Wednesday, January 31, 2018
3) Realizing Australia’s Defense Export Dreams
WEDNESDAY, 31 JANUARY, 2018 | 18:24 WIB
1) Child Protection Minister Claims Papua Unfit for Children
Children swim in the sea in Raja Ampat, West Papua. TEMPO/Hariandi Hafid
TEMPO.CO, Jakarta - Women Empowerment and Child Protection Minister Yohana Yembise considers Papua as a region that is unfit for children’s development. Her consideration is influenced by the geographical condition of the region.
“I have expressed it to the [Coordinating Minister for Human Development and Culture Puan Maharani] that the geographical condition hampers us in reaching those regions,” said Yohana following a meeting on Wednesday, January 31.
Yohana said that central government must synergize with the Papuan regional administration to Papua more hospitable for children. She said that based on Government Regulation No 23/2016, problems related to the development of children should be handled by each regional administration.
Furthermore, Yohana explained that the budget for women empowerment in Papua is still too limited. She has urged the Papuan government to increase the budget in that sector.
A number of state Ministers held a meeting at the Coordinating Ministry for Human Development and Culture office to discuss the follow-up of the extraordinary event took place in Papua. Coordinating Minister Puan Maharani said that she will utilize the budget from each ministry and Papuan special autonomy.
2) Measles, Malnutrition Kill 71 in Papua
Wednesday, 31 January 2018 | 22:29 WIB
3) Realizing Australia’s Defense Export Dreams
By Grant Wyeth January 31, 2018
Canberra wants to spark growth in its defense industry, but the market is a crowded one.
Australia is continuing its recent trajectory towards developing a more robust defense architecture. Not only has the country significantly increased its defense expenditure, and has begun acquiring major new hardware, this week saw the government release an aspirational new Defense Export Strategy that hopes to move Australia in to the top 10 defense product exporting countries by 2028.
Currently, the country’s defense exports amount to 0.3 percent share of the global market — $1.6 billion per annum — making it the 20th largest arms exporter. The government is hoping that by establishing a $3.1 billion fund that will provide loans to local defense industry manufacturers to expand their businesses, they will be able to find new export markets, and rapidly increase Australia’s share of the market.
The plan seems wildly ambitious as countries in the lower half of the top 10 exporters (Spain, Italy, Ukraine and Israel) each have over eight times the worth of exports. However, Australia seems to have identified an area of manufacturing that should continue to grow as other manufacturing industries decline or become locally unviable, and it hopes that the country can develop the necessary skills to take advantage of the demand. Australia itself doesn’t have the military capacity to sustain a domestic industry with its own needs. But the government has indicated it would focus on complimentary hardware for its Five Eyes allies in the United States, United Kingdom, Canada and New Zealand, as well as targeting markets in Asia and the Middle East.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The government has stated that as Australia’s export capabilities increase it will have measures in place to prevent the sale of hardware into conflict zones or to countries with poor human rights records. Yet according to a report by the Stockholm International Peace Research Institute, Indonesia is currently Australia’s second largest importer of defense equipment (after the United States) at around 21 percent of Australian exports, and concerns remain about the behavior of the Indonesian military (TNI) in West Papua. While ever-closer ties with Indonesia are vital to Australian security, and greater arms sales may assist with this process, a greater consolidation of defense sales to Indonesia would be of particular concern to Australia’s Melanesian neighbors, who remain strong advocates for West Papuan rights.
While the uncertainty brought by shifting regional power structures in the Indo-Pacific may be a major driver of Australia’s desire to enhance its defence capabilities, domestic regional economic shifts are also a significant factor. With the state of South Australia (SA) struggling with the viability of a number of manufacturing industries, it is seeking to become the hub of Australia’s defence aspirations in an attempt to revitalize the state’s fortunes.
With the last car manufacturing plant in Australia closing in the state capital of Adelaide in October last year, the country has also lost a strategic heavy manufacturing capability should it find itself in need to convertcivilian operations into large-scale military production. The government seems to be attempting to pivot this civilian loss directly into a greater defense capability. Hoping that the “high end” value of this industry will be of greater and more stable financial benefit to the region, as well as a national strategic gain.
However, the new scheme has posed the question of whether Australian defense manufacturers actually requirepublic funding to boost their operations, when opportunities for finance would exist in the private sector. Although the government may be using the high profile announcement to encourage defense manufacturers to heighten their ambitions. And the potential for civil society groups opposed to financial institutions lending to defense manufacturers gaining public traction could also have been a factor.
Despite this, because the market for large scale defense hardware — warships, planes, submarines — is already dominated by the United States, Russia and European Union countries, it is unlikely Australia will develop the capacity and expertise to shift the market in any significant way within a decade. It is also unlikely that Australia could be competitive on cost either. The development of niche innovations that can be complementary to the hardware of major global defense manufacturers is most likely what the government envisages.
