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  • For human capital or social justice? Indonesia’s study abroad scholarships fall short either way

    Governments around the world subsidise study abroad programs with various motives: to promote cultural exchange, contribute to the development of recipient countries, or create a network of future leaders as part of public diplomacy efforts. The internationalisation of higher education is also an integral part of the globalising economy and labour movements. These motives are easily understood if the education is funded by a government or institution of a developed country aiming to attract foreign nationals, typically those from developing countries.

    When study-abroad programs are provided by a developing country for its own citizens, it is more difficult to pinpoint the necessity. LPDP, the Indonesian government’s flagship international scholarship program, and its scholarship recipients have intermittently come under pressure to justify their use of public funds. LPDP has sent a total of 24,929 Indonesians abroad for postgraduate education, more than 3,500 per year since 2013. The large number of LPDP recipients looks especially jarring when juxtaposed with the fact that only 9.4 percent of Indonesians aged over 25 had at least a bachelor’s degree in 2018, the lowest ratio in Southeast Asia.

    Faced with limited public resources and under-achievements in inclusive education at home, LPDP recipients are constantly reminded not to waste the state funds. LPDP materials are replete with terms such as kontribusi (contribution) or pengabdian (serve the country)—essentially a call for the recipients to give back to their country. However, it is unclear how an LPDP recipient is supposed to pay the nation back for financing their higher education.

    In this article, we outline two different rationales that commonly underpin the decision of governments from developing countries to provide international education to their citizens. These are the desire on one hand to invest in human capital and on the other the goal of promoting social justice and equitable access to opportunity, objectives that are to some degree inherently in tension with one another. While we try to locate LPDP in either rationale to interrogate the effectiveness of the policy, we find that LPDP presently is effective in promoting neither human capital nor social justice.

    Investing in human capital

    One of the most common rationales for financing study abroad is to invest in citizens with great potential, hoping that education in a developed country will grow their knowledge and talents for the sending countries to later reap. Like every investment, there is always a risk of loss. To send your finest individuals abroad is to entrust them to the host country’s custody: to believe in their management of your assets in exchange for paying an entry fee of tuition costs and transferring a (possibly high-income) consumer base. The quite literal return on investment is expected when these students come home after study with newly accumulated knowledge and skills.

    Scholarship programs working in this investment paradigm understandably often have a return policy in place—to extend the analogy, this is perhaps equal to a deposit insurance scheme. Without a return policy, the sending country risks losing its investment if the students decide to settle abroad after study. Scholarship programs often require recipients to sign an agreement which stipulates the repayment of the scholarship in the event of non-return. In order to guarantee repayment ability, some programs require applicants to demonstrate the possession of assets equal in financial value to the scholarship fund as collateral or name several financial guarantors. Of course, the latter way of enforcing the return policy means that only people with considerable financial resources are able to apply.

    Inequality of access, however, is a fundamental part of the investment model of funding higher education. Governments invest in individuals with the best academic achievements, many who would have benefitted from education in the best secondary schools in the country and a high-income family background. This combination of qualities, whether intentionally considered or not in scholarship selection, is viewed by many governments as likely to lead to the highest possibility of gain in terms of total accumulated knowledge and skills, economic resources, and networks that these individuals bring to the country of origin.

    Ensuring that students return home after study might be effective in preventing brain drain, but it does not necessarily guarantee that the investment will pay off. Scholarship programs sometimes have an additional arrangement to connect returnees to the job market to ensure distribution according to their expertise. The Bolashak scholarship for Kazakhstanis, for example, requires applicants be employed and, after they graduate, to work for the same employer for five years. The requirement shows what scholarship as an investment basically is: an extravagant way of recruiting high-quality talent for an industry or public agencies. Indeed, scholarship as human capital investment probably makes the best sense when considered as a procurement of services. The government or the industry is the service user; the scholarship recipients are the providers.

    Promoting social justice

    The second rationale views higher education in terms of social justice and equity. Scholarships are a way to ensure that common citizens and people from disadvantaged groups can access quality education regardless of socioeconomic position. The paradigm is taken up by the Ford Foundation, for example, who focusses their mission on help peopling from marginalised groups access graduate programs despite age and geographical barriers. The scholarship aims to create new leaders who can bring social change in their communities.  In this case, the purpose of higher education is not so much to contribute to the national economy through the supposed multiplier effects of having highly-educated elites, but to give people their rightful share in education.

    Brennan and Naidoo (2008) argue that actions from institutions and the government aiming for equity and social justice through higher education should cover two aspects: ensuring equal access to education and that graduates can participate in the workforce arena afterwards. However, they suggest that as long as social structures do not offer equal opportunities, students from disadvantaged groups will likely derive limited advantages in terms of social mobility after graduation—higher education credentials are only one factor in social mobility. This framework challenges the modern, common viewpoint that higher education can be a determining factor in improving social mobility through the production of new groups of elites.

    Evaluating LPDP 

    At first, the LPDP scholarships appear to employ an investment rationale. The stated objective of LPDP is to prepare Indonesia’s future leaders and professionals, and it also has a return policy. However, LPDP’s implementation seems to be incomplete. First, it does not have a mechanism to enforce the return policy. Scholarship recipients are required to sign a legally binding agreement to return to Indonesia after graduation and repay the scholarship amount upon violation. However, there is no rule on collateral and seemingly no effective monitoring of the graduates’ whereabouts. When graduates do return (LPDP reports only 1 percent of its graduates were given a warning to return in 2018), the program is not linked to the job market to ensure the relevant placement of graduates. In other words, there is a risk of loss in LPDP’s investment from non-return and unemployment.

