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Indonesia History

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Indonesia: Searching For The Ratu Adil

In the 1966 Italian film ‘The Battle of Algeries, the insurgent leader Ben M'Hidi is having a conversation with one of his foot soldiers named Ali. During this scene Ben M’Hidi makes an observation that was true of many nationalist movements for self-determination during the 20th century by stating “It's hard to start a revolution. Even harder to continue it, and hardest of all to win it. But, it's only afterwards, when we have won, that the true difficulties begin. In short, Ali, there's still much to do. “ (Pontecorvo, 1966). Ben M’hidi’s words have rung true of a great many of the national revolutions as the world moved from an imperial world order to one of sovern nation states.
The Indonesian archipelago has a history of civilization going back as far as the 7th century CE, but not a united one. The diversity of the region is exemplified in its current national motto, “Bhinneka Tunggal Ika” (Unity in Diversity). However, prior to the 20th century this unity was largely nonexistent, and instead consisted of rival kingdoms and sultanates, vying for power with each other and technologically and socially backwards in relation to the Imperial powers which were becoming aware of the potential the region could serve to those who controlled its trade routes and resources.
In the 17th century CE, Dutch traders realized the potential of East Indies trade, and set forward in consolidating power over the region. To gain control over the trade of rare spices such as nutmeg, as well as to take advantage of the potential for other trade crops like tobacco and coffee, The Dutch East India Company (VOC; Verenigde Oost-indische Compagnie) was established by the Dutch government. While the Dutch East India Company began as a business venture, and private multinational corporation, by the 19th century corruption and financial problems lead to it being nationalized by the Dutch crown (Brown 2008).
At the turn of the 20th century a movement began in Holland promoting the idea that the Dutch had a moral responsibility to the indigenous population of the Dutch East Indies. In 1901, Abraham Kuijper, leader of the Calvinist Christian Democrat party, took power in Holland. This new government, with the support of the Queen, began putting forward a new policy towards the Dutch East Indies. This policy would focus on bringing progress and prosperity to the indigenous peoples on the region, as a way of making reparations for their exploitation, and paying their ‘debt of honor’ (Keat Gin Ooi, 2004, p.490). That year the Dutch Ethical Policy, as it was known, became the official policy of colonial government in Indonesia.
This new ethical policy did not coincide with a lessening of control over the archipelago. Instead it created a greater sense of “white man’s burden” among the Dutch, who were more motivated to expand direct colonial rule and take control from the remaining independent local rulers in an effort to civilize the people (Kratoska, 2001, p.176). In the 19th century Dutch rule was confined largely to Java, with outposts at significant trading posts on the islands of Sumatra, the Moluccas, and Borneo. During the period from 1901 to 1920, through conquest or treaty, Dutch rule was expanded over the entire archipelago.
While Dutch control was expanding, another force was also developing as a result of the new Ethical Policy. Dutch investments into education had been developing a class of educated Indonesian elites. This class would be the foundation for an Indonesian National Awakening, where for the first time a national consciousness as "Indonesians" began to come into existence. In 1908 the first indigenous political group was formed by students from Batavia and Yogyakarta, named Budi Utomo (Kratoska, 2001, p. 238). Other nationalist and anti- colonial political movements followed, as well as internationalist ones such as the Communist Party of Indonesia (Partai Komunis Indonesia), which was actually lead by a Dutch Socialist named Henk Sneevliet (IISH, nd).
The most significant national movements began to arise out of the island of Java. This island had at one time been home to a large empire known as the Majapahit, who at its peak ruled over much of the archipelago. In the 10th century a Javanese Hindu king of Widarba, named Ratu Joyaboyo had a prophecy that “The Javanese would be ruled by a whites for 3 centuries and by yellow dwarfs for the life span of a maize plant prior to the return of the Ratu Adil [divine king]” (Suresh 2011). While there is no shortage of prophecies from Indonesia, a land known for a culture of mysticism, this one has a special significance. In the period from 1925 to 1950, this prophecy came true.
