flora Indonesia lies within the botanical region of Melanesia. Pamancanthus semicirculatus. Pmagaritifera and Rteria penguin species. The seas of Indonesia's eastern part around Halmahera Island. Pearl oysters became an important marine product after the setting up of the Marine Fisheries Research Institute (LPPL) in 1960 which started to conduct research and making experiments on the cultivation of pearl bearing oysters on the island of Aru and in Sulawesi. There are still many other species of ornamental fish in Indonesia. Other attractive species are the Acunthurus-leucosternon fish. Sea Horses or Hippocampus-coronatus of the syngnathidae family are also among the ornamental fishes collected in Indonesia. the Zebrazoma-veliverum and the Naso-literature fishes. Pterois-bachiopterus. Pygoplites-diacanthus and Auxiphipos navarchus or angle fishes belonging to the Pamancanthidae families are collected because of their beautiful colors. These characteristic 7 . The most common species among Indonesia's ornamental fishes are the Thalassoma lunare. the Indonesia archipelago. Volitans.

a valuable kind of timber for furniture. a product of man-made forest in Java. tengkawang or illipe nuts.000 species of pants. ebony. Ramin. the flora making up the Indonesian vegetation abounds in timber species. Approximately 6. is obtained from species of Gonystylus. as well as from the flora of other tropical areas in the world. In view of the richness of the Indonesian flora it isn't surprising that the Indonesian people are depending heavily on these natural resources to support their daily life. As might be expected.000 m. elfin or mossy forest and alpine vegetation are found. The insect trapping pitcher plants (Nepenthea Spp.) are represented by different kinds of species from many areas in western Indonesia. the luminescent species. but comparatively speaking this is insignificant since the major part of Indonesian land-mass consists of lowland. The myriad or orchids found in Indonesia are rich in species. Fogaceae. Moreover. is reflected in the accommodation of close to 40. which is found only in certain parts of Sumatra is the plant with the largest flower in the world. the rich flora of Indonesia contains many unique examples of tropical plant life and manifestations Rafflesia arnoldi. Above an altitude of 1. Amorphoplalus titanum. medicine and handicraft. etc. with the largest inflorescence of its kind. varying in size from the largest of all orchids. the sooty mould and the black mildew. a better development of what is normally considered temperature families can be seen.000 species of Indonesian plants are known to be used directly by the 8 . whereas sandalwood. Higher still. The Dipterocarp family is world famous as the main source of timber (the meranti) as well as resin and vegetable fat. ulin and the kayu Palembang are taken directly from the forest. Lauraceae. The forest ground in Indonesia is so rich in litter enabling a multitude of fungi to grow luxuriantly. The richness of the Melanesian region of which Indonesia represents the major portion. the tiger orchid Grammatophyllum speciosum. or about 10-12 percent of the estimated number of plant species in the whole world. Besides. such as the Rosaceae. Rafflesia arnoldi From the same area in Sumatra comes another giant. Indonesia is also known for its teakwood. including the horsehair blight.features and the high number of genera and species endemic within this region make the flora of Indonesia completely different from that of neighboring continental Asia and Australia. this parasitic plant grows on certain lianas but does not produce leaves. to the tiny and leafless species of Taeniophyllum used by the local people as a source of food.

This is the legal basis of the Indonesian-Exclusive Economic Zone. Exclusive Economic Zone When independence was proclaimed and sovereignty gained. measured from a straight baseline drawn from the outermost points of the islands. Indonesia Standard Time Indonesia's three time zones are as below: 1. Most characteristics in this modern time is probably the use of plants as the source of raw material for Indonesia's traditional herbal medicine (jamu) and as indispensable part in ceremonies. 5 of the same year. 9 . Central Indonesia Standard Time equals GMT plus 8 hours (meridian 120°E). on December 13. West and East Nusatenggara. did not mean that the country would bar international passage. 1957. covering the provinces of Maluku and Papua. 2. It stated that all the waters surrounding and between the islands in the territory came within Indonesia's sovereignty. with a territory that embraces all the islands. and the provinces of West and Central Kalimantan. Indonesia had to enact laws to govern the seas in accordance with the geographic structure of an archipelagic state. covering all provinces in Sumatra and Java. The laws were necessary instruments for the unity and national resilience of the country. all provinces in Sulawesi. covering the provinces of East and South Kalimantan. Today such economic zones are confirmed by the International Convention on the Law of the Sea. In view of the country's susceptibility to foreign intervention from the sea and for domestic security reasons. and the provinces of Bali. Eastern Indonesia Standard Time equals GMT plus 9 hours (meridian 135°E). customs and traditions. It also determined that the country's territorial water limit was 12 miles. however. the islets and the seas in between. which was ratified by the Indonesian Government on October 18. Western Indonesia Standard Time equals GMT plus 7 hours (meridian 105°E). archipelagic states like Indonesia have unilaterally determined their 200-mileExclusive Economic Zones. by Act No. 1983. 3.local people. the Indonesian Government issued a declaration on the territorial waters of the Republic. In the past. This.

the Javanese in Central and East Java. the Makasarese and the Buginese. The Ambonese on the group of islands in the Maluku and the Irianese in Papua are classified into the Polynesians and the ProtoAustronesians. Ceramese. The main district local languages of Indonesia are among others: the Acehnese. Tetum of Timor. Sasak. A pure classification according to their racial origins is difficult to realize due to their inter-marriages. 150 to 250 in number are usually classified according to the above mentioned ethnic denominations. Minahasa. The Micronesians are found on tiny islets of Indonesia's eastern borders. Sundanese. Halmahera. On the island of Sulawesi in the north are the Minahasas and in the center the Torajas. Ambonese. into four ethnic groups. Batak. These Melanesians are again sub-divided into the Acehnese of North Sumatra. Toraja. one finds the Dayaks. the Balinese. Javanese. the Minangkabaus in West Sumatra. On the island of Borneo in Indonesia's Kalimantan. 10 . These four main ethnic groups are the Melanesians (the mixture between the Sub-Mongoloids with the Wajaks). the Madurese on the island of Madura. have caused the individual development of cultures. the Sasaks on the island of Lombok. the Sundanese in West Java. and Timorese on Timor Island. In between these languages there exist many other different dialects. the Batak in Northeast Sumatra. Buginese. though of one similar ancestry. and in the southern part. were separated by seas and therefore lost contacts. several Irianese languages and other such languages.People Due to Indonesia's emergence into an archipelago where its inhabitants. but more so on the basis of their linguistics identities caused by mentioned diversification. the population of Indonesia has been reclassified. the Proto-Austronesians (including the Wajaks). Dayak. including their languages and their growing into diversification. Nevertheless. Languages and Dialects Languages and dialects spoken and written over the whole of the Indonesian archipelago. not so much on the basis of their racial origins. the Polynesians and the Micronesians.

yet local languages are equally valid and no attempt and intention exist to abolish these local languages and dialects. the greater parts of the Indonesian nationals are bilingual. 9 . In August 1973. Therefore. Its lexicon and structure is mainly based on the Malay language enriched by Indonesia's lexicon of her multi-local languages and dialects.Profiles of some Indonesian women Ambon Bali Betawi Riau West Kalimantan South Tapanuli Lombok South Sumatra Nias Indonesia's National Language has been officially introduced since Indonesia's independence and is called the BAHASA INDONESIA. Indonesia and Malaysia signed a cultural agreement in which similar spelling of both the Malaysian "Bahasa Persatuan" and the Indonesian "Bahasa Indonesia" has been agreed upon. Although the Bahasa Indonesia has since been regarded as the Lingua Franca.

while those found in Wajak were called Wajakensis. In Aceh. Culture and Ethnic Groups The first inhabitant of Indonesia was the Javaman. followed by the Sundanese. Homo Soloensis with the same characteristics as the Austro-Melanosoid people had roamed to the West (Sumatra) and to the East (Papua).000 years ago. They were followed by Spaniards. they propagate Christianity.language. The influx of the Indian settlers until the seventh century AD brought about the Hindu religion spread throughout the archipelago. The arrival of the Portuguese should be linked to the European demand for spices. Besides search for spices. that Portuguese arrived in Indonesia. Islam founds its way to the community at a later stage.000-500 BC. First accepted by court circles. the "Wali Songo" (Islamic preachers) had played a very important role. were called Homo Soloensis. Moslem merchants from Gujarat and Persia began visiting Indonesia in the 13th century and established trade links between this country and India and Persia. named Pithecanthropus erectus by Eugene Dubois who found the fossils at several places on the island of Java in the vicinity of the Bengawan Solo River. Indonesia was inhabited by Sub-Mongoloid migrants from Asia who later inter-married with the indigenous people. In the rivalry that ensued. In the period preceding independence. Madurese. near Solo. The Javanese community is the largest number of Indonesia's total population. While conducting trade. which before had embraced Hinduism.000 BC.Race. The members of each group are tied to each other by a sense of solidarity and identity which finds its roots in the land. thus making the beginning of 350 years of Dutch colonialism over the country. Minangkabau. Islam was widely accepted by the community with the Pasai and Perlak Kingdoms becoming the first Moslem kingdoms in the archipelago. It was in 1511. Particularly in Java. culture and customs they share. In the period of 3. who lived 500. There are about 500 ethnic groups in Indonesia spread from Sabang (the northernmost tip of Sumatra) to Merauke in Papua. the Gujarat and the Arab people also spread the Islamic religion in this area. the Dutch ultimately succeeded in gaining the trade monopoly in spices throughout the archipelago. the Dutch and the British. The fossils found in 1891 and 1892 in the village of Trinil. In 1. art. 11 . The first to accept the Islam religion were the coastal kingdoms. intermarriage still occurred with Indo-Arian migrants from the South-Asian sub-continent of India. Indonesia's community was made up of a large variety of ethnic groups or rural communities.

of which 41. Further.000 heads. etc. The following decade saw the total households numbering 52.49 percent in the 1990-2000 period.6 percent. The decline was chiefly due to the success of family planning programs starting into operation in 1970s. at the time the total number of population of the Netherlands East Indies now called Indonesia. the country has held population census for five times i.42 percent in trade.000 households with an average of 4.700. Maluku and Papua 1.97 percent per annum. and Distribution According to the 2000 Population Census. Higher proportion of the working population in Java earned their life in manufacturing and trade rather than in agriculture.30 percent in services. the remaining 27.000 working population. Growth Rate.9 percent. meaning more male than female in number. the total number of population in June 2003 was estimated at 215. Arabs and Indians. Since its proclamation of independence in August 1945. According to Kolonial verslag: Volkstelling 1930 (Colonial Report: Population Census 1930). Sasaks. was 60. there were 39.000 with an average of 3. 1971. 19. Indonesia had total population of 205. Other ethnic groups are among others the Ambonese. population grew at an average of 1. However.industry. The island of Sumatra accounted for only 13.49 percent per annum during the period of 1990-2000. India. Based on the 1990 Census. Dayaks.6 percent.000 heads _placing it the world's fourth largest after China. and 2000. Kalimantan 3.600. 1980.700.000 heads with population density at about 111 heads per sq km.34 percent worked in agricultural sector. manufacturing. 12 . and agriculture.9 heads per household. POPULATION Number. other sub-communities of foreign descent are the Chinese. of 91. some 44.5 heads per household. and the United States of America_ with ratio between males and females over 100. Such a census was once held during the Dutch colonialists' occupation as well but its results' accuracy were doubtful.33 percent worked as labors or employees. Batak and the Balinese. trade.21 percent in manufacturing ployees in the sectors of services. With population growth of 1.7 percent. Population growth rate tended to decline during the past two decades. Sulawesi 6. it decreased to an average of 1. its data could be used as comparative basis of reference. 13.5 percent. in 1961.e.546.7%) occupied the island of Java.843. Apart from the indigenous communities. Nusa Tenggara 5.276. and 11.008. The reverse applied in other islands. the Acehnese. 1990.Buginese. During the period of 1980-1990. This declining growth rate was parallel with the decrease of a households' number. In 2002.000 heads (68.

which makes up some 30. Trailing behind is Banten with 1. was for the first time declared as lingua franca for ethic groups residing in the territory of then the Netherlands East Indies.37 percent of the country's total land area. Serui. In Kalimantan live in the Dayak. Yali.4 percent of the country's total area. Malays.10 percent of total population. Marind-anim. The event _called as the "Youth Pledge"_ was the starting point of the all ethnic groups to awake to build one nation and one motherland. Kalimantan (part of Indonesia). Piring dance of Minangkabau (West Sumatra). with each group having distinct language. Korowai. Tortor dance of the Batak.01 percent of the country's total population. Bali is the most dense with 596 heads per sq pm. On the contrary. Makassar. Kalimantan and Papua). It was during the second Indonesian Youth Congress on October 28. The island of Sumatra is home to the ethnic groups of Acehnese. Mandar etc. the Indonesian nation under the Unitary State of the Republic of Indonesia.3 percent of the country's total area. Minangkabauan. making its population density stood at 12. Banjar and Malays. The programs ended a couple of years ago. Indonesia.49 percent of the country's total population or with an average density of 20 heads per sq km. The Greater Jakarta.With its land area of about 6. such as Saman dance of Aceh. making its density of only six heads per sq km. The island of Java is home to the ethnic groups of Betawi. Javanese. which accounts for only 0.985 heads per sq km. tradition and custom. Biak. accounts for only 5.83 percent of the country's total population. Sasak. Those ethnic groups politically and geographically unite into a nation. Papua which accounts for some 19.100 heads per sq km. Artak are ethnic groups that live in Papua. in Sulawesi the Minahasans. Flores and Timorese live in East and West Nusa Tenggara. Sundanese. The Asmat. Each of those ethnic groups has its own distinct dances popularly known among the public. Indonesia had for many years introduced and carried out migration programs by moving a number of people from the densely populated islands (Java and Bali) to the sparsely populated islands (Sumatra. etc. the Batak. Bugisnese. and North Sumatra with 162 heads. It means population density in Java Island is 997 heads per sq km.75 percent of the country's total land area. Dani. the Indonesian Language. The island of Bali is home to the Balinese. In overcoming such uneven distribution of population. Java accounts for about 58. art. Outside Java. now called Indonesia. Torajans. is home to only 1. is home to about 4. Ondel-ondel dance of Betawi. while the ethnic groups of Lombok. Races and Ethnic Groups The Indonesian people consist of hundreds of ethnic groups. Palembang etc. 1928. the Gayo. with Pancasila as its state philosophy. Lenso dance of Ambon (Maluku). 13 . Jambi. that the Bahasa Indonesia.

The Bugisnese-Makassars have been known for their seafaring people with their wooden "phinisi" ships sailing high seas since hundreds years ago. According to the 2000 Census.02 percent. the people of Maluku have been known for their skillful singers and traditional music instruments. The Minangkabauans. and their arts batik textiles are popular at home and even abroad. The availability of data on each ethnic group is believed to be able to help understand them.36 2. So are the Balinese with their particular dancing and carvings. Sasak 1.30 percent.04 3. namely some 41. among the hundreds existing ones. The 2000 Census recorded only 15 ethnic groups.37 4.51 percent. Makassar 0. The Bataks are known for their talented singers.72 percent. Minangkabau 3.28 3. Banjar 1.Each ethnic group adopts a different kinship system as well.71 2.37 percent.84 percent. Sundanese 14.66 percent.71 percent of the country's total population.02 14 . the Bataks 3. Madurese 3. stick to a matriarchal system. and settle any ethnic conflict. Meanwhile.53 5. But the 2000 Census did it again. Javanese people account for the greater part.86 percent.02 41. Bugis 2. Sundanese and Javanese are known for their industrious and tenacious labors. Gorontalo 0.51 percent. and others 14. It also revealed different composition from that of the 1930 Census recorded. Batak 2.4 percent.59 2.43 percent.41 3. The Bataks. Javanese 47. for instance.99 percent.49 6.49 percent.45 percent. Chinese descents make up only 0. Torajan 0. Balinese 1. This feature was dropped in the following censuses until the 1990 Census due to mainly socio-political reasons. Minangkabau 2. Malay 3. Bugisnese 2.72 5. Betawi 2. Acehnese 0.74 percent. particularly in term of quantitative data reflecting socio-political perspective changes in the country. and bear clan names after their own surnames. Trailing behind are Sundanese with 15. known as domestic tough migrants. and Papuans are the country's promising athletes for the future. Ethnic Group 1930 2000 1. It was the 1930 census that for the first time recorded the composition and number of ethnic groups in the country. Composition of Main Ethnic Groups to the country's Total Population (%) No.37 percent. adopt a patriarchal system. with ethnic members more than one million people. Madurese 7.

Balinese 1. The greater concentration of Hindus is in Bali Island (some 75. followed by Betawi with an average of 2. of whom 35.69 percent.81 percent). and the Javanese with an annual average of 1. 5.88 1.731 heads or 61. While trading.08 percent of the province's total population). 15 .66 percent of the area's total population). 3. Betawi 1.58 percent.89 percent of the area's total population).640.62 percent Malays. located in Magelang.53 percent Chinese descents. Malay 1. were propagated by Indian merchants and migrants.51 8. they also propagated religious teachings they respectively adhered to local people.31 percent. and in Jakarta (15. Bugis 1. The Sundanese live in West Java _their homeland_. Indonesians may boast Borobudur Temple.03 percent) and North Sulawesi (0. North Sumatra (32. Hinduism and Buddhism.61 percent the Bataks.34 percent. 3.51 9. homeland to the Betawis. Banjar 1. in Jakarta (35. some 1. and the remaining of other ethnic groups.94 percent.66 2.60 percent of the country's total population adhered to Hinduism.18 percent Minangkabauans. The least percentage of this ethnic group can be found living in East Nusa Tenggara (0. The least Javanese people can be found living in West Nusa Tenggara (1.61 3. the Batak 2.74 During the period of 1930-2000. and the capital of the Republic. Central Java.52 1. and Yogyakarta _their native land. has been an important passage of trading ships and place to call in for traders from many nations. which is now called Indonesia. In 2000. recording the highest population growth rate was the Malay with an average of 2. 1.000 people.27 percent). they also live in Lampung (4. particularly in Java.84 percent per annum.35 percent of the Island's total population). However.45 10. as one of the world's marvels. in Banten (22.7.713. East Java. The majority of the Javanese people reside in Central Java. Banjar 1. for example.47 percent of its total population) and in East Nusa Tenggara (0.62 percent). 15. Jakarta. in 2003 was home to estimated 8. Remnants of the two religion's glory are the monumental buildings of Borobudur Temple (Buddhist) and Prambanan Temple (Hindu) in addition to tens of smaller temples.16 percent are of Betawis.16 percent).27 percent Sundanese. Religions Since many centuries ago the territory.

Java and others.86 percent annually. some 8.51 percent).51 percent of the country's total population were followers of Islam. some 87. before spreading to Banten and Demak in Java Island. The number of followers has been increasing from time to time. According to the 2000 Census. It is worth noting that the Istiqlal Mosque in Jakarta is the country's largest mosque. or an average increase of 1. The number of the two religions' followers grew at an annual average of 2. While Protestantism was introduced and propagated by Dutch and German missionaries.48 percent during the past there decades. Jakarta's large and beautiful cathedral is the pride of Indonesian Catholics. Islam was brought to Aceh. and later on by American missionaries. the Portuguese went away to land in Larantuka. Minahasa (North Sulawesi) and Manokwari (Papua). Islam followers accounted for 88. They initiated preaching the religion at Tapanuli (North Sumatra). Ambon (Maluku). From this place Catholicism was propagated and spread for the first time to throughout the country. Greater concentration of the Christian denominations are found in East Nusa Tenggara Province (87. Flores. and even the largest in Southeast Asia. After failing to defend Malacca.22 percent.92 percent of Indonesia's total population adhere to Catholicism and Protestantism. According to the 1971 Census. This makes Indonesia a country with the largest Islam followers in the world. and other areas later on. Papua (75. by Gujarati and Persian merchants embracing the religion. Islam was thus developed at coastal areas first before penetrating to hinterlands. 16 . Catholicism was first introduced to this area by pastors participating in the Portuguese voyages in search of Indonesian spices.Buddhism is followed by some 1. and according to the 2000 Census. with their greater concentration found in the province of Bangka-Belitung (7.67 percent of the province's total population). and in North Sulawesi Province (69. the role of the nine Islamic holy men (Wali Songo) in propagating Islam was prominent. In Java in particular.51 percent of the country's total population. before to Kalimantan. Missionaries are still active in Papua.23 percent of the province's total population) and in Riau Province (4.18 percent). the most northern tip of Sumatra Island.27 percent). and the Demak Mosque one of the country's oldest mosques.

must have been the first inhabitant of Indonesia. A later mixture was brought about by Indo-Aryan migrants from the South Asian sub-continent of India (1000 BC). but grew into well-developed trade relations. the Oligacene period (25 million BC). Early trade relations were established between South India and Indonesia. during the Pleitocene period (4 million BC). Sumatra was then named "Swarna Dwipa" or the Island of Gold.HISTORY Ancient Time Indonesia in ancient time DURING the Paleocene period (70 million years BC). It is believed that Indonesia must have existed and was linked with the present Asian mainland. the island of Java was called "Java Dwipa" or the Rice Island. Nor did it exist during the Eurocene period (30 million BC). due to the rise of the sea that the Indonesian archipelago emerged. It was also in this period (3000-500 BC) that Indonesia was inhabited by Sub-Mongoloid migrants from Asia who later inter-married with the indigenous population of the archipelago. Beside this Pallawa script. and Miocene period (12 million BC). The first Indian immigrants mostly from Gujarat in Southeast India came during the period of the first Christian era. The Caka period in Indonesia was marked by the introduction of the Sanskrit language and the Pallawa script by the Indian Prince Aji Caka (78 AD). who found fossilized remains on the island of Java. Relations with India were not only confined to religious and cultural exchanges which later on developed into diplomatic realizations between the Buddhist Kingdom of Sriwijaya and Nalanda in South India. This period was also closely related to the first appearance of the Homonids. It was during the smelting of ice sheets north of Europe and America that resulted in the emergence of islands. Both the language and scripts were in a later period of Indonesianized and called the "Kawi" language which has in its lexicon a number of additional Javanese words and phrases. named Pithecanthropus erectus by Eugene Dubois. Indonesia did not exist yet. 17 . "The Java Man. It was in this period that the "Java Man" must have inhabited that part of the world now called Indonesia. the Devanagari script of the Sanskrit language was also in use as indicated in the ancient stone and copper inscriptions (pracasthies) unearthed in Indonesia. while the Hindu Kingdom on Borneo (Kalimantan) Island was called Kutai.

methods and ritual of worship and even the "Varna" (cast) division of labor system was introduced in a less strict division of the "Varnas. advanced in agriculture. Other Chinese chronicles dated 132 AD mentioned the existence of diplomatic relations between Java Dwipa and China. was introduced and spread all over the country. Indian customs and culture were introduced with regard to the monarchic system of governing. on the island of Borneo. "Labadiou's Ptolemy's Chronicles described Java as a country having a good state system. The latter became more advanced in the 8th century AD. Devawarman. The Hindu religion was peacefully spread throughout the archipelago gradually to all layers of society in Java and to the upper classes only in the outer islands. or Sumatra." The Hindu religious interpretation of the "Vedas" Holy Scriptures in the Mahabharata and Ramayana epics presented through the Wayang puppets shadow-play as its visual media. As Buddhism was also spread to China so many Chinese pilgrims went to India. introducing the Hinayana and the Mahayana sects. Kudungga. The Period of Hindu Kingdoms Many well-organized kingdoms with high civilization were ruled by indigenous Rajas who embraced the Hindu religion or Buddhist religion at a later stage. 18 . a Chinese Buddhist Saint Fa Hsien. music and dances. which lasted from ancient time to the 15th century AD. while there already existed metal works. emanating from the Hindu and Buddhist religion were later syncretized with Indonesia's cultural elements and therefore also termed as the "Hindu-Indonesian" period. the use of the metric system and the production of coins. named either the island of Java. The Greek explorer and geographer. and it was for this reason that this period in history was called the Period of Hindu Kingdoms. The northern part of Java was then ruled by a Hindi Raja. their ancestral geneological pedigree system. landed in Java Dwipa (present Java Island) and stayed there for five months. sailing through the Strait of Malacca. which are still popular nowadays in the Republic of Indonesia. Some of them on their way to India did make visits to Indonesia and even stayed for a while to get trained in and to develop their knowledge on the Buddhist religion. In 144 AD.A continuous influx of Indian settlers went on during the 1st to the 7th century AD. literature. in Kutai region there were the successive rules of the Hindu Rajas. Ptolemy from Alexandria who visited Indonesia. driven by a storm. Aswawarman. The first Indian Buddhist arrived in Indonesia between 100 and 200 AD. Its culture and civilization. Opposite his kingdom. architecture. the organizing of their armed forces. and Mulawarman. navigation and astronomy and mentioned that the people already knew the "batik" processing of cloths.

other Buddhist temples were built by Raja Panchapana such as the temple complexes of Mendut. and Pajajaran. which was fostering art and culture. "KantoLi". so Sriwijaya influence sphere also grew in many other parts of the archipelago. Central Java). It was ultimately entirely subdued 19 . It was in this period (750-850 AD) that the famous Buddhist monument "Borobudur" was built. which was ruled by a Buddhist Raja Gautama Subhadra and later by his son Pryawarman or Vinyawarman who established diplomatic relations with China. Hindu Civaite temples were erected on the mountain plain of Dieng. The capital of this Hindu Kingdom of Mataram was Medang Kamolan. presumably in the neighborhood of present Palembang in South Sumatra. The Kingdom of Cailendra was also known as being the center of commercial and naval power. In 772 AD. China. with Pakuan as its capital and which succeeded an earlier established kingdom of "Galuh.e. in the neighborhood of present Semarang city. A manual for singing. on his way to India. These temples are at present still found in the vicinity of Yogyakarta. At the end of the 13th Century. were the Hindu Kingdoms of Galuh. The Hindu Civaite temple complex of Prambanan was built in 856 AD and accomplished in 900 AD by Raja Daksa. Kawali and ParahyanganSunda. which already knew the use of ink and paper since 2nd century AD. West of the Central Java Kingdom of Cailendra. The Chinese Buddhist pilgrim I-Tsing. recorded in their annals the existence of the Buddhist kingdom in Sumatra. Due to phonetically language barriers. Kalasan and Pawon. As Buddhism at the period flourished." Later there were the kingdoms of Taruma Negara.Around 502 AD. One of the Pallawa language stone inscriptions (Pracasthi) of 732 AD mentioned the name of the Hindu Raja Sanjaya who was later identified as the Raja of the Hindu Kingdom of Mataram (Replacing Cailendra in Central Java). "Pajajaran" was founded by Raja Purana. Sriwijaya was then the center of Buddhist learning and had many well-known scholars in the Buddhist philosophy. The Crivijaya diplomatic mission had attached to its building a school when local Indians could learn the art of molding bronze statues. southwest of the capital of Medang Kamolan." one of the might Buddhist kingdoms in Indonesia. the capital of the Special Territory of Yogyakarta. apart from developing their knowledge on the Buddhist philosophies. called Cailendra and was ruled by the Cailendra dynasty or Rajas. "Kanto-Li" was presumably "Crivijaya. Earlier. Kuningan. Dharmapala and Vajrabudhi. in present West Java Province. in the year 675 AD. named the Chandra-Cha-ana was first composed in 778 AD. Another known Buddhist kingdom emerged on the island of Java (i. the Crivijaya Empire began to decline as a result of severance by its vassal states as well as due to frequent attacks by the South Indian Kingdom of Chola and by the Kingdom of Majapahit. This kingdom had established diplomatic relations with the South Indian kingdom in Nalanda. Kanoman. like Sakyaktri. visited Sriwijaya in 671 AD to study the Sanskrit language and returned 18 years later in 689 AD.

Raja Dharmawangsa codified laws and translated the Indian Sanskrit Hindu Epic of the Mahabharata into the Javanese language and also the philosophical essence of it as contained in the "Bhisma Parva" scripture. The disappearance of records was presumably caused by a catastrophic natural disaster. Besides. he also ordered the translation of the Hindu Holy Book. a mighty Hindu Kingdom of Singasari was emerging in East Java. the "Bhagavat Gita. Before his death in 1409 AD. Raja Airlangga divided the kingdom into the Kingdom of Jenggala and Daha or Kediri to be ruled by his two sons. At the end of the 10th Century (911-1007 AD).by Majapahit who in its subjugation efforts was supported by Raja Adityawarman of the Kingdom of Melayu. for unknown reasons. which completed the entire subjugation of Sumatra under the rule of Majapahit. which completed the entire subjugation of Sumatra under the rule of Majapahit. for unknown reasons. Majapahit first conquered the Jambi Kingdom in Sumatra. It was ultimately entirely subdued by Majapahit who in its subjugation efforts was supported by Raja Adityawarman of the Kingdom of Melayu. or by an endemic. built in 856 AD by Hindu King Sanjaya frequent attacks by the South Indian Kingdom of Chola and by the Kingdom of Majapahit. Meanwhile." Raja Airlangga who meanwhile also ruled over the island of Bali was known for his water-works along the Brantas River now still in use and who was a wise and firm ruler. mighty Hindu kingdoms of Central Java disappeared from its historic records and new prosperous Hindu kingdom emerged in East Java. Raja Balitung who ruled within 820-832 AD had once succeeded in uniting Central and East 20 . which later extended its expansion along the rivers and finally annexed the Kingdom of Pagar Ruyung in West Sumatra. Its King. Airlangga was also known as the promoter of the production of literary works. mighty Hindu kingdoms of Central Java disappeared from its historic records and new prosperous Hindu kingdom emerged in East Java. The "Panji" novel produced Prambanan temple in Yogyakarta. Raja Balitung who ruled within 820-832 AD had once succeeded in uniting Central and East Java kingdoms. Meanwhile. Majapahit first conquered the Jambi Kingdom in Sumatra. which later extended its expansion along the rivers and finally annexed the Kingdom of Pagar Ruyung in West Sumatra.

The Moghul emperor. The disappearance of records was presumably caused by a catastrophic natural disaster. which had dependencies in territories outside the present borders of the Indonesian archipelago as far as Champa in North Vietnam. Tonkin. Marco Polo visited Java and North Sumatra. These kingdoms of East Java were later succeeded by a might Hindu Kingdom of "Majapahit." Raja Airlangga who meanwhile also ruled over the island of Bali was known for his water-works along the Brantas River now still in use and who was a wise and firm ruler. succedeed in gradually uniting the whole Indonesian archipelago under the name "Dwipantara. Raja Jayabaya of the Hindu Kingdom of Kediri (1135-1157) wrote a book in which he foretold the downfall of Indonesia and made subservient to the white race domination (the Dutch). Raja Dharmawangsa codified laws and translated the Indian Sanskrit Hindu Epic of the Mahabharata into the Javanese language and also the philosophical essence of it as contained in the "Bhisma Parva" scripture.Java kingdoms. Thailand. Prapancha (1335-1380) in which some parts described the diplomatic and economic ties with the then existing South-East Asian countries like Burma. a mighty Hindu Kingdom of Singasari was emerging in East Java. Before his death in 1409 AD. or by an endemic. the first European. The "Panji" novel produced during this period are today still known and taught at certain university literary coleges in Thailand. During this golden period many other literary works were produced such as the Javanese version of the Hindu epic "Mahabharata" composed by the Hindu Mpu (Saint) Sedah and his brother Mpu Panuluh and published in 1157. Raja Hayam Wuruk who appointed his successful premier. and Malaysia. This gradually powerful growing empire also subdued the kingdom of Sriwijaya in South Sumatra. Besides. he also ordered the translation of the Hindu Holy Book. Cambodia. Kubilai Khan in 1293 attempted to invade Majapahit. His troops however were defeated and driven back to their ships. Gajah Mada. At the end of the 10th Century (911-1007 AD). the "Bhagavat Gita." During that golden period many literary works were produced such as "Nagara Kertagama" by the famous author. Raja Airlangga divided the kingdom into the Kingdom of Jenggala and Daha or Kediri to be ruled by his two sons. 21 . Hindu kingdom ever known in Indonesia under the reign of Raja Hayam Wuruk. which afterwards was succeeded by a yellow race (the Japanese) domination and ended his book by forecasting that Indonesia ultimately will regain her independence under the rule of justice. Annam. Cambodia. Its King. In 1292. and the present Philippines (1331-1364)." first ruled by the Hindu Prince Wijaya or later known as Raja Kartarajasa. Airlangga was also known as the promoter of the production of literary works. The Mogul Empire founded in East Java became the most powerful. which was earlier attacked by the South Indian Kingdom of Chola.

Grave of Maulana Malik Ibrahim. Sarasa Muschaya and many other such literary works were later translated into many modern languages of Europe for study purposes. Also books on various codes of law were produced such as the "Kutaramanawa. Gresik. Other literary works written in the "Kawi" (old Javanese) like the Pararaton.Gate of the mighty Majapahit Kingdom in Trowulan. particularly in the coastal area of Java. Ramayana. Arjuna Wiwaha. East Java Cambodia and even with India and China. East Java 22 . At a later stage they succeeded in influencing and even converting Hindu ruling Rajas to Islam. Along with the trade." the "Gajah Mada" and the "Adigama" Codes of Law." the "Manava Dharma Sastra. such as in Demak. The Period of Islamic Kingdoms Gujarati and Persian merchants who embraced the Islam religion started to visit Indonesia in the 13th century and established trade links with Persia and India. they also propagated the Islam religion among the Indonesian Hindus.

therefore. Their position was strongly felt then in Maluku. their sailing to the East were later on accompanied by Dutch warships in convoy. religious scholars and Hindu Khsatryas ret through the East Java Peninsula of Blambangan. Majapahit aristocratic descendants. To make their trade more efficient and organized. which they sold in European markets with big profits. in search of Indonesian spices. in later periods the eastern part of the island of Lombok was converted to Islam which infiltrated the island from Makassar in South Sulawesi. As VOC's merchant fleets were often not free from pirate attacks. which was followed by the Spaniards. General Falatehan succeeded also in defeating the Portuguese who attempted to conquer mentioned city. and further east to the northern part of the Maluku where the Sultanates of Ternate and Tidore were established. After Dutch VOC was nationalized by the then Dutch Government (1799). Meanwhile. the Dutch started their ventures to seek spices in Indonesia. the exploitation of Indonesian commodities for Europe developed into Dutch suzerainty over Indonesian territories where the people on such territories were levied by force to make agricultural tributes to 23 . After the subjugation of Majapahit by Islam rulers.The Hindu Raja of the Kingdom of Demak was the first in Java who converted to Islam. North of Java. This capital of the Sunda Kelapa Kingdom was conquered by an Islam General Falatehan of the Sultanate of Demak in 1527. Pasai and Perlak to Islam. entered Indonesia after conquering the Islam Kingdom of Malacca on the Malay Peninsula. However." Besides conquering Sunda Kelapa. Jakarta. The Beginning of Dutch Colonialism In the meantime. European Influences The Portuguese in Indonesia The Portuguese. The capital of the Hindu Kingdom of Pajajaran in West Java was Sunda Kelapa (1300 AD). and ever since renamed it Jaya-Karta meaning "the City of Victory. Minangkabau (West Sumatra). which was situated at the present Capital of the Republic of Indonesia. further eastwards to the island of Bali and Lombok. the Dutch established the Dutch East India Company (VOC) with the aim to exploit the Spice Islands in the Indonesian archipelago for European markets (1602). It was this Islam Sultan who later further spread Islam west of Demak in Cirebon up till Banten and then eastwards along the northern coast of Java to the Kingdom of Gresik and ultimately caused the downfall of the mighty Hindu Kingdom of Majapahit (1513-1520). Islam spread further east of the island of Java and established the Bone and Goa Sultanates in Sulawesi. Both started their first attempt to propagate Christianity in Indonesia. Islam spread to Banjarmasin in Borneo and further west on the island of Sumatra and converted Palembang.

Jan Pieters Zoon Coen. Indonesia's inter insular trade. Sultan Agung was also the greatest enemy of the Dutch.the Dutch. Dutch policy of exploitation through "divide and rule" tactics were introduced. To control spice monopolies in the Maluku. who in 1629 sent his troops to Batavia to attack the Dutch bulwark but were repulsed by the troops of the then Dutch Governor General. who waged a war against the Dutch was defeated and killed by the Dutch in 1680. particularly conducted against those who opposed the destruction.R. Mataram and Banten. After Dutch seizure of Ambon in Maluku in 1605 and Banda Island in 1623.H. Aceh. Kohler who was killed during the Aceh War 24 . In 1605. These outrageous expeditions aimed at destroying crops were seldom not accompanied with cruelties. as well as foreign trade was gradually crippled by the Dutch ruthless policies and which had forced Indonesia to merely become an agricultural country growing crops suitable to be sold to European markets. Dutch colonialism began to have a foothold in Indonesia. The capital of Sunda Kelapa was named "Batavia" by the Dutch. Prince Trunojoyo of the Kingdom of Madura. such as between Makassar. Merciless. Sultan Agung did not only develop the political power of the state but was also a great patron of arts and culture. The Dutch meanwhile pursued a so-called open door policy for Chinese to become their middlemen in their trade with Indonesia Wars against the Dutch Sultan Hasanuddin of Goa waged a war against the Dutch in 1666. Grave of Dutch Major General J. He introduced the Islamic Javanese calendar in 1633. Meanwhile. but was defeated by the Dutch who made Goa a vassal state of the VOC under the Treaty of Bunggaya signed in 1667. the former Hindu Kingdom of Mataram in Central Java became the Islam Kingdom of Mataram and was ruled by the Islam Sultan Agung Hanyokrokusumo. the Dutch carried out their notorious "Hongi Expedition" by burning clove trees of Indonesians which they regard as being "superfluous" causing the drop of its prices in European markets. the Dutch gained all the spice islands trade monopoly.

Sisingamangaraja. British Temporary Rule In 1714." The Buddhist monument of Borobudur and other Hindu temples were restored and research carried out. 25 . Raffles wrote his famous books entitled "The History of Java" in which he described Java's high civilization and culture. In those days. which deteriorated in strength. King of the Batak led the war against the Dutch in 1907. During the Napoleonic wars in Europe. To mention some of those revolts: Thomas Matulessy alias Pattimura staged a revolt against the Dutch in Maluku (1816-1818). After the end of French occupation of Holland. slaves were held and traded by foreigners.In 1740. Prince Diponegoro of Mataram led the Java war against the Dutch from 1825 till 1830. when Holland was occupied by France. Sir Thomas Stamford Raffles became Lieutenant-Governor-General of Java and dependencies subordinated to the Governor General in Bengal in India. 1799 all its territories in Indonesia were taken over by the Dutch Batavian Republic. the British and Dutch signed a convention in London on August 13. the Dutch intensified their colonial rule in Indonesia but was responded by wide-spread Indonesian revolts to regain their independence but were suppressed by the Dutch one after the other. 1814. the British came to Indonesia and built their "Fort York" fortress in Bengkulu on the west coast of Sumatra. was divided by the VOC into the Principalities of Yogyakarta and Surakarta." The British stayed in Bengkulu till 1825. Dutch Return to Indonesia Soon afterwards. Raffles introduced the "land-rent system" replacing the Dutch hated system of "contingent land use" and "compulsory deliveries of crops. in which it was agreed that Dutch colonial possessions existing since 1803 should be returned and consequently the Batavian Republic reclaimed the Indonesian archipelago from the British in 1815. after the downfall of Napoleon. which was published in 1889. The Kingdom of Mataram. Teuku Umar led the Aceh war in North Sumatra (1873-1903). which was later renamed "Fort Marlborough. which was a fierce struggle for independence. the Dutch suppressed a rebellion in Jakarta sparked by dissatisfied Chinese. These rebellious Chinese were later joined by Indonesians. Ten thousand Chinese were massacred by the Dutch. William Marsden wrote a similar book on the history of Sumatra. Since the British stayed in Sumatra from 1814 till 1825. Mismanagement and corruption forced the VOC into bankcruptcy and on December 31. Raffles introduced partial self-government and the slave trade was prohibited. Tuanku Imam Bonjol led the "Padri" war against the Dutch in West Sumatra. Indonesia fell under the rule of the British East India Company (1811-1816).

Indonesian leaders started a more organized struggle against Dutch colonialism known as Indonesia's national movements for independence. Gunawan and Suradji. Douwes Dekker. Communism was introduced in the Dutch East Indies by Dutch nationals. Baars. with Dr. in 1912 this middle class entrepreneurial organization turned into a political party and called them "Sarekat Islam" led by HOS Tjokroaminoto. In 1914. However. in Jakarta National Movements When all these regional wars of independence were unsuccessful. These three leaders of the party were later exiled by the Dutch colonial government of the Dutch East Indies in 1913. Tjipto Mangunkusumo and Ki Hajar Dewantoro (Suwardi Suryaningrat) striving for complete independence for Indonesia from the Dutch. turned into politics. later named Setyabudhi. an Indonesian Party "Partai Indonesia" was founded by Dr. which accelerated modern national movements throughout Indonesia. the Society of Moslem Entrepreneurs "Sarekat Dagang Islam" was founded by Haji Samanhudi and others which was aimed at encouraging and sponsoring the interest of Indonesian business within the Dutch East Indies. Wahidin Sudirohusodo. 26 . In 1911. supported by Dr. Haji Agus Salim and others. In 1911. The founder of "Boedi Oetomo" was Dr. Revolts were also launched in Goa in South Sulawesi and also in South Kalimantan. and Brandsteder. Soetomo. In December 1912. Sneevliet.In 1908 the Dutch attempted to occupy Bali but were fiercely repelled by Raja Udayana who led the Bali war against the Dutch. stimulated by Japan's victory over Russia in 1901. which was initially designed as a cultural association for Indonesian intellectuals. This period was pioneered by the founding of the "Boedi Oetomo" (Noble Conduct) movement on the 20th of May 1908. Second Youth Congress held on 27-28 October 1928. a Progressive Moslem Organization "Muhammadiyah" was established by Hajji Dahlan in Yogyakarta aimed at social and economy reforms.

When the Sarekat Islam demanded the Dutch Colonial Government of Dutch East Indies for minimum social legislation in the colony. were members of mentioned body. Dr. and others. This student's association had put more leverage to the Indonesian Nationalist Independence Movements in Indonesia in general. Further Growth of Indonesian Organizations Despite those restrictions by the Dutch colonial government. The Powerless People's Council "Volksraad" In 1916. and others. Wiwoho. Tjipto Mangunkusumo. the Indonesian Students Association "Perhimpunan Mahasiswa Indonesia" was founded by Dr. Achmad Jayadiningrat and Sujono were among the very few Indonesian members of the "Raad van Indie. MH Thamrin. Sutardjo Kartohadikoesoemo. the latter of which formed the Indonesian Communist Party "Partai Komunis Indonesia" (PKI) under the leadership of Semaun. whereas part of the number of its members consisted of appointed colonial officials. Sukiman. Sarekat Islam was split into a right and left wing faction. HOS Tjokroaminoto. Abdul Muis. Restrictions were put on the freedoms of assembly." Restrictions of Civil Liberties Worsening economic conditions and increasing labor strikes in the Dutch East Indies prompted the Dutch colonial government in 1923 to put severe restrictions on Indonesian civil liberties and made further amendment to the colonial constitutional law and penal codes. Under pressure of social unrest in the Netherlands at the end of World War I in Europe. In 1942. an organization aimed at promoting Indonesian national education calling themselves "Taman Siswa" was founded on the 3rd of July of mentioned year by Ki Hadjar Dewantoro. 27 . GSSJ Ratulangi. Muso and others. Dr. Soekardjo. this demand was countered by the Dutch by setting up powerless People's Council named the "Volksraad" in 1918 which was purely of an advisory nature to Dutch colonial rulers. in 1922. The Indonesian representation within the council was by indirect election through regional councils. Radjiman. the Sarekat Islam Party held its first congress in Bandung and advocated in its resolution self-government for Indonesia in cooperation with the Dutch. speech and expression in writing. Alimin.In May 1920. the Dutch pledged to the Indonesians to grant self government to Indonesia known as the "November" pledge which was never realized. Besides the "Volksraad" there was another body called the "Raad van Indie" whose members were appointed by the Ducth. It later developed into a semilegislative assembly in which body some Indonesian prominent nationalist leaders. Darsono. such as Dr. Dr. Mohammad Hatta.

It exerted a militant policy of non-cooperation with the Dutch colonial authorities on the basis of a permanent conflict of interest between Indonesian nationalism and Dutch colonialism." etc. The Law University College was opened in Jakarta. Wage Rudolf Supratman. Ir. a federation of all Indonesian parties was called into being by Dr. Sartono and others formed the Indonesian Nationalist Party (PNI)." "One Motherland. Soekarno in December of mentioned year which caused great discontent among the Indonesians. 1927. In July 1927. which later became Indonesia's National Anthem. which had a great impact in the Indies being a raw material producing colony of the Dutch. replacing the former Law School in 1924. Meanwhile in 1930. which adopted the Bahasa Indonesia as the official language. Dutch colonial authorities in the Dutch East Indies concerned about the developing national conscience and the increasing urge for independence by the Indonesian arrested PNI leader." "Young Sumatra. a pledge was made by the Indonesian Youth to strive for "One Nation. After Dutch suppression of these communist rebellions many Indonesian non-communist nationalist leaders were exiled to Tanah Merah. Meanwhile. The Medical University College. Gatot Mangkupradja and Maskun Supriadinata were tried in court on charges of "plotting" against the colonial 28 . Other leaders of the PNI. On the 28th of October 1928. Tjipto Mangunkusumo was exiled to Bandaneira. which the Dutch called "Boven Digul" in Papua. Mohammad Hatta. All of these University Colleges were later united into the University of Indonesia in 1946 during Indonesia's independence. during the Second Indonesian Young Congress held in Jakarta. the Technical University College was set up in Bandung in 1920. "The Indonesia Raya" song. Dr.In 1926 till 1927. Ir. Communist revolts. replacing the former Medical School was opened in August." This youth pledge is today still commemorated every year." and "One Language. the world suffered from an economic and monetary crisis. In the same year an all Indonesia's Nationalist Movement was set up among the Indonesian youth and women replacing earlier established youth organizations based on regionalism. Mohammad Hatta and Achmad Soebardjo and some other members of the federation attended the First International Congress of League Against Imperialism and Colonial Oppression in Brussels together with Jawaharlal Nehru and many other prominent nationalist leaders from Asia and Africa. such as the "Young Java. led by the Indonesian Communist Party "PKI" broke against Dutch colonial rule. In November 1926 it rebelled in West Java and in January 1927 in West Sumatra. was for the first time introduced at the Second Indonesian Youth Congress by its composer. In 1929. called the "Perhimpunan Politik Kebangsaan Indonesia" (PPKI). In February 1927. A balanced budget policy for the colony was strictly carried out detrimental to the economic and educational life of the Indonesians." and Young Ambon. Dr. Soekarno.

regime. Ir. Soekarno was released in September 1931 but again exiled in August 1933 and remained in Dutch custody till the Japanese invasion in 1942. In January 1931, Dr. Soetomo aimed at elevating the status of the Indonesian people on the basis of nationalism founded the Indonesian Unity Party, the "Persatuan Bangsa Indonesia." In April of the same year, the PNI was abandoned and followed by the founding of another party, the Indonesia Party or "Partai Indonesia" by Sartono, LLM, based on nationalism and Indonesia's self-supporting movement. In the same year, Sutan Syahrir founded the Indonesian National Education Group or "Pendidikan Nasional Indonesia," abbreviated as the new PNI, which was joined by Dr. Mohammad Hatta. In 1933, a mutiny broke out on the Dutch warship "Zeven Provincien," the Indonesian nationalists were held responsible for this. In 1934, Sutan Syahrir, Dr. Mohammad Hatta and other nationalist leaders were arrested by Dutch colonial authorities and sent into exile till 1942. In 1935, under the leadership of Dr. Soetomo a merger of the "Persatuan Bangsa Indonesia" organization with the "Boedi Oetomo" was brought about, aimed at striving for the independence of Greater Indonesia, the "Parindra."

Indonesian Petition In July 1936, Sutardjo submitted to the "Volksraad" the Indonesian petition calling for greater autonomy for Indonesia. This petition was flatly rejected by the Dutch dominated "Volksraad." In 1937, Dr. AK Gani founded the Indonesian People's Movement, "Gerakan Rakyat Indonesia," which was based on the principles of Indonesian nationalism, social independence and Indonesia's self-supporting efforts. In 1939, the All Indonesia Political Federation "GAPI" called for the establishment of Indonesia's full-fledged parliament, which was flatly rejected by the Dutch government in Holland in 1940. They also demanded an Indonesian National Military Service in order to defend Indonesia in times of war. This demand was also rejected in spite of the grave international situation, which proceeded the outbreak of the Second World War, the situation of which called for fundamental and progressive reforms in colonies and dependencies in Asia in general. Japanese Occupation After the Japanese attacks of Pearl Harbor in Hawaii, Japanese Armed Forces went southwards and occupied several Southeast Asian countries. After the British defeated Singapore, Japanese forces invaded the Dutch East Indies whereupon the Dutch colonial army surrendered to the Japanese in March 1942. Ir. Soekarno was released from his


detention. The Japanese introduced Japan's "Great East Asia Co-Prosperity Idea," which became unpopular in Indonesia as the Indonesians realized that Japanese occupation was just an alternate colonialism substituting Dutch colonialism. For the sake of furthering the course of Indonesia's independence however Ir. Soekarno and Dr. Mohammad Hatta were giving limited assistance to Japanese occupation authorities on the surface while other Indonesian nationalist leaders went underground to stage insurrection all over Java, such as in Blitar (East Java), Tasikmalaya and Indramayu (West Java), Sumatra and Kalimantan. Due to the hardships suffered by the Japanese in waging the Pacific war caused by interruptions of their supply lines and by Indonesian insurrections, the Japanese occupation forces in Indonesia ultimately gave in to recognize the Indonesian Red and White colored flag as the Indonesian national flag which was followed later by the recognition of the "Indonesia Raya" as Indonesia's National Anthem, and the "Bahasa Indonesia" as Indonesia's National Language. After persistent demands by the Indonesians for complete Indonesianization of the Civil Administration in Indonesia, the demands were ultimately met the Japanese. This became Indonesia's basis to further build up the foundation for the proclamation of independence of the Republic of Indonesia. Proclamation of independence …..sian insurrections, the Japanese occupation forces in Indonesia ultimately gave in to recognize the Indonesian Red and White colored flag as the Indonesian national flag which was followed later by the recognition of the "Indonesia Raya" as Indonesia's National Anthem, and the "Bahasa Indonesia" as Indonesia's National Language.

Text of Proclamation


After persistent demands by the Indonesians for complete Indonesianization of the Civil Administration in Indonesia, the demands were ultimately met the Japanese. This became Indonesia's basis to further build up the foundation for the proclamation of independence of the Republic of Indonesia. Proclamation of independence The final defeat of Japan after the dropping of the atomic bomb in Hiroshima and Nagasaki on the 6th and 9th of August 1945 prompted the Japanese to surrender unconditionally to the Allies. This constituted an ample opportunity for Ir. Soekarno and Dr. Mohammad Hatta to proclaim Indonesia's independence on the 17th of August 1945. The Republic of Indonesia came into being based on Pancasila under a constitution, with strong Presidential powers, a Parliament, Supreme Advisory Council, State Audit Board and a People's Consultative Assembly as the embodiment of people's sovereignty in free Indonesia, all of which were adopted on the 18th of August 1945. This 1945 Constitution is still in force up till now. The Red and White flag was officially accepted as the National Flag of Indonesian and the Bahasa Indonesia as the National Language. Ir. Soekarno was elected as the first Indonesian President and Dr. Mohammad Hatta as VicePresident. On the 5th of September 1945, a Presidential Cabinet was formed with President Soekarno as Premier.

