Brief History

Indonesia, a Nation in Transition

Although hundreds of ethnic groups have been know as the indigenous of Indonesia for hundreds and thousands of years, Indonesia did not exist in its present form until the turn of the 20th century.

Of the so-called natives of Indonesia, archaeologists have speculated that the first people to populate Indonesia migrated from mainland China some 1,000 years ago and inhabited a stretch of islands along the equator, later known as Nusantara.

Over the centuries they built and refined their statecraft in the form of kingdoms and principalities. Sharing similar characteristics with other Southeast Asian kingdoms, these Nusantara kingdoms based their conception of state more on people than on space or territory. But intercourse with the western world changed the course of history in Nusantara.

In 1511, the Portuguese conquered Malacca, located on the Malay peninsula, which was then still an inseparable part of Nusantara. The Dutch followed in 1512 and landed on Banten shore in Java. At first, the Dutch came more as traders under the trading umbrella of the Royal East Indies Company (Vereniging Oost Indische Compagnie, VOC). For the next two centuries, the Dutch conducted business with the natives, although in many cases the trade was not on equal terms. Often, trade was accompanied by violent pacification processes.

Then the VOC went bankrupt and the Dutch government took over the business in Nusantara (called the East Indies by the Dutch). Starting from about the mid-seventh century and lasting until the arrival of the Japanese in 1942, was the "real colonization" called "high colonialism" in literature. The period was disrupted briefly when the British took over colonial rule in 1811 to 1814. Among other things that the natives learned from colonization was statecraft based on territorial conception rather than on people.

In the early 20th century, the natives of Nusantara learned that as diverse as their ethnicities were, they could imagine themselves as a unified community. A nationalism had grown in a process that Benedict Anderson, a doyen of Indonesian studies, calls an "imagined community". During the first half of 20th century Nusantara, its people built an imaginary nation called Indonesia -- the name itself was borrowed from the West. By the end of the 1930s, it was clear that the end of Dutch colonialism in Indonesia was only a matter of time.

During World War II, 1942-1945, the Japanese occupied Indonesia. Although short-lived, the occupation enabled Indonesians to arm themselves for the very first time. Shortly after Japan's defeat in WWII, Sukarno and Hatta proclaimed Indonesia an independent state, and they became the founding fathers of the new country. The largest archipelago in the world, with over 17,000 islands -- only 3,000 of which are inhabited -- has emerged into a new Indonesia.

When the Dutch returned and tried to reestablish colonial rule, armed Indonesians resisted. The Dutch were forced to recognize an independent Indonesia in 1949.

The new Indonesia adopted a federal system of governance for a short time. But for a longer period, within a five-year span (1950-1955), leaders of the new country were eager to adopt a liberal system of government. Although there is no proof that the system ruined the economy, it was clear that the elite's political stability was shaky. The longest serving prime minister was only two years in office.

The government then held a general election in 1955, the first and only democratic general election Indonesia ever had. But feeling that the country was still unstable two years after the election, president Sukarno, backed by the Army, declared the 1950 Provisional Constitution void and reintroduced the 1945 Constitution. The latter provided an ample opportunity for Sukarno, popularly known as Bung Karno (Comrade Sukarno), to balance three political powers -- the Indonesian Communist Party, the Army and himself.

In the first half of the 1960s, Bung Karno leaned toward the left. On domestic politics, he was trying hard to balance the communists and the Army; on the international stage he was establishing himself as leader of a new world, free from Cold War antagonism. But economic decline and mounting conflicts, especially between communists and noncommunists, the latter of which was backed by the Army, caused him to lose control over the situation.

Saturday, April 21, 2007

Indonesia’s Crude Price Formula Revised

TEMPO Interactive, Jakarta: The government is analyzing the formula for calculating the Indonesian Crude Price (ICP).

Energy and Mineral Resources Minister, Purnomo Yusgiantoro, emphasized that the modification will be done starting July this year. As at the moment, the price determination still uses the old formula. “We will roll it over until July 1, 2007,” said Purnomo in Jakarta yesterday (19/4).

He explained that the decision to change the formula is because it is sensitive to the matter of gas. Therefore, the government will talk about this with the buyers as the oil and gas market structure is a buyers’ market. “This means, the domination is in the buyer’s hands ,” said Purnomo.

According to Purnomo, after July 1, the Department will propose these possibilities during the forum between seller and buyer, called Managers Meeting. In the forum, there will be discussion between the sellers and buyers on the ICP formula.

The ICP Formula comprises three components: ASEAN Petroleum Price Index (APPI), Japan Rim and Platts. According to Purnomo, the question is which one of the three components is the most influential to ICP. The component which is not sensitive will be concluded. “The sensitive ones will go on. The insensitive ones don’t change the result much. The formula will be simplified,” he said.

The Indonesian government expects that the crude oil price can be maintained at the level of US$54 to US$55 per barrel. The effort to maintain the price can be through the oil supply guarantee so that in the future the oil price does not depend on the political situation.

Posted by I love Indonesia at 8:08 AM

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