The national awakening in Indonesia that was building in the early 20th century, propelled forward by an elite class of educated intellectuals, had begun articulating a new national consciousness and expressing a rising desire for self-determination in the face of colonialism. "Indonesia" was a word that had been created by Europeans to denote the geographic area of the archipelago, a chain of islands that was home to a Javanese people, a Sundanese people, a Balinese people, and countless others. However in the 1920s nationalists saw a shared history of, and struggle against, Dutch colonialism, and began to unite under a banner of Indonesia as one nation of one people (Vickers, 2005, p. 79). One of the most important figures in this national awakening was a 26 year old engineering graduate named Sukarno, who in 1927 founded the Indonesian National Party. Sukarno’s Indonesian National Party differed from other anti-colonial movements in Indonesia at the time, such as Perserikatan Komunis Indonesia and Sarekat Islam, in that it was neither Marxist nor Islamist in nature, but built on the idea of guided democracy with a focus on national unity (Keat Gin Ooi, 2004, p. 1226). Sukarno’s growing movement and the publication of his work Mentjapai Indonesia Merdeka ("To Attain Independent Indonesia") caused the Dutch authorities to view him as major threat to the status quo, and by 1931 he had seem his organization dissolved and himself exiled and imprisoned on the island of Flores. In 1942 the invasion of the East Indies by Japan had for the first time in century’s broken Dutch rule. This event was met with great enthusiasm by Indonesian nationalists, as what would be the catalyst for their independence. The Japanese required local civil servants to administer their new occupied territories in the East Indies as well as support from local nationalists leaders to secure the population, opening up high level positions in governance for Indonesian activists and a return of figures such as Sukarno and Muhammed Hatta to prominent positions (Indonesia, 2011). However, while the Japanese were initially greeted as liberators this did not last long, as it became apparent that their chief concern was conquest and the use of indigenous people for slave labor. Soon local insurgencies aimed at the Japanese occupation were growing and being crushed by the Japanese with extreme brutality (Abdullah, 2009, p.104). With the defeat of Japan by the allied forces in 1945, Indonesian nationalist leaders moved quickly, and on the 17th of August 1945 Sukarno and Hatta formally declared Indonesia’s independence. This formal declaration by Sukarno and Hatta would not mean an end to the story of Indonesian independence, and Indonesia would see a return of occupation by initially by British forces attempting to restore order and later Dutch military forces attempting to restore imperial control, as well as the renewal of fighting between them and anti-colonial Indonesian forces. However, after this declaration of independence by Sukarno and Hatta the momentum had turned irreversibly in the favor of the nationalists, and they began working to secure it. The day following the declaration a constitutional convention was established by 27 members of the national resistance (CountryStudies, .nd). This constitution would not be a final draft, but many initial presidents were established, such a declaration that Indonesia would be as a nation would be a unitary state and a republic, and not a loose federation. Also significant was that the 1945 constitution would not declare Indonesia as an Islamic state (Abdullah, 2009, p. 124).
While Indonesia is often quoted as the ‘Largest Muslim country in the world”, that statement is deceiving, and not only because there are such large religious minorities. Islam itself was relatively a new and in many ways foreign religion to the archipelago, and because it had not been introduced on a large scale until after the fall of the major Javanese empires and around the time when Dutch control was beginning, it had never fully assimilated the culture to it. Among the Javanese many held to a religious classification of Abanggan Muslims or those who blended the native hindu-buddhist traditional Javanese culture with Islamic practices (Suryadinata, 2002, p.8). During this initial constitution convention there would be conflict between the Abanggan Muslims and the more orthodox factions, over including a clause that “[The Indonesian state is based on] Belief in the one supreme God with the obligation to live according to Islamic law for Muslims”. The Abanggan would have an important ally in the Nationalist heros Sukarno and Hatta, who would prevent that clause from becoming a part of the new nation’s constitution (Abdullah, 2009, p.124).
Sukarno had come from a traditionalist cultural Javanese upbringing, as well as having a mother who was Hindu Balinese, and this was reflected in his political philosophy. While developing the Indonesian constitution Sukarno would use his influence to promote his philosophy as the official foundation of the Indonesian state. As Sukarno expanded on this is a speech delivered in the East Java port city of Surabaya, explaining how he wished to develop a foundation for the state that would promote unity in the diversity of the nation, where “the Republic of Indonesia, does not belong to any group, nor to any religion, nor to any ethnic group, nor to any group with customs and traditions, but the property of all of us from Sabang to Merauke!” (Sukarno, 1955). This philosophy would become known as the Pancasila. Sukarno’s Pancasila was based on five principles: Social Justice, democracy, nationalism as expressed in the unity of Indonesia, humanitarianism, and belief in God. The principle dealing with belief in god was significant as it did not specify a particular god or religion. As such it became an aspect of contention for the islamist factions, but Sukarno would win this battle, and see his Pancasila translated into the preamble of the first Indonesian constitution, and the foundation of the state (Suryadinata, 2002, p. 10).
