Security dilemma for investors<\/p>\n
By Lesley McCulloch<\/p>\n
JAKARTA (JP): On Monday at the opening of the Jakarta
\nInternational Energy Conference, President Abdurrahman Wahid
\nstated that the government would use force if need be to protect
\nthe operations of mining companies against disruption from
\n"outsiders".<\/p>\n
Yet on Tuesday, Minister of Defense Juwono Sudarsono lamented
\nthe fact that the government was unable to guarantee the security
\nof its people due to lack of funds. The deficiencies of the
\nIndonesian defense budget are nothing new, and have resulted in
\nthe close to obsolete state of much of the equipment belonging to
\nthe Indonesian Military (TNI).<\/p>\n
In an interview with this author on July 7, Juwono said that
\nit would take five to 10 years to even begin to acquire the
\ndesired state of military capability, but that "the process
\ncannot even really begin until we have tangible economic
\nrecovery." This is a dilemma indeed.<\/p>\n
If the government is willing to use scarce resources to
\nprotect foreign investors and their operations, while the
\ncivilian population tolerates increasing crime and violence,
\nthere may be serious political repercussions.<\/p>\n
The Jakarta Post reported on Tuesday that Juwono had requested
\nthat mining companies cooperate with the police and the security
\nforces to ensure the security of their operations.<\/p>\n
Many have being doing just that for a long time. The
\n"security" payments by Freeport -- and other companies -- to
\ncertain services within the armed forces is no secret. Juwono
\nhimself has conceded that the military may in some cases be the
\nsource of insecurity, as some individuals or groups within the
\nmilitary seek to line their own pockets by participating in
\nand\/or protecting illegal mining operations.<\/p>\n
Those few mines which have been forced to temporarily close
\ndown operations are often those who have lost favor with the
\nmilitary by refusing to pay for protection, have attempted to
\nstop it "helping itself" or are selling concessions which are not
\ntheirs to sell.<\/p>\n
In addition, trouble often comes either from disgruntled
\nemployees; locals who accuse the companies of environmental
\ndamage; or exploitation (even pillaging) of resources and
\ncultural insensitivity -- with little of the benefits being felt
\nby them directly.<\/p>\n
Given the propensity of the military to engage itself in
\neconomic interests as the "need" and ability arises, one may be
\nforgiven for thinking that the President's recent order to
\n"protect" mining operations may actually increase the insecurity
\nof the very operations they have been dispatched to secure.<\/p>\n
Indeed, since the fall of Soeharto the military has become
\neven more active in areas such as illegal logging and mining, and
\nalso in protection rackets for legal enterprises in these fields.<\/p>\n
Information on the scale of involvement is patchy due partly
\nto the fact that these operations take place in remote areas, but
\nit has been a common secret for many years. The isolated nature
\nof these operations make it even more likely that financial
\nexploitation (with Abdurrahman's inadvertent blessing) will take
\nplace.<\/p>\n
Speaking with Juwono on Friday it was apparent that he is
\nacutely aware of the persistent wheelings and dealings of the
\nmilitary, and that off-budget financing will continue for some
\ntime. The fact that TNI has little choice but to rely on these
\noff-budget sources does not concern him per se.<\/p>\n
The source of his disappointment is more the knowledge that
\n"if certain elements within the military were not so intent on
\nlining their own pockets, our off-budget funding could be double
\nwhat it is now".<\/p>\n
Juwono is an impressive figure. He is a man with a mission,
\nand has the backing of his President. "Removing the military from
\nits economic interests is a big adjustment process ... it must be
\nsteady and comfortable ... we must be willing to tolerate a
\ndegree of corruption for the foreseeable future ... perhaps for
\nas many as five more years. If we move too quickly there may be
\nrepercussions", he says.<\/p>\n
The fact remains, however, that a government policy to send
\neven more military personnel to these "lucrative" outposts will
\ngive even more business opportunities to the "underfed,
\nunderequipped and undertrained" military. Of course we can
\nunderstand the problems the government faces.<\/p>\n
It would be very bad for the economy if, for example,
\nproduction at Freeport's Grasberg copper and gold mine, deep in
\nthe mountains of the remote eastern province of Irian Jaya were
\nto be disrupted; it is the country's single largest tax payer.<\/p>\n
On the other hand, using scarce military resources, or placing
\nthe military in a position where they are able to "sell" these
\nmilitary resources for private gain will solve nothing.<\/p>\n
Perhaps the government should move to address the concerns of
\nthose who seek to secure more of the benefits of such operations
\nfor local people, and remove those elements within the military
\nwho contribute to the problems in these remote areas.<\/p>\n
I would like to ask Juwono whether he really does think it a
\nwise strategy to "expose" the cash-strapped military to such
\nlucrative opportunities.<\/p>\n
Surely the temptation will be all too much for it to resist?
\nAnd if this is so, then what does this say for the desire
\nexpressed by the minister to me on Friday that "in an ideal
\nIndonesia, the defense budget would be enough and there would be
\nno off-budget financing". If this is really your long-term goal,
\nthen surely the government should reconsider the policy options
\nbefore it to solve this current problem.<\/p>\n
The author is conducting a study of Indonesian military
\nspending for the Bonn International Center for Conversion in
\nGermany, and is currently a Visiting Fellow at the Centre for
\nStrategic and International Studies, Jakarta.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/security-dilemma-for-investors-1447893297",
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"sponsor": "Okusi Associates",
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