Indonesia, Amin Rais and Globalization

Amin Rais, no doubt, is one of the initiator of the reform movement in Indonesia known as reformasi in Bahasa Indonesia (Indonesian language). He was born on April 26, 1944 in Surakarta (Solo). He passed from Muhamaddiyya elementary school, junior high school and senior high school, in his hometown. He also studied in Mamba'ul Ulum and Madrassa al Islam in Solo. After that he continued his study at International Relations Department, Gadjah Mada university, in Yogyakarta. He also studied at Tarbiyya department of Sunan Kalijaga Insitute of Islamic Studies in Yogyakartas where he achieved his bachelor. Then he continued his study to United States where he got his master degree from Notre Dame University in 1974 and his Ph D degree from Chicago University in 1981. In 1978-1979 he studied at Al Azhar university in Cairo, Egypt. After Soeharto fell from his office he established Partai Amanat Nasional (national mandate Party) and he became the chairman. In 1999 he became the chairman of Majelis Permusyawaratan Rakyat (People's Consultative Assembly). He failed when he ran for presidential election in 2004 and since then he went back to Yogyakarta to teach. Today although he is no longer the chairman of National Mandate Party, he remain one of the prominent persons in Indonesian politics. Recently he just launched his book - Agenda mendesak bangsa - Selamatkan Indonesia (Urgent Agenda - Save Indonesia) . Here is the abstract of his book.

Chapter I : History repeats itself.

He wrote that what happened in Indonesia over the past several decade of 20th century and the 1st decade of 21st century, in many ways, is just repetition of our experience during colonial period. the difference is merely in format. Long time ago they used to occupy us using military power while today they use other power. To some extent we lose economic sovereignty that weaken our political, diplomatic and military power. He appeals us to learn from the lessons of history. He cited a Spanish philosopher George Santayana who said that 'those who fail to learn from the lessons of history are doomed to repeat them'. He further wrote that the Dutch East Indies company and the Dutch government could exploit Indonesia for more than three centuries due to mechanism of corporatocracy. The Dutch East Indies company could occupy Indonesia because the Dutch government gave full support , including military support. Banks also supported it. So did mass media so that stories about colonization had been distorted. Black sides of colonialism never revealed. Intellectuals also gave their support. Snouck Horgroje was an adviser to Dutch viceroy Van Heutsz. He gave his advice on how to conquer Aceh where fifty thousand to one hundred thousand people killed. The local elite also gave their support. Sultan Amangkurat I and II from Mataram opened the way for the Dutch company. At the end of 17th century Paku Buwono I gave even greater concessions to the Dutch. By 1755 territory of Mataram kingdom had been seized by the Dutch, and only small part remained. The consequences of long colonial rule also damaged our mentality and mindset. We have mentality of inlander (literally means native people but with pejorative meaning) who have inferiority feeling. At present the Indonesian elite bowed down to corporatocracy powers so that they destroy our economic sovereignty.

Chapter II : Weakening Globalization.

Globalization is a process of rising interconnection among many societies so that events in a country will influence other societies. Globalization refers to rising economic integration among nations, mainly through trade and finance. Consequently forces of market and financial centers break through national boundaries and smash economies that are not ready. IMF insisted that free market economy assumes efficiency through competition and division of labor and will lead to better access to capital flow, latest technology, cheaper import and wider export market. World Bank stated variations of view on globalization. One sees it as a process of impoverishment of the world's poor and enrichment of the world's rich and damaging environment. The other see it as the best way to develop universal peace and prosperity. The core is a process of sharing world economic activities by three activities : international trade, foreign direct investment and flow of capital market. Jan Aart Scholdt describes five definitions of globalization in literature : 1.globalization as internationalization as seen in international activities encompassing boundary of each individual country that will create inter dependency regarding mainly trade and capital. 2.Globalization as liberalization refers to process of erasing various political restrictions so that world economy will be more open and unlimited. 3.Globalization as universalisation of information, communication and transportation of other activities of world society. 4.Globalization as westernization that means the spread of the West's modernity structure regarding capitalism, industrialism, bureaucratism, etc at the cost of local cultures. 5.Globalization as deterritorialisation that means reconfiguration of geography, so that social sphere no longer defined by territorial map, distance and territorial boundaries.