    LPDP, however, has a second stated objective: to ensure sustainable funding is available for the next generation’s education. To finance its programs, LPDP manages its own endowment fund which, in Indonesian, is called dana abadi, literally “eternal fund.” Considered together with its large number of recipients, this appears to signal LPDP’s recognition of the value of higher education as a need—something that should be enjoyed not by a few select individuals in hopes of the systemic change that these educated elites will bring, but by as many Indonesians as possible. It is as if LPDP is working to ensure that higher education becomes the generational difference between future and past Indonesians.

    The paradigmatic differences between the two objectives are not easy to reconcile. Investing in too many individuals defeats the purpose of investing in the first place due to cost inefficiency. As an investment, LPDP would ideally limit its awards to fewer people while ensuring that these recipients possess not only huge intellectual capability but also a strong presence in their respective fields even before they embark on their journeys abroad. Upon their return, LPDP’s task is to trace, recruit and place these individuals in strategic professional or policy-making posts deserving of the “leaders” designation. The fewer number of awards also directly serves to facilitate locating and re-identification of recipients.

    If this framework seems familiar, it is because this strategy was the basis of the New Order’s technocratic governance model, where an elite group of Western-educated economists were recruited to help the military-backed regime impose a grand plan of development. Arguably, the strategy depended heavily on the degree of control the regime had on the technocrats, something that gradually diminished to the point that the educated elites branched into two competing factions—the economists and the engineers—toward the end of Suharto’s rule.

    Control is perhaps where LPDP’s nationalistic flavour comes from. The notions of kontribusi or pengabdian are evoked not because one cannot give back or serve the country from abroad. It is possible for the government to conceive a nationalist image for citizens working entirely abroad, as exemplified by the “foreign exchange hero” branding of Indonesia’s migrant workers. Rather, the non-returning recipients are branded as un-nationalist because they refuse to follow the path designated by the government. However, with the lack of monitoring and control over career choices, LPDP’s call to return and serve the country is weakly enforced.

    Meanwhile, if international higher education is seen as a means to improve equality, it is redundant to try to control recipients’ choices after they graduate or to quantify contribution in monetary terms. The redistributive aim of social justice is achieved for every unit of public resources spent on the education of a citizen who would otherwise not be able to afford it.

    If LPDP chooses to see higher education as a basic need, the program would ideally set as its goal the proliferation of as many highly educated Indonesians as possible. But until 2019, LPDP distributed scholarship funding mostly to science and technology study programs and deprioritised social sciences study programs. Due to the COVID-19 pandemic, LPDP recently adjusted its policy to accept applications for all study programs but remains limited to so-called “leading world universities” mainly in the US and UK.

    LPDP can more efficiently deliver on its promise to leverage the demographic bonus if it targets people from disadvantaged groups who can bring long-term impacts directly to their community after graduation. Although it does have an affirmative program specifically for this purpose, eligibility is given solely to the populations of underdeveloped and remote districts, overlooking the multifaceted nature of deprivation. The program should ideally consider other inequity aspects such as poverty and gender barriers.

    LPDP has unquestionably realised life-changing educational experiences for thousands of young Indonesians and holds the door open for thousands more. For possibly the first time in Indonesian history, a government program has promised a continuous supply of highly educated individuals for the foreseeable future. However, as is the case with all public programs, resources are not infinite and effectiveness is always a looming question. With a lack of serious enforcement and specific policies to promote either the human capital or social justice objectives, LPDP has yet to excel in any of the goals it has set for itself.

    The post For human capital or social justice? Indonesia’s study abroad scholarships fall short either way appeared first on New Mandala.

    This post was originally published on New Mandala.

  • Indonesia’s rice racket

    Last April President Jokowi appeared frustrated by the discrepancy between the falling value of unhulled rice (gabah) that farmers sell to brokers before processing, and the rising price of hulled rice (beras) that consumers purchase: “The price of gabah has fallen, so the price of beras should have gone down as well. Farmers do not benefit and the people lose. Who benefits? Find them”, he said.

    By focusing on traders and their representatives, we can see the collusion with politicians that shapes Indonesia’s rice racket. Further apparent from focusing on the actors involved is that despite government and lobbyists’ claims about representing small players, their actions more support big businesses that already dominate the rice trade.

    Indonesia’s rice prices are high. The average price of beras is over double the world average, while gabah costs nearly the same as the world average for already processed rice. Media reports suggest that high rice prices nowadays stem from seasonal supply shortages, import restrictions, and mafia racketeering.

    Leaders often use the term “mafia” to blame shadowy figures without implicating anyone in particular. From afar, trying to see who is benefitting from illicit exchanges in the rice trade is near futile. Instead, to see who is benefitting, it is more productive to focus on traders.

    Officials involved have suggested as much. When rice prices began to skyrocket in mid-2006, Sutarto Alimoeso, then Director General of Food Crops in the Ministry of Agriculture said, in response to shortages of subsidised rice, that traders were able to set the prices.

    Jokowi is well aware of who these traders and politicians are. Yet his apparent frustration more reflects awareness of distributive discontent among “the people” than intent to intervene. Indeed, his government’s interventions in the rice trade never go beyond incremental measures because of the strength and scale of the vested interests involved.

    Rice prices and regime transition

    Indonesia’s rice prices increased coincided with liberalisation and democratisation in the post-Suharto period. Post-authoritarian freedoms allowed agricultural traders and associations to re-emerge and exert influence to extract maximum profits in commodity chains for their members.

    For much of the authoritarian New Order period (1966-1998), traders and their associations were absorbed into regime-sanctioned functionally representative groups that fed Suharto’s franchise. In the months prior to the mass killings of late 1965 and early 1966, rice prices skyrocketed. In the aftermath, as well as destroying peasant representative organisations, the Suharto regime coercively reorganised agricultural traders and their representative associations.