With a new constitution in tow and a nationalist vanguard ready to take control, the Dutch could no longer fight the tide of history. From 1949 to 1950, following years of fighting between nationalist Indonesian forces and Dutch rule, the Dutch crown would transfer full sovereignty to the Republic of Indonesia and President Sukarno would finally realize his dream of a single united Republic of Indonesia(Indonesia, 2011), but conflicts over the new nation’s constitution would remain. In 1950 a second temporary constitution would be put in place, one that would create a parliamentary system with limited executive power.
This time period would see massive changes to Indonesian society, struggles from every side to craft the nation’s future, and Sukarno increasingly trying to fill the role of “Ratu Adil”. While Sukarno had was a national hero, and had been president since the nation’s founding, but under the parliamentary system he felt that he did not have the power to remake Indonesia in the image he desired. In the drive to make himself the center of Indonesia’s political future, Sukarno began to adopt a semi authoritarian system of Guided Democracy. This was a system in which democratic institutions and elections would continue, but power is heavily concentrated in the President preventing elections from having any major effects on government policy. Like many of Sukarno’s political philosophies, his concept of Guided Democracy grew out of traditionalist Javanese culture. Sukarno argued that western style democracy did not fit Indonesia, and that political parties in a parliamentary system would only encourage conflict and mob rule. Guided democracy as Sukarno saw it would be an extension of the Javanese village system, where decisions were made by mufakat, or concensus of wise elders (Keat Gin Ooi, 2004, p. 554).
To accomplish this consolidation of power Sukarto would triangulate himself to control the various factions in Indonesian politics: The Communists, the Islamists, and the Nationalists. Sukarno would create a council, known as the Nasakom, which would represent all important political parties, and where he could balance the growing communist party with the nationalist and islamic factions. From 1957 to 1963, with the support of the military, Sukarno would be able to unilaterally reinstate the 1945 constitution, dissolve the parliamentary system, institutionalize Guided Democracy with him as the chief executive and granting sweeping power, and even have himself proclaimed president for life (Keat Gin Ooi, 2004, p.554).
Sukarno’s victories in the late 1950s and early 1960s would be short lived, and his authoritarian tilt would lay the foundation for his downfall. During the 1960s the economy would flounder, with production and trade coming to a standstill and hyperinflation (Bhakti, 2004, p.198). While an ideologue with a strong charismatic presence, he was to prove a failure as an administrator. Populist policies that nationalized major industries and even banned Chinese participation in the rural economy, coupled with an antagonistic stance towards the western nations chased much foreign investment from the country. During this period of economic stagnation Sukarno would attempt to align closer with the communists, in part to secure Soviet aid and to get greater support for his populist initiatives, while granting greater power to the military in order to control the communists should they seek greater power (Vickers, 2005, p.144). This triangulation would come to a head in 1966, when the military under Suharto would lead a coup against the Sukarno regime in response to an attempted uprising by elements of the communist party within the army (Bhakti, 2004, p.198).
Following the attempted coup by leftist elements, Major General Suharto moved quickly, securing the capital Jakarta. With the Communist party now labeled as traitors Suharto would be able to initiate a great purge. The government was compelled to outlaw the communist party, and the military would send supporters out to the country side to purge the territory of communist and communist sympathizers. Over a million people were imprisoned and another million killed during these anti-communist purges (Keat Gin Ooi, 2004, p. 1026). Worst of all for Sukarno, he would be made out to be guilty by association, as he had been leaning closer to the Communist party over the last several years. Suharto took great advantage of this and by political maneuvering was able to compel Sukarno to transfer his authority over the military and the parliament over to him. In1968 Suharto took the title of Acting President, till elections could be held, while