Wars of Independence against the Dutch Soon after the independence proclamation, British troops as a component of the Allied Forces landed in Indonesia with the task of disarming Japanese Forces in Indonesia. Dutch troops have meanwhile used this opportunity to also land in Indonesia however with a different purpose, i.e. to restore the Dutch East Indies. The Dutch were in the beginning aided by the British Forces under General Christson which was confirmed later by Lord Louis Mountbatten, British Commander of the Allied Forces in Southeast Asia and based in Burma, whereas the British Allied Forces' task was to be the repatriation of Allied Prisoners of War and Internees and the disarming and internment of Japanese troops in Indonesia. Fierce fighting broke out in Surabaya on the 10th of November 1945 between the British troops and Indonesian armed volunteers, which culminated in "Allied Forces" attacks by battle ships, airplanes tanks and armored cars in which Brigadier Mallaby died. The newly recruited republican army was not yeat ready to face such an all-out attack by such superior and well-armed Allied Forces fresh from their victorious battle against Hitler's Nazi forces in Europe. The Indonesian Armed Forces therefore withdrew from urban battles and organized themselves into guerilla forces, which put heavy pressures on the invading troops. The newly Republican Armed Forces fought along with the people armed units. Meanwhile, Dutch troops, under the pretext of representing Allied Forces, grew in number and attacked Indonesian Republican strongholds twice in their military actions between 1945-1949.


During the 1948 Dutch military action against the Republic, the Indonesian Communist Party unilaterally proclaimed the "Indonesian People's Republic" in Madiun (East Java), armed themselves and began to attack republican forces, from the rear. Squeezed by Dutch forces and communist forces, the Indonesian people and the republican army fought their enemies back in two fronts. Since its inception, Indonesia experienced threats from without and from within. Diplomacy vis-à-vis Fighting On the 11th of November 1945, Vice-President Hatta issued a Manifesto laying down the policy of peace with the whole world and the principle of good neighbor policy for the new Republic. On the 14th of November 1945, the newly appointed Prime Minister, Sutan Sjahrir introduced a parliamentary system in the republic with political party representation. On the 22nd of December 1945, Sutan Sjahrir announced Indonesia's acceptance of the British proposals to disarm and confine to internment camps, 25,000 Japanese troops within Indonesia's territory, which successfully carried out by the Indonesian National Army "TNI." On the 28th of April 1946, the transportation of the Japanese troops to be emigrated, took place from all places in Indonesia. When fighting with Dutch troops continued, even in urban areas, including Jakarta, the seat of the Government was moved from Jakarta to Yogyakarta on 4th January 1946.

The Indonesian Question in the United Nations Since the war in Indonesia dragged on which was considered as endangering the maintenance of international peace and security, in line with the principles of the United Nations as stipulated in Article 24 of its Charter, the question of Indonesia was officially brought before the Security Council by the Ukranian Soviet Socialist Republic. Soon afterwards the first official meeting of representatives of the Republic of Indonesia and the Netherlands took place on the 10th of February 1946, under the chairmanship of Sir Archibald Clark Kerr. Besides Indonesian forces putting stiff resistance against Dutch military aggressions and therefore dragging the war, the Indonesian government also conducted diplomatic offensive against the Dutch. With the good offices of Lord Killearn of Great Britain, Indonesia and Dutch representatives met and negotiated together at Linggarjati in West Java in which negotiations the Dutch were forced to recognize the "de facto" sovereignty of the Republic of Indonesia over the territories in Java, Sumatra and Madura. The Linggarjati


which was proclaimed on the 17th of August 1945. This agreement was in fact in violation of Indonesia's independence. under the auspices of a UN Commission at a Round Table Conference between Indonesia and the Dutch. Yogyakarta. which resulted in the capture of President Soekarno. 33 .Agreement was initiated on the 15th of November 1946 and officially signed on the 25th of March 1947. the Dutch. under the auspices of the United Nation's Security Council. leader of the Indonesia's Communist Party (PKI) led the communist coup and attacked the Indonesian Army from the back. their military aggression against Indonesia guerilla strongholds. This first military aggression was ended by the signing of the "Renville Agreement" on the 17th of January 1948. off the east coast of Sumatra. initiated by representatives of India and Australia. Therefore. guerilla fighting continued putting heavy pressure on Dutch troops wherever they exercised their military operations. an agreement was signed between Indonesia's Emissary. Mohammad Roem and Dutch Emissary Van Royen calling for the end of hostilities. the release of republican leaders and their return to Yogyakarta. On the 20th of January 1949. It also demanded the Dutch to surrender all Indonesian prisoners and territories seized during their military actions to the Indonesian Republic. ignoring the Renville Agreement launched their second military aggression against the Republic and succeeded to penetrate into the then Republican capital. the UN Security Council adopted a resolution on a ceasefire. On the 19th of December 1948. On the 28th of January 1949. the restoration of the Indonesian Republican Government to Yogyakarta and the holding of further negotiations. West Sumatra. but was finally defeated and killed. Mohammad Hatta and other Republican leaders whom they interned on the island of Bangka. initiated by Jawaharlal Nehru of India. On the 7th of May 1949. 19 nations gathered in New Delhi at the Asian meeting which adopted a resolution submitted to the United Nations demanding the Dutch to surrender complete sovereignty to the Republic of Indonesia by 1st January 1950. in which Dutch troops intensified from their urban military bases. The Indonesian Government still functioned under caretaker Syafruddin Prawiranegara who headed the Republican Emergency Government with headquarters in Bukittinggi. Vice-President Dr. It was in September 1948 that Muso. The first Dutch military aggression was launched in July 1947.

the former territory of the Dutch East Indies ceased to exist and became the sovereign Federal Republic of Indonesia under a federal constitution based on a parliamentary system providing Cabinet responsibility of Parliament. while the sovereignty over Papua (former West New Guinea) was suspended till further negotiations between Indonesia and Holland. 34 . 1950. On the 27th of December 1949. With the reinstatement of the Unitary State. Ceylon On the 23rd of August 1949. He is to be assisted by ministers of his choice and at his discretion and who can not be discharged by the House. And since September 28. which became the source of frequent changes of cabinet or governments. This issue had since become the source of perpetual conflict between the new Republic and Holland. the Round Table Conference was held in The Hague under the auspices of the United Nations. which dragged on for more than 13 years. The Unitary State of the Republic of Indonesia On the 15th of August 1950. This situation naturally could not be a firm basis for national development in a developing country. where no political stability could be secured. which had just become an independent state.World Recognition of Indonesia's Sovereignty Indonesian Representative Office in Colombo. the President became Chief Executive and Mandatary of the People's Consultative Assembly. Indonesia became a member of the United Nations. retaining a liberal democratic system of a cabinet answerable to the House of the People's Representatives. the original proclaimed Unitary State of the Republic of Indonesia was restored however. The conference was concluded on the 2nd of November 1949 in which an agreement was reached that Holland was to recognize the sovereignty of the Republic of Indonesia.

Earlier. Soekarno emerged as the over-riding leading figure who won the acceptance of the "Pancasila" principles to be the ideological basis for a sovereign Indonesia. Andi Aziz also rebelled. for a sovereign Indonesia. It was also at this forum that Indonesia's first constitution. In Kalimantan Ibnu Hadjar led another 35 . General Imamura. the Committee for the Preparation of Indonesia's independence dissolved itself. It was only after the 14th of August 1945. another armed rebellion flared up pressing for Islamic state under the leadership of Kartosuwirjo who coined his demand as "Darul Islam. Turco Westerling. The first year of the sovereign Republic of Indonesia under the Presidency of President Soekarno was marked by a war of defense against the Dutch who attempted to reinstate the former colony of the Dutch East Indies. consisting of 26 members comprising Indonesian nationalist leaders chaired by Ir. when Japan surrendered to the Allies after the atom bomb dropped at Hiroshima that a power vacuum existed in the Indonesian archipelago.e. The official surrender took place at 16. i. Outside Java. Tjarda van Starkenborgh Stachouwer and Dutch East Indies Armed Forces Commander. weight and contemplate about the ideological basis. When the Dutch. This forum provided ample opportunity for these Indonesian nationalist leaders to debate." Since then many other armed rebellion emerged such as the "Queen of Justice" (APRA) rebellion led by an ex-Dutch Army Captain.The First Government of the Republic of Indonesia The Dutch East Indies was since its unconditional surrender to the Japanese Armed Forces on the 7th of March 1942. the 1945 Constitution. Ter Poorten signed the documents of surrender to the Japanese Commander. In South Sulawesi ex colonial army-man. Soekarno and Hatta had pressed the Japanese for yielding to Indonesia's demand to set up a committee for the preparation of Indonesia's independence. On the same day. Soekarno. was debated and ultimately adopted. other armed revolts were staged such as in Maluku where demobilized ex-colonial army-men faithful to the Dutch Crown proclaimed the Republic of South Maluku. Mr. followed by the election of Soekarno and Hatta as Indonesia's first President and Vice-President. This power vacuum prompted Soekarno and Hatta to proclaim Indonesia's independence on the 17th of August 1945. After hectic debates which went on and which were seldom not interrupted by extreme conflicting views. due to Indonesia's armed resistance and pressed by world opinion as manifested in the UN resolution finally recognized Indonesia's independence.00 hours of that date in which the Dutch East Indies' Governor General. the structure of the state and the constitution to be. occupied by Japanese occupation forces. The Indonesian Communist Party (PKI) disagreed with the principles of Pancasila and in 1948 staged an armed and bloody rebellion against the newly proclaimed Republic of Indonesia and unilaterally proclaimed a Communist "People's Republic" in the region of Madiun (East Java).

Myanmar and Ceylon (Sri Lanka). The Asian-African Conference President Soekarno had to his credit the holding of the Asian-African Conference in Bandung. The conference was attended by delegates from 24 Asian and African countries. Their elected representatives in the Constituent Assembly failed to reach a consensus on laying down a new constitution which compelled President Soekarno to dissolve the Constituent Assembly and the House which he was constitutionally entitled to and called for the reinstatement of the 1945 Constitution. The political pattern which governed the new republic was a liberal parliamentary democracy based on a provisional constitution of the Federal Republic of Indonesia as imposed by the Dutch after its abandonment of the 17th of August 1950. India. the Muslim Majelis Sjura Party (Masyumi) and the Indonesian Communist Party (PKI). which was to lay down a new constitution for the Republic. The purpose of the meeting was to promote 36 . This election was won by the Indonesian Nationalist Party (PNI). from April 18 to 24. The initiative was taken by Indonesia. 1955. while in Sumatra and later linked up with North Sulawesi rebellions against the central Government demanded separation like the case in the South Maluku. the Nahdlatul Ulama Moslem Scholars Party (NU). Political strive was rampant due to the multi-political party system Indonesia copied from the then existing system in Holland.armed revolt. Pakistan. The first Republican Government under President Soekarno after the recognition of independence was marked by efforts to unite the Indonesian people and to claim the Dutch occupied Province of Papua. At the end of this chain of armed rebellion emerged the second communist rebellion on 30rd of September 1965 led again by the Indonesian Communist Party manifested in an abortive coup attempt by kidnapping and murdering six top army generals of the Defense Department. President Soekarno succeeded in carrying out Indonesia's first General Elections in 1955 in which 47 political parties contested to elect their representatives for the House of People's Representatives and for the Constituent Assembly. This system has not seldom led towards a dichotomy of extreme political and ideological view which found linkages between parliamentary and armed conflicts. West Java.

The resolution also sought to uphold the human rights principles of the United Nations. at the height of Indonesia's confrontation with Malaysia. was abrupt and quickly stamped out by the Armed Forces under Major General Soeharto. on the outskirts of Jakarta. It strived for world peace. It was during this power vacuum that the communists struck again. cultural and political fields. crack troops of the Army's Commando Regiment (RPKAD) freed the central radio station (RRI) and the telecommunication center from communist occupation. many cabinet members were attending a celebration of the Chinese October Revolution in Beijing. Moreover. and for non-interference in each other's internal affairs. April 1955. Their bodies were dumped in an abandoned well at Lubang Buaya. Since then the membership of the Movement has grown to its present strength of 112 member countries. then Chief of the Army's Strategic Command. however. The Asian-African Conference became the embryo of the Non-Aligned Movement. or more precisely in the early hours of October 1. The resolution adopted became known as the "Dasa Sila". set out to kidnap. torture and kill six top Army Generals. The coup was staged in the wake of troop deployments to Kalimantan. armed PKI men and members of Cakrabirawa." of Bandung. or "The Ten Principles. the President's security guard. The uprising. The seeds that sprouted in Bandung took firm root six years later when 25 newly independent countries formally founded the Non-Aligned Movement at the Belgrade Summit of 1961. 37 . at the time. The Beginning of the New Order Government Over-confident of their strength and precipitated by the serious illness of President Soekarno. the Indonesian Communist Party (PKI) attempted another coup on September 30. 1965. On the night of September 30.The Asian African Conference. who was undergoing treatment by a Chinese medical team from Beijing. in Bandung closer and amiable cooperation in the economic. respect for one another's sovereignty and territorial integrity. Under instructions from General Soeharto. 1965.

To end confrontation and normalize diplomatic relations with Malaysia. and reduce the prices of basic necessities. pending the election of a new President by an elected People's Consultative Assembly. To complete the restoration of order and security and to establish political stability. Hence. To consistently pursue an independent and active foreign policy. 3. To hold general elections once every five years. particularly when Soekarno did not show support for the cabinet's program to establish political and economic stability. To rejoin to the United Nations. or "Tritura. 2. President Soekarno eventually gave in and granted Soeharto full power to restore order and security in the country. 8. This decision was endorsed and sanctioned by virtue of the Provisional People's Consultative Assembly Decree Number XXV/MPRS/1966. To emerge from the political and economic legacy of Soekarno's Old Order." that aimed to ban the PKI. The transfer of power was affected by a presidential order known as "the 11th of March order" of 1966. replace Soekarno's cabinet ministers. 1966. To prepare a plan for national development and execute it with the emphasis on economic development. 38 . but Soekarno remained as Chief Executive.Students made for the streets in militant demonstrations to fight for a three-point claim. Under these explosive conditions. 4. 5. 9. General Soeharto banned the PKI. To resolve the West Irian question. the new government set out to undertake the following: 1. The New Order Government Ever since taking office in 1967. Soon afterwards. To carry out economic rehabilitation. He also formed a new cabinet. This brought dualism into the cabinet. 7. The Assembly resolved to relieve Soekarno of his presidential duties and appointed Soeharto as Acting President. a special session of the Provisional People's Consultative Assembly (MPRS) was convened from March 7-12. 1967. 6. the New Order Government of President Soeharto was determined to return constitutional life by upholding the 1945 Constitution in a strict and consistent manner and by respecting Pancasila as the state philosophy and ideology. on March 12. To regain Indonesia's economic credibility overseas. They set up a "street parliament" to gather the demands of the people. which Indonesia had quit in January 1965.

a tragedy happened in the Trisakti University Campus. Currently. Indonesia secured an agreement with creditor countries to reschedule an overseas debt of US$5 billion. finally causing this situation to develop into a political crisis. Unfortunately. social and cultural fields. The objective of the association is the establishment of regional cooperation in the economic. the IGGI has been replaced by the Consultative Group for Indonesia (CGI) consisting of the former members of IGGI (except the Netherlands) and five new creditors. Since the middle of 1997. To a certain extend. Jakarta. To prepare for national development. Kampochea and Laos. Britain and a number of West-European countries. This led to riots and disturbances. On May 12. but ASEAN also operates in the political area. This consortium was known as the Inter-Governmental Group on Indonesia (IGGI) and included the United States. indeed. The political system which had been developed since 1966 turned out to be unable to accommodate the dynamism of the aspirations and interests of the community. Canada. collusion and nepotism. while Vietnam was accepted as the seventh member of this regional organization followed suit by Myanmar. they reflected the malfunctioning of the political order and of the government. Australia. the Philippines. Japan. The decline in the people's standard of living was aggravated by various political tensions arising from the 1997 general elections. Brunei Darussalam became the sixth member of ASEAN. had been able to achieve substantial progress in various fields which had been enjoyed by the majority of the Indonesian people. Singapore and Thailand joined to establish the Association of Southeast Asian Nations (ASEAN). Further. causing the death of four students. Indonesia. severe economic crisis. Its annual meetings were held in Amsterdam under the chairmanship of the Netherlands. The President's effort to accommodate the developing aspirations of the people by forming are 39 . Indonesia had gained success in the national development. Critical moments prevailed in the capital. demanded President Soeharto to step down and stamp out corruption. in addition to economic rehabilitation. the leadership of the House suggested the President resign. Indonesia under the New Order Government of President Soeharto had endeavored to achieve its national development goals. On May 18. not only were relations normalized but Indonesia together with Malaysia. the people's standard of living dropped considerably. including the occupation of the People's Consultative Assembly/House of People's Representatives compound. Indonesia succeeded in the formation of a consortium of creditor countries to assist in her economic development. and other towns from 12 to 21 May 1998. The Reform Order Government Since the outset of the First Five-Year Development Plan in 1969. With the recovery of the country's overseas credibility.With regard to Malaysia. A number of student demonstrations ensued. They appealed for political and economic reform. New Zealand. struck Indonesia as of July 1997. which began with the monetary crisis.

Implementing sweeping reform in all sectors. Conducting a special session of the People's Consultative Assembly (MPR) in November 1998. 1977. Habibie formed the Reform Development Cabinet. Pursuant to Article 8 of the 1945 Constitution and the People's Consultative Assembly decree No. on May 21. 4. export-oriented industry and tourism sectors. 2. Finally. regional administrations and elections. followed by General Elections on May 1999. 1999 and the recent 2004. He picked the ministers from the various political and social forces. the People's Consultative Assembly (MPR). 1992. General Elections The Indonesian nation has been so far organizing general elections for nine times. VII/1973. economic. 1971. A day after his installment as the third president. widely acclaimed as a fairly democratic general elections. to enable the government to satisfy mounting demands for a strong and clean government.J. he handed over the country's leadership to Vice-President Bacharuddin Jusuf Habibie. 1982. Reviewing the five political laws upon which the current political system is bound. to provide the needed synergy. Accelerating the bank restructuring program 7. and legal fields. Boosting output from the agriculture. They are the laws on mass organization. 1987. 5. The first. 8. 1997. including three politicians from the United Development Party (PPP) and the Indonesian Democratic Party (PDI). Habibie took his oath of office before Chief Justice Sarwata to become Indonesia's third President. President Soeharto. Earlier President Soeharto disbanded the cabinet which he formed shortly after his reelection for a seventh five-year presidential term in March. President B. Resolving the problem of corporate foreign debts. after a 32-year rule of the New Order Government resigned. and create a clean government. including in the political. was held in 1955 under the 40 . Rooting out corruption.form cabinet and a reform committee never materialized as there was no adequate support from various circles. 3. the House of Representatives (DPR). Safeguarding the implementation of the 1998/99 state budget 6. political parties. Habibie outlined the agenda for reform during his presidency as follows: 1. agribusiness. 1998. namely in 1955. collusion and nepotism. After the announcement.

held under the Administration of President Soeharto. Marxism and nationalistic. in which there were still many parties contesting. then President Soekarno was forced to dissolve the Assembly. 41 . Only during the 1999 General Elections under the relatively short-term Administration of President B. many parties (48 parties) could contest again. However. relegating the Golkar Party to second place. the day after the nation proclaimed its independence. Act No. This time Partai Demokrasi Indonesia-Perjuangan. and to issue a Presidential Decree calling for the reinstitution of the 1945 Constitution. 1959 revoked at the same time a Government Manifesto calling for the formation of as many political parties as possible. Eligible voters cast their votes at the 1955 General Election Partai Persatuan Pembangunan (the United Development Party) and Partai Demokrasi Indonesia (the Indonesian Democratic Party). and one Functional Group (Golongan Karya). contested to elect members of the House of Representatives and the Constituent Assembly with the task to draw up the nation's new constitution to replace the existing 1945 Constitution adopted on August 18. The second was in 1971. Then in 1975. issued on July 5.e. During this general elections many parties. they failed in scoring a majority. After that there had been only the two parties and the functional group contesting the next five general elections.Administration of Soekarno. the first president of the Republic. the Indonesian Democratic Party of Struggle (PDI-P) won the contest by getting the most votes. after deliberating for three years. The Presidential Decree. Habibie.J. in which the Functional Group always came up first with a landslide victory. As a result. with ideologies ranging from religious. 1945.3 of 1975 was issued with regard to the fusion of about 150 political and mass organizations into two political parties i.

31 of 2002 on Political Parties. the President and Vice-President are to be elected direct by popular votes. but shall be done according to the provisions of the Constitution." It explicitly means that sovereignty shall no more be exercised by the People's Consultative Assembly as it did previously. 12 of 2003 on General Elections to elect Members of the House. Regional Representatives 42 .Eligible voters cast their votes at the 2004 General Election Counting of votes in the poll station in 2004 General Election The 2004 General Elections Article 1 clause (2) of the amended 1945 Constitution stipulates that "sovereignty is vested with the people and shall be exercised according to the Constitution. Law No. Translating the stipulation are Law No. Law No. and for the first time in the history of this Republic. 23 of 2003 concerning General Elections to elect the President and Vice-President. Under this stipulation all members of the House of Representatives and the Regional Representatives Council _the members of the two legislative bodies then constitute members of the Assembly_ and members of provincial and district as well as municipal Houses of Representatives should be elected.

455. H. and the candidates in pair shall be proposed by a political party or a coalition of parties participating in the general elections.266. the House. peaceful and democratic manner. Pursuant to Article 6A of the Constitution. With no single pair winning a majority votes in the first-round presidential election on July 5. Salahuddin Wahid.704 votes or 39. (4) Susilo Bambang Yudoyono-Muhammad Jusuf Kalla. against 44. There were 155 million registered voters but only 114.68 percent of total valid votes. who was elected by direct popular votes.38 percent seized by incumbent Megawati Soekarnoputri and Hasyim Muzadi. but only 124 million or some 83 percent cast their ballots. Contesting in the 2004 general elections to elect members of House.990. the Nation's Awakening Party (PKB) with 11. 12 of 2003 stipulates that the number of seats of the House is 550. the election of the President and Vice President is in pair by direct popular votes. and Law No. (2) incumbent President Megawati Soekarnoputri-K. proposed by the Democratic Party.225 votes to seize 57 seats. Susilo Bambang Yudoyono is the first president of the Republic since Indonesia proclaimed its independence on August 17. an independent institution that organized the legislative and presidential-vice-presidential elections. the two top pairs. 2004 that retired Army general Susilo Bambang Yudoyono and his running mate Mohammad Yusuf Kalla as the winner of the election runoff. Siswono Yudo Husodo. proposed by the National Mandate Party (PAN). The General Elections Commission (KPU). that of Provincial Houses shall not be less than 35 and no more than 100 seats.350 votes or 60. and the Regional Houses. proposed by the United Development Party (PPP). Hasyim Muzadi. Five major parties topping the outcome of the 2004 general elections are: the Golkar Party that garnered 24. Wiranto-Ir. (3) Prof. namely: (1) H.054 votes or less than 80 percent declared valid. 1945. (5) and incumbent Vice Prersident Hamzah Haz-Agum Gumelar.480.629 votes to get 109 seats.H.257.757 votes to win 127 seats of the House. the United Development Party (PPP) with 9.248. There were 148 million eligible registered voters. there were five candidate pairs competing. proposed by the Golkar Party. Amien Rais-Ir.026. proposed by the Indonesian Democratic Party of Struggle. During the 2004 general elections to elect the President and Vice President.764 votes to have 58 seats and the Democratic Party with 8. followed by the Indonesian Democratic Party of Struggle (PDI-P) with 21. and those of district/municipal Houses shall not be less than 20 and no more than 45 seats. 22 of 2003 concerning the Composition and Status of the Assembly.564 votes to gain 52 seats. Law No. DR.Council and Regional Houses of Representatives. 2004 in fair.989. announced officially on October 4. The Susilo Bambang Yudoyono-Jusuf Kalla pair garnered 69. 43 . and regional Houses were 24 political parties to fight for seats mentioned earlier. Susilo Bambang Yudoyono-Jusuf Kalla and Megawati Soekarnoputri-Hasyim Muzadi were eligible to contest to the election runoff that was held successfully on September 20.

in addition to the existence of appropriate system and process of general elections. people can manifest their rights to express their opinion concerning their life direction and their future in the society and state. underpin national unitary and integrity. In the democratic political system. and over the fixed limit. i. Political parties constitute the most important component in the democratic political system. Therefore the political structure must rely on the people's sovereign norms which give freedom. political parties in fact will improve political awareness and participation of the society. and receive donation and/or grant contribution from foreign parties in any means that is against the statutory regulations. a simple multiparty system. To create the aims of the society and state having national perspective. and express opinion. socialization. materialize justice. with the requirements of having regional party boards at least 50 (fifty) percent of the total provinces. Political parties as participants of general elections have the opportunities to struggle to win the broad interests of the people. A political party must be established by a notary public certificate and registered to the Department of Justice. and communication. fill up state institutions. and development of political parties that basically constitute one of the reflections of citizens' rights to assemble. and cohere various groups and social classes.Political Party Law No. uphold the law. This can be achieved by systematizing the parties' life. but also better nurture democratic environment that enables political parties to take optimum role. freedom and equality are exercised in order to be able to reflect the feeling of togetherness that guarantees the manifestation of the people's whole ideals. Through implementing their functions as agents of political education. it is necessary to establish a sound and mature party life and system. interests formulation and channeling. respect human rights. 2002 to replace Law No. By the simple multiparty system it will easier to carry out cooperation for the creation of national synergy. and to form government. and secure stability. equality and togetherness.e. This mechanism tends not only to discourage monolithic. some 50 percent of the total districts/municipalities in each province concerned. A political party is prohibited to receive contribution either in the form of goods or money from individual and/or enterprise or any part whatsoever without stating clear identities. The law stipulates the formation. 2 of 1999. associate. 44 . Through those political parties. maintenance. It is realized that the process that lead to political life giving a role to political parties as a national asset takes place on the foundation of the principles of change and continuity that promote democratic maturity and responsibility. and 25 percent of the total sub-districts in each district/municipalities concerned. 31 of 2002 that governs political parties was enacted on December 27.

free. secret.In addition. but shall be exercised according to the provisions of the Constitution. 45 . General Elections to Elect Members of the Houses. and fair. the Regional Houses of Representatives (DPRD) of the provinces. a new law is required to replace Law No. general. while of the House of Representatives of the provincial level (Provincial DPRD) shall have at least 35 seats and no more than 100 . the membership of the House of Representatives (DPR) shall total 550 persons. and other names. With the taking effect of this law. the Regional Representatives Council (DPD). foundations. To this end. 3 of 1999 on General Elections. secret. and humanity organizations. the general elections shall be executed in a more qualified fashion in order to secure sound competition. fair. and the Regional Houses of Representatives of the Districts/Municipalities shall be elected through elections which shall be executed based on the principles of direct. General elections shall be executed based on the principles of direct. non-government organizations. regional-owned enterprises. and clearer mechanism of accountability. In conformity with the reformation mandate. and just and once in every five years. and the Council The amendments to the 1945 Constitution of the Republic of Indonesia. honest. higher representation. Article 1 clause (2) states that sovereignty shall be vested in the people and shall be exercised according to the Constitution. national-owned enterprises. and District/Municipal DPRD for each electorate by taking the female representation at the minimum of 30 percent into account. According to the Law. and of the House of Representatives of the district/municipal level shall have at least 20 seats and no more than 45. social organizations. The general elections will in turn produce democratic representative institutions and government. cooperatives. general. Provincial DPRD. Based on these amendments. a political party is prohibited to ask or receive contribution from state-owned enterprises. the settlement of the cases of political parties in penal process adjusts itself to the provisions of this law. This amendment means that the sovereignty is no longer fully exercised by the People's Consultative Assembly. free. all members of the House of Representatives (DPR). Every political party that participates in the general elections can nominate its candidates for the membership of the DPR.

Considering that the Constitutional Court is one of the substantial parts to the 1945 Constitution. 22 of 2003 concerning Composition and Status of the People's Consultative Assembly (MPR). after the 1945 Constitution having been amended. is enacted in the frame of improving the role and responsibility of the members of parliament/regional parliament in exercising their duty and authority. Composition and Status of Legislature The Preamble to the 1945 Constitution has stated that the state of Indonesia shall be in the form of Republic which in its implementation will adopt the principle of democracy guided by the inner wisdom of deliberation amongst representatives. Constitutional Court Based on the amended 1945 Constitution. productivity. and developing the mechanism of checks and balances between legislative bodies and executive ones. as well as correction to the state affairs experience emerging in the past dual interpretation to the Constitution. the House of Representatives (DPR). Law No. and Sub-District General Elections Supervisory Committees shall be established. In the 2004 general elections. Provincial General Elections Supervisory Committees. In line with development of state affairs and national public. including of the newly established regional representatives council. Law No. 2004 as the 2004 General Elections Day. the Central General Elections Supervisory Committees. the legislative bodies shall be established to strive for the people's aspirations including regional ones in the frame of upholding democratic values. District/Municipal General Elections Supervisory Committees. the state organs have experienced a substantial change in their composition and status. To realize that.To supervise the general elections. The existence of the Constitutional Court is also aim to keep state administration stability. The General Elections Commission has determined April 5. the Regional Representatives Council (DPD). and the Provincial and District/Municipal Houses of Representatives (DPRD). and performance of the members of those bodies for the sake of realizing the people's well-being. 24 on the Constitutional Court was enacted. regulating 46 . the Constitution Court is one of the state organs exercising an independent judiciary power to uphold law and justice according to its duty and authority. as well as improving the quality. the personnel of the Indonesian Defense Force and the National Police had no rights to vote.

7. Indonesian Nahdlatul Community Party (Partai Nahdlatul Ummah Indonesia _PPNUI). the Provincial Houses of Representatives and the District/Municipal Houses of Representatives. Indonesian Unity Party (Partai Sarikat Indonesian _PSI). As one of the application of the sovereignty. National Awakening Party (Partai Kebangkitan Bangsa _PKB). Reform Star Party (Partai Bintang Reformasi _PBR). Marhaenism Indonesian Nationalist Party (Partai Nasional Indonesia Marhaenisme _PNI Marhaenisme). 21. 9. National Mandate Party (Partai Amanat Nasional _PAN).appointment and discharge of constitutional court judges. 22. they have the right to be the participants of the General Elections of the members of the House of Representatives. and other provisions on the Constitutional Court. The 24 Parties Taking Part in the 2004 General Election The General Elections Commission determined the 24 parties that have passed the clarification. there will be general elections to be executed to elect the members of the People's Consultative Assembly (MPR). Freedom Party (Partai Merdeka _PM). it is stated that: "The sovereignty shall be vested in the people and shall be exercised in accordance with the Constitution. The first general elections to elect the President and Vice-President in 2004 is a political process for the Indonesian nation towards a democratic and responsible political life. Regional Unity Party (Partai Persatuan Daerah _PPD). 11. Prosperous Justice Party (Partai Keadilan Sejahtera _PKS). 6. Prosperous Peace Party (Partai Damai Sejahtera _PDS). and 47 . 19. Democratic Party (Partai Demokrat _PD). 12. Therefore. The amendment has a meaning that the people's sovereignty is no longer fully exercised by the People's Consultative Assembly (MPR). Both the elections shall be executed in accordance with the Law as an implementation of a state based on law in the Unitary State of the Republic of Indonesia. and 24. Article 1 clause (2). the House of Representatives (DPR). 20. Indonesian Democratic Vanguard Party (Partai Penegak Demokrasi Indonesia _PPDI). 14. law of procedure. Pancasila Patriot Party (Partai Patriot Pancasila _PPP). Democratic Solidarity Labor Party (Partai Buruh Sosialis Demokrat _PBSD). 18. 13. Indonesian Unity and Justice Party (Partai Keadilan and Persatuan Indonesia _PKPI). Democratic Nationhood Unity Party (Partai Persatuan Demokrasi Kebangsaan _PPDK). 5. 2. 10. 17. New Indonesia Alliance Party (Partai Perhimpunan Indonesia Baru _PIB). duty and authority. but shall be exercised in accordance with the stipulations of the Constitution. Indonesian Democratic Party of Struggle (Partai Demokrasi Indonesia Perjuangan _PDIP). Freedom Bull Nationalist Party (Partai Nasionalis Banteng Kemerdekaan _PNBK). the Regional Representatives Council (DPD) and the Regional Houses of Representatives (DPRDs) as well as another to elect the President and Vice President. 3. 4. 23. United Development Party (Partai Persatuan Pembangunan _PPP). Golkar Party (Partai Golongan Karya _Golkar). Concern for Nation Functional Party (Partai Karya Peduli Bangsa _PKPB) . Pioneer Party (Partai Pelopor _PP) General Elections to Elect President and Vice President According to the amended 1945 Constitution of the Republic Indonesia. 15. Crescent and Star Party (Partai Bulan Bintang _PBB). 16. The parties are as fallows: 1. composition and status. 8.

2004. The candidate pairs who want to race in the general elections to elect the President and Vice President shall be proposed by a political party or a coalition of political parties which meet the requirements. The general elections supervision and monitoring are executed based on the principle of accountability. fair and just manners and will be organized by a national. general. permanent and independent commission. free. The political party or a coalition of political parties shall only be able to. This is meant that the political party as a means of people's political participation to propose candidates has made first selection for the candidate pairs of President and Vice-President. and September 20. secret.to elect the President and Vice President who have concrete support from the people. district/city and sub-district. The determination of the result of the general elections for President and Vice-President took place on October 5. The Constitution Court will settle disputes on the results of general elections to elect President and Vice-President. Supervision on the general elections to elect President and Vice-President shall be executed by supervisory committees for general elections at the level of province. The general elections to elect the President and Vice-President shall be executed once in five years in direct. propose one candidate pair who meets the requirements of having a votes return minimum of 20 percent of valid votes in the national general elections to elect the House of Representatives members. General Elections Commission has determined July 5. 2004 as the date of the first round of general elections for President and Vice-President. The law enforcement of criminal provisions shall be done by the court of justice. 48 . Whereas the General Election Commission (KPU) will handle violations and dispute settlements of general elections related with administration and procedures. 2004 as the second round if it is deemed necessary.

Three days after the unconditional Japanese surrender. Jakarta Hoso Kyoku. was heard by thousands of Indonesians throughout the country because the text was secretly broadcast by Indonesian radio personnel using the transmitters of the Japanese-controlled radio station. Mohammad Hatta proclaimed Indonesia's independence on behalf of the people. Hiroshima and Nagasaki. the Indonesian national leaders Ir. after the surrender of the Dutch colonial army following the fall of Hong Kong. is the philosophical basis of the Indonesian State. 1945. They are: 1. 1945. the Japanese occupied the Dutch East Indies as of March 1942. on August 17. That occasion opened the opportunity for the Indonesian people to proclaim their independence. Jalan Pegangsaan Timur. the Japanese surrendered to the Allied Forces. pronounced Panchaseela. 1945. the State Philosophy Pancasila. on August 14. A few days later. American troops landed in Okinawa. "Panca" meaning five. on August 6 and 9. The proclamation. Pancasila. BELIEF IN THE ONE AND ONLY GOD 2. Manila and Singapore. DEMOCRACY GUIDED BY THE INNER WISDOM IN THE UNANIMITY ARISING OUT OF DELIBERATIONS AMONGST REPRESENTATIVES 5. It comprises five inseparable and interrelated principles. SOCIAL JUSTICE FOR WHOLE OF THE PEOPLE OF INDONESIA 49 . JUST AND CIVILIZED HUMANITY 3. Soekarno and Drs. Soon after. Jakarta. the United States dropped Atom bombs on two Japanese cities.STATE AFFAIRS When World War II broke out in Europe and spread to the Pacific. Pancasila consists of two Sanskrit words. An English translation of the proclamation was broadcast overseas. which took place at 58. and "sila" meaning principle. THE UNITY OF INDONESIA 4. On April 1.

The principle is embodied in article 29. or musyawarah. one nation and one language. uphold human values in line with human dignity. Pancasila Democracy means democracy based on the people's sovereignty which is inspired by and integrated with other principles of Pancasila. with respect for humanitarian values of man's dignity and integrity. This implies that democratic right must always be exercised with a deep sense of responsibility to God Almighty according to one's own conviction and religious belief. and be aimed at realizing social justice for the whole of the people of Indonesia. 3) The Unity of Indonesia This principle embodies the concept of nationalism.Elaboration of the five principles is as follows: 1) Belief in the One and Only God This principle of Pancasila reaffirms the Indonesian people's belief that God does exist." 4) Democracy Guided by the Inner Wisdom in the Unanimity Arising Out of Deliberations amongst Representatives Pancasila democracy calls for decision-making through deliberations. Pancasila nationalism demands that Indonesians avoid feelings of superiority on ethnical grounds. It emphasizes that the Indonesian people do not tolerate physical or spiritual oppression of human beings by their own people or by any other nation. It emphasizes the pursuit of sacred values will lead the people to a better life in the hereafter. Section 1 of the 1945 Constitution and reads: "The state shall be based on the belief in the One and Only God. 50 . 2) Just and Civilized Humanity Just principle requires that human beings be treated with due regard to their dignity as God's creatures. and with a view to preserving and strengthening national unity and the pursuit of social justice. This means that the use of democratic rights should always be in line with responsibility towards God Almighty according to the respective faith. It envisages the need to always foster national unity and integrity. or mufakat. It is democracy that lives up to the principles of Pancasila. for reasons of ancestry and color of the skin. Thus. guarantee and strengthen national unity. In 1928 Indonesian youth pledged to have one country. of love for one's nation and motherland. It believe in life after death. while the Indonesian coat of arms enshrines the symbol of "Bhinneka Tunggal Ika" which means "unity in diversity. to reach a consensus.

not in a static but in a dynamic and progressive way. Protection should prevent willful treatment by the strong and ensure the rule of justice. deliberations of representatives (musyawarah) and consensus (mufakat). This partly is because the constitution was drafted and adopted in 1945 when the Republic was being established. Furthermore. 2001 and 2002. the 1945 Constitution originally adhered an ideology that the sovereignty was vested in the people executed fully by the People's Consultative Assembly (MPR). and another to distinguish it from other constitutions which were introduced in free Indonesia. It was inspired by the urge for unity and for the common goals and democracy built upon the age-old Indonesian concepts of gotong royong (mutual assistance). All the amendments were based on topics covering the following issues: 1. and defended thereafter. 1945. should always be respected by every Indonesian because it is now the ideology of the state and the life philosophy of the Indonesian people. But protection should not deny them work. Social justice implies protection of the weak. On the contrary. It adhered an ideology of the People's Consultative Assembly supremacy.5) Social Justice for the Whole of the People of Indonesia This principle calls for the equitable spread of welfare to the entire population. as a cultural principle. Its huge and unlimited power caused the People's Consultative Assembly was unable to be controlled by any other state institutions. These are the sacred values of Pancasila which. Sovereignty The Constitution. Accordingly. It reflects the spirit and vigor of the time when the constitution was shaped. The Main Materials of the Amendments to the 1945 Constitution Since the reformation era. The 1945 Constitution The Constitution of the Republic of Indonesia is usually referred to as the 1945 Constitution. additions. the MPR became a super body state institution that in the structure of the matters pertaining to form of the government 51 . the 1945 Constitution has experienced some amendments. making the MPR be a state institution that had unlimited authority because it became an institution of the sovereignty embodiment of all Indonesian people. 2000. This means that all the country's natural resources and the national potentials should be utilized for the greater possible good and happiness of the people. and completion for four times in the annual session of 1999. the articles of the 1945 Constitution spell out the ideals and the goals for which independence was proclaimed on August 17. they should work according to their abilities and fields of activity.

For that. The members of the HR were elected in the General Election. With this amendment. Therefore. 2. the structure of the membership of the People's Consultative Assembly consisted of member of the House of Representatives (DPR) including appointed members of the Indonesian Military/Police. its decree of the Article 2 section (1) were converted to the sovereignty is vested in the people and executed according to the constitution. so that its position makes it be equal with other state institutions.of the Republic of Indonesia was positioned as the highest state institution. especially concerning his power begun from declaring war until granting abolition. If the conditions of the first round general election are not fulfilled. while the RD and DG were appointed. To keep abreast to the changing era. and Group and Delegates (DG). Direct Election of the President and the Vice-President by the People Since the establishment of the Republic of Indonesia. 4. the president has such a quite big and important power and role. So does in Indonesia. therefore the formulation was changed by conforming that all members of the MPR have to be chosen by the people through general election. Either in theoretic and practice of the matters pertaining to form of government in countries following the presidential government system by this constitution. the People's Consultative Assembly is no longer the highest state institution. The appointment of some members of the MPR was considered not conforming to with the teaching and spirit of democracy. 3. The Structure of the Membership Authority of the People's Consultative Assembly Before the amendment. the election of president and vicepresident had been executed by the MPR by an indirect of representative mechanism. the appointed Regional Delegates (RD). the original 1945 Constitution views was no longer conforming to democracy ideology that required the implementation of checks and balances system among intra-state institutions. so the current election system by the MPR has to be changed to the direct election system by the people. a new representative institution in the structure of the matters pertaining to form of government of the Republic of Indonesia. it was logical that there were quite many materials related to the Presidential authority in the 1945 Constitution that spread over in various articles and sections. In accordance with the spirit of democracy that requiring the people are being given the right to elect the president and vice-president directly. The Authority of the President The 1945 Constitution adheres presidential government system. then the second round will be executed to appoint a candidate pair who has the majority vote from the first and 52 . The MPR does no longer become the state institution having huge authority. the structure of the membership of the MPR consists of the HR members and the Regional Representatives' Council members.

The replacement of the President amid the Term by the Vice-President According to the amended 1945 Constitution. The Discharge of the President and Vice-President on Posts Prior. The amended 1945 Constitution sets that the president and vice-president hold the fixed term of five years and can be reelected for another term. there was no decree in the 1945 Constitution which arranged the discharge of the president and/or vice-president from their offices. 7. the position of the Vice-President is to assist the President in discharging his/her duties. and is discharged. The constitution only stipulated a decree on the accountability of the president before the extraordinary session of the MPR based on the invitation of the DPR. the President and Vice-President at the same time die. there remain another possibility of the emergency condition caused by. In this condition. 5. the Home Affairs Minister and the Defense Minister. it opened chance for more than one interpretation. resign. It is executed when the DPR considers the president is really violating the basic state guidelines or guidelines of state policy. 53 . the executors of the presidential duties are that consisting of three cabinet members namely: the Foreign Affairs Minister. the formulation of the term of office of the president and vice-president in the 1945 Constitution was not decisive or concrete to arrange the frequency of the term. or unable to discharge his/her duties during his/her term of office. and are discharged. The Term of Office of the President and Vice-President Before having been amended. 6. resigns. 8. Now the amended 1945 Constitution embodies casual factors and procedures of discharging the president and/or vice-president from their offices.second ranks. for example. Ancitipating such case the amended 1945 Constitution stipulates that in case that condition occurred. It means that an Indonesian citizen is only being able to be voted for the president and/or vice president for 10 years consecutively. In consequence. The couple that has the majority vote will be inaugurated as the president and vice-president. The Executor of the Presidential Duties Although improbable. prompt decision based on a strong law is needed. or are unable to discharge their duties of offices during on their terms. That position makes the Vice-President automatically shall replace the president until the end of his/her term if the president dies.

10. It was due to unbinding of the advice and judgment to the president. 13. Financial Matters Concerning with the increase of the awareness of the importance of the state financial management. The State Ministry As a constitution adhering to the ideology of presidential government system. To substitute for it the constitution gives the authority to the President to form the Advisory Council that has the task to give advice and judgment to the President. who are appointed and discharged by him/her. the original 1945 Constitution was amended to be more details and perfectly managed. which is special and extraordinary in character. are to assist the President. 11. 54 . The institution is the Regional Representatives Council as stated in the provisions of the Chapter VIIA concerning the Council. The newly amended Constitution also regulates the state recognition of and respect for regional administration units. the amended 1945 Constitution asserts that the state ministers. which was equal with the president and had a task to give advice and judgment to the president was viewed as less effective and efficient.9. study of constitution draw of the budget that was proposed by the president and then executed together with the HR by taking note of the judgment of the Regional Representatives' Council. the amended 1945 Constitution eliminates the existence of the Council. The Regional Representative's Council The amended 1945 Constitution introduces a new representative institution in the structure of the government of Indonesia. with the yields emphasized regu lates to raise the regional progress and prosperity. The Regional Government The regions are given the freedom and authorities to exploit and manage their natural resources. The regional autonomy has to be executed and remains within the Unitary State of the Republic of Indonesia. 12. The formation of the President Advisory Council and the Elimination of the Supreme Advisory Council The existence of the Council as a state institution. Based on that consideration. Now.

17. which decision is final. and results of the general election. With the formation of the Judicial Commission it is expected that the quality of the supreme judges and judges improve. or be under the pressure.In the new chapter concerning the financial. either by the state institutions or boards or public and individuals. The confirmation is viewed as very important. political party dismissal. The formation of those two institutions is aimed at strengthening the implementation of the justice authority to achieve the expected results to upholding the law and justice. and in turn it will improve the judicial process and judicial decision in the Commission as the highest judicial institution in the Indonesia judicial structure. it is arranged in the new amended 1945 Constitution. having the status of a free and independent. except certain cases taken into court by the Commission. The Audit Board In the new provision concerning the Board it is. inter-institutional arbitrariness disputes. It is expected to be able to manifest the prompt court in order not to become a prolongedterm case. 16. The Judicial Commission The judicial commission as a new institution is formed related to the implementation of the justice authority. influenced. The Supreme Court The amended constitution concerning the justice authority produces two new state institutions: Judicial Commission and Constitutional Court. The Constitutional Court The existence of the Court is viewed very important to implement the judicature function on cases related to the judicial review. among others confirmed that the AB as the state institution functions in the field of financial investigation. The amended Constitution stipulates that besides locates in the capital city the Board also has a representative office in each province. The authority of the Court as enacted in the provision of the Article 24C of the 1945 Constitution is to judge in the first level and final. 15. 55 . 14. it was also firmed that there is the tax arrangement and other collection of finance duty that are by force for the state needs. so that the implementation of its duties is not intervened.

formulation concerning the national economy contained in Chapter XIV Social 56 . the formulation of the provisions of the national education objectives improved by inserting the formulation of "improving faithfulness and devotation. After having been amended. The retroactive principle shall be operative in the context of protecting human rights themselves.18." "nobleness of character" and "advance the intellectual life of the nation". and the Indonesian people as the supporting force. Human Rights Along with the development of ideas concerning Human Rights. So it becomes the government obligation to pay for each citizen acquisition of his/her elementary education. The State Defense and Security The 1945 Constitution stipulates that defense and security is carried out through total people's defense and security system by two state organs. 21. upholding. National Economies and Social Welfare By examining carefully the dynamic of national economy and development of the global economy. In the provision concerning human rights it is also asserted that the responsibility to implement protection. The implementation of it is the inclusion of Human Rights in a separated chapter of the amended Constitution. Concerning with the exercise of human rights there has been a non-retroactive principle confirming that the violation on human rights shall not to be charged on the ground of the retroactive law. and fulfilling of human rights is vested on the state. 19. as the main force. mainly the government. This formulation becomes a specific characteristic of the Indonesian national defense and security since it places the people to take part actively in the system. and nation having the wish to realize the national grandeur and noble civilization. Educations and Culture It was formerly formulated in the 1945 Constitution that each citizen has the right to obtain education and the right to take basic education. 20. it is necessary to improve the formulation of the rights in the 1945 Constitution. namely the Indonesian Nation Army and the Indonesian Police. The inclusion of those three matters constitutes the realization of the collective awareness of the Indonesian nation as a religious nation. development. The national education budget prioritize is at least 20 percent of the state budget and the regional budget constitutes the answer to the reality that most part of the human resources belong to lower standards of education.

fairness. transitional. Having been amended. efficiency. friendly environmental vision. In addition is asserted that all existing state institutions remain functioning before being amended according to this Constitution. Beside maintaining the formulation of the existing provision of Article 33. The transitional provision is proportional. the amended 1945 Constitution inserted into it formulation about the national economy that shall be managed based on economic democracy with the principles of common endeavor. The State Attributes Before the amendment. 24. independence. Transitional Provisions The provision concerning the transitional provisions in the 1945 Constitution consists of 3 (three) articles aimed at regulating the transitional enforcement from ius constitutem (positive law in force) to ius constituendum (new law replaces it) The transitional provisions are needed because each constitutional amendment (in the wider aspect of law amendment) will cause the transitional situation of the old constitution to the new one with the legal norms having been changing. The Amendment of the Constitution One of the provisions considered important to be regulated in a constitution is a matter concerning amendment to the constitution itself. 25. the state attributes mentioned in the 1945 Constitution included only the State Flag (Article 35) and Indonesia Language as the state language (Article 36). 23. 22. The change of the title has been viewed appropriate considering that the provisions encompass economy and social welfare. persistence. and by maintaining the balanced proportion between the progress and the national economic entity. It aims that the next generations remain to have an opportunity and poses legal foundation to amend it to keep abreast with the changing era. In the transitional provisions embodied in the 1945 Constitution it is said that all existing provisions remain in force before being amended according to the Constitution. or interim in character. the 1945 Constitution encompasses the "Garuda Pancasila" as the state symbol with the slogan "Bhineka Tunggal Ika" (Unity in Diversity) in Article 36A. underwent some improvements by constitutional amendment to become Chapter XIV National Economy and Social Welfare.Welfare. and "Indonesia Raya" as the National anthem (the Article 36B). Additional Provisions The additional provision consists of 2 (two) articles that govern the task of the MPR to carry out judicial review on the materials and legal status of the provisions of the PCA 57 .

The provision of Article 11 Additional Provision asserts that by the enactment of the amendments to the 1945 Constitution. gold. Its principal color. Since then it has been hoisted at Independence Day commemoration in front of the presidential palace in the capital city of Jakarta. 1968. the 1945 Constitution consists of the Preamble and Articles. These provisions terminated the existence of the elucidation of the 1945 Constitution of which. Since then it has been preserved and replaced by a replica woven of pure Indonesian silk.and the PCA in relation with the MPR changing authorities as stipulated in Article 33 of the 1945 Constitution. was flown for the last time on August 17. It is hoisted in front of the presidential palace. 8 on the tail and 45 on the neck. the flag is made up of two colors. or "bendera pusaka". of government buildings and Indonesian missions abroad. called "garuda" that is a figure from ancient Indonesian epics. suggests the greatness of the nation. These figures stand for the date of Indonesia's independence proclamation: 17 August 1945. As provided for in Articles 35 of the 1945 Constitution. The Coat of Arms The Indonesian coat of arms consists of a golden eagle. before the 1945 Constitution amended. The National Flag The Indonesian national flag is called "Sang Saka Merah Putih". or two meters by three meters. red on top of white. The first flag was courageously flown amidst Japanese occupation forces on the day Indonesia's independence was proclaimed. This historical flag. The eagle is a symbol of creative energy. It is also pictured on many temples from the 6th Century. 58 . it was a part of this Constitution. Its width is two-third of its length. The black color represents nature. There are 17 feathers on each wing.