    The result of this state co-optation of the rice trade meant that for much of Suharto’s era, rice prices were stable and similar to world averages. Suharto saw low stable rice prices as necessary to prevent hunger and maintain political stability.

    To achieve rice price stability, Suharto used the National Logistics Agency (Bulog). Bulog is responsible for state food procurement and distribution. As well as facilitating Indonesia’s food import contracts, Bulog absorbs domestic rice at the government’s purchase price for stock. During the Suharto era, Bulog was very powerful and one of Indonesia’s most corrupt institutions.

    Average monthly rice prices, January 1969 – March 2020 (adjusted for inflation to 2012 values). Rice price data from Arianto Patunru (forthcoming), “Is Greater Openness to Trade Good? What Are the Effects on Poverty and Inequality?”

    After Suharto and the exposure of corruption scandals, Bulog’s status changed from a powerful centralised government agency to just another decentralised state-owned enterprise. Although pruned, Bulog remained the most important actor in the rice trade because of its influence over prices.

    The most dramatic rise in rice prices after the Suharto regime occurred during both of Susilo Bambang Yudhoyono’s presidential terms (Figure 1). Under Yudhoyono, attempts to alleviate farmers’ poverty by increasing Bulog’s purchase price of gabah helped trigger overall prices to rise.

    Somewhat ironically in a newly deregulated institutional context, each time the president set new recommended rice prices  traders justified ever-higher gabah purchase and beras sale prices to maintain and even increase profit margins and prevent Bulog from absorbing their rice.

    Although government intervention to raise set prices is intended to alleviate poverty, traders benefit most from increasing their profit margins while smallholding rice farmers try to recoup ever-higher livelihood expenses from still relatively low-value harvests. High beras prices can even prevent harvests making it to market. I have often encountered smallholders who saved a rice crop for their household’s consumption because the price of beras per kilogram was too high.

    Politically powerful actors have an interest in rice prices remaining high. Traders who profiteered during Yudhoyono’s time in power are still very influential in the rice market. Moreover, today, unlike during Suharto’s era, many rice traders and their lobbyists are more independent, given their market power and political connections that are not subservient to the Jokowi administration.

    Sutarto Alimoeso is a useful example for appreciating the relationship between elite political power and the rice trade. He is a close childhood friend of former President Yudhoyono, a schoolmate from the early 1960s in Pacitan. This friendship later bore employment benefits. During Yudhoyono’s second presidential term in 2009, Sutarto was Director General of Bulog, a period in which the president issued repeat special instructions to increase the government’s purchase price.

    Promotional biography of Sutarto Alimoeso ‘Ant General’

    Sutarto’s promotional biography is called Jenderal Semut, or ‘Ant General’ because he claims to have enabled smaller traders, or ants, to sell to Bulog and gain from government set prices – previously a privilege for larger traders with large-scale purchasing agreements.

    After Bulog, Sutarto became chairman of the nation’s most prominent rice traders’ lobby group, the Rice Traders and Millers’ Association of Indonesia (Persatuan Penggilingan Padi dan Pengusaha Beras Indonesia: PERPADI). A successor to colonial-era rice milling and trading associations, PERPADI had a small number of members through the Suharto era. Yet after the dictator’s downfall, its membership grew exponentially.

    In 2015, Sutarto claims PERPADI had over 180,000 members throughout the archipelago. The vast majority comprised small millers and traders, though it reportedly represents around 2,000 larger rice businesses too. PERPADI’s leaders are powerful voices within the rice trade. As Sutarto’s ghost-writer put it in ‘Ant General’, the chairmanship of PERPADI is strategically important: “The closer the access is to the chairman, the more access to power, and in turn more business opportunities. This is an open secret”.

    The Cipinang rice market and politicians

    PERPADI’s main leaders operate at Indonesia’s largest rice market in Cipinang, East Jakarta, which is directly opposite a prison that houses some of Indonesia’s most notorious inmates. A number of rice traders at Cipinang have somewhat less notorious cases in Indonesia’s Supreme Court database.

    Much of the Cipinang rice market, like much of East Jakarta and Bekasi, has frequently been oppositional for Jokowi’s administration and the Indonesian Democratic Party of Struggle (PDIP). While he was Governor of Jakarta (2012-2014) Jokowi’s relationship with the market and PERPADI soured due to unfulfilled infrastructure promises and an effort to relocate traders. The market’s rice trader cooperative went on to support the Prabowo Subianto-Hatta Rajasa presidential ticket in 2014.

    In subsequent years, tensions continued between PERPADI members at Cipinang and government representatives, with particular disputes becoming public. For example, in 2015, PDIP supported action against alleged fake rice sales (involving plastic pellets resembling rice) at Cipinang, a practice denied by PERPADI Jakarta division chairman Nellys Soekidi. Such cases occur in a broader context of government attempts to stabilise prices and Cipinang traders’ tactics to negotiate such regulation.

    Price stabilization solutions include “market operations” (operasi pasar), where traders, many of whom are represented by PERPADI become obligated to sell Bulog-supplied rice at its mandated ceiling price. The government appears prepared to be coercive during these “market operations”. PDIP Governor Djarot (2017) threatened to evict from the market those recalcitrant traders who disregarded ceiling prices.

    A more peculiar market operation to stabilise prices in 2015 involved then-Minister of Trade, Rachmat Gobel, who claimed that mafia practices caused the soaring price of rice. At the time Gobel himself was part owner of a rice mill in East Java, PT Lumbung Padi Indonesia, which business records show has connections with a shopfront at Cipinang rice market. Was he taking action against himself?