The implications of the government’s proposal is that it sees some potential growth and profitability in the future of Australia’s defense industry. At the very least, the desire to develop a viable high-end defense manufacturing capability is an indication that Australia is seeking to create a more self-sufficient and muscular defense infrastructure. One that is less reliant on other powers and a little more strategic flexibility.
Tuesday, January 30, 2018
Indonesia: strategic threat or strategic partner?
17 Jan 2018Evan Laksmana
Monday, January 29, 2018
3) A Guide to Navigating the 2018 Risk Landscape in Indonesia
Lack of engagement
What needs to change
2) Inalum asks Danareksa to calculate Freeport’s shares value
Viriya P. Singgih The Jakarta Post
3) A Guide to Navigating the 2018 Risk Landscape in Indonesia
By Aishwarya Gupta and Ossama Ayesh
January 29, 2018
The Indonesian economy presents a stable outlook, but the political landscape of the country paints a bleaker picture.
As one of the largest emerging markets in Southeast Asia, Indonesia has been at the forefront of investments in the region. It is an archipelago consisting of 17,508 islands that rest on the Malacca Straits and South China Sea, both of which are regional hubs for trade.
However, the current political, security, and socioeconomic paradigms capture risks and uncertainties that affect the investment climate of the country. The history of authoritarianism and elitist politics were trumped with the arrival of President Joko Widodo, known as Jokowi, who recently secured strong approval from the coalition. Besides a thaw in coalition politics and reforms in the crackdown on corruption, there are significant risk factors posed by regional dynamics in the region with a growing bubble in the banking sector that does not seem promising.
Even though growth projections remain positive for the upcoming year, the investment climate in the country remains somewhat stagnant with manufacturing industry taking a dip and a slump in tourism. 2018 will prove to be a significant year as 171 administrative regions will simultaneouslyhold gubernatorial and mayoral elections. To understand the risks posed by all of these different factors, it is important examine them all individually alongside some key indicators, beginning with the domestic climate of the country.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Indonesia is a resource rich country which initially grew under Dutch colonial rule. Under Sukarno’s leadership following a four-year guerilla war with support from the Japanese, the Dutch granted independence to Indonesia in 1949. In 1965, coups and vigilante killings of communists and other leftists left the country torn, leading to the emergence of General Suharto taking power in 1967.
What followed were over three decades years of authoritarian politics with a closely aligned military involved in corrupt political and economic practices. During Suharto’s rule, Indonesia invaded East Timor and incorporated West Papua into Indonesia. The late half of the 1990s saw the Asian Financial Crisis, which resulted from bouts of currency speculation, plummeting the value of the Indonesian Rupiah. By 1998, protests toppled the Suharto regime followed by free elections in 1999.
After Suharto’s fall, East Timor gained independence (and in 2002 changed its name to Timor-Leste and admitted to the United Nations). Although the era of authoritarianism passed, the administrations of Abdurrahman Wahid and Megawati Sukarnoputri (Indonesia’s 4th and 5th presidents, respectively) were dogged with corruption scandals.
The following years saw Susilo Bambang Yudhoyono come into power through direct presidential elections, and he he enacted some anti-corruption laws and decentralization reforms. Even as corruption declined, the country continued to see clashes. Foreign copper and gold mines saw protests and separatist movements crippled the Aceh until finally peace deals were signed to give the region relative autonomy. Once Jokowi took power, he pushed forward anti-corruption laws, strengthening the rule of law and easing red tape barriers to investment. However, the current political climate of the country still presents a risk.
Indonesia pushes forward with the slogan of “Unity in Diversity” as it houses many diverse ethnic groups and religions. The country has a long history of separatist movements, be it Timor-Leste or more recently in Papua. The divergent ethnic groups in the amalgam of islands have created fractured identities that have been a source of conflict. After the decentralization reforms were enacted due to ethnic and geographical issues, governance was relegated to the individual provinces.
From the time of the Suharto regime, the military’s alignment with the political elite has been a source of dismay for the population. The Indonesian Military’s (TNI) has continued to fight separatist movements in West Papua and Makaum, which came on the heels of a yearlong courtship of Jokowi. More recently, West Papua independence campaigners gathered a staggering 1.8 million signatures on a petition that called for a free vote on independence. The increase in clashes between separatist groups and the government is a great source of risk for the country. At the same time, ethnic conflicts have manifested themselves in the major cities as well with the growing discontent with Chinese and non-Muslim groups.
Not only is Indonesia susceptible to fractured ethnic identities, but it also contains very diverse religious groups. It is also the world’s largest Muslim-majority nation. The role of Islam has manifested itself in the politics and economics of the country as well. Aceh, for example, instituted Sharia post-decentralization. The formation of a Sharia police has resulted in strict punishments that are largely viewed as dangerous in the context of a democratic country. Religious factions have sought to stymie the growth of many minority communities along the islands, including Christians and Shia Muslims. Separatist movements coupled with ethnic divides in the region are likely to serve as a further source of conflict in the region.
