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(Continued from page 1)
and legal reform) that had been accelerating following the fall of President Suharto. While US actions against bin Laden and the Taliban are provoking a realignment among Megawati's coalition government towards Muslim interests and (at least for now) away from her secular/nationalist roots, the US-Indonesia relationship hasn't unraveled nor has the country suddenly turned anti-Western. Too many Indonesian jobs are tied to Europe and the US. Already, her Vice President is calling for protests to end and major Muslim leaders are saying that breaking relations with the United States would be suicidal.
In assessing the confusing statements voiced by Indonesia's political leaders, one has to keep in mind that elliptical and ambiguous speech characterizes much public rhetoric. Also, public protests are not always spontaneous but can be engineered for political purposes. So, foreigners may see black and white when learning of anti-American protests while Indonesians themselves see grey. US attacks on Afghanistan provide a convenient launching pad for moves to slow the reform process or assert a marginal political agenda such as the effort to reincorporate Indonesia as a Muslim state. Certainly, Indonesia is far too large a country with too much diversity to form snap judgments that it has switched sides in the globalization debate. But its leaders must placate those left out of the process, mostly poor, young, urban Muslim males. Just one incident seemed to symbolize the paradox: thirsty anti-US protestors in Makassar (Sulawesi's largest city) gladly downed bottles of Fanta soda (by US-based Coca-Cola) offered by local vendors. If indeed Indonesia ever clearly chooses sides, it will do so with an asterisk.
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 | BANKING AND FINANCE
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INDONESIA TO MAINTAIN FREE FLOATING FOREX EXCHANGE SYSTEM
JAKARTA, Oct 17 Asia Pulse/Antara - The Indonesian government has said that it would not abandon its free floating foreign exchange system, saying it was still the best system for the country under the present circumstances.
Finance Minister Boediono told the lawmakers in a hearing Tuesday other systems as suggested by a number of observers and economists will need certain requirements the country could not meet such as adequate foreign exchange reserve and mechanism or system to control foreign exchange flows.
A number of leading economists have suggested the use of fixed exchange rate to stabilize the ailing rupiah.
Boediono said a fixed rate will not be effective without the support of sufficient foreign exchange reserve and system to control foreign exchange movements.
"People will turn away from the official agencies selling and buying dollar and will make a deal in other places using illegal exchange rate. The official rate will be meaningless," he said.
INDONESIA TO ISSUE US$390 MLN SHORT TERM BONDS
JAKARTA, Oct 16 Asia Pulse - The government will issue short term bonds valued at Rp3.9 trillion (US$390 million) next year to cover a deficit in the 2002 state budget, an official said. Fuad Rahmany, head of the state bond management center, said the issuance of the short term bonds is based on a letter of intent signed with the International Monetary Fund.
The bonds will be used partly to replace bonds maturing that year, but the amount will depend on the absorbing capacity of the market, Fuad said.
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| ECONOMIC AFFAIRS
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INDONESIA STILL BEHIND AFTA
Trade and Industry Minister Rini Soewandi said Indonesia will meet its commitment to join the Asean Free Trade Area [AFTA] scheme despite calls from the private sector to postpone joining the scheme.
Rini noted that some of the Indonesian industries are still below expectations in productivity.
"In fact, Indonesia has not specially taken steps to prepare itself for AFTA although it has given its commitment since 1993," she said Wednesday.
Meanwhile, Aburizal Bakrie, the general chairman of the Indonesian Chamber of Commerce and Industry, said four Indonesian industrial products -- automotive, chemicals, retail and food products -- are not yet ready for the AFTA scheme.
INDONESIA DELAYS PLAN TO SELL SEMEN GRESIK TO CEMEX
JAKARTA -- The Indonesian government Thursday said it will delay the sale of cement maker PT Semen Gresik (P.SGK) to Mexican cement company Cemex (CX). Senior Economics Minister Dorodjatun Kuntjoro-Jakti said President Megawati Sukar (Continued on page 4)
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