HIGHLIGHTS


INDONESIA – POLITICS

Indonesia: Fragile Democracy
Presidential candidates 2004
Indonesians will head to the polls again on July 5 for the country's first direct presidential election. If no candidate gets the required 50 per cent plus one of the national vote, a second round of elections will be held in September. That round would require only a simple majority for victory.
There are five candidates in the poll: Megawati Sukarnoputri; Wiranto; Hamzah Haz, Susilo Bambang Yudhoyono; and Amien Rais.

Megawati Sukarnoputri - Democratic Party of Struggle Indonesia (PDI-P)
The staunchly nationalist Megawati Sukarnoputri rose to the presidency in July 2001, as the vice president who replaced ousted president Abdurrahman Wahid.
The daugher of independence hero Sukarno took power with a promise to bring stability to the country as it emerged from decades of authorcratic rule.
However, faced with the task of bringing about reform in the wake of the Suharto era, a struggling economy, ethnic tension and the rise of Islamic extremism, Megawati's presidency has garnered mixed reviews. She has been accused of uncommunicative leadership and insufficient action against graft and a faltering economy.
In the April 5 legislative polls, Megawati's Democratic Party of Struggle Indonesia (PDI-P) won only 109 seats, compared with 153 in 1999, and she is trailing her former security minister, Susilo Bambang Yudhoyono, as favourite for president.
Megawati has picked the leader of Indonesia's largest Muslim organisation Nahdlatul Ulama (NU), Hasyim Muzadi, as her vice-presidential candidate to broaden her appeal. However, analysts predict she faces a tough fight against both Yudhoyono and Golkar's candidate, Wiranto.

Wiranto – Golkar
Former defence minister and Indonesian military chief, Wiranto, surprised many when he was nominated as the Golkar Party's presidential candidate, ahead of the party's own chairman, Akbar Tanjung.
Wiranto, 57, has emerged from retirement to run the presidential race and has promised stability, security and strong leadership for Indonesia. Wiranto, who is renowned for his love of singing, has vowed to serve only one term as president if he wins the election.
The former general is facing an arrest warrant by an East Timor judicial body over charges - which he denies - of crimes against humanity related to violence that erupted during the territory's split from Indonesian rule in 1999.
International human rights groups have opposed the selection of Wirtanto as Golkar's candidate. However, foreign governments, including East Timor, say they will respect the democratic process in Indonesia and work with the him if he wins the presidency.
Wiranto has chosen a human rights champion, Salahuddin Wahid, as his running mate. Wahid is deputy of Indonesia's human rights commission and the brother of former president Abdurrahman Wahid.

Hamzah Haz - United Development Party (PPP)
Hamzah Haz is Chairman of Indonesia's third largest party, the Muslim-based United Development Party (PPP).
The seasoned politician has been President Megawati Sukarnoputri's deputy since she became leader in 2001, but announced his bid for president in the 2004 poll after Megawati chose another Muslim leader as her running mate.
Haz, 64, has at times been a controversial deputy president. He once described the United States as "the king of terrorists" and expressed support for radical Islamic cleric Abu Bakar Bashir before Bashir was arrested as a terrorism suspect.
He has chosen the transport minister and former army general, Agum Gumelar, as his running mate.

Susilo Bambang Yudhoyono - Democrat Party
According to recent pre-election polls, Susilo Bambang Yudhoyono, a former Indonesian military chief and chief security minister, is the favourite to win the presidential election.
Yudhoyono, 54, was security minister in President Megawati Sukarnoputri's coalition cabinet until he resigned in March 2004 amid a row with her over his presidential ambitions.
The popular former military chief, commonly known by his initials SBY, is one of the founders of the Democrat Party, established in 2002. The small party gained less than 10 per cent of votes in the April parliamentary poll, placing it fifth, but polls show it is personal popularity that will count most in the presidential race.
Yudhoyono has pledged to fight separatism and terrorism and to win back investment if he is elected president.
Yudhoyono has chosen a former Golkar social welfare minister, Jusuf Kalla, as his running mate in the presidential race.

