:00:00. > :00:15.involved and people were injured. Now BBC News, it's time for
:00:16. > :00:18.HARDtalk. Welcome to HARDtalk. Indonesia is the dominant power in
:00:19. > :00:22.Southeast Asia, the fourth most populous nation in the world and
:00:23. > :00:28.Nicky player in the 21st century shift of global power from west to
:00:29. > :00:39.east. But how stable are Indonesia 's economic and political foe of ``
:00:40. > :00:45.foundations. It has hit tensions. Corruption remains a drag on
:00:46. > :00:49.development. Our guest is a senior adviser to Indonesia 's vice
:00:50. > :01:17.president. Will Indonesia fulfil its potential?
:01:18. > :01:26.Welcome to HARDtalk. Why do you think it is that the world seems to
:01:27. > :01:35.be losing confidence in Indonesia is economic story? I think we hit a bit
:01:36. > :01:45.of turbulence. We actually managed to navigate through the crisis in
:01:46. > :01:49.2008 particular in the financial institutions that had been put in
:01:50. > :01:53.place at the 1997 crisis. They still stand to this day. We managed to do
:01:54. > :01:57.very well with expectations of continuing growth despite the fact
:01:58. > :02:04.the rest of the world was not doing so well. With the continuing global
:02:05. > :02:07.crisis and the fact that Indonesia 's economy is still very much
:02:08. > :02:14.dependent on exports and private commodities, commodities are very
:02:15. > :02:22.stable, we have problems with our revenues and exports. It seems that
:02:23. > :02:27.there were some complacency. An overreliance on commodity. We have
:02:28. > :02:34.seen the stock market go down by 20%. And you see your currency at a
:02:35. > :02:40.real lowered again the US dollar. It comes down to the US ``
:02:41. > :02:45.international community wondering whether the success of the last few
:02:46. > :02:51.years can be set range. Maybe there have been some, you know, pick up
:02:52. > :03:02.the new past few weeks. The government has got its act together.
:03:03. > :03:07.It has stabilised. The rating agency the couple years ago were crowing
:03:08. > :03:13.how comfortable they were... They were very worried about deficit.
:03:14. > :03:17.They were. They are still. I think the government has seized on these
:03:18. > :03:23.problems. The Genesis problem is being addressed. Every time someone
:03:24. > :03:30.talks about the Indonesian economy infrastructure issues. Most ``
:03:31. > :03:38.investors have zeroed in on. I hope that in the next one to two years
:03:39. > :03:43.ports, roads and various major infrastructure problems are the
:03:44. > :03:48.pipeline. Institutional problems, the redtape issues, other certain
:03:49. > :03:54.issues, these are issues we are addressing. We'll go through a lot
:03:55. > :03:59.of that. Your specialism is in international relations and
:04:00. > :04:03.politics. And therefore you must be concerned when, for example, the
:04:04. > :04:08.Financial Times and the Wall Street Journal have highlighted the
:04:09. > :04:13.difficulties of Oracle needs who have tried to in Indonesia, thinking
:04:14. > :04:19.of mining companies and who find there is increasingly strident
:04:20. > :04:24.nationalism that make it difficult for them to expand their businesses.
:04:25. > :04:32.I would like to underline that Indonesia has been very open. It is
:04:33. > :04:39.very outward looking. We are much more open to many other countries.
