Friday, January 13, 2006

The Rice Politics in Indonesia

Rice, Indonesia’s staple foods, has always been a a political tinder box at any time and the most sensitive commodity. The first president Soekarno was ousted because of skyrocketing rice price, among others. His successor, Soeharto, realized how important the rice that he spent most of his time dealing with rice. He was ousted in 1998 after in the last years in power he spent too much time to deal with family businesses.

Indonesian dependence on imported rice has been moving upwards since 1995. The total rice import grew from 3 million tons in 1995 to 7 million tons in 1998 and 5 million tons in 1999 to increase subsidies to the vulnerable group. Since 2002, Indonesia has been the world’s largest importer of rice.

But recent developments indicated the impact of imported rice to the domestic rice price and the downward pressure to paddy price at farm level. That’s why, early last year, government banned import of rice to support farm gate prices. It has been a political issue since the government reopened the import late last year.

Rice also always a good business for politicians. During Soeharto years, the state agency dealing with rice (Bulog) was the cash cow for Golkar (the dominant political party) and the military. Remember how the fourth president Abdurrahman Wahid was ousted because of Bulog case (Buloggate I)? And how Akbar Tandjung (chairman of Golkar and The House Speaker) almost live behind the bars on Buloggate II?

Ever since Bulog’s operations commenced in May 1967, it has been an important ‘incubator of state tutelage’ (as Richard Robison once put it), aiming to promote private business that would help the state and cronies of power holders.

Late last year, the cabinet was apparently split on the rice import issue and contributed to further ‘breakup’ in the relationship of president SBY and vice president Jusuf Kalla. Kalla openly supported the import, while SBY tend to quietly oppose it. Minister of agriculture Anton Supriantono (from Partai Keadilan Sejahtera, PKS) strongly rejected the import and tried to have legislators (DPR) rally behind him. Minister of trade Mari Pangestu (economist), however, argued in favor of import saying that would secure the food security and control the inflation. Fellow minister Aburizal Bakrie (that time as coordinating minister for the economy) also supported the import. Bulog Chairman, Puspoyo Wijanarko (from PDI-P), for sure, is in their side.

How about the parliament?

Most members opposed the import. Just few days ago, 103 members waged a plan to use their budget right to question the president over the issue, while 34 members plan to use their other constitutional rights.

The Jakarta Post reported that signatories of the petitions were legislators from the opposition factions, including PAN, the National Awakening Party (PKB), the Prosperous Justice Party (PKS), the United Development Party (PPP) the Prosperous Peace Party (PDS) and the Indonesia Democratic Party of Struggle (PDI-P). (I think The Post inaccurately put PKS as opposition party. In fact, PKS is one of government’s key allies)

No members of the ruling Golkar and the Democrat parties joined the movement.

Several legislators presented their proposals to the House leadership after the opening of the third session on Thursday, which was marred by frequent interruptions over the issue.

"We smell possible political and business interests in the decision on rice imports," legislator Cecep Rukmana of the National Mandate Party (PAN) said.

VP Jusuf Kalla quickly respond the petition with brand new accusation that some parties are trying to politicize the issue. But government’s respond also political. Department of Communication announced today that the imported rice would not be sold to the market. Well, I have to say this is a political move. Rice is not gold that could remain the same for a long period of time. Keeping the rice for few weeks would result in worthless rotten rice. Why we import (buy) the rice if we want to keep it for a long period of time?

Who gain the most out of the imported rice?

Government argues it is the consumers at large. But others suspects it only satisfies importers. Who are they? Some says those businessmen close to the government and Golkar Party. I do hope Bulog would disclose the names in detail.

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