The round links represent women and the square ones men." It was a policy that deliberately aggravated language. The bar across the center indicates the equator. Kalimantan. 3. the Indonesian nation. which passes through the islands of Sumatra. The shield symbolizes self-defense in struggle and protection of oneself. One native land. Wage Rudolf Supratman. which means Great Indonesia.The motto. cultural and religious differences amongst the people. The golden star on the black background in the center of the shield represents the first principle of Pancasila. the Indonesian language. The song was firstly introduced by its composer. democracy guided by the inner wisdom in the unanimity arising out of deliberations amongst representatives. The red and white colors on the shield's background denote the colors of the Indonesian national flag. The birth of Indonesia Raya marked the beginning of Indonesian nationalist movements. Sulawesi and Halmahera. The National Anthem The national anthem is "Indonesia Raya". One nation. social justice for the whole of the people of Indonesia. represents the fourth principle. at the second All Indonesian Youth Congress on October 28. 1928 in Batavia. a saint of the Majapahit Kingdom introduced this old Javanese motto. in the 15th century. Indonesia. belief in the One and Only God. The colonial policy of the day was "divide and rule." or banyan tree. The chain symbolizes successive human generations. 2. is enshrined on a banner held in the eagle's talons. the foundation of the Indonesian state. is symbolized by the gold and white paddy and cotton ears. ethnic. It is the symbol of the second principle. The fifth principle. The head of the "banteng". The song was composed in 1928. just and civilized humanity. The "beringin. the unity on Indonesia. symbolizes the third principle. religious and cultural backgrounds resolutely pledged allegiance to: 1. now Jakarta. language. This is a reminder of the fact that the Republic of Indonesia is the only tropical country in which the people have built a free and sovereign state by their own hands. One unifying language. The five symbols on the shield represent the state philosophy of Pancasila. Empu Tantular. which is black on a red background. 59 . It was the moment when Indonesian youth of different ethnic. "Bhinneka Tunggal Ika" (Unity in Diversity). It signifies the unity of the Indonesian people despite their diverse ethnic and cultural backgrounds. or wild bull (Bos javanicus).

there are now 7 (seven) organs of the state: 1. The Assembly can only discharge the President and/or Vice-President during his/her term of office with due observance of the Constitution. The Assembly does no longer elect the President and Vice-President. which called for the unity of Indonesia. the assembly is no more the highest political institution in the state. The Constitutional Court (Mahkamah Konstitusi _MK) 7. The Supreme Court (Mahkamah Agung _MA) 6. The Regional Representatives Council (Dewan Perwakilan Daerah _DPD) The People's Consultative Assembly Article 1 of the amended 1945 Constitution states that Indonesia is a unitary state which has the form of republic with the sovereignty vested in the people and shall be exercised in accordance with the constitution. The membership of the Assembly consists of 550 members of the House of Representatives and the number of the members of the Regional Representatives Council. because the President and Vice-President in pair are elected direct by the people. the Chairmanship of the People's Consultative Assembly is made separate from that of the House of Representatives. According to the amended 1945 Constitution. where people stood in solemn observance. It was echoed at Indonesian political rallies. The House of Representatives (Dewan Perwakilan Rakyat _DPR) 4. The People's Consultative Assembly (Majelis Permusyawaratan Rakyat _MPR) 2. as they were previously. According to the amended 1945 Constitution. Pursuant to Decree Number VII/MPR/1998. According to the amended the 1945 Constitution. The State Audit Board (Badan Pemeriksa Keuangan _BPK) 5. the MPR Chairman is assisted by three 60 .Soon the national song. The Presidency 3. became popular. The song seriously aroused national consciousness among the people throughout the archipelago Indonesia's National Anthem State Organs According to the amended 1945 Constitution. which is elected through the general elections. The Assembly has the authority to amend and stipulate the Constitution and to inaugurate the President and Vice-President. delegates of the regions and delegates of functional grouping will no longer be appointed to the membership of the MPR.

and religious affairs and perform surveillance on the implementation of the law and submit the results of surveillance to the DPR. The establishment of DPD is aimed at enhancing the democratic life. Where as the candidates who come from civil servants. and he/she is not being an organizer of a political party at least for four years. establishment and development of new regions. which is counted until the date of submitting the candidacy. second. Accordingly. and Mohammad Yusuf Kalla as Vice-President. which is counted until the date of submitting the candidacy or have been domiciled for ten years since he was 17 years old in the concerned province. In fulfilling one of its tasks. Current chairman of the Assembly is Hidayat Nur Wahid. and developing a mechanism of check-and-balance between legislative bodies and executive ones and improving the quality. productivity and performance of the members of people's consultative/representative's bodies and the regions to realize justice and welfare for the people. relationship between the central and regional government. 61 . whereas total number of all DPD members shall not exceed 1/3 (one third) of the number of DPR members. education. Electoral region for DPD members are the provinces. The DPD consists of regional representatives of the provinces who are elected through general elections. The determination of DPD elected candidates is based on candidates' names who have the first. the requirements and procedures shall be regulated by law. the Regional Representatives Council (DPD) and the Regional House of Representatives (DPRD). who reflect the groupings in the DPR and DPD and are elected by and from among the members of MPR in an MPR Plenary Session. the Assembly has taken the oath of Susilo Bambang Yudhoyono as president. It is established pursuant to Article 22C of the 1945 Constitution and based on Law No. third. the House of Representatives (DPR). The DPD may submit to the DPR bills relating to regional autonomy. 22 of 2003 on structure and status of the People's Consultative Assembly (MPR). The DPD shall hold session at least once in a year. The terms of office for the DPD is five years. Candidates for DPD members should meet the requirements of: having been domiciled in concerned province at least for three consecutive years. should resign themselve from their organizations/offices. The Regional Representative Council The Regional Representatives Council (DPD) is a regional representation institution with the status as a state institution. the DPD will also give considerations to the DPR concerning the bills on State Budget and the bills concerning tax.vice-chairmen. natural and economic resources management which are related to the central and regional finance affairs. and the DPD members shall be able to be dismissed from their position. and fourth largest number in the concerned province. and the amount of DPD members for each province are 4 (four) persons. the Indonesian Military/Police members. securing people's regional representation in implementing their duty and authority.

bribery. Decree No. representing political organizations that took part in the general elections which are elected through general elections. members of the House shall have the right to submit a bill. The President and Vice-President shall hold office for a term of five years and shall be eligible for re-election in the same position only for another term. or any other big crime. inquiry and expression of opinions. the President is both head of state and chief executive. or he/she has been proved to be no longer fulfilling the qualifications of a President and/or Vice-President. Besides those rights it shall have the rights to pose questions. either when he/she has been proved guilty of violating the law. In exercising his/her duties. the President and Vice-President in pair is elected direct by the people. The President and Vice-President can be discharged from office in mid-term by the People's Consultative Assembly.The Presidency In the government system of Indonesia. The House of Representatives The total membership of the House of Representatives is five hundred and fifty (550) members. budgetary function. Further. In carrying out its functions the House shall also have the rights of interpellation. VII/MPR/1998 regulates that the Chairman of the People's Consultative Assembly is made separate from Speaker of the House. 62 . corruption. based on the proposal of the House of Representatives. According to the amended 1945 Constitution. the President shall be assisted by a Vice-President. and supervision function. as well as the right of immunity. or indecent act. The President has the right to submit bills to the House of Representatives and determine Government Regulations to expedite the enforcement of laws. The General Elections Commission has determined seats allocation for the House of Representatives by the amount of 550 seats for 32 provinces in Indonesia. submit suggestions and views. such as betrayal of the state. The House shall convene at least once a year. It shall have legislative function. current House Speaker is Agung Laksono.

to rule on conflicts of authorities among state institutions whose authorities are given by the Constitution. shall have the authorities to hear appeal cases to review regulations below the level of laws to the laws concerned. Current chairman of the Board is Anwar Nasution. Its main function is to conduct official examinations of government financial accounts. 63 . and to settle disputes on the results of general elections. to review laws against the Constitution. They shall exercise the judiciary power. whose ruling irreversible. The Supreme Court The Supreme Court and the subordinated judiciary institutions within the realms of the general court. the Regional Representative Council. to decide the dissolution of political parties. The Supreme Court. the religions court. and other authorities accorded by law. The Constitutional Court The Constitutional Court shall have the authority to put on trial at the first and final instance.South Sumatra Provincial House of Representative Building The State Audit Board The functions of the State Audit Board are outlined in Article 23E of the 1945 Constitution. according to Article 24A of the Constitution. The Board should locate in the capital of the state and have representatives in every province. Current chairman of the Court is Bagir Manan. The findings of the Board are submitted to the House of Representatives. the material court and the administrative court are independent courts. and the Regional Houses of Representatives in accordance with their respective authorities.

and following up transparent internal supervisory results. and the Improvement of Public Services Quality Scheme. professionalism and skill of the state apparatus in performing their respective duties and functions in a more optimum way. and striving efficiency in the inspectorial structure. upholding ethics and morality of the government auditors. and the enhancement of human resources capacity. which is intended to improve the quality of public services in various fields of public administration and development in consonance with the system of Governmental Institutions' Performance Accountability in central and regional administrations' working units. The other schemes are: the Institutional and Management Restructuring Scheme. collusion and nepotism. In addition. there are main activities of the scheme aimed at: developing a transparent and accountable information system on supervision. implementing consistently Law No. arranging and developing the system of Governmental Institutions' Performance Accountability as criteria for the success and/or failure of main tasks completion and function of government institutions. Therefore. monitoring. and reporting. the institutional and management refurbishment. and reinforcing civil servants disciplinary regulations. controlling. including the State Apparatus Scrutiny Scheme. measures have been taken to include the execution of state apparatus supervision. In this context there have been some schemes. improving the information quality of supervision system.It shall also be obliged to rule on the opinion of the House on the assumption of violation by the President and/or Vice-President according to the Constitution. 64 . which is aimed at enhancing quality. which is designed to refurbish the state apparatus institutional and management system in the execution of general governmental task and development focused on the implementation of decentralization which is supported by a more efficient and effective documentary/archival management. which is free from corruption. the improvement of public services quality. The Government Apparatus The government apparatus have a decisive role in achieving successful implementations of general government affairs and development activities. collusion and nepotism and at the same time improving the role of the Commission Watch on the State Apparatus' Wealth.28 of 1999 concerning the Management of State Affairs. respectable state apparatus that are free from cases of corruption. which is integrated with the measure of enhancing the quality of planning. which aims to realize clean. The Court's current chairman Jimly Asshidiqie. the Improvement of Public Services Quality Scheme.

he ordered to establish 65 . President Soekarno's stance was firm. outlined five principles called Panca Sila that later on developed to become the nation's basic philosophy contained in the Preamble of the 1945 Constitution. West Java. 1959 he issued a Decree for the reinstatement of the 1945 Constitution. In 1955. 1945. This was followed by his announcement of a Political Manifesto on August 17. the First President On August 18. now Papua that was being occupied by Dutch troops. the Indonesia's Committee for Preparation of Independence (PPKI) elected Soekarno by acclamation as first president of the young Republic with Hatta as vice-president.The Indonesian Presidents Soekarno. the day after independence was proclaimed. Regarding Indonesia's claim to get back West Guinea. Furthermore. India. Myanmar and Ceylon (Sri Lanka). This was an important beginning for nonaligned movement. In the same year Soekarno succeeded in holding Indonesia's first general election in which 47 political parties contested to elect their representatives for the House (DPR) and the People's Consultative Assembly (MPR). Later the Manifesto became the Guidelines of State Policy. 1945. Also presences in the conference were Chou En-Lai of China. The initiative was taken by Indonesia. Pakistan. The conference was attended by delegates from 24 Asian and African countries. Nehru of India. Soekarno's address before the members of the Investigating Committee for Preparation for Indonesian Independence (BPUPKI) on June 1. his handpicked Provisional People's Consultative Assembly did resolve to make President Soekarno president for life. On July 5. and Nasser of Egypt. President Soekarno had to his credit the holding of the Asian-African Conference in Bandung.

66 . XLIV/1968. President Soekarno staged a confrontation against it. the second general election was held. In March 1967 the MPR formally revoked Soekarno's governing authority and appointed Soeharto acting president. 1964. The negotiations resulted in a resolution of the UN to administer the territory of West Irian for a period of one year to be ultimately officially transferred to the Republic of Indonesia. Soekarno was put into house detention. Indonesia and Malaysia severed as of September 3. On the 30th of September 1965 the Indonesian Communist Party (PKI) staged another coup which was however abortive failed by the Indonesian Armed Forces. before passing away in June 1970 Soeharto. and ordered the army to eliminate all traces of the Communist Party." This move was bringing some tangible result which led to the negotiations between the Dutch and Indonesian Government in New York under the auspices of the UN to reach an agreement to settle the problem of Indonesia's claim to West Irian or West New Guinea. At the time Malaysia was ultimately accepted as member of the UN Security Council.the "People Threefold Command" to liberate it. that President Soekarno ordered Indonesia's representatives of the UN to quit the organization. and the functional group (Golkar) won 73 percent of the total seats in the House of Representatives (DPR). the Second President In July 1971. The people's "act of free choice" later resulted the West Irian's choice to remain with the Republic of Indonesia. Diplomatic ties between the two countries. pursuant to the Provisional People's Consultative Assembly's Decree No. Later. He also created the "Mandala Command for Liberation of the West New Guinea. Major General Soeharto emerged as the strong man of a new regime. Considering the formation of Malaysia being the British Empire's puppet and satellite government.

the MPR had re-elected Soeharto to the fourth. which had been enjoyed by the majority of the Indonesian people.J. collusion and nepotism. The nation's forth. Indonesia under the New Order Government of President Soeharto had shown substantial achievement in many fields. 1978 the MPR re-elected Soeharto to third five-year term as president. Parallel with this. sixth. Habibie. sixth. fifth. 1977. Pressure against President Soeharto to resign became so strong. they demanded political and economic reform as well as resignation of President Soeharto who had ruled the country for more than 32 years and eradication of corruption. On March 22. 1998. 67 . 1987. and took control of 332 seats in the 460-member House of Representatives. Sultan Hamengku Buwono IX was elected vicepresident. Soeharto resigned on May 21. 1973. The nation's third general election was held on May 2. and seventh general election had been held consecutively in 1982. It had gained success in the national development. The ruling Golkar won 62 percent of the vote. fifth. Such economy crisis caused substantial decline in the people's standards of living. Students' street protests occurred frequently. and he handed over the country's leadership to Vice-President B. before severe economic crisis that began with monetary crisis hitting the country as of July 1997. Adam Malik was elected vice-president. 1992 and 1997.The 960-seat Assembly (MPR) unanimously re-elected Soeharto as president to a second five-year term on March 22. The Golkar emerged as the winning party at every national election with landslides vote during the New Order government. Even the leadership of the House suggested Soeharto that he should resign. and seventh five-year term as president. Finally. Following suit was political crisis since the existing political system was unable to accommodate the dynamism of the aspirations and interests of the community.

Habibie. It was under the leadership of President Habibie the country's eighth general election taking place on June 7. the National Awakening Party (PKB). 1999. from October 1 to 3. 1999. Abdurrahman Wahid secured 373 votes out of the total 691 against 313 votes gained by Megawati. The MPR held general session in two stages. During the session the accountability address of President Habibie was rejected. Hamzah Haz. i. Earlier. The Indonesian Democracy Party of Struggle (PDI-P) got the top of the list. and Habibie withdrew from his presidential nomination as a candidate from the Golkar Party. the United Development Party (PPP) and the Indonesian Democracy Party (PDI). the United Development Party (PPP) and the National Mandate Party (PAN). the Habibie's administration reintroduced party system. including politicians from the two minority parties. Abdurrahman Wahid after he outvoted four contenders including Megawati Soekarnoputri. Golkar Party.J. A day after having been inducted as President. composing of various political and social forces. then the Assembly elected Mr. 68 . the Third President Habibie became the nation's third president. At the conclusion of its session. by which forty-eight (48) political parties contested the election. he formed the Reform Development Cabinet.B. followed by its major contenders. who later was elected vice-president after overcoming Mr. freedom of expression by the people and press respected. and October 14-21. It was under the Habibie Administration a number of political prisoners were released.e.

and suspended the MPR. But on the other hand. the Fourth President Abdurrahman Wahid. President felt his administration had governed in conform with the constitution. Internationally acclaimed moderate Moslem leader. 2001. Relations between the House and President Abdurrahman Wahid became sour and severe because the House regarded Abdurrahman Wahid failed to execute the constitution properly and to administer good governance. He started his political career in 1984 when he was elected chairman of the Nahdlatul Ulemas Islamic Organization. he declared a state of emergency that would be effective as of 6 p. so he ignored the summon from Parliament to give explanations. especially when he was suspected to have a connection with the so-called "Buloggate" and "Bruneigate" extortion. In respond to the actions made by President Wahid.Abdurrahman Wahid. But it proved that during his one year and nine months in office he failed to recover the economic as well as political crisis. the MPR immediately held a special session during which it discharged Abdurrahman Wahid as president and appointed VicePresident Megawati Soekarnoputri the fifth president of the Republic of Indonesia. better know as Gus Dur. DPR and Golkar Party. Even his image started to fade away.m. 69 . on July 31. the House sent letters of warning in the form of "Memorandum" I and II to him and demanded him to give explanations to Parliament. indisputably became Indonesia's fourth president. Instead. The people's earlier expectations and hope upon President Abdurrahman Wahid to be able to restore the prolonged crisis was high enough. he is one of the National Awakening Party's founders. For this.

2001. and two high officials enjoying ministerial level. Her cabinet consists of three coordinating ministers. She surrendered the presidential post she served for more than three years.Megawati Soekarnoputri. fair and democratic general elections of members of legislature and President and Vice-President in 2004. However. to her predecessor Susilo Bambang Yudhoyono. So far. complicated but peaceful. nine state ministers. Megawati _the eldest daughter of Soekarno. 18 ministers with portfolio. it was only on August 9. 2004. but also in managing fairly arduous. Megawati succeeded in not only improving substantially macroeconomic performance. She served his term of office until October 20. President Megawati could announce members of her Cabinet named "Kabinet Gotong Royong" (Mutual Cooperation Cabinet). the Fifth President On July 23. Diah Permata Megawati Soekarnoputri took an oath of office of President of the Republic of Indonesia. During her tenure. 2001. 70 . maintaining socio-political stability. the first Indonesian president_ and her cabinet have tried hard to first of all stabilize the country and to recover the nation's economy from severe crisis.

the SIXth President Susilo Bambang Yudhoyono. pairing with Mohammad Jusuf Kalla as his running mate. Susilo Bambang Yudhoyono was once Minister of Energy and Mineral Resources under the Abdurrahman Wahid Administration. and Coordinating Minister for Political and Security Affairs under the Cabinet of Megawati Sukarnoputri before quitting to contesting for the presidency. Heads of foreign Governments at ending the installment of President Susilo Bambang Yudhoyono were newly elected Australian Prime Minister John Howard. Broad education and experiences during his military and public services he holds are regarded as his advantages to lead the country to a better situation and condition. Brunei Darussalam Sultan Hassanal Bolkiah. by his party. he was considered among the Army's rising stars and one of the architects of reform in the military. and took his oath of office. He graduated from the Military Academy in 1973 before earning a master degree in management from Webster University in the United States of America. Before becoming President. Timor Leste Prime Minister Mari Alkatiri. The installment itself was also attended by heads of governments of and special envoys from some foreign countries _the first installment of an Indonesian President attended by foreign envoys. on October 20. Thailand. replacing Megawati Seokarnoputri following his landslide victory _by garnering more than 60 percent of total valid votes in the nation's first-ever direct presidential election. Singaporean Prime Minister Lee Hsien Loong. South Korea and the Netherlands President Susilo Bambang Yudhoyono was proposed to be a candidate for the President. 2004. Under the administration of President Soeharto. the Democratic Party. and special envoys from Japan. 71 . Malaysian Prime Minister Abdullah Ahmad Badawi. and recently completing his doctorate with the Bogor Institute of Agriculture.SUSILO BAMBANG YUDHOYONO. to become the sixth President of the Republic of Indonesia. retired Army general. was officially inducted by the People's Consultative Assembly.

E. Listed below is the line up of the cabinet: Coordinating Ministers: 1. 11 state ministers. 2.I. Marie Elka Pangestu 13. Minister of Maritime Affairs and Fisheries: Freddy Numberi 17. Minister of Industry: Dr. 14. 9. Hamid Awaluddin."INDONESIA BERSATU" (UNITED INDONESIA) Cabinet The first Indonesian President elected by direct popular votes. Minister of Forestry: H. M. Nur Hassan Wirajuda 7. 18 ministers with portfolios. Ir. 2004 at Presidential Palace.S. Minister of Trade: Dr.H. Minister of Energy and Mineral Resources: Dr. Andung Nitimihardja 12. Fahmi Idris 72 . and three high officials with status of state ministers. M. Yusril Ihza Mahendra 5. Kaban. Anton Aprianto. Legal. President Susilo Bambang Yudhoyono inducted his cabinet called as the United Indonesia Cabinet. Coordinating Minister for the Economy: Ir. Jusuf Anwar 10. Aburizal Bakri 3. Coordinating Minister for People's Welfare: Prof. Minister of Foreign Affairs: Dr. M. Juwono Sudarsono 8. Minister of Transportation and Telecommunication: Ir. Minister of Home Affairs: H. and Security Affairs: Widodo A. Ir. Dr. Minister of Agriculture: Dr. Ir. S.S. Dr. Minister of Finance: Dr.. Dr. consisting threee coordinating ministers. State Secretary: Prof. Minister of Manpower and Transmigration: Drs.S. Purnomo Yusgiantoro 11.Si.P. Moh. 15. 6. S. S. Ma'ruf. Alwi Shihab Ministers with Portfolios: 4.Hatta Rajasa 16. Minister of Defense: Prof. Minister of Justice and Human Rights: Dr. M. Coordinating Minister for Political. on 21 October.

Rahmat Witoelar 27. H. Maftuh Basyuni 23.A. Fadilah Supari 20.Si. A. State Minister for State-Owned Companies: Sugiharto. M. S. State Ministers: 24. Dr. Saifullah Yusuf 30. State Minister for Public Housing: Drs. 19. M. State Minister for Environment: Ir. State Minister for Research and Technology: Dr.E. 33.. M.B. Sri Mulyani Indrawati 31. Joko Kirmanto. 34. M. Minister of Health: Dr. H. 29. S. Djalil. Dipl. S.. Kusmayanto Kadiman 25. Minister of Culture and Tourism: Ir. S. Minister of Religious Affairs: M. Jero Wacik. Bachtiar Chamsyah 22.A. MADD.E.A. State Minister for Youth and Sports: Adhyaksa Dault.E. Bambang Sudibyo. Taufiq Effendi. State Minister for Cooperatives and Small/Medium Enterprises: Drs.A. Sofyan A.H. Suryadarma Ali.K.A. S. M.B. 32.Si. 26.S.18. 73 . M. State Minister for the Accelerated Development of Disadvantaged Regions: Dr.H. Meutia Farida Hatta Swasono. M..H. Muhammad Yusuf Asy'ari. 21. State Minister for Women Empowerment: Dr. Minister of Public Works: Ir. Minister of Social Affairs: Dr. State Minister for Communication and Information: Dr. 28..Si. State Minister for Administrative Reform: Drs. M... State Minister for National Development Planning/Chairman of the National Development Planning Board: Dr. Minister of National Education: Prof.

the 100-day program impels on the prudent execution of the 2004 State Budget. a number of urgent matters that are considered routine and already going on well are excluded from the 100-day program. that have the potential to retrieve embezzled state money. and building and fostering trust among inter-communal groups in those places. and creating a tranquil situation in some conflict-torn areas. personnel. an inseparable part of the Cabinet's middle-term development program for the next five years. and to combat illegal logging. The 100-Day Working Program of "Indonesia Bersatu" Cabinet The United Indonesia Cabinet's 100-day working program. the protection and the repatriation of Indonesian migrant workers from Malaysia. The program also urges on the maintenance of conducive situation during the commemoration of religious events of Idul Fitri (Islamic feast at the end of the Ramadhan fasting month) and Christmas. contains concrete measures to respond to public high expectations over the government of the newly inducted President Susilo Bambang Yudhoyono. On the creation of job opportunities and the protection of workers.. Other activities are to cope with separatist movements in the provinces of Nanggroe Aceh Darussalam and Papua. 74 . Regarding macro-economy.H.High-ranking Official with the Status of State Minister: 35. Meanwhile. They include maintaining security and order. the close monitoring over some organizations that possibly do massive lay-off. and the reform of governmental administration system (bureaucracy). and on the review of the 2005 State Budget. and finance. S. North Maluku. on their authorities. and the provision of sufficient attention over the establishment of courts for corruption criminal acts. such as in Mamasa (West Sulawesi). and the anticipation of possible floods during the rainy season (October 2004-March 2005). and the formation of an independent Professional Certification National Body. the payment of Idul Fitri and Christmas allowance. Attorney General: Abdul Rahman Saleh. the 100-day working program puts emphasis on the improvement of regulations and ministerial decisions to make them capable of creating a more flexible manpower market. to augment the nation's resilience against terrorism. and to fight terrorism as well as to improve institutional bodies dealing with terrorist acts. the cabinet's middle-term development program itself is scheduled to be introduced to the House of Representatives in January 2005 to be made into a law. However. illegal fishing. and smuggling of sea-sand and tin-sand. to uphold law enforcement at the country's territorial waters.H. Poso. the formation of a commission tasked to control public prosecutor offices. M. including serious handlings of corruption cases. The short-term program covers a wide-range of activities in many fields. Prominent in the short-term program is the eradication of corruption.

and the protection of small-scale depositors. the provision of qualified skills and entrepreneurship education. and the improvement of competitive edge of industrial products. the improvement of educators' professionalism. commission tasked to control public prosecutor offices. and the reform of governmental administration system (bureaucracy). On poverty alleviation.On investment. In dealing with education. Last but not least. the program drives for the improvement of the implementation of the nine-year compulsory education system. On the creation of job opportunities and the protection of workers. the program encourages the improvement of hajj pilgrimage services and the provision of free meals for nine days during the pilgrimage in Saudi Arabia. the 100-day working program puts emphasis on the improvement of regulations and ministerial decisions to 75 . and the purification of drinking water. the program aims on the provision of free-of-charge health care services by third-class hospitals. the program seeks to enhance the provision of various tax incentives and trade facilities for business players. and the protection of manufacturing industrial establishments as well as the encouragement of industrial establishments in the regions. the program stresses the review of regional regulations and taxes which are considered impeding investment. Susilo Bambang Yudhoyono takes official oath as President of the Republic of Indonesia before the Assembly Touching on health care. and the establishment as well as equitable distribution of educational facilities and infrastructures. the program spurs the Cabinet on the provision of access and guarantee on rights over land plots for people belonging to economically-weak bracket. As far as the business world is concerned.

the 100-day program impels on the prudent execution of the 2004 State Budget. and the purification of drinking water. In dealing with education. and the improvement of competitive edge of industrial products.make them capable of creating a more flexible manpower market. and on the review of the 2005 State Budget. the program aims on the provision of free-of-charge health care services by third-class hospitals. Regarding macro-economy. the program drives for the improvement of the implementation of the nine-year compulsory education system. the program spurs the Cabinet on the provision of access and guarantee on rights over land plots for people belonging to economically-weak bracket. the improvement of educators' professionalism. and the establishment as well as equitable distribution of educational facilities and infrastructures. the protection and the repatriation of Indonesian migrant workers from Malaysia. As far as the business world is concerned. the provision of qualified skills and entrepreneurship education. and the protection of manufacturing industrial establishments as well as the encouragement of industrial establishments in the regions. the program encourages the improvement of hajj pilgrimage services and the provision of free meals for nine days during the pilgrimage in Saudi Arabia. the close monitoring over some organizations that possibly do massive lay-off. the program seeks to enhance the provision of various tax incentives and trade facilities for business players. Touching on health care. and the formation of an independent Professional Certification National Body. On poverty alleviation. Last but not least. and the protection of small-scale depositors. the program stresses the review of regional regulations and taxes which are considered impeding investment. the payment of Idul Fitri and Christmas allowance. 76 . On investment.

President Susilo Bambang Yudhoyono Vice-President Mohammad Jusuf Kalla Members of the United Indonesia Cabinet pose for a photograph in front of Merdeka Palace 77 .

Dumai from previously a fishing village to a modern town 78 .

22 of 1999 on Regional Administration and Law No. 25 of 1999 on Financial Sharing between Central and Regional Administrations. the Installation Phase during the period of 2002-2003. the Regional Government Institutions Development scheme. The regional development comprises the Regional Government Apparatus Promotion scheme. the Rural and Urban Development scheme. which is pursuant to Law No. and Maluku. and the Stabilization Phase after 2007. concrete. the Non-Governmental Institutions Promotion scheme. enhancement of competency of regional government apparatus. 104 of 2000. and responsible execution of regional autonomy based on the principles of democracy. Law No. and are divided into four major programs. Papua. the continuation of reformation and democratization. and Maluku. Pertaining to the Province of Nanggroe Aceh Darussalam (NAD). the Community's Alertness Promotion scheme. Law No. equality and justice. the allocation of profit-sharing fund of oil and gas for regional administrations is determined at 15 percent and 30 percent respectively from the revenue after taxes. namely the regional autonomous development program. the Strategic Areas Development scheme. has been so far formulated through phases consisting of the Initiation Phase in 2001. and the Special Management of Aceh. the Social-Organizations Promotion scheme. 22 of 1999 on Regional Administration allows extensive. In implementing the policy on regional development. The decentralization policy. as well as the potentiality and plurality in the provinces. the Development scheme of Areas at Borderlines with few neighboring countries. but in nine years the ratio will be 79 . measures adopted as of 2001 included the maintenance of the nation's unity and integrity. Papua. the Empowerment of Poor People Development scheme. the allocation of profit-sharing fund from oil and gas for the province is 70 percent each. 25 of 1999 on Financial Sharing between the Central and Regional Administrations meanwhile governs the regional governments in performing their tasks.REGIONAL DEVELOPMENT Policy on regional development underlines the development of regional autonomy focusing on the creation of balance in financial proportion between the central and regional administrations. The policy covers 20 regional development schemes as Law No. the Regional Economic Development scheme. the Regional Financial Development scheme. area development program. the Consolidation Phase during the period of 2004-2007. and empowerment of the Regional Houses of Representatives or regional legislative bodies. and the improvement of regional economy. 25 of 2000 regulates. improvement of managerial institutions of regional administrations. the Land Management Development scheme. empowerment of communities program. betterment of personnel and public service management. the Housing Development scheme. Pursuant to Law No. the Development scheme of Spatial Management. 25 of 1999 and Government Regulation No. people's participation. and special development program for the provinces of Nanggroe Aceh Darussalam. the Lessdeveloped Areas Development scheme.

and to promote a dynamic sense of unity and cohesion. and thirdly. With 80 . District/city or municipality up to the province will manage their regions according to its relevance. except those of defense foreign policy. to give an extensive autonomy to the region in anticipation of the rapid growth of social affairs. The change of this function and role. The 2004 state budget allocates some 31. That reposition has also influenced the regional administration accountability which is previously is in vertical manner. health. exploring regional potentials in the process of the development which is based on the principle of democracy. to enhance people's participation. significance and capacity to execute the authority. industry and trade. filling the position of head and deputy head of regions and policy making concerning the region. the accountability will become horizontal. 22 of 1999 concerning Regional Autonomy covers some regional administration instruments. The reposition and redefinition of government administration in the region shall be understood clearly to reach the goals of the regional autonomy. land affairs. just and equitable. 2 of 1999 says that the authority of the regional administration covers the authority in all government aspects. The background and goals of which underlaid the writing of Law No.2 percent. According to the law. a slight decrease from that of 2001 which was 32.e. communication. secondly. and conversely decrease the role and participation of province and central government. the regional administration will receive some power delegation or decentralization from the central government. to the President through the Minister of Home Affairs. to the Regional House of Representatives (DPRD). 22 of 1999 concerning Regional Administration has caused changes in the paradigms that contained in the concept of regional autonomy. i. Subsequently. as regulated in Law No. in which the general allocation fund is fixed at a minimum of 25 percent of net domestic revenue minus profit-sharing fund and special allocation fund derived from reforestation fund. Regional Autonomy The implementation of decentralization and regional autonomy policy based on Law No. such as regional administration construction. environment. monetary. Revenues apportioned for provincial and local governments are derived from taxes and natural resource revenues. 22 of 1999 on Regional Autonomy are: first.e. Chapter 7 of Law No. Meanwhile. The regional autonomy gives a greater role and participation of regional (district) administrations to manage their regions. cooperatives and manpower. based Law No. agriculture. education and culture. to maintain the integrity of the Unitary State of the Republic of Indonesia. 25 of 1999 regulates the ratio of budget between Central and Provincial Governments. self-reliant.8 percent of central government expenditures for provincial and local governments. fiscal and religious affairs. Further. Article 7 of Law No. politics and economy that need fast and accurate response. investment. i. which is still processed creatively in line with temporal change. 22 of 1999.reduced to 50 percent each. head of region accountability. the authorities to be executed by a regional administration are among others: public works.

with the distribution of 8 percent for the province and 12 percent for districts/cities. the General Allocation Fund (DAU) and the Special Allocation Fund (DAK) Expansion of Regional Administrations Parallel with on-going political dynamism of development and in accommodating public aspirations. it is hoped that the supervisory function of the legislative will run smoothly In the regional autonomy.these new procedures. fishery. oil and gas mining and natural gas. between those of relatively moredeveloped urban areas and the relatively less-developed rural areas. will be given to the region. 20 percent of personal income tax and corporate income tax. the share will be divided not only to the producer-region. Up to 2004 there have been six new provinces added to the system to make the country's total provincial governments 32. unavailability of integral national policy to develop areas along the borderlines and of coordination between the central and regional administrations. and between the relatively advanced Java Island and the less-advanced outer-Java. the regional administration will receive all fund received from Tax on Land and Building (PBB). In the case. The areas that also receive development priority are of areas near and along the borderlines with the neighboring countries such as with Malaysia in Kalimantan. the provincial tax revenue will be shared with the districts/cities or municipalities. Also conditions hampering the development of the areas are limited domestic funds to 81 . while the 10 percent of the central government share will be distributed back to the region. along with 80 new district administrations to total 349. of the less-developed areas to make them on par with the relatively more-developed areas. In line with the principle of justice. and with Timor Leste in East Nusa Tenggara. general mining. Developing Less Developed Areas Disparities. the region will also receive fund from the State Budget (APBN). several provincial and local (district and municipal) administrations came into being. still not definitive border marks. are tangible and common between the relatively more-developed regions in the country's western part and the relatively less-developed regions in the country's eastern half. both in the from of average and proportional computation. improving economic infrastructures and facilities etc. Besides taxes. Meanwhile. including regional gross domestic products (RGDP). The central government has also given share to the provinces state revenues from the exploitation of natural resources of forestry. Regional developments are among other things aimed at addressing and dealing with such unfavorable conditions and simultaneously boosting regional economic growth rate. but also to the non-producer regions that are situated in the neighboring areas within the province. particularly in economic and welfare term. and six new municipal administrations to number 91 in total. and were put into the state system. In fact there are some problems to deal with seriously among other things: a lackluster of control due to primarily unavailability of sufficient infrastructures and facilities. with Papua New Guinea in Papua.

rampant smuggling of people and natural resources. as well as to better infrastructures and means of transport. to arrange spatial management of land and seas at border areas. such as in Kalimantan. and East Nusa Tenggara. Up to 2004 some regional development programs have been carried out. immigration and custom and quarantine offices. to empower socio-political. Papua. and to maintain the areas' security and order. economy and management of natural resources and environment. immigration and custom as well as quarantine services. to promote potential resources the areas near borderlines have. including to set out integrally development of border areas. including the complete arrangement of measures and strategies as well as planning of spatial management of areas near borderlines.accompany foreign investment. Therefore the main aims of the development of areas near and along the borderlines are to improve the living standard of the people of these areas. and crossing points. education and health. welfare disparity between domestic people Downtown Palembang city. there have been action plans to be executed. to encourage the development of growth centers at areas near and along borderlines. the Philippines. bilateral cooperation still takes the form of ad hoc nature and valid for certain areas. and Timor Leste through various fora. and economic institutions and non-governmental organizations. to enhance managerial capacity to exploit potentialities the border areas have. the execution of economic cooperation through investment for development of special areas in the districts within the Provinces 82 . and to improve infrastructures and means of security. Papua New Guinea. the organization of bilateral meetings with some foreign parties from neighboring countries like Malaysia. limited availability of infrastructures and facilities in offices of local security. to improve bilateral cooperation with neighboring countries in the fields of security. to maintain the security and order at border areas. South Sumatra living along the borderlines and those across such as in Kalimantan. To achieve such conditions.

and improving welfare and justice. and information and charts of areas along borderlines and the most outer islands and islets have been made available. thus impeding almost all development activities. the schemes have been bearing fruit. PAPUA. and many others. rather less-developed socio-culture of native tribes. for instance there are some regional regulations adopted to support the implementation of Law on Special Autonomy Status of NAD. AND MALUKU The national issues the Government has been giving serious attention to are those pertaining to problems of security and order in the provinces of Nanggroe Aceh Darussalam (NAD). 21 of 2001 on Special Autonomy of the Province of Papua. and the good functioning of local governmental institutions to provide public services in the context of maintaining security and order. to improve the capacity of the local governmental institutions. So far. causing the implementation of Law No. and peace.of West and East Kalimantan under the Malindo socio-economic framework. ISSUES ON THE PROVINCES OF ACEH. A main problem the province of NAD administration has been facing is on security matters caused by a rebellious armed movement calling themselves the GAM (Gerakan Aceh Merdeka the Aceh Freedom Movement) that has hampered the province's socioeconomic and administrative activities. The security problem has also forced many people to flee to more secure and tranquil areas. the settlement of cases of human rights abuses. have introduced the development acceleration schemes to make the province more conducive to allow all aspects of life including legal certainty. and to expedite the implementation and operation of Law No. Regarding the province of Papua. and the improvement of welfare of the Papuan people. 83 . The main goals of the scheme are the availability of qualified human resources. the Central Government along with the Provincial Administration of NAD. Papua or Irian Jaya. human rights. etc. The main aims of the development acceleration scheme are to encourage the local people to take part more actively in development activities. the lackluster implementation of Law No. and the Law has been socialized to people at large.. to settle more quickly cases of human rights abuses. 21 of 2001 on Special Autonomy of the Province of Papua. its geography that is rather too rough to facilitate the development of economic infrastructures and facilities. things that to some extent impede developments in this province are among other things unfavorable condition and situation of internal security and order due to frequent armed conflicts among tribes. and between the Indonesian Armed Forces and the rebellious armed group of OPM (Free Papua Organization). In dealing with such unfavorable situation and condition. 18 of 2001 on Special Autonomy Status for the province of NAD crippled and ineffective. and status of special autonomy run normally as they should. and hampering the development and rehabilitation of transport infrastructures and facilities as an important economic mover. At the same time database on areas along borderlines have been composed and built up. and Maluku.

development activities go well as they are planned. the local socio-economic conditions has been showing an encouraging trend. The scheme has been designed as well to reconcile the hostile parties. to recover socio-economic life. etc. Meanwhile the main aims of the development acceleration scheme for the provinces of Maluku and North Maluku are to maintain security and order. regional administrative services run more effectively and efficiently. 6 of 2003 on the Post-conflict Accelerated Development Recovery for the province of Maluku and North Maluku. The goals of the scheme are the resumption of normal life of the local people and the refurbishment of socio-economic as well as public infrastructures and facilities. etc. 84 . Under the scheme and with the issuance of Presidential Instruction No. the welfare of the local people improves meaningfully. to intensify religious guidance and preaching. 21 of 2001 would serve as it is envisaged.One of supermarkets available in Banda Aceh. as well as the settlement of cases of human rights abuses. including schooling for children in refugee camps. and their education level advances. and the normalization of local governmental administrative activities. and the people's health condition sound. Nanggroe Aceh Darussalam Province It is hoped that under the scheme Law No. the growing number of refugees who have returned to their hometowns or villages. and to recover comprehensively the feeling of the local people from traumatic insecurity and gross fear of previous bloody social conflicts. to restore damaged infrastructures and facilities of education and health as well as to activate schooling. and to normalize the life of the local people through dialogues and peaceful agreements. to strengthen the communities' resistance against any provocation from within and without. and to grant financial assistance to refugees. the people's economic activities flourish. marked by the lifting of civil emergency status.

to realize independent legal institutions that are free from interference by any party whatsoever. 1 of 2000 on 85 . On intellectual property rights. to be executed through four development programs: the Legislation Formulation Program. the Empowerment of Judiciary and other Law Enforcement Institutions Program. As regard to judicial authority. the Program for the Settlement of Cases of Corruption. Law No. 5 of 2004 on Supreme Court. 19 of 2002 on Copyright. low-cost operations. there are Law No. Law No. 15 of 2001 concerning Trademark. 30 of 2002 concerning Commission for Corruption Crime Eradication. to nurture legal understanding and consciousness. 24 of 2003 on Constitutional Court. Pertaining to human rights. Law No. to cultivate the public's trust in them by improving their welfare. to improve moral integrity and professionalism of law enforcers. 14 of 2002 on Tax Tribunal. etc. Collusion and Nepotism and Human Right Abuses.THE LAW Legal developments during the recent years have been focusing on the promotion of law supremacy and improvement of good governance. 23 of 1999 concerning Bank Indonesia (Indonesia's Central Bank). to manage fast. and Law No. 14 of 2001 concerning Patent. Law No. there has been put into force Law No. several laws have been enacted. the 1999-2004 Guidelines of State Policy gives directions to promoting legal affairs as follows: 1) to develop legal culture to all levels of society to make them have legal awareness and obedience within the frame of upholding law supremacy and a law state. 3 of 2004 on Amendment to Law No. 31 of 2000 concerning Industrial Design. Law No. and Law No. education and control. 4 of 2004 on Judicial Power. and to settle completely various judicial processes on unsettled abuses of laws and human rights. and the Program for the Enhancement of Legal Awareness and Development of Legal Culture among the People. and to promote the protection. 25 of 2003 concerning Money Laundering Criminal Acts has been put into force. 30 of 2000 concerning Trade Secrecy. 7 of 1983 concerning Income Tax as well as Law No. there are Law No. Law No. So has Law No. to uphold consistently regulations to secure legal certainty and respect to human rights. 32 of 2000 concerning Integrated Circuit Lay-out Design. On monetary and tax. 17 of 2002 on Amendment to Law No. Regarding money laundering. a number of laws pertaining to various areas have been enacted and promulgated. including those related to gender. and corruption-collusion-and nepotism-free judicial process by upholding the justice and truth principles. Law No. to develop statutory regulations conducive to economic activities in facing the free trade era without hampering national interests. particularly those pertaining to human rights. among other things Law No. and replacing statutory regulations inherited from the Dutch colonial government as well as discriminative laws. to arrange a comprehensive and integrated national legal system by recognizing religious and traditional laws. to continue ratifying international conventions. suitable with the need and interests of the nation. supportive means and facilities. respect to and enforcement of human rights in all aspects of life. including the Police of the Republic of Indonesia. In relation with the legislation formulation program. In the context of reinforcing law supremacy.

50 justices have been appointed under crash-program recruitment to fill the posts in those areas. on State-Owned Enterprises. 9 of 1990 concerning Tourism. In addition. legal researches have been conducted to include Legal Aspects of the Implementation of the Rights of the House of Representatives in the context of controlling government management. 4) laws on foreign investment in the framework of the World Trade Organization. a special measure has been adopted that allows citizens of the People's Republic of China wanting to visit Indonesia to get visa from all Indonesian representative offices abroad without prior approval from the Directorate-General of Immigration of the Republic of Indonesia. and Law No. Legal Aspects of the Settlement of BLBI (Bank Indonesia Liquidity Support) by banks. Much more attentions have also been given to the fight against the drugs abuses. on Ombudsmen. improvement of legal service facilities at central and regional levels. 86 . 154 justices have been assigned to 47 courts of first level in those areas.Ratification of International Labor Organization Convention No. In addition. legal assistance. 26 of 2000 on Human Rights Court. In addition. In view of empowering judiciary and other law enforcement institutions.000 in their possession when entering Indonesia. and 399 permanent court halls. has been lifted. promotion of correctional institutions. by among other things setting up 13 special correctional institutions for drugs convicts in 13 cities and towns. of immigration and customs. and projects planning and control. It has been endeavored as well to arrange bills on Police Acts against Legislators. improvement of trainings for justices. 3) law on the Constitutional Court. and 5) laws on private court in the system of free foreign exchange. and Amendment to Law No. 182 (concerning the Prohibition and Immediate Action For the Elimination of the Worst Form of Child Labor). 2) direct election of president. So far there are 321 legal technical organizing units. on Banking Reconstruction. various activities have taken place to include promotion of public courts and state administrative courts at central and regional levels. In the context of developing the national legal system. On immigration matters. manned by 2. studies have been done to cover five issues: 1) legal matters on economic reform and regional autonomy. In overcoming the shortage of justices in conflict-torn areas.773 justices. the obligation for visitors from troubled countries to show US$ 2. and Legal Aspects of Credit Reconstruction in stimulating the real sector.

14 of 2003 on Compensation. The legal promotion has taken place in various forms from dramas broadcast by radio and television. under Law No. In this context. 30 of 2002 on Corruption Crimes Eradication Commission has been enacted and put into effect. In line with this. four cases in Tanjung Priok incident and two cases in Abepura (Irian Jaya or Papua) incident. the Offices of Immigration and Customs. of which 1. and Rehabilitation to the Victims of the Crimes of Human Rights. to displays. In line with this. children. and Government Regulation No. the Ministry for Law and Human Rights as the official institution that is concerned with the matter. namely 18 cases in East Timor. Medan. has been active in maintaining cooperation and coordination with other related bodies such as the Police. 87 . and put into force the burden of reverse proof by keeping on abiding the principle of presumption of innocence. had adjudicated 24 cases of serious human rights abuses. there have been issued as well Law No. 2 of 2002 concerning Procedure for the Protection of the Witnesses and the Victims of Serious Abuses of Human Rights.Human Rights Under Law No. Further. labors. the Human Rights Courts. Evaluation and assessment of the legal promotional activities have been regularly made. and Makassar. the Office of Attorney General etc. and respect to human rights. 26 of 2000. Under the Law. the Commission has been in operation. etc. available only in Jakarta. Eradication of Corruption Endeavors to establish good and clean governance have been persistently sought out by among other things preventing and eradicating the practices of corruption.099 cases had been adjudicated. Law No.807 special criminal cases including corruption cases. During the period of 2001-2004. Promotion of human rights has been giving stress on efforts to protect the rights of women. During the period of 2001-2004. This is to add to Law No. In relation with the Human Rights Court. disabled and minority people. the Attorney General handled 1. the National Commission on Human Rights came into being to among other things promote and maintain human rights and help settle human right cases arising in the public. the Human Rights Court is established. to promote the public's legal awareness. it has been officiated villages with high awareness of legal matters in West Sumatra and East Kalimantan. This law in principle accommodates conventions of Rome Statute that contains definitions of international crimes such as genocide and crime against humanity. Restitution. collusion and nepotism. 39 of 1999. and even investigating six big corruption cases involving government officials. 20 of 2001 on the Eradication of Corruption Crimes that broadens the meaning of corruption crime.

Application of Copyrights Law Law No. so far the steps have been taken for the supervision of special cases in relation with cases handling. books. (KKN) has not been executed optimally. Previously. and translation or interpretation. Meanwhile. in the short term has made priority to eradicate film and song piracy. 502 cases in the phase of appeal to the Supreme Court. architecture. collusion and nepotism as well as abuses of human rights due to primarily the lack of public trust over law enforcers for there are still many cases left unsettled. 6 cases in the phase of resistance. photography. 30 of 2002 on Corruption Crimes Eradication Commission. putting investigators and attorneys on unfavorable situation to gather sufficient corruption-related proofs. accountability and transparency. 522 cases in the phase of prosecution. The Ministry of Justice and Human Rights. The Attorney General had handled 733 cases of corruption crimes in the period of January 2002 to April 2003 in the phase of investigation. other property works that have also been admitted are computer program. 88 . The amendment of these five articles is important because these will be one requirement for Indonesia to be exempted from the sanctions of Counter Measures from the countries involved in money laundering eradication grouped in the Financial Action Task Force on Money Laundering (FATF). to follow up the law aforementioned. In line with KKN eradication in the law enforcement field. 19 of 2002 on Copyrights started to take effect as of Tuesday. 318 in the phase of appeal. Law on Anti-Money Laundering In its Plenary Session on September 16. cinematography. the Ministry of Justice and Human Rights has established the Steering Committee for the Preparation of Appointment of Membership of the Corruption Crimes Eradication Commission. 2003. It must be admitted that the eradication of Corruption. speeches and lectures material. art works.It is realized that there are still difficulties for law enforcers to handle cases of corruption. the Government has enacted Law No. Five important articles from the previous law were amended as the efforts to prevent money laundering parties. Preferring to the Law on Copyrights. To eradicate KKN optimally. 16 of 2003 on Eradication of the Crimes of Money Laundering. July 29. visual displays for education and science. authority delegation. in addition to lackluster of the intelligence function. in coordination with the Indonesian Police. the FATF determined that the previous law on Money Laundering still contained weaknesses. Films and songs have been included as intellectual property. the House of Representatives agreed to enact Law No. drama. and Nepotism. batik arts. 2003. and 38 cases in the phase of judicial review. Collusion. which is estimated to have caused the state losses of Rp8 billion every year. primarily in the Attorney General Office. songs or music.

— To prohibit financial service institutions and authorities not to leak the transaction reports. — To regulate international cooperation in the form of reciprocal legal on problems of money laundering handling. By tightening money laundering action. financial fraud. The five articles of the amendment of Law concerning Money Laundering Crimes are: — To eliminate the minimum requirement of Rp500 million to be categorized as a crime of money laundering. 2001. or smuggling. 89 . The United States and other developed countries believed that the biggest sources for terrorist fund had come from dirty money resulted from narcotics trafficking. — The period of reporting suspicious transactions has been shorted from 14 work days to three work days. corruption. it is hoped to narrow the terrorism actions. — To extend the definition of money suspicious money transaction. The enactment of the bill into law shows Indonesia's commitment to adjust the regulation on prevention and eradication of money laundering crimes to international standard. as well as a realization of Indonesia as a member of the international community to participate in narrowing the action space of crimes and as an effort to prevent and eradicate money laundering.The fight against money laundering action has been boosted since the tragedy of bomb blast at the World Trade Centre (WTC) building in New York on September 11.

