Jakarta silent over cancelled KL loan

INDONESIA IN TRANSITION

Indonesia is strangely quiet over KL’s loan withdrawal, in contrast to its ‘hue and cry’ recently that Singapore was not doing enough to help them

WHY is Indonesia silent over Malaysia’s decision to cancel a US$1 billion (S$1.7 billion) loan to its crisis-struck neighbour? Jakarta has not made any comments and local press coverage is scant after Malaysia’s Second Finance Minister Mustapha Mohamed announced in Parliament last week that KL was withdrawing its offer, given its own economic problems.

Several Cabinet ministers contacted by The Straits Times indicated that most were unaware of Malaysia’s action.

Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita, Indonesia’s point man for bringing in aid from the International Monetary Fund (IMF) and other foreign countries, said he had “not heard anything about the cancellation.”

“I think that will be a sufficient answer to your question,” he said, refusing to comment further. Insiders said that Jakarta’s silence was due to a number of reasons.

One was that the Indonesian government “understood” that Malaysia was also going through a rough patch. “There is no reason for us to go up in arms because they cannot give us money,” said presidential adviser on economic affairs Umar Juoro.

But why all the hue and cry from Jakarta in recent months that Singapore is not doing enough despite a US$12 million humanitarian aid package and taking part in major economic projects such as the US$8 billion Natunas gas deal?

Mr Umar, who is also linked closely with Cooperatives Minister Adi Sasono, had this to say: “It is different for Singapore because we see them as a rich neighbour. We expect more.

“Malaysia is poorer. Naturally, the noises from Jakarta are louder if we don’t get enough aid from Singapore.”

A Cabinet minister who declined to be named said that the government’s nonchalance was due to the fact that more vocal ministers like Mr Sasono were keeping quiet largely because of their close ties and admiration for Malaysia’s economic model.

He noted that race was a key factor in bilateral dealings for ministers with links to the Association of Muslim Intellectuals (ICMI).

“It is a cultural thing for some ministers,” said the Cabinet source. “There is less reason to be frustrated or resentful against a fellow Malay than a Singaporean Chinese.”

But he stressed that not all ministers felt this way and that the “serumpun” concept is now passe in Indonesia-Malaysia relations. “It is just that those who are not too friendly to Singapore tend to be the most vocal ones in Cabinet,” he added.

He said Jakarta’s “no-comment” posture could also be linked to underlying tensions with Malaysia on several other matters. The main issue here was the Anwar Ibrahim trial and conviction which upset ministers including President B.J. Habibie.

The source believed that while Malaysia has economic grounds to cancel the loan, it could have been linked to the support Indonesians had been giving Malaysia’s former deputy prime minister.

Another reason was anger over Prime Minister Mahathir Mohammad’s repeated claims this year that “Malaysia is not Indonesia.”

He said: “We are not dying for Malaysian aid. It is inconsequential to us whether they give us anything. We are too preoccupied with our own problems to bother reflecting on this. It must be terribly frustrating for them to see us Javanese remaining unfettered.”

Despite such sentiments, some are of the view that Indonesia has no choice but to turn to Malaysia and Singapore for help.

Coordinating Minister for Welfare and Poverty Alleviation Haryono Suyono said that it was “saddening” for Malaysia to cancel the loan but Jakarta expected KL to explore other ways to help Indonesia.

Mr Haryono said that he would be making a trip to KL early next month. Besides exploring ways to fight the haze-inducing forest fires, he said he hoped to convince Dr Mahathir of the need for joint-projects to reduce poverty in the vast archipelago.

”It is sad that they are not giving us the money which would rebuild our economy,” he told The Straits Times. “We understand that Malaysia has its own share of problems. But we hope that they can come up with something else to make up for this.”

MALAYSIA’S DECISION: Indonesia understands

* MANY Cabinet ministers may still not be aware of Malaysia’s decision.
* The Indonesian government understands that Malaysia is also going through a rough patch and may not be able to afford the loan.
* Indonesian ministers may also be keeping quiet because of their close ties and admiration for Malaysia’s economic model. They feel less resentment towards the Malaysians, for whom some of them may feel a cultural affinity.
* Jakarta’s “no-comment” posture may also be linked to underlying tensions with Malaysia on several matters.
* Another reason may be Indonesian anger over Prime Minister Mahathir Mohammad’s repeated claims this year that “Malaysia is not Indonesia”.