:04:40. > :04:43.If you work for Churchill mining and you think that you have got a
:04:44. > :04:46.licence to mind going to dolls with: Indonesia, as they thought
:04:47. > :04:56.they have, and you suddenly find that the local government has
:04:57. > :05:01.withdrawn the... It is a problem. We are trying to address it. As you
:05:02. > :05:07.know very well, Indonesia went from one centralised countries to become
:05:08. > :05:16.one of the most decentralised. At that time that water demand. One of
:05:17. > :05:20.these problems in these uncertain regulations, where investors
:05:21. > :05:26.sometimes complained that there were too many deaths and there were not
:05:27. > :05:32.sure if you went to that central investment board it would be
:05:33. > :05:35.honoured by the government. At the moment we are trying to revise some
:05:36. > :05:41.of these bills to make sure that all of this confusion could be buying
:05:42. > :05:48.now, these are some of the problems we are trying to address. Do you
:05:49. > :05:54.worry that having seen the economy grow do you worry that's deal more
:05:55. > :06:00.than 30 million Indonesians live on a dollar a day? Live in dire
:06:01. > :06:04.poverty. The trade unions are so dissatisfied with the lot of the
:06:05. > :06:09.Indonesian worker that they have called for a national strikes. We
:06:10. > :06:15.are all very worried about this. For Indonesia, poverty is not just about
:06:16. > :06:21.having poor people. This is also related to social stability. You
:06:22. > :06:26.have seen what happened in 1997 and 1998 when the economy plunged and
:06:27. > :06:28.what happened was a social upheaval. Indonesia does not want to return to
:06:29. > :06:33.that kind of difficult history again. At the moment the government
:06:34. > :06:44.is trying massive measures to accept that, giving food stamps and giving
:06:45. > :06:48.cheaper rice, social insurance. We are going to introduce national
:06:49. > :06:55.healthcare. We are trying to introduce measures to address the
:06:56. > :07:00.poorest of the poor. He administration you advice have had
:07:01. > :07:04.to terms in office and yet still union representatives day that
:07:05. > :07:08.workers cannot afford their rent, they have to move from their homes
:07:09. > :07:17.and living under bridges and sewers. Was a quote. Union leaders, if you
:07:18. > :07:24.look at them, unions have become very empowered in the past 15 years
:07:25. > :07:31.since we have come in. And they have managed to negotiate price, salary
:07:32. > :07:34.increases over and over again. Now they are demanding much higher wages
:07:35. > :07:40.and there are some justifications or that demand. But at the same time,
:07:41. > :07:47.businesses are also facing problems. Demand`side declining. Unions also
:07:48. > :07:50.need to pay attention to whether businesses are in a position to give
:07:51. > :07:56.them the salaries they are demanding. Now the government and
:07:57. > :08:02.businesses need to work together and at the time, unions can go on
:08:03. > :08:08.strike. They have the freedom of organisation. A saying in the future
:08:09. > :08:12.that would be curtailed? No, we will continue to respect that. We will
:08:13. > :08:18.curtail any of our democratic expressions. But I would like to
:08:19. > :08:22.call on the unions to be much more sensible. Do not kill the goose that
:08:23. > :08:27.lays the golden eggs. Their response might be this `` but what you have
:08:28. > :08:31.failed to do as the government over the last decade is actually take
:08:32. > :08:38.seriously the ASIC needs of the people. We have seen the top of
:08:39. > :08:42.Indonesian society become very wealthy. There are extraordinary
:08:43. > :08:46.numbers of prosperous people inside Jakarta and the top of the economy
:08:47. > :08:52.but there are also many people who live with the reality as the World
:08:53. > :08:58.Bank says, in aqua that `` in adequate sanitation across the
:08:59. > :09:00.country which cost two to 3% of GDP every year through the impact of
:09:01. > :09:06.illness on communities. That is the problem. Indonesia has not leveraged
:09:07. > :09:15.its economic growth in the right way and the right areas for the mass of
:09:16. > :09:24.the people. That is not correct. If you have seen the decline, the real
:09:25. > :09:30.decline in poverty, there have been decreased from 40% to 23%. You would