Sukarno was placed under house arrest where he would die (Vickers, 2005, p. 160). The era of Sukarno’s Guided Democracy was over, and Suharto’s new era was to begin.
Suharto would find himself in control of a republic that Sukarno had created, and inheriting his authoritarian executive power. Suharto felt that Sukarno focused too much attention on political games and ideological posturing, and as such built a cabinet stacked with technocrats whose prime function would be to promote economic development (Elson, 2001, p. 168). His pro-western stance had invited back foreign investment, and throughout the 1970s he would see the situation in Indonesia greatly improve as the country entered a period of greater political stability and economic growth. In 1975 he was able to promote even greater political stability and legitimacy for his regime by co-opting one of the founding members of the Indonesian nationalist movement, Muhammed Hatta, by offering him a position on his advisory council on the proper implementation of the Pancasila which he was still committed to upholding (Keat Gin Ooi, 2004, p. 903).
The liberal economy promoted by the New Order regime had been a great outward success, industrializing the country and lifting millions out of poverty. Going into the 1990s Indonesia’s economy was growing at 7.6%, making it one of the fastest growing economies in Asia (Friend, 2003, p.293). However, with economic liberalization the New Order had been slow to adopt political liberalization, and while elections were held and political parties existed they were all tightly managed. Opposition leaders had found a symbol in Sukano’s daughter, Megawati, and began to build a reform movement around her that would become known as the PDI (Peoples’ Democratic Party). Opposition was also brewing from out. In the 1970s Indonesia had invaded and annexed the island of East Timor, and while the occupation had consistently been brutal, the Santa Cruz Massacre of 1991 had become a real turning point in the East Timor independence movement, motivating Timorese insurgents and drawing international attention. This lead to Indonesia becoming more isolated internationally as well as loosing critical support from the USA (ETAN, nd.).
While the financial booms of the New Order era up till the mid-nineties has done much to buttress Suharto’s regime, the East Asian Financial Crisis weakened it beyond repair, and as financial instability grew, political and social instability followed, and in the first weeks of 1998 dozens of riots and demonstrations had rocked Indonesia (Friend, 2003, p. 340). Calls for reform came in every direction, from Islamists to the PDI to military officers. As opposition grew Suharto met it with a heavy handed response that would only fuel the reform movement, and reactionary violence by the government was no longer confined to the outer rural regions and ethnic minorities like the Chinese, but was now being directed at the children of the middle class. As Suharto began to lose his support among the military and middle class he came to understand that New Order regime would not last, and to save himself from the fate he imposed on Sukarno, he would resign his position in 1998 and hand the power of the presidency to his vice president, Bacharuddin Jusuf Habibie (Vickers, 2005, p. 205).
Habibie would serve as a transitional leader, only holding office for a year. In 1999 Indonesian would have the first opportunity to vote for a successor to Suharto’s New Order regime. In a historical irony, the Daughter of the Indonesian hero who had been overthrown by Suharto, would lead the party which garnered the plurality of this vote. Megawati Sukarnoputri, and her Peoples’ Democratic Party (PDI) had become the most powerful party in the new government, but they did not have a majority. Abdurrahman Wahid, of the conservative National Awakening Party, created a coalition with other conservative and Islamic parties in order to counter Megawati, that out maneuvered her for the position of Indonesia’s President. Megawati’s supporters seemed to be more politically astute than she was, and proved themselves to be adept at the political games and deals that had characterized Indonesia’s government. In 2001, the PDI was able to remove Wahid from office and elevate Megawati to the position of President (Karon, 2001).
Megawati’s time as president would last as long as her predecessor’s in the post Suharto era, and she would lose the next election to Susilo Bambang Yudhoyono of the democratic party. These days much has changed from the days of Presidents for life like Sukarto or military dictators like Suharto, but many of the old problems still remain. Economic stagnation and corruption persist, and politics are still dictated by deals and triangulating conflicting parties. While the occupation of East Timor has ended, insurgencies persist in West Papua and Aceh. Sectarian violence between Christians and Muslims explodes on islands like Ambon, while Islamists still try to replace Sukarno’s Pancasila with their Sharia. While we don’t yet know who will succeed Susilo BamBang Yudhoyono as the next president of Indonesia, we can be sure there will still be much work to do.

