[econ]The Impending Indonesia Trainwreck

Redeye

Inactive
The below article pretty well says it. Especially about Japan being very vulnerable, economically and in terms of Chinese pressures, to Indonesia's very-impending trainwreck.
Singapore is taking it seriously indeed. There have been daily articles in the Singapore Straits Times about Indonesia and Gus Dur. See <a href="http://straitstimes.asia1.com.sg/primenews/story/0,1870,47812,00.html?">Impeach Gus Dur</a> and <a href="http://straitstimes.asia1.com.sg/asia/story/0,1870,47949,00.html?">Indonesia on the brink</a> for some tame stories...

Under Fair Use... Found on Nyquist's site in the <a href="http://www.jrnyquist.com/may28/issues_of_the_day.htm">Issues Of The Day</a> area...
RIO


indonesa.gif

Map of Indonesia from Country Analysis Briefs -- Indonesia


<a href="http://www.jrnyquist.com/may28/issues_of_the_day.htm">Asia’s Vulnerable Underbelly—Indonesia</a>

by Gordon Frisch
Website: www.HSLetter.com
E-mail: gordon18@qwest.net



"Indonesia … is falling off the edge."

—Sol Sanders, The Washington Times, May 7, 2001

While all attention has been focused on other parts of Asia—China, Japan, Philippines and the Koreas—a major crisis is building in Indonesia. It’s the world’s fifth largest nation (200 million people), the world’s largest Muslim nation, and it’s coming apart geo-politically.

Indonesia failed to make urgently needed structural reforms following its financial and economic collapse in 1998 when GDP fell 13 percent. The country's army is corrupt and brutal and Wahid Abdulrahman, its unpredictable President, faces imminent impeachment. Heir apparent to the presidency, Vice President Megawatti Sukarnoputri (daughter of Indonesia’s first president, Sukarno) has displayed few leadership skills.

Indonesia is a world trade chokepoint, sitting astride some of the world’s most vital shipping lanes, through which life-sustaining Mideast oil to Japan, South Korea and China passes. The CIA estimates that by 2015, three-fourths of all Mideast oil will go to Asia (only 10 percent to Western nations). Piracy is already epidemic in the sea lanes. Indonesia is also the major power in ASEAN, the organization on which the U.S. has based its strategy for East Asian stability ever since the fall of Saigon. Secessionist forces are at work in many parts of Indonesia, and President Wahid’s followers threaten civil war if he is ousted. With 13,500 islands stretched over a 3,000-mile archipelago, 300 different racial, ethnic and linguistic groups, and political and religious unrest bubbling, Indonesia is ripe for disintegration.

The ramifications of Indonesian devolution, civil war, or disintegration, are enormous. From the 1950s-70s, the West was obsessed with the "domino theory"—the spread of communism from Northeast Asia to Southeast Asia—and that’s what the Vietnam War was all about. Now concern is for a "reverse domino theory" in which Indonesian collapse could trigger a northward sweep of chaos and instability. For example, increased Muslim unrest in Indonesia would be fueled by the exploding Muslim insurrection underway in the Philippines. Recent uprisings in Aceh and East Timor are further manifestations of growing unrest.

Hanging like a black cloud over everything is China’s imperialistic posture in East Asia, and especially Indonesia, whose valuable mineral resources are a magnet for natural resource-starved China. A Chinese (Diaspora) minority already controls Indonesia’s economy. It should be remembered that Beijing was behind a failed communist coup in 1964, and much of the current unrest harkens directly back to that failed 1964 coup.

Further complicating the political equation is Japan’s keen interest in Indonesia—<u>half of Japan’s entire foreign development assistance is locked up in trade with Indonesia</u>, from whom it imports huge amounts of oil and other raw materials. It doesn’t take much imagination to foresee potentially earth-shattering conflicts of interest ahead between China, Taiwan, Japan and the U.S. in Indonesia. There is sound logic behind U.S. Secretary of Defense Rumsfeld’s decision to formally switch primary U.S. military focus from Europe to East Asia.

Meanwhile, amid growing anxiety, Indonesia’s currency (the rupiah) has lost 15 percent of its value in 2001, and its stock market is down 50 percent from its 2000 high. Mining companies, who have legal claim to sites, have been invaded by unauthorized native miners who mine (steal) an estimated $250 million of gold and other minerals per year, tax free. In the process, these claim-jumping trespassers, who could care less about the environment, are turning mining areas (especially in Sulawesi) into toxic wastelands.