Three pillars of globalization : IMF, World bank and WTO are based on ideology of Washington Consensus designed by John Williamson. There are ten recommendations for developing countries : 1.Fiscal policy discipline. 2.Redirection of public spending subsidies. 3.Tax reform. 4.Interest rate that are market determined and positive in real terms. 5.Competitive exchange rates. 6.Trade liberalization. 7.Liberalization of inward foreign direct investment. 8.Privatization of state enterprise. 9.Deregulation -abolition of regulation tat impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions. 10.Legal security of property right. The three pillars of globalization are very powerful. Jim Garrrison who wrote America as Empire : Global leader or Rogue Power ? stated that they dictated the direction of globalization, which rule to obey, which country to be awarded and which country to be punished for resisting them. The United States with three hands of globalization wants to integrate all national economies into one free market while Washington Consensus wants 'to break down national barriers to trade, end protectionism, expand free markets and free zones and allow capital to flow anywhere with minimal restraints or regulations. John Rolston Saul in his book The Collapse of globalization, wrote that promises of globalization like : -authority of nation states fade away. -those nation states may collapse. -power lies in the global market in the future. -economy, not military, that shapes events. -global economic market, if let free, will reach international economy equilibrium. -boom and bust will end. -free market will push trade that will in turn improve world economic growth. -prosperity will wipe out dictatorship and replace with democracy. -the new democracy will erase narrow nationalism, irresponsible racism and political violence. -in economy, substantial market growth needs bigger corporations. Big corporations make bankruptcy impossible and assures international stability. -leaders of trans-national corporations will lead civilizations for market control. -world corporations will become a kind of state and their dominance will not easily penetrated by local prejudices. These conditions will lead to good government and debt -free government and history will indeed be dead.

Globalization and economic imperialism.

Dr Mahathir Mohammad, former prime minister of Malaysia, reminds us about the danger of neo-colonialism when he said:"neo-colonialism is not a fancy term carried by President Sukarno. It is real. We feel it as we come under the control of agencies owned by our former colonial masters".

He further reminds us that if Asian countries want to develop they have to change their mindset to be truly free and sovereign. Amin agrees with him.

Since foreign economic expert said that the most productive economic system is market-friendly ones, some of us echoed the appeal that our economy should be market-friendly. They forget that market just search for profit. Joseph Stigliz reminds that the invisible hands theory is not real.

Globalization is in fact economic imperialism. There are three characteristics. First, there wide gap of prosperity between colonial countries and colonized ones. Second, the relationship between the colonial and colonized are exploitative. Third, colonized countries lose sovereignty in its widest sense. The present condition is no similar. By the end of 1990's 20% of the world population in developed countries enjoyed 865 of world income while 20% of the lowest only got 1% of the world income. 1,3 billion people or 1/6th of the world population earn less than one dollar a day. Per capita income in more than 80 countries in 1990's are lower than in 1980's.

Noam Chomski reminds :"globalization that does not prioritize the right of people will very likely degenerate into a form of tyranny, perhaps oligarchic and oligopolistic, based on concentrations of tightly-largely unaccountable top the public". James K Galbraith said that economic and social gap in the globalization era is a perfect crime.

Exploitative economic relationship in the globalization era basically lead to concept of "one-size-fit-all golden strait jacket" of Thomas Friedman that comprise of :low payment for labor to control inflation rate, privatization of state owned companies to global security market s, erasing tariff and quota
so that good may fully penetrate state boundaries, prioritizing production of export goods and opening all economic sectors to foreign ownership.

This concept is of course beneficial to strong states at the cost of weak ones. This system will eventually fail. Advance countries like US, UK, France, Japan, and Canada give billions of dollars to support their agricultural products while developing countries are under heavy pressures to ope their markets. Indonesia was pushed by WTO to receive US chicken, consequently thousands of local chicken breeder went bankrupt. Indonesia also had to receive sugar, textile, and many other commodities. No wonder that Henry Veltmeyer wrote that globalization sponsored mainly by US is economic imperialism.

Globalization based on new economic model or neo liberalism went smoothly for big countries interests. One of the doctrine is to drive countries to integrate their economy into a single global economy. The doctrine comprise of : trade liberalization, deregulation of production, capital and manpower, and downsizing state role, regarding mainly economic and social development program.

The main objective of the structural reform is to minimize role of state and replace it with private institution and release economic powers from regulations so that market economy moves freely with minimum control.

George Bush said :"the forces of economic and political freedom could flourish, vanquishing the enemies of freedom and obstacles such as government regulations, capital controls and restrictions on the movement of goods and capital.

Among US elite there are new conservatives who established Committee on the Present Danger, whose dream of American foreign policy is imperialistic. They are Donald Rumsfeld (former defense secretary), William Kristoll, Irving Kristoll, and academicians like Richard Pipes, Paul Wolfowitz, Richard Perle.

George Soros in The Bubble of American Supremacy, reminds us that what happened in America today is a combination of market fundamentalism and religious fundamentalism. Jim Garrison, chairman of the state of the world Forum reminds us, in America as Empire : Global Leader or Rogue Power ? that US has changed from a republic into an empire. He further predicts that one day America will decline.

Exploitative economic relationship and imperialism create gap and erase sovereignty of weak states. Indonesia is one of those victims.

Chapter III : Internal Sharp Criticism.

Criticism to globalization come from within like Joseph Stiglitz who won Nobel prize in economics in 2001, John Perkins who wrote Confessions of an economic hitman, NGO activists like Naomi Klein, Susan George, Arundhati Roy, Tariq Ali, Stephan Lendman, Chalmers Johnson, Noam Chomski, James Petras, Walden Bello, Howard Zinn, Kenneth Galbraith and many others.

