TRADE: US, Indonesia Make Deals Despite Human Rights Pleas

By IPS Correspondents Reprint | | Print |

Abid Aslam

WASHINGTON, May 8 1998 (IPS) - Trade between the United States and Indonesia got a boost Friday, despite pleas from an Indonesian democracy activist for an end to military support of the government of President Suharto.

“Economic improvement will mean nothing without political reformation,” Pius Lustrilanang, who reportedly was abducted in February and tortured for two months, told IPS Friday.

‘Reformation’ has become the catchword of Indonesians wishing to oust Suharto.

U.S. and International Monetary Fund (IMF) financial assistance to the ‘New Order’ regime “must set preconditions for there to be democratisation, political reform, and recognition of human rights” in the world’s fourth most populous country, Lustrilanang said.

As the 30-year-old student leader spoke with journalists Friday, Indonesian and U.S. officials cemented a deal to provide up to one billion dollars in short-term credit insurance to finance U.S. exports to Indonesia.

Officials and corporate executives celebrated the agreement later at a luncheon presided over by Indonesian Finance Minister Fuad Bawazier and James Harmon, chairman of the U.S. Export-Import Bank, the official export credit agency also known as the Ex-Im Bank.

The Ex-Im programme will enable U.S. banks to confirm letters of credit, issued by Indonesian banks, on behalf of U.S. exporters. Without it, officials said, U.S. banks will not confirm letters already received from the Indonesian buyers of U.S. exports.

Purchases of U.S. goods and services needed by Indonesian manufacturers have all but dried up since financial crisis struck the Southeast Asian late last year. Ex-Im’s risk under the new programme will be offset by a sovereign guarantee from the Indonesian finance ministry, which would cover any defaults.

That and similar commitments by Japan, Singapore, Canada, Australia and Malaysia, ” will ease the credit constraint which has hampered our exports,” Bawazier said.

“It is appropriate for Ex-Im Bank…to step forward and fill the current gap in export financing in Indonesia,” Harmon said, adding that the effort would “help promote U.S. exports to Indonesia that would otherwise not go forward.”

Over the years, those exports have included support for the Indonesian military, according to summary minutes from meetings of Ex-Im’s board of directors. In 1995 alone, the body approved at least two direct loans for military procurement. These included 15.4 million dollars for “aircraft parts and overhaul services” for the Indonesian air force and 22.9 million dollars for Indonesian army helicopters.

Elsewhere in the U.S. government, the Pentagon has been training Indonesian military forces since 1992, despite a Congressional ban intended to curb human rights abuses, recently- released Defence Department documents revealed. Skills taught have included “military operations in urban terrain”, advanced methods for snipers, and pyschological warfare.

Soldiers trained under the ‘Joint Combined Exchange Training’ (JCET) programme have included members of the ‘Kopassus’ commando unit, which Indonesian and international human rights groups have accused of killing and torturing civilians.

Indonesian officials denied those allegations as well as any involvement in the kidnapping and detention of Lustrilanang and at least 49 other political activists known to have ‘disappeared’.

Pentagon officials said the training activities had broken no laws because Congress had barred Indonesia from participating in the International Military Education and Training’ (IMET) programme, not the more secret JCET. Unlike IMET, JCET is not a specific ‘line item’ in the defence budget but is hidden in a broader appropriation, analysts said.

That sleight of hand has led lawmakers to introduce a bill that “says very simply that, if Congress prohibits a nation from participating in the IMET programme, the Department of Defence must stop all military training to that country,” said Rep. Nita Lowey, Democrat of New York and author of the bill, in a recent letter to fellow legislators.

The proposed ‘International Military Training Accountability Act’ would make the “military training programme consistent with Congressional intent, and eliminates any room for misinterpretation,” she added.

Also introduced in Congress is a resolution endorsing the idea of a referendum in East Timor, which the government in Jakarta claims as its twenty-seventh province, but the annexation of which never has been recognised by the United Nations.

Lawmakers are likely to amend an IMF funding bill so U.S. contributions to the agency would be tied to human rights improvements in Indonesia and East Timor, said Alan Nairn, veteran journalist and coordinator of the human rights group ‘Justice for All’.

The IMF played a key role in the gradual removal of military dictator Mathieu Kerekou in Benin during the late 1980s and early 1990s. No similar action was being taken with regard to Suharto, a veteran of that campaign told IPS, because no major shareholder had shown the necessary ‘leadership’. In Kerekou’s case, France had pushed a political reform agenda in the IMF’s executive board.

The United States, as sole remaining superpower, and IMF, as controller of Indonesia’s 43-billion-dollar international bail- out, hold the key to democracy in Indonesia, Lustrilanang said, and the U.S. public needed to understand that activists in his country felt “democracy is worth more than death.”

Officials here have argued there are no viable alternatives to Suharto – albeit because the 76-year-old leader has stifled opposition and neglected to nurture a cadre of leaders to succeed his rule, which so far has lasted 32 years.

“I doubt that among 200 million people in Indonesia there is no one who can replace Suharto,” countered Lustrilanang, who coordinated a coalition supporting opposition leaders Megawati Sukarnoputri and Amien Rais.

He acknowledged factions within the Indonesian military believed to back political reforms but feared they would be unable to prevent a large-scale crackdown.