Annotated Bibliography:

Abdullah, Taufik. (2009). Indonesia: Towards Democracy. Singapore: ISEAS Publishing

This book offers a detailed overview of Indonesia’s history from the beginings of the anti colonial movement through the modern era, and is part of a five book series dealing with nation building in the 20th century. Taufik Abdullah explores the events with a focus on the motives of its actors. The chapter dealing with the Japanese occupation is especially detailed and offers insight into how it was perceived by the indigionous population and the leaders of the nationalist movement.

Indonesia. (2011). In Encyclopædia Britannica. Retrieved from: http://www.britannica.com/EBchecked/topic/286480/Indonesia This source is an encyclopedia entry from Britannica gives a general summery of events and dates in regards to the nation of Indonesia. The source is used primarily as a reference for dates, and providing an accurate timeline of events. It was also sourced because it noted the effect the Japanese occupation had on placing nationalist leaders Sukarno and Hatta in positions of authority that they could take advantage of following the Japanese surrender.

Suresh, Akshay. (2011). The Prophecies of Indonesia. Retreived from: http://www.hinduyuva.org/tattva-blog/2011/01/the-prophecies-of-indonesia-by-akshay-suresh/ Akshay Suresh writes for an internet blog that focuses on hindu beliefs and mythology. In the referenced section Suresh deals with hindu prophecies related to Indonesia.

Vickers, Adrian (2005). A History of Modern Indonesia. Cambridge: Cambridge University Press. Vickers’ History of Modern Indonesia is a focused narrative of Indonesian history. Vickers not only covers significant events and people, but does a good job explaining motives and the effects policy in a manner that is clear and easy for a reader to understand. The section dealing with the transition from the Old to New Order was particularly useful as it delves into the reasons for Sukarno and Suharto to align politically in the manners they did, shedding light on the political process in mid to late 20th century Indonesia.
Brown, Lorri (2008). Dutch East India Company: The Dutch Trading Empire. Retrieved from: http://lorribrown.suite101.com/dutch-east-india-company-a51477#ixzz1X2if4bkh Overview summery of the creation and establishment of the Dutch East India Trading Company. This reference provides a simple timeline that can be used to chart the rise of Dutch domination of trade in South East Asia.

Keat Gin Ooi (Ed.) ( 2004). Southeast Asia: a historical encyclopedia, from Angkor Wat to East Timor . (Vol. 1). Santa Barbara, CA: ABC-CILO Keat Gin Ooi’s large encyclopedic volume on South East Asia provides an easy reference for any event or significant person in South East Asia from pre historic to modern times. This is a very comprehensive encyclopedia that provides detailed data on events, such as the numbers of casualties of the communist purges under Suharto and clear consis definitions of terminology used by political leaders, such as the meaning of Guided Democracy in the context of Indonesia.
Kratoska, Paul H. (2001). South East Asia, Colonial History: Empire-building in the nineteenth century. New York, NY: Routledge Kratoska gives an excellent analysis of the motives behind European colonialism in South East Asia. This is a very good reference for anyone who needs to understand how the Dutch created the colonial system in Indonesia, and the reasons they instituted various policies. It is also significant in giving an analysis of the effects of those policies.