Joseph Stiglitz wrote three books on globalization : Globalization and Its discontents (2002), The roaring Nineties : seeds of Destructions (2003), and Making globalization work (2006). In his first book he wrote that free- market economy never result in efficiency because there is asymmetrical informations of market.

Stiglitz corrects IMF's theory that economic openness and liberalization are panacea. Sates that open to free trade, and deregulate their markets and privatize state- owned companies suffer from economic and social setbacks.

Developing countries become victim of hot money that rise real estate but then when investment market change, their money is pulled and result in bust. Boom and bust.

Stiglitz said that privatization never take into account the importance of corporate culture, under estimate problems of building the needed institutions and that many government cannot create just regulations.

Sustainable development needs not only liberalization and privatization but also programs to ensure all segments of society take advantage of globalization.

IMF neglects impacts of wealth distribution. By demanding financial austerity, driving liberalization, IMF erase legitimacy of many governments.

Stiglitz said that United State's control over world bank and IMF is too strong, consequently they become instruments of Us foreign policy that push developing countries.

World Trade Organization reflects gap and hypocrisy of developed countries. They push developing countries to open their markets for their products, but they closed their markets to developing countries, especially in agriculture and textile products.

They push developing countries not to give subsidy to farmers. US talks about excellence of competitive market but protects its industry of aluminum and steel when they are under threat.

US push for liberalization of financial sector but oppose liberalization in general, include construction and maritime.

In his book, Making Globalization work, Stiglitz wants to save capitalism through market reform.

He wrote about paradox of plenty and oil curse. natural resources make nations lazy, unproductive, and lowering manufacturing industry, agriculture and decrease export. Corruption make situations worse.

Stiglitz praised China, India and Malaysia who can develop their economy without following Washington Consensus and take globalization selectively. Globalization in east Asia shows good result. Over the past thirty years they grow six percent annually while in Africa they decrease by 0.2 % per year.

Stiglitz said that oil, gas and mining companies try to assure governments of developing countries to gain as little profit as possible while helping them find foolish reasons that gaining little portion is better.

If governments of developing countries are sure that most profit are for those companies and the host countries get minor portions, developing countries like Indonesia have no future. Those companies become a state above a state.

We respect pacta sunt survanda but we forget an important clause - rebus sic stantibus ( things thus standing). It means that our agreement is no longer applicable when there is fundamental change in the context. If an agreement make one party suffer from great losses, then the party can ask for renegotiation.

Indonesian position.

Stiglitz reminds Indonesian to get rid of false understanding of globalization. He said that liberalization pf capital market is not a solution. Amin Rais insisted Indonesia to find a new agenda like land reform and investment in education and renegotiation of mining sector. This actions will make greater profit.

Malaysia, Brazil, Chile, and Norway that operate their mining sector by themselves achieve greater profit than what corporates give them. Latin American countries show how renegotiation give more profit. There is no contract that cannot be renegotiated.

There are at least four reasons for Indonesia to demand renegotiation. First, the doctrine of pacta sunt surbanda must be understood as a unity with the clause of rebus sic stantibus. If a contract is detrimental to a party, then the party has a right to renegotiate the contract.

Second, article 1(1) of the International Rights Covenant on Civil and Political Rights stated :"All peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic corporations, based upon the principle of mutual benefit, and international law. In no case a people be deprived of its means of subsistence".

Third, interpretation of Universal Declaration of human Rights give us confidence that protecting and managing our natural resources is one manifestation of human rights. Article 3 and 4 of Universal Declaration of Human Rights ensure everyone's right to enjoy life, freedom and security. An expert said :" each people's right to its resources is a human right".

Fourth, the 1945 constitution, article 33(3) :"The land, water and natural resources are controlled by state and shall be managed to the maximum of people's prosperity". Contract in mining of oil and gas and others are harmful to Indonesia and excessively beneficial to foreign investors.

Since the operatorship of most mining are under foreign corporations, they always mark up the cost recovery.

Most probably Indonesian leaders are narrow minded and they have vested interests. They search for profit for themselves, for their family, and for their clique and they neglected the interests of their nations.

Amin questions Exxon be given operatorship of Cepu bloc rather than state oil company Pertamina while Indonesian geologist stated that they are capable of operating the bloc.

By 2036 when contract with Exxon terminates and by 2041 when contract with Freeport ends, our mining wealth will diminish and our environment will be destroyed. Joseph Stiglitz advice is similar to Amin's and some Indonesian leaders'.

Chapter IV : Pax Americana

Post World War II US became world leader but they went too far. Arrogance made US intervene in Vietnam and many other parts of the world. Under Clinton there was a cabal or group of intellectuals, journalists, politicians, who dreamed of a Pax Americana. Those new conservatives want invincible military supremacy and their view on international politics is identical to that of Israel.