    Such price stabilisation operations appear even more tokenistic as government critics attain positions in the market’s institutions. Recently Sudirman Said, a Prabowo-affiliated politician, former natural resources and energy minister (2014-2016) who Jokowi dismissed, became the President Commissioner of state-owned enterprise PT Food Station that leases shops at the Cipinang market to traders.

    Tension about collusion between traders at Cipinang and politicians emerges during elections. During the runoff election for the Governorship of Jakarta in 2017, the treasurer of incumbent Basuki Tjahaja Purnama’s re-election team, Charles Honoris, a national-level parliamentarian for PDIP and scion of the MODERN conglomerate, tried to shame PERPADI’s vice chairman Billy Haryanto.

    Haryanto allegedly supported the election winner, a Gerindra Party cadre and former education minister who Jokowi also dismissed, Anies Baswedan. Yet Cipinang traders sell rice to any politician needing votes. Despite supporting Baswedan, Haryanto still sold over 60 tonnes of rice to the Ahok campaign through PDIP politician Aria Bima, among others.

    With little self-consciousness about his status as a rice trader, Haryanto makes direct appeals to the president. During the 2019 presidential election season, although supporting for Jokowi, Haryanto nevertheless requested the incumbent president not inspect the market, saying such a visit would disturb traders. Later that year, Haryanto held an event attended by hundreds of players at his badminton club, to announce support for Jokowi’s son, Gibran Rakabuming Raka, in his campaign for the mayorship of Surakarta (Solo). Indeed PERPADI’s opposition to the Jokowi administration and PDIP is selective rather than rigid. After all, PERPADI sometimes needs people in high office to cooperate.

    Perpadi “representing” small business

    PERPADI purports to support small rice millers and traders in the face of emerging larger competitors. In July 2017, the chairman of a number of parliamentary committees on agriculture-related issues, Herman Khaeron from Yudhoyono’s Democrat Party, said competition with larger factories in the absence of government protection meant for the closure of smaller rice businesses. Indeed, reports at the time suggested 40 percent of PERPADI members in East Java closed their operations due to competition with the “rice mafia”.

    One of PERPADI’s more prominent efforts to support small traders in the face of larger competition was leading the dismantling of Indonesia Superior Rice (PT Indo Beras Unggul, PT IBU), a subsidiary of major instant food conglomerate Tiga Pilar Sejahtera (TPS).

    TPS entered the rice market in 2010 and took advantage of rising prices. It purchased a number of mills, one being PT IBU located in Bekasi. TPS’s subsequent rice-based profits were a major factor in the company’s near-tenfold revenue increase from 2010 to 2016 (from 705 billion rupiah or USD 43 million, to 6.5 trillion rupiah or USD 434 million).

    Their success did not last. In July 2017, police raided PT IBU warehouses and arrested its director, precipitating financial disaster for parent company TPS, with its directors also later sentenced albeit for different issues.

    The raid immediately appeared connected to party politics. The President Commissioner of TPS, Anton Apriyantono, was Minister of Agriculture under Yudhoyono from 2004-2009 when rice prices first began to climb, a member of the opposition Islamist Prosperous Justice Party (PKS), and affiliated with oligarch and former chair of the Golkar party Aburizal Bakrie.

    Then-Minister of Agriculture Amran Sulaiman of PDIP said the raids were not political and he was surprised to learn that TPS had connections with his predecessor Apriyantono. Yet even his own government questioned the motives for acting against PT IBU. A few months later Indonesia’s Ombudsman office claimed Sulaiman provided inaccurate data in relation to allegations of enormous losses incurred by the state because of PT IBU’s business practices which justified the raids.

    As further details subsequently emerged, they raised more questions than answers. While PT IBU’s director was sentenced for fraudulently labelling lower quality rice as premium rice, a potentially more important justification for taking action emerged from PERPADI: PT IBU had cut out established brokers by buying gabah from farmers directly at prices slightly above average.

    National Awakening Party (PKB) parliamentarian Erma Mukaromah, questioned why above average purchasing prices from farmers was problematic: “They [PT IBU] buy farmers’ rice at a higher price, how come they are accused of committing criminal acts?” Erma has a point: the government has even encouraged farmers to process their rice at small state supported mills so they hold onto more profit and cut out brokers.

    Looking more closely at PERPADI’s role in the raids partly addresses Erma’s question. Billy Haryanto claimed he was a victim of TPS. He said they “… buy grain and rice at a more expensive price. Whether we want to or not we have to follow their price…” As a result, he said, TPS had long been the enemy of small traders.

    Indeed, PERPADI appears to have played a role in instigating the raid against PT IBU. According to Tempo magazine, PERPADI was the alleged source of information for both the police and Ministry of Agriculture. Comments by leaders of both the Ministry of Agriculture and police suggest the raids were about supporting smaller traders.

    The Director of Special Economic Crimes in the police force at the time reasoned, “Many rice mills have closed down. Small traders cannot compete because of their actions.” Amran Sulaiman claimed while farmers may benefit from PT IBU’s higher prices, everyone else is “killed”, meaning put out of business. Haryanto was very appreciative of Sulaiman’s work protecting small rice millers and traders: “Thank you very much and salute to the Minister of Agriculture Amran Sulaiman, who very bravely raided the warehouse of PT IBU… This crazy minister. Crazy and great!”, he said.

    So, what of PT IBU and TPS’s fate? PT IBU’s factory in Bekasi is one of the largest in Indonesia, so could it really fall into disuse? After TPS’s bankruptcy in 2019, the much larger MNC Corporation, owned by tycoon-politician Hary Tanoesoedibjo, sought to provide a bailout. Worth noting, too, is that soon after the raids high-ranking military officials appeared as commissioners at PT IBU and TPS.