International Institute of Social History (n.d). Henk Sneevliet - A Life in Documents
Retrieved From: http://www.iisg.nl/collections/sneevliet/life-2.php A simple reference detailing various European anti colonional figures, who assisted the indigiousnous populations in the lands that their nation was exploiting, as well as how they advocated for their cause in Europe. Henk Sneevleit was one of the more significant figures in regards to Indonesia, as he actually went to Java and helped form the Socialist movement there.
Suryadinata, Leo. (2002). Elections And Politics In Indonesia. Singapore: ISEAS Publishing A short eassy that deals in detail with the religious and cultural aspects of Indonesian politics. It provides a good reference for the cultural background for Sukarno’s Pancasila, as well as an analysis of how it is implemented and problems associated within the Indonesian political system.
Elson, Robert E. (2001). Suharto: A Political Biography. Cambridge: Cambridge University Press. Elson provides a simple biography of Suharto from a perspective of politics. It is a good reference for the style of governance and political philosophy of Suharto.

Friend, Theodore. (2003). Indonesia Destinies. Boston: Harvard University Press

Friends narrative of post colonial history looks at the events from a largely cultural perspective, but also is an excellent source for facts and figures related to the economic situation in Indonesia during the New Order. It also provides insight into how the economic situation effected the political culture.

Karon, Tony. (2001, July 27), Megawati: The Princess Who Settled For The Presidency. Time Magazine. Retrieved from: http://www.time.com/time/nation/article/0,8599,169130,00.html

A time magazine article from 2001, gives a historic perspective on the assumption of the office of president by Megawati. It is also a significant source because it provides an editorial critic of her political ability.

Pontecorvo, Gillo (Director). (1966). The Battle of Algiers [Motion Picture]. Italy: Igor Flims This 1966 Italian Film dealing with the Insurgancy in Algieria against the French provided a relevant quote that was used to summarize this paper.

Country Studies (nd.). Indonesia: The Constitution. Retrieved from: http://countrystudies.us/indonesia/83.htm Reference for economic and political events that related to the Constitution of Indonesia from Sukarno through Suharto. Provides reference for Sukarno’s relation with the military and communist party, as well as how his triangulation backfired on him.

Bhakti, Ikrar Nusa. (2004) The Transition To Democracy In Indonesia:
Some Outstanding Problems. The Asia Pacific: A Region In Transition. Honolulu: Asia-Pacific Center for Security Studies. Retrieved from: http://www.southchinasea.org/docs/asia-pacific%20in%20transition,%20apcss.pdf Bhakti provides one chapter within a journal dealing with Security studies in East Asia. This Chapter is a good reference for the reasons behind both the rise and fall of Suharto, as well as how his policies effected the reformasi movement.

East Timor Action Network. (nd.) The Santa Cruz Massacre: November 12, 1991
Retrieved from: http://www.etan.org/timor/SntaCRUZ.htm Provided background on the Dili/SantaCruz Massacre in East Timor, and its effects with regards to both the East Timor independence movement, and the consequences for Indonesia.

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Indonesia

...Photo of Anak Krakatau, the "Son of Krakatoa," during a minor eruption in Indonesia. flydime on Flickr.com Updated December 04, 2014. In the past two decades, Indonesia has begun to emerge as an economic power in Southeast Asia, as well as a newly democratic nation. Its long history as the source of spices coveted around the Indian Ocean world shaped Indonesia into the multi-ethnic and religiously diverse nation that we see today. Although this diversity causes friction at times, Indonesia has the potential to become a major world History Philippines Indonesia Trade Christianity Facts Jakarta Indonesia Capital and Major Cities: Capital: Jakarta, pop. 8,800,000 Major Cities: Surabaya, pop. 3,000,000 Medan, pop. 2,500,000 Bandung, pop. 2,500,000 Serang, pop. 1,786,000 Yogyakarta, pop. 512,000 Government: The Republic of Indonesia is centralized (non-federal) and features a strong President who is both Head of State and Head of Government. The first direct presidential election took place only in 2004; the president can serve up to two 5-year terms. The tricameral legislature consists of the People's Consultative Assembly, which inaugurates and impeaches the president and amends the constitution but does not consider legislation; the 560-member House of Representatives, which creates legislation; and the 132-member House of Regional Representatives who provide input on legislation that affects their regions. The judiciary includes not only...