The root is Defense Planning Guide, designed in 1992 by seven persons : defense secretary Dick Cheney, Andrew Marshall, Paul Wolfowitz, Zalmay Khalilzad, Lewis Libby, Richard Perle and Albert Wohlstetter. The main points are : US military spending must increase so that none may come close to US military anywhere in the world, preventive and preemptive strike mat be carried out anytime if it meets US global interests. US has a right to intervene to any conflict, in any place, although not in US interests directly, but of its allies to keep international stability.

In fact, preventive and preemptive strike is to protect, to expand and to ensure US economic interests, including to control oil and natural resources in developing countries. But Clinton declined it.

Then the group joined Project for the New American Century. They designed a document called Rebuilding America's Defense. First, US military supremacy must be retained. Second, global hegemony must be kept with any means. Third, US military build up include nuclear weapons. War theater is not limited to space but also outer space and cyber space.

These neo-cons are now inside Bush administration. In 2002 White House issued a document called The National Security of The United States of America. This documents is based on RAD and and PNAC documents.

Bush Doctrine

This doctrine refers to NSS designed by neo-cons. It is contrary to morality and international law. What happened in Iraq, Afghanistan, Guantanamo are examples. Bush is similar to Hitler and Caligula.

It is not only about politics and military but it is also about economics. Chapter IV : "Ignite A New Economic era of Global Economic Growth through free markets and free trade". It is just s repetition of Washington Consensus plus keeping environment and global weather. But US did not sign Kyoto Protocol.

NSS 2002 is renewed in NSS 2006. Political and military aspects remain and economic doctrine is confirmed especially about free trade while erasing protectionism. In short Bush doctrine is equal to globalization theory of IMF, World Bank and WTO.

Chapter II : Champion Aspirations for Human Dignity is ridiculous. It said the world has seen expansion of freedom, democracy and human dignity. Afghanistan is said to be a success story while Afghan people feel their life is much better before US occupation. Iraq is said to be a success while everybody knows that Iraqi government is a puppet.

NSS 2006 also stated that Lebanon, Egypt, African countries, Latin America and Asia (but not clear which one) are successful in keeping democracy, rule of law, free court, economic growth and improving human rights. At least a part of it is an insult to human intelligence.

Criticism to Pax America.

The US supremacy is in the brink of collapse. Today there are 4000 deaths of US soldiers in Iraq with one trillion dollar losses. If America lose in Iraq, they will lose against stronger North Korea and Iran. Second, there are internal weaknesses obvious during hurricane Katrina. The world knows that there is a part of US which is poor and under developed and has no future. When Mississippi bridge fell they revealed that 28% of all bridges are structurally deficient.

Third, US economy is weakening. The trade balance is suffering from deficits. Foreign loan is soaring. Unemployment is also rising.

Amin is sure that the US and its allies in the near future will decline. US has passed the peak of its political, military, social achievement. It is about time for them to go down.

Amin cited Cornelius Tacitus, Arnold Toynbee. He also cited J.B Foster and R.W. Mc Chesney who wrote Pax Americana. They wrote that Pax Americana changed into Pox Americana. Amin further reminds US to be humble and to learn from history lessons.

Chapter V : Corporatocracy.

The word corporatocracy , introduced by John Perkins who wrote Confessions of an Economic Hitman, is "the new elite who had made up their minds to attempt to rule the planet".

1.Big Corporations.

There are several differences between ordinary crime and corporate crime. First, creating law or more precisely dictating law through executive, legislature and judicature. Second, the damage and loss caused by corporate crime is much greater than ordinary crime. Third, they have political power so they always win the legal process. Fourth, they are so strong that many judges and attorneys back them instead of justice. Fifth, legal institutions like police, judiciary, and attorney do not have capability and courage to fight corporate crime. The clean ones do not have courage. Corporatocracy is beyond the reach of legal institution.

2.Government.

Actually government are stronger than corporations because they have legitimacy, military power, and legal institutions. But in reality many of them surrender to economic interests of big corporations.

The easiest way for corporations to control political power is by giving campaign fund when candidate run for public offices. Elected president then will give favor to those who had helped him/here come to power. Campaign fund remain a complicated problem in America.

There is a more effective way fir American big corporations to control government. It is by by directly controlling important posts. Dick Cheney was a CEO of Halliburton based in Dallas, Texas. Condoleezza Rice, US secretary of State, was director of Chevron. Both Bush Sr and Bush Jr used to do oil business.

It is not exaggerating to say that the real reasons behind US occupation in Iraq is ambition to seize Iraqi oil fields and to serve the interests of big corporations. The reason that associates existence of weapons of mass destruction is just a lie.

It is clear that the most important element of corporatocracy - the big corporations - cannot reach their objective without political power from governments.

3.Banking and international financial institutions.

World Bank and IMF are pillars of globalizations. Both play the role as instruments of international capitalism, maximizing profit to big corporations and preserving economic dominance of US. World Bank give long-term loans to developing nations to finance development projects like dams, roads, power stations, bridges, harbors, schools, and many other infra structures. IMF chooses which country need aid to achieve economic and financial stability and give directives (pressures) to aid-receiving countries.