Amien Rais - National Mandate Party (PAN)
Amien Rais was one of the few outspoken critics of harsh government rule under former president Suharto, and was a leader in the nationwide demonstrations that precipitated the standing down of Suharto in 1998.
Rais, 60, once led the second largest moderate Muslim group in the country, Muhammadiyah, which has thrown its support behind his presidential bid.
In the past five years, the former university lecturer in politics has proved his prowess at the podium as Indonesia's Consultative Assembly Speaker. He has been described as a political opportunist and wildly ambitious, and is known for swinging his ideology from religious right to centre and back.
Rais, whose National Mandate Party won less than 7 per cent in the parliamentary elections, has pledged to work safeguard democracy, restore the economy and fight corruption if he is elected president.
He has chosen Siswono Yudhohusodo, a nationalist businessman and former minister under Suharto, as his vice presidential candidate.
Write; by LuisB
Date; May 04

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HUMAN RIGHTS – ASIA

Asian governments accused of using war on terror to attack rights
Rights Group, Amnesty International, has accused Asian governments of using the US-led "war on terror" as a pretext to oppress millions of people.

In its annual report on the region's human rights, Amnesty says authorities are jailing, torturing and possibly even killing people under the guise of cracking down on terrorism.

It also says draconian laws that impinge on human rights are being drafted as part of counterterrorism legislation.

In particular Amnesty has accused China, India, Malaysia, Pakistan and Thailand of harbouring the belief that human rights can be curtailed under the "war on terror" umbrella.

It says Hong Kong could have been added to the list had authorities not reacted to a protest by half a million people against security legislation many believed would have eroded civil liberties.

North Korea
The Amnesty report says while the threat of war between the regions newly nuclearised adversaries, India and Pakistan, has eased, thanks to diplomatic efforts, North Korea's resumption of reprocessing activities is a cause for grave concern.
North Korea has also been singled out for a litany of offences, including doing little to relieve its population of the famine and starvation that has blighted it for much of the past decade.

Indonesia
Amnesty International says Indonesia resorted to increasingly repressive methods last year in its attempts to crush separatist movements in Aceh and Papua provinces.

The rights group has reported a rise in extrajudicial executions, "disappearances", arbitrary detention, torture, forced displacement and destruction of property since martial law was declared and a military operation launched in Aceh in May 2003.

It says military operations against both armed and peaceful independence activists in Papua also resulted in human rights violations, including arbitrary detention and torture.

China
The Amnesty report says China's rights record has made little progress in the past year and has worsened in areas such as the treatment of ethnic minorities.

Thailand
Thailand's war on drugs has marred its rights record in 2003.
According to Amnesty International, 2,245 people were killed in the three-month anti-narcotics campaign launched in February, which was aimed at curbing rampant methamphetamine addiction.

Burma
Despite its claims to be pursuing democratic reforms, Amnesty says Burma's ruling junta carried out serious rights abuses in 2003 including a violent attack on Aung San Suu Kyi's opposition.
It says some 1,350 political prisoners are languishing in the nation's jails, many of them prisoners of conscience.
Among them is democracy icon Aung San Suu Kyi herself, who was taken into custody along with other leaders of the National League for Democracy (NLD) after a May 30 attack on her convoy during a political tour of northern Burma.

Vietnam and Laos
Vietnam and Laos have both been accused of serious violations against freedom of expression.
The Amnesty report condemns the Hanoi and Vientiane governments for their arrests and often-lengthy imprisonment of political and religious dissidents.

Source; Amnesty International
Write; by LuisB, May 04
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ECONOMY – PAPUA NEW GUINEA

Go Asia Pacific In Focus Asia - Easy money
Get-rich-quick schemes are on the rise in Papua New Guinea, causing concern for those in charge of the nation's financial system.

Officers from the country's central bank recently seized documents from a Port Moresby hotel, targeting yet another pyramid scheme promising fantastic returns for a tiny investment.

Our PNG correspondent, Shane McLeod, reports on the latest in a string of fast money scams, which have taken thousands of people for a ride.

For years fast money schemes have plagued PNG, making promises that are simply too good to be true.
Promoters spruik fantastic returns for small investments - hundreds and thousands of per cent for just a few months' use of your money.
Sadly, they rarely deliver, something thousands of Papua New Guineans discover every year.
One woman, who preferred to remain anonymous, lost money in a scheme known as Hosava.
"One of them came and talked to me about it and he asked me if I can give him some money, just to invest it somewhere," the woman says.
"I went there and I gave him $500 and then I did fill out the forms and he told me that after three months I would get the $36,000," she says.
Of course she has never seen the money.

Fooling the public
The country's central bank, the Bank of Papua New Guinea, has wrestled with the schemes for years.
The bank recently targeted another scheme, called Papalain, which is believed to have been operating from a local hotel for months.
The bank's deputy governor, Benny Popoitai, describes the people who run these schemes as convincing liars.
"They are normally fast talking people who are able to convince the public to... place money with them, simply because they wanted a fast return," he says.
"These people, the promoters of money schemes, are liars and they fool the public into placing money with them."