:09:31. > :09:36.wish that the poverty alleviation could work harder and can deliver
:09:37. > :09:40.better results but the fact of the matter is the level of economic
:09:41. > :09:46.develop and that we have after the crisis has not been sufficiently
:09:47. > :09:52.high to absorb the kind of labour demands that we have. It has not
:09:53. > :09:59.really given the various demands and infrastructures. There are 240
:10:00. > :10:04.million people and there are so many challenges. We really need to
:10:05. > :10:12.balance the need for constant growth, constant high growth with
:10:13. > :10:20.equity. Clearly, we have to wonder address `` address the state of the
:10:21. > :10:22.union. You cannot have equity if corruption is endemic through the
:10:23. > :10:29.public and private sectors. Your government has failed to read the
:10:30. > :10:35.curse of corruption. The government is very serious in addressing this
:10:36. > :10:37.issue. We are very proud of the fact that our anticorruption commission
:10:38. > :10:44.is one of the most powerful agent in the country. It was the terror and
:10:45. > :10:53.fear in all government and parliament. We can talk about the
:10:54. > :10:55.numbers are up and that have been convicted of corruption in the
:10:56. > :11:00.Parliament and police and across the public sector. But that suggests
:11:01. > :11:05.that the fear is not there because people are still on the take, still
:11:06. > :11:12.taking bribes and the rest of it. The fear factor is not there. I
:11:13. > :11:22.would disagree with you. The fear is already there. 88% of Indonesians
:11:23. > :11:25.stay say that corruption is widespread in the government. I was
:11:26. > :11:34.a corruption is endemic in government. But it has only been 15
:11:35. > :11:39.years. We have 15 years of the new government but nobody actually would
:11:40. > :11:44.dare to expose any other corrupt officials. Within the past 15 years
:11:45. > :11:49.we have tried to address these issues. If people are talking about
:11:50. > :11:56.corruption, the fact that they are being arrested, new scales are being
:11:57. > :12:01.exposed, we feel that these issues are being exposed. They sure are
:12:02. > :12:07.being exposed every day. There was a huge scandal over the rest by the
:12:08. > :12:11.corruption eradication commission of the chief justice of the
:12:12. > :12:19.Constitutional commission. I was there. Here is the thing. He has
:12:20. > :12:24.been now charged with money laundering charges, he seems,
:12:25. > :12:30.according to the allegations, to have taken money from local
:12:31. > :12:36.politicians an local democratic fights. How, if these charges are
:12:37. > :12:41.now being pursued through the courts, can the Indonesian public
:12:42. > :12:46.have confidence in the next round of elections? And their ability to
:12:47. > :12:52.appeal if they see wrongdoing in the next round of elections? This
:12:53. > :12:58.Constitutional Court is a very new Court. It is supposed to be the
:12:59. > :13:03.shining light. Hopefully the government has taken a quick measure
:13:04. > :13:08.and they have introduced a new law that would improve the recruitment
:13:09. > :13:16.process. Was an oversight that of the Constitutional Court. We do not
:13:17. > :13:22.want to prejudge court decision. The fact of the matter is the decisions
:13:23. > :13:29.of the court on the local elections are binding and final. It is very
:13:30. > :13:33.very important that we need to restore probity to this report.
:13:34. > :13:35.Otherwise it will jeopardise the whole credibility of the elections
:13:36. > :13:40.and I think we are all very aware of this. Nobody in Indonesia wants to
:13:41. > :13:45.go back to the Dark Age of military rule. With the democratic process is
:13:46. > :13:48.being undermined, and people no longer trust elections, this is
:13:49. > :13:55.going to be very dangerous. We all very aware of this. An individual we
:13:56. > :13:59.are talking about now faces charges, he continues to deny those
:14:00. > :14:07.charges, but the taint which has been put upon the system in the eyes
:14:08. > :14:12.of the public is very real. And I want to know if you believe that the
:14:13. > :14:27.next round of elections in your country are going to be seen either
:14:28. > :14:30.public as credible? The people would make sure that the current people
:14:31. > :14:38.sitting in the Constitutional Court would be fully full of integrity.