Countries wanting to receive aid must apply Structural Adjustment Programs dictated by IMF and WB. They must sell their state-owned companies. They must forget about or minimize budgets for education, health, child care, pension fund, and must deregulate their economy, open their market, decrease subsidy for local industry, open national economy so that big corporations may come, decrease import barrier, give license and facility to foreign corporations to gain direct access to natural resources with cheapest price, and never fix currency rate.

Jeffrey Sachs, Jesse Jackson are among critics of their role. But the hardest critics come from Latin America. Hugo Chavez, the president of Venezuela, said that WB and IMF are tools of US imperialism. Venezuela resigned from WB and IMF on reasons that they just preserve poverty by dictating economic policies that are detrimental to public.

By 2002 Venezuela with Bolivia and Nicaragua resigned from International Center for Settlement of Investment Dispute. Then Bolivia insisted to reconstruct all contract with mining companies that used to be harmful to their interests to become profitable to them. Venezuela and Argentina did the same and now they enjoy greater profit then before.

4.Military.

Michael Chossudouski in his book America's War on Terrorism, wrote that US military has a close tie with international financial institution and oil companies that their interests become identical. C.Wright Mills in his book The Power elite, called them the power elite. They can manipulate the public to support their ambitions. William J. Lederer wrote A Nation of Sheep to describe how easy American public be deceived by their elite. Gradually US military grow as a global oil protection service.

5.Mass media.

Mass media is the fourth estate of democracy. But now the main mass media that shape public opinion has become tools of corporate interests. Noam Chomski and Edward Herman wrote Manufacturing Consent : The Political Economy of Mass media. They stated that mass media voiced interests of big corporations. Chomski used the term propaganda to describe their effort to influence public opinion.

There are four filter to real truth. First, the size, ownership, profit orientation, lay out, manner, and head lines. NBC, ABC, CBS, and CNN are owned by General Electric, Walt Disney Companies, Viacom Inc, and AOL-Time Warner. Leaders of New York Times sit in Carlyle Group, Eli Lilly, Ford, Johnson and Johnson, and Hallmark. Leasers of Washington Post sit in Lockheed Martin, Coca Cola, Dan and Broadstreet, Gilette etc. Leaders of The Tribune sit in 3M, Allstate, Caterpillar, Conoco Phillips, Krafts, Mac Donald, Pepsi, etc.

Policy of mass media must conform with that of corporations. Journalists must apply self censorship to survive. Once Pulitzer prize winner were fired for writing report that reveals bad sides of big corporations. Jane Akre was fired for writing reports on Monsanto. Twenty journalists were fired for similar reasons.

Second filter is corporate power to advertise or not to advertise. Corporations can push mass media not to write certain report by threatening not to advertise. Third filter is source of news. News from center of power and center of corporations are decisive. Fourth filter is flak. It is a series of criticism and threat that discourage mass media, a call from White House to journalist or editor and anti media campaign is effective way to push mass media.

It is clear that mass media are controlled by corporations so they express interests of corporations. Theory about free press that controls then executive, legislature and judiciary, in reality is just theory or illusions. Lies about Weapons of Mass Destruction of Iraq under Saddam Hussein and also Osama bin Laden are lies that can assure American people prior to American aggression to Iraq in 2001.

6.Intellectual.

An intellectual is someone who has an appropriate knowledge that he/she can absorb the phenomenon in the society, nation and state and who has commitment to defend the interests of his/her nation and is ready to bear the consequences in the struggle for justice and truth. Intellectuals have decisive role in social change, even revolution in their countries.

There are three kinds of intellectuals. first, those who dedicated their lives to truth, justice and universal humanity. They come from universities, religious communities, NGO activists, journalists, artists, and scientists and sometimes even from the military. In short they are people who follow the trail of prophets.

Second group are those who oppose change. They prefer establishment instead. They do not want any risk. They are safety players. It is impossible to expect change let alone revolution from this group.

Third group is the "neutral" ones. They do not prefer social change nor status quo. Most of them just want to wait and see. They wait for direction of wind. They wait for the winer t come out. When change happen they will quickly go to the front lines. Sometimes they call themselves pacifist intellectuals. They never oppose evil things because they think pacifism taught peace. But being passive when we observe evil things is immoral.

Today intervention of corporations to universities is greater because universities face financial problems. Corporations are ready to give financial support. Research are conducted for corporations. donations are given with certain conditions. Consequently there are many of them work for the interests of corporations.

7.Sick national elite.

Developing countries that become subordinate of developed countries are those whose leaders suffer from mental illness. In other word they have enemy within. The enemy is their psyche who feel inferior and suffer from defeatism disease. This mental condition results in inertia, confusion, and lack of self confidence.