Scheme promoter on the run
Papalain is just the latest.
The most notorious of recent years was U-Vistract, which promised fabulous wealth to the many thousands who invested in it.
Some of the contributors, usually high profile Papua New Guineans, received their payouts. But most didn't, and were still waiting for their money when the central bank stepped in and closed down the scheme.
U-Vistract's promoter, Noah Musingku, is still on the run, facing arrest warrants in PNG and Solomon Islands.
He's now said to be in Bougainville, in the company of reclusive secessionist Francis Ona, and reportedly making more claims about big payouts.
The governor of Bougainville, John Morris, told our reporter, Caroline Tiriman, that Mr Musingku is misleading a lot of people on the island.
"I guess it is convenient for him to hide in the mountains of Panguna and continue to mislead those who are gullible," Mr Morris says.
"It's taking the focus away from the real issues that the people of Bougainville should be involved in, for example finalising the constitution, working on reconstruction and rehabilitation of life on the ground," he says.

Anger against bank staff
Mr Popoitai from the Bank of PNG says his officers will continue to pursue the schemes, but concedes not everyone's happy when the schemes are closed down.
"We don't get any more popular. The bank, the staff, and every one of us who do that, we don't get popular at all," Mr Popoitai says.
"It's not a comfortable thing to do, to go out and tell the public that you just lost your money. So yes, we do not get any popularity out of this exercise. It's not something that we want to do, but we have to do it," he says.
But in an environment where economic challenge is a daily reality, most expect the promise of a quick and fantastic return will continue to attract many.
Source; ABC, May 04

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FOCUS


GEOPOLITICA – TIMOR-LESTE VS AUSTRALIA

Rich Man, Poor Man

Introduction
Tension is rising between East Timor and Australia over the multi-billion dollar oil and gas fields that lie beneath the ocean between them. Australia wants East Timor to honour an agreement signed last year covering the disputed Greater Sunrise field, which would give Australia claim to more than 80 per cent of the gas field. However, East Timor has so far refused. It claims the border should be drawn in the middle of the sea separating the countries, which would place 90 per cent of the oil and gas reserves on East Timor's side.
The argument has heated up in recent weeks, with Dili accusing Australia of stealing its resources and threatening its very future, and Australia vowing to stand by its rights.

The reportage
Four Corners investigates the increasingly rancorous fight between Australia and East Timor over the multi-billion dollar oil and gas bonanza that lies beneath the waters dividing them.

JONATHAN HOLMES, REPORTER: Three weeks ago, the Prime Minister of the Democratic Republic of Timor-Leste, Dr Mari Alkatiri, swept into the lobby of Dili's best hotel. He'd come to open negotiations to establish a permanent maritime border between his nation, the smallest and poorest in the region, and his richest and most powerful neighbour.

East Timor wants the matter settled within three years. Australia has said it might take 20. It's a David and Goliath contest, and Mari Alkatiri had brought a sling full of verbal stones to hurl at his opponents.

DR MARI ALKATARI, PRIME MINISTER OF TIMOR-LESTE (ADDRESSING CONFERENCE): For us, a 20-year negotiation is not an option. Timor-Leste loses $1 million a day due to Australia's unlawful exploitation of resources in the disputed area. Timor-Leste cannot be deprived of its rights or territory because of a crime.

JONATHAN HOLMES: To open negotiations by publicly accusing your opponents of profiteering from a crime is, by diplomatic standards, like chucking a grenade. The Australian team returned fire with the curtest handshakes in their armoury. Back in Australia, their boss would be even less amused.

ALEXANDER DOWNER, FOREIGN MINISTER: I think they've made a very big mistake thinking that the best way to handle this negotiation is trying to shame Australia, is mounting abuse on our country, um...accusing us of being bullying and rich and so on, when you consider all we've done for East Timor.

JONATHAN HOLMES: But Mari Alkatiri is unapologetic. He claims his country is being cheated, and he's going to go on saying so - to his own people, to Australia, and to the world.

DR MARI ALKATARI: I'm here to defend the interests of my people. Of course, there are many ways to do it, but I think that, uh, for a small country, a poor country to be listened to, uh...we need to voice loudly our voice, and that's what I'm trying to do.

JONATHAN HOLMES: Meanwhile, the Australian Embassy has been besieged by angry demonstrators.