:14:39. > :14:44.That would ensure that there would be that oversight of the
:14:45. > :14:49.Constitutional Court. You say, we are a bit naive, why is it that
:14:50. > :14:52.after so long in power, and so many promises about rooting out power,
:14:53. > :15:02.that he has failed so miserably? A lesson is learnt for us. Maybe we
:15:03. > :15:08.should not have allowed politicians to apply in the Constitutional
:15:09. > :15:11.Court. Maybe this is the case, and in fact, under the new regulations,
:15:12. > :15:15.you have to be out of politics for seven years before you are allowed
:15:16. > :15:21.to stand for the Constitutional Court. So a depoliticise
:15:22. > :15:32.Constitutional Court? Yes. That is what we want. Howdy you take deep
:15:33. > :15:37.religious tensions out of Indonesian society as well? One should not
:15:38. > :15:42.exaggerate. There are regions that have been torn apart, where the
:15:43. > :15:45.Christian and Muslim conflicts happened, and at that time we have
:15:46. > :15:51.two address the deep seated problems. Indonesians have always
:15:52. > :15:55.been brought up with Paul Araki, being Muslims and Christians and
:15:56. > :16:00.Hindus and was as, it has just been part of our culture. But they do
:16:01. > :16:04.flareup during the early transitional period, and most of
:16:05. > :16:09.them was related to issues that were not dealt with. Whenever there were
:16:10. > :16:13.problems, they were not addressed properly, and we found that a lot of
:16:14. > :16:17.the complex were not related to religious differences, it is not
:16:18. > :16:22.primary issues, most of them were competition for resources, shifts in
:16:23. > :16:33.power and so on. So, if we're talking the question, Muslims `` the
:16:34. > :16:37.question Muslim conflict, we can't focus on that. You have a Minister
:16:38. > :16:47.of foreign affairs who has expressed his own opinions about the Muslim
:16:48. > :16:52.community is, in some ways suggesting that they are her
:16:53. > :16:58.radical. I can assure you that that is not the position of the
:16:59. > :17:01.Indonesian government, or the position of... Why do you have a
:17:02. > :17:04.religious affairs Minister who keeps staring at these issues? That is
:17:05. > :17:09.something we have to ask the religious minister. Don't you had to
:17:10. > :17:14.ask your boss, the vice president, and his boss, the President, why
:17:15. > :17:21.they could continue to see him in his office? On a Mac the fact of the
:17:22. > :17:27.matter, at the moment, with the President's Cabinet, it is still a
:17:28. > :17:32.minority government. It is still comprising different political
:17:33. > :17:36.parties. The minister is the chair of an Islamic party, and probably
:17:37. > :17:39.represents a view of that particular party, but I'm happy to say that
:17:40. > :17:44.that he was not shared by the whole of Indonesia. No, but you won't be
:17:45. > :17:47.happy to see that the UN High Commissioner of human rights, when
:17:48. > :17:50.she visited Jakarta less than a year ago, talked about increasing levels
:17:51. > :17:55.of violence and hatred towards minorities, and the narrow extremist
:17:56. > :17:59.interpretation of Islam that was gaining ground in the country. Were
:18:00. > :18:03.all very concerned about this, because very existence of Indonesia
:18:04. > :18:09.is dependent on our poll Araki. Unity and diversity. If there is
:18:10. > :18:19.intolerance, it would break up our social harmony. The government is
:18:20. > :18:24.now, as a whole, part of the problem is now not so much the existence of
:18:25. > :18:28.the radical groups. In any society, in Britain as well, there is
:18:29. > :18:35.extremist groups. It is about rule of law. People expressing different
:18:36. > :18:55.views, that is just part of our freedom of expression. ``
:18:56. > :18:58.words like harmony, and rule of law, all of those are called into
:18:59. > :19:01.question by perhaps the biggest specific challenge of those are
:19:02. > :19:02.called into question by perhaps the biggest specific challengeable
:19:03. > :19:07.facing your government, and that is the story of west Papua, and the
:19:08. > :19:11.fact that there is a fundamental stain on the human rights record of
:19:12. > :19:21.Indonesia in Westpac were. Would you acknowledge that? Under the new
:19:22. > :19:32.order period the over in sepsis on security, and the ability to
:19:33. > :19:35.maintain that, is very real. Imposing rule on a population that