Amin Rais worries that Indonesian leaders suffer from the same mental disorder. He remembered when Indonesia took a very long time to consider support to PLO office in Jakarta. Consequently Indonesia lose diplomatic support of about twenty Arab nations in UN on Timor case. He also noted the way the Indonesian government handle their forest. Indonesian tropical forest are dominated and exploited by illegal loggers. Indonesia is the world champion in deforestation. In 2006 the Indonesian public was surprised when three debtors of Liquidity Aid from bank Indonesia (central bank) came to state palace. Foreign domination in banking is getting stronger. foreign investors may own up yo 99% of share in Indonesian banks. By the end of 2005 foreign asset in banking reached 48,51%, government only 37,45% and the rest owned by private business, probably the expansion of foreign corporations. Central bank do not limit foreign ownership to BI investment instruments.

Slave mentality is also obvious in the way they handle mineral wealth. Freeport Mac Moran mine gold, silver, and copper in Papua since 1976. The second contract was signed in 1991 for fifty years. Amin said that the American corporation committed several crimes. First, to environment. Everyday they dispose about 300 000 tons of tailings that destroy the environment in the river Agwagon-Otomona-Ajakwa. Thousands of square kilometers of forest around Grassberg now become desert. Second, tax crime. In 1990 Amin wrote that Freeport did not pay amount of tax in accordance to their obligations because their position was only number eight or nine of highest tax payers. The following year Freeport was in the first rank. Third, ethic and morality crime by giving bribe to police and military officers. New York Times in December 27, 2005 wrote about Freeport. They even wrote the names of officers who received the bribe. Fourth is crime against humanity. Seven ethnic groups of Papua were forced to abandon their lands. Some of them shot to death. It was estimated that 160 persons died between 1975-1977 in the mien area and its surrounding. Fifth is crime of exploiting Indonesian wealth by manipulating administration and make the mining area a mysterious and secret area. Freeport's asset is much greater than what is revealed in their official report.

Besides Freeport, there is also Cepu bloc in central Java. Its operatorship was fully given to Exxon Mobile until 2036. If Cepu bloc were operated by state oil company Pertamina, Indonesia would gain additional asset worth US $ 40 billion. Kwik Kian Gie wrote that "if after sixty year of independence there is no Indonesian capable of exploiting the bloc, there are two possibilities : all of them are bribed by Exxon Mobile or all of them still have slave mentality". Amin said Kwik forgets the third possibility : combination of both.

Another case is the stealing of sands by dredgers from many countries who do business with Singapore. There are 54 dredgers operating around Riau. Then they sell the sands to Singapore. By 1960 the territory of Singapore was only 581,5 square kilometers but by 1980's it became 650 square kilometers. By 2010 they plan to expand to 820 square kilometers. Where are the sands and the land come from ?

By 2001 the official data of sand export was less than 75 million cubic meters. While Singapore imported sands as much as 300 million cubic meters. The difference means that the unmonitored ones is illegal sand business with sole buyer : Singapore. The sellers are dredgers from many countries. It means billions of dollars. This business can operate well because there is protection from "strong" men from Jakarta.

Palapa satellite and Indosat are now owned by Temasekfrom Singapore. The other case are sale of large tanker from Pertamina, and Defense Cooperation Agreement with Singapore. Amin wrote that the present leaders is similar to Sultan Amangkurat I and II from Java who gave opportunity to Dutch EIC to rule over Java.

Chapter VI : State Capture Corruption

There are three ways for a corporation to conquer a developing country. First is by using brutal military power. Afghanistan and Iraq are present examples. Second is by using pressures ans threats. Third is by using subtle way, without military violence. Indonesia belong to this group. They control the economy, in fact also politics and to some extent defense, by the so called state capture corruption or state-hijacked corruption. The three pillars of government serve foreign interests.

State capture corruption is manifested in purchase of various decree and law by corporate sectors and abuse of power. Corporations through the ruling government can purchase law, dictate contract in mining, banking, education, health, water supply and others. Government is just the expansion of corporations. Consequently the state wealth, including its natural resources are exploited for many years with the help of legislation, rationalization and justification of government. This is what happen is Indonesia.

Amin is sure that Indonesian government by itself or by colution with legislature, too often facilitate and protect exploitation of Indonesian natural resources by big corporations. It happened long before SBY era.

Habibie era.

The government passed law number 7/1998 about banking. This law is more explicit in driving one agenda of Washington Consensus - liberalization of financial and trade sectors. But it was done too far, without taking measures to cope with risk.

The spirit of liberalization is written in article 22(1b) which let foreign individuals or legal body to establish general bank in partnership with Indonesian people or legal body. The article 26 (2) which let foreign citizen or legal body to buy shares of general bank directly or through stock exchange.

Under the law foreign people may own up to 99% of bank shares in Indonesia. This is much higher than in WTO which was initially 49% then 51%. Indonesia is more liberal than USA, Australia, Canada, Singapore that apply limitation to bank ownership. Consequently at present six out of ten biggest banks in Indonesia are owned by foreigners with majority ownership. They can buy those banks at price of only 8-12% of the total recapitalization and reconstruction cost paid by the government. In addition the state must pay interests of about 50 -60 trillion IDR annually until 2030. Today more and more smaller banks are acquired by foreigners.