    Big business and the public interest

    With PT IBU’s factory still standing and larger players looking to take it over, does PERPADI really represent the interests of smaller rice millers and traders? It is a worthwhile question to ask since some of the main beneficiaries of PERPADI’s lobbying are far from minor players.

    Though some companies at Cipinang market appear to be long-term medium-sized family operations, others have owners involved with some of Indonesia’s largest agribusiness corporations, such as Triputra, Sinar Mas and Wilmar. Notably, over the last several years, Wilmar has been expanding its rice operations by buying up large milling businesses in East Java, which sell into Cipinang.

    Beyond the veneer of such corporations, there are important links between the rice trade and Indonesia’s more intriguing oligarchs. For example, the Jakarta office of former trade minister Rachmat Gobel’s part-owned rice mill is located at the Pacific Place building in the upmarket Sudirman Central Business District owned by Tomy Winata’s Artha Graha Group. Winata has a long history of interesting deal-making with state institutions, including the military, and Gobel has previously praised the tycoon.

    As the world food price crisis of 2007-2008 was developing, Winata was expanding his ‘hobby’ in rice. For a mere pastime, Winata once chartered a plane with a day’s notice to follow then Vice President Jusuf Kalla to Chengdu to seal a rice seed deal. He has occasionally appeared with politicians to promote his rice seed enterprise. More recently, the charitable foundation Buddha Tzu Chi, with which he and fellow Artha Graha boss Sugianto Kusuma have strong links, collaborated with Billy Haryanto of PERPADI, the military, and police, to distribute rice for Covid-19 pandemic relief.

    While the likes of Wilmar and Winata are big players, they are not the largest in the rice trade. The biggest player of all is state-owned enterprise Bulog, which tycoon-politicians influence too. Leading PERPADI’s representatives described here, themselves hardly small players, also have strong relationships with Bulog.

    In Sutarto’s promotional biography there is a special insert explaining how Nellys Soekidi’s small rice trading business profited and grew as a result of his reforms at Bulog. In 2013, when the recurring issue of rice imports from Vietnam flared up, one trader said of Billy “He is a broker (calo), a middleman for Bulog. If you want to buy rice from Bulog you have to go through him”.

    Further demonstrating close links between Bulog and PERPADI, the lobby group’s main office is in Bulog’s second office building in South Jakarta. Indeed, there is little separation between government and rice entrepreneurs’ interests. The thick entanglement of private and public interests is structural, has its origins in Indonesia’s colonial past, and has been perpetuated by major politician-businessmen in the post Suharto period.

    One prominent example is the relationship between Bulog and former two-time Vice President Jusuf Kalla. He has influence at Bulog via medium sized Bank Bukopin, which he once controlled before selling to the conglomerate Bosowa, owned by his brother-in-law tycoon-politician Aksa Mahmud (its control is subject to takeover bid by South Korean bank Kookmin, which incidentally has also been busy taking over Cambodian rural microfinance giant Prasac). Bukopin has long been the bank for Bulog’s off budget finance.

    In the immediate reform period of 1998-1999, Bulog’s systemic corruption became public as repeat scandals known as Buloggate I and II—the first of which memorably involved, among others, President Gus Dur’s personal masseuse Soewondo handling enormous amounts of money from Bukopin accounts—exposed how political actors appropriated substantial sums from the agency’s funds.

    According to recent audits, significant amounts of Bulog’s listed cash reserves are still stored with Bukopin. A branch of Bank Bukopin, with its distinct canary-yellow logo, is on the ground floor of Bulog’s second office building, which to some may seem an oddity as most government buildings have state-owned rather than private banks on site. As well as sharing an office building with PERPADI, Bukopin’s microfinance subsidiary, Swamitra, appears the only lender with an office at the PT Food Station building in the Cipinang rice market.

    Kalla, while seemingly far removed the day-to-day fray of the rice trade, has exerted influence over Bulog in recent years. For instance, it was Kalla that “examined” former Police General and head of the National Narcotics Board Budi Waseso to lead the institution. Kalla rather than the Minister of Agriculture, Minister of Trade, or Budi Waseso, announced both the possibility of rice imports and their cessation in 2018. Incidentally, when reflecting on the PT IBU raids, Kalla said “We want no one to take too much profit in this business”. He also denies there is a rice mafia.

    Yet of late, Rizal Ramli, who held ministerial portfolios under both Presidents Gus Dur and Jokowi and succeeded Jusuf Kalla as chair of Bulog two decades ago, has claimed that Jusuf Kalla’s wealth has increased considerably on annual rich list rankings since his time in high office because of his trading power. This trading power appears to have previously involved rice imports. Though we must remain circumspect about claims to do with Gus Dur’s decision-making, a new well-received biography suggests he dismissed Kalla as head of Bulog partly because of rice imports, among other irregularities.

    A high-class protection racket and distributive discontent

    Jokowi’s first administration moved to disrupt a powerful but more concentrated oil and gas cartel that prospered under Yudhoyono. In striking contrast, Jokowi has not seriously tried to intervene in the rice market to lower prices. Unlike the more concentrated oil and gas mafia, there a vast number of beneficiaries of high rice prices.

    Intervention to lower prices could interfere with interests millions of farmers that rely on higher gabah prices, along with traders and millers that ratchet up consumer prices. Intervention would necessarily interfere with collusion between traders, the police, military, tycoons, and politicians. Really moving to lower prices would mean confronting a well-connected PERPADI that operates like a high-class protection racket.

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    No need for door-to-door preman, this relatively opaque group appears to have enlisted the police, and even a minister, in its pursuit of gutting an old-money instant food corporation worth hundreds of millions of dollars. Selectively oppositional agricultural lobbying associations with connections to political-power like PERPADI are a feature of contemporary Indonesian democracy.