Bottom Line: Indonesia looks increasingly like the Achilles Heel of the Far East. Its power vacuum and growing domestic unrest may be an irresistible temptation for imperialistic China, which already has a fifth column in place by virtue of a Chinese Diaspora that controls Indonesia’s economy. Add the volatile fuel of Muslim insurrection (87 percent of the population is Muslim) and dominos could start falling, and the entire Indonesian archipelago could run amok.

Fittingly, the word "amok" is of Malay origin.

Commentary and Interpretation of Global Issues by Gordon Frisch
Editor: Issues of the Day
E-mail: gordon18@qwest.net (comments welcome)

(Edited to add a category :) )

[ 06-01-2001: Message edited by: Vipper ]
 

Maher

Inactive
Redeye: Nice Catch! Great Display!

I posted two stories about this development a couple of days ago, but didn't get much reaction. This story is very important, and so are the developments taking place in South America right now.

<a href="http://www.gunsnet.net/forums/tb2k/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=1&t=000205" target="web">LINK #1</a>

and

<a href="http://www.gunsnet.net/forums/tb2k/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=1&t=000183" target="web">Link #2</a>
 

Redeye

Inactive
Maher,

I'd missed your two Indonesia posts; my apologies. Been doing a schedule with abnormally high amounts of off-line time recently.

I've been watching Indonesia especially since 1998 and the role of the sizable ethnic Chinese minority in that economy and political structure came more to light. It seems a made-to-order situation for Chinese mahem.

And I also certainly agree with you about South America.
It gets rather mind-numbing to try to anticipate which dominoe will topple, and why, and which other dominoes will be nudged over also...

RIO
 

Taz

Deceased
I have been watching Indonesia and the ME but have missed South America. Please direct me to any posts, etc. Thanks...
Taz
 

Redeye

Inactive
Taz,

Mutter's link's contents spoke to the geo-political considerations, especially vis-a-vis Venezuela and Cuba and to some degree, Mexico.


In addition, several SA countries are also facing economic troubles of major consequence.
<a href="http://pub16.ezboard.com/ftb2kfulltopicfrm1.showMessage?topicID=1617.topic">Brazilians hit the dimmer switch</a> deals with impending electricity rationing in Brazil, and probably in Chile.
Brazil already has F&M, as <a href="http://news6.thdo.bbc.co.uk/hi/english/world/americas/newsid%5F1317000/1317825.stm">Brazil campaign against foot-and-mouth</a> from the BBC reflects, as does Argentina, per <a href="http://news6.thdo.bbc.co.uk/hi/english/world/americas/newsid_1238000/1238172.stm">Foot-and-mouth spreads in Argentina</a>, and as does Uraguay per <a href="http://news6.thdo.bbc.co.uk/hi/english/world/americas/newsid%5F1287000/1287148.stm">Uruguay vaccinates against foot-and-mouth</a>. <a href="http://news6.thdo.bbc.co.uk/hi/english/business/newsid%5F1295000/1295948.stm">Argentina's struggle to contain crisis</a> speaks to Argentina's debt situation; they are still on very thin ice, capital flight is still a real risk, an IMF deal has been approved, and
you can anticipate the rest.

[Edited to add]
Go see <a href="http://pub49.ezboard.com/firrationalexuberancefrm1">Maher's Econ Forum</a>.
His <a href="http://pub49.ezboard.com/firrationalexuberancefrm1.showMessage?topicID=724.topic">Argentina Debt Swap May Lead Interest Costs to Double</a> is very good. <a href="http://pub49.ezboard.com/firrationalexuberancefrm1.showMessage?topicID=645.topic">Latin America's Plight</a> speaks to commodity pricing history in SA per se, and is pertinent.

I have some SA-related stuff scatter through the <a href="http://pub42.ezboard.com/fabundantlivinginvestmentsfinance">A.L. Investments & Finance</a> forum.

<a href="http://pub16.ezboard.com/ftb2kfulltopicfrm1.showMessage?topicID=1542.topic">Eastern & Western Approaches To War</a> may help with geopolitical strategic comparisions, and
<a href="http://pub16.ezboard.com/ftb2kfulltopicfrm1.showMessage?topicID=1492.topic">China: Economic Warfare: Bond Markets & Oil</a> seems to be showing application of some of those differing approaches.

RIO

[ 06-01-2001: Message edited by: Redeye ]
 
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