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Using Old Resources in New Ways: Taman Dayaks Owe Their Existence to Carefully Nurtured Resources, but They Have to Adapt If They Want to Survive

...The roosters were crowing before darkness had faded in the riverside Dayak hamlet of Kunsali Patamuan in Kapuas Hulu district, West Kalimantan. Through the cracks of the timber walls in the 122 metre wide long-house, the faint sound of shuffling feet on squeaky floors penetrated to the compartments, as people went back and forth to the kitchens at the back of each living quarter. Not long afterwards, the clattering of tin kettles and stirring of teaspoons could be heard right, left and centre. The long-house was awakening. The village of Malapi is one of the home villages of the Tamans, a sub group of the Iban Dayak. There are about 6000 Tamans in all, their community spread through about a dozen villages in Kapuas Hulu. The village of Malapi is one of them, and consists of a string of four hamlets, one of which is Kunsali Patamuan, and six long-houses. Each long-house lodges between 20 and 40 family units. All are close to the river which runs through the village. Our particular long-house was only recently relocated here as the ever-moving Kapuas river bed had turned its erosive powers right up to the front of the old long-house. The old site had to be abandoned. An increasing rate of riverbank erosion is one of the environmental problems facing this community as a result of upstream logging, both legal and illegal. Every family living in the old long-house builds their own compartment or bilik, and it might take ten years or more before all are completed. The wood used in...

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...Economics and Management in Developing Countries INSEAD P4 Assignment MICROFINANCE in INDONESIA By Dewi BRAMONO Ming CHUNG Yoonmi EOM Kevin LAM Yenn Khan Executive Summary • • Microfinance in Indonesia can be traced back to more than a century ago, where village credit organizations (BKDs) offered small loans to villagers. Today, BRI unit desa of Indonesia is one of the most successful and profitable microfinance institutions in the world with more than 3.1 million borrowers with a gross loan portfolio of more than USD 1.7b as of Dec 2003. Indonesia’s successful experience in microfinance is further shown during the hard-hitting Asian Financial Crisis in 1997 to 1998. At a time when commercial banks were collapsing, savings in microfinance institutions rose from IDR 8 trillion in 1997 to about IDR16 trillion in 1998, as depositors sought the stability of these institutions. There are however some outstanding issues: o Inadequate outreach to the rural community o Politics impact the microfinance efforts negatively o Lack of awareness of microfinance among stakeholders o Microfinance may not be the answer for the poorest of the poor. Recommendations include: o Greater co-ordination required with the NGOs to target the poorest of poor, especially in the rural areas(through aid, training and provision of the infrastructure) o Increase the awareness of the benefits of microfinance, and to educate stakeholders accordingly. • • • Page 1 of 12 Economics and Management...

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Indonesia Econ Analysis

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...Coffee production in Indonesia From Wikipedia, the free encyclopedia Jump to: navigation, search This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (July 2010) An old man is peeling coffee near megalithic stones at Bena, Ngada, Flores Coffee being roasted at Toko Aroma, Bandung, Indonesia Indonesia is the fourth largest producer of coffee in the world. Coffee in Indonesia began with its colonial history, and has played an important part in the growth of the country. Indonesia is located within an ideal geography for coffee plantations. The longitude and latitude of the country means that the island origins are all well suited micro-climates for the growth and production of coffee, resulting in widespread environmental degradation and the destruction of tropical rainforests that have the highest concentration of endemic species in the world. Indonesia produced 420,000 metric tons of coffee in 2007. Of this total, 271,000 tons were exported and 148,000 tons were consumed domestically. Of the exports, 25% are Coffea arabica and the balance is Coffea canephora.[1] In general, Indonesia’s Arabica coffees have low acidity and strong body, which makes them ideal for blending with higher acidity coffees from Central America and East Africa. Contents [hide] 1 History 1.1 Origins 2 Cultivation ...

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