    Yet is the public’s best interest really the first priority for politician-tycoons and the beneficiaries of PERPADI’s efforts? From time to time, food prices emerge as an issue of distributive discontent in popular politics. In 2019, mothers’ groups (emak-emak) campaigned prominently for the Prabowo Subianto-Sandiaga Uno presidential ticket partly because of exorbitant rice prices. Solutions such as ambiguously named “market operations” may prove superficial public relations spectacles to placate “the people’s” rice price discontent.

    Nowadays, there are parallels between Indonesia’s rice price situation and the early 1960s, when “Domestic prices [were] almost wholly isolated from world market prices”. In this period of Indonesian history, we can see more severe political problems caused by high rice prices.

    The inflation of already high rice prices was a contributing factor in the violence unleashed as the Sukarno administration collapsed. What if today’s high rice prices go even higher in Indonesia’s polarised political landscape?

    The post Indonesia’s rice racket appeared first on New Mandala.

    This post was originally published on New Mandala.

  • Police, TNI raid Papuan secretariat in Merauke – 14 activists arrested

    The vandalised KNPB secretariat at Almasuh, Merauke, in Papua. Image: Suara Papua

    By Charles Maniani in Manokwari

    Indonesian Mobile Brigade (Brimob) paramilitary police, national police intelligence officers (intel) and the army’s special forces (Kopassus) have stormed the West Papua National Committee (KNPB) offices in the Almasuh area of Merauke regency, Papua,

    The raid last week was reported by a Suara Papua informant from Merauke on Monday. The raid ended with two motorcycles being seized and six more people arrested.

    “Yesterday, on Sunday (13/12/2020) at around 2 pm local time Brimob and intel officers arrived and vandalised the KNPB secretariat in Almasuh, they arrested six people and two motorcycles were taken,” the source told Suara Papua from Merauke.

    When sought for confirmation on Tuesday, Merauke KNPB member Yoris Wopay said that arrests were made on two occasions totalling 14 people who were being held temporarily by the Merauke district police (Polres).

    “They were all arrested and beaten with cane sticks, four people were ordered to lie on the ground, then they were taken to Polres, there they were assaulted again, Kristian Yandun’s head was cut and bleeding and Michael Beteop’s back was bleeding, then they were detained with criminal prisoners. And two motorcycles were taken by the Merauke Polres”, he said.

    No reason was given for their detention and the detainees have asked for a lawyer.

    Suara Papua meanwhile has been unable to obtain confirmation from the Merauke district police about why they were arrested.

    The names of those arrested are:

    KNPB Chairperson Charles Sraun (38)
    Deputy Chairperson Petrus Paulus Kontremko (32)
    KNPB diplomacy division head Robertus Landa (23)
    KNPB members Kristian Yandun (38), Michael Beteop (24), Elias Kmur (38), Marianus Anyum (25), Kristian. M. Anggunop (24), Emanuel. T Omba (24), Petrus Kutey (27), Linus Pasim (26), Salerius Kamogou (24), Petrus Koweng (28) and Yohanes Yawon (23).

    Translated by James Balowski for IndoLeft News. The original title of the article was “Sekretariat KNPB Merauke Digerebek, 14 Aktivis Ditangkap”.

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  • Jakarta ‘regrets’ Morning Star flag protest at Melbourne consulate after video goes viral

    Pacific Media Centre newsdesk

    Indonesia’s Presidential Staff Office says it regrets the raising of the Morning Star flag – which is identified with Papuan independence – at the Indonesian Consulate General (KJRI) in Melbourne, Australia, this week.

    Presidential Staff Office deputy for political, legal, security and human rights affairs Jaleswari Pramowardhani insisted that the area in and around the consulate must be respected.

    Pramowardhani pointed to the stipulations in the Geneva Convention on respect for foreign consulates and international legal customs.

    “The host country, in this case Australia, has an obligation based on international law to maintain security in the area of the Consulate General of the Republic of Indonesia,” said Pramowardhani.

    “Above all breaking in or infiltrating without authorisation. So the incident which occurred at the Melbourne KJRI cannot be justified and conflicts with international law,” she added.

    Earlier on Tuesday, December 1, a video of the Morning Star flag flying over the Melbourne consulate went viral on Twitter. The owner of the Twitter account @Tbuch2, Tim Buchanan, shared a video of six people standing on the Melbourne consulate’s roof.

    Two of them were holding a banner with a picture of the Morning Star flag with the message “Free West Papua”, while four others held a Morning Star flag and a poster with the message, “TNI [Indonesian military] Out, Stop Killing Papua”.

    Officials grappled with the protesters trying to prevent the flags and banner being unfurled.

    Pramowardhani has asked the Australian government to take a “firmer stand” so that a similar incident does not reoccur.

    This is not the first incident of its kind. In 2017, a Free Papua Organisation (OPM) sympathiser also managed to climb the wall surrounding the Melbourne Indonesian consulate and raise the Morning Star flag.

    Translated by James Balowski for IndoLeft News. The original title of the article was
    “Bintang Kejora Berkibar di KJRI, KSP Sesalkan Sikap Australia”.

    This post was originally published on Radio Free.

  • Papuan flag day protests in Yogya, Jakarta reject ‘special autonomy’

    Student protesters staged West Papuan flag-raising events across Indonesia with the banned Morning Star ensign of independence this week. Image: Arah Juang

    Pacific Media Centre Newsdesk

    December 1 flag day protests have taken place in several cities around Indonesia including the capital Jakarta, Yogyakarta (Central Java), Ternate (North Maluku) and Sinjai (South Sulawesi), reports Arah Juang.