PROTESTER (TRANSLATION): We know we have profitable resources, but we know that you are exploiting our oil and stealing it.

JONATHAN HOLMES: Four years ago, these people hailed Australia as their protector. Now they say that they'll be forced to play the beggar unless Australia stops behaving like a thief.

Just over an hour's flight to the south, the gleaming little city of Darwin dreams of future greatness. Across the harbour, in what was pristine wilderness just a few months ago, they're building a plant to liquefy natural gas for export to Japan.

CLARE MARTIN, NORTHERN TERRITORY CHIEF MINISTER: Four out of nine levels of the LNG tank has been constructed, and, uh, it really...in many ways it could double up a sports stadium. I don't know how it compares with Colonial, but it's big.

JONATHAN HOLMES: The gas will arrive through a seabed pipeline from a giant gas field deep beneath the Timor Sea, 500km north-west of Darwin. The Bayu-Undan field lies substantially closer to East Timor than it does to Australia. But just south of Timor lies the Timor Trough, 3km deep in places. Far easier, the oilmen claim, to run the pipeline across shallow seas to Darwin and its First World infrastructure. And far better for Australia too.

BRUCE FADELLI, PRESIDENT, NT CHAMBER OF COMMERCE: So far there's been a large influx in construction into the Northern Territory. That's about to gear up even further in June with the start of the laying of the pipeline, so it's been a welcome boost to the construction industry.

JONATHAN HOLMES: But the potential bonanza for Darwin lies in a vast, still undeveloped gas field called Greater Sunrise - three times the size of Bayu-Undan, and located still closer to East Timor. Territorians are fervently hoping that that gas will be piped to Darwin too.

BRUCE FADELLI: It's got the potential to create 80,000 jobs Australia wide - 20,000 in the Northern Territory - and the tax revenue benefit from all that investment is in the order of $22 billion over the 20-year life of the project.

JONATHAN HOLMES: The Timor Sea could transform Darwin into an industrial centre, and the Territory into a State. The town of Suai, just across the Timor Sea from Darwin, has no such grand ambitions. This is a different world.

On the whole length of East Timor's south coast, there is not one natural harbour. The fishermen of Suai have to use canoes that are light enough to come in with the surf. These are treacherous waters. The fishermen never travel far from the beach. Their catch is correspondingly modest. Their incomes are tiny, their horizons limited.

You have no thoughts about the oil and the gas out there in the sea there, about who it belongs to?

FISHERMAN (TRANSLATION): I'm sorry, we don't know these things. We don't know who it belongs to. But you can talk to us about fishing.

JONATHAN HOLMES: The women of Suai Loro take a still more modest share of the riches of the Timor Sea. Every morning they walk a kilometre from the village to collect water from the sea. And then, laboriously, they carry it back. Even the fresh water is brackish here. It's hard to eke a living from the salt-laden soil. So the women make their living from salt instead. If you earn a dollar a day in East Timor, you're comparatively rich. These women make much less.

It's taken hours to gather enough firewood for the job. It will take hours more for the water to boil away, leaving a detritus of sea salt. Early next morning in Suai market up on the hill the salt can be sold, or more likely bartered for a handful of rice or a parcel of greens.

KERYN CLARK, OXFAM COMMUNITY AID ABROAD: East Timor is one of the poorest countries in the world. It ranks as the poorest in Asia. Very high levels of maternal mortality, a high level of infant mortality, really poor nutritional practices, very poor food security. So, I think in terms of where I've worked, with often being in-conflict countries, I think really it does compare, unfortunately, with those countries such as Angola, Mozambique.

JONATHAN HOLMES: East Timor, of course, is not in conflict now. But for 24 years it was - until the final paroxysm in September 1999.
This is how the marketplace of Suai looked after the militia and the Indonesian military had finished with it. By the time the INTERFET peacekeepers from Australia and New Zealand arrived in Suai, the culprits had fled into West Timor. The young men who'd been hiding in the hills filtered back into the town to greet their new protectors. Then they went to the ruins of the church, where their wives, their children and their old people had sought the protection of the priests.

Eyewitnesses say the militia used machetes to hack down the priests. The military tossed hand grenades into the church and used machine guns on those who ran out. The fleeing militia trucked corpses and survivors alike over the border to West Timor. Not all have returned. So no-one really knows how many were killed in Suai, but certainly hundreds.

The church has been repaired, the trauma has not and nor has much of the devastation.