Terrorist Activities and Returning Foreign Fighters
The presence of terrorist groups including ISIS, al-Qaeda, and Jemaah-Islamiyah add another layer to the nature of instability in the region. Reports have approximated that close to 500 Indonesian foreign fighters were believed to be in Syria as of late 2017. After the increased presence of ISIS in the Philippines, Indonesia has ramped up its counterterrorism program in the hopes of keeping a lid on terrorist activities within its borders. Extremists from the Philippines pose another risk as the borders between the two island nations are rather porous; fighters could easily circumvent immigration controls and enter Indonesia. The critical challenge for the Indonesian government will be to curb extremist activities while rehabilitating returning foreign fighters.
Upcoming Elections and Identity Politics
The impending elections of 2018 and 2019 are likely to pose significant risks for the country as ethnicity and religion could play a key role. The gubernatorial and mayoral elections set for 2018 are likely to witness a play on religious and ethnic sentiments. In West Java, Ridwan Kamil, who was touted as the leading candidate by the Muslim conservatives, was deemed a “lesser Muslim” following his open support for Jokowi. It is possible that the president himself might face similar challenges during his re-election.
The more concerning aspect remains the espousing of religious rhetoric with respect to candidates’ suitability for office. Following the sentencing of Jakarta’s governor Basuki Tjahaja Purnama (known as Ahok) for alleged religious remarks, it is apparent that religion in some way will play a part in the country’s elections. As religious rhetoric increases, there is a stark possibility that sectarian divides will deepen and violence is likely to follow.
The Youth Bulge and Lack of Infrastructure Development
After the highly centralized and corrupt Suharto regime that ruled the country for nearly 30 years beginning in the 1960s, Indonesians sought to have more of a say in their governance. Ultimately, decentralization reforms did not provide the type of economic development that the country needed in its rural areas. Indonesia has continued to face a lack of technical and vocational training despite the growing youth bulge.
Unemployment and underemployment rates among the youth (15-24 years) are 22..6 percent indicating a need for more education and soft infrastructure development programs. Without critical education and training programs, it is hard for the nearly 60 million youth to find gainful employment. Given the general distance of the islands from one another, interconnectivity and communication has been lacking. Though Jokowi has promised infrastructure development and investment throughout the country, many of the proposed projects are big ticket items that may only provide temporary relief while draining the overall budget.
In the lead up to the Asian Games this coming year, the country had allocated $411 million to the infrastructure development budget. Of the country’s $156 billion budget for this year, over 9 percent has been committed to infrastructure development. In addition, the infrastructure development projects contain components that provide poverty reduction and relief programs.
While the investment in infrastructure is a positive sign, it is important to note that some infrastructure projects, like the ones related to the Asian Games, are only likely to provide temporary economic growth. Should infrastructure costs related to the Asian Games ramp up in the months preceding the game, it would take away from essential infrastructure needed by the country.
The Deepening Effects of Climate Change
A critical risk that the Indonesian government will have to tackle head on is the effects of climate change. In the past year, Indonesia has witnessed multiple climate disasters, recording 2,341 natural disasters in 2017 alone. Reports have indicated that the Java Sea is rising and as weather conditions become more extreme, Jakarta appears to be sinking faster than any other large city in the world. In 2014, 2.6 million people had been displaced as a result of natural disasters.
Every year, with the number of climate related disasters increasing, Indonesians will see mass displacements, increasing climate refugees, destruction of infrastructure and overall disruption in the livelihoods of the Indonesian people. These are all factors that must be addressed by the government as they will most definitely pose a socioeconomic burden on the country’s economy.
Indonesia is one of the riskier markets in Southeast Asia, primarily due to its domestic dissonance. The political risks are significant with challenges to security, infrastructure, and increasing employment throughout. These political factors will continue to bog down Indonesia’s growth unless they are remedied.
2018 will prove to be a significant year in Indonesian politics with various issues in flux. Even though the Indonesian economy presents a stable outlook, the political landscape of the country paints a bleak picture. The Indonesian government might be able to achieve their economic growth targets, but unless they address some of these core issues domestically, the country’s growth will be met with multiple obstacles in the near future.
Aishwarya Gupta is an Analyst at Morgan Stanley with a Master of Science in Global Affairs from New York University. She has previously worked with UN Women, Advanced Energy Group, UN Security Council’s Counter Terrorism Executive Directorate and various other organizations.
Ossama Ayesh is an Analyst at JP Morgan with a Master of Science in Global Affairs from New York University. He has worked with various international firms and organizations, including Advanced Energy Group, Eurasia Group and the UN Security Council’s Counter Terrorism Executive Directorate.
Sunday, January 28, 2018
2) Indonesian teams scramble to attend Papua measles outbreak