sba.gif (25753 bytes)
Click here!   

  headermenu.gif (2323 bytes)


Memo from the Chairman
view.gif (3718 bytes)
Venture Capital
Mergers & Aquisitions
Corporate Finance
International Finance
Reorganization & Restructuring
Business Plan Analysis
Flow Analysis
Broker Dealer Analysis
Health Care
securities.gif (3395 bytes)
History and News

The Internet
joinbot3.gif (9803 bytes)
eye.gif (5286 bytes) Point of VIEW.

A purely analytical perception...




Continued from page 10


Indonesia’s unhappy neighbors started muttering about committing some kind of benevolent mayhem on the country unless it did something to rein the fire which by Indonesian based environment groups caused $1.3 billion in damage last year. The airport in East Kalimantan is now open only irregularly and 180 homes in the Loa Janan Iliar Village have burned down. Not only are the Indonesian people unhappy about becoming poverty stricken over night, but they now have lung disease to worry about as well, but can't do it in an open air environment because their homes are burning down.

Never a government to be caught without and answer, Indonesia has now ordered the clouds in the region seeded to bring much needed rain. This has been loudly proclaimed to the people as their salvation, but meteorologists give the project little or no chance at success. For it to work, all of the elements have to be favorable and at this time of the year, it does not seem to be in cards. At least though, those with homes in the region that are still standing give the people something to cheer about as they scurry around looking for their next meal.

Scientists have estimated that last years fires in Indonesia have produced three billion tons of carbon dioxide –considered one of the most damaging greenhouse gasses – into the atmosphere. This is equivalent to the European Union’s entire CO2 output for the year. (24) It is strange to note that little is being done to extinguish the blazes in spite of all the talk about how serious a situation it is.


Brazil showed the world how to get it right when their farmers in the Amazon set the forest ablaze to reclaim land for farming. When the fires got out of control and threatened to destroy the entire jungle, Brazil was quick to call in two Shamans. The Shaman picked a site in the Yanomami reservation and suggested a ritual aimed at repelling the smoke and potentially bringing rain. Governmental officials expressed optimism that as soon as the Shaman and their ritualistic equipment could be moved onto the site, all would be well, but of even greater importance, local bookmakers were laying a line of 8 to 5 that the shaman would extinguish the blaze in short order. Now this is the kind of thinking we believe that they need in Indonesia if they are ever going to amount to anything.


The Indonesia Government will be able to legalize their coming genocide with the indigenous "anti-subversion law" which calls for penalties of between 18 months imprisonment all the way up to the death penalty for violations. The International Commission of Jurists, extremely concerned of how the law has been handled to this point and is far from sanguine about how it will be mishandled in the future when the going really gets really rough in the near future. They have issued a report critiquing the six anti-supervision trials, which outside observers were allowed to witness during 1997. "The failure to adhere to court procedure, the improper rejection of defense evidence, judicial pressure on witnesses, the admission of hearsay evidence and the reliance on irrelevant evidence are a common occurrence in the conduct of the anti-subversion trials in Indonesia." The report went on to add that criminals faired a lot better on the law than people merely expressing free speech, "Regrettably the rights afforded to normal criminal defendants are not provided to defendants charged with subversive activities..., The anti-subversion law does not provide for the suspect to be informed of the nature of the investigation , nor is there any limit within which charges must be laid, there are not provision to notify the suspect’s family or to permit visits." All I can say about all of that is that this just appears to be the same kind of nit picking the IMF has been indulging in and you really can’t blame Suharto and his henchmen for getting into the trenches.

Eventually we believe that Indonesia is on a path that will lead to its being broken up into over twenty or so different countries that are more homogeneous than the patchwork group of islands that is now bound together. In the meantime, a new government will redistribute assets, if their are any left, and Indonesia will get another chance, this time to set a real example. There is little question that with $40 billion on the line, Suharto and his relatives will not leave Indonesia other than in a body bag without accounting for their wealth. The hue and cry has already gone up to put him under house arrest until the matter is put to rest. Suharto’s money when added to the IMF’s funding will make a nice start in getting the country going again, that is if the assets remained intact. The companies that make up this immense pool of assets are heavily dependent on either government monopolies, subsidies or contracts. If you are naive enough to believe that this "pork barrel" will continue under the circumstances that currently exist, you have another think coming. When the financial forensics finish micro-anaylising what is left they will find that the house of cards had collapsed and it may well be that the angered crowds will become even noisier when confronted with the fact that the Suharto’s wealth had become an illusion.

The riots that forced Suharto to resign took a grim toll. Over one thousand people were killed but that was just the beginning, according to the National Human Rights Commission, 40 shopping centers were destroyed as well as over 1500 shops and offices. Many of the victims were caught in burning buildings while they were being looted. The large brunt of the damage was borne by the ethnic Chinese as could have been expected and attempts at damage control were almost non-existent. Along with a near revolution in Indonesia proper, East Timor which Indonesia annexed after invading it in 1975 upon it being abandoned by Portugal, has indicated that it will have a referendum to determine its own fate. Mr. Habibie certainly is going to have his hands full. The U. S. State Department has put out an advisory stating that "The Department of State advises all American citizens to defer travel to Indonesia, including Bali ...Any Americans in Indonesia should employ caution and avoid large crowds, demonstrations and other activities that could place them inadvertently at risk." The Luther Baranung, chairman of tourism from the Island of Bali in response to this action got 11,101 people involved with tourism on the island to sign a position indicating that "Bali is safe and in good order". On the other hand the petition does not act as a bodyguard or an insurance policy and any American looking to spend some moon lit nights in this beautiful country would be well advised to heed the American Government’s warnings.

B. J. Habibie got the attention of the "Petisi 50" a group of retired generals who had been instrumental in sending Suharto out to pasture. The powerful group has called for Habibie’s resignation on the ground that he illegally seized power and that he should be replace by a transitional government. They noted that Habibie had accomplished nothing of note while in office and his plans political and economic revitalization were equally flawed. Not a particularly ringing endorsement.



Previous | Next


Home | About Us! | Search Us! | Contact Us! | Contents

Copyrighted Worldwide 1997 Chapman Spira & Carson, LLC.
45 Wall Street - Suite 1022
Tel: 212.425.6100 - Fax: 212.425.6229