    The actions were launched to commemorate West Papua Independence Day.

    But even before the actions were launched, security forces attempted to  thwart them by blocking protesters, breaking up rallies and arresting demonstrators.

    The following are reports on the actions in Jakarta and Yogyakarta:

    Jakarta
    In Jakarta, protesters from the Papuan Students Alliance (AMP), the Indonesian People’s Front for West Papua (FRI-WP) and the Papuan Central Highlands Indonesian Student Association (AMPTPI) had began preparing to launch actions since 5.30am.

    The protesters gathered at the Jakarta Legal Aid Foundation (LBH Jakarta) in Central Jakarta holding banners reading “Reject Special Autonomy and Give the Right of Self-Determination to the West Papuan Nation” along with posters with similar demands.

    The women demonstrators wore sali (traditional Papuan women’s clothing)  while others painted pictures of the Morning Star independence flag on their faces and bodies.

    The protesters then moved off in an orderly manner to the intersection near the Indonesian Alkitab Foundation before taking vehicles to the United States Embassy in Central Jakarta.

    At 6am the demonstrators had gathered in front of the US Embassy and were giving speeches. AMP member Roland Levy said in a speech that Special Autonomy (Otsus) had failed to protect the Papuan people.

    “Many Papuan people have been killed, evicted, discriminated against and labeled as separatists. Because of this the solution is independence for the West Papuan nation as a democratic solution”, he said while shouting “Referendum? Yes!”

    Following this, the protesters moved off to the nearby Presidential Palace but were blocked by police from entering the National Monument from the west near the Hotel Indonesia traffic circle.

    The demonstrators then gave speeches, made up games, performed the Wisisi dance (a traditional Papuan dance) and prayed together to commemorate the declaration of West Papuan independence on 1 December 1961.

    One of the participants read out a poem about the Papuan people’s spirit of nationalism for December 1. One of the women then related how independence was the right of all nations.

    A statement was read out at 9.30am and the action closed with a prayer.

    At the end of the action as the protesters were to return to the starting point, they were provoked by a small group of unknown individuals. The demonstrators restrained themselves and did not respond, referring to the group as “1000 or so people”, meaning a group hired by the Unitary State of the Republic of Indonesia (NKRI).

    Yogyakarta
    In Yogyakarta, thousands of students from the Free Papua December 1 Movement Alliance launched an action commemorating the declaration of independence in Papua.

    The action, which started at 9am, involved a long-march from the Papuan student dormitory to the nearby Zero Kilometer point in front of the Central Post Office. During the march the protesters shouted slogans such as “Free West Papua”, “NKRI no” and “Referendum yes”.

    They also took turns in giving speeches with Momiake Gresya saying, “We Papuan people constantly live under the shadow of death, being killed, tortured like animals, and all of this is perpetrated by the TNI [Indonesian military] and Polri [Indonesian police]”.

    “An example of this is in Nduga [regency] today. For two years more than 40,000 people have fled seeking shelter and 240 have died as a result of Indonesian military operations,” said Gresya.

    In another speech, FRI-WP representative Muhamad Iis explained about the ordinary Indonesian people’s support for the Papuan struggle for independence.

    “Today we declare our full support for Papuan independence”, he said.

    Iis said that colonialism in Papua was not supported by all the Indonesian people.

    “Colonialism is not the position of the majority of Indonesian people, just a greedy handful of people,” he said.

    Accompanied by the song “Let the Coordination Post be Torn Down”, at 1pm the protesters danced around the command vehicle waving two Morning Star flags.

    This managed to incite security personnel who tried to move into the crowd but demonstrators succeeded in blocking them and the situation returned to normal.

    The action ended at 2.30pm with the reading out of a statement and
    shouts of “Free West Papua, Free West Papua, Free West Papua”.

    Other demands
    A number of other demands were also made during the demonstrations, including:

    • putting the perpetrators of human rights violations in Papua on trial;
    • the withdrawal of all organic and non-organic troops and an end to military operations;
    • an end to the theft of land and natural resources,
    • that the Indonesian government acknowledge that West Papua
      has been independent since 1961;
    • the closure of PT Freeport and other mining operations; for the UN to take responsibility for and be active in an act of self-determination;
    • the “straightening out” of history and resolving human rights violations in Papua;
    • allowing access for national and international journalists to report in Papua; an end to racial discrimination against Papuans;
    • the ratification of the Draft Law on the Elimination of Sexual Violence; and for
    • the government to revoke the recently enacted Jobs Law.

    Declaration of independence
    Although it is widely held that West Papua declared independence from Indonesia on 1 December 1961, this actually marks the date when the Morning Star (Bintang Kejora) flag was first raised alongside the Dutch flag in an officially sanctioned ceremony in Jayapura, then called Hollandia.

    The first declaration of independence actually took place on 1 July 1971 at the Victoria Headquarters in Jayapura where the OPM raised the Morning Star flag and unilaterally proclaimed West Papua as an independent democratic republic.

    Slightly abridged translation by James Balowski for IndoLeft News. The original title of
    the article was “Peringati 1 Desember di Jakarta dan Yogyakarta, Mahasiswa Menyatakan Tolak Otonomi Khusus dan Berikan Kemerdekaan Bagi Papua”.

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  • 36 arrested after police break up Free Papua rallies in Manokwari, Sorong

    A Papuan self-determination protest … The Australia West Papua Association has protested to Foreign Minister Marise Payne condemning Indonesian police threats against Papuan protesters. Image: Antara

    The West Papua regional police (Polda) have arrested 36 people in Manokwari and Sorong city following a demonstration commemorating the anniversary of the West Papua New Guinea National Congress (WPNGNC) at the weekend, reports CNN Indonesia.