:19:36. > :19:40.is fewer than 3 million, there is still security forces in west
:19:41. > :19:45.Papua? You know very well, Indonesia has a territorial defence distant,
:19:46. > :19:49.selling it province we have tens of thousands of soldiers. That these
:19:50. > :19:52.soldiers are not defending Indonesia, they are repressing the
:19:53. > :19:57.people of west Papua. That is not true either. If there is the
:19:58. > :20:02.perception that there are soldiers in Papua but not in the other parts
:20:03. > :20:05.of Indonesia, that is not true. The military is based in each and every
:20:06. > :20:08.province. Is it not time for some truth and reconciliation here? Is it
:20:09. > :20:13.not time for you and the government to acknowledge that as the
:20:14. > :20:20.University of Sydney's report back in 2005 suggested, more than 100,000
:20:21. > :20:30.native people in west Papua have been killed in what has been decades
:20:31. > :20:38.of, in effect, occupation? That is very wrong, to say that West Papua
:20:39. > :20:42.has been occupied. It has always been part of Indonesia. It is very
:20:43. > :20:50.irresponsible usage of the word occupation. I don't think London
:20:51. > :20:58.occupies Scotland or Wales. Papua has always been an integral part of
:20:59. > :21:07.Indonesia, because Papua was part of the Dutch East Indies. Because the
:21:08. > :21:11.Dutch left, that did not change this aspect. We admit the fact that
:21:12. > :21:16.Papua, because of its geography, because of its very widespread
:21:17. > :21:20.territory and difficulties in logistics, there are pockets of
:21:21. > :21:27.areas that are not easily accessible. These have been problems
:21:28. > :21:32.of development. The past 15 years, the Indonesian government has tried
:21:33. > :21:35.very hard to reorient its policy to become much more human rights
:21:36. > :21:40.oriented, much more prosperity are entered. I just want to be clear
:21:41. > :21:42.about a couple of things. Number one, to you except that tens of
:21:43. > :21:47.thousands of people in that territory have died in the 50 years
:21:48. > :21:51.that Indonesia has exercised authority over at? No, I don't
:21:52. > :21:53.accept that. Because I have never really seen the figures being
:21:54. > :22:02.presented in Indonesia, really seen the figures being
:22:03. > :22:11.you hear men who have been required to leave, political excise, when he
:22:12. > :22:15.says, they look at us as a colony, they do whatever they like, that is
:22:16. > :22:20.why I say to the world that in 20 or 30 years time my people will have
:22:21. > :22:28.disappeared, what do you say to him? I think he should return to
:22:29. > :22:32.Indonesia and face the law that... People are imprisoned for raising a
:22:33. > :22:37.flag in Papua. Another gentleman, Philip, who is serving 50 years
:22:38. > :22:43.because he was... It Papua and are going to disappear, the population
:22:44. > :22:48.will decline, the fact remains that the Papua and population has
:22:49. > :22:52.actually gone up. There are some 4 million Papua and is now, so they
:22:53. > :22:57.are not disappearing, they are actually increasing. That is because
:22:58. > :23:00.of better health service, better education that we try to deliver. We
:23:01. > :23:05.are still lagging behind because of the difficulties in logistics,
:23:06. > :23:09.building roads, providing healthcare to the remote districts are real
:23:10. > :23:20.struggle. Since two years ago, under the vice president, Yudhoyono, we
:23:21. > :23:24.are developing west Papua. Do you think it has fundamentally harmed
:23:25. > :23:30.Indonesia's reputation? I would agree. Indonesia should try to do a
:23:31. > :23:34.better job of informing the international community what it is
:23:35. > :24:02.doing. Thank you very much for being on HARDtalk.
:24:03. > :24:08.The unsettled theme is set to continue for the rest of the week,
:24:09. > :24:11.and also into the weekend. All our weather has been coming in off the
:24:12. > :24:14.Atlantic, with streams of cloud pushing our way in across the
:24:15. > :24:19.British ours bringing outbreaks of rain. That is what we will see
:24:20. > :24:23.through the course of this morning, outbreaks of rain pushing towards
:24:24. > :24:27.Wales and the south`west of England. Ahead of it, some dry, colder
:24:28. > :24:31.weather, through the course of this morning, particularly for north`east
:24:32. > :24:36.Scotland. Frosty, with blustery showers blowing in in the morning,
:24:37. > :24:38.and that rain