Megawati era.

The Megawati government passed law number 19/2003 about state-owned companies. The basic concept is pro Washington Consensus than pro Indonesian people. The following are examples. first, in the general chapter of the law, point II, first paragraph, it is written :"state-owned companies are also one of significant state resources in the forms of various kinds of tax, dividend and privatization".

From the budget perspective this sentence is wrong, because privatization is not income but cost. The sentence implicitly acknowledge that privatization is a source to finance budget deficit. This is a manifestation of Washington Consensus - macro economic stabilization, especially budget stabilization by selling state-owned companies to cover deficit.

Second, in the general chapter, point III and IV it is written about the failure of state-owned companies to meet their objectives, how global environment change due to globalization, privatization as solution and privatization does not mean state lose its sovereignty. These are all arguments of Washington Consensus about globalization - that state ownership is source of problems and failures. so the solution or reducing or erasing state ownership.

Actually the main reason for poor performance of state-owned companies is intervention from political parties and bureaucracy that make management do not comply with principles of corporate management. Ideally the solution is by erasing the intervention of elite. Temasek is a proof that state-owned companies can become competitive global player.

Third, the criteria of state-owned companies that will be privatized is like giving blank check to privatization committee - make it easy to be abused. Article 76 stated that companies must at least : (a) competitive (b) its technology changed rapidly. With these criteria, most state-owned companies can be sold.

Fourth, mechanism of privatization was carried out with minimum control of parliament. Article 79-83 give very great power to privatization committee - Coordinating Minister for economics as chairman, Minister of state-owned companies, Finance Minister, and the linked Technical Minister. Their decision is just "consulted" to parliament and do not need approval of parliament.

So there is no legal barrier to privatization. This is a big victory for Washington consensus.

Another case is when the Megawati government gave "release and discharge" to debtors worth trillions of IDR. Finance minister, chief of BPPN (agency of national banking reconstruction) minster of state-owned companies, attorney general, and coordinating minister , designed Master of Settlement and Acquisition Agreement to serve the interests of several conglomerates who owned failed banks. In essence MSAA is releasing debtors that broke legal lending limit and non performing loans or in other words stealing state money.

Salim group's debt worth 52 trillion IDR and they gave their asset said to worth 50 trillion IDR to receive R&D. Later it was revealed that the asset worth only IDR 29,5 trillion. Then Bank Indonesia building that kept R&D documents was on fire. Losses from R&D is hundreds of trillions IDR but it is not comparable to those involving big international corporations.

SBY era.

Government broke the constitution four times in education. The 1945 constitution states that at least 20% of state budget be allocated to education but in reality they allocate only 8%. The state has no money for reforestation, armament, health etc.

Hendri Saparini said that law number 22/2001 about oil and gas management is confusing. Amin estimated that it is sold to foreigners for debt. SBY do not correct the situation. Production sharing contract is 85%-15%. It sounds good for Indonesia but operatorship holder calculate cost recovery first. This must be paid first to foreign corporation then the nett is divided. Indonesia get 85% and contractor get 15%. Kwin Kian Gie said that actually Indonesia get 58,98% and contractor get 41,02%.

Amin quoted other experts who wrote in details about Indonesia's great losses. Details are in appendices.

Since law number 22/2001 about oil and gas is excessively beneficial to foreign corporation, some members of parliament tried to submit judicial review to Constitution Court (Mahkamah Konstitusi) in 2004. Unfortunately it is only partially amended on several articles : 12(3), 22 (1) and 28 (2). But up to the end of 2007 the government neglect the verdict of Constitution Court.

Then eight members of parliament submit material test on article 11 (2) to Constitution Court. They argued that it is contrary to the 1945 constitution, because it stated that the government shall only inform the parliament rather than talk. Unfortunately the submission was declined. The Constitution Court said that they did not have legal standing.

It is clear that Indonesia is controlled by foreigners through state capture corruption due to slave mentality. The executive, legislature, and judiciary have become actors of state capture corruption.

Foreign control is also obvious in national waters. Siswono Yudo Husodo revealed that 46,8% waters is controlled by foreign flag ship. Indonesia's export using national ships is only 5%. telecommunication is also in foreign hands : Temasek controls Indosat, 35% of Telkom, and 98% of XL. So is otomotive business.

Law number 25/2007 about investment is a result of collusion between executive and legislature. It is the final nail on the coffin. Chapter V : treatment to investors is more liberal than that of developed countries because there is no escape clause to safeguard domestic interests.

In article 6 (1) : "the government should give equal treatment to all investors from any country ......according to law".

This article is an application on "non discriminatory" principles of World Trade Organization. This principle forbids any country to give special treatment to domestic investors, if the treatment id not given to foreign investors. Foreign investors must not be treated differently unless there had been certain multi lateral or bilateral agreement.