Non-oil and gas export value showed an increase of 5. had indeed attributed to moderate economic growth of 4. has upgraded the country's sovereign rating from CCC-to B+. Fairly conducive and stable monetary condition as indicated chiefly by the strengthening of rupiah (the country's currency). an international ratings agency.5 percent.77 percent.18 percent compared to that of 2002. The performance has become a solid basis for economic development in the future.ECONOMY General feature Entering the year of 2004. lower than 10 percent in 2002. and manufacturing sector at 3.8 percent. to determine measures required to improve export and investment. As a matter of fact. More hearteningly. The better performance of economic indicators in 2003 should certainly become the stable basis for more improvement of economy on 2004. sufficient for exports during seven months. This will certainly promote a sustained economic recovery with more favorable condition. Rupiah exchange rate was stable with strengthening trend. More heartening are the implementations of the country's legislative general elections and the direct presidential election in 2004.02 billion or US$5 billion in average per month. Export value reached US$61. the Government formed a National Team for Export and Investment Improvement assigned with three tasks: to formulate general policy for export and investment improvement. a continued easing of inflation environment. following the maintaining of more favorable political and security conditions. the country's macro-economy was enjoying a heartening and significant improvement. which ran smoothly without even a single incident. and controllable base money. particularly for the year 2004. lower than that of 13 percent at the beginning of the year. Still. investment at 2. boosting foreign trust to invest in Indonesia. in the context of anticipating the post IMF program. of which its recovery assumptions of the real and macro-economic sectors to be attained have been defined through the 2004 State Budget. Those assumptions are among other things: economy is projected to grow at 4. Thanks to sound achievements of the country's macro-economy during the year of 2003 the best achievement since the crisis hit the country in the middle of 1997. meaning it was returning to the level reached before the monetary crisis in 1997. In 2002. 90 .3 percent (in December 2003).6 percent (y. Bank Indonesia's benchmark interest rate was 8.o.3 percent. particularly in pursuing the improvement of investment and exports. agricultural sector at 2.y). Moody's.1 percent in 2003. inflation in 2003 stood at 5. economic growth was recorded at 3. and to examine and decide settlement for crucial problems when they arise in the process of export and investment improvement. and international foreign exchange reserve stood at US$36 billion.8 percent.

Rupiah exchange rate against one U. The country's foreign exchange reserve is projected to reach US$34. to anticipate the possibility of accelerating the 2005 State Budget drafting in connection with the implementation of the 2004 general elections. enhancement of quality of economic growth as the result of political and public accountability improvement.S.e. namely: to maintain continuous economic recovery and reform in the first year after the termination of the IMF's Extended Fund Facility to nurture external and internal credibility. 5 of 2003) on September 2003 with its principal targets: to build on the macro-economic progress. to further strengthen the financial sector. Economic Growth (GDP) Despite SARS endemic and terrorist attacks. and to improve the climate of investment. to boost more growth of the 2004 Gross Domestic Product for the sake of the people's welfare improvement in the whole. and better economic development which takes social-welfare into account. and to maintain sufficient supply and distribution of basic materials throughout the country. to secure the implementation of the 2004 general elections from the economic point of view. and to encourage the application of good corporate governance. the Bali bombings and the Marriott Hotel bombing. the government debts to gross domestic product (GDP) ratio is expected to be 60.4 billion. capital market and labor market run normally. much better than that of 2003 which was 66.4 percent.In line with the improved macro-economy. by maintaining economic activities in order that market of goods and services.5 percent. provincial and district/municipal legislative bodies. better economic stability as the national result of better representation system in national. The Government then issued an economic policy package called the "White Paper" (Presidential Instruction No. which stood at US$36 billion. oil price per barrel at US$22. to execute strategy of growth based on competitive edge improvement through investment and exports. the Government has determined economic priority programs for the year 2004. The decrease is chiefly due to the payment of principal and interest of foreign debt. Further. to continue the strive for poverty eradication and creation of job opportunities through human resource quality improvement towards Millennium Development Goals. the year 2003 also saw the dissolution of the National Bank Restructuring Agency (BPPN) and the termination of the IMF's Extended Fund Facility. lower than that of 2003. would truly encourage the increase of expense and demand for goods and services in bulk. exports and job opportunities. the economy in 2003 proved tough enough to grow moderately at 4. and crude oil production per day at 1.15 million barrels. impeding the country. In the context of achieving the matters mentioned above.5 percent in average. Economic Prospects The 2004 General Elections i. In addition. the post 2004 general elections is expected to give contributing achievements as follows: improvement of economic growth.7 percent and even higher than 91 . Bank Indonesia's three month-notes (SBI) at 8. general elections to elect members of legislative bodies and the direct Presidential Election. inflation rate is projected to stand at 6.3 percent.500. Meanwhile.1 percent. higher than that of 2002 by 3. dollar at Rp 8.

10. to reach Rp 506.164. The estimated growth was expected to be underpinned by higher fair growth of exports and consumption.85 percent and 1. 6.39 percent from services. The value of GDP at 2000 constant prices in 2003 was estimated to reach Rp444.29 billion.22 percent from utility. The country's GDP at current prices in March 2003 was recorded at Rp 451.8 billion in March 2004. 6. the biggest contribution to GDP in 2004 is still expected coming from the sectors of manufacture and agriculture. meaning an increase of 24.00 percent from construction.777. Agriculture is expected to contribute some 16 percent.6 percent.58 percent in 2002.376. which is predicted to grow at only 3.1 million rupiahs or about US$968.58 percent from agriculture. other sectors such as electricity. gas and drinking water.5 percent. hotel and restaurant as well as transport are expected to post an increasing contribution. Consumption was expected to grow by between 4.2 percent and 5 percent. some 24. and 2. and export between 2.6 percent. though predicted to grow by 2. Viewed from economic industrial sectors' contribution to GDP in 2003.2 percent.5 percent. per capita income in 2003 noted an increase of 2.5 trillion. 92 . is expected to contribute almost a quarter of GDP. and without oil-and-gas was Rp412. from 6.530. trade. 10. and in March 2004 at Rp 551.3 percent and 4. Economic growth without oil-and-gas was recorded at 4. the GDP per capita for Indonesians notes an increasing tendency.88 percent from finance.7 percent.global economic growth. 16. namely from Rp 51.4 billion in March 2003 going down to Rp 45. Manufacture.25 percent from transport and communications. Income per Capita Parallel with the improved economic situation as macro-economic indicators showed. construction. Non-oil and gas GDP in March 2004 grew at about 24. Based on 2000 constant prices.36 percent compared to that of March 2003.7 trillion.70 percent from mining.32 percent from trade. In 2003 per capita income at current prices grew to 7. While oil and gas GDP in March 2004 decreased by 12. 6. Economic growth for the first quarter of 2004 was estimated to hover between 4.5 percent and 3.8 billion compared to that of March 2003. which was estimated at 3.265.65 percent originated from manufacture. By sactorial fronts. 16. though has not yet reached the level before the monetary crisis in 1997. Except mining.5 percent.6 million rupiahs in 2002.49 percent.6 billion.

76 percent compared to that of 2002. The increase of exports in April 2004 was attributed to the growth of non-oil and gas exports by 3. Dominating exports of non-oil and gas in 2003 were machinery and electric tools.05 percent.08 percent. In April 2004.21 billion. Trailing behind was mechanical engines that accounted for 6.63 percent to reach US$13. Export value in May 2004 even reached US$5. increasing by 2.07 billion. particularly those of non-oil and gas. export value was recorded at US$5.380 billion. and Singapore for 9.03 billion.642 billion.68 percent compared to that of March 2004. Attributable to the increase was the 93 . animal and vegetable oil for 6. That of oil and gas increased by 12.18 percent surpassing the targeted 5 percent to reach US$47. Export value in 2003 reached US$61. They accounted for 13. which reached US$5.6 percent.Jakarta International Container Terminal that plays an important role in importing-exporting activities Exports Exports continue to show a heartening development. export value reached US$5.5 billion or an increase of 5. compared to that of January 2003.93 percent. The value of non-oil and gas exports in 2003 grew by 5. Main export destinations of the country's exported commodities in 2003 were the US that accounted for some 15 percent. exports continued to indicate an increasing trend: In January 2004. Japan for 14 percent.99 billion.18 percent.94 percent from those of March 2004.023 billion or an increase by 6. When entering the year 2004. which stood at US$4.

76 billion.75 billion in April 2004. The increase was attributed to imports of oil and gas as much as 35. and 3.22 billion. In line with this.57 billion.0 billion in 2002. In the meantime. This 94 . In March 2004. decreasing by 6.29 billion in April 2004.99 billion to US$12. necessary interventions in foreign exchange would be done to control excessive volatility of rupiah exchange rate.05 percent of non-oil and gas imports. swelling from US$32. Imported commodities comprised machines. import value rose by 10.52 percent. During the period of January-April 2004.3 billion.71 billion. compared to US$1. electric machines and equipments. the country's international foreign exchange reserves at the end of 2003 stood at US$36. In May 2004 the country's foreign trade surplus was recorded at US$2. import value amounted to US$3. organic chemical. Balance of Payment Balance of payment in the past few years marked positive development.12 billion.16 percent.24 percent. namely from US$10.high augment of non-oil and gas exports to China.20 percent compared to that of the corresponding period last year. This is aimed at securing the target of the middle-run inflation by keeping on reinforcing the process of economic recovery through the promotion of economic growth. the US and China. the country's balance of payment in 2003 recorded a surplus of US$4. international reserves were recorded at US$34. import value grew a bit by 0. Japan and South Korea.28 billion. Indonesia imported those commodities mainly from Japan. non-oil and gas imports reached US$2. meaning an increase of 2. Monetary Monetary policies remain to be focused on striving to maintain monetary stability.2 billion. interest rate is still made possible to be lowered prudently and consistently by the achievement of such inflation target.18 billion before augmenting by 5 percent to reach US$2.97 billion.38 percent compared to that of the corresponding period in 2003. Imports The country's import value in whole in 2003 was US$32. In January 2004. cumulative exports during the period of January-May 2004 reached US$25. up from US$4. On another side. Cumulatively the country's import value reached US$16. In the second week of August 2004. Thus. Underpinned by increasing tendency of exports.88 billion or an increase by some 24.39 billion. which amounted to US$13.0 billion in 2002.21 percent compared to that of the corresponding period in 2003.81 percent compared to that of April 2004. making the total amount of imports during the said month US$2. In May 2004. or increasing by some 3.

portraying this was expanded stable and controlled monetary. Attributable to the relatively stable rupiah exchange rate were more favorable domestic economic fundamental factors that promote domestic foreign exchange supply.500 per US$ on average. Interest Rate The benchmark interest rates of Bank Indonesia (Central Bank) promissory notes (SBI) have been enjoying a downward trend. inflation rate is expected to be 6. In July 2004. the benchmark interest rate of 3-month SBI is projected at 8.5 percent on average.1 percent. recorded at Rp8.would be parallel with the implementation of foreign exchange transactions monitoring and control against prime doers in markets.1 percent. particularly deposit interest rate. far lower than that of 2002 at 10. inflation recorded a 15-month high of 7. positive market expectations towards rupiah value movement. increasing investors' 95 . inflation noted a downward trend. Inflation The year-on-year inflation rate in the year 2003 was recorded at 5.o. it was recorded at 7. In the first quarter of 2004 the 1-month deposit interest rate was 5.11 percent (y. and for the year 2005 and 2006 is projected to be 5. In general. The rise was mainly due to increasing prices of foods and other basic commodities. During the first quarter of the year 2004. Rupiah Exchange Rate On average. For the year 2004.469 per US$. down from 13 percent at the beginning of the year 2003. At the end of the year 2003.y) due to the decrease of inflation rate in foodstuff components. The figure is close enough to the previous estimate of Rp8.34 percent. rupiah exchange rate during the first quarter of the year 2004 was relatively stable compared to that of the fourth quarter of the year 2003.25 percent. namely 5. the 3-month SBI stood at 8.2 percent higher than annual rate target of 6.48 percent. and 3-month deposit interest rate 6.300 to Rp8. and relatively stable of rupiah exchange rate.5 percent each.98 percent. lower impact of administered prices. underpinned by more favorable domestic economic fundamental factors and controllable inflation expectation. Following this trend have been credit interest rates.99 percent.5 percent.5 percent. For the year 2004. and lower than the target of 10. In April 2004. monetary condition during the first quarter of the year 2004 was quite stable.

budget allocation for government revenue and grants in 2003 totaled Rp341. Base Money and Economic Liquidity Base money in April 2004 stood at Rp146. the total amount of M2 (M1 plus quasi money) reached Rp935.7 trillion in March 2004. For 2004.1 trillion or 17.48 percent against that of March 2004. 17/2003 on State Finance. it is projected to be 1. The 2002 budget deficit was recorded at 2.confidence on account of up-grade sovereign rating by Moody's international rating agency.7 percent of GDP. which merges routine and development expenditures into single expenditure format. replacing the two-decade standing balanced budget policy.1 percent of GDP. and in 2003 it stood at 1. starting in 2005. (2) maintaining sustainable medium-term fiscal policy. and (3) providing a modest degree of stimulus to the overall economy. Current State Budget As of 2002 the Government has been practicing a deficit budget system. and expenditures totaled Rp 374. It means government expenditures in 2004 are 96 .0 trillion. The 2004 State Budget earmarked government revenue and grants of Rp349. within the constraints set by the government's fiscal year policies.2 trillion. At the same time.2 percent and 0. the state budget will adopt a new budgetary system called an integrated or united system.8 percent. as mandated by Law No. The 2004 State Budget features a continuation of the government's endeavors to attain its three major economic policy objectives: (1) achieving favorable fiscal condition and reducing government debt.3 percent of GDP. as well as greater socio-political stability.5 percent of the country's GDP. shrinking from Rp935. and government expenditures of Rp374.4 trillion or some 18.6 percent of GDP in 2005.691 per US$. Rupiah exchange rate in April 2004 was recorded at Rp8.34 trillion. the position of M1 (currency and demand deposit) changed insignificantly. For comparison. The budget deficit has been consequently financed from both internal and external sources. reaching Rp219.5 percent of GDP. In addition.8 trillion or 19. slightly higher then the expectation of 1. The declining trend of M2 was largely due to lowering demand deposit following the decrease of deposit rate.9 percent. or declining by 1.9 trillion or some 17. The relatively unchanged growth of M1 and M2 would hopefully give room to the improvement of public purchasing power and consumption. Meanwhile. This declining trend was attributed chiefly to the strengthening of US$ against other world's currencies following the improvement of the US's macro-economic indicators.

175 trillion or some 13. transportation. social assistance and programs aimed at poverty alleviation. and non-tax revenues to reach Rp77. 97 .7 percent of GDP from 21.3 percent in 2003.9 percent of GDP.5 percent from 3. health.7 percent in 2003.124 trillion or some 3. The largest shares of the development budget are allotted to education.budgeted to shrink to 18. tax revenues are projected to reach Rp272. and development spending are budgeted to decline to 3.6 percent of GDP. Of the total government revenues in 2004.

7 0.4 4.6 2.030. Import duties 11.121.4 Income tax 133.0 285.214.671.272.5 6.9 0.2 0.136.3 3.002.6 0.1 b.6 a.240. Export tax 315.7 17. Domestic Taxes 260.5 iv.017.6 a. Oil and Gas 44.3 i.0 344.5 377. Total Revenue and Grants 349.636.886.4 2.289.941.8 0.147.0 0.9 0.2 3.2 0.6 297.9 0. Oil and Gas 13.0 13.933.0 2.238.STATE BUDGET 2004 & PROPOSED BUDGET 2005 (In billions rupiah) 2004 2005 Items Budget % Proposed % to GDP Budget to GDP A.5 1.2 2.9 13.835.2 ii.4 5.6 i.9 ii.3 17.1 13. Tax revenue 272.6 0. Natural Resources 47.2 0.3 0. Land and building tax 8.4 10.5 ii. International trade tax 11.0 128.2 0. Non oil & Gas 120.626.6 12.367. Value-added tax 86.223.1 2.0 0.2 I.6 12.4 28.667.510.5 iii.4 3.933.828.9 79.7 141.2 98 .3 98.7 0. Duties on land and building transfer 2. Other taxes 1.820.858.3 13.6 6.1 3.124.0 1.0 1. Domestic Revenue 349.614.1 2.5 17.3 vi. Non Oil and Gas 3.2 1.1 v. Non-tax Revenue 77.5 377.0 i.3 17.6 2.7 4.2 47.7 13.967.568. Excises 27.3 0.

3 6.1 ii.0 0.1 1.9 19. Grants 634.775.589.4 4. Personnel expenditures 57.0 3.275.309.130. General Allocation Fund 82.5 18.877.0 2.0 1.186.4 1. Others 16.6 123.651.9 II. Interest Payments 65.6 a.639.3 18.1 2.2 2.4 b.8 14.0 42.0 I. Financial Institutions 853.2 0.2 5.7 394.5 1.8 b.268.130.7 II.0 B.3 33.645.1 1.8 0.217. Other non-tax revenues 18.2 25.042.0 0.844.7 8. Expenditures 374.8 264.6 9.2 0. Material expenditures 35.1 88.9 0. Grants 7.5 i.8 1.3 63.986.1 2. Revenue Sharing 26.2 1.796.1 1.9 5.9 4.142.9 a.260.293.351.8 2.0 4.153.6 0.0 1. Non Financial Institutions 25.736. External interest 24.778.3 33.8 1.8 30. Private entreprises 48.6 0. Subsidies 26.1 5.5 0.5 1.0 1.1 38.3 31.238.1 12.0 6.078.5 b.235.7 16.1 1.8 0.0 0.9 62. SOE's 26.0 750.901. Profit transfer from SOE's 11.2 0.603. Capital Expenses 39.9 1.638.9 2.420.971.454.8 2.4 0.4 c.429. Balanced Funds 112.4 3.8 1. Domestic interest 41.2 5. Social Assistance 14.927.450.9 1. Regional Transfer 119. Central Government Expenditures 255.3 0.3 32.3 12.0 42.448.5 a.0 99 .375.970.b.0 129.

417.1 0.357. Domestic Bank Financing 19.4 26.4 percent. Gross Drawing 28.5 7.0 0.000.0 9.128.4 0.7) (0.237. Special Autonomy & Adjustment Fund 6.8 0.4 b.0 0.085.2 4.0 0.8) E.3 2. 22 of 1999. an average rupiah exchange rate of Rp 8.193.4 8.9) 1.6 20.0 18.6 0.094.7 2.8 percent of central government expenditures for provincial and local governments.085. a significant proportion of central government revenue goes to provincial and local governments.0 0.6 0.690.642.556.0 1.9 0.0 37. The Proposed 2005 State Budget The proposed 2005 State Budget portrays key assumptions used to estimate expenditures and revenues are quite conservative. Revenues apportioned for provincial and local governments are derived from taxes and natural resource revenues. Project Loan 19. It estimates a GDP growth of 5.4 0.3 a.2 a.3 b.885.042.8 0.1 47.3 6. Adjustment Fund 5.762.9 II.600. Domestic Non-Bank Financing 21. Financing 24.836.453.198.7 0.2 16.0 0.8) (20. The 2004 budget allocates some 31.2) (16.2 2.138. Privatization Proceeds & Assets Recovery 10. Foreign Financing (16.6 1. Special Allocation Fund 3.212.8 1.7) (2.417.500.0 0.0 1. Primary Balance 41.8 I.3 a.2 C.375.600 to one US dollar.5) (2.2) (0.357.100.642. Government bonds (net) 11.233.585.8 1.9 1.892.c. compared to some 32. Amortization (44. Domestic Financing 40.1 D.3 4.892.1 1.737.500.000.1) Pursuant to Law No.2 percent in 2003. Overall Balance (A-B) (24.1 28.2) (46.6) (0.6 1.0 0.1 b.4 2. interest rate at 6.6) (1. Program Loan 8.5 percent.4 2.7 1. Special Autonomy Fund 1. inflation 100 .7 1.8 2.2 0.

5.5 percent, and average international oil price at US$24 a barrel. It also predicts a budget deficit of 0.8 percent, down from 1.2 percent at current year. The budget envisages higher government's expenditures of Rp 264 trillion than that of previous year, which amounted to Rp255.3 trillion. Those which would receive larger proportion are ministries of defense, education, settlement and infrastructure, health, and the National Police. Of the proposed total government expenditures, some Rp 22 trillion would go to the Defense Ministry, Rp 21.5 trillion to the Ministry of Education, Rp12.4 trillion to the Ministry of Settlements and Infrastructures, Rp11.2 trillion to the National police, and some Rp 7.4 trillion to the Ministry of Health. The budget also envisages tax revenues of Rp297.5 trillion (US$32.11 billion), higher than the 2004 tax revenues target of Rp 260 trillion. Taxation As of 2001 the share of tax receipts to government revenues has been noting an increasing trend. In 2001, tax revenues accounted for some 61.6 percent of the total government revenues. The figure then grew to some 70.0 percent in 2002 and 75.6 percent in 2003. In 2003, realized tax revenues were 97.2 percent of the year's target; domestic tax revenues were 97.3 percent; and international tax revenues 98.8 percent of the target. In the context of augmenting the share of tax revenues to the government revenues in 2004, endeavors have been focused on tax and custom administration reform. The reform includes improved utilization of modern technology, regulatory reform, institutional developments, and improvement of quality of human resources. Parallel with this, the scheme to minimize arrears has been more intensified due to increasing tendency of evading. In 2001, for example, tax arrears amounted to Rp13.3 trillion, and swelled to Rp17.3 trillion in 2002, before decreasing slightly to Rp17.1 trillion in 2003. For 2004, tax revenues are projected to amount to Rp272, 2 trillion or growing by 7.1 percent from that of 2003. Of the total tax revenues, some 49.2 percent derives from income tax and some 31.7 percent from value-added tax as well as tax on luxurious goods. By value, realized tax revenues during the first quarter of 2004 amounted to Rp 51.5 trillion or an increase of 15 percent compared to that of the corresponding period in 2003. Tax ratio in 2003 stood at 13.1 percent of GDP, and for 2004 it is projected to reach 13.6 percent, a slight increase from the target of 13.5 percent, but still below those of neighboring countries, which ranges between 14 percent and 15 percent. In helping to improve and boost domestic businesses in order that they enable their outputs to meet both local and overseas demands, the 10-percent value-added tax on the


import of certain capital goods and raw materials by several industries has been waived, and the luxury tax on 45 products eliminated. Foreign Debt It has been a key policy of the Government since 1997, when financial crisis hit the country as well as other Asian countries, to reduce public debt in percentage of GDP. So far, the fruit of the policy has been tangible: Its external debts as a percentage of GDP shrank from a peak of 65.3 percent in 1998 to 49.5 percent in 2000, further to 47.5 percent in 2001, to 43.1 percent in 2002, and to 39.1 percent of GDP in 2003. The country's total debt repayment is expected to reach US$21.01 billion in 2004, down from the estimated US$28.31 billion in 2003. Of the total debt repayment, around US$16.24 billion would be for the payment of principal, and the remaining US$4.77 billion would be the interest. Up to March 2004, the country's outstanding foreign debt amounted to US$136.10 billion, up from US$134.40 billion during the previous month. Attributable to the increase was the raise in official foreign debts of US$81.197 billion from US$80.01 billion previously. On the contrary, the outstanding private debts slightly shrank from US$52.77 billion in February 2004 to US$52.39 billion in March 2004. The decrease was chiefly due to the lower outstanding private debt of non-financial institutions, whereas the bank and nonbank private debt augmented. Banking Policies in the banking industry are more focused on various measures to reinforcing the condition of the national banking industry. This is a continuation of banking restructurization programs in the context of making the banking industry recover. The measures put a stress on sustained efforts to recover its intermediary role. They are also aimed at improving the banking system through among other things enhancement of banking good corporate governance, and improvement of banking regulations and control. This includes the betterment of banking services innovations such as mobile banking services via the growing popular cellular phones. In line with more favorable monetary condition, some indicators in the banking industry have shown heartening improvements. Banking intermediary function has slightly improved further as the growing third party funds and higher credit position reflect, so this needs to be optimized. Other banking indicators such as net interest margin (NIM) has been persistently growing; non-performing loans (NPLs) relatively low;


BNI branch office in Medan, North Sumatra banks' capital and profit ratio relatively stable; and capital adequacy ratio (CAR) improving. At the first quarter of 2004 (March 2004), banks' total assets amounted to Rp1,150.0 trillion. Meanwhile, third party funds shrank by Rp11.5 trillion to reach Rp877.1 trillion. At the same time, credit position stood at Rp477.30 trillion. New credit during the first quarter of 2004 was amounting to Rp4.3 trillion, some 53.9 of which went to small-andmedium establishments (SMEs). By type of usage, the new credits had been channeled for working capitals (45.6 percent), investment (24.3 percent) and for consumption (30.1 percent). Loan-to-deposit ratio in March was recorded at 43.7 percent, growing from 42.9 percent in the previous month. Reflecting improved banking performance had been net interest income that grew from Rp3.2 trillion in the third quarter of 2003 to Rp5.1 trillion in the first quarter of 2004. The increase was mainly due to the increase of credits and the declining tendency of credit interest. In general, banks' capital adequacy ratio (CAR) in the first quarter of 2004 was well above the minimum level, namely around 23.2 percent, up from 19.4 percent in the previous quarter. During the year 2003 the average CAR level was around 23 percent, higher than that of 2002 at 21 percent. The central bank's minimum requirement was set at eight (8) percent. 103

Until June 2002, the number of bank offices was recorded at 14,300. The country's major banks are Bank Mandiri, which in March 2004 had a total asset of Rp239,383 billion; Bank Central Asia (BCA) which had a total asset of Rp 136,139 billion; Bank Negara Indonesia (BNI) Rp125,078 billion, Bank Rakyat Indonesia (BRI) with its total asset of Rp 94,503 billion, Bank Danamon with total asset of 54,887 billion, Bank International Indonesia (BII) with its total asset of Rp29,769 billion, Lippo Bank Rp 26,090 billion, Bank Tabungan Negara (BTN) Rp 25,623 billion, Bank Niaga Rp 23,393 billion, and Citibank with total asset of Rp 23,012 billion. In addition, there are also several overseas banks' representative offices operating in the country's major cities. Those banks include Bank of America, Bank of Tokyo, Hong Kong Bank, Amro Bank, Standard Chartered Bank, Thai Bank, etc. Bank Indonesia Previously, Bank Indonesia, the country's central bank, was regulated under Law No. 11 of 1953. However, since the issuance of Law No. 23 of 1999, which has been amended by Law No. 23 of 2004 on Bank Indonesia, the bank operates under the Law that allows it the status and position as an independent state institution, free from any interference by the Government and other external parties. It means that the bank is fully autonomous in formulating and executing each of its task and authority as the Law regulates. As it is governed, the Bank Indonesia has one single objective: to achieve and maintain stability of Rupiah, the country's currency. To pursue the objective the bank has the task: to formulate and implement monetary policy; regulate and ensure a sound payment system; and regulate and supervise the national banking system. The Bank's accountability and transparency take the form of open information pertaining the evaluation of monetary policies having been executed in the previous year, and policies being planned for next year as well as their targets for the public. Such information is also reported to the President and the House of Representatives (DPR). In relation with the Government, the bank assists the printing and placement of government securities to finance the State Budget; acts as the cashier to the government and administrator of government account at the Bank Indonesia, and accepts, upon request by the Government, foreign loans for and on behalf of the government. State-owned Enterprises The meaning of a state-owned enterprise (BUMN) in general term is a corporate body outside of the Bank Indonesia, with no-less-than-51 percent share of which must be owned by the government, and a joint-venture in which all shares are owned by the government together with local governments or other state-owned enterprises without taking the composition of the government ownership into account.


Realization of such privatization schemes in 2002 and 2003 was Rp7.39 percent from that of 2002.2 trillion. gains of BUMN privatization schemes having been deposited to the state treasury amounted to Rp3. In 2001. and their whole capitals amounted to Rp249. Bank BNI.5 billion in 2003. Insurances' total investment value in September 2003 amounted to Rp 442. Telkom Indonesia Tbk.2 billion in 2002 to Rp15. PT. 25 insurance adjusters. there were 120 insurance brokers. tourism industry.1 billion in 2002 to Rp13. transport. 20 reinsurance brokers. During the year 2002 and 2003. plantations and forestry as well as public services. up to March 2004.8 billion. two social insurance and worker social insurance companies and three companies running insurance programs for civil-servants and military personnel.The Office of the Minister of State-owned Enterprises supervises state-owned enterprises. Those 160 establishments do businesses in the sectors of manufacturing. there are four large state-owned enterprises which possess assets worth over Rp 50 trillion. Meanwhile.19 trillion.323. the total assets of those state-owned enterprises were estimated to reach Rp849. Insurance Non-bank financial institutions continuously show an improved performance. The total assets of life insurance companies in September 2003 were recorded at Rp 31. particularly insurance. while medium enterprises own assets worth ranging from Rp5 trillion to Rp10 trillion.4 billion in 2002. and revive finance and management in order to augment their outputs and products' competitive edge. trade.320.768.2 trillion out of the targeted Rp5 trillion. total assets of reinsurance companies shrank slightly from Rp15. medium. the number of insurance enterprises remained 73 establishments. Petrokimia Gresik. Investment from insurance companies amounted to Rp 412. before growing to Rp 442. construction services and consultancy.5 billion in 2002. communications. Investment gains in the field of insurance have also noted an improved performance.3 trillion and in 2001 were estimated at Rp26. Bank Mandiri. numbering 160 establishments in 2003. improve their efficiency and productivity. So far. and 21 insurance consultants. They are grouped into large. 140 loss insurance companies. However. total assets of insurance companies have augmented meaningfully. financial services.500. In addition. up from Rp 26. For the past five years. six enterprises with assets worth from Rp10 trillion to Rp 50 trillion. On the contrary.8 billion in 2003. 105 .9 trillion. In 2003. total assets of companies running insurance programs for civil servants and military personnel swelled from Rp10. and small undertakings. consisting of 60 life insurance companies.3 trillion respectively. increasing 7. Among the large enterprises are PT. PT Aneka Tambang Tbk. Their net profits in 2000 were Rp13. Pupuk Kujang. four reinsurance companies. agriculture.7 trillion and Rp7. Privatization schemes are still underway to broaden public ownership.397.5 billion.4 billion in 2003.320. those state enterprises were estimated to gain profit of Rp28 trillion. Bank Rakyat Indonesia. PT.

established in 1973. and frequent disputes among labor associations and employers have to some extent withered away foreign investors' interest to invest.7 billion. In term of number. This agency. Approved projects in the January-June of 2003 numbered 109 projects.773. while direct foreign investment is regulated under Law No.3 billion. A government institution that manages investment in Indonesia is the Investment Coordinating Agency (BKPM). coordinate and perform investment promotion. 357. In provincial level.867. and step to centralize the authority to license foreign and domestic investment in the Investment Coordinating Board (BKPM) aimed at relevant ministerial offices and regional administrations as well as making it easier for investors to get business permits. Investment trend Up to 1997 when monetary crisis hit the Asian countries. headed by a chairman of the agency who is accountable to local governor. as amended by Law No. ranging from the issuance of measures as required by "the White Paper". the prolonged economic crisis since the middle of 1997.Investment Domestic investment is regulated under Law No. Indonesia had been one of most attractive investment destinations in the Southeast Asian region. there is a Provincial Investment Agency. widespread security problems. are authorized to do that. the country's representative offices such as embassies. but in term of investment value recorded the contrary. 1 of 1967. and coordinate investment development activities among government institutions.5 billion. and they turn away looking for other promising countries. the Government has introduced various efforts. consulategenerals and consulates abroad. directly accountable to the President. Unfortunately. to promotional activities such as road-shows to overseas in the context of improving investment to speed up economic recovery and widen job opportunities. 12 of 1970. In giving approvals to direct foreign investment applications. approved projects during the January-June 2004 noted a substantial decrease compared to those of the corresponding period in 2003. In anticipation of such unfavorable situation. Attributable to this was that the country introduced liberal investment policies and regulatory frameworks. 6 of 1968 which has been amended by Law No. with investment value of Rp10. there were 45 expanded projects with investment value of Rp3. is tasked mainly to: formulate and assess national investment policies. 106 . 11 of 1970. Included in those measures have been plan to open more sectors for foreigners' ownership. Domestic Investment Performance Approvals on domestic investment during the period of January-June 2004 or the first semester of 2004 were 72 projects with investment value of Rp15. and offered foreign investors good incentives and favorable investment climate. In addition.

4 billion. construction with US$312. Cumulatively.8 million for 74 projects. most investment.049. 107 . The most attractive sector for direct foreign investment during the period of January-June 2004 was metal.1 million.4 million.3 million. the UK with US$793.0 billion. By term of investment value. Japan ranked first with US$882.649.1 million for 107 projects. the Province of West Java.994.2 million during the period of January-June 2004. followed by hotel and restaurant with US$536.9 million with 45 projects.591. Malaysia with US$321. In addition.3 million. direct foreign investment in term of value. the cumulative number of direct foreign investment having received permanent business permits had been 8. there had been 1. worth Rp114. warehouse and telecommunications third with Rp1. the most attractive business sector for domestic investment was foodprocessing industry (14 projects).4 million for 30 projects. there were also 118 expanded foreign investment projects with investment value of US$1.3 billion.890.8 million.038. warehouse and telecommunications (8 projects).1 billion. machinery and electronic industrial group that absorbed as much as US$729. By location. and Singapore with US$131.4 million. went to West Java Province.3 million for 44 projects.8 million. namely US$760. and transport. the electric. the Special Territory of Jakarta. At the same time.597 projects. Direct Foreign Investment There were 551 approved projects of direct foreign investment worth US$3. South Korea with US$230. warehouse and telecommunications with US$282. The total investment value during the period of January-June 2003 was US$ 4.7 million to finance 510 projects. followed by the Special Territory of Jakarta that absorbed US$590. foodstuffs industry came second with Rp4. of domestic investment given permanent business permits from 1997 to June 2004. textile industry with US$321. Central Java that did US$315 million with three projects.At the same time. Trailing behind were transport. gas and drinking water sector ranked first by absorbing Rp4.046.626 projects with investment value amounting to US$114. and transport. By country of origin. followed by Riau.6 million with two projects. the Province of Central Java ranked first.4 million for 42 projects. and rubber and plastic industry (5 projects). and the Province of Banten. the province of Banten US$271. in the period of January-June 2004 suffered a decrease.1 million with 273 projects.2 million. Compared to that of the corresponding period of 2003. By location. with 85 projects. and the province of Lampung US$256.831. machine and electronic industry (7 projects). but in term of project number was increasing.

Improvements to several macroeconomic indicators-economic growth. 2002 Dec.08 points in February.159 points on April 27.45 Hong Kong 9321.CAPITAL MARKET The Indonesian capital market during the year of 2003 posted a strong performance. 2003 % Thailand 356. As a result.62 22.48 746.945 693. or an increase by 63.29 33.50 Indonesia 424. 761.81 109.89 108 .40 Malaysia 646.41 points in April and 732.82 Dow Jones 8341.28 Japan 8578.89 30. the highest CPI was noted at 818.50 pct.033 63.72 Taiwan 4452. 735.32 787.07 1741. the index declined solely.51 points in May. from January to May 2004. 783. the composite share price index (CPI) during the year reached a higher level.67 points in March.38 Singapore 1341. Compared to the development of composite index of other countries in the Southeast Asian Countries (ASEAN). inflation and rupiah exchange rate were supported by a stable political situation.00 25.80 21. It was 752.45 5804. It successfully restored confidence toward the Indonesian capital market and enhanced improvement in trading activities on the Indonesian stock exchanges-the Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX) in East Java.08% compared to 2002.93 points in January. the highest index was 693. On the JSX.95 10500.29 12464.033 points toward the end of the year and closed at 691. The table below shows the index development in the ASEAN countries: Countries Dec.01 29.41 1450. This was the highest level of the index since the revival of the Indonesian capital market. Indonesian index development ranked second after Thailand. 2004.63 10450.70 42. In the first-five month.895 points on its closing level in 2003. which recorded an increase by 109. In 2003.08 Philippines 1018.

there had been 488 companies issuing stocks and bond while the total fund mobilization was Rp320.91 billion in 2002 to Rp516.79 billion in 2003. which was at 566. Meanwhile.13% compared to that in 2002 which was only Rp120. In the first five months of 2004.57 points in 1999.84% from 492. 109 . the Indonesian Capital Market Supervisory Agency (Bapepam) promoted new launch of Syari'ah Capital Market by signing a memorandum of understanding with concerned institutions.55 trillion. was noted at Rp462. the Surabaya Stock Exchange (SSX) had posted a slow development.81 points in January. at 416. Meanwhile. Meanwhile the value of transaction totaled Rp124.90 points in 2003.89 points in 2001.51 points in 2003. at 267. 137 companies issued bond.The composite price index development on the JSX was noted at 676.32 points in 2000. Some 410 companies had launched initial public offering (IPO) and listed their shares on the stock exchanges. or an increase by 72.94 points in 2002.765 trillion. In March 2003. and at 691.821 trillion. the main stock exchange. consisting of 127 launched IPO. or an increase by 3.24 points in May. 2 Syari'ah Bond (Islamic Concept). 399.578 trillion. market capitalization on the JSX. and at 252.81 points in April and 402. The SSX was mostly known as the second class market as it specialized in bond trading activities. 414. The significant increase of index marked an awakening of the securities industries in Indonesia. Daily transactions lose by 3. Issuers Up to May 2004. 432. at 424. two bonds wits the US dollar denomination had also been available in the Indonesian bourses worth US$ 105 million. This was a reward of hard work by capital market elements to fight for coping with the crises which had hit the country for several years. Market capitalization Till the end of December 2003. Six companies were unlisted as they did not carry out IPO. it was noted at 410. at 392. It was seen from the composite price index.91 points in 1999. at 220. In addition. 7 Convertible Bond (CB) and 1 Credit Securities (CS).03 points in 2001.33% compared to Rp268.63 points in 2000.4223 trillion in 2002.85 points in February.61 points in March.

the Bapepam during 2003 issued 4 licenses to new four securities companies.5 trillion in 2003. 20 legal consultant & offices. while the value of fund mobilization was up 525. 96 civil law notaries.05% as its number increased from 13 in 2003 to become 98 companies. or an increase by 306. from Rp 1. The government institution also registered 20 custodian banks and 12 securities administration bureaus. and 199 mutual funds.2 trillion.820 in 2002 to 174. Fund mobilization from third party was worth Rp56. To complete the run of the capital market. 45 legal advisors.25% from Rp46. making a total of 191 companies. announced that in 2003 there were 54 bonds issued with the total value of Rp 25. In addition. non-regular market. 137 bonds. all bonds issued in the capital market had reached 254 corporations and 133 companies with a value of Rp62. up by 38. all professionals who had registered in the agency were 105 appraisals. Up to 2003. In line with the development of securities industry in Indonesia. This figure decreased by 60. cash market.87%. 110 . They are traded in regular market. The Indonesian Capital Market Supervisory Agency (Bapepam). 7 warrants.93% compared to only 131 companies in 2002.2 trillion. Investment Management activities showed an increase by 47. a decrease by 70% compared to 2002 with a value of Rp8.892 in 2003.48 trillion in 2003. As such. convertible bonds. its number had also increased to 182 companies in 2003. 33 public had accountants (partners) and 17 accountants (public). crossing and others through main and development boards mechanisms.5 trillion.6 trillion. the unit holders also made a significant reward in number.9 trillion in 2002 to Rp82.45% compared to 2002 which was only Rp6. margin.During 2003. 11 companies launched rights issue with a value of Rp2. negotiated market.99 trillion. consisting of 7 appraisals. nine companies launched IPO.83 trillion in 2003. Mutual Funds In terms of mutual funds as a market instrument of the bourses. Net Asset Capital (NAB) rose by 56.2 trillion to Rp7. rights. By that way. 593 civil law notaries.0% in 2003. a government institution authority. 242 legal consultants. from 125. Market instruments on the Indonesian stock exchanges consist of 336 stocks.61 trillion in 2002 to Rp 72. in 2003 the Bapepam recruited 206 professionals.

000). bonus shares.000). 4. frozen one investment management. the institution had posted administrative sanctions to 83 listed companies. two appraisers and one commissioner of a listed company. To tighten monitoring system in 2003. in September 1997. the Bapepam obliges all capital market supporting elements to improve their synergy. six custodian banks.630. A securities company which has function as investment management is obliged to have paid-up capital of Rp 5 billion with net adjusted capital of Rp 200 million.500. In May 1999. Gudang Garam Tbk (1. except for banks (49% of the total listed shares).800. index. right issue. 7. A securities company. Biggest Market Capitalization Ten Biggest Market Capitalizations until June 2004 were as follows: 1. Bank Mandiri Tbk (19. A securities company functioning as broking and trading with client's account and investment management also should come up with paid-up capital of Rp35 billion and net adjusted capital of Rp25. futures contract. among others on management system of securities account in the Indonesian Central Securities Depository (ICSD).640). Bank Central Asia Tbk (12. 3 trustees. Telekomunikasi Indonesia Tbk (10. liquidated 17 mutual funds. A company which has function as securities underwriter needs to have paid-up capital Rp50 billion and net adjusted capital of Rp 25 billion.200 million. 3.000. net adjusted capital. 5. client's principles. asset-backed securities.In the sector of regulation.000. The Bapepam also issued eight regulations in 2003.000.000). public accountant and periodical financial reports. 2.999.000). the maximum number of listed shares and foreign ownership on Banks Company was set to 99%.079. 23 securities companies. A company dealing with broking and trading with client's account needs to have paid-up capital of Rp 500 million and net adjusted capital of Rp 200 million. written warning to nine investment managements. is deemed necessary to have paid-up capital of Rp55 billion with net adjusted capital of Rp25.200 million. fines to 23 investment managements and investigated custodian banks.060). accountability of board of directors of the issuers on financial reports.163. three securities administration bureaus.088. work of auditory committee. Unilever Indonesia Tbk (7. and revised regulations on script less and remote trading in the Jakarta Stock Exchange.377. based on the government regulation dated May 7. Crucial to foreign investors. listing procedures. option. A company which has function as securities broking and trading with client's account needs to have paid-up capital of Rp30 billion and net adjusted capital of Rp 25 billion. With the issuance of the new regulations. HM Sampoerna Tbk (4. Astra International 111 . 1999. 6.924. which has function as broking and trading activities concurrently an investment management. lifted out licenses on investment management. the use of proceedings from IPO. the Bapepam until 2003 had issued 151 regulations on capital market. the foreign ownership limitation was abolished.

Bank Rakyat Indonesia Tbk. Bank Mandiri Tbk. 9. 5. 4. Astra International Tbk. 8. JAPFA Comfeed Indonesia Tbk.647.2. Bank Mandiri Tbk. Top Losers Ten top losers in June 2004 were 1. Most Active Brokerage (Value) Ten most active brokerage house in June 2004 were 1.870. 4. Artha Pacific Securities Tbk. Bumi Resources Tbk. Indoexchange Tbk. Energi Mega Persada Tbk. Bank Rakyat Indonesia (11.048.500. 8. Indosat Tbk. 7.950). Telekomunikasi Indonesia Tbk. Hortus Dana vest Tbk.057. Bank Buana Indonesia Tbk. 5. 9. Danasupra Erapacific Tbk. Bank Buana Indonesia Tbk. Maskapai Reasuransi Indonesia Tbk. 2. 3. Bank Global Internasional Tbk. Surya Toto Indonesia Tbk. 5. 10. 3. 7. 7.177. Bank Central Asia Tbk. 3. Bumi Resources Tbk. 8. Energi Mega Persada Tbk. 10. Pelangi Indah Canindo Tbk. Bank Negara Indonesia Tbk (13. 7. Asuransi Jasa Tania Tbk. Artha Pacific Securities Tbk. 9. 8. Asuransi Harta Aman Pratama Tbk. 10. 8. Most Active Stocks (Frequency) Ten most active stocks till June 2004 were 1. 9. Energi Mega Persada Tbk. JP Morgan Securities Indonesia 5. Bank Mandiri Tbk. Adhi Karya Tbk. 9. Asuransi Harta Aman Pratama Tbk. Tbk. 2. Ryane Adibusana Tbk. Panca Wiratama Sakti Tbk. 7. 6. 10. Bank International Indonesia Tbk. Astra Argo Lestari Tbk.355. Palm Asia Corpora Tbk. Kim Eng Securities 3. 5. Most Active Stocks (volume) Ten most active stocks until June 2004 on the JSX were as follows: 1. 6. Indofarma Tbk. 3. Cipendawa Agroindustri Tbk.Tbk (4. 2. Indosat Tbk. 4. Top Gainers Ten top gainers on the JSX till June 2004 were 1. DBS Vickers Securities Indonesia 2.526).148. 4. Telekomunikasi Indonesia Tbk. 10. 8. 6.000). 112 . 4. 5. Bank Rakyat Indonesia Tbk. Indosat Tbk (5. 3. Bakrie & Brothers Tbk. Bumi Resources Tbk. Bank Central Asia Tbk. 10. Wicaksana Overseas Int. Hortus Dana vest Tbk. Panasia Filament Inti Tbk. Hortus Dana vest Tbk. 6. Most Active Stocks (Value) Ten most active stocks till June 2004 were 1. 6. 9. Suba Indah Tbk. CLSA Indonesia 4.314). 2. Sierad Produce Tbk. HM Sampoerna Tbk. Kawasan Industri Jababeka Tbk.

Danarreksa Sekuritas 7. empowering small-and medium-scale enterprises (SMEs) by improving the mastering of science and technology. focusing on: revitalization of various industrial branches. MANUFACTURING INDUSTRY AND TRADE Policy in the sector of manufacturing industry and trade as the 1999-2004 Guidelines of State Policy underlines is aimed at: developing popular economy based on market mechanism. Semesta Indovest 8. and promoting bilateral and multilateral economic cooperation in the framework of augmenting exports. Trimegah Securities 4. and development of supporting industries. development of manufacturing industry and trade stresses on the establishment of micro. small. Dhanawibawa Arta Cemerlang. Indonesia 5. and improving the people's earnings as well as in alleviating poverty. but in another aspect it has caused impairment for a country to compete when the country is heavily relying on comparative superiority based on natural resources and abundant but unskilled labor. In one aspect the fast technological advancement has been offering substantial benefits. In refurbishing the real sector in a short term in a bid to recover economy from crisis the Government has introduced industrial and trade revitalization scheme. and on the prevention and control of environments from any destruction and pollution. in bringing in and saving foreign exchange. Kim Eng Securities 2. 113 . GK Goh Indonesia 9. Most Active Brokerage (Frequency) Ten most active brokerage house in June 2004 were 1. Merrill Lynch Indonesia. medium and cooperative undertakings. This sector has in fact played a key and strategic role either in underpinning economic growth and improving productivity of the people engaged in or in creating job and business opportunities. establishing a globaloriented economy by building competitive edge based on comparative superiority of being a maritime and agrarian state. fair competition. development of various industrial branches. on the improvement of domestic products' competitive edge. and non-monopolistic practices. Ciptadana Sekuritas 10. Mandiri Sekuritas 10. Indonesia 9.25 of 2000. rearrangement of industrial structure. Pursuant to Law No. ABN-AMRO Asia Sec. advancement of industrial technology. boosting regional developments. Valbury Asia Securities 3. DBS Vickers Sec. CLSA Indonesia 8. The world's economic order has been undergoing a more rapid and fundamental change due to mainly more widespread economic globalization practices and fast development of technology. Sarijaya Permana Sekuritas 6.Danareksa Sekuritas 6. Artadwipa Persada 7.

Short term measures having been taken to achieve the aims include maximizing the installed capacity of manufacturing industries by minimizing inefficiency of domestic and overseas trade. including from tourism industry. quantity and quality become rare and dwindle.Bontang NGL plant. 114 . This situation would make human resources becoming more-determining factor than other resources. East Kalimantan The shorter time cycle of a product indicates the faster technological development. many technologies being out of date. and to strengthen the country's economic viability. The main aims of improving the country's competitive edge are to augment foreign exchange from non-oil-and-gas exports. This means that to have improved competitive edge and industrial competitive superiority based on skillful and creative human resources. technological and managerial capabilities is unquestionably-a prerequisite. Middle-term measures cover the strengthening of market institutions. and by improving trade funding. In the meantime the availability of natural resources in term of sorts. and development of manufacturing industries having competitive edge based on comparative superiority which is underpinned by the advancement of science ad technology.

7 percent.126 in 2003 or a decrease of 0.9 percent.5 percent from that of previous year.e. and 54 establishments respectively. Manufacturing Industry Manufacturing industry has been for the past ten years playing a prime mover of the country's economy by contributing the biggest share to the gross domestic products (GDP). Of chemical.8 percent in 2003.2 percent or increasing on an average of 0. For instance in 2002 this sector accounted for some 25.01 percent of the total GDP. Other sectors accounted for 57. printing and recording industrial group. Those large. This classification is based on the number of workers employed without taking machineries of production used or capitals invested into account.6 million per worker per annum. required 26 percent 115 . At the same time that of agriculture was 17. Manufacturing industry is classified into four major groups i. compared to 17.9 percent in 2000 and for 58. The increase. But individually the number of publication. and in 2003 24. Expenses for those employees by those establishments in 2002 totaled Rp46 trillion or a decline of 12 percent from those of 2001.2 percent in 2000 and decreasing to 16. In 2002 the largest decrease of expenses for workers in large and medium industrial establishments was suffered by food and beverage industrial sub-sector. namely about Rp 5 trillion. large-. however. or an average of Rp10.4 percent per annum. Investment of fixed capitals at subsectors of leather and leather goods industry.1 percent. 50 establishments.7 percent.The period of 2000-2004 saw a less-than-optimum increased utilization of installed industrial production capacity. or growing on an annual average of 1.146 in 2002 to 21. except of machinery. rubber and plastic industrial processing group and motorized vehicles assembling group added by 56 establishments.5 percent.6 percent in 2003. medium-. In 2000 the utilization of installed production capacity of manufacturing industries was about 61. suffered a decrease of almost 50 percent. amounting to Rp5 trillion.and medium-scale establishments altogether employed 4.47 percent of agriculture.3 percent in 2003. The number of workers employed by large and medium industrial establishments was expected to increase quite high in 2002.869 workers in 2002 or a decrease of 0. In 2000 the share of manufacturing industry to the country's GDP was making up some 24. and of metal goods.9 percent during the last four years. electronics and multifarious industrial group was 55. machinery. and small-scale industrial groups in addition to cottage or household industrial group. It grew to 65. The number of large-and medium-scale industrial establishments in the whole indicated a decreasing tendency from 21. and of metal.364. agro-and forestry industrial group the production capacity in 2003 was recorded at 75. Outputs of large and medium industrial establishments in 2002 recorded a rise of more than 30 percent to reach Rp882 trillion. So were their expenses for workers. The highest formation of fixed capitals occurred in machinery and its accessories industry.

155. 116 .4 billion in 2002.83 percent or as much as Rp720. and cottage establishments 1.67 percent from that of 2002 or as much as Rp 7. small-scale establishments were assumed to absorb a 4. By the increase. Dominating the country's industrial structure has been cottage industrial establishments. and that of cottage 1.40 percent of Rp1.5 trillion in 2000 and the figure was expected to reach Rp46. development of innovative and realistic schemes meeting all market players in real sector.98 percent in 2003. The sub-sector also earned from its products added value as much as Rp 40.3 billion.5 trillion in 2003. The increase was followed by the rise of raw materials by 23 percent or amounting to Rp 468 trillion.42 percent additional workers.and Medium-Scale Industries Development policy of small. and growing to an estimated 16. Of the total production value in 2002. For 2003. empowerment of entrepreneurs of the industries and their institutions. Parallel with the increase of output value.51 percent in 2003.and medium-scale industries puts priority on the promotion of small.69 percent. small-scale and cottage industrial establishments added by 3. output of small-scale establishments was expected to grow by 6. particularly at rather isolated and remote areas.additional expenses of input. That of small-scale grew at 15. the cost of input borne by small-scale establishments raised by 23. improvement of prime services in term of management. betterment of business climate. At the same time.28 percent.34 percent. and that of cottage establishments by 21.54 percent or as much as Rp2. Output of small-scale establishments in 2002 swelled by 20.and medium-scale industrial establishments at outer Java.53 percent. accounting for 91.64 percent and an estimated rise of 13. In 2002. 733.26 percent.29 percent. Promotion of Small.64 percent in 2003. system and supporting facilities. and an estimated 9.91 percent respectively compared to those of 2001. the values of products made by the establishments grew at more than 21 percent to reach Rp 811 trillion. the total added value of large and medium scale industrial establishments in 2002 noted a rise of 16. the sub-sector of food and beverages accounted for the biggest proportion of 15.37 percent.41 percent and 7.7 billion. areas along borderlines with some neighboring countries and at the countries eastern part.65 percent. on constant market prices. 850.47 percent and cottage establishments by 27.8 billion. The number of employees absorbed by small-scale industrial establishments noted an increase of 0. and cottage establishments 10. Added value of cottage industries in 2002 also noted a rise of 13. Wholly.

there are SMIs engaged in the industries of foodstuffs.969 trillion to Rp5.711 trillion to Rp15.746 trillion to Rp 28.123 trillion to Rp12. Banana is basic raw material for pasta Development vision of small. that of metal and electronics grew from Rp4.473 trillion.741 trillion. chemicals of construction materials.777 to Rp. the formation of more viable and stronger industrial structure. metal and electronics.592 trillion. as well as handicraft. Gross domestic product (GDP) of SMIs engaged in foodstuffs had amounted to Rp 9. Production value of SMIs in foodstuffs based on 1993 constant prices suffered a decrease from Rp 31. At the same time that of SMIs in clothes swelled from Rp 9.720 trillion.473 trillion in 1998 to more than Rp 5. in clothes. The main aims of the development of SMIs are the formation of modern and viable SMIs that can offer job and business opportunities as well as better income for SMIs entrepreneurs in a more equitable fashion. By type.548 trillion to Rp15.908 trillion in 2001.and medium-scale industries (SMIs) is oriented to approach the year 2020 for the creation of people's economy-based SMIs that play a significant role as important mover for manufacturing industries in a whole.516 trillion to Rp4. of SMIs undertaking in chemicals of construction materials rose slightly from Rp12.5589 trillion in 2001. of SMIs in metal and electronics undertakings swelled from Rp11. At the same time that of SMIs dealing in clothes augmented from more than Rp3. greater number of technology-based SMIs.114 trillion. and that of SMIs in handicrafts increased from Rp2. improvement of exported products made by SMIs. 117 .994 trillion. of SMIs in chemical of construction materials shrank slightly from Rp28.7.740 trillion in 1998 before shrinking to Rp8. and that of SMIs in handicrafts undertakings rose from Rp 5.793 trillion in 1998 to Rp 27.Banana processing middle-scale industry.207 trillion.808 trillion in 2001.

Loading and unloading activities at Bom Baru riverport in Riau 118 . and the development of exports as well as imports. distribution of population (that tends to the occurrence of urbanization). mining. Carrefour and Giant. and even rather isolated and remote areas. It was booming in 1996 or before the monetary crisis hitting the country. including mini-markets. Its practices embrace sheer areas to include inter-insular migration resettlements areas. allowing big foreign retailing players such as Sogo. areas at or along borderlines. and promotes stability of appropriate prices. thanks to the availabilities of facilities of trading. in protecting local retailing players and traditional markets. finance. manufacturing industry. technological advancement. improvement and distribution of income. the Government limits their operations to major towns or they are not allowed to operate at district or municipal towns. transport and communications. It supports greatly the distribution of goods and services. meets the needs of people for staple foods. To encourage the business in 1999 the Government lifted the retail business from the investment negative list. the creation of relatively stable prices. to operate in Indonesia. change of population age composition. the formation of job and business opportunities and trade facilities. tastes and life style following the betterment of their living standards. How ever. Retail business as part of the trade sector has been also featuring a heartening development in recent years.Domestic trade Trade sector has been playing a substantial role in the country's economy. and change of the people's needs. 802 supermarkets. Macro. and 37 hypermarkets. Development of domestic trade is very much related to the population growth rate. to say some. Trade sector has served a substantial share in economic development as it is proved by the establishment of more viable trading system. In 2002 alone there were 100 convenience stores. Trade activities are intertwining and intersupporting with other sectors of production such as agriculture.

Dubai. During the period of 2000-2003 non-oil and-gas exports grew at an average of 5. Budapest. In one hand in fact the country's export commodities destinations have been expanding.1 billion in 2001. Makassar. and swelling again to US$47. trade exhibitions. Johannesburg. it is expected that Indonesia would turn to be a leading and viable trade state.3. centers for trade promotion have been established in Surabaya. The increase trend of oil in world market caused unfortunately trade balance deficit to Indonesia for the Indonesian oil export value was below its oil import value. insufficient infrastructures and facilities to help boosting investment in export-oriented manufacturing industries. and Medan. and trade diplomacy as well as the operation of overseas trade promotional offices in six cities (one each in Osaka. For domestic market. and though sorts of non-oil and gas commodities have been growing more varied only some have export basis.9 percent.Foreign trade Overseas trade plays a key role in marketing oil and gas as well as non-oil and gas commodities. Los Angeles. labor disputes. before decreasing to US$45. and tighter competition as well as some domestic unfavorable conditions such as high cost in getting documents of export and import. In this context market expansion to countries of non-quota has been carried out through various activities including selling missions. By the improvement of competitive edge of the country's non-oil and gas export commodities at international marketit is marked by the augment of exports in term of volume and valueand the betterment of non-oil and gas export structure as well as expansion of their market.67 percentfar in fact below the target of 11. In encouraging non-oil and gas exports in 2001 necessary measures were taken including the reduction of export tariff of some commodities and the improvement of textile quota management system. Indonesia still records trade balance surplus when export value of gas was counted in. 119 .4 billion in 2002.2 percent. During the first five months of 2004 Indonesian crude oil price was averaging at US$33.76 billion. Exports of oil and gas from 2001 to 2003 grew at an annual average rate of 1. The target was not attained due to chiefly the global economic slowdown as a direct effect of the September 11 tragedy. and Sao Paulo). Some kinds of the country's products have proved themselves successful in competing in and gaining international market to bring in large amount of foreign exchange. and the rampant illegal trade and smuggling practices. Non-oil and gas export value in 2000 reached US47. A similar center is planned to be established at Banjarmasin. but on another hand large proportion of those exported commodities is still concentrating to several countries.

that of large enterprises on the contrary dropped from 45. and of large-scale about 5.3 percent. The number of SMEs also recorded an increasing trend.4 percent in 2003 due to mainly high degree of oil prices and domestic needs. hotel and restaurants. So has their contribution to the country's economic growth and the creation of job opportunities. Medium scale enterprises' contribution to the national economic growth of 4. has been significant.7 percent of total GDP. While that of medium-scale enterprises had been relatively stable at 15 percent.6 percent. Even though the growth rate of medium-scale enterprises was relatively higher. of smallscale 4. All of these have helped SMEs. So did their aggregate investment and imports.5 percent. gained some advantages in the advanced processing industries.013.The country's sluggish economy has affected the import of non-oil and gas commodities. in electricity. Small-scale enterprises have always more advantages in businesses utilizing natural resources and in tertiary sector such as agricultural crops. plantation or estate.1 percent. In 2000. and large-scale only 3. finance. meanwhile.1 percent in 2003. In 2003. Products' added-value of small enterprises also noted a growing tendency: 39. and mining. At the same time. urban gas.1 percent. communications. small-scale 43 percent. and fisheries.8 percent in 2001 before regaining by 0.5 percent in 2002 and 17. At the same time.5 percent to 43. leasing. imports of oil dropped substantially by 17. Their contribution to the country's GDP during the 2002-2003 period noted an increasing trend to reach Rp1.1 percent in 2002 and 9.5 trillion or some 56. the medium-scale enterprises grew by 5.7 percent in 2000 to 41. It plunged by 15.2 percent. The medium-scale enterprises at the same time played a leading role in making higher added value in the businesses of hotel. small-scale enterprises managed added value more than 75 percent during the 2000-2003 period. the growth rate of the middle-scale enterprises stood at 5. and forestry. In each sub-sector.1 percent in 2003 120 . more viable and strong as the country's economic backbone. meaning higher than that of the large enterprises did. SMALL-MEDIUM ENTERPRISES AND COOPERATIVES SMEs The role of small-and medium-scale enterprises (SMEs) in endeavors to recover the country's prolonged economic crisis happening since 1997. The large-scale enterprises.4 percent in 2003. their contribution to the country's economic growth rate had been relatively smaller than that of other groups due to relatively little added value the group created. and their kinds of business more varying. The added value they made in those sub-sectors reached some 60 percent. trade. services. livestock.

Productivity of small-scale enterprises also noted a significant increase from Rp8 million per worker in 2000 to Rp10. Labors and Productivity The number of small-scale undertakings in 2003 was 42. which accounted for 19.1 per annum. 121 .6 percent per annum. investments in all economic fronts had been almost stagnant.9 trillion and in medium-scale Rp73.69 percent. annual average investment in small-scale group amounted to Rp58.accounted for only 0.6 percent from the number of workers absorbed in 2000.2 trillion. Exports of SMEs Exports from products of SMEs reached Rp75.9 percent of the total exports in 2003. It contrasts with what a large-scale establishment could absorb. There is a tendency that mediumscale enterprises focus on products of processing industries.7 million and Rp1.5 million per worker per annum in 2003. Business Units. The large-scale undertakings group is potential to be a pump-primer of economic growth. Small-scale group attracted the least investment i.5 million per small-scale establishment.3 percent of total exports .4 billion annually. before augmenting to Rp31.86 trillion or some 19.8 billion respectively in 2003.69 percent of small-scale and 1.73 percent of large-scale enterprises.53 percent of total exports.e. They employed 79 million workers.9 percent in 2000 to 14. namely Rp91. The increase was attributed to the rise of exports of medium-scale from 13.5 billion in 2000. Combined. Investment During the 2000-2003 period.5 percent against that of the year 2000. compared to medium-scale group that could record at an average of 23 percent per annum. and the small-scale to be a balancing element of income equity and labor-intensive absorbing. It means equivalent to Rp1. Compared to the total number of small-scale undertakings. The number of workers employed by small-scale undertakings during the period of 2000-2003 grew by 12. compared to 1. Those of mediumscale and large-scale were respectively Rp24.6 percent on average per annum. it proved that small-scale undertakings are of low or not capital intensive establishments. an increase compared to that of 2000. small-and medium-scale groups only absorbed investment about 41. During the period of 2000-2003. meaning a rise of 8.8 million and Rp1.2 percent or an average of 4. 18.4 million units. increasing by 9.

and that of large-scale. Small-and medium-scale groups.0 percent and 9.2 percent respectively). at the same time.51 Medium 73. The small-scale group's output was primarily dedicated to household consumption (61.9 percent.1 percent of imports. and mediumscale as well as large-scale at 0. gas and drinking water (18.1 percent of the total national demands. and large-scale accounted for 42.556 7. and that of mediumscale groups was 15. and to exports (19.2 percent). as the people's economic backbone.884 40. It means that SMEs tend to be much more influenced by domestic economic dynamism rather than of large-scale enterprises.424.0 percent to exports. They spread in 122 .709 1.024 1. and electricity. the greater part to exports. have been contributing meaningfully to the national economy. Economic subsectors that absorbed the greater part of investment in large-scale group were services (35 percent). In small-and mediumscale the sectors were transport (29 percent and 20. and on imported materials 5.823 percent to household consumption and 30.0 percent. and trade (16.191 56.2 Total 317.3 percent respectively.118 40. In producing its goods.5 percent and 15.4 percent respectively).240. that of medium-scale about 48.6 percent).658 establishments in 2001 to 117.8 percent.806 establishments in 2002 or an increase of 6.197. supplied some 43.9 Small-scale group in 2003 recorded its investment growth at 2. and medium-scale 13.5 percent). and 14. From one year to another the number of cooperative establishments showed a rising tendency: from 110.8 percent of the national demands for goods and services (small-scale accounting for 30. in addition to SMEs.8 percent). Cooperatives Cooperatives. the small-scale group's dependency on large-scale enterprises' products was 14.69 Large 185.1 percent.043 2.46 percent.01 percent and 2 percent respectively.Average Investment by an Establishment (2000-2003) Scale Investment Number of Investment per (billion Rp) Establishments Establishment Small 58.

589 trillion paid-up capital in 2002.448 in 2002. the amount of credits channeled to their members noted a raise of 1.Milk cooperative undertaking in Bondowoso.11 percent.265 or an increase of 1.87 percent. On the contrary. but also supervises them to recruit employees. and the remaining 46. 123 .2 percent compared to that of 2001.040. The number of employees working for cooperatives in 2001 was 202. paid-up capital of cooperatives suffered a decrease.67 percent.55 billion in 2002.624 in 2001.56 percent to reach Rp642. and the remaining Rp8. East Java more than 391 districts and municipalities. The amount of their paid-up capital in 2002 noted an increase of 0. Their internal paid-up capital accounted for some 29. The number of saving-credit cooperatives in 2002 was 1. there were 23. compared to that of 2001. meaning an increase of 1. the Business Development Services (BDS) "Provider" has been formed and introduced. before increasing to 24.635.038 trillion in 2001 to Rp 23.088 members of cooperatives in 2001.257 trillion (63. from Rp 28. Of Rp 23.058 or growing by 3.92 percent compared to that of 2001.947. better their management and help seek market opportunities as well as educate managers of SMEs and cooperatives to read market demands.589 trillion in 2002 or shrank by 15. At the same time.60 percent) were internal paid-up capital.06 percent. and in return offer credits to their members.632 trillion (36. Saving-Credit Scheme Cooperatives Saving-credit cooperatives are cooperatives that receive savings from members. Rp14. It functions not only to help SMEs and cooperatives finding working capital from financial institutions in order to improve their business activities.207 in 2002 against 576.40 %) were external paid-up capital. and in 2002 was 209. Their members totaled 586. and external paid-up capital for 24.21 percent were of members' savings.01 percent. With the paid-up capital the saving-credit cooperatives owned plus their members' savings. Business Development Services (BDS) "Provider" To improve the performances of SMEs and cooperatives.

40 percent. The world's economy that grows at a lower rate would certainly cause an unfavorable impact to the country's economic growth.57 percent the lowest rate the country had ever made.72 percent in the period of 1976-1986. statistics says that in 2003 some 56. However. foodstuff sub-sector grew on average 2.Due to the important and strategic role the BDS has played. So would unfair practices of international trade such as excessive subsidies to agriculture in some developed countries since it would affect the competitive edge of products from the developing countries such as Indonesia. and 5. The policy that stressed more on self-sufficiency in rice during the said periods led to rather unfavorable impact towards other types of food crops. Thank to endeavors the Government. Up to 2003 some two trillion rupiahs had been granted directly to some 25.65 percent. the procurement of their tools 124 . Cumulatively this sector (agriculture.5 ha on average or were merely tenants. making these time Indonesia self-sufficient in food. namely by developing a business system from downstream to upstream. their collective undertakings or cooperatives. to make it the prime mover of the country's economy. and animal husbandry 1. Agriculture grew at 3.54 percent. cultivating land of less than 0. estate sub-sector 1. AGRICULTURE According to Population Census 2000. Extensive socialization of this system is required to reach all levels of society. that agribusiness should be managed not by the Government but by the society itself. Policies and Strategies New paradigm has been currently adopted to develop agriculture.73 percent per annum. Though almost all regions in the country suffered a rather long drought in 2003. it grew at only 1. a number of foreign institutions such as the Japan International Cooperation Agency (JICA).4 million families of peasants or farmers belonged to the economicallyweak bracket.5 percent of 25. forestry. Of the growth rate. including politicians and legislators. The country's agricultural performance has been to some extent influenced by the ongoing domestic and global dynamism. agriculture was still capable of growing in a heartening trend.39 percent during the period of 1967-1976. and fisheries) up to the third quarter of 2003 noted a growing rate of 2. and some domestic and overseas business agencies have been invited to improve professionalism of the BDS.000 groups of peasants scattering in some 250 districts throughout the country. to finance their undertakings. In empowering peasants or farmers. some 60 per cent of the country's population earned their living from agriculture. Even though this sector still proved viable from the economic crisis the country suffered in the middle of 1997. direct aids for them have been made available. the public and business circle made to maintain such growth rate that the country's stockpile of foodstuffs suffered no shortage.

introducing various deregulations such as on pesticides. down by 3. Vegetable production at the same time amounted to 3. banana. for instance. lanzon.49 million tons in 2002 to 52.40 percent and 13. grew 1. from 673.000 tons. except of sweet potato. mustard green. fertilizers. helping peasants or farmers to have more accesses to market and market information. Horticulture At the end of 2003.7 thousand ha or a rise of 3. The increase had in fact improved the country's viability of food supplies.66 percent. and cassava by 4. soybean by 0. Production of rice. Horticulture products. reached 316. sapodilla. The aid proved offering the peasants either positive impacts for the development of agribusiness or a multiplier effect to the development of the real sector of economy. protecting domestic agribusiness undertakings from unfair trade practices by other countries. and agricultural tools and machines.79 percent. encouraging peasants or farmers at rural areas to have more accesses to financial institutions. the harvested areas of vegetable consisting of spring onions.08 percent. including with regional administrations. and simultaneously become a stimulus for rural economic development. facili tating the formation of synergic undertakings of agribusiness. speeding up dissemination of technology.08 million tons in 2003. producing excellent varieties of plants of food. and estate crops. lower than the target of 53 million tons. and orange. also noted an increase: production of corn up by 12.99 percent than that of 2002. Java Island is the country's main fruit producer.46 percent due to primarily the decline of production of mustard green and shallot by 16. improving skills and knowledge of peasants. from 9. salaks. peanut by 5. facilitating the cultivation of seedling.20 percent. and carrot.8 million tons. along with increasing the trend of domestic investment during the last few years. cabbage. Agricultural Products Food crops The year 2003 saw in general better performance of agricultural productions than those of 2002. except of durian. lanzon. though they were still below the target. shallots. and guava.14 percent from 51. reinforcing system of quarantine.65 million tons in 2002 to 10.82 million tons in 2003. Policies and programs having been introduced by the Government to encourage agribusiness include: maintaining sactorial cooperation.000 tons to 674. durian. potatoes.77 percent. Indonesian main fruit crops are avocado. green pea by 8. pineapple.79 percent respectively. orange. which the island of Sumatra mainly 125 . horticultural. and maintaining stability of unhusked rice prices.and development of their skills and knowledge. rambutan. Other stimuli would be among other things increasing budget allocation either from state budget or regional budget that reflects serious commitment of the Government for the development of agribusiness. mango.

231. In term of production.8 thousand tons). Of outer Java.4 thousand ha. they were rubber (1. there were 882 establishments with total plantation area of 2.9 thousand ha). rubber (3. five es tablishments with 1.61 percent of the Island's total production. in kapok 25 establishments with 4. in quinine 16 establishments with 1. West Java is a major fruit producer. and 16 companies of quinine estates.6 thousand ha).produces.9 percent.456. In addition there were 88 companies engaged in sugarcane plantation. palm oil (3.6 thousand tons).141.0 thousand ha).7 thousand ha.9 thousand tons).9 thousand ha.4 thousand tons). Within the Java Island.7 thousand tons).7 thousand ha.0 thousand ha). Major products of large scale estate companies were palm oil (5. in oil palm. 126 .360.876. coffee (1.8 thousand tons).325 thousand tons).3 thousand ha. Leading smallholding estates in term of the size of cultivated area in 2003 were respectively rubber (3. and that of avocado which decreased by 33.796. in jute.3 thousand ha.1 thousand ha. palm kernels (1.810.648. coconut (3. tea (122. oil palm (1.4 thousand ha. and cashew nut (604. Large-scale companies engaged in rubber plantation in 2003 numbered 453 establishments.788. accounting for 33. Plantation Estates Plantation estates consist of large estates and smallholdings.7 thousand tons).8 thousand ha).875. there were 230 establishments cultivating some 78. 19 companies of tobacco estates. Fruit production in 2003 declined due to chiefly the decrease of lanzon production from 208 thousand tons in 2002 to 116 thousand tons in 2003. cultivating a total planted area of 543. 803.7 thousand ha. coffee (669.2 percent. in coffee plantation 155 establishments tilling 60.8 thousand tons). in tea plantation 144 establishments with 84.1 thousand ha). East Nusa Tenggara is also the main fruit producer.6 thousand tons) and sugar (1. in coconut plantation. down by some 44. cacao (817. in cacao plantation 222 establishments with 155. and cacao (572. coconut (3.

Smallholders cabbage plantation in Lembang, West Java Animal Husbandry The year of 2003 saw a rise of large livestock population: dairy cow grew at 2.90 percent, to 368.7 thousand heads; slaughtered cow went up by 0.87 percent to reach 11.4 million heads, buffalo by 2.18 percent to 2.5 million heads, and horse by 8.06 percent to 452.9 thousand heads. So did the population of small livestock such as goat that amounted to 13.3 million heads or a rise of 5.79 percent compared to that of 2002, sheep eight million heads or a rise of 5.04 percent, and pig 6.3 million heads or a rise of 7.05 percent. Also noting an increase was the population of poultry: native breed chickens in 2003 amounted to 85 million heads or a rise of 8.98 percent, broiler chickens 917.7 million heads or a rise of 6.08 percent, and ducks 48.1 million heads or a rise of 4.16 percent.

Large scale palm oil estate in North Sumatra Province 127

Exports and Imports The exports of agricultural commodities (excluding those of fisheries and forestry) went up substantially by 26 percent in 2003 to a total of US$5.7 billion from US$4.5 billion in 2002. The year 2003 also saw the net exports of agricultural commodities arising significantly from mere US$0.8 billion in 2002 to US$1.35 billion, an increase of 225 percent. Of the amount, the commodities of plantation accounted for US$2.91 billion, horticultures for US15.3 million, but animal husbandry suffered a decrease to US$139.4 million. At the same time total imports of agricultural commodities recorded a rise of 4.94 percent to reach US$4.37 billion in 2003 from US$4.16 billion in 2002. Exchange Values of Commodities In general, the exchange values of agricultural commodities in 2003 were better than in 2002. In Java, the value increased between 2.59 percent and 31.11 percent. Of West Java, a province in Java Island, it grew by 4.84 percent, in Central Java 9.84 percent, in Yogyakarta 2.57 percent, and in East Java 31.11 percent. Of outer Java except of North Sulawesi, South Kalimantan and Bali, there was an increase of the agricultural commodities' exchange value. In West Nusa Tenggara it recorded a rise of 5.77 percent, in South Sumatra 4.23 percent, in West Sumatra 3.40 percent, and in South Sulawesi 2.27 percent. Six out of 14 provinces which their agricultural commodities' exchange value was less than 100 percent were Lampung (74%), South Sumatra (74%), West Sumatra (91%), and North Sumatra (99%). If this exchange value was a reference of peasants' welfare, it could be reasonable to say that the peasants' welfare was improving. Prospects of Agribusiness

Bullfrog farming for export commodity, at Pacitan, East Java


Indonesia's economy for the year 2004 is envisaged to grow at 4.8 percent, and during the first quarter of 2004 it recorded a growth rate of 3.54 percent (based on constant prices). Recording the highest rate was among other things the agricultural sector (agriculture, forestry, and fisheries) that grew at 17.07 percent. Attributable to such growth rate in the sector were the sub-sector of food crops that went up by 54.99 percent and of animal husbandry by 6.69 percent. On the contrary, other sub-sectors such as plantation grew minus 22.29 percent, forestry minus 29.83 percent, and fisheries minus 8.92 percent. The World Bank predicted that estate commodities such as coffee, tea and crude palm oil would increase. So would the price of rice to return to the level achieved in 2002. According to the prediction, meanwhile, economies of the developed countries would be growing at 1.5 percent, and of the developing countries at between 4 percent and 4.9 percent. At the same time the world's trade would go up by an estimated 4 percent. The said trends would certainly affect economic development in Indonesia. Another factor that would also influence economy in Indonesia is the recovery of Iraq, for this country is one of the countries importing Indonesia's commodities. What is more, the exports of Indonesian coffee, cocoa, and pepper to the US would probably be affected by the imposition of the Bio Terrorism Act and stricter export procedures by the US. Market segment of Indonesian traditional export commodities would also probably dwindle by the admission of 16 East European countries to the European Economic Community. In general, the exports of Indonesian agricultural products still have promising prospects in some regions such as the Middle East, South Asia and East Asia, but they will largely depends on creativities and shrewdness of Indonesian exporters to seek out and manage the opportunities. In promoting the agribusiness, the Government has taken measures to among other things continue augmenting productivity and improving seedling system; to keep on schemes of direct financial assistance to peasants; to continue modernizing the agribusiness system and its production marketing as well as agricultural tools particularly in rural areas; and to continue struggling for fairer trade policy through the World Trade Organization. Poultry and Bird Influenza Epidemic The country's large number of population should certainly be a potential market for the production of chicken eggs and meat. These days the country's per capita egg consumption is 50-60 eggs annually, and per capita consumption of chicken meat is ranging from 3.5-4.0 kg per annum. After being hit by the impact of the monetary crisis in the middle of 1997, the poultry industry in 2001 started indicating its recovery, and become a substantial economic mover. The poultry industry involved businesses worth estimated at Rp 50 trillion as it was reflected in the production of poultry feed of six million tons per annum, with price assumption of Rp 2000 per kg. In 2002 Indonesia was known as one of eggs-producing countries with cheapest cost of production and selling prices.


During the period of 1974-1986, in which the country's economic growth rate recorded as high as seven percent per annum, the sub-sector of animal husbandry's GDP once accounted for some 25 percent of total contribution of agriculture to the country's GDP. Modernization of animal husbandry in Indonesia began in late 1970s when the breeding of egg-laying chickens, broilers, and native-breed chickens had been developing rapidly. The chicken feed industry usually related to foreign investment also flourished. Of the total 854 million chickens in 2004, broilers accounted for 524 million heads, native chickens for 263 million heads, and egg-laying chickens for 67 million heads. They were susceptible to viruses of the so-called "bird influenza" recently attacking several countries in East Asia. The Government officially admitted that this dangerous chicken disease attacked some provinces in Indonesia in January 2004. In protecting chickens and minimizing victims of the disease, the Government helped farmers in tackling the endemic by providing vaccine (Avian Influenza Vaccine), imposing biosecurity, socializing and disseminating information related to bird influenza, and other preventive actions. The number of chickens victimized by either bird influenza or Newcastle Disease (ND) etc., was 4.7 million heads or 0.05 percent of total population, relatively low indeed. However, the plague had caused Japan to temporarily stopping of importing chickens from Indonesia, and domestic consumption declined to the lowest ever of 20 percent of total supplies, and the prices of chicken meat dropped substantially. The price of feeds on the contrary soared because some 70 percent of materials were imported. The country's exports of poultry in 2002 amounted to US$4.8 million. In tackling and eradicating bird influenza endemic, Indonesia along with other countries such as Thailand, Vietnam, Laos and Cambodia received emergency financial aid from the Food and Agricultural Organization (FAO). Prospect for poultry industry of post-bird flu plague is still promising and its domestic market is still significant. Technological innovation in poultry industry is indeed required to improve output qualitatively and quantitatively. Also required is to improve the production of corn as one of prime raw materials for feed industry. FORESTRY The main aims of forestry policy are to maintain the preservation of forests for the improvement of public welfare; secure the existence of forests, optimize the benefit of forests; and reinforce forestry institutions. To achieve these aims, with reference to policy and strategy having been determined, there are five priority schemes put into operation in addressing the major issues of forestry: Illegal Logging Eradication scheme; Forest Fire Handling scheme, Forestry Restructurization scheme, Rehabilitation and Conservation scheme of Forest Resources; and scheme for Decentralization of the Forestry Sector.


the implementation of forestry sector soft landing. to manage well the supplies of wood for industrial raw material and to secure that only legal logs and timber are available in the market. as well as intensifying activities towards the establishment of conserved forests. in order that forests are managed in a sustainable fashion. Execution of the scheme also covers: the implementation of sustainable production forest management being the manifestation of sustainable forestry development concept. International cooperation has also been maintained such as with the Governments of the UK and People's Republic of China in the context of curbing down and fighting the illegal trade of logs. Central Kalimantan. Forest Fire Handling Scheme Under the scheme it has been and is being strived to prevent and minimize forest fire. and East Kalimantan. and with the Governments of countries joining in the Forum of Forest Law Enforcement Good Governance (FLEG). Early warning system is given priority to be developed in the context of preventive actions against forest fire. there have been spotted fire-susceptible areas that should be given high priority in dealing with forest fire. and of improving law enforcement. namely gradual reduction of timber production from natural forests as an effort to curb down the destruction of forests. Riau. and the establishment of the Forestry Industrial Revitalization Agency to improve performance of the timber processing industries. and under the Operation of Wana Bahari done by the Navy to hunt down the transportation of illegal log by sea). and to encourage the establishment of viable wood industries and of efficient wood industrial structure that can produce products of high quality and having competitive edge in global market. including: maintaining close cooperation with the Police and the Navy in intensifying the operation to fight illegal loggers on the spots (such as under the Waralaga Operation that enforces a law upon illegal logging including transport and trading of illegal logs. and to intensify surveillance operations along the northern coast of Java to prevent smuggling of illegal logs from outer Java. Similar cooperation has also been organized with the Governments of Japan. and from HIMAWARI of Japan.Illegal Logging Eradication Scheme The scheme aims to secure and preserve forest resources. Jambi. etc. The 131 . Those areas include North Sumatra. South Korea. and at the same time to protect people living around fires-prone forest areas. The early detection system on forest fires is taken from meteorology data satellite of the US National Oceanic and Atmospheric Administration (NOAA) and from the Geo-Stationary Meteorological Satellite (GMS-5). In this frame work. Cooperation has been maintained with donor countries in handling forest fires. which recently tend to decline. Under the scheme various activities have been done. Forestry Restructurization Scheme The main aims of the scheme are to preserve forest resources and to manage them in order to provide socio-economic and ecological benefits for the whole Indonesian people. The zero burning scheme has been also imposed upon forest concession holding companies to prevent forest fires. with each area has already a Forest Fire Brigade.

Makassar. Regarding the decentralization system.000 ha in 27 river basins. arrangements of national and regional-scope master plans for forest and land rehabilitation. through a scheme known as "seed for people". and Ambon). economically and socially can be maintained and even improved. Denpasar. and 300. Decentralization Scheme of Forestry Sector The scheme aims to promote the good organization of coordination of decentralization system in the field of forestry among related agencies and institutions in conforming to their respective authority and function in order to create harmony in actions to achieve better performance.agency is also tasked to endeavor the preservation of forest. promotion of active participation of society in the program of forest and land rehabilitation. By conserving forest resources it is hoped that the utilization of forest function and status ecologically. to empower members of society particularly those who live around forest areas to enhance their welfare. various measures have been. and to create common understanding and perception on forestry decentralization system in implementing sustainable forest management in the context of regional autonomous system application. and to accelerate the recovery of damaged forests. improvement of institutions engaged in forest seed under the auspices of the Indonesian Forest Seed Project (IFST) through maintaining bilateral. multilateral as well as international cooperation. and reforestation fund. various regulations which govern forest management. types of plant. utilization and use of forest areas. and simultaneously animal population. Banjarbaru. economic and ecological values of forestry are expected to be optimum. In the implementation of the scheme of rehabilitation of damaged forest and land. and social conditions of the people living around the forest improve by getting direct benefits from it either as the doers or business partners. forest management planning. genetic germs and ecosystems existing in the conserved forests be protected and preserved. Through this scheme. are being and will be done to include: rehabilitation and reforestation programs of damaged forests and land of about three million hectares in five years. urban forest. the Ministry of Forestry has provided Rp134 billion to 182 district administrations. 132 . and the establishments of Forest Plant Seedling Houses (already available are in Palembang. the development of social forestry to improve the management of forest and land preservation. To make the implementation of the scheme successful. have been imposed. Bandung. Forest Resources Rehabilitation and Conservation Scheme The scheme aims to secure and maintain the still unimpaired forests. explore the possibilities of employment and business opportunities.

and offer employment. excessive and indiscriminative timber cuttings have to some extent degraded. Frequent landslide. but also regulate the supply of water. Indonesia has a total forest area of about 120.539 species of reptile and amphibians (16 percent of the world's reptile). socially and economically. and pollution.000 species of plant. and about 40. micro-seasonal changes. a type of ever-wet vegetation containing a large number of timber species.06 million ha limited production forest. Most of these species are found in forest areas which these days are suffering heavy pressures from different fronts such as animal smugglings.5 million ha constitute parks and reservation forests. resin. nature recreation parks (89 areas).2 million ha production forest. about 33. nature conservation (179 areas). For instance the total number of people earning their living directly or indirectly from forests was estimated at about 30 million.07 million ha of convertible production forest. Forest Social-Economic Function Numerous people have enjoyed the benefits. sandalwood etc. flood. aloe wood. Forests provide not only its main products such as many kinds of timber.000 species of plants are known to be used directly by the local people. While its mammal accounts for 12 percent of the world's mammal. forests can offer directly and indirectly. depleted and damaged the forests. In 1997 employment in forests was estimated at 183 thousand. Unfortunately reforestation and land greening have not kept abreast yet during the past few years.25 million hectares or some 63 percent of the country's total land area. What makes the flora of Indonesia completely different from those of other countries as well as the flora of other tropical areas in the world is among other thing its high number of genera and species endemic. and by-products such as rattan. theft of germ plasma. about 35. illegal hunting. 23. or about 10-12 percent of the estimated number of plant species in the world. draught. illegal trade of protected species of flora and fauna etc. Of the area about 20. About 6.52 million ha protection forest. kinds of fish 25 percent. As it is recorded. Indonesia has also some 1. 133 . major forest parks (13 areas). prevent flood. timber illegal cutting. hunting ground (15 areas).Ecology Indonesia still has many parts of its territory covered by the luxuriant growth of the characteristic tropical rainforest vegetation. and kinds of bird 17 percent. Indonesia has as many as 27. Conservation forest area is divided into national parks (41 areas).500 species of flowered plants or about 10 percent of the estimated number of flowered plant species in the whole world. and wildlife sanctuaries (51 areas). and about 8.

344. 339. In 2001. Of the total area.096 persons touring conservation areas. qualified secure. In 2003 the Government imposed a regulation that determines a maximum of about 6. plywood mill. private enterprises.2 million ha belonging to 83 forest concession areas were administered by Joint-Venture companies between private and state owned enterprises. and 3. An encouraging trend is that the number of people visiting nature tourist objects such as nature parks and conservation areas has been increasing.881 establishments with installed capacity of 44. This limitation is intended to recover forests potentiality and to achieve balance between supply and demand of timber logs as raw material. for instance.5 trillion. and the remaining 5. The main aims of development of transport means and infrastructure are: 1) to rehabilitate and maintain the existing transport means and infrastructure in order that they function as they should.614 cubic meters (from 2000 to 2002).77 million cubic meters far higher than the 18. 3) to create a much more favorable. some 22.Forest Concession Up to December 2002 there were 270 valid forest concessions. The Government revenues from reforestation funds (collected from forest concession holders) and other taxes and levies during the period of 1999-2002 amounted to Rp13. They are designed to be part of the whole system of distribution.892 million cubic meters of timber per annum natural forests can supply. and affordable.60 million cubic meters raw materials can supply.221 ha (up to the end of 2002) to produce 16. scheme of industrial timber concessions has been in operation for some years covering about 2.220 persons visiting nature parks.867. 2) to make them meet the standards of transport security services operation of domestic and international ones. TRANSPORT. In meeting the supplies of timber as raw materials for industries such as for pulp (for making paper) and other purposes. POSTAL SERVICE AND TELECOMMUNICATIONS Development of transport means and infrastructure continues taking place to make services much more efficient. The number of sawmill and wood working.240 ha belonging to five forest concession areas were run by state-owned enterprises. including making the rural and urban networks function properly.5 million ha belonging to 182 forest concession areas were managed by private companies.101. exploiting for about 28 million ha of forest. there were 741. and integrated with the regional development drive. capable of offering services and benefits for the people. fair and open business climate in the transport sector so that all business players such as state-run enterprises. and to realize the national transport networks in inter-model system. pulp mill was 1. reliable. as well as central and regional governments take part 134 .

07 percent. At the end of 2002 there were 22. to offer the private business sector and regional administrations more room to take part.10 percent buses. buses for 1. industrial areas and ports). The total length of road networks in 2002 was 368.6 thousand km are under the management authority of the central government. and 4) to meet at least the minimum necessities of transport services in remote or rural areas. sea. of which 73. along with new construction of roads.4 thousand km. institutional tariff and subsidy aspects as well as the aspects of human resources. and to take measures on tariff and subsidies more conducive to investment by private and state-owned enterprises. which were numbering 19. Road Transportation Roads play a leading role in passenger and freight traffic. and to link the centers of production and their market places.613 in 2001.370 in 2004.03 percent. the Government has offered subsidies for the operation of pioneering transport services. The studies have been so far leading to among other things final drafting of amendments to the existing laws in the field of transport (Law No. 15 of 1992 on Civil Aviation.21 percent. including inland waterways (river. those under the management authority of provincial governments. lake and ferry transport). Improvement and repair as well as maintenance. of which some 27. and jeeps 0. and 3. and those under the authority of district/municipal administrations. Law No.97 percent were passenger cars. in addition to the economic-class transport services for people of economically low-andmiddle brackets.12 percent trucks. 13 of 1992 on Railways.12 million units. Law No. there were 50 pioneering bus routes in 2001. It is worth noting that the number of vehicles assembled at home in 2003 was 3. and Law No. 14 of 1992 on Road Traffic. Enjoying the subsidy scheme for pioneering bus services. sedans 1.28 percent. and competition fairer and healthier. 48. up from 17. and air transport In making the traffic of goods and passengers services run more smoothly to reach even remote areas.46 percent. The number included inter-city buses serving public passenger services. trucks 0. an increase of 19. Law No.actively in providing transport services. pick ups and vans 7. rehabilitation and improvement of transport infrastructure of land transport. 21 of 1992 on Sea Transport). The amendments to these laws are designed among others things to reposition the real role and function of the Government in public transport services. of which motorcycles accounted for 90. in the period of 20002004 priority was given to the development. 13 of 1980 on Roads.28 percent than that of 2002. Studies on transport-related measures covering legal aspects. are continuously being made in the network of roads which are classified into road networks under the central government's management authority (which form a basic network linking major cities. In the context of improving and maintaining transport services. which increased to 92 routes in 2004.03 percent. have been and are being done to improve services. and 135 .99 million vehicles licensed for use on the roads in Indonesia.9 thousand km under the authority of provincial administrations. 8.

130 m mainly on 136 . Kalimantan routes and Sulawesi routes. Road safety and facility The country's road accident record had been considerable. Sumatra's eastern coast. at Papua (with Papua New Guinea). Flores-Seram routes. Buru Island.500 traffic nail marks and road marks of 349. and East Nusa Tenggara (with Timor Leste). which will shorten the drive time from Jakarta to Bandung to only about two hours from about four hours currently. and improve the role of residential areas along and by borderlines as international gateways. 20. at Sumatra's western coast including Ladia Galaska route (a land route linking Indian Ocean's coast to coast of Malacca strait via Gayo and Alas mountains) in the Province Nanggroe Aceh Darussalam.000 m of bridges have been built to open up residential areas along and by the country's borderlines with a few neighboring countries. such as Jayapura-Wamena route. Some 1. The road constructions in those places are also designed to speed up development in the country's less-developed eastern territory. making accident road traffic density high enough. 11.8 thousand km under the authority of district/municipal administrations. in addition to the construction of 2. in addition to roads in Nias Island. The Suramadu (abbreviation of Surabaya and Madura) suspension bridge that will link Surabaya and Madura across the Strait of Madura in East Java is under construction.291. Buton Island.000 km.185 traffic lights. including the installation of 1. and road routes along borderlines at West Kalimantan.976 m of road safety fence.500 m of bridge were also built at Java's southern coast. East A bridge over Kahayan River in Central Kalimantan Province Kalimantan (with Malaysia). Road widening and reinforcing of their surface structures have been made to some 3. Some 850 km of roads and 1. To address the issue the Government has managed to construct and install road safety devices.000 m of bridges along the road networks of Java's northern coast.500 km of roads and 1. Sangihe Island and Wetar Island. Also under construction is the 40-km toll road between Purwakarta and Padalarang (West Java).

100 km of R-54 rail track. In offering the public in Jakarta much more comfortable services with relatively reasonable price. In addition. weighing bridge stations have been put into operation in many places including those having been built in West Sumatra. along with improved services. Cikampek-Padalarang route. betterment of rail traffic signs and telecommunication devices. Railway facilities and infrastructure continue to be made available and modernized. and improvement of a 118. and the Kutoarjo-Kroya route double-track rail is being prepared along with the reconstruction of railway in the Province of Nanggroe Aceh Darussalam.25 km rail track of economy-class trains. Yogyakarta-Solo route are being done. and South Sumatra). Riau and North Sumatra. West Sumatra. Railways Railway services in Indonesia are available only in Java Island. Still to minimize the effect of road accidents. and repairs of 18 units of diesel trains and three units electric trains. It is also designed to help easing the city's heavy traffic. and wearing helmets for motorcyclist. and construction of a 223 km double-track rail of Cikampek-Cirebon route. The island of Kalimantan will have such services in a few years to come as preparations are being worked on. faster ride. In dealing with overloaded freight by trucks and container trucks. 137 . the "Transjakarta" bus services has come into operation since the beginning of 2004 to serve the main route of Kebayoran Baru (South Jakarta) Kota (West Jakarta). and Sumatra Island (North Sumatra. Rehabilitation schemes from 2001 to 2004 (up to August) included the betterment of rails as long as 71. The state-run PT Kereta Api Indonesia (The Indonesian Railway Company) manages train services.national road networks. This includes the construction of double-track rail and installation of electronic traffic signs in heavy traffic routes. there had been the procurement of 1. in easing the city's traffic congestion two monorail systems have been planned. it has been made compulsory to wear seat belts in the front sears of cars.8 km. Also.

The PT KAI also operates electrified services from Jakarta to Bogor. audio-videos etc. The PT KAI also provides special services for tourists. Gumarang train and Kamandadu train both operated on the Jakarta-Semarang route. Argo Gede train and Parahyangan train both operate on the Jakarta-Bandung route. and Bima train that operate on the Jakarta-Surabaya route. PT KAI started in the period of 2000-2004 adopting a financial scheme of Public Service Obligation (PSO) for subsidizing the operation of economy-class passenger train services. Argo Lawu train and Dwipangga train both operate on the Jakarta-Yogyakarta route. Bekasi and Depok. The number of passengers transported by trains services in 2000 totaled 190.Pasar Senen train station Passenger services The passenger networks consist of inter-city network linking major cities in Java in particular. and railway enthusiasts by operating Nusantara. especially in inter- 138 . the coaches of which having facilities and interior decoration of Indonesian cultural nuance. Argo Bromo Anggrek train. runs inter-city executive services such as Argo Bromo train. dining rooms. In improving railway management. and the Track Access-Charges (TAC) application to fund railways services. especially Jakarta and its surroundings such as Bogor. mini-bars. meeting rooms. and are equipped with bed rooms. and Bekasi. The decrease was chiefly due to tighter competition the services had to face from other modes of transport. businessmen. but in 2003 it dwindled to 150. and commuter services in and around the large cities. Infrastructure Maintenance and Operation (IMO).7 million. local stopping services. The Indonesian Railway Company PT KAI.7 million. the Gajayana train that operates on the Jakarta-Blitar-Malang route. Bali and Toraja trains. Depok.

529 cubic meters of mud along some shipping courses dredged.city services from air transport. Development and rehabilitation of inland waterways and ferry crossings continue to improve services. there were some 277. four crossing and river wharves rehabilitated.8 million tons in 2000 to 17. Kalimantan and Papua. Java and Bali. particularly big rivers in Sumatra. In addition. both in Southern Sumatra 139 . especially in view of Indonesia being an archipelago. The number of passengers transported Passenger ship that plies between Palembang and Muntok. On the contrary the total amount of freight handled by cargo trains rose from 16. In the period of 2000-2004. Meanwhile ferry crossings play a key role in transporting passengers and freight from and to adjacent islands such as between Java and Sumatra. Inland Waterways and Ferry Crossing The inland waterways. While the number of passenger transported by commuter trains tend to increase. ten vessels have been constructed and made available for serving pioneer crossing services.99 million tons in 2003. play an important part in both passenger-and freight-carrying. The number of both passengers and freight carried on ferry crossings shows an increasing tendency. among other things 13 crossing beacons and 700 river buoys were installed. Subsidies are also provided for the operation of pioneer shipping services on 59 crossing routes. etc. 30 crossing wharves and five river and lake wharves developed. To open up isolated and remote areas.

but the number then shrank to 5. North Maluku. eight pioneer vessels have been constructed and handed over to the administrations of North Sulawesi Province.7 million cubic meters of mud along some shipping routes. and another five still under construction. subsidies have been provided for the operation of pioneer-shipping at 174 routes. Total freight handled in 2000 amounted to 13. and the number swelled to 39.9 million tons before increasing to 14. In addition. the dredging of 10.94 million. including the construction of a multipurpose wharf of 237.8 m in length at Kupang (East Nusatenggara).4 million tons in 2003.712 million units. Sundakelapa traditional harbor for inter-insular shipping In the framework of developing sea transport services. the installation of supporting navigation instruments (12 light houses. and a container wharf of 130 m in length in Bitung (North Sulawesi). 140 .9 million units in 2003. The number of vehicles ferried in 2000 was 8. To make isolated and remote coastal areas and islands better accessible. and East Nusatenggara. many years in transporting inter-island passengers and freight.by ferry crossing services in 2000. 22 beacons. totaled 35. for instance.36 million in 2003. So it is very reasonable the Government to always pay serious attention to the development of shipping facilities and infrastructure as well as improvement of its management. Sea Transport Shipping has been playing an important role for so many. marine facilities and infrastructure have been made available during the past few years. and 119 floating beacons). the construction of two marine disaster prevention ships and three passenger ships of 2000 type. Papua Province. the rehabilitation of 101 units of supporting navigation instruments.

to make them capable of handling larger aircraft and many more passengers and cargo. some 185 fixed-wing aircraft and 13 helicopters belonged to the Government. 141 . For the year 2004 the Government allotted Rp33 billion for the development of pioneerflight routes in Papua or Irian Jaya by the state run airline company PT.354.179 sq. Merpati Nusantara. swelling from 9. Those include the maintenance of runways and terminals of 470. Of the number.778 tons in 2002. the amount of cargo carried by air was 154.450 tons in 2003. m and 1.m respectively.811sq. The runways and terminals of Manado airport in North Sulawesi and Ambon (Maluku) airport are among those undergoing expansion. and the remaining 184 fixed-wing aircraft and 163 helicopters were owned by private airline companies.515. up 1. the Government has provided subsidies for some 317 routes.920 sq. up 5.95 million tons.76 percent from that of the previous year. and domestic freight to 139.866 passengers traveled by air. and 225. Air Transport Development and improvement of air transport facilities and infrastructure keep on going to improve services. and Mimika Air.In 2002 overseas freight loaded amounted to 163.310 sq.303 passengers in 2002. At the same time. In 2003 a total of some 13. consisting of 369 fixed-wing aircraft and 176 rotary wing or helicopters. Garuda aircraft was in the Netherland's Schippol Airport The number of national fleet in 2003 was 545 aircraft. m respectively. and expansion of runways and terminals of 431. Concerning pioneer-flight.96 percent. m and 18.34 million tons.

For improved meteorological and geophysics telecommunications. forestry.73 million of telephone or a 3. In addition.developments of radio frequency station and procurement of various devices for controlling illegal radio frequencies.Meteorology The institutional restructurization of the National Meteorology and Geophysics Agency took place in 2002 pursuant to Presidential Decisions No. 48 of 2002. rearrangement of radio FM and television frequencies.15 million telephones lines. Instruments added to the Agency's system comprise one unit of rain radar. fixed line telephone ratio is 3. and the users of internet services swelled by 320 percent from 1. 4. irrigation. 3. PT. the Agency uses VSAT Link 32 Kbps. five automatic port weather devices. improvement of laboratory for telecommunications tests to help the supply of telecommunications devices meeting international standards. six automatic weather stations (AWS). transponder and LC. Telecommunications and information are growing rapidly during the past few years.5 per 100 populations. 6 of 2001 on the development of telecommunications and information technology in Indonesia. three units of accelerograph digital components. and the public. a substantial increase from more than 3. and that of cellular telephone is 5.3 million. Post and Telecommunication Various efforts have been done to improve the services of Post and Telecommunications.68 million telephone connections to make the total installed capacity of the company's telephone centre amounting to 10. water resources. Telkom. During the period of 2002-2003.6 million in 2002. VSAT IP. in Soekarno-Hatta Meteorological Station. with used capacity of 8. 2. Included in the restructurization scheme is the modernization of the agency's instruments and their optimum use. 142 . Telkom had added to its system some 1. 46 of 2002 and No. two units of three seismograph broadband components. The restructurization aimed to allow the Agency function optimally and serve not only the interest of transport sector. During the period of 2000-2003.9 million in 2002 to eight million in 2003. through PT. Currently. and one unit of gravimeter. but also those of other strategic elements such as agriculture. among other thing through: 1. In anticipating this trend. rehabilitation schemes of post and telecommunications infrastructures. continues to improve telecommunication services. mobile communications or cellular telephone subscribers totaled 11. In 2003. the Agency has developed a center for flight weather information services that meets international standards.6 per 100 populations. the Government has enacted Presidential instruction No.5 percent penetrating level. three units of lightning detector. The Government. internet subscribers grew by 140 percent to reach 865 thousand.

Indonesia is in fact rich in minerals in addition to its oil and gas.3 million barrels from 474.556 million barrels and that of gas reached 2. MINING Mining sector still plays an import role in economic force. Those minerals include tin.491 billion MMBTU. production of oil dwindled to 456.507. as well as in supporting the efforts of economic recovery. At the same time overseas mail amounted to 11. Gas production.6 million pieces.8 million Mscf in 2002.4 billion. Oil lifting realization in the year reached 400. and built telecommunications facilities in 3.579. There were 7.456. on the other hand.85 percent of the amount targeted in the 2003 state budget.072 billion. amounted to US$8. and gold that spread throughout the country.508 billion or some 112. and universal service obligation (USO) in field of post and telecommunications.8 million Mscf from 3.147 post offices in 2002 throughout the country. Pos Indonesia with compensation fund. and in 7. increased slightly to 3. measures taken in this sector give emphasis on the development of its means and infrastructure to make it self-sufficient in meeting the domestic needs and even exports. In 2003.0 percent from that in 2001. Government revenues from energy and mineral resources in 2003 amounted to Rp 79. Due to the important role the sector does play as foreign exchange earner.615 billion or some 108. 143 .057.7 million. silver.49 percent of the target. and 3.392 million metric british thermal units (MMBTU) or some 96 percent of the targeted 2.016 villages. Production of oil and gas has been always quantitatively influencing the economy because the production constitutes one of the basic assumptions in planning the annual state budget. coal. copper.2 billion.544 postal services kiosks. the Government in 2003 provided PT. down by 24. 2. Gross revenues of gas at the same time.6 percent from that in 2001. During the period of 2000-2004. nickel. During the past five years the sector of energy and mineral resources has been growing averagely at minus 2.041. consisting of 207 main post offices.500 villages in 2004.9 million barrels in 2002.In meeting public service obligation (PSO). and accounts for a substantial share in the country's endeavor to recover from its economic crisis. Oil and Gas Gross revenues from the selling of crude oil in 2003 reached US$11.496 auxiliary village post offices.621 million barrels or some 84.4 billion or some 110 percent of the targeted Rp 72.6 percent of the targeted 463. and other minerals resources Rp 1.9 percent per annum. Of the total amount in 2003 revenues. the postage consumption for domestic mail and for overseas mail noted a decreasing tendency: domestic mail in 2002 amounted to 282. down by 39. oil and gas contributed as much as Rp 78.

Oil refineries are available in Pangkalan Brandan.58 billion cubic feet (BCF). The contract is worth US$1. Lubuk Linggau (South Sumatra). 24.93 billion cubic meters to South Korea. Indonesia. US$3.6 percent above the price fixed for the 2003 state budget of US$22 per barrel. 6. of the amount. and US$329 million for administrative matters. the world's top rank LNG producer. US$2.081 million barrels in 2003.096 million for development activities. and Balikpapan (Kalimantan). Cooperation contracts for seven blocks were agreed through direct offer and were signed in March 2004 and ten other blocks in August 2004. The country's current total oil refinery capacity is 987 MBCD or 360 thousand MBBL.921 million for production activities. and Boven Digul (Papua or Irian Jaya).510 million for production. Investment realization of production sharing contracts in 2003 amounted to US$3.9 million for the period of three years. was signed by Indonesia and Singapore. in 2003 exported 35. In augmenting foreign exchange earning.Average price of Indonesian crude oil in 2003 was US$28. Seruai (Nanggroe Aceh Darussalam). it is predicted to increase to 6.66 billion cubic meters.28 billion cubic feet in 2003. Investment in the down-stream sub-sector in 2003 took place by the issuance of approvals for 20 oil refineries. and one LNG refinery and one LPG refinery. as well as 13 principle agreements on oil and gas supply through pipelines. in 2003 a working contract of natural gas supply through piped transmission of 100 million cubic feet a day for a duration of 15 years. of which US$779 million for exploration activities. In speeding up the economic recovery. and 4. or accounting for 1. Tingau and Ambalat Timur (East Kalimantan). Cepu and Balongan (Java). Cilacap.5 percent of the world's total deposits.05 billion cubic meters were exported to Japan.150 million barrels per day. It is predicted that crude oil production in 2004 would reach 1. from 6. US$2. and of gas.10 billion. the Government offered working areas in oil and gas through tenders and direct offers.971 million for exploration. The Government planned also to invest as much as US$7. The seven blocks are Bulungan. up from 1. Dumai and Plaju (Sumatra).73 per barrel or some 30.3 trillion cubic feet. In 2004.68 billion cubic meters to Taiwan. Its proven gas deposits are estimated at about 90. Nunukan.482 million in up stream oil industry. the Government in 2003 signed agreements on 15 oil and gas working contracts in land and off-shore areas with total commitment of US$140. 144 . and US$686 million for administrative matters.

South Korea (1. Also in 2003. and crude oil 59. Trailing behind are the mining companies Kaltim Prima Coal (18 million tons. plans to produce 24 million in the near future). the total consumption of oil reached 57. It is the current Government's commitment to continuously reduce oil subsidy by increasing retailed oil prices. the greater part of which is available in Sumatra and Kalimantan. Coal Indonesia is one of the world's leading coal producers. In 2003. Parakan special coal pier in Tarahan.2 trillion. ranking third after Australia and China.02 trillion. Japan. Papua. up from 106. and 11.6 million tons). PT Tambang Batubara Bukit Asam (11 million tons). or above the targeted Rp13. PT Kideco (12 million tons). South Sumatra in 145 . to the US (3 million tons). LPG as much as 1.40 million kiloliters.71 million kiloliters for need of transportation. The supply will last for 12 years. Indonesia signed in 2003 a contract to sell more than three million tons of LNG from the Tangguh field.6 metric tons in 2002. For domestic needs.5 million tons).For the year 2004. it dwindled to Rp32. In 2004.65 million kiloliters for households.15 million tons) and to China (2. and PT Berau Coal (8 million tons). The main importers of Indonesian coal are Taiwan. a contract of an additional natural gas supply of 50 million cubic feet per day through piped transmission to Singapore with selling value of US$0. it reached Rp26. coal production is expected to reach 119. and India. of which 26.29 trillion in 2002. PT Adaro Mining Company is currently the country's leading coal producer with coal output of 22 million tons per day.359 billion MMBTU. has been also agreed and signed. Indonesia exported LNG as much as 1. PT Arutmin (14. 7.22 billion tons. South Korea. The country's estimated coal reserve deposit is 5.105 MT.7 million metric tons in 2003 and 100. In 2001 subsidy for oil amounted to Rp36.58 million kiloliters for industries.87 million barrels.40 trillion.7 million metric tons. In addition.77 billion.

Reserve deposit of copper in Batu Hijau is estimated at 1. the reserve can last for about 15 years. This copper-pit has reserve deposit of an estimated 2. South Korea. one ton of copper concentrate contains 0. and West Java. in 2003 it could manage only 5. the production of which reached 17. The state-owned gold mining company PT Aneka Tambang operation in West Java could produce gold of 4.3 million ounces. and 3.52 percent of copper. the Philippines. total production of nickel matte was 15.019 kg in 2003 from 142. With its fixed production assumption.000 tons of copper concentrate and 18 tons of gold concentrate that are exported to Japan.238 million metric tons.306 metric tons in 2002. India.8 percent of silver. nickel ore is also processed to be nickel matte produced by PT. Germany and Bulgaria. among other things in Papua.4 percent of gold.21 million pounds in 2002. with annual production is expected to reach 245. North Sulawesi.176 kg and silver of 28.395 metric tons in 2003 from 4. in 2003 it could produce only 71.986 kg in 2003.5 million ounces. The company has an estimated gold reserve deposit of 64.13 percent of copper. Freeport Indonesia is the country's largest private gold mining company. with its total selling reached 2.803 metric tons in 2003. PT.5 million pounds. While its total production still reached 88. Private gold mining company operating in West Nusatenggara could produce gold of 585. In 2002. Spain.000 ounces.695 million metric tons. Sumbawa Island by PT Newmont Nusa Tenggara by investing about US$1. The reserve deposit can be mined for and estimated 25 years.000 metric tons. up 18 percent from 13. 146 . decreasing from 3.798 tons. production of copper concentrate reached 3. the country exported tin as much as 62. So did its exports. This concentrate was dug from the Grasberg copper-pit managed by the PT Freeport Indonesia.366 metric tons in 2002. 1.Tin production indicated a declining trend.05 percent of gold. Gold and Silver Gold and silver reserve deposits are scattering in several sites. The country's total gold production dwindled to 141.142 million metric tons in 2002.500 metric tons. Inco.570 kg in 2003. Copper In 2003.786 million metric tons in 2002.238 kg in 2002.5 million ounces of gold in 2003 or a raise of eight percent compared to that of 2002 amounting to 2. and that of silver shrank from 288. and 0. Nickel Production of nickel ore in 2003 noted a slight increase to 4. In addition.031 tons. declining from 42. Part of nickel ore is processed to be ferronickel. One ton copper concentrate contains 1. West Nusatenggara.9 billion. Another copper mining is being worked on in Batu Hijau. In 2003.806 kg in 2002 to 278.

or 3.9 percent. The company is also to complete the Java southern transmission networks to improve the security of electricity supply in Java-Bali 147 .5 percent. Sales of electricity in 2003 amounted to 89. In 2003. Those plants are Area I (33.3 percent. making the electricity ratio in Indonesia reach 60.536 gigawatt hours (GWH). The number of villages enjoying electricity supply. Mrica (176 MW). Brantas-Non Sutami (125 MW).34 percent. The greater part of bauxite is exported to China and Japan. The need for electricity in Java and Bali is supplied by several hydro power plants with total installed capacity of 2.5 MW).5 MW).266 MW.9 trillion in 2004. and public 8 percent (2.20 percent higher than that of 2002. Electricity There are two main electricity grids in Indonesia: the Java-Bali electricity grid.244 GWH).879 MWh. Not all the country's territory is covered by the national electricity grid managed by the PLN.3 percent (2. and the outer Java-Bali electricity grid.262 million metric tons from 1. and Rp3. household 33. Saguling (695 MW).644 GWH). which has not been interconnected yet.4 percent of the country's total villages.8 trillion for building transmission networks. In bettering its national grid and in overcoming short supply. producing 10. commercial 10. In 2001.849 GWH). which is interconnected by extra-high voltage networks. Installed capacity of electric power plants in 2002 amounted to 21.605 thousand MWh. industry took 49. Area IV (40 MW). The number of households using electricity supply in 2001 was 27. of which Rp 2. Area III (124 MW). industry took 41. and Jatiluhur (179 MW). at the same time. Eleven area electricity boards and four regional electricity distribution boards of PLN are responsible for the distribution and for the retail sale of electricity.360 thousand MWh.Bauxite Production of bauxite in 2003 suffered a slight decrease to 1. production was increasing by 8. Area II (54.283 million metric tons in previous year. The state-owned electricity company Perusahaan Listrik Negara (PLN) supplies most electricity.1 trillion for distribution expansion.114 MW with total production of 108. so non-PLN bodies such as cooperatives or small private companies manage the supplies.53 percent to reach 117. was 31. The state-owned company PLN currently operates 41 hydro-power plants with installed capacity of 3. with almost unchanged installed capacity. Out of the total consumption in 1990s.500 MW.9 millions.2 percent (13. using small and medium capacity electricity generation plants such as diesel-power plants.000 MW). It is also responsible for the operation and maintenance of power stations and the national grid.2 thousand or 79. Cirata (1. Sutami (102 MW). the PLN is to invest Rp5. particularly for remote rural areas. and commercial 13.

06 billion. The potency includes demersal and pelagic fish catch. They include: empowerment scheme of people who are engaged in fish farming and are living at coastal areas. The country's maximum sustainable yield of sea fish is estimated at 6. the Government encourages companies dealing in the supply of electricity to develop micro hydro-power plants and sell their production to the PLN. with a capacity of 60 MW. sea cultured fishery. Altogether their total potential economic value is estimated at US$82. spreading in nine major maritime zones. scheme for improving the growth rate of fishery-based businesses in the sector of maritime and fisheries. The main aims of maritime and fisheries policies are the improvement of the welfare of Indonesian fishermen and fish farmers in particular and the whole Indonesian people in general. and international cooperation development scheme. the maritime and fisheries sector has developed more rapidly to offer a meaningful contribution to the country's economy.000 km. During the past three years. brackish cultivated fish. In 2000 and 2001. some schemes were introduced in 2003. Responsible for policy. Thus this sector is still expected to be a substantial economic mover in the years to come.8 million sq km and coastline of some 81. scheme for enhancing the role of Indonesian waters as the unifying element of the Indonesian Nation and marine culture. the GDP 148 . the company plans to build two hydro-power plants in Raja Mandala. Indonesia has a total maritime area of 5. small-scale private electric companies are encouraged to sell their products to the State-owned electric company PLN. development and promotion of maritime resources and fisheries is the Ministry for Maritime Resources and Fishery. In augmenting the supply of electricity. particularly to help accelerate economic recovery and simultaneously improve the people's welfare. to make remote villages capable of enjoying the supply of electricity. underpinned by development of maritime and fisheries industries having excellent human resources to produce highly competitive products. Meanwhile. development scheme of technology and information system of maritime and fisheries natural resources. As a maritime state Indonesia is rich in fish in term of quantity and variety. In advancing the maritime and fisheries sector. wise and environment-friendly manners.4 million tons per annum. rehabilitation and conservation schemes of marine natural resources and fisheries and their ecosystems. West Java. marine biotechnological fish as well as fresh-water cultured fish. In addition. and is rich in maritime natural resources which have not been optimally exploited. MARITIME RESOURCES AND FISHERIES Being an archipelago. and that the development of maritime resources and fisheries is made in a sustainable. It means that the development is based on a sustained development conception.interconnection.

The area and establishments then expanded to 730. the total area of cultured fisheries was 594.9 percent. While the growth rate of area for sea cultured fish.48 million tons.176 ha run by 80.04 percent.2 percent.521 million tons in 2002 to 4.94 million tons in 2003. During the period of 2000-2003 fish products noted a rise of about 5. the contribution of the fisheries sub-sector to the country's GDP amounted to Rp46.67 trillion or accounted for about 2. but in 2003 export value swelled to US$2 billion with export volume of 696 thousand tons. and 28. slightly dropped from 81 percent in 2000 to 79.3 percent and 43.33 percent of the country's GDP.51 million tons.919 fish farming establishments. Sea fish catch grew at an average of 4. Thus it is reasonable that the development of cultured fish has been given priority in the development of fisheries.6 percent respectively. In 2002.63 million.3 percent respectively.79 trillion or made up 3.090 ha and 315. 35. In 2001 GDP of fisheries sub-sector amounted to about Rp34. sea fish catch still constituted a dominant proportion. In 1999.728 million tons in 2003. so has the area and establishments of cultured fish. on the contrary.07 million tons in 2000 to 5. higher than that of sea fish catch production that grew at about 4.76 percent only. Contribution of cultured fish to the country's total fish production reached 19 percent in 2000. That of sea fish catch. and floating net caged sea fish farming was 56. Of the total fish production.of fisheries sub-sector grew at an average of 15. In 2003 it amounted to Rp. At the same time. The export value of fish products in 2002 declined to US$1.57 million with export volume reaching 0. and it increased to 21 percent in 2003. the growth rate of cultured fish production was 7.1 percent of the country's total GDP.000 fish farming establishments respectively in 2003 or growing at 5.39 percent of the total GDP.44.5 percent in 2003.61 trillion or constituted about 2. bringing in a foreign exchange earning of US$1.58 percent per annum from 4.21 percent per annum from 5. Fresh water fish farming in Riau Exports of fish products in 2001 amounted to 0. 149 .65 percent per annum. sea caged-fish farming. As cultured fish production has an increasing tendency.

30 million tons in 2003. the Philippines. The schemes include: scheme for improving productivity of economic activities. encouraging local fishermen to improve their fleet and fishing equipments. During the period of 2000-2003 law enforcers had handled and settled 186 criminal cases in the field of maritime and fisheries. and promotion for collective fish farm undertakings. with composition of larger-size vessels bettering to make increasing number of employment. promoting coordination among related government agencies such as among the Ministry for Maritime and Fishery and the Police. In 2003 alone the Indonesian Government was successful in capturing a number of foreign vessels fishing illegally on the country's waters territory. 150 . among other things. domestic fish consumption rose at an average of 6. and nila fish. the Government has maintained and improved cooperation with the governments of the People's Republic of China. During the period of 2001-2003. there were estimated 7. The scheme for improving productive activities of coastal communities has been implemented up to 2004 in 527 districts throughout the country. particularly within the country's 200-mile limits of its Exclusive Economic Zone (EEZ). Indonesia is faced with rampant illegal fishing within its seas by foreign fishing vessels. Also in overcoming such illegal fishing.14 percent per annum. the Government has imposed a decision that allows no more than 900 foreign fishing vessels to operate in the 200-mile EEZ limits. the Indonesian Government has taken some anticipative measures.2 million cultured fish farmers. Illegal Fishing Having sheer waters territory.Domestic fish consumption in 2001 reached 4. In this context. development scheme for small-scale sea fish catch undertakings. Various schemes have been introduced to empower fishermen. and 5. Before the decision took effect. cultured fish intensification scheme for shrimp. In minimizing illegal fishing by foreign fishing vessels.83 percent per annum from 449 thousand in 2000 to 474 thousand in 2003. the Navy etc. seaweed. The number of fishing vessels rose by 1.055 trillion in potential loss. rural fish farming development scheme.69 million tons. In 2003 there were 3. Attributable to the increased fish production during the last three years had been the bigger number of fishing vessels and even fishing boats being operated and modern technology applied to augment productivity.000 foreign vessels fishing illegally. securing the country of about Rp. improving licensing system for fishing businesses. and Thailand. kerapu. reinforcing law enforcement and the imposition of fish catch control. cultured fish farmers and communities living at coastal areas.4 million fishermen and 2.1.

along with planting of coral reefs. 33 of 2002 on Control and Surveillance of Sea Sand that governs the mechanism of control and exploitation of sea sand. Regarding the management of islets which are many in number. the Government has identified their basic data. the Team for Controlling the Exploitation of Sea Sand. coastal areas and islets management. With the imposition of the sea sand exploitation zoning areas. solar-system electric power installations. profitable and much in demand by both domestic and international market. endeavors have been made to manage integrally the resources of seas and coastal areas. and business circles. In short-term. Marine and Coastal Areas Ecosystem In pursuing an improved quality of the ecosystem of seas and coastal areas. in October 2003 at the Tomini Bay. government. rehabilitation of coral reefs in six provinces covering 12 districts. Meanwhile. Activities of these endeavors include: the arrangement of seas. National Campaign To more advance the maritime and fisheries sector. some 50 percent of sea sand exploitation areas are closed. President Megawati Soekarnoputri launched the national campaign for maritime and fisheries development. of which eight arrangements have been enacted to be Regional Ordinances. The major aims of the campaign are to manage and maximize the exploitation of the sector. the regulation on exports of sea sand is governed by Decision of the Minister of Industry and Trade No. The years 2004 and 2005 would be the phase of preparatory to reinforce the ground of the scheme as the continuity and improvement of the on-going development. and construction of coastal protective structures has also been done to maintain the ecosystem in a number of islets. Kinds of fish to be cultured and developed are fish having high economic values. and the construction of mini ice plants in several islets. Rehabilitation of mangrove forests. Infrastructures and facilities to be constructed include industries to process cultured 151 . and the national campaign for cleaning the seas and coastal areas from organic litters. and to address all marine problems through synergic efforts by communities. designation of local seas conservation in four locations. and the formation of an ad hoc institution. 598 of 2003. The Team is tasked to mainly manage and run the mechanism. So far the Team has issued regulation on quota and zoning areas for the exploitation of sea sand. South Sulawesi. It has also built some facilities and infrastructure such as communication devices. the campaign aims to build infrastructures for both sea fish catch landings and cultured fish farming.Sea Sand Exploitation In dealing with the control and surveillance of sea sand exploitation the Government has issued Presidential Decision No. while others are being processed. The main aims of these endeavors are to improve and preserve sustainable exploitation of natural resources for the interest of environmental and socio-economic development in helping governmental decentralization.

CLS-Argos and Spot Image of France. Chiba University. and marine technological innovations. and environment-friendly energy. Radarsat International of Canada. satellite monitoring on weather and seasons. Furthermore. which is located at Perancak. Indonesia has been selected as the site of the center due to chiefly to the fact that Indonesia has seas with highest bio-variety in the world. Germany. 152 . JIFIC. mining at the deep-seas and coastal areas. sea pollution. Article 27 clauses (2) the development of manpower aims to provide jobs and business opportunities for the working population to enable them to have jobs and earn their proper living. Joining the center are noted international institutions such as the National Science Foundation and NOAA of the US. legal protection. mollusk. and legal defense which are managed integrally to prevent the emerging of manpower exploitation. Bali Island. cultured fishery. Restec Mitshubishi Corp of Japan. and to safeguard resources of illegal fishing. to develop small-scale fish catch undertakings in all provinces. the 1999-2004 Broad Outlines of State Policy stipulates that the comprehensive and integral development of manpower aims to improve the competency and self-capacity of manpower. better wage. Necessary infrastructures and facilities are to be made available in some 89 islets along the country's borderlines. and other islets and islands to control pollution on seas. The main aims of this center establishment are : to improve marine monitoring and research in Indonesia and Southeast Asia region. which has an estimated economic value of about US$2-US$4 billion per annum. In addition. the Policy also envisages the improvement of quantity and quality of manpower to work abroad by taking into account their competency.shrimp. Canadian Space Agency. secure the welfare of manpower. JICA. maintenance of coastal and marine environments. BMBF of Germany. and to protect manpower and the freedom to associate. and to run meteorological monitoring system for monitoring local or sub-regional weather conditions. Research Center In 2003 Indonesia initiated the establishment of an ocean research center named the Southeast Asia Center for Ocean Research and Monitoring. the CSIRO and AIMS of Australia. transport. The construction of the center received financial assistance from several countries including the US. It also serves information on marine resources management. such as fishery. The same things are to be developed to promote marine tourist potential at coastal areas and islets. Korean Ocean Research and Development Institute of South Korea. The center provides information on various matters. and patin fish as well as sea fish catch. seaweed. MANPOWER Pursuant to the 1945 Constitution. France. and Australia. marine tourism. the UK.

Labor force participation rates (LFPRs the number of population classified as labor force for every 100) of the country in 2003 recorded a decrease to Women working at a tobacco company 153 .Based on the policy there are various programs introduced.37 percent of them were in Java Island.6 million. program of social security system development. of which some 60. Labor Force The total working population of Indonesia in 2003 was 152. including: expansion and development of job opportunities scheme. and social insurance program. improvement of quality and productivity of manpower scheme.

with lower level of education (secondary school and under) accounting for 76. The unbalanced growth rate of manpower and job and business opportunities as well as economic growth caused unemployment. trade sector and agriculture. to develop Indonesian workers who are qualified and capable.50 percent had been working.32 percent of higher level education. In striving for the expansion and development of job and business opportunities.65. provincial and district administrations. The campaign aims to nurture sensibility and awareness of government apparatus and members of society to seek a solution to overcome the growing unemployment. and to set up an excellent manpower information system.23 percent).25 percent of the country's total working population.23 percent). the Government in July 2004 launched a National Campaign for the Handling of Unemployment. the goals of the scheme are: to expand job opportunities in various fields of business.72 percent from 67.54 percent).4 million. and (4) to improve the mechanism of the sending. The total number of labor force in 2003 was 100. and other supporting skills and expertise in order to make the work force capable of creating job opportunities. Employees in Indonesia in 2003 numbered 23. self employed assisted by temporary employees (53.68 percent of them was of lower level education and the remaining 40. with some 59.3 million. and employers (6. 154 . The major activities of the scheme include: (1) to improve trainings with curriculum related to acknowledging efficient technology. comprising self employed (40. which involved leading figures of central.22 percent of higher level of education (college and university). Mostly they worked at the service sector. (3) to set up settlements for new inter-island migration to expand job opportunities in agriculture. Agriculture employed about 42 million people. and seek out their protection. and some 32. both at rural and urban areas.5 million people in 2003. entrepreneurship development. guidance and selection of Indonesian workers who want to work abroad. Open unemployment in 2002 numbered eight million people. The total number of unemployment in 2004 is estimated at 10. manufacturing industries. Meanwhile. (2) to prepare and disseminate information on job market. Expansion and Development of Job and Business Opportunities The main aims of the scheme are: to reduce unemployment and disguised unemployment through adding working hours in various business fields.78 percent and the remaining 23. At the same time the number of population employed totaled 41. of which some 90. business representatives and representatives from higher learning institutions.8 million or some 26.99 percent of them were unpaid workers.8 million people.76 percent in 2002. and augment foreign exchange earnings through the sending of Indonesian workers abroad. and the figure increased to 9.

and improving trainings and all aspects that affect productivity enhancement.225 people undergoing training of trainers. the betterment of relevancy. in 2003 there were 4.38 percent of them working in non-formal sector and the remaining in formal economic activities.499. 98. Up to April 2004 there had been 167 institutions organizing training for workers who wanted to work overseas. social workers. Under the scheme. high productivity and high competitive edge both in domestic and international market.521 people undergoing non-institutional trainings. employees.344 job seekers employed under the placement program of Professional Independent Young Manpower (PIYM)/Volunteer Manpower (VM). there were 1. as well as another 293.183 people undergoing apprenticeship abroad. The chief target of this scheme is the availability of work force having good quality. and 2. some 75. and the promotion of the system and method of productivity improvement. leading figures of communities and non-government organizations. 4. attending institutional trainings and 20.753. quality.419 job seekers under Expanded Labor-Intensive scheme. under EIM scheme 248. 155 .800 people consisting of job seekers.993 people undergoing institutional trainings. under expanded labor-intensive scheme 1. and 171 people undergoing on the job-training abroad. Up to May 2004. under labor-intensive scheme 457. 258 undergoing training for trainers. 2. 820 persons attending entrepreneurship trainings and 123 persons attending training on institutional productivity development. Improvement of Quality and Productivity Scheme The scheme is aimed at encouraging.485 people of the same professions attending non-institutional trainings.069. the number of job seekers getting placement under the scheme of PIYM/VM was 210. and efficiency of the job-trainings organized by the Government as well as private institutions. in 2003 there had been 14.764 people taking part in entrepreneurship training. and under schemes of IrMP. 1. Local Manpower Placement (LMP).088 people undergoing training for on-the-jobtraining abroad and 2. The sending of Indonesian workers to the Middle East countries had been handled by 171 service companies and to Asia-Pacific region by 233 service companies. popularizing. 1. 8. During the past three years the number of Indonesian workers who had been placed overseas totaled 1. and of Special Manpower Placement (InMP). LMP and InMP 9.930 job seekers under the placement program of Educated Independent Manpower (EIM).406. and the placement of Indonesian workers abroad totaled 18. 171 people undergoing job-trainings at home.885 job seekers under the labor-intensive scheme. The number of Indonesian workers who had overseas placement from January up to May 2004 was 106. Up to May 2004. The number of job seekers placement in 2003 showed an increasing trend compared to that of 2002.Under the campaign scheme.867 workers getting jobs abroad. 4.602 job seekers under scheme of Inter-regional Manpower Placement (IrMP).300. The main activities under the scheme include: the development of competency standardization and certification done through the formation of an institution dealing with competency standardization and certification.883.

630 persons attending training courses on Communications. and 9.745 persons on Employment Protection and Industrial Relations Control (EPIRC).530 persons having guidance on Job Requirements and Labor Welfare (JRLW). and law enforcement of regulations imposed on labors. Kuwait. to improve vocational safety and health.102 cooperation agreements were made.207 workers.821 companies. some 160 cases of industrial disputes and lay-off were settled.16 million workers working in 102. So far memorandums of understanding (MoU) on the placement of Indonesian workers have been agreed and signed with Jordan (in 1996) and with Malaysia (in 2004). This program is aimed at improving labor institutions in companies. In addition. 156 . the settlement of 63 cases of labor strikes and protests. 1. and in helping them when they have problems involving legal cases. to follow up various regulations of the ILO Convention on Labor Protection.269 enterprises.200 persons taking trainings on Manpower Institutional Development (MID). to improve obedience over the implementation of regulations on labors.876 persons taking training courses on MID. Under this scheme. company regulations for 36. The main activities of the program are: to promote industrial relations and labor protection in order to encourage the formation of labor institutions in companies. Information and Education (CIE). Qatar. In the context of dealing with all matters of Indonesians working abroad particularly in Malaysia and Saudi Arabia. control. Hong Kong.76percent increase of regional minimum wages and provision of Employees Social Security (locally known as Jamsostek) to 20. in 2003 there were 14. and the 10. In 2004 (up to May 2004) there were 866 persons attending training courses on CIE. and healthy vocational security. 3. Similar MoUs with other countries such as Syria. to enhance protection. and social security for improvement of labors welfare. which has been ratified. More similar attaches will be commissioned and posted in other countries such as Singapore.8-percent increase of regional minimum wages. South Korea. Also done under the scheme were the 14.210 enterprises were drawn. 1.Industrial Relations There is a program designed to maintain a working and business tranquility in order to create harmonious relations between employees and employers that in turn will improve the welfare of employees and their families.118 joint cooperation agreements. and Taiwan. enhancing working conditions. and Taiwan are still under preparation. Brunei Darussalam. along with the settlement of industrial disputes and lay-off for 1. the arrangements of company regulations for 36. South Korea. 22. the composition of 9. three Government Officials (attaches) have been currently commissioned and posted in those countries.

and lay-off . The schemes are also aimed at covering more and more number of people being protected by social insurance schemes. Parallel with this. such as to provide its members with down-payment for credit of house mortgage. Although still short of covering the communities. to build public facilities for religious houses of worship. maximum treatment. through Article 34 clause (2). as stipulated by the nation's Constitution. during its 2001 Annual Session commissioned the President of the Republic of Indonesia to establish a National Social Security System in the framework of granting the labor force a comprehensive and integrated social security. In dealing with all social risks arising during the employment of Indonesian workers overseas or during preparation for the overseas placement at home. Article 28H clause (2). is the citizen's basic right. states that "the State shall develop a social security system for the whole Indonesian people…" Meanwhile. the Constitution. including the cost of burial/sending a corpse to his/her native hometown. their family members. death due to accident or sick. and c) post-placement program that embraces insurance on death due to accident. and accident. 102 of 1952 recommends all countries to provide protection to every worker. as well as the communities from emergency conditions caused by among other things famine. 157 . It is a social security scheme for employed workers. 157 of 2003.Social Security Social security. work accidents. are designed to protect members and their families from unfavorable situations such as layoff. The operator of this social security scheme has been asked to expand its services. This social security is necessary in protecting individual workers. and death. there has been a scheme locally known as Jamsostek. Further. the People's Consultative Assembly of the Republic of Indonesia. there has been arranged a scheme that will protect Indonesian workers working abroad through an insurance scheme pursuant to Decision of Minister for Manpower and Transmigration No. Social Insurance Scheme Scheme of social insurance. accidents and social unrest that might disturb the people's earnings and supplies of foods. and total paralysis caused by accident. for sports etc. permanent deformity. sick. unpaid wage. and allowances for celebrating religious commemorations. which are funded by individuals and companies. The insurance scheme consists of three kinds of programs such as : a) pre-placement program that secures insurance on death. b) on-going placement program that covers insurance on outand in-work accident. natural disaster. the International Labor Organization's Convention No. sick treatment.

158 . and midwifery. nursing. human resources and community-based tourism development. decentralization. However. in one hand. measures and steps necessary have been introduced.Global Trend Liberalization of global trade will pose a tight competition among workers of all countries since it allows the traffic of workers from one country to another much more rapidly. the criteria of which are set forth by developed countries. it is time for Indonesian workers to adjust themselves to the criteria on each profession to be able to compete with professionals from other countries to fill in vacancies at domestic and international market. TOURISM Tourism industry in Indonesia has placed itself as an important economic sector in speeding up the national sustainable development. it has been proved that the policy which stresses more on foreign exchange drive has gained. arts. seamanship. relevant regulations ascertain that tourism development should be based on the potency of socio-cultural diversity. Thus. and natural beauties. and the utilization of expatriates. Some professions the Indonesian workers have claimed international reputation for are among other things accountancy. which stipulates among other things the improvement of Indonesian worker's ability and self-capacity to compete. but on the other hand has caused rather unfavorable impact to natural resources and culture. The development should certainly take into account the aspects of good governance. In facing this situation. natural resource preservative and environment friendly criteria. much more foreign exchange earnings. This has been in parallel with the industry's expanding contribution to the opening of business opportunities to accommodate more and more labors to work in. the industry later on has turned to be one of important economic sectors of foreign exchange earner. oil drilling. Foreign exchange the industry had brought in proved swelling from one year to another to turn much more significant contribution to the economy. In dealing with such tourist industrial development. Furthermore. as of 1999 tourism concept has been regarded as part of socio-cultural development program. It also will require professional workers. by using economic. construction. put into practice and implemented appropriately to the developments of the industry. This is in line with Law No. technical. various policies. Having been regarded as a cultural based development activity during its initial stage. The 1999-2004 Guidelines of State Policy affirms that tourism industry needs to be developed through a comprehensive and integrated approach system. socio-cultural. though this sector was in fact put into the Guidelines of State Policy only in 1978 or during the implementation of the Second Five-Year Development Plan. agronomic. inter-discipline and participative in character. energy thrifty.13 of 2003.

foreign exchange earning of US$7. 159 .Matras beach in Bangka Island. Travel Weekly East etc. with its natural beauties and culture to rely on. including world's well known TV stations such as CNN. In addition. and to the J. Marriott.. Bali. it certainly should strive to make the products of tourism industry more improved. In connection with efforts to lure more tourists. and Indonesia as a comfortable. etc). the International Tourism Bourse-ITB Berlin. To encourage domestic tourism promotion it has been launched the "Gebyar Wisata Nusantara" (Archipelago Tourism Glitter) scheme with the theme: "Come on Exploring the Archipelago". domestic and foreign ones. but also through advertisement via mass-media. and domestic tourists' expenses of Rp16. attractive tourist destination having high competitive edge. and other promotional forms. Ultimate in Diversity".9 percent growth of domestic tourists. The country's image was plunged to negative due to terrorist attacks in Kuta. In relation with the targets to achieve. Bangka-Belitung Province The long-term goals of tourism development are: sustainable development of national tourism industry.97 trillion. as well as the latest attack in Kuningan area both in Jakarta. Targets to be achieved in the field of tourism industry in 2004 are. both in term of quality and quantity. While the shortterm target is the recovery of the country's tourism image in international market. the 7-percent to 10-percent growth of foreign arrivals and the 1. and BBC and world's leading magazines such as the Time Asia. For overseas promotional scheme. by promoting Indonesia as the most varied destination anywhere'. that in turn they would offer more contribution to the expansion of job opportunities and improvement of community's income. it also strives to lure more domestic as well as foreign tourists to outer islands of Java and Bali. among other things. Promotional marketing has been done not only through participation in various tourism bourses at home and overseas (the International Tourism-Milan Bourse. the new theme is: "Indonesia.6 billion at the end of 2004. promotional schemes and marketing's have been launched.M. TTG Asia. CNBC.

Singapore. Foreign Arrivals The number of foreign tourists visiting Indonesia in 2003 was only 4. Peru. Tourism Working Group and Japan ASEAN Centre. Chile. Algeria. In its role within the international fora. the Philippines. The new pay-on-arrival visa allows visitors to stay for 30 days. ASEAN and APEC. In June 2004 the number of foreign arrivals reached 407. Emil Salim of Indonesia as member of the world committee on Tourism Ethics. Brunei Darussalam-Indonesia Malaysiathe Philippine-East ASEAN Growth Area. and Taiwan. remain to enjoy a reciprocal policy by the Indonesian Government. South Korea. While tourists from countries offering visa-free facilities to Indonesians. The new policy also shortens the length of stay of tourists able to continue availing of the free-visa facility from 60 days to 30 days. The appointment was made during the 15th WTO Meeting held in Beijing in October 2003.0 billion in 2003.03 million. Morocco. At the 160 . Finland. The decrease of the number was followed by the reduce of their length of stay from 9. the United Arab Emirate. Britain. Overseas Cooperation In promoting tourism industry. Japan. Hungary. Denmark.428 million. Norway. and Poland. Thailand.9 thousand. South Africa. including maintaining cooperation with other governments such as in sub-regional cooperation. and bilateral cooperation among other things with Japan. Poland. Brazil. decreasing by 12. Tajikistan. as well as with world organizations such as the UN-ESCAP. namely the Indonesia-Malaysia Singapore Growth Triangle (IM-GT). 2004 Indonesia has started implementing the Visa-on-Arrival (VoA) policy. Canada. UNICEF.69 days in 2003. During the meeting it was also designated Prof DR. A foreign tourist has to pay US$25 for a 30-day visit and just US$10 for a three-day visit. The Pay-on-Arrival Visa is required of visitors from 21 countries. and Vietnam.3 billion in 2002 to US$4. UNESCO.51 percent compared to that of previous month.1 thousand. WTO. Australia. Macao Special Administrative Region. such as Thailand.02 percent from that of 2002.79 days in 2002 to 9. New Zealand. the Indonesia Malaysia-Thailand Growth Triangle (IMT-GT). which numbered 369. growing by 10. Argentina. France. the Government has endeavored various efforts. Italy. The shrink of tourists' number and their length of stay had in fact diminished the earning of foreign exchange from US$4. Switzerland. Brunei Darussalam. Germany. Malaysia.Visa Policy As of February 1. These countries are the United States. Hong Kong Special Administrative Region. and member of Committee for the WTO's 2003-2005 Program. Indonesia has been appointed as member of Executive Council of the World's Tourism Organization (WTO) for the period of 20032007. which totaled 5.

" The gamelan orchestra generally composes of xylophones of bronze or copper bars 161 . developing the national Indonesian language and local languages and promoting the use of the Indonesian language and local languages properly and well. batik cloth from Solo (Central Java). artistry has been a daily life. Yogyakarta. in the form of national culture suitable with the motto `Unity in Diversity'. etc. including that of underwater archaeology. Word of Gamelan is derived from Javanese word `gamel' meaning "to beat. and believe in One and Only God existing and developing in respective tribes or ethnic groups. Cultural remains The country is stunningly rich in kinds of arts and craft. cloth weaving from East Nusa Tenggara and Palembang. Pekalongan (Central Java). Cumulatively. Skill and creativity of Balinese artisans have been popular worldwide. and mass-media. So have craftsmen and artisans of woodcarving from Jepara. formal education. so that they can be a reference in the life of society.13 million. Madura (East Java) etc. and enhancing the community's appreciation to the national film products.same time. a mere simplest household item.0 thousand in May 2004 to 137. Besides. customs. study. caring. this kind of music has been well known in almost entire Indonesia. Music Gamelan is a music instrument having been so popular and reaching a sublime degree in Java and Bali. increasing by 34. particularly for younger generation through the channel of non-formal (family and community) education.64 percent compared to that of the corresponding period in 2003. the number of foreign tourists visiting Bali noted a growing trend from 123. nation and state. is plaited artistically and decorated with patterns inherited from one generation to another. In many places in the country.3 thousand in June 2004. writing and nurturing historical values and heroism to build nationality and spirit of patriotism. the number of foreign tourists visiting Indonesia during the first quarter of 2004 was 2. usually made of bamboo or rattan. Central Java and West Sumatra. CULTURE Policy Policy in the field of culture aims to among other things enhance the people's awareness on the importance of preserving each local culture. within the frame of national unity. safeguarding. Nowadays. For instance. Various measures have been taken in the context of among other things improving the performance of national film industry as part of culture. particularly for younger generation. and nurture of traditional values. Cirebon (West Java). pride and respect towards our national cultural nobility be more nurtured to strengthen the nation's self esteem. It is also designed to more preserve the national cultural values through efforts of revelation. and protecting. conserving and renovating historical sites and objects spread throughout the country.

Usually this kecapi is accompanied by bamboo flute. A complete gamelan outfit consists of two sets of ensembles. The story of the show is usually culled from Hindu epics Ramayana and Mahabrata. puppet show is a shadow show to which onlookers watch the shadow of puppets. angklung. seudati agam from Aceh. beksa lawung dance from Yogyakarta. Among those dances acclaiming popularity among the people are: tanggai dance of South Sumatra. such as in welcoming guests or visitors. recognized and appointed puppet show as the World Master Piece of Oral and Intangible Heritage of Humanity. Indonesians were puffed up with pride when in November 2003 the UNESCO. each tuned to a different tone system. Puppet show is usually played during the night. mask dance of Jakarta and Cirebon (West Java). negejiak and kantet from Kalimantan. In addition to these puppet shows. 162 . Meanwhile. piring dance of West Sumatra. manipulated by a narrator while narrating a story. one of the UN organizations. In addition to gamelan there are gambus. saman dance of Aceh. puppet show time usually is shortened to a half to one hour only. traditional music instrument made of bamboo popular in many places in the country. the best known war dances include baris dance from Bali. In Central and East Java and Bali.suspended over bamboo. wood or metal resonators. to make kecapi-suling with rather melancholic resonance. a music instrument in the form of guitar but more narrowed. kecapi. Indonesian style zitar. Puppet show The word wayang derives from the Javanese word meaning bayangan in the Indonesia language or shadow in English. and the local people name them "golek. Dances Many regions of the country have their own dances. In West Java. there is also wayang wong which is played by a number of dancers. popular among Sundanese (West Java). remong dance of East Java." "golek" show. and cakalele from North Sulawesi. puppets are made of wood. Through TV. etc. made of leather. almost the whole night. The dances are believed to originate from either religious rituals or have been developed for presentation at special occasions.

the art of carving and sculpting has always been the artistic heritage of Indonesians. Traditional Weaving Indonesia is one of the world's leading traditional textiles producers. many of the traditional cloths were attributed to magical properties and in some occasions still are and were used in the various rites related to the important milestones in the human life cycle. such as birth. However. adulthood and death. North Sumatra.Betawi modern dance Carvings Using various materials such as wood. 163 . Jepara (Central Java) and Bali are the hubs of the woodcarver's art. Balinese carvers and sculptors often tend to follow innovative and creative spirit of the people. and bone. The skills to produce the traditional textiles have been going down from one generation to another within thousands of years. Some of the most beautiful and highly artistic cloths are the work of even simple village throughout the country. and lurik of Solo (Central Java) and Yogyakarta. the songket or Saji textiles of South Sumatra. the batik of Java. In the past. Less popular but not of mediocre degree are the carvings of some regions including West Sumatra and Tana Toraja (South Sulawesi). The centers of leather art are Solo (Central Java) and Yogyakarta. While rather "primitive" art pattern of Asmat people in Papua have been famous the world over. ivory. which typically adopts rather traditional patterns for the ornamentation of objects. Of the country's best known traditional textiles are the ikat cloths of several regions. ulos cloths of Batak. unlike Jepara's art.

professional groups. to perfect the 1945 Constitution to keep abreast with the needs of the nation. namely the Political Structure Improvement Scheme. and participation of social organizations. to improve the role of legislative bodies and higher state institutions by asserting each function. To that end there have been four major schemes to be and to some extent have been implemented. maximize control over the performance of state institutions. improve effectiveness. responsibilities which refer to separation of power and clear relationship order among executive.Producing exquisite "songket" cloth in South Sumatra POLITICAL AFFAIRS DOMESTIC AFFAIRS Pursuant to the 1999-2004 Guidelines of State Policy and the National Development Programs in the field of Domestic Politics. authorities. development of domestic politics aims to strengthen and maintain the existence of the unitary state of the Republic of Indonesia based on the motto of unity in diversity. Political Structure Improvement Scheme The main aims of this scheme are: to make the Constitution comply with the dynamism of the national political life and aspirations of the public as well as development of international environments. and NGOs in the state life. and to promote national political system that is more open and democratic. dynamism and reformation by remaining to nurture the national unity and integrity in accordance with the soul and spirit imbued in the Preamble to the 1945 Constitution. function. the Political Process Quality Improvement Scheme. legislative and judicative bodies. and the Political Culture Development Scheme. to encourage political institutions to practice democratic 164 .

stressing on the empowerment of the role and position of the Regional Representatives Council. national consensus on neutral stance of state institutions and the Armed Forces and the Police as regard political affairs. including things that promote the development of civil society which is tolerant and antidiscrimination. In this context it is understandable that all aspects related to the checkand-balance among state institutions. the General Elections Commission (KPU) that more or less has proved itself capable of organizing the 2004 general elections on the principles of honesty.principles. and relation between the Armed Forces and the Police based on decrees of the Assembly and laws on defense and security. which is based on new regional autonomous law. and the creation of improved capacity of state institutions in executing their respective role. An important development worth noting in political life is the organization of general elections by an independent institution. and agreed consensus on the need for a special and independent institutional umbrella in eradicating corruption. the agreed consensus on new format on civil-military relationship. which separates power of state. freedom and fairness Also worth noting is the formation of Constitutional Court. and to encourage the neutrality of civil servants and personnel of the Armed Forces (TNI) and the Police. formation of new political format with the operation of new law on political matters. the agreement that ends the existence of appointed representatives from the Armed Forces and the Police in legislative bodies. the implementation of direct elections for president and vice-president as the Constitution mandates and relevant laws ask for. an important legal institution functioning to do judicial reviews on legal products against the Constitution. The introduction of bicameral system in the nation's parliament it certainly requires appropriate adjustment itself is to create a parliament that can accommodate more balanced political aspirations and representation between those of national and local levels. are improved. and maintain internal check-and-balance system to avoid excessive hegemony in the parliament. general elections and composition and status of the People' Consultative Assembly and the House of Representatives. Major changes the nation has had currently are marked by: amendments of the Constitution that changes substantially some previous consensuses in governing the nation and state life. The Court is expected to produce a breakthrough in legal affairs. Appropriate attention has been given to regional autonomy and the institutionalization of the National Reconciliation and Truth Commission (NRTC) for the creation of a more 165 . But the ultimate goal of this scheme is the strengthening and maintenance of the Unitary State of the Republic of Indonesia. and task as well as the mechanism of check-and-balance. and to make the sound application of it. capable of reforming political life. independency. the formation of new format of relationship between central and regional and local administrations. The scheme is also designed for the formation of a democratic political structure.

peaceful and just political culture to reinforce the foundation of national unity and integrity. as well as all members of legislature (the People's Consultative Assembly. and less focusing on ism. the relation between political parties and the mass has been apparently oriented to the implementation of vision and mission as well as programs. honest. and political parties' function to control effectively the performance of state institutions as well as to promote effectiveness. well-rooted political parties adopting fairly modern conceptions emerged to compete with primordial parties which in the future are expected to be no more dominating the country's political spectrum. by an independent and non-partisan organizing body. including the process of their alliance. and Regional Houses of Representatives). The multiparty system regained in 1999. political process in quality term has undergone relatively drastic changes. direct. political parties and recruitment of state officials. and to promote a democratic system of general elections and the application of it by improving related statutory regulations. Parallel with the growing critical and intelligent people. fair and civilized ways. function and participation of social organizations. The nation may claim having organized the most complicated general elections system with numerous eligible voters scattering at a very large territory consisting of thousands of islands and islets. coalition. compromise and consensus among them. to elect members of the regional or local Houses of Representatives. free. 166 . and in democratic. which respect differences of political aspirations and notions. members of the national House of Representatives and members of the Regional Representatives Council in a single year. House of Representatives. professional groups. Political Process Quality Improvement Scheme The main aims of the scheme are to develop national political system which is democratic and open. In the year 2004 the Indonesian nation for the first time elected directly its President and Vice-President. the institutionalized reconciliation underlines the settlement of political bickering and conflicts in the past with the main aim to create a peaceful and sound political climate in order that the nation's energy is concentrating on building the nation a better future. secret. general. It is also the ideal of the scheme to organize general elections in a more well-organized fashion with maximum participation of eligible voters. has been apparently undergoing the process of rationalization. The life of political parties. In consequence of the effective laws on general elections. and new. and non-governmental organizations in the life of state. religion and ideology. Members of the House of Representatives and the Regional Representatives Council constitute members of the People's Consultative Assembly that has become being a bicameral. Another important change in the membership of legislature worth noting is the exclusion of appointed representatives from the Armed Forces and the Police as of 2004. The scheme is directed towards political parties' improved independency. particularly in struggling for popular aspirations and interests. to build the life of political parties. Regarding the NRTC.

Amendments to the 1945 Constitution. popularizing and practicing the principles of equality and anti-discrimination in the life of society. encouraged and facilitated are the holding of sociopolitical forums and discussions for which the mass-media can play a key role. The process of political recruitment tends to be on rational considerations rather than on emotional ones. tolerant. and it needs to be applied more widely to candidates for secondary and even tertiary posts. Things still need to be promoted. nation and state. no more appointed representatives from the Armed Forces and the Police in legislative 167 . and programs a candidate of public leader or parliamentarian can envisage and offer. Thus. executing and supervising the 2004 general elections. mission. settling disputes on the result of votes counting.Institutions having been established to improve the political process such as the Constitutional Court. All of them have reduced substantially the role of Government participation in preparing. and the General Elections Supervision have already played their respective roles in preparing general elections. the values of democracy. the effectiveness of new laws on political field. the General Elections Commission. Political Culture Development Scheme The scheme is aimed at improving political education in more intense and comprehensive ways to make political culture more democratic. legal supremacy and human rights upheld pursuant to what the 1945 Constitution stipulates. democratic. Hard work by those institutions and active participation of the public in making the general elections successful have been good signs that political reform has been in the right track. and simultaneously discouraging discrimination. including cultural values. Promoting civic education containing modern political education along with improving schooling curriculum containing cultural matters. Freedom of the press in this matter is decisive to nurture more sound and democratic political process. and supervising the implementation of the general elections. peaceful. The fit and proper test method practiced currently by the House of Representatives to select a candidate nominated to hold an important public post has been a good way to gauge a credible leader. things that democracy nurtures. promoting nation-and-character building towards a more modern. dynamic. the cultivation of the importance of respecting differences of opinions. unified. At the grassroots level a number of organizations came into being as the watchdogs over the political process occurring so intense particularly in 2004. the Judicial Commission. prosperous and just Indonesian nation. in encouraging this tendency a mechanism of public debates is in fact imperative to be given ample room and promoted to allow the public to know more and even examine critically the eligibility of the vision. the differences of opinion respected. human rights and political ethics are imperative to be sought out to educate Indonesians of younger age to understand and respect the high values of political ethics and egalitarianism. in a more credible and transparent ways.

including institutional creditors and investors towards the Indonesian Government. and inter-community. trade. is national interest orienting. helping the nations' struggles for their independence. and socially just. and the implementation of regional autonomy or decentralization have been the real evidences of the reform of the country's political culture through democratic processes. and cooperation under the ASEAN region to maintain regional stability. tourism. More over. particularly in approaching the working of the AFTA. the public have been apparently more mature and critical in understanding the existing political conditions and in controlling the management of the state administration. In addition. Policy of bilateral relations covers the fields such as political security. the aim of the country's foreign policy is to strive for a meaningful contribution for the creation of the world that is peaceful.bodies. For this. antidiscrimination. This is pursuant to what the 1999-2004 Guidelines of State Policy says. free. economy. which is free and active. In diplomatic front. It is also underlined that the country's preparations in all fields boosted to face the world free trade. on 168 . and human rights. cooperation and development drives. It is also stated by the state policy that the quality of diplomacy should be more improved in order to help speed up economic recovery and development activities. it is Indonesia's commitment and principle to continuously improve multilateralism. Those encouraging trends are hopefully leading to the materialization of social transformation that preserves noble values of tolerant behavior. national unity. Foreign AFFAIRS As the 1945 Constitution stipulates. refusing colonialism in its all forms. development. particularly by reinforcing and improving the system of the United Nations Organization. improving the nations' help-capacity. it is also sought out to broaden agreement of extradition with friendly countries. socio-culture. stressing solidarity among developing countries. and to enhance cooperation in all fields with some neighboring countries. Bilateral relations in political and security fields focus on matters of protecting Indonesians citizens and workers abroad under the umbrella of law and diplomacy. and improve welfare. regional and international levels. APEC and WTO. through regional and international economic cooperation in the context of improving regional stability. Indonesia has tried hard to revive its foreign politics by remaining to adopt a free and active foreign policy. Policy The country's free and active foreign policy aims to bilateral. among other things that: the direction of foreign politics. in the context of speeding up the recovery of the nation's and country's dignity and trust of foreign governments. and maintaining international cooperation's for the people's welfare.

diversifying armor system. with Russia. guarding the territory from any foreign interference that can worsen the tendency of disintegration. In socio-cultural front. on among other things the establishment and implementation of MOU on banking cooperation among commercial and central banks. review their travel warning. regarding developments of various bilateral forums and agreements among other things Agreement on Investment Improvement. and with East European countries on intensive trade diplomacy followed by efforts to build new agreements on economic and technical cooperation. particularly the US. concerning improvement of non-oil and gas export segment and investment in various sectors. concerning the improvement of various programs pertaining to economic cooperation and technical assistance for trading activities. with the Central Asia on preliminary attempts on the application of balance-trade system to improve trade relations with countries of this region. Bilateral measures in the field of economy and trade aim to enhance bilateral relations in investment and trade between Indonesia and some key countries such as the US. transferring of technology. Bilateral cooperation in tourism covers among other things the implementation of visafree for short visits for 11 countries on reciprocal basis. enhancing law enforcement to help overcome national security problems particularly on separatist movement and terrorism such as that has done with Sweden on separatism of Aceh. The cooperation also embraces development of bilateral cooperation with several countries where the tourists come from. fighting inter-state crimes through among other things agreements of extradition with various countries such as what the country has done with Australia. as well as with the Middle East countries on the enhancement of economic relations. the US etc. simultaneously the improvement of investment of those countries to Indonesia. with India.fencing the whole territory of Indonesia in the legal and political sense through border diplomatic activities (the implementation of foreign policy) in the context of settling any borderline dispute and the management of state borders with all participation of the people living near the border lines. organization of cultural and tourism roadshows in a more integrated and well-planned ways in several countries. and with Afghanistan on the reactivating of Indonesian representative office. through the establishment of joint-working groups. with Japan. on balance-trade system and improvement of function of the two-country commissions. and with Malaysia. and cooperation on the handling of related trans-national crimes. with the European Union (EU). and Australia. improving bilateral military cooperation with several countries in the context of modernizing the country's military might. Britain. Japan. particularly expansion of market access to this region. with Chile and Peru for instance. provision of facilities for international conventions and visiting-exchange programs for foreign editors ad chief-editors of noted newspapers to boost mass-media promotion in the context of 169 . and the visa-on-arrival constitutes efforts to combine tourism promotional interest and interest of national security. the Philippines. particularly in strengthening efforts to prevent and fight inter-state crime. and provision of inputs periodically on security condition in Indonesia in order that the countries where tourists come from. the policy covers: improvement of educational and scientific cooperation with various friendly countries such as Australia.

Regional policy covers measures on the ASEAN. and the ASEAN Socio-Cultural Community to create a peaceful. Indian Ocean Rim Association for Regional Cooperation (LOR-ARC). Regarding the ASEAN. by and for various regional organizations and fora such as the Pacific Islands Forum. The same effort has been sought to make the APEC remain paying more attention on the permanent institution and programs focusing on economic issues by offering fair balance between: Liberalization and Trade Facilities. ASEAN-Australia. In addition. economic. Liberalization and Investment Facilities. It also includes the offering of one-year-nondegree travel scholarships to post-graduate scholarships. Indonesia underpins the building process of a mechanism of the regional ASEAN Human Right based on step by step building blocks approach. The country also makes efforts to improve ASEAN relations with dialogue partners such as ASEAN-China. 170 . Indonesia continuously pursues the creation of a more fair multilateral trade system and a more open economic regionalism. Concerning its policy in the APEC. cooperation. and Technical Cooperation and Economy. the Southwest Pacific Dialogue. Indonesia. and on Middle East. AASROC. Indonesia received a mandate to formulate a plan of action for the ASEAN Security Community that will be put forward in the ASEAN Summit in November 2004. stable and prosperous Southeast Asian region. ASEAN+3. Indonesia also promotes ASEAN cooperation improvement in fighting against inter-state crime. and sociocultural relations improvement to both parties. APEC. ASEAN-Japan. handling natural calamity and infectious diseases as the implementation of the ASEAN Security Community.maintaining the nation's positive image. continues to be sought for by Indonesia for common interest in various fields. Indonesia acts as the coordinator for the ASEAN Disease Surveillance Net. Indonesia keeps endeavoring that the expansion of the European Community does offer opportunities for political. the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC). During the 37th ASEAN Ministerial Meeting held in July 2004. among other things. and support in. On account of the European Community. the Southwest Pacific Dialogue (SwPD). the ASEAN Economic Community. Indonesia continues endeavoring the achievement of ASEAN economic integration (by realizing the sole market and production base as contained in the ASEAN's Vision 2020) going towards the ASEAN Economic Community. etc. At the regional level. the Pacific Island Forum (PIF). ASEAN-Republic of Korea. ASEAN-India etc. Various measures covering efforts to improve participation. and the sending of Islamic preachers and Qoranic recites in the context of providing clear and true description on Islamic development in Indonesia. ASEAN-the US. directs ASEAN cooperation to the establishment of an ASEAN Community consisting of the ASEAN Security Community.

Group 77. particularly on access for products of the developing countries to the developed countries. among other things. including financial assistance. Socio-Cultural Council. which has been initiated by the US. This is based on a reality that multilateral cooperation places all nations as equal by still respecting their sovereignty. and decision making process that involves participation of all members. and proposes that the use of veto rights to be completely abolished. and the principle of land for peace. security recovery. General policy of the Republic of Indonesia on its membership in multilateral organizations is among other things: to make its membership advantages in multilateral organizations optimum for the interest of national development. etc. Indonesia seeks out expansion of permanent and nonpermanent members of the Security Council. Regarding the UN. WTO. and at the same time to encourage active participation of Indonesia in various multilateral fora. Indonesia keeps on supporting the struggle of the Palestine nation as what the UN-Security Council's Resolution No. Together with other developing countries. that through this Movement various problems faced by the developing countries can be 171 .In Palestine issue. Indonesia is eager that the trade liberalization process accommodates fairly the interests of developing countries and developed countries. through technical assistance and cooperation. Indonesia keeps on pursuing for restructurization of system and function of the UN's main bodies such as the General Assembly. While concerning its multilateral policy. Concerning the Non-Aligned Movement. On Iraq issue. Oslo Peace Conference (1993). 242 (1967) and No. environmental. economic. developmental. 338 (1973) demand unconditional return of all Arab territories occupied by Israel. Indonesia makes efforts. among other things. the Security Council. and socio-cultural fields. Sham Al Sheikh Peace Conference (1999). On the WTO. in quality and quantity. the UN and the European Union. Indonesia also supports peace initiatives under the Madrid Peace Conference (1991). OIC. Indonesia's representatives in various committees and commissions as well as other international agencies in order to struggle for national interest. and the International Court. to step up. Non-Align Movement. Indonesia strives for food security and rural development interests being accommodated through. Russia. Indonesia gives support to the leading role by the UN in the process of reconstruction. and the latest Road Map. the receipt of Special Product (SP) and Special Safeguard Mechanism (SSM) concepts as an integral part of agricultural advanced liberalization. It is worth noting that Indonesia is a member of multilateral fora such as the UN. Indonesia has a strong commitment to improve multilateral cooperation in responding to global opportunities and hurdles in political. the Economic. and recognition over the rights of the Palestine people to determine their own fate to establish their state on their own land. Secretary-General and other organizations of the UN. and the promotion of a new legitimated representative administration in Iraq.

and inter-D8 trade cooperation. The country's policy on the Group-15 is among other things to try to manage. trade and human resources development. the leaders of the 10-member grouping signed the Declaration of the Bali Concord II. namely political and security cooperation.settled. and to seek for improvement of economic and financial cooperation as well as of trade among the organization's member countries. to reaffirm that ASEAN is the grouping of the Asian Southeast nations. particularly in the frame work of the UN. The Bali Concord II During the 9th ASEAN Summit meeting held in Bali. and food security. the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC). They agreed that they regard their security as fundamentally linked to that of other members and bound by geographic location. In relation with the OIC. Indonesia strives to make cooperation among member countries of the Group improving more through exchange of experience schemes. through this Group. it should be supported by three pillars of cooperation. 2003. The leaders of the ASEAN unanimously agreed the ASEAN Security Community for the concept is envisaged to be able to bring ASEAN's political and security cooperation to a higher plane to ensure that countries in the region live at peace with one another in a just. bonded together in partnership in dynamic development and in a Community of Caring Societies Committed to upholding cultural diversity and social harmony. The country's policy on the Group-77 is to endeavor that the group capable of improving its members' bargaining position in dealing with the developed countries upon economic. on October 7-8. stability and shared prosperity in the region For that purpose. By the Concord II it is agreed that in achieving the ASEAN community objective before 2020. and socio-cultural cooperation that are closely intertwined and mutually reinforcing for ensuring lasting peace. and developmental issues. Those problems include international trade. foreign debt. Indonesia tries among other things to enhance the organization's performance to make it a relevant and effective means to contribute to the settlement of problems faced by its members. finance. economic and technical cooperation such as in investment. democratic and harmonious environment. While on the Developing-8. it is also agreed to adopt frameworks for the establishment of the ASEAN Security Community (ASC). investment and monetary. 172 . Indonesia. economic cooperation. common vision and objectives. social.

In addition. communications and mass-media development program. The ASC has a view to reinforce national and regional capacities to flight against and deter terrorism and transnational crime. What the program does want to achieve are the creation of the public's political awareness and maturity through the formation of information flows and exchanges in free and transparent ways. and communications among individuals and community groups and between the government institutions and the communities in conformities with their respective role and function. promote and advance the communicationsinformation-mass media-related matters. and Mass Media Development program The main aims of the program are to encourage and improve information exchanges. Therefore. economic. INFORMATION. and human rights. cultivating national identity and secured right to use information and communications means and infrastructures. military alliance or a joint foreign policy. various action plans have been made and carried out to develop. Current trends of information and communications technological advancements have indeed brought about on one hand significant changes in the lives of the public in political. information. legal supremacy. They include the introduction of: information. It recognizes the sovereign right of the member countries to pursue their individual foreign policies and defense arrangements and taking into account the strong interconnections among political. COMMUNICTIONS AND MASS-MEDIA The 1999-2004 Guidelines of State Policy underlines that the development of information. in relation with this. Communications. on the strengthening of unity and integrity of the nation. economic. Mass media 173 . socio-cultural and defense and security aspects. and the availability of more open political control.It is stressed that the ASC subscribes to the principle of comprehensive security as having broad political. and improved quality of development information services program. economic and social realities. improved quality of communications in various fields through the mastering and application of information and communications technology in order to strengthen the nation's competitive edge in facing global challenges. social and cultural aspects in consonance with the ASEAN Vision 2020. The ASEAN leaders affirmed the importance of the ASC to have capacities and responsibilities as the key mover of the ASEAN Regional Forum (ARF). program for improving infrastructures of broadcasting. Information. the enhanced role of the press in line with the improvement of the journalists' welfare. information and the mass-media have been playing an important role either in determining possible success of the democratic political system or in advancing the intellectual life of the nation. Communications. the ASC shall work to ensure that the Southeast Asian region shall remain free of all weapons of mass destruction. communications and the mass media. rather than to a defense pact. communications and the mass-media should focus on the improved use of information through modern and traditional mass media to educate the people.

and the Government's obligation to disseminate information the public may want to know or more popularly as known as the obligation to tell. and composing concepts 174 . The regulations concerned include Law No.industries. and of the manual on Indonesian Television Ethical Conducts covering Television Broadcasting Ethical Standards and Broadcasting Business Standards prepared by the Indonesian Television Broadcasting Association. Thanks to community media. No less important is the establishment of such institutions such as the Television Watch that reflect the public concern over television programs in particular.32 of 2002 on Broadcasting. However. composing developmental concepts for media watch institutions. It is under the program that relevant studies have been taking place to produce data and information on overseas information system and on the utilization of new media communications or internet as new means of communications. all members of society may share equal access to information. and even the Bill on the Freedom of Access to Obtain Public Information. Opportunities the communities may get to determine public tastes and demands are made much more ample by granting the communities chances to disseminating information considered important. including the arrangements of central-regional information model. on another hand have already got improved and ample freedom to perform their social and political control. The expected outcomes from the secured legal certainty are the guarantees that the public have the right to get information they wish to know or more popularly known as the right to know. To this end a series of actions have been undertaken. More encouraging are the issuances of directives on Broadcasting Ethical Conducts and Standards of Broadcasting Materials or Contents by the Indonesian Broadcasting Commission. and simultaneously protect the public from any negative impacts the mass media might cause. The developments which have already encouraged the function of the mass media run as they should are the introduction of related regulations that secure legal basis for the operation of the mass media. Developmental concepts of the community media empowerment have been made available in the context of realizing nation-wide networking of information. inventories of community media. electronic and printed ones. Improved capacity and capability of the national information services in supplying and catering to information are indeed directed towards efforts to reduce disparity of information among the public. By the networks. the industries as a matter of fact still need to better their professionalism. in conformity with the development of democratic life of the state and nation. The mixture of the advancement of information technology and freedom of the press has in turn a great potentiality to encourage firmly the process of democratization. communications and the mass media. the community media offer the public greater access to any information sources. socialization of formulations of community media development. The results of the studies constitute inputs for policy decision-making in developing overseas information service system and in utilizing new media as telecommunications means to disseminate information on government policies and measures.

by providing the application of documentary management and data reporting. to endeavor equitable dissemination of information to all layers of society. to encourage stakeholders in developing infrastructures of communications and information. and the public in composing measures on the networks of communications and information technology to stimulate participation of the said elements in arranging policies on social-communications networking in the public. and the mass media. under the framework of improving infrastructures of information and telecommunications. communications. and guidance for government information service mapping. The activities constitute among other things increased studies on statutory regulations to promote the utilization of communications and information technology. Students seeking information via internet Besides. The arrangements of development plans of overseas information service system and the provision of information on public opinions concerning governmental policies and performance are aimed at promoting studies and development of communication and information.of professional rating standards for mass media contents. there have been also related activities that put emphasis on the encouragement of the communication media to fulfill the needs for information. and to set up communications forums of mass media watch organizations. and of the mass media. to improve participation of government institutions. and to build and develop institutions of information. business circles. it has been sought out to expand information and communication networks even up to remote areas. Along with them. It is realized that economic and social disparity which causes information deficiency has in turn caused wider a gap between the rich and the poor information society and this has 175 .

the required efforts to facilitate cooperation forums between governmental institutions and the public in the context of nurturing understanding of the people to improve the participation and investment in the use of information services. Information-Telecommunication and Mass Media Development scheme some things worth noting are the establishment of information and communications networks between central and regional areas and among regional areas themselves in mutually promoting national development. It is under the scheme the ware house data are developed and to be the basis application of the system for the governmental information inflow order. particularly with regards to the formulations being considered controversial for the freedom of the press and for the process of democracy. Other steps need to be more seriously facilitated and promoted are the role the community media should play. Parallel with this. communications and the mass media still requires follow-up actions to maintain the continuity of the goals and targets of related development programs. it is the common concern of the people at large to maintain together the freedom and independency Infrastructure Improvement Scheme The main aim of the communications. information and mass media infrastructures improvement scheme is to improve the quality of information in all fields through the mastering and application of information and communications technology in a bid to better the nation's competitive edge in facing global competition. serious preparations for the formation of centers for governmental information services. the relevant studies and researches in the framework of bettering mass media professionalism with characteristics among other things capable of cultivating excellent tradition of the press that adopts the principles of precision journalism (based on investigative reporting). the need of synergic works among institutions of information. 176 . Following steps need to be taken into considerations are among other things: more intensive socialization of the Bill on Freedom of Access to Obtain Public Information. communications and the mass media in composing minimum service standards as one of the measures on the utilization of information technology. and to overseas to struggle for the national interests. It is unquestionable that the press here is a significant institution capable of maintaining and protecting political transparency and in safeguarding the very right of the society to get information related to the living needs of the people at large. Under the Broadcasting. Still in this context. a foundation having been established in advancing information.been one of the main problems the nation has to face. and centers for the data interconnection on services and regulations of state institutions. Thus. efforts are required to facilitate judicial reviews over socio-political aspects against the Law on Broadcasting and the press and media-related statutory regulations. and preparation for communications and information network between the central and regional governments. and promotion of independency and maturity of the press. public understanding on the importance of mass media watch institutions.

Quality Improvement of Services scheme The scheme is more directed towards the development of information and communications networks between central and regional areas and among regional areas to mutually support national development activities and to improve their institutions. which will be tried out at the office of 177 . industry. socio-culture. So far. particularly in relation with that for overseas services in the framework of struggling for the national interests in the international forums. For the future. However. The availability of websites has. and the improvement of studies on the utilization of informationtelecommunications technology at central and regional governmental agencies and institutions. For the reason. and disseminated information. It is also in the context of the scheme that a manual for governmental information services map has been made available to help governmental institutions and agencies or bodies in arranging their respective information services map. websites may be used nation-wide. and information means and infrastructures.3 of 2003 constitutes a legal basis for the development of egovernment in Indonesia. the scheme has been bringing about increased availability of information. as well as the improved inter-institutional cooperation. human resources. to some great extent.Following suit is the establishment of government and private websites to further disseminate information on government policies and measures by on-line. including the so called Inter-Governmental Access Share Information system or Governmental Data and Information Exchange system prepared by the Ministry of Communications and Information. information concepts on the fields of economy. informationtelecommunication and mass media infrastructures have been developed and improved to make the flow of information and communications between the central and regional administrations smooth to underpin the national development programs and to strengthen the unity and integrity of the nation. including regional administrations in composing their respective maps of their own potentialities. In materializing the instruction a number of action plans have been introduced and carried out. it is realized that what the nation needs now to further promote society-based independent information and communications establishments is the formulation of a grand design as the basis for the development of the Indonesian Society Electronic Infrastructure Network (ISEIN). security and defense. Presidential Instruction No. particularly for areas where private and public media hardly cover them. helped reduce the hindrances in disseminating information on government policies in a quicker way. Its improved capacity may enable it to cater to varied and increased kinds of services. politics. and improved capacity of governmental websites on the aspect of content. the provision of public service advertisements. Improving the quality of developmental information services has been undertaken place by among other things: the provision of information on regional potentialities in the form of chart. broadcasting.

based on global. and the office of the Ministry of Agriculture. to make more and more people get used to or familiar with internet. and improve physical and non-physical accessibility for disabled persons. regional. as Articles of 27 and 34 of the 1945 Constitution state that every citizen has the rights to gain worthy livelihood and means of living and welfare. and active roles in coping with social problems in their neighborhood. and institutional e-government development plan directive. including manual for the establishment and organization of regional governmental websites. the office of Ministry of Communications and Information. and the people. in cooperation with local administrations have been trying to introduce an electronic network system called the Indonesian Society Electronic Infrastructure Network Scheme (ISEINS). and improving life's quality and welfare of people who have problems in social welfare. The national commitment. business world. Program for the Development of Social Welfare Potential. responsibility. step up concern to the people suffering from some social problems (PMKS). and e-government human resources education and training directive. particularly students. the Government has arranged four programs: 1. in this case the Ministry of Communications and Information. manuals on the operation of e-government have been made available. of governmental websites infrastructure development. governmental electronic documentation management system. 178 . Pursuant to the policy in social welfare.the Coordinating Body for Family Planning Program. living in rural areas and even at rather remote areas may have greater access to information at local. the Government. In the context of promoting and popularizing the use of e-government by which people. and national commitment. Parallel with the introduction of the system mentioned above. and Lembaga Informasi nasional (LIN)—the National Information Agency. national. electronic infrastructures are installed at designated locations such as campuses of high schools and premises of local administrations or even premises of small-scale internet business undertakings locally known as "warnet". Development policy in social welfare is directed to develop social resilience. ability. Under the scheme. that is aimed at developing people's awareness. SOCIAL AFFAIRS Social Welfare Development in social welfare was held in cooperation among the government. improve appreciation to elderly citizens and veterans. regional as well as international levels. by which one can explore the information domain. internet shops.

6 million people (19. Until 2003. and 17. and 24.5 million people (12. Public Policy Suitability Development Program in Coping With Social Problems. Destitute and street children are helped through empowerment schemes.100 calories of food per capita per day and cannot fulfill his/her basic non-food need. 18.3 thousand of poor families living in the slums have received assistance in the form of housing materials and tools to renovate their houses. and business guidance with business capital assistance to about 371. or relocating those who cannot be returned. about 192 thousand destitute children and 143. motivation.1 thousand heads of families. For 2004. that is aimed at identifying the kinds of data and information needed for decision making in social problems policy. developing information system needed as an early warning device.6 percent) were living in urban areas.20 percent.6 percent. the Government has undertaken social welfare efforts to the PMKS. and arranging social welfare standardization and legislation. including women with unstable social-economic condition and in isolated customary communities (KAT). that is aimed at improving the quality and professionalism of social welfare services through development of alternatives for intervention in the fields of social welfare. In the period of 2001-2004 in the social welfare development. Meant by poor people is a person who consumes less than 2. Besides. Social Welfare Services Professionalism and Management Quality Improvement Program. prostitutes. In poor family empowerment. or about 16.1 million out of 217 million people of Indonesia still living under the poverty line. Rehabilitation services have also been given to disabled persons. 179 . data from the Central Bureau of Statistics (BPS) until February 2004 showed that there was 36. 4.3 thousand street children had received social empowerment services. and developing the function and coordination of institutional information network to form an integrated social problems control. juveniles and drugs victims. about 11. and ex-prisoners. Social Problems Information System Development Program.5 percent) living in rural areas. 18.2.41 percent. about 30 thousand elder lies have received social assistance. About 9. that is aimed at realizing public policy suitability in coping with social problems towards the realization of people's social resilience and people's protection from the effects of the fast development and social changes through employment network. poverty rates were 19. 3. beggars. improving the ability and competency of social welfare and social workers.42 percent. From that sum. Domestic refugee problems have been controlled by giving them assistance to overcome emergency condition and returning them back to their home. the Government has given social guidance. the homeless.14 percent. Poverty and Unemployment For the years of 2000 through 2003.

representative head of the World Bank in Indonesia said that the World Bank has prepared four business platforms.98 percent. namely the development platform for businesses activated by the people up to about 25 percent total loan. Through this new strategy.28 Total 47.753 37. 180 .268 25. 5. the World Bank has prepared loans of US$450-850 millions annually for Indonesia. and the national loan platform about 20 percent of the loan.70 Source: BPS. has still been stagnant at 16 percent. the local services platform about 20 percent.15 percent.075 -7. the rates of open unemployment were 4.394 -6.15 Rural 32.312 8. In the even of the launching of Indonesia Country Assistance Strategy (CAS) for 20042007.For the year of 2000 through 2003. INDONESIA'S POVERTY TREND 1999-2002 (in thousand people) 1999 2000 2001 2002 Annual average growth(%) Urban 15.599 13. it is stated that the efforts to decrease poverty rate in Indonesia which reached 20 percent in the crisis era.867 38.431 29. 6.319 1. of about US$200 million per year. 2003 In that event.96 percent.332 26.33 percent. This is due to the low investment growth and lack of public facility in Indonesia.975 38. and 6.643 12.

840 9.061.793 tons of rice).109 23.390 tons.833 37.349 3. and Promotion of Religious Socio-Institutions and Religious Traditional Schooling. there were 15. the raskin has reached 2.997 20.072 Agriculture 25. 181 . During the period of 1999-2004 the development in the field of religious affairs underlines the schemes of: Improvement of Religious Life Services.048.TOTAL OF INDONESIAN POOR PEOPLE BY EMPLOYMENT 1999-2002 (in thousand people) Head of Household 1999 2000 2001 2002 Unemployed 4.069 5.784 6. bigger than that of 2003 allocation of 2. Buddhism.380 4.109 35.063 3.401 4. RELIGIOUS AFFAIRS There are six religions officially recognized by the Government. 2003 Program for Compensation of Fuel Oil Subsidy Reduction In the effort to improving food sustainability and giving protection to poor families and empowering the people.719 Source: BPS.571 Total 47. The raskin and PKPS-BBM in the field of food is decided based on subsidy provided by the Government.061. Religious Schooling Improvement. the Enhancement of Understanding and Application of Religious Teachings and Harmonious Life among Religious Followers.746. 1000 per kg. namely Islamism. Hinduism and Confucianism. This program is implemented by distribution to poor families of 20 kg per family per month at the ceiling price of Rp. since 2004 the Government has continued the Program of Rice Ceiling for Poor People (Raskin Program) and the Program for Compensation of Fuel Subsidy Reduction for Social Welfare (PKPS-BBM Program).605 Industry 6.590.471 Services 11.843 poor families.843 families (2. For 2004. Catholicism. whereas the budget plafond provided by the Government was only for 8. Protestantism. In 2004.793 tons and has been distributed to 30 provinces.969 38.560 2.375 20.984 7.

charities. some 2. viharas. Under the scheme.Responsible for policy. In 2002. Regarding the enhancement of Religious Understanding and Application and the broadening of religious knowledge of religious adherents.000 copies.799.187 units. the Offices of Marriage Affairs throughout the country handled 1. Promotion of religious institutions such as religious alms. To deal with this promotion. In this context the Government either allots a sum of money or gives financial assistance to build or rehabilitate the houses. and development related to religious matters is the Ministry of Religious Affairs. Other action 182 . the Government and the communities have been striving for religious adherents to have ample facilities to do religious worship by building more houses of worship. 1. the Government has helped them by offering religious holy books including their translations and interpretations.. For this purpose. In handling marriage affairs those institutions need about 4. Each institution has been also tasked to promote household's welfare. Improvement of Religious Life Service Scheme The scheme aims to facilitate religious adherents to worship in accordance with their respective belief and religion. hajj transit boarding houses. and motivate households to practice family planning program. donation.000.000. and improvement of hajj pilgrimage management.886 cases of divorce and separation. and other books related to religious teachings. etc. The translations and interpretations of those holy books give boost to experts in this field to develop interpretations on holy books in accordance with temporal needs and developmental course. Buddhist viharas. and 5.930 plots in 2003.193 plots in 2002. promotion. there are also the sub-district-based Offices for Marriage Affairs that also deal with remarriage and divorce. In securing the use of plots of land used for religious interests such as plots of land donated for mosques. optimum use of houses of worship.971 plots of land were certificated in 2001. and 2. Islamic Marriage Halls or Religious Marriage offices. and the like continues to be intensified to improve the people's welfare and to alleviate poverty. The number of holy books and their translations and interpretations of different religions procured per annum from 2000 to 2003 was 2. a number of institutions have been established and made available in every province. In addition to the institution. During the period of 1999-2004 the Ministry has introduced and carried out many activities under the schemes mentioned above. Catholic/Protestant churches. more than thousands of people have attended upgrading courses. During the period of 2001-2003 the cumulative number of houses of worship having been rehabilitated was 5. contribution. In improving services on marriage affairs. 143. The scheme has been manifested through development and rehabilitation and maintenance of religious houses of worship (Islam mosques. there are the Marriage Halls and Marriage Consulting Institutions.174 cases of marriage. temples. churches.126 cases of remarriage. guidance. provision of holy books etc.000 copies of marriage guidance books and marriage certificates per annum. Hindus temples etc).

some 15. 183 . These included the organization of Islam-Christian International Conference in Jakarta attended by a number of representatives from 18 countries. Religious-related conflicts are a potential to disintegrate this nation. there were accumulatively 255 groups of hajj pilgrims attending guidance courses. In addressing this issue. various efforts have been sought out by prominent leaders of each religion through dialogues. (2) the reinforcement of foundation of harmonious life among the same religious adherents. socio-political and economic dimensions. meetings and forums to find out preventive and deterrent ways or peaceful solutions. Scheme of Harmonious Life among Religious Adherents The main aims of the scheme are: (1) the improvement of understanding and application of religious teachings by any individual. Qur'an Recital competitions are always organized from local to national and even international level. to study the historical relations between Islam and Christianity and discuss religious. and community. thousands of people groups attended guidance courses on harmonious life among different religious adherents. and among different religious adherents.062 persons.14 percent from Sumatra Island and the remaining from other islands. Of the total number of persons who did hajj service in 2003 some 46. courses for officials who cater hajj pilgrimage affairs. During the period of 2001-2003. To promote the hajj pilgrimage management.plans included the organizations of upgrading short courses for 1. The total number of Indonesians doing hajj pilgrimage in 2002 was 182.483 copies of guidance books on management of socio-religious funds. and (3) the establishment of social and national harmonies. Hindus "Utsawa Dharma Gita". including the formation of inter-religious adherents' cooperation networks. and Buddhist Tripitaka Art Recital festival. and provision of books related to hajj pilgrimage codes and services. as well as socio-reconciliations of Malindo I and II Declarations (declarations of reconciliation between hostile parties in Maluku). In seeking out the aims. to say but some.78 percent came from Java Island. etc. During the period of 2001-2003. consultations and dialogues among religious leaders of different religions. So are of Christian "Pesparawi". family. various measures have been introduced and done to include the construction of new hajj boarding houses and rehabilitation of rather old hajj boarding houses. the accelerated finalization of the Bill on Harmonious Life among Religious Adherents. various activities have been taking place. Still in the context of deepening religious understanding and application.319 persons in 2003. The growing number of hajj pilgrimages has been to some extent due to better management of the services by the Ministry of Religious Affairs that is responsible for the services. and the number increased to 201.057 persons to manage Islamic religious donations and other religious donations as well as the distribution of 69.

and even colleges and other higher learning institutions at home and abroad. and the development of a number of workshops for students to do practical teaching system. particularly for villagers of economically-weak bracket. model and integrated Islamic boarding schools.The formation of the Institute for Studies on Harmonious Life of Religious Followers in Jogyakarta and its branch offices in Medan and Ambon.000 copies in 2003 alone). Under the scheme. the Indonesian Hindu Dharma Parisada (PHDI). Improvement of Religious Schooling Quality scheme The 1945 Constitution underlines that education sector shall have first priority of development. workshops. the Indonesian Buddhist Association (Walubi) and the Indonesian Confucian High Council (Matakin). together with other governmental agencies and non-governmental institutions. the Ministry of Religious Affairs. and equip those schools with better teaching aid devices and equipment. particularly their schooling quality. etc. Students are at the same time encouraged to attend not only curricula but also extra-curricula activities. and (2) serving educational services for the public. various action plans have been undertaken. Reference books of various disciplines in large number are also made available to allow students to enrich their knowledge. nine-year schooling is compulsory. and development of socio-religious institutions. arrange competency standards for religious teachers. gives priority to the promotion of the schools by. seminars. the Ministry of Religious Affairs has taken necessary measures to improve religious curriculum. better Islamic boarding school and public school buildings. for instance. including the provision of reference books (numbering 542. is expected to play an important means for religious intellectuals to jointly study and examine histories of plural communities to find out peaceful solutions when religious-related conflicts arise. which in turn are expected to be able to organize trainings on empowering people's economy. Also under the scheme are the improvement of means and infrastructures of schooling by providing teaching aid devices and equipment. the Indonesian Catholic Churches Conference (KWI). Under the scheme a large number of religious teachers and lecturers have had chances to attend up-grading courses. organize regular. the Indonesian Churches Association (PGI). sending religious teachers/lecturers to Yemen and 184 . training/guiding courses on religious affairs attended by many people. Regarding the development of traditional Islamic boarding schools. Promotion of Traditional Religious Schooling scheme This scheme is aimed at: (1) empowering and improving the capacity and quality of socio-religious institutions. Having demonstrated an important role in appeasing religious-related conflicts are religious organizations such as the Indonesian Ulemas Council (MUI). installing websites. In addition. Pursuant to what the Constitution stipulates and the compulsory nine-year schooling.

and implementing supervision of the national education system. If they choose graduate program. Reformation of the national education system. scientific autonomy. and helping the development of agro-businesses at 60 Islamic boarding schools. graduate school. 2 of 1989 on National Education System. In 2003. supplying educational facilities. schooling in Indonesia shall begin from kindergarten in two years. as entrusted by the amended 1945 Constitution. organizing open and equitable education. encouraging the establishment of model Islamic boarding schools. implementing compulsory education. that allocation has not been fulfilled. educational expenditures that is in accordance with the principles of justice and equality. In accordance with Law Number 20 of 2003 on National Education System. After graduating from primary school. empowering people's participation. accreditation. educative and dialogic learning process. 185 . and certification. implementing autonomous educational management. 20 of 2003 on National Education System to replace Law No. they can continue to post-graduate study and if they choose diploma program. academy. they can continue to specialist program. pupils can continue to next higher level that is called junior secondary school in three years. such as university. providing scholarships to students from rather remote and isolated areas with the hope that they would later set up similar schoolings at their native villages or hometowns. Graduates from general senior secondary schools can continue to diploma or graduate programs or other types of higher education. development and implementation of competency-oriented curriculum.the Middle East countries and other countries. and will be fulfilled by stages. and management principles as education development direction in Indonesia. the Government enacted Law No. followed by next higher educational level called primary school in six years. the strategy of national education shall consist of implementation of religious teaching and good behavior. Article 31 directs the Government to allocate education budget up to 20 percent of the National Budget and the Regional Budget. Education The 1999-2004 Guidelines of State Policy states that education development policy is directed to extend and equalize the chance to reach high quality education to all Indonesian people. The main agenda of education development in Indonesia is to develop and stabilize the national education system based on decentralization. institute. empowering educational evaluation. Due to the Government's budget limitation. however. and after graduating from junior secondary in three years or to vocational senior secondary school in three or four years. or polytechnique. enhancing the professionalism of teachers and educational manpower. to be followed by preparation of 14 Government Regulation bills as materialization of said law. Based on Law Number 20 of 2003 on National Education System.

926. showing a decrease from the previous academic year's 171. managed and supervised by the Ministry of Religious Affairs. Primary School In 2002/2003 academic year.315. Primary school students. six years of primary school and three years of junior secondary school. the total of private and state-run primary schools was 169. On the other hand.927.234. Included in Basic Education are Islamic general primary school called Madrasah Ibtidaiyah.050. The goal of basic education is to develop student as individuals. as well as to prepare them to pursue studies in senior secondary education.808. while playgroups and day-care centers are attended by children of at least three years old. the hope of future generation 186 . equivalent to general junior secondary school.Pre-school and Basic Education Basic education is general education of nine years. showing an increase over the previous academic year's 1. Kindergarten is provided for children for one to two years of education. i. members of society. Pre-school education aims at stimulating physical and mental growth of children outside of the family circle before entering primary education that can be held in formal school system or informal education. total of teachers in 2002/2003 was 1.164. equivalent to primary school and Islamic general secondary school called Madrasah Tsanawiyah. Basic education provides the learners with basic knowledge and skills. citizens and members of humankind.e.834 showing an increase from the previous academic year's 28.147. The total pupil in 2002/2003 was 29.377. Among the types of pre-school education available are kindergartens at the formal schools and playgroups and day-care centers at the out-ofschool form.

099. The number of vocational secondary schools in 2001/2002 academic year was 4. and 261.753 pupils in 2002/2003 academic year. and natural environment and to develop further skills to enter the work market. particularly to students with excellent achievements but coming from poor families.936. 2. an increase over previous academic year's 9. Secondary education consists of general secondary schools. Higher Education The national development program for higher education is aimed at developing the higher education system.036 in 2002/2003 academic year. showing an increase over the previous academic year's 31. The number of teachers in 2001/2002 academic year was 252. the Bandung Institute of Technology (ITB) in West Java. 187 .647. On the other hand. total of pupils in the academic year of 2002/2003 was 9. Secondary education gives priority to continue and expand the basic education and prepare students to become members of society with knowledge and skills to make relations with social environment.626.730 pupils in 2002/2003 academic year. and enhancing an equitable opportunity to continue studies to the higher level education. The number of general senior secondary schools in 2001/2002 academic year totaled 7.322.785 and 8. improving educational quality as a basis for the pupils to continue their studies to a higher level of education or the preparation of student to enter the work market.143.089 in 2002/2003 academic year. vocational secondary schools and religious secondary schools that aims at extending the scope and accommodation capacity of the schools.522.176 pupils in 2001/2002 academic year and 3. or to continue their studies to a higher level of education. Secondary education is made available to graduates of basic education.Junior Secondary School The number of private and state-run junior secondary schools in 2002/2003 academic year was 32.027.943 in 2002/2003 academic year. culture. i. An increase was also shown in the number of pupils i.e. total of teachers on the academic year rose to 376.e.512 from the previous academic year's 384.e.123.672 in 2002/2003 academic year. In addition. The goal of the program is to realize autonomous management to four state-run higher learning institutions. Senior Secondary Education The program for the development of senior secondary education includes general secondary schools. and religious secondary schools.464 pupils in 2001/2002 academic year and 2.682.757. An increase was also shown in the number of pupils i. The number of teachers in 2001/2002 academic year was 90.806 and 96. The length of secondary education is three years for general secondary schools and four years for vocational education.024. increasing the quality and relevance of higher education with the job market. vocational secondary schools.843. and 4. 3.

the Bogor Institute of Agriculture (IPB), also in West Java, the University of Indonesian in Jakarta, and Gadjah Mada University in Yogyakarta, and to do pioneering work for its implementation of other state-run higher learning to increase the number of graduates absorbed in employment and to increase the crude participation rate (APK). Higher education is an extension of the senior secondary education, consisting of academic and professional education. Higher education is made available to prepare the students to become members of society with academic and/or professional skills, who have ability of education that holds higher education is called the higher learning institutions in the form of academies, polytechnics, schools of higher learning, institutes, or universities. The length of higher education is called the higher learning institutes, or universities. The length of higher education is three years for diploma program, and four years for undergraduate studies and finally to post-graduate program for three more years. Higher Learning Institutions In 2004, the number of state-run universities was 81 and private universities 2,399. The number of students studying in state-run universities in 2002/2003 academic year was 2,935,848 and the number of lecturers was 143,096. In 2003/2004 academic year, all of Indonesia's 81 state-run universities admission of new entrants showed a decrease from 82,969 in 2002/2003 academic year to 82,190 seats for new entrants in 1,615 study programs. In the year of 2003/2004 the participants of State University Admission Test (SPMB) who passed it were 78,829 from 350,306 who had registered for the test. The number of SPMB participants who passed the admission test in 2002/2003 academic year was 78,829, showing a decrease 3.24 percent compared to 471 in 2001/2002 academic year. In 2003/2004 academic year, the status of six leading State Higher Learning Institutions (PTN) has been changed to be State-Owned Higher Learning Corporate Body (PTBHMN). They are the Bandung Institute of Technology (ITB), the Bogor Institute of Agriculture (IPB), the University of Indonesia (UI), the Gadjah Mada University (UGM), the North Sumatra University (USU), and the Indonesian Education University (UPI) in Bandung, West Java. The establishment of State Higher Learning Institutions with the status of State-Owned Higher Learning Corporate Body (BHMN) is aimed at decreasing government financial burden in financing the education sector, in addition to the autonomous implementation of Higher Learning Institutions and the application of Government Regulation No. 61 of 1999 on Implementation of Indonesia's State Higher Institutions as State-Owned Higher Learning Corporate Body. Research University With a status of State Owned Higher Learning Corporate Body (BHMN), the University of Indonesia (UI) has targeted its program to become a research university in 2010, but it 188

needs government support especially through laws and regulations. According to the Rector of UI, Usman Chatib Warsa, actually UI has taken action as a research university, by establishing a noble industry, namely the Institute of Human Virology and Cancer Biology (HIVCB), which involves a world expert, Professor Robert Gallo of University of Maryland, United States. The IHVCB laboratory has started its activity since August 2004, together with physical facility building in the UI Campus of Salemba, Jakarta. Informal Education Development for informal education (PLS) is aimed at providing services to the people who do not receive or have not received a formal education to develop their selves, behavior, knowledge, and skills, self-potential, and developing productive efforts to increase their welfare. In addition, the PLS Program is directed to give basic knowledge on professional entrepreneurship and skills for themselves and their families. The goal of PLS program is to enable people or students who do not receive or have not received formal education. They consist of people who have not yet finished nine-year compulsory basic education. The program is also directed to empower centers or workshop of people's learning activities. The main agenda of the PLS Program is to accelerate illiteracy eradication through the development of functional literacy, especially to people of 10-44 years old. The existence and usage of book centers shall be developed and increased to make people love to read. The efforts to eradicate three-old illiteracy (the Latin words and number illiteracy, Bahasa Indonesia illiteracy, and basic education illiteracy) are developed by their types to accommodate drop-out students from various paths, kinds and levels of education services and quality and quantity of student of Package A Learning Group (equivalent to primary school), Package B Learning Group (equivalent to junior secondary school) to support nine-year basic education, and to develop learning model for sustainable education program with skill and entrepreneurship orientation. Types of informal education may include courses, education and training, group learning, centers for group community education; and religious education. In line with this development, the rate of literacy people by the age of 15 years off and up increased to 89.8 percent in 2003. International Olympic In 2003, Indonesia participated in Natural Sciences and Mathematics Olympics, both in national and ASEAN level followed by ten nations and won gold medals, one silver and two bronze medals. In 2004's, representatives from Indonesia followed the Asian Physics Olympic, and they gained six gold medals. In the 2004's XXXV International Physics Olympiad in Pohang, South Korea, Indonesia gained one gold medal, one silver medal, and one honorable mention.


SCIENCE AND TECHNOLOGY One of the duties of the Ministry of Research and Technology is to assist the President of the Republic of Indonesia to formulate policies to be implemented by the Indonesian Government specifically in utilizing, developing and mastering science and technology for the national development. The implementation of these policies are based on several regulations: the 1945 Constitution, the Guidelines of State Policy (GBHN), National Development Programs (Propenas), Law No. 18 of 2002 on National System of Research, Development and Application of Science and Technology, and Development Programs of National Strategic Policy of Science and Technology (JAKSTRANAS IPTEK). Article 31 clauses 5 of the Amended 1945 Constitution stipulates that the Government shall develop science and technology based on religious values and unity of nation for the development of human dignity and welfare. This is further emphasized in Decree No. IV/MPR/1999 of the People's Consultative Assembly concerning the Guidelines of State Policy (GBHN), which states that Indonesia shall improve her ability in mastering, enhancing and utilizing science and technology, including the capability of Indonesian people and business players, especially Small and Medium Enterprises (SMEs) and cooperatives, in order to increase product competitiveness based on local resources. This also means that technology shall be able to carry out activities in increasing health, education, food fulfilment, industry and others, to meet self sufficiency and improvement of the nation's competitiveness. In parallel, the National Development Programs (Propenas) 2000-2004 emphasizes that science and technology (S&T) is expected to take part in the acceleration of the economic recovery, the strengthening of the foundation of sustainable and equitable development, as well as the development of cultural resilience and social welfare. To develop science and technology effectively, oriented to people's need, promoting the real benefits, and fulfilling the whole regions, in 2002 the Government ratified Law No.18/2002 on National System of Research, Development and Application of Science and Technology. This law forms a guideline to the formulation of the National Science network system. Hence, the role of the central government, regional governments and society, especially business players, can be in synergy in the development of the national science and technology. With determined policies, therefore, the implementation of various programs is related with the mastery of science and technology in the frame of strengthening national economy and developing social life. To materialize such contribution, the Ministry of Research and Technology implements the Strategic Policy of National Science and Technology Development 2000-2004 (JAKSTRA IPTEKNAS).


Achievement To increase the science and technology capability and culture, the Ministry has carried out some priority research programs such as the Integrated Priority Research Scheme Program (Riset Unggulan Terpadu), the International Integrated Priority Research Scheme (Riset Unggulan Terpadu Internasional), the Partnership Priority Research Scheme (Riset Unggulan Kemitraan), and the Selective Research Scheme for Social Sciences and Humanities (Riset Unggulan Kemasyarakatan dan Kemanusiaaan). In these research schemes, participants initiate research topics and plans of proposed activities. Another priority research scheme program is the National Strategic Priority Research Program (Riset Unggulan Strategis Nasional). In this top-down research, the Ministry initiates plans and ideas of intended activities for research and technology. The Integrated Priority Research scheme is designed, among others, to orient the ability of human resources of research institutions, be they in central and regional governments, universities or industries, toward the creation of an integrated network to improve their ability in enhancing basic and applied science and technology. The International Integrated Priority Research scheme has carried out international joint research and development among Indonesian researchers and international research institutions/universities in various fields, such as with CSIRO-Australia and University of Twente in the Netherlands (marine), Oregon State University-USA (agriculture and food), Katolieke Universiteit Leuven, Belgium (environment), and Shinshu University of Japan (health). The Selective Research Scheme Program for Social Sciences and Humanities is designed to bridge the gap between social sciences and humanities with other sciences and to develop theories and new concepts in this field. In 2003, this program conducted applied research and science development researches. The implementation of the national strategic research scheme program covers six activities of enhancement in the fields of: (1) Information technology and microelectronics that produces gateway media prototype, antenna planner array prototype, IP Core video transcoder; (2) priority fruits pineapple, banana, mangosteen for consumption and raw material for industry; (3) group fish cultivation; (4) diversification of corn-based stapple food; (5) light Aluminium Engine for various transportation modality; and (6) oil-palm downstream industry to lengthen its value-added chain. The Partnership Priority Research scheme is one of the Ministry's policies in utilizing science and technology in industrial sector through research cooperation between research institutions and industries. The Government, together with industries, funds this research in the form of cost sharing. In 2003 this program financed 35 research activities. Start-Up Capital. This program is designed to bridging the S&T activities, done by research institutions and universities, with business activities. In 2003, this program executed research activities in the fields of health, agriculture and food, 191

Other incentive programs conducted by the Ministry of Research and Technology are among others: Center for Intellectual Property Right (Sentra HKI). Jambi. To promote the socialization and utilization of S&T. the Ministry of Research and Technology has also executed some specific or thematic programs. Bioisland is an integrated research and development area for commercialisation of biotechnology. covering the development of Digital Library. Warintek is equipped with a data base in the form of an "Educating Nation" CD-ROM. The Bio-island's field of works covers agricultural and food biotechnology. to strengthen the synergy of biotechnology-based industries and to provide an integrated infrastructure for biotechnology research and development.telecommunication and information. In 2003. Center of Technology Promotion and Marketing (Sentra Promptek). Bandung. 192 . Purbalingga. To internationally broaden the market. Information Technology Kiosk (WARINTEK) is a program aimed at cultivating and utilizing S&T information in society. chemical and post harvest. Magelang. This scheme is aimed at encouraging technology-based small-medium-scale industries (UKM) to increase their productivity. industrial and environment biotechnology as well as marine biotechnology. such as Bioisland and Agrotechnopark. Incentives for Strengthening Technology and Management (SIPTEKMan). Bengkulu. and regional governments such as Malang. To increase the added value of biological resources in Indonesia. the Ministry has distributed computers to some education institutions. The objectives of Bioisland development are to increase the biotechnology role in the global economic and human welfare. Yogyakarta. The Advancement of Regional Innovation through Business Technology Center (BTC). the development of S&T activities using multimedia information system. the government of Germany also supports this program through training and networking channeling. non-government organizations. such as the enhancement of S&T information system. product diversification. enhance marketing network and simultaneously absorb numbers of manpower. The concept of BTC is the strategy of the Ministry to accelerate the process of interaction between business world and technology suppliers in regional areas of which their activities will very much depend on the market and industrial need. Medicinal Crops and Food Diversification Information. Batam Island. Riau. in term of science. manufacturing laboratory facilities for education. OLEH Paten. and Jakarta. Along with the incentive scheme programs. medical and pharmaceutical biotechnology. as well as the promotion of regional S&T. Garut. Yogyakarta. This program is adopted from UNESCO's "Information for All Program". the promotion of Laboratory Accreditation. technology and industry. comprising of Appropriate Technology. the Ministry has carried out Bioisland planning and development in Rempang. the BTC had been established in Batam. To further improve society knowledge. several programs have been executed.

and animal provision.Agrotechnopark. Universities and industry. In 2003 the Ministry accomplished the examination of the two drafts of those regulations. Government Regulation on Allocating part of enterprise earning. PUSPIPTEK and PP Iptek. This effort is implemented through the development of Center for S&T Visual Display (PP IPTEK) located at the Beautiful Indonesia in Miniature Park (TMII) and in several other regions. Some of the cooperation. shrimps and sheep) and post-harvest process. BSN (Agency for National Standardization). animal husbandry (laying pullets. To enlarge productivity and competitiveness for the national utilization and development. The four regulations are: Government Regulation on Technology Transfer by Research Institution. In the frame of S&T socialization. Included in this program are the development of Eijkman Institution. In order to strengthen the basis and sharpen the direction and priority of S&T development. namely Government Regulation on Technology Transfer by Research Institution. construction of post-harvest processing. The Eijkman institution has conducted some researches and developments in health and medication. the ministry has also promoted cooperation with Regional Research and Development Institutions. and business society be they in domestic or international scope. this program built some physical constructions such as clearing of soil. Involved in this program are Regional Government. and Government Regulation on Research Permit for Foreigners residing outside Indonesia. the Ministry is dedicated to formulate four Government Regulations as the implementation of Law No. Development and Application of S&T. located in Muara Enim. The main duty of Agrotechnopark is to develop human resources through agribusiness application in the field of agricultural (corn and peanut) cultivation. Agency for National Nuclear Energy (BATAN). ducks. The Ministry of Research and Technology also conducts some programs related to guidance and strengthening the S&T Institutions. Board of National Research Development and other stakeholders through among others developing Regional Research Development Boards and fostering S&T cooperation. corn plantation. the Ministry has also set up coordination with its LPNDs (Non Departmental Government Agencies). hatchery and shrimp pond. is the development of an integrated agro system emphasized on technology transfer. the Ministry has introduced and facilitated S&T to the people of the early age. Government Regulation on Research Permit for Foreigners residing outside Indonesia. 193 . Indonesian Institute of Sciences (LIPI). which is expected to support the growth of technology-based industry. South Sumatra. cows. for instance. In order to build national superiority and competitiveness. National Institute of Aeronautics and Space (LAPAN).18/2002. Higher Education Institutions. Furthermore. In 2003. the Ministry of Research and Technology steps up partnership and networking between S&T institutions. and BAPETEN (Nuclear Control Board). BAKOSURTANAL (National Coordination Agency for Survey and Mapping). namely the Agency for the Assessment and Application of Technology (BPPT). PUSPIPTEK development program is another priority program. Government Regulation on the Permit of Hazardous Research.

health development should be able to: 1) motivate national development with health outlook. people. some 85% of which is allocated to fund "policy instrument" programs.include the ASEAN COST (Committee on Science and Technology) which is held twice a year.5 Recovery Percentage from Tuberculosis of the Lungs >85 Percentage of HIV/AIDS Carriers to Risk Population <1 194 . as mentioned in this table: HEALTHY INDONESIA VISION 2010 Health Indicators Target Life Expectancy at Birth 70 Infant Deaths per 1. 4) improve individual. commonly prevalent. namely. and priority research scheme programs.18 billion (routine and development additional budget). Total budget for executing those all mentioned programs amounts to Rp 172.000 Children 1 Maternal Deaths during Childbirth per 100. This Healthy Indonesia Vision 2010 is also aimed at improving 16 health indicators. the remaining 15% of budget is allocated to fund "policy study" program. such as incentive scheme. 2) urge people's independence to live healthily.000 People <1 Malaria Infections per 1. the Republic of China. Meanwhile. that is the study of S&T Development. and Germany. Health In building health for the people. with its four missions. and bilateral relations with India.000 People 0.000 Children 2 Childhood Diarrhea Deaths per 1.000 Live Births 40 Childhood Deaths per 1. 3) keep and improve qualified.000 Live Births 58 Childhood Pneumonia Deaths per 1. family.000 Live Births 150 Dengue Fever Infections per 100. and attainable health service. and neighborhood health. the Government has determined Healthy Indonesia Vision 2010.

and the communities in line with local socioculture. among others 195 . their aims.000 live births (Indonesia Demographic and Health Survey SDKI 1997) to become 35 per 1. and the status of people's nutrition.Acute Flaccid Paralysis (AFP). Maternal Death during Childbirth (AKI) has gone down from 334 per 100. Meanwhile. the result of health development implementation can be seen at among others in people's health and nutrition and illness pattern. maternal death rate during childbirth. Children Under 15 Years per 100. life expectancy at birth.000 live births (SDKI 1997) to 46 per 1. family and community health in the frame of keeping. fulfills basic needs to live healthily and enhances social interactions. Following are the programs.000 live births (SDKI 2003).5 percent in 2003. families. and protecting their health and environment towards the development of a healthy. attitude.000 live births (SDKI 1997) to 307 per 100.000 People <1 Percentage of Infants with Low Birth Weights 5 Percentage of Children With Sufficient Nutrition 80 Percentage of Pregnant Women With Malnutrition -induced Anemia 45 Prevalence of Disorders due to Iodine Deficiency 6 Percentage of Women of Child Bearing Age With Chronic Energy Deficiency Syndrome 10 Source: Department of Health (2002) In building health for the people. The status of people's health and nutrition can be seen among others from infants death rate.000 live births (SDKI 2003). Children Under Five Years Old with Lack of Nutrition rate has declined from 30 percent in 1998 to 27. and active participation of individuals. Meanwhile. Children Under Five Years of Age death rate has decreased from 79 per 1. In general. and keeps the community out of threats coming from the neighborhood. empowers individual. Along with the decline of Infants Death rate. Healthy Behavior and Community Empowerment Program is aimed at promoting the quality of healthy living environment that supports the growth of children and youth. improving. the results of this program show an increasing trend.000 live births (SDKI 2003). The National Development Programs (PROPENAS) 2002-2004 has determined six health programs. Infants death rate (AKB) has declined from 46 per 1. and the results based on the performance indicators of the PROPENAS: 1) Healthy Environment. death rate of children under five years age. Life Expectancy has increased from 63 years (1990) to become 66 years (2002-2003). self-supporting and productive community through improvement of knowledge. development of positive behavior.

2 percent in 2001 to 80 percent in 2003.000 people. securing the availability and equitable-distribution of quality medicine needed by the people. Food and Hazardous Material Program is aimed at protecting people from the dangerous effect of the abuses of drugs. and exclusive breast feeding (ASI Exclusive) to infants of 0-4 months old reaching 52 percent and 53 percent respectively. and logistic support to health services.8 percent respectively.33 percent. The result of this program in 2001 and 2003 included: the scope of Universal Child Immunization (UCI) reaching 72.5 percent in 2001 to 68 percent in 2003. quality. improvement in nutrition services to reach good nutrition.000 people and 120.64 per 100. iron anemia (AGB) of pregnant women reaching 40. health equipments which do not meet the requirements of quality and safety. and improvement of quality food diversification to strengthen household food reinforcement. infrastructures. affordable and usable by the community. improving the number. 2) Health Efforts Program is aimed at promoting equitable distribution and the quality of effective and efficient health efforts and their affordability by the community. effectivity and efficiency of health budgeting and improving the availability of facilities. and distribution of health workers. rising percentage of families using clean water in urban and rural area from 77. food. which is equitably distributed. and the scope of medical treatment at childbirth by health workers reaching 68 percent and 70 percent respectively. and ratio of health workers compared with the number of people reaching 85.1 and 45 percent respectively.an increase of families using healthy toilet from 61.5 percent respectively. The results of the program reached in 2001 and 2003 included: prevalence of malnutrition to children under five years old reaching 26. 4) Health Resources Program is aimed at stepping up the number. narcotics.46 per 100. psychotropic. 5) Drugs. 3) Improvement of Community Nutrition Program is aimed at improving the intellectuality and productivity of human resources through the improvement of family self-supporting efforts to improve nutrition. prevalence of chronic lack of energy (KEK) among pregnant women reaching 20.5 percent respectively.7 percent respectively.1 percent and 27.9 and 80 percent respectively. and addictive substance (NAPZA). lack of Vitamin A (KVA) among children under five years old reaching 0. households consuming iodized salt reaching 64 percent and 78. 196 .1 and 16. The results of the program reached in 2001 and 2003 among others were: people following the financing system of pre-efforts 20 percent and 21. and improving pharmaceutical industries competitive power potential based on domestic natural resources. protecting people from usage of pharmaceutical. quality.

health technology services. health fostering research. Most HIV-infected are males (77 percent) while the most-affected age group are those between 20 years and 29 years old (41. imported from Thailand and India. widely known as the antiretroviral (ARV) treatment. the Government distributed drugs for the community. social riots. In Indonesia.25 million in the previous year.7 million from its 2003 fiscal budget for the fight against the virus. control upon 65 percent of production and distribution of health pharmaceutical in the frame of Good Management Practice (GMP) in 2003. Drug use by injection and commercial sex have been fueling the epidemic. etc. 197 . drugs for AIDS. psychotropic. Separately. making 199 research works that covered policy studies. narcotics. from US$9. The Government provided 30 percent of the total budget spent on the anti HIV/AIDS movement. with the rest provided by foreign donors. Indonesia also allocated US$5. pharmacy and traditional medicine. foreign donations increased to US$19. epidemic. 6) Health Development Policy and Management Program is aimed at facilitating health efforts implementation through an efficient and effective policy and management and supported by science and technology.The results of the program are among others: protecting people from the dangerous effect of the abuses of drugs. determining drugs list and drugs price standard ceiling of basic health drugs as a guide for district/city in connection with natural disaster. In 2003.9 in 2004. and addictive substance (NAPZA). ecology. up from US$3.3 million last year. AIDS Carriers in Indonesia The first AIDS case in Indonesia was diagnosed in 1987.4 percent among sex workers in Papua and 47 percent among drug users in Jakarta. reaching 100 percent of the processed cases in 2003. through the Program for compensation of Oil Fuel Subsidy Reduction (PKPS BBM). remains big concern due to its unaffordable cost. and publishing of 174 articles on scientific researches. only six years after the first in the U. Generic ARV has been available in this country since September 2001. contagious diseases eradication. introduction of the concept of essential drugs of the National Essential Drugs List (DOEN) as an instrument of rational drugs consumption and cost effective.S.7 percent). operational research for intensification of contagious diseases eradication. at the rates reported by the United Nations Program on HIV/AIDS (UNAIDS) as high as 26. The results of the program reached in 2003 were among others: determining 56 laws and regulations to become health program policies.

000 of their customers 24. with population growth reaching 1.4 million people and 202.000 gays 8.000 injecting drug users 10. The number of Indonesian people has been increasing yearly.000 couples from the above mentioned groups Source: Department of Health. and Fatmawati Drugs Dependency Hospital.6 children in 2002 (Indonesia Demographic and Health Survey SDKI 2002). Based on Population Censuses (SP) of 1990 and 2000. as well as develop and harmonize the policy of demography by noting the aspects of demography and environment as the center of development. the Total Fertility Rate (TFR) of reproduction age women reached 2.000 of their customers 1. Gatot Subroto Hospital. For demography and Family Planning. Central Java. the Government had arranged legal support for the waiting of the Bill on Demography Administration and academic draft on population data protection. improve the quality of the Family Planning Program. Besides. To develop the information system. Dharmais Hospital. Sulanti Saroso Hospital. West Java. namely: Cipto Mangunkusumo Hospital. Mintoharjo Hospital. In 1997. the number of Indonesian population was 179.8 children.000-130. the Government has provided free AIDS medicines in nine hospitals in Jakarta.97 percent). Bali. as follows: 198 . Success in controlling population showed in the significant decline of birth rate. The decrease of the TFR was a consequence of increased contraceptive devices (prevalence) of fertile age spouses. although the growth rate tends to decrease.49 percent in the period of 1990-2000.000 sex workers and 6. and North Sulawesi). 2002 Since August 2004. Prevalence rate increased from 57 percent in 1997 to 60 percent in 2002 (SDKI 20022003). the Government has setup some programs.AIDS Carriers in Indonesia (90. decrease death rate. or lower than that of previous period of 1980-1990 (1. Demography and Family Planning The policy in the field of demography and family planning is to improve the quality of people through birth control. Duren Sawit Hospital. Persahabatan Hospital. demography administration tryouts had been implemented in 13 districts in 6 provinces (Banten.500 transvestites and 6. but decreased to 2.2 million people. Polri Hospital. Special Territory of Yogyakarta.000) 43.

covering about 7. and the establishment of the Indonesia Children Protection Commission in 2003 through Presidential Decree Number 77 of 2003. behavior and positive attitude of youths on reproduction health in the form of improving their reproduction health degree to prepare family living to support the improvement of efforts for the development of future generation. demography effect analysis and indicators.1. In 2004 (until March 2004) Prosperous Family Income Improvement Effort (UPPKS) groups were still recorded at 342.9 million for the past five years (2000-2004 until April 2004). 3. Demography Policy Appropriateness and Development Program. Youth Reproduction Health Program is aimed at improving knowledge. Meanwhile the programs relating to children development are among others: Master Plan of Children Welfare and Protection (KPA). Prosperous Family Undertaking Credit (Kukesra) reached 50.9 of the total UPPKS members. developed the Ceria (happy) Internet Website. there were also established the Concern-for-Youth Family Groups (KKPR) for 21. Family Empowerment Program is aimed at improving family welfare and resilience as the smallest unit in community. bill on Demography Administration and Family Development as the amendment to Law Number 10 of 1992. and controlling the birth rate that in turn improving qualified small families. National Campaign on Free Birth Certificates. The results of the program include the capability to ask Fertile Age Spouses (PUS) to become new family planning participants at the average of 3. Besides.1 thousand groups. marked by among others increase of family awareness and empowerment in fulfilling basic.2 thousand groups. social. The results reached until 2004 are among others: formularization of demography administration system and policy. and training for promotion force for Youth Reproduction Health for 15.8 million of families primarily from Pre-Prosperous Family (KPS) and Prosperous Family I (KSI).2 million. health. and HIV/AIDS controlling. Family Planning Program is aimed at fulfilling the need for qualified Family Planning and reproductive health services. During the period of 2000-2004 the Government has established the Youth Consultation and Information Center (PIK) for 662 groups. 2.3 thousand people. document on National Program for Children Protection (PNBAI) 2015 which is children program in national scope covering the fields of education. 199 . which is aimed at realizing appropriateness of demography policies in all aspects of development. children protection. and psychological needs. while active family planning participants in 2004 reached about 27. population numbering system. 4.

Based on Population Censuses (SP) 1990 and 2000. primarily those undertaken by the community. by owning proper and healthy houses.6 children per woman in SDKI 2002-2003. and at last to 2. The relationship between the Family Planning Program and the population number is shown from the efforts above. The proportion of the patients serviced by this private services had been increasing from 41. Housing Housing development constitutes a major concern of the Government to improve the people's living standard. doctors and private midwives giving family planning services to community were recorded at 51. and increased to 60.470. The efforts to improve the Private Family Planning Network that consists of Family Planning Clinics.5 percent in SDKI 2002-2003. and the majority of them were held by private midwives.The SDKI has also showed increase of family planning participation for the past five years. housing policy aims to: (1) meet demand for appropriate and affordable houses. In early 2004 there were recorded Rural/Urban Community Institutions (IMP) as follows: 80.6 children per women in 1970-s to 3. and of separate unit of readyto-be built environment.920 Private Family Planning Clinics. that is the number of children per reproductive age woman (15-49 years) or the Total Fertility Rate (TFR) had decreased from 5.32 percent) and the period of 1980-1990 (1. In SDKI 1997. (3) promote the development of simple high-rise apartments for people of low income bracket at urban areas with high population density.3 percent in SDKI 2002-2003. 363. Under the 1999-2004 National Development Plan.195 Private Doctors. the participatory rate of family planning reached 57. particularly of economically low income bracket.533 Village Family Planning Assistant Supervisors (PPKBD). 10.4 million and 206. or lower than that of in the period of 1970-1980 (2.0 in SDKI 1991.2 million respectively.4 percent. 5. and 35.9 percent in SDKI 1997 to 62.8 in SDKI 1997. (2) encourage the development of large-scale residential areas through schemes of ready-to-be built housing areas. consisting 2. the number of Indonesian population was 179. Family Planning Network and Institutional Strengthening Program is aimed at improving self-support as well as the scope and quality of Family Planning and reproductive health .066 Sub-PPKBD and 749. particularly by people of low income bracket. The family planning participation has successfully decreased the birth rate. the family planning program has taken part to decrease the population growth rate in the past three decades.97 percent). with population growth rate of 1.034 Family Planning Groups having participated in as the spearhead of Family Planning in the field. industrial areas 200 . In line with the increase of people's socio-economic degree.48 percent in the period of 1990-2000.478 Private Midwives. and become 2.

Those homes. there are problems to face in addressing the housing supply and conditions. which was launched in October 2003. (4) promote sound environment at residential areas.968 homes having historical values or traditional styles covering 641 ha in 145 areas. However.and trading areas.5 million (28. slum clearance of 3.573 homes erected by home owners.000 locations. and not-healthy-for-occupation homes numbering about 14. and victims of natural disasters or calamites through the establishment and rehabilitation of damaged houses and their environmental infrastructures and facilities.602 homes constructed under micro-mortgage scheme. subsidies have been made available. provided under a mortgage system.000 homes being the target to be built in the year. 474. limited economic capacity of the said families (some 70 percent of them earn less than Rp1. During the period 2000-2004. and (5) help recover the living of refugees. help to make access to financial institutions to obtain low-interest credits through a mortgage. The subsidies. simple but healthy to be occupied. to simplify procedures to get permits. The homes are of the sizes from 21 sq. the central Government strives to improve the effectiveness of housing development programs and maintain synergy with regional administrations. districts and municipalities) to be used for simple but healthy homes and high-rise rented apartments. meters worth ranging from Rp21 million to Rp36 million per house. which is a system of installment purchase through loans from some sources (banks etc).2 million persons in 10.000 homes out of 200. 66.000 homes need to be built to keep pace with the country's population growth.000 homes. and so does the number of rented dwellings. to utilize efficiently and effectively plots owned by regional administrations (provinces. Scheme of Building One Million Homes In supporting the scheme of building one million homes per annum during the period of 2004-2020.000 units. business circles and the communities. The number of owner-occupied homes keeps growing. are given to people with earning less than Rp1.22 percent of the total) In tackling the short supply of housing. about 800.114 units of homes constructed at urban areas. and renovation of 191.742 ha through the supply of micro-mortgage for 6. In this context the Government allots Rp420 billion to subsidize the disparity of bank interest those banks should bear for the construction of 150. among other things: about six million heads of families still do not own homes.297 homes built for people of low-income bracket under a mortgage. meters to 36 sq. In addition there were a number of simple apartments having 6.5 million per month).5 million per 201 . there were 378. are for people who still do not have their own homes or apartments with low income or unfixed earnings. and high-rise apartments. and utilize foreign loans efficiently and effectively. the increase of slum dwellers to about 17. For 2004. there are 27 banks ready to provide subsidies to finance the construction of 112.

Also in 2004 the Government built 160.600 sq.15 percent. The total number of civil servants is 3.128 homes or averaging 75. meters in the first quarter of 2004. capitalization of national property projects swelled by 83. 202 .month. It means they each get financial aid ranging from Rp2. Every civil servant has the right to get a subsidized home credit on condition he or she has been a civil servant for five years and his or her age no more than 50 years. meters from 8. of whom 1.2 trillion.5 million have no homes of their own yet. of which 27 administrations have signed agreements with developers.000 homes per annum.5 million.22 trillion. and the Home DownPayment Loan Scheme for first-time home buyers.500 sq.4 million to Rp3. Demand for property during the first quarter of 2004 showed a rise in many sectors.368 units having been constructed. In 2000.000 homes for civil servants.58 trillion to Rp10.753 units out of 27. A 11-percent interest per annum is offered by the agency to housing developers.000 establishments in 2002 to 1. and members of the Police to improve their living standard. Cross-subsidies along with their housing savings managed by a Housing Savings Supervision Agency will help finance the construction cost.34 percent. the agency earmarks about Rp 2. Cumulatively the number of rented apartments was 14.000 homes for civil servants. The same trend occurred in rented apartment new-occupation when the number increased to 243 units during the first quarter of 2004. To accelerate the supply of housing since 2002 the agency has offered housing builders loans under the Home Construction Loan Scheme. to reach 22. The trend of property business in 2003 was astonishing: it grew by 87 percent from Rp25. To pay the down payment of the housing construction. During the past ten years.79 trillion in 2002 to Rp45. from 176 in the previous year. Development of Property The past few years have seen a substantial growth in the property sector. from Rp5. meters during the final quarter of 2003 to 10. In the same year property business' contribution to the country's GDP was 2. This sector was suffering a great loss when the country was hit by monetary crisis in the middle of 1997. by maintaining cooperation with regional administrations and developers.1 percent. So far there are 101 district/municipal administrations willing to build homes for civil servants in their respective areas. the agency has financed the construction of only 752.300 establishments in 2003. personnel of the Indonesian Armed Forces (TNI). or a rise of 30 percent. Condominium occupation grew at 83. Following suit was the number of housing developers that increased from 1. The agency has set a target to set up 100.5 million. Demand for office space noted a rise of 160 percent or 220 sq.936 units. and credit interest of six percent to ten percent.90 trillion in 2003.

Working of Women Movement. Other supporting programs are Developing Family of Children under Five years. Women Empowerment The government has arranged three programs on the position and role of women. Women Empowerment Policy Suitability and Development Program that is aimed at realizing suitability in all policies of women empowerment in all fields of development. It was followed suits by Bank Tabungan Negara (BTN-the State Savings Bank) that lowered its housing loan interest to 15 percent from previously 18 percent. the exiting policy is directed to increase service of men to be able to actively participate in Family Planning Program. • • Some results of the programs of women life quality improvement in 2001-2004 include: The Gender-related Development Index (GDI). that is aimed at improving the position and roles of women as individuals. as part of family setting up recent and future generations. strengthening active roles of the people in the efforts of enhancing women empowerment. and Husbands Readiness-to-help Campaign. and Breast Feeding Care Movement. making housing loan interest relatively lower or cheaper. both as development human being and sources. and developing family development approach with emphasis on health and reproduction rights. Youth of Girl Movement. the Government has increased the efforts to improve the quality and scope of health service to reduce high mortality rate of women delivering babies.3 percent at the beginning of 2003. Love Mother Hospital. that is aimed at improving the role and independency of institutions having the vision of women empowerment especially that of women organizations. as social being acting as agent of social change in all aspects of life and development.671 in 2001 to become rank of 91 out of 175 countries with index values of 0. 203 . Love Mother District. Empowerment of People's Role and Gender Mainstreaming Institutions Capability Program. they are: • Women Life Quality Improvement Program. through Love Mother Movement (GSI). In health development.678 in 2003. Through Family Planning Program. which measures the quality of human development related to gender showing increased rank from 92 out 162 countries with index of values of 0.Stimulating the rapid growth of property in 2003 was the decline of the SBI interest rate from 13. improving male contraceptive services. especially in rural areas and slums in urban areas.2 percent in 2002 to 10. developing the capacity and ability of government institutions in Improving gender mainstreaming in all phases of development process.

Some programs implemented to increase women empowerment in the economic sector are among others: Family Empowerment Program (PPK) with activities including productive economic business and infrastructures development that have been implemented in 20. scholarship grant for girl students has decreased the number of drop-out girl students.4 percent in 2000 to become 92. some efforts have been implemented. the Government has implemented coordination and cooperation with related parties in arranging policy on women worker protection. In executive institution.25 percent in 2003.8 percent. To protect Indonesian workers.83 percent in 2001 to 44. 204 . including women migrant workers. To support public policy backing up gender mainstreaming. in the period of 2001-2004 the Government has conducted some studies concerning implementation of leave for women who deliver babies for women workers in the formal sector. the Regional Representatives Council. women in First and Second Echelon posts had increased from 9. and the Regional Houses of representatives has given opportunity for women to participate more actively in political sector. by establishing special working unit to handle credit for small and medium enterprises empowerment of the real sector of businesswomen. and protections to women as victims of household violence. mapping of business. improvement of recruitment process until departure.81 percent in 2003 (SUSENAS 2001 and BPS 2003). and 26 provinces (year of 2003). and fight against people trafficking especially women and children. and preparation of bill on Indonesian Workers Placement Abroad. In the field of women protection.9 percent in 2003. The result of the 2004 General Election shows that women representation in the House of Representatives has reached 11 percent or an increase compared with 9 percent in previous General Election. Women's role in economic development showed the increase of women's work participation rate (TPAK) from 42. 187 districts. especially women workers who work abroad. such as establishment of services of Indonesian workers in receiving countries. In political development. a women caucus in parliament has been established to express women issues. and improve women involvement and awareness to participate in political activities. women politicians are about 19. potential partnership. opportunity to continue study for pregnant girl students. The efforts to improve women economic well-being has also involved the banking system. protection to women trafficking victims. The data from the National Socio-Economic Survey (SUSENAS) show that the percentage of literate women had increase from 91.9 percent in 2001 to become 13. Law No. improvement in protections agreement for Indonesian workers in receiving countries.000 villages. social insurance for women workers informal sector.In education development.12 of 2003 concerning General Elections to Elect Members of the House of Representatives. and financial relation facility (credit and saving) between businesswomen and banking. In Regional Representatives.

To institutionalize the gender mainstreaming. which until 2003 stood in 7 provinces. Nowadays the Bill on Anti-Violence against Women that initiated by the House of Representatives has been passed. the Government has established some working units dealing with women empowerment. People participation in coping with the problems of women and children in refugee sites has proved to be helpful for victims of social conflicts. the Government has improved policies to expand and revitalize Love Mother Movement Plus. the Government has established One-Stop Crisis Center in some big hospitals in 10 provinces. and development of gender equality and fairness in the field of reproductions health in family. including HIV/AIDS. the government has established the Forum of Gender Equality and Fairness (KKG) in national level. provincial. which includes health of new born babies and improvement of breast feeding. To give protection and service to the victims of violence against women. To prevent and cope with the problems of trafficking in women and children. in 2001 the Government together with people has built commitment through Declaration of Joint Commitment of Indonesian Country and People for Eradication for Violence against Women. the Government also held women detective training to cope with victims of violence against women involving policewoman from 21 Regional Police Commands in Indonesia. 205 . public education on reproductions health. women empowerment institutions in all provinces and its initiative in 235 districts. A number of 123 institutional networking of Women Study Centers (PSW) have been established to be able to actively participate in giving inputs to regional governments. In the efforts to strengthen regional.In relation with the effort to improve health. focal points in 37 ministries and nonministerial institutions. the Government has drawn a Bill on Anti Pornography and Porno Actions. Besides. institutional management and network of the Love Mother Movement. The effort was followed by arrangement and implementation of the National Action Plan of Eradication of Violence against Women (RAN PKTP). the Government has issued Presidential Decree Number 88 of 2002 on National Action Plan on Eradication of Trafficking in Women and Children and Presidential Decree Number 87 of 2002 on National Action Plan on Eradication of Commercial Sexual Exploitation of Children. It was realized by establishing the Integrated Service Centers of Women Empowerment (P2TP2). and district/city institutions. the Attorney General Office and Indonesian Police Headquarters. Since 2002 the efforts were extended by building crisis centers in some districts and 163 Specials Services Rooms in 19 Regional Police and Resort Police in some districts in Indonesia. To cope with violence against women. To cope with pornography and porno action.

the national sports development policy is marked by some priority themes. Sport. The XXIXth National Special Conference of KONI in Jakarta in 2004 has declared important pointers through its Work Programs. and to improve the efforts to foster and guide prospective athletes since the early age. In general. 206 . and self confidence. the only Indonesian athlete who grabs gold medal in Athens Olympic Games Sports In accordance with the direction of the Guidelines of State Policy and National Development Program 2000-2004. the development of sport is aimed to realize sports policy harmonization in various fields of development.Youth. • To prepare the best Athletes in taking part in the 2004 Olympic Games in Athens. vehicle for the process of value transformation of national culture. of about 33 sports committee members at the provincial level. and human intelligent forming in macro meaning. mastering the competency of social skills. • To improve potential/talented young athletes development. as follows: • To make sports a means of national cohesion and unity in upholding national values and dignity in international fora. The National Sports Committee of Indonesia (KONI) consists of members from various branches of sport divisions. and creativity. • To support the birth of the Sport Act. to improve physical fitness of the people. and Drugs Abuse Control Taufik Hidayat. that is that sports is an instrument of nation's integrity.

football. sailing. and international level. archery. Central Java. and the 2008's XVII PON in East Kalimantan Province. North Sumatra. cycling. South Sumatra Province. volley ball. in Copenhagen. The LADI. especially in facing some international events namely the 2004 Olympic Games in Athens. Special Territory of Yogyakarta. medical doctors and lawyers. the 2005 Arafura Games 2005 in Darwin. 207 . • To prepare implementation of the 2004's XVI PON National Sport Games in Palembang. the 2005 First Indoor Asian Games in Bangkok. and South Sulawesi. The "Indonesia Bangkit" Program is a short-term program of the Central KONI in preparing Indonesian athletes contingent in some sports branches which has been predicted and evaluated to have potential to win gold medals in the 2004 Olympic Games in Athens. which consists of professionals. The centers are for sports development for regional and national level for athletics. rowing. the XXIII SEA Games 2005 in the Philippines and the 2006 ASIAN Games in Qatar. and the 2006 Asian Games Qatar. pencak silat (martial arts). The "Indonesia Bangkit" Program In line with the long-term development series of "Garuda Emas" (Golden Eagle). as obliged by the World Anti-Doping Agency (WADA) established by the Montreal-based (Canada) International Olympic Committee (IOC) in 1999. archery. 2004 in Jakarta. the 2005 Solidarity Games in Saudi Arabia. lawn tennis. beach volley. the Achievement Development Program of the Central KONI is focused on the successful implementation of the "Indonesia Bangkit" (Indonesia Rises) Program. and boxing. lawn tennis. diving. the 2005 SEA Games in the Philippines. athletics. diving. Denmark. Training Center for Student Sportsmen (PPLP): These centers are located in 30 provinces. The sports branches are: fencing. takraw. cycling. and weight lifting. chess.• To prepare the best Athletes to the event of the 2006 Asian Games. namely training center for 16 sports branches for regional. the Ministry of National Education has established the Indonesian AntiDoping Agency (LADI) on August 6. namely the priority sports development in: badminton. archery. taekwondo. Australia. and boxing. West Java. the 2004 Paralympic Games in Greece. Anti-Doping Agency As an effort to keep sportsmanship and values of sports out of bad actions damaging sports images. was established as follow-up action of the anti-doping in sports declaration on March 3-5 2003. takraw. football. wrestling. national. wrestling. Training Center for Higher Learning Student Sportsmen (PPLM): These centers are located in seven provinces. table tennis. East Java. athletics. karate. and some of which are prepared for international level. namely in DKI Jakarta. swimming. athletics. namely fencing.

The facts above. treatment facilities. illicit production and trafficking remains one of Indonesia's serious problems and has become a national concern. do not and will not stop or discourage the Government of Indonesia in continuing to pursue its strong commitment in fighting against drug abuse. The NNB has the tasks to formulate and implement policies related to drug demand and supply reduction. rehabilitation centers and guidance & consultation programs. 208 . Law Enforcement. especially in implementation of DRUGS FREE ASEAN in the year of 2015. BERSAMA has also a special coordination forum in regional and international level. and is expected to give firm and comprehensive law enforcement in facing drug problems in the country. the Government has also revised Law Number 5 of 1997 on Psychotropic Substances and Law Number 22 of 1997 on Narcotics. Non-Government Sector. 17/2002. Drugs Abuse Control The rising trend of drug abuse. As stipulated in Article 1 of Presidential Decision No. however. In fact. the most serious aspects has been the rapidly rising incidence of HIV/AIDS among injecting drug users. the NNB is directly under the President of the Republic of Indonesia. within the past five years. the LADI will socialize the existence of this agency and act as an official agency for the 2004's XVI PON in South Sumatra. Treatment & Rehabilitation. On the other side. There are four TF's Centers of Prevention. and facing much more serious illicit drugs and organized crime problems then ever before. And for the long term. The Government focal point in Indonesia is The National Narcotics Board of Indonesia (NNB). known as BERSAMA is the Organization of Indonesia's Focal Point of Non-Government Agencies.For the short term. with the National Police Chief as the NNB Chairperson. at the same time to implement preventive and control measures and activities to prevent and eradicate the abuse of illicit trafficking in drugs through its Task Forces/TF composed of relevant government agencies. As a coordinator agency. BERSAMA is an umbrella of all Indoensian nongovernment organizations/NGOs related or the agencies which have activities in drug abuse prevention. the LADI will organize education for medical doctors in monitoring doping application. It is supported by 25 government ministries and agencies. and Research & Development."Badan Kerjasama Sosial Usaha Pembinaan Wargatama". Indonesia is indicated as one of the destinations for illicit drugs and producer of synthetic drugs.

For short-term environmental development. relevant action plans have been formulated to include the arrangement of natural resources and environments balance sheet. conservation. hand-in-hand with NGOs concerned with the issue. controlling and monitoring natural resources. Access to Information scheme The scheme is aimed at disseminating complete and comprehensive information on potentiality and productivity of natural resources and environments after being inventoried and assessed and evaluated. resulting in the destruction of coral reefs and other marine biota including fish species. the Government. making draft of bill on natural resources management. Excessive timber cutting and slash-and-burn farming system for instance have been bringing about high degree of forest destruction. and rehabilitation. action plans are focused on schemes of: development and improvement of access to information on natural resources and environments. The ideas of the scheme are that natural resources and environments as well as their supporting forces to be managed well and preserved for the benefits of the people's welfare from one generation to another.ENVIRONMENT Development in the field of environment as it is envisaged in the 1999-2004 National Development Programs aims to exploit wisely and prudently natural resources for the benefits of the people by improving equitable and sustainable people's welfare in term of improved and healthy quality of environment. By the scheme the public may have ample access to get information on natural resources and environments in form of spatial data. and that the country's economy to be developed on its comparative superiority as a maritime 209 . protection and control of environments against destruction and pollution. For long-term. and promotion of the role of communities in managing. studies on funding scheme through debt-for-nature swap (DNS) and clean development mechanism (CDM). making critical lands enlarge almost uncontrollably. and improvement of the role of community in natural resources management and environmental preservation. It is realized that pressure against the environment is mounting up chiefly due to varied and different causes and interests. enhancement of effective natural resources management. studies on the application of green tax model. institutional management and environmental preservation. has made short-and long-term action plans and development schemes. In addressing the problems. studies on `green gross domestic products". Reckless and irresponsible disposals of industrial and mining wastes to the sea in many places have already polluted those places. Almost a similar situation happens at sea and under the sea. High degree of pollution is also happening particularly at big cities due to primarily gas emission from motorized vehicles. A number of rivers and creeks or inlets particularly at urban areas are being polluted because of waste disposals from industries and households which have not yet been treated well by using modern method and sophisticated technology. value and balance of natural resources and environments.

and agrarian state capable of producing superior products as output of every region within this country. various environment-related activities were carried out to make among other things data on non-informal mining undertakings and unlicensed mining undertakings. it is sought out to improve information technology. identified properly. Other activities included doing advanced inventories on mineral resources by systemic ocean geological mapping. There are also accessible data on evaluation of potentialities of forest resources. and inventories of coal and peat moss potentialities. to make all available resources. and at the seas of Riau. data on potentialities of geothermal and renewable energies. the 2000 State of Environment Report featured environmental situation and status in Indonesia. dissemination of 210 . Bali. promotion of information system on integrated marine and fish farming developments. and natural resources spatial management. In attempts to protect national biological varieties. and minerals. survey on marine geology at the Sunda Shelf. the making available information on fertile fishing grounds for fishermen and cooperatives as well as fishing enterprises on regular basis. Besides doing geological mapping and studies. which also caters public complains.economy. For 2002. Related activities worth recording in 2004 included the finding of several places identified as important habitats for protected species. at part of the Malacca Strait. West Kalimantan and East Kalimantan. and its data are accessible to the public in the provinces of West Java. one of the major lacks to intensify the implementation of action plans. a concept of biological variety clearance house mechanism has been composed. fresh water. Papua. West Kalimantan. The establishment of website. and the implementation of Agenda 21. and the publication of magazine "SERASI" both dealing chiefly with issues on environments. inventories of mineral resources have also been done by composing or drawing varied maps. It included additional inventories of wild animals. examining South Sumatra and Kutai curves. The counting of natural resource balance has been conducted by doing experiments on benefits they can offer. environmental geological mapping and land water conservation. Under the scheme. In addition. making inventories on metal and non metal minerals. including geological and geophysical maps. data on sea sand at Riau Islands. sea waters. have been part of the scheme. Central Kalimantan. data on natural resources and environments were updated. inventories on fresh water resources. As of 2001 a system of management information on environmental impact analysis has been put into operation. and arrangements of maps of land water curves as a basis for of socio. and South Kalimantan. composing data base of mineral and coal resources. including those of maritime with its limited infrastructures and facilities as well as accessible data. Southeast Sulawesi. Central Java. and arranging balance of mineral and coal resources. In 2003.

125 ha mangrove reforestation program has been carried out at Segara Anakan region. Thailand. and socialization of policies on geological calamity and potential geological calamity in Indonesia. and the Philippines in fish catching. and underground waters. reforestation areas have been expanded along with recovery of coral reef at several locations. unbalanced proportion of fish stock distribution. such as those with the BILB of Germany and the CEVA of France.information on potentialities of mineral resources. In addition some preparation works have been going on for the designation of Kakaban Island in East Kalimantan as area of marine conservation. lackluster law enforcement against offenses occurring in exploiting resources of sea fish. and control of environmental pollution at marine and coastal ecosystem. geothermal. peat moss. The scheme is also sought out to make conservation areas being protected from any destruction as a consequence of excessive and uncontrolled exploitation. unsmooth implementation of spatial management. and Banda Island as the world's heritage site.000 ha. In cultivating and managing sea weed. mining. with the aim of utilizing natural resources in efficient and sustainable way to meet the needs of industries for raw materials. completion of geological and geophysical mappings. and geological and geophysical research and development in the field of geological catastrophes or calamities. The Government has also launched campaign scheme for reforestation of national forest and rehabilitation of critical lands covering a total area of 300. and with related organizations in the People's Republic of China. Meanwhile lingering unfavorable conditions to be addressed in implementing the scheme are among other things: the public's poor understanding on the importance and beneficial values of marine resources and sea fish species. improvement of volcano monitoring technology. arrangement of blue print of volcano catastrophic mitigation as the foundation for planning of national volcano mitigation system. volcano. And improved utilization of natural resources and environment through natural resources conservation and rehabilitation by using environment-friendly technology has been what the scheme does require. Under the conservation and rehabilitation scheme. 211 . In the context of preventing and reducing the area of critical land. Management Effectiveness Scheme This scheme underlines the urgent need for maintaining the balanced proportion between the utilization and preservation of natural resources and environment. cooperation with foreign institutions concerned with marine development continues to be maintained and promoted. a 1. Studies on environments and marine geological calamity at coastal areas and seas have been and are being conducted. coal. and mining areas. and regreening at Cikawung and Cimeneg river banks. forestry. forest areas. and the yet-to-be optimum development of cultured fish farming and development of islets. solid bitumen.

preserve natural resources and environments and protect them from illegal practices or exploitation. the Ministry of Forestry. and designation of geological protected areas and mining areas. promotion of environment-friendly cultural system at damaged green areas through mangrove-fish farming. Prevention and Control Scheme The scheme of Prevention and Control over environmental destruction and pollution aims to improve the quality of environments in a bid to prevent environmental pollution. manuals for the management of land rehabilitation and land conservation. Attainable achievements made under the scheme have included investment in equipments to support preventive efforts of environmental pollution. conduct inventory on newly designated marine conservation areas by using marine ecosystem unit approaches. provision of soft-loans to a number of companies to encourage them to use environment-friendly technology. in promoting the preservation of environments. clean and fresh. of hotels and hospitals and many others. Scheme for Institutional Arrangement and Law Enforcement The main concern of this scheme are the development of environmental institutions. the scheme stresses on gradual transfer of authority from central to regional administrations in managing natural resources and environments. the maintenance of cooperation between the government institutions concerned with environmental issues and non-government environmental organizations. to be Natural Resources Conservation Offices and Offices of National Parks. the arrangement of legal system and law enforcement to secure. domestic and overseas. and to recover spoiled environments due to excessive exploitation of natural resources and environment-unfriendly activities of industries and transport. to make the environment healthy. It underlines the application of indicators enabling the preservation of renewable natural resources to avoid unrecoverable damages. and recomposing directives for the management of lakes. promotion of status for a number of technical executing units under the Directorate for Forest Protection and Nature Conservation. development of communal-based management of coastal areas and islets.In improving and maintaining marine biota. socialization of environment-friendly technology for small-scale industrial undertakings. 212 . it has been endeavored to rehabilitate damaged coral reefs and implant artificial coral reefs. Achievements made under the scheme included the reviews and recomposing of various regulations and bills related to matters of natural resources and environments. manuals to handle waste of chemical industries. publication of directives to treat waste of oil and gas products. Pursuant to the 2000-2004 National Development Programs. to develop national marine parks and marine conservation areas. the making of master plans for cleaner river program. provision of designs for small-scale waste water disposal treatment installation rehabilitation.

(5) completing separation scheme of the Police from the Indonesian Defense Forces (TNI) and improvement of professionalism of the Police as the state instrument tasked to enforce law and order.economic evaluation models for natural resources and environment. The scheme gives emphasis on the greater utilization of natural resources and environments for the broadest possible benefits to the people without neglecting the preservation of function and balance they should hold. it has been sought out to involve members of the community in establishing partnership mode at river basins. and to participate actively in maintaining the world's peace and order. and development of state defense and security might which is supported by appropriate facilities. In addition. partnership with gold miners at Gunung Pongkor. VI/MPR/2000 of 2000 on the separation of the Police from the Indonesian Defense Forces. DEFENCE AND SECURITY Policy in the development of defense and security. Decree No. as the 1999-2004 Guidelines of State Policy outlines. such as training to prevent and control destruction of mangrove forests. Initiating systematic and well planned development of the defense and security components have been the arrangement and improvement of all related statutory regulations as the manifestation of the People's Consultative Assembly's Decree No. military and police as the main elements. maintain. to strengthen the might and capability of defense and security. (4) expansion and intensification of bilateral cooperation in the field of defense and security in a bid to maintain regional defense and security stability. In empowering members of the communities. Improvement schemes have been taking place at all components of the state defense might. Improvement of Communal Role Scheme The scheme aims to improve the role and awareness of parties concerned with prudent and wise management of natural resources and efficient and effective preservation of environment. with the defense forces and the police as its core. which is supported by other components to improve state defense. to protect and guard the public. trainings for cultured mangrove-fish farming to develop a system of communal mangrove preservation. the documentation of fauna and flora identities per district and municipality. and defend the unitary state of the Republic of Indonesia against any treat from within and outside by respecting human rights. (2) capability enhancement of the people's total defense and security system based on the might composing the society. and reactualization of the role the Military should play as the tool of the state to protect. forum for ecosystem-based environmental management and many others. VIII/MPR/2000 of 2000 on the role of the Indonesian Defense Forces 213 . training and up-grading courses have been organized. redefinition. etc. infrastructures and budget. is more directed towards: (1) restructurization of the Indonesian Military pursuant consistently to its new paradigm through reposition. (3) the military professionalism improvement.

Of the total budget in 2004. Ever since the reformation era taking place. public security and order maintenance. supporting defense. So do the Police to maintain security and order. By taking each role as the national defense guard and security guard the TNI and the Police are expected to be able to play a role in maintaining the nation's unity and integrity. to enforce law. but striving to be professional in their respective field and being credible. In developing and maintaining defense and security there have been adopted a number of development schemes grouped into main development schemes of state defense. and will have no more appointed representatives sitting at legislative bodies. Law No. State Defense Development Scheme The scheme is designed to build the might of state defense in proportional and gradual way in the context of establishing the mighty President Megawati Soekarnoputri inspects parade during a commemoration of the State Defence anniversary day 214 . and Law No. Rp10. As of 2004.and the Police. and of the Police as the element to maintain security and order. and to give the public appropriate protection and services. To manage the schemes defense budget allocation for the year 2004 saw a 15 percent rise compared to that of 2003. and domestic security promotion. they cease their political role. the TNI has been continuously repositioning its stand in shouldering the task and responsibility to defend the country and the nation. the country's defense and security system has undergone a substantial transformation. 3 of 2002 on State Defense.721 trillion were mostly allocated to finance the operational units and procurement and maintenance of defense equipment. So have basic paradigms of the Indonesian Defense Forces as the mighty pillar in the defense system. 2 of 2002 on the Police of the R. The Military and the Police do not play their dual-function role (defense-security and social functions) any more.536 trillion to Rp13. With the country's very vast and rough geographical condition under its protection and surveillance while its personnel have to readjust their behavior-and mentality to the new paradigms.I. namely from Rp11.266 trillion.

23. equipment. It also plans to add its might by purchasing four corvettes from the Netherlands. 215 . are concentrating their operations around the Malacca Strait to the Natuna Sea.356 noncommissioned officers. In improving its defense power.567 commissioned officers. in addition to maintaining services of aircraft. and separatists. The Government attaches high priority to making the most effective use of defense personnel and equipment to be capable of deterring enemies. and Police supporting operations. and air force dimensions. and 129. personnel. to launch anti-terror operation. it has also pursued to retrofitting combat vehicles. effective. repressive operations. the Philippines. the Army in 2004 (up to first quarter) had personnel totaling 274. and artilleries. Besides. The country's defense policy covers the developments of system. The total number of the Navy's personnel up to first quarter of 2004 was 55. Naval forces. Naval operations are classified into: the prioritized operations safeguarding the Natuna Islands and the Sangihe-Talaud Islands. communication services night vision goggles (NVG).612 lower noncommissioned officers. deploying intelligent operations and clandestine operations. and maintaining coordinative patrols with neighboring countries such as Malaysia.528 lower noncommissioned officers. and India. the Navy is developed to have mighty marine equipment and marine corps. while capable of operating through the country's territorial waters as required. and preventive operations. and four landing platform deck (LPD) warships from South Korea. as well as aircraft maintenance services to prolong their operational services. efficient.061.486 noncommissioned officers. consisting of 29. rebels. navy. consisting of 7. protecting vital objects. 114.541. The Army As the defense might at land. selected operations. and 24. Naval military supporting operations to support shifting of naval personnel deployment. and KAL-28M warships. and facilities materialized through development of the army. Singapore. the Navy has procured KAL-12M type warships. and modern with high quality and mobility so that it can be deployed in a relatively short time to all corners of the country. supporting operations at Maluku and Papua. It aims to maintain the capabilities and might of the Defense Forces. combat vehicles. and improve the operations of their existing prime aims system to create a complete and credible might. To improve its military equipment.state defense which is professional. the Army has procured transport-combat MI-35 helicopters and personnel transport MI-17 helicopters.963 commissioned officers. and repowering canon dragging vehicles. The Navy Commissioned to protect the country's waters.

and countries at the Asia-Pacific region in the context of maintaining regional as well as international security stability. and with Timor Leste. Parallel with the organization of state defense. The scheme underlines the importance of good management of human resources. including surveys on and determination of borderlines with Malaysia (at Kalimantan-Sabah border).The Air Force With total personnel of 25. It is also continuing the repair program of F-16 aircraft.548 commissioned officers. and to improve the capabilities of promoting and utilizing state territory. and international military cooperation with members of ASEAN. seven technical squadrons.871 noncommissioned officers and 7. it has been always pursuing the improved professionalism and readiness of the police to uncover any case. the Air Force continues to procure new aircraft to enhance air defense including the introduction into service of 16 Hawk 2000 aircraft.732 consisting of 6. natural resources. 11. 216 . Under the scheme. In maintaining the unity of the Republic. promotion and nurturing awareness of any Indonesian citizen's responsibility to participate actively in state defense have been conducted by empowering social organizations. six "Special Force" squadrons. four Sukhoi (two SU-30 and two SU-27) combat aircraft. and maintaining international cooperation in the field of defense. Scheme of Security and Order Maintenance The main aim of this scheme is to realize the organization of security and order system to enable the system to protect the public from any disorder and disturbances. pursuant to the operative statutory regulations. conducting national surveys and mapping. and the developed might of the Police. three training squadrons. 16 radar squadrons. Supporting Defense Scheme The scheme is designed to make the use of modern management more professional. and artificial resources to help the organization of state defense. and 16 NAS-332 aircraft and three CN-235 KPA aircraft. including the ratio between the number of the police personnel and the number of the public to serve. and seven KT-1 trainer aircraft. and overhauls of Puma SA-330 helicopters. with Papua New Guinea.313 lower noncommissioned officers and a number of combat and non-combat aircraft as well as other supporting equipment the Indonesian Air Force fulfils various operational roles to protect and secure air defense. various activities have taken place. and seven maintenance depo squadrons. In improving its might. 12 Colebri EC-120 trainer helicopters. The Indonesian Air Force' might consists of 15 air squadrons.

and to carry out programs of preventive actions therapies and law enforcement against drug users and traffickers. etc. 862. 70 of 2002. such as communications devices. the Police have set up a Security Intelligence Agency tasked to deal with state security and safety and to give input to the State Intelligence Agency that handles any threat from inside and outside. Steps taken under the scheme are to uphold and maintain law enforcement. to improve their professionalism.077 suspects including 14 foreigners. in addition to tightening the control and upholding discipline of the personnel in doing their jobs as well as to impose reward-andpunishment system. personnel and training operation. Marriot Hotel. Various trainings continue to be organized for the Police personnel. aircraft and helicopters. budget. the Police established in 2002 the National Drugs Agency with the authorities to formulate policies. and in handling domestic security disturbances by deploying all components of the state security might is the main aim of the scheme. 217 .5 tablets and 488 bars were seized. and on legal affairs and statutory regulations. Pursuant to Presidential Decree No. Domestic Security Development Scheme Improved capability in safeguarding the national legal territory.In promoting the Police might seven basic conceptions have been introduced to promote the Police's self-reliance. strategies on the eradication of drugs trafficking. and to hunt down and arrest the doers and masterminds of bomb attacks. Some 2. logistics. J. Kuningan (in front of the Australian Embassy) bloody incidents. motorized vehicles. Papua. It has been always pursued to maintain the operative quality of their rather out-of-date equipment. management.W. It is the priority concern of the Police to maintain and restore security and order in some conflict-torn areas such as in Aceh. The conceptions are on the Police doctrine and ethics. including drugs trafficking.293. including bomb attackers in the Kuta-Bali. and take strict actions against rioters. either at home or abroad.460 grams of narcotic substance. The scheme is also directed towards the creation of a system that promotes cooperation between the Police and the Indonesian Defense Forces as well as related bodies in facing security troubles threatening the unity and integrity of the nation.671. and Maluku. Under the drugs operations launched during the first quarter of 2004 the Police had succeeded in uncovering 795 cases of illegal use and trafficking of drugs that involved 1. In fighting against drugs.

and the Districts of Paniai. but then another could be convened on May 18. These included endeavors to hold the Joint Council Meeting (JCM).Security Problems The most serious problems in the field of security the Indonesian Government is currently coping with are the armed separatist movement in parts of the Provinces of Papua and Nanggroe Aceh Darussalam. The meeting failed to be held. or dialogues held abroad. The failure to reach an agreement with the separatist movement led to the issuance of Presidential Instruction No. the Province of West Irian Jaya. In early 2003. but only to come to a deadlock. Mimika. the government has exerted every effort to settle the issue through a peaceful way by holding dialogues and negotiations with the Aceh armed separatist movement. 28 of 2003 concerning the State of Emergency with the Status of Material Law in the Province of Nanggroe Aceh Darussalam. Papua Law No. modern and civilized life in the Province within the Unitary State of the Republic of Indonesia. in addition to a security restoration operation. 1 of 2003 on the acceleration of the implementation of Law No. Switzerland. 2003. Puncak 218 . The implementation of the status of martial law takes in the form of a concerted approach by carrying out humanitarian operation. which was properly speaking to be held in Geneve. Aceh In dealing with the issue of Aceh. and terrorism. 45 of 1999 on Formation of the Province of Central Irian Jaya. concerted approaches in more comprehensive development plans. law enforcement and empowerment of the public administration. This military emergency measure has been the last choice after exhausting a series of peace efforts by the government. and granting the majority of Aceh people an improved feeling of security and protection. Substantially the law governs almost all life aspects of the local communities. 21 of 2001 on Special Autonomy Status for Papua constitutes the best compromise for a peaceful. The implementation of the status of martial law has been viewed successful since it has succeeded in reducing room for action of the armed separatist movement. allows ample room to actualize political life and economic growth and others related to the principles of justice and rights of the local people. 2003 in Tokyo. on April 25. there was issued Presidential Instruction No. But neither could halt the intention and action of the Aceh armed separatist movement to secede from the Unitary State of the Republic of Indonesia. be it through the granting the province with the status of special autonomy.

Jaya. and Sorong. the government is going to maintain close cooperation with other countries in the fight against terrorism. In addition. not to mention a string of bombings in other sites including the J. the Indonesian Police deserve to be given thumbs up for their successes to uncover. the government keeps on improving the mechanism of terrorism eradication. claimed not only hundreds of lives and untold material damage but also brought about negative impacts to either the Bali Island's and Indonesia's tourism industries or the country's economic development. Meanwhile. for instance. major casualties and indiscriminate destruction. Marriott Hotel in Jakarta. both in bilateral and multilateral framework. This tragedy was noted in the Agenda of the UN Security Council in Resolution No. In line with this. 1438 dated October 14. The issuance of Law No.W. which give strong legal foundation to fight against terrorism. 219 . 16 of 2003 (though it was then nullified through a judicial review by the Constitutional Court) showed that the Government and the Indonesian nation have a strong commitment to persistently fight against terrorism. The instruction is the policy to improve the management of administrative affairs and public services. who had waged a series of terrors. and will never surrender. Now some have even been sentenced to death and life imprisonment. The trial process of the Bali blasts. In their later development the two regulations have been adopted and promulgated as Law No. 15 of 2003 and Law No. there are no other ways then to condemn them and at the same time to fight against and eradicate them. in a relatively short time. 16 of 2003. 2 of 2002 on the application of Government Regulation in lieu of Law No. Aware of the terrorist actions of having always caused horrible consequences. 15 of 2003 and Law No. and intensifying early detection efforts and deterrent actions. the Indonesian government among other things has issued Government Regulation in lieu of Law No. 2002. 1 of 2002 concerning Eradication of the Crimes of Terrorism and Government Regulation in lieu of Law No. has been an indication to some extent of the success of the government in coping with anarchies committed by a group of people suspected of having connection with international terrorist networks. as an international terrorist action. Terrorism The tragedy of Bali bombings on October 12. 2002. capture and detain terrorist suspects. 1 of 2002 on the Bali bombings. including the Bali blasts. For that.

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