Friday, January 23, 2015

1) Papuan Governor Disapproves of Freeport’s Smelter Plan Outside Province

2)  Jokowi’s Presidency Thus Far: Part One – The Good News


1) Papuan Governor Disapproves of Freeport’s Smelter Plan Outside Province

By Rangga Prakoso on 09:19 pm Jan 23, 2015

Jakarta. Papua disapproves of mining giant Freeport Indonesia’s plan to build a smelter facility outside Papua, calling the move indicative of the company’s lack of good deeds to the nation’s easternmost province.
Papua governor Lukas Enembe said on Friday that for the past 50 years, Freeport Indonesia, the local unit of US mining company Freeport-McMoRan, only wanted to export the raw materials without having the good intention of building an integrated processing industry in Papua.
He said integrated smelter facilities in Papua are needed. Not only can the facilities help eradicate poverty, Lukas said, but they could also create jobs and strengthen Papua’s fiscal capacity.
“So, it is obligatory to build the smelter in Papua and not in Gresik, East Java. Freeport’s reason of lack of infrastructures is baseless because Freeport had never had strong commitments to help develop Papua,” he said at the House of Representatives’ building on Friday.
Freeport Indonesia signed on Thursday a memorandum of understanding with state-controlled fertilizer company Petrokimia Gresik, for renting land so that that it can establish a raw minerals processing facility near Petrokimia’s plant in Gresik.
Its progress toward construction of the smelter secured Freeport Indonesia’s export permit as the government extended the permit for another six months. Its current permit will expire on Jan. 25.
Freeport Indonesia’s construction of the copper smelter in East Java is part of its $15 billion expansion in mining operations in the country.
Lukas said that the Papuan administration with local administrative offices are ready to cooperate with Freeport Indonesia for the creation of the integrated smelter facility in Papua. He called for the central government to issue special policies for Papua.
“The policies included investment facilities, fiscal and non-fiscal incentives and capital access,” Lukas said.
Investor Daily


2) Jokowi’s Presidency Thus Far: Part One – The Good News

by Joshua Kurlantzick
January 22, 2015
Without any doubt, the first months of Indonesian President Joko “Jokowi” Widodo’s first term have delivered some impressive successes. The president’s “smart card” and “health card”—cards sent out to poor Indonesians guaranteeing them a certain number of years of free medical care and schooling, as well as state subsidies for school supplies—have gone out to millions of Indonesians. In the long run, this new social welfare  program will likely bring dramatic improvements in education and health indicators for many of the poorest in the country. The cards, which Jokowi started during previous mayoral positions, thus deliver on one of Jokowi’s major campaign promises. And although they aren’t cheap, the cards can be paid for by the cuts in fuel subsidies Jokowi has enacted, another bold move. Previous Indonesian presidents had refused to cut fuel subsidies, which had become the third rail of Jakarta politics, even though the subsidies did more to benefit rich and middle-class car-driving Indonesians than they did to actually help the poor.
But Jokowi slashed the subsidies, publicly announcing that he would do so even if the cuts wound up making him unpopular, since reducing subsidies were critical to restoring fiscal health. Jokowi has been somewhat lucky—the plummeting global price of oil has meant that, although the president cut fuel subsidies (other than on diesel, where the subsidies remain), the price of fuel for Indonesian drivers today is actually less than what it was before Jokowi made the cuts, cushioning the blow of Jokowi’s decision. Still, Jokowi’s resolve seems to have impressed Indonesians, even those who could be affected by the fuel subsidy cuts.
The president also has, rhetorically, shown himself to indeed be willing to diverge from long-standing government positions on some of the most difficult issues in Indonesia. During a visit to Papua, the province with the most restive ongoing conflict—some might say insurgency—Jokowi was asked about an outbreak of recent violence in early December that left several Papuans dead. Local security officials assured the president that security forces in Papua, who have over decades amassed a record for brutality and obfuscation, were attacked by armed Papuans and simply were forced to respond. This report contradicted many other local accounts of what happened, which suggested that security forces fired on hundreds of unarmed Papuan protestors.
Previous Indonesian presidents simply would have accepted the assurances of security forces and local officials in Papua, since there was seen to be little political benefit in questioning them, and potentially alienating the military, which still maintains tight control in Papua. But Jokowi questioned whether the report provided to him was accurate, the first time an Indonesian president has doubted the security forces in Papua. Jokowi looks likely to establish some kind of independent investigation into the violence in Papua, which also would be a first for Indonesia.

In part two, we will examine how, despite these successes, some of the shine has begun to come off of Jokowi’s reputation as a clean politician. In addition, we will examine how Jokowi’s foreign policies, including his policies toward international investment, appear to be poorly thought out and, ultimately, courting disaster.

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