Based on this article a state may be sued by foreign investor if it gives protection to traditional shops and markets that are under heavy pressures of foreign hypermarkets. State may also be sued if it give tax and credit facilities to domestic investors who want to develop national car industry, steel industry, or any other manufacture. The same thing can be applied if a state gives protection to sectors threatened by imported goods and services like agriculture, animal husbandry, textiles, shoes and many others.

On the other hand, in developed countries the non discriminatory principles is applied using escape clause to protect their domestic interests. It may be in many forms usually related to environment, health, and consumer safety. European Union, for example, applies conditions of ecolabelling and health to import products from China, accompanied by campaign that Chinese products are not safe. Indonesia applies the principle without escape clause, consequently national industry and business people find difficulty to survive, not to mention acquiring technology.

Article 7 (1) states :"the government shall not take actions like nationalization or take over of investment, except by law". Article 7 (2) :"If government nationalize, the government shall give compensation in accordance to market value. If the government and the investor do not reach agreement, then the settlement shall be done through arbitration.

Chapter VII : Conclusion : Action Plan.

Suggestions :

* Prepare alternative national leadership who have free and independent mentality.

* Alternative leadership should be young people who have national and international horizon, and ideally should be cross-ethnic, religion, party, economic and social background.

* They must understand that power is people's mandate and therefore must work hard for people and must be honest to them. Power is not for accumulating wealth for personal interests.

* The new leadership must promote the importance of national independence. Free and sovereign in economy, politics, law, defense and education.

* Cooperation with foreigners must be based on equality and mutual benefit. Indonesia must not become servant who serve interests of big corporations.

* The New leadership must stop being a part of state capture corruption that bring Indonesia to poverty, unemployment, and multi dimensional backwardness. State-capture corruption must end.

* State -capture corruption is the prime reason for setback so the new leadership are expected to know this.

* Economist are needed to join KPK or Commission for Eradication of Corruption in the future because they can help find economic crimes.

*All production sharing contract on oil and gas must be reexamined honestly and rationally. Renegotiation is a must.

Indonesia must respect pacta sunt survanda but must not forget the clause of rebus sic stantibus. National interest is number one, Corporate interests must not above national interests.

* Indonesia must stop ecocide or ecology killing. Corporations have ecological debts to Indonesia. All tax, profit and royalty from them is not enough to rebuild the destroyed environment.

* The new alternative leadership must establish national agency for arbitration.

* Examination to revise of all license to forest exploitation cannot be delayed because they exploit Indonesian forest excessively that Indonesian forests are destroyed.

* All holders of license to exploit forest that destroy Indonesian forest must be punished. If cabinet ministers protects them, they must be prosecuted. Even the president, if he is involved, must be prosecuted. There is no one above the law.

* There are many license holders destroy Indonesian forest. All of them must be prosecuted.

* Theft of Indonesia's sands by foreign dredgers must be stopped, once and for all.

* Erasing debt addict is an urgent agenda. High deficit state budget must be stopped.

* The alternative leadership must stop neglecting Indonesian farmers and peasants.

* All strategic law must be reexamined. Law on mining, investment, state-owned companies, agriculture, plantations, electricity, waters, forestry, that are detrimental to Indonesia must be reexamined and replaced by more beneficial ones.

* Assuming that there are detrimental law that excessively beneficial to foreign corporations, the next house of representative must have one orientation - protect and uphold national interest. They must beat bribery.

* Mass media as fourth estate and watchdog must take over parliament's role as social control agent if parliament is too weak to defend people's interest.

* It is necessary to restate that executive and legislature conspiracy is obvious in legislation process and policy-making process which are 'orders' of corporations. The evil conspiracy operates through various financial institutions like World Bank, IMF , Asian Development Bank, economic hitmen, and economic jackals. They are public enemy number one. Not to mention high- ranking officials, slave intellectuals and politicians that defend foreign corporation's interest.

* Renegotiation of foreign debt payment is a must - they are odious debt, and if calculated, all installments far exceeds the debts. Revision to excessive Indonesian commitment to international fora, especially WTO, is a must.

* The national leadership post 2009 must totally reconstruct Indonesia's economic policy, from the present pro-foreign creditors and investors into pro-people and domestic investors. Equally urgent is prioritizing utilization of land, water, outer space, and natural wealth for domestic people, including native business people. Article 33 of the 1945 constitution is the basic guideline in Indonesia's economic development.

* The national leadership post 2009 must enact law enforcement without discrimination.

Six References :

1.The National anthem is a source of inspiration to keep on uniting and developing a free Indonesia, and to fully awaken toward a great Indonesia.

2.The national flag of red and white shall be above flags of party, group and any other components. Different flags may exist but under the two colors.

3.Bahasa Indonesia (Indonesian language) as a lingua franca.

4. The National Motto : Bhinneka Tunggal Ika (Unity in diversity). None may feel superior and none may feel inferior.

5.The national armed forces and police are above all groups and shall be instrument of national unity. Their vow guarantee dedication to the whole nation, not limited to a certain group or element.

6.Panca Sila (the five basic principles) as foundation and philosophy of our state.