    West Papua regional police spokesperson Assistant Superintendent Adam Erwindi said that the people arrested on Friday were currently being questioned by police.

    “The Manokwari Polres [district police] backed up by West Papua Polda Brimob [Mobile Brigade paramilitary police] have secured them and are taking information,” said Erwindi .

    Erwindi said that the protesters did not provide prior notification of the rally with police. The police claimed they had the authority to break up the protest as a result.

    In addition to this, Erwindi said, the protest action was disrupting public order and blocking roads so that road users were unable to pass.

    “The substance of the demo violated Article 6 of Law Number 9/1998 [on demonstrations]”, he said.

    This article stipulated that in conveying an opinion people must respect the rights and freedoms of others, respect morality and safeguard security and public order.

    Protesters told to consider security
    Erwindi asked that those who wanted to hold protest actions pay attention to the security situation and public order. He also warned that all protest actions must be in accordance with regulations.

    “If they’re not in accordance with the above then police in accordance with mandated laws are obliged to break them up,” he said.

    At least two Brimob members were injured after being hit by stones when the rally was being broken up.

    According to the Antara state news agency, the demonstrators refused to disperse and pelted police with stones and bottles until they were pushed back by teargas.

    The demonstrators who were forced back became even more brutal and continued pelting police with rocks and bottles. They also ignited firecrackers and threw them at police.

    The demonstrators shouted “Free Papua” as they threw stones in the direction of police.

    Translated by James Balowski for IndoLeft. The original title of the article was “36 Orang Ditangkap Usai Demo Papua Merdeka”.

    Australia West Papua Association protest
    The Australia West Papua Association has protested to Foreign Minister Marise Payne, saying Indonesian police threats against Papuan protesters ahead of the December 1 flag-raising protests are of “grave concern”.

    Association spokesman Joe Collins wrote a protest letter to Payne, saying:

    “Dear Foreign Minister,

    “I am writing to you concerning the issue of West Papua and in particular regarding comments made by the Indonesian national police spokesperson, Brig. Gen. Awi Setiyono on the 23 November 2020, which is of grave concern.

    “Tempo News (24 November) reported the police spokesperson as saying that the “The Indonesian national police (Polri) together with the National Armed Forces (TNI) will conduct massive joint patrols ahead of the commemoration day of the 1 December. He also made an announcement that locals should not participate in the annual anniversary.

    “I am sure you are aware that the 1st of December is West Papuan National day or National Flag day and it is of great importance to the West Papuan people. Fifty-nine years ago on the 1st of December in 1961, the Morning Star flag was flown for the first time officially beside the Dutch Tricolor. The Dutch were finally about to give the West Papuan people their freedom. However, it is one of the great tragedies that at their moment of freedom it was cruelly crushed and West Papua was basically handed over to Indonesia in 1963. After 6 years administration of the province, Indonesia held a sham referendum called the “Act of Free Choice” under UN supervision. The Papuans call this the’ act of no choice’.

    “The West Papuan people continue to raise their flag as an act of celebration but also of protest against the injustices they suffer under Indonesian rule. They can face up to 15 years jail for doing so. Just two weeks ago 23 Papuans were given jail terms of between 1 and 2 years. They were arrested in December 2019 while on their way to take part in a flag raising ceremony on the 1 December (2019) in Fak Fak.

    “The human rights situation in West Papua is deteriorating with the security forces conducting operations to intimidate local people. There is also an increase in violence towards villagers who the security forces suspect of supporting independence or to those they believe have what the security forces term “separatist” sympathies. There have been a number of killings and arrests by the security forces in the past few weeks in West Papua. Indonesian police arrested 54 participants at a public hearing organised by the Papuan People’s Council (MPR) in Merauke on the 17 November. They were arrested for alleged makar (treason). Yet all they participants were doing were holding a meeting to discuss Indonesia’s intention to extend the Special Autonomy laws. Although they were eventually released the arrests show there is no freedom of expression or freedom of assembly in West Papua.

    “There have been reports that on 20-21 November 2020, 4 West Papuan school students aged between 13 and 19 and 1 West Papuan man aged 34 were shot by the Indonesian Security Forces. Eighteen year-old Manus Murib, who survived the shootings remains in a critical condition in hospital. When he was first shot Manus passed out and when he came to reported that he found that men wearing black uniforms, vests and helmets were placing guns across his chest and taking photographs. The troops were possible Detachment 88 troops which are trained by Australia.

    “There have been ongoing security force operations in West Papua in the regencies of Nduga, Intan Jaya, Mimika and Puncak Jaya since the end of 2018 resulting in the loss of civilian life not only by armed conflict but also by sickness and malnutrition as these operations have created a large number of internal refugees who are reluctant to return to their villages because of their fear of the security forces.

    “As recently as the 27 November 36 people were arrested by the police after being involved in rallies in Manokwari and Sorong. They were simply commemorating the anniversary of the West Papua New Guinea National Congress (WPNGNC).

    “Twenty civil society organisations that are members of the Papua Civil Organisation, Solidarity (SOS), have called on the Indonesian president to “withdraw all organic TNI-Polri troops from the areas in Nduga Regency, Intan Jaya Regency, Mimika Regency and Puncak Jaya Regency which have given birth to serious human rights violations in the form of refugees and violations of the right to life”.

    “I urge you to support the call by the West Papuan civil society groups and raise the matter of the human rights situation in West Papua with the Indonesian President.

    “I also urge you to use your good offices with the Indonesian Government asking that it control its military in West Papua and asking it to inform the security forces that it should allow any rallies called to celebrate West Papuan National flag day to go ahead peacefully, without interference from the security forces.”

    Yours sincerely

    Joe Collins
    AWPA (Sydney)

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