KERYN CLARK: Many buildings haven't been rebuilt. There was also massive destruction of people's own assets, so their, um...for example, if they had ploughs or tools that they were working the land with, they've...they've gone. They lost a lot of their animals. They just really lost everything.

JONATHAN HOLMES: But at least East Timor did gain the independence it had fought for so stubbornly for 24 years. With the flags and fireworks two years ago came heartfelt thanks to its neighbour across the Timor Sea.

JOSE RAMOS-HORTA (ARCHIVAL FOOTAGE): John Howard, you are a friend of East Timor. Your support to our small nation is invaluable and we are delighted to welcome you among us tonight.

JOHN HOWARD (ARCHIVAL FOOTAGE): This is a very proud day for Australia but, more importantly, I know it is a very proud day for all of the people of East Timor. You deserve every moment of that warmth and pride.

ANGRY PROTESTER (TRANSLATION): We'll scream with all our strength, together as East Timorese. We will never be slaves again. Never again, never again! Long live the people of East Timor!

JONATHAN HOLMES: But now, in many Timorese eyes, Australia has been transformed from saviour to ogre. The argument is ultimately about oil and gas and money. But it's rooted in history and geography and the law of the sea. The Timorese believe it's crucial to their fledgling nation.

XANANA GUSMAO, PRESIDENT OF TIMOR-LESTE (TRANSLATION): It is a question of life or death, a question of being continually poor, continually begging, or to be self-sufficient.

JONATHAN HOLMES: To find the origins of the dispute, we must go back more than 30 years to when the Portuguese still ruled in Dili. Coup leader, General Suharto, was still consolidating his power in Jakarta. And Australia had become aware that beneath the seabed to its north might lie enormous wealth in oil and gas. In the late '60s, Australia and Indonesia began negotiating a permanent seabed boundary.

PROFESSOR GILLIAN TRIGGS, INTERNATIONAL LAW, MELBOURNE UNIVERSITY: The legal background at that time was that the World Court in the North Sea continental shelf cases had just determined that the continental shelf is the natural prolongation of the land territory and that a state has sovereign rights in relation to the continental shelf.

JONATHAN HOLMES: If sea levels were 200 metres lower than they are, the continent of Australia would stretch far to the north. Only the narrow width of the Timor Trough would separate Australia from Timor Island. Australia argued that the Trough marked the edge of its continental shelf and the Indonesians essentially agreed.

DR HASJIM DJALAL, FORMER INDONESIAN AMBASSADOR FOR MARITIME AFFAIRS: But that was the law then, you know. That was the existing Indonesian legislation and that was also, uh, the normal international legislation at that moment, so considering that one, I think it's somewhat fair at that time.

JONATHAN HOLMES: In 1972, the two neighbours agreed on a seabed border that followed the southern edge of the Timor Trough, much closer to Timor than to Australia. Opposite Portuguese East Timor, they left what came to be known as the Timor Gap. The Portuguese declined to negotiate with Australia to close the Gap. The law of the sea, they believed, would soon change in their favour.

But by 1974, after a coup in Lisbon, the Portuguese hold on East Timor was faltering. President Suharto's generals were advising him to annexe East Timor, by force, if necessary. Australia was trying to decide its own policy.

In August 1975, Richard Woolcott, Australia's ambassador in Jakarta, sent a secret cable to the Whitlam Government, which contained a now notorious paragraph. Australia, he remarked, had an interest in acquiring as much seabed as possible.

AMBASSADOR RICHARD WOOLCOTT, CABLEGRAM TO CANBERRA, JAKARTA, 17 AUGUST 1975: This could be much more readily negotiated with Indonesia by closing the present gap than with Portugal or independent East Timor. I know I am recommending a pragmatic rather than a principled stand, but that is what national interest and foreign policy is all about.

CHARLES SCHEINER, INSTITUTE FOR RECONSTRUCTION MONITORING ANALYSIS: And that was Australian policy from that day until 24 years later - at tremendous cost of human life in East Timor.

ALEXANDER DOWNER, FOREIGN MINISTER: You can ask Whitlam and Fraser, but I think that is a complete myth. Um, that is, uh, selectively quoting one document. If that were true, then that would be a theme that ran through many documents and many public statements at the time. I don't think that that was something, which would have been significantly in their contemplation. I'd be certain of that.

CHARLES SCHEINER (ADDRESSING PROTEST RALLY): The Government of Australia should be ashamed of what they've done.

JONATHAN HOLMES: But if you want proof that oil was the key to Australia's policy, say East Timor's supporters, look no further than the Timor Gap Treaty of 1989.

CHARLES SCHEINER (ADDRESSING PROTEST RALLY): And that treaty was illegal and the whole world knew it was illegal, but Australia and Indonesia wanted to take advantage of the dying and the killing and the suffering and the struggling that was going on East Timor.

ONATHAN HOLMES: The treaty was famously signed by Gareth Evans and Ali Alatas in a plane circling above the Timor Sea. It hadn't proved easy, in the end, to close the Timor Gap. The Indonesians had changed their tune, now arguing that the Timor Trough was a geological irrelevance. For years, neither side would give way.

DR HASJIM DJALAL, FORMER INDONESIAN AMBASSADOR FOR MARITIME AFFAIRS: But in the end we come to the realisation, despite our disagreement in settling this geological quarrel and dispute, we need to do something, and one way of doing it which is justified under international law is to develop a joint development.

JONATHAN HOLMES: The treaty closed the Timor Gap not by drawing a line, but by carving out a joint development zone. Royalties from oil and gas found within it would be split 50/50. The northern border of the zone followed the edge of the Timor Trough. Its southern border marked the halfway point between Australia and East Timor, the so-called 'Median Line'.

ALEXANDER DOWNER: The Australian Government at that time did strike a compromise with the Indonesians, uh, and the Indonesians with Australia, in creating a joint development area and that was a pretty sensible sort of a compromise.

JONATHAN HOLMES: But to Fretilin's fighters in the mountains and its leaders in exile, the treaty was simply a sell-out. The UN had never recognised Indonesia as the lawful ruler of East Timor, but now Australia clearly did.

DR MARI ALKATARI, PRIME MINISTER OF TIMOR-LESTE: We immediately understood why, uh, at that time, Australia decided to recognise the illegal occupation and they...their reasons are the resources in the Timor Sea.

JONATHAN HOLMES: The treaty gave the green light to serious exploration in the Timor Sea. Quite quickly, the oil companies struck viable deposits. The Corallina and Laminaria fields began production in 1999. Fortunately for Australia, both fields lay just south of its border with Indonesia and just west of the new joint development zone. So the royalties flowed entirely to Australia.

That same year, the East Timorese finally got to decide their own future. Chaos and brutality followed. Australia's leadership of the UN intervention force cost the Australian taxpayer a pretty penny. But the Treasury was already recouping at least some of those costs from the royalties from the Laminaria field, which lay much closer to East Timor than to Australia. Even as its soldiers were winning the gratitude of East Timor by securing its land borders, Australia was pushing hard for the continuation of the Timor Gap Treaty in the Timor Sea. But it found itself then, as it finds itself now, up against a feisty opponent.

PETER GALBRAITH, FORMER UNTAET NEGOTIATOR: It was the desire of the East Timorese and of the United Nations to negotiate about borders and we made that clear.

PETER GALBRAITH (ARCHIVAL FOOTAGE): East Timor is the legal owner of this territory.

JONATHAN HOLMES: Four years ago, Peter Galbraith, at the time an American diplomat, was UN boss Sergio de Mello's choice as the man to take on Australia.

PETER GALBRAITH: He smelt a rat in the Timor Gap Treaty. He thought that the 50/50 split was something that Indonesia had agreed to because it had gotten something in return - namely recognition of the annexation of East Timor - but that under international law, that wouldn't be the right deal for East Timor.

JONATHAN HOLMES: Right from the start, claims Galbraith, he made it clear that East Timor claimed total sovereignty over an area much bigger than the joint development zone.

PETER GALBRAITH: It would be wider to the east and to the west, and it would extend down to the midpoint between the two countries. We showed them maps in October 2000 here in Dili at the start of the first formal round of negotiations on the Timor Sea Treaty. We showed them maps as to what we thought was the correct line and we tried hard to get that line.

JONATHAN HOLMES: But Australian negotiators adamantly refused to discuss permanent borders or anything outside the zone, until there was a sovereign East Timorese government to talk to.

PETER GALBRAITH: And so we had no choice. We had to negotiate about arrangements for this area, which is only part of Timor-Leste's maritime space, to see what kind of deal we could get relating to petroleum in that area alone.

JONATHAN HOLMES: On the face of it, they got a pretty good deal. In July 2001, Mari Alkatiri, representing East Timor's unelected leadership, and Peter Galbraith, for the UN, signed a provisional agreement with Australia, which would later form the basis of a new Timor Sea Treaty. Instead of 50%, East Timor would get 90% of tax revenues from oil and gas in the joint development area. The Australians now claim it was a generous concession, which recognised the gross disparity of wealth between the two sides without entirely surrendering Australia's legal position.

ALEXANDER DOWNER, FOREIGN MINISTER: We obviously had a robust negotiation, but in the end we decided that we'd give them 90% of the government revenue on the basis of generosity. I think when a country is generous to another country, to turn around then and accuse them of bad faith is probably not a brilliant negotiating tactic.

JONATHAN HOLMES: The East Timorese, even then, saw it differently.

XANANA GUSMAO, PRESIDENT OF TIMOR-LESTE (TRANSLATION): We can't understand Mr Downer, Mr John Howard saying they are being generous to us, we can't. According to international experts and international law, if the maritime border is the median line between the two coastlines, we are the one being generous with Australia. We are giving 10% of what belongs to us to Australia.

JONATHAN HOLMES: Peter Galbraith, now a private consultant, has been brought back to Dili by Mari Alkatiri, to lead the East Timorese team in its border negotiations. But he's been making the same argument all along, based on the UN Convention on the Law of the Sea, which, since 1982, his team maintains, has changed the law entirely.

PETER GALBRAITH (ADDRESSING MEETING): Nuno will outline the legal case.

DR NUNO ANTUNES, MARITIME LAW ADVISER, TIMOR-LESTE: Equidistance or very slight variations of equidistance - over 60 cases.

If two states lie less than 400 nautical miles apart, they claim, as Australia and East Timor do, the border should be drawn halfway between them, regardless of the shape of the seabed.

PETER GALBRAITH (ADDRESSING MEETING): How many cases support their argument?

DR NUNO ANTUNES: I only know of one, which is the Australian case.

PETER GALBRAITH: In fact the court, in a number of cases, including one between Libya and Malta, explicitly said that where states are less than 400 nautical miles apart, the underlying features are of no relevance whatsoever.

JONATHAN HOLMES: When Australia assigned 90% of the royalties to East Timor back in 2001, says Peter Galbraith, it was because it knew its legal case was fatally weak.

PETER GALBRAITH: They know full well that under international law a court would put the boundary at the median point between the two countries and that would mean that 100% of the resource in the area that was the subject of the Timor Sea Treaty would come to East Timor.

ALEXANDER DOWNER: Well, he would. I mean, he is the negotiator for East Timor. And, I mean, you couldn't call Mr Galbraith an objective analyst or observer in this case.

PROFESSOR GILLIAN TRIGGS: I think Australia has a credible case to put.

JONATHAN HOLMES: Professor Gillian Triggs, who's been a commercial consultant to Timor Sea oil companies and advised regional governments on maritime law, believes Australia's claims still have validity.

PROFESSOR GILLIAN TRIGGS: But I think it also has to be understood that the 1982 convention still privileges those states that have a continental shelf. In other words, if you actually have a shelf, then you're entitled to the full extent of that shelf.

JONATHAN HOLMES: But the Timor Sea Agreement had its advantages for everyone. Crucially, it gave ConocoPhillips and their partners the security to pour billions into the big new gas field at Bayu-Undan, which lies entirely within the joint development area. The LNG plant and the pipeline to Darwin went ahead, bringing jobs and investment in their wake. By 2007, East Timor should be receiving tens of millions of dollars a year in royalties from Bayu-Undan.

But even back in 2001, there were plenty who believed that the secretive negotiations had sold East Timor short. Outsiders were beginning to realise what the negotiators had known all along - that East Timor might well be entitled to total sovereignty, not just over the joint development area, but over tracts of the Timor Sea at either side. The argument is that the lines which define the eastern and western edges of the joint development area are not where they should be. They closely follow lines of equidistance between East Timor and Indonesia. In other words, every point on those lines is an equal distance from the nearest point of land on either side.

But according to Dr Nuno Antunes, a respected maritime law expert who's on East Timor's negotiating team, equidistant lines in this case don't produce a fair result - and international law demands fairness.

DR NUNO ANTUNES: For example, this line here, which is the line to the west of the JPDA, is completely influenced by one single point here, which is on the Indonesian coast, and why? Because if you...if you notice, this point is very close to the boundary and is very prominent, and it has an undue impact that international lawyers identified as, uh, a special circumstance, and that special circumstance should be object of relief - i.e., in a way that would turn the boundary to this side.

JONATHAN HOLMES: Similar though different arguments apply to the eastern border of the joint development area, says Dr Antunes.

DR NUNO ANTUNES: And that would be my opinion why these lines have to be opened to accommodate to a further extent the rights of Timor-Leste.

PROFESSOR GILLIAN TRIGGS, INTERNATIONAL LAW, MELBOURNE UNIVERSITY: On the, um, authorities that I've read, that part of the coastline to the western side of East Timor is a relatively smooth coastline and is one from which an equidistant line can properly be drawn, but there is always another view, and indeed, if so, then that should be discussed and negotiated.

JONATHAN HOLMES: Even a small adjustment to the lateral lines could make a dramatic difference to East Timor. If a maritime boundary were agreed only slightly to the west, East Timor would gain all the royalties from the Laminaria oilfields - perhaps another $300 million a year for the next few years. Far more lucrative is the massive Greater Sunrise field to the east. Based on the current line, 20% of the field lies inside the development area, and 80% under the Australian seabed. The Timor Sea Treaty agrees to divide the royalties accordingly. But shift the line just a few kilometres eastward, and those proportions might be reversed - putting billions of extra dollars East Timor's way over the next 30 years.

JOSE TEIXEIRA, SECRETARY OF STATE FOR INVESTMENT, TIMOR-LESTE: We don't take the view that these resources belong to us in this generation. These resources belong to future generations of Timorese. We are committed to sustainable development of this country. We are committed to a permanent petroleum fund that will utilise these resources in a sustainable manner, not just for us, but for our children, our grandchildren, our grandchildren's children. That's what it's all about.

JONATHAN HOLMES: East Timor's total budget today - for education, for health care, for infrastructure, for security - is around $100 million - that's a good bit less than the Australian Sports Commission's. But even that much money is hard to find. From people as poor as this, there's precious little tax to be raised. International donors' funds are already drying up. The revenue from Bayu-Undan will enable East Timor to subsist for the next 20 years. But $8 or $10 billion extra, wisely used, could theoretically provide financial security and real development for the long term.

XANANA GUSMAO, PRESIDENT OF TIMOR-LESTE (TRANSLATION): We know we can develop this land, give our people a better life, and we feel that this opportunity is being taken away from us. And on top of that, it's something that belongs to us.

ALEXANDER DOWNER, FOREIGN MINISTER: If there is an issue of economic disparity between Australia and East Timor, that should be addressed through aid programs, which it is, um...and other mechanisms. That should not be addressed through shifting boundaries and changing international law.

JONATHAN HOLMES: That professed regard for international law rings somewhat hollow in some ears, because in March 2002, just weeks before East Timor gained its independence, Australia announced it would no longer accept the jurisdiction of the International Court of Justice on matters relating to its maritime borders.

CHARLES SCHEINER, INSTITUTE FOR RECONSTRUCTION MONITORING ANALYSIS: Australia claims to be a democratic country. It claims to be a law-abiding member of the world community. Uh, they've...Australia has withdrawn from the courts. Can I commit a crime, then withdraw from the court and say, "No, the court had no jurisdiction"? My neighbours wouldn't be very happy about that.

ALEXANDER DOWNER: We have said that we would rather negotiate all of our arrangements with other countries, not just with East Timor, but with Indonesia. And remember, we have to think about our other relationships when we think about this relationship. We will determine all of those on a bilateral basis. Not having courts and arbiters and, you know, people over there in the Hague deciding on our relationship.

PETER GALBRAITH, LEAD NEGOTIATOR, TIMOR-LESTE: Australia's decision to withdraw from the International Court of Justice reduced East Timor's opportunities to get a fair maritime boundary in accordance with international law. There's no question about it.

JONATHAN HOLMES: The eve of Independence, in May 2002. Behind the scenes, the new nation's leaders are under huge pressure. The oil companies and the international donors, as well as Australia, were insistent that their first action must be to sign and then ratify the Timor Sea Treaty.

A chorus of voices at home and abroad had been urging the new Prime Minister not to trust Australia, not to sign, to hold out. But he ignored them. A rival oil company has even filed suit in the USA recently, alleging that ConocoPhillips, the operator of Bayu-Undan, paid millions of dollars to Mari Alkatiri for his signature.

DR MARI ALKATARI: I never received any single coin from anybody.

PETER GALBRAITH: Those kinds of allegations are, um...crap.

JONATHAN HOLMES: Alkatiri says his country desperately needed the money from Bayu-Undan and he believed the Treaty would give him the leverage to pressure Australia into negotiating new permanent borders. When Alexander Downer next came to Dili a year later, it looked as though Alkatiri had succeeded.

DR MARI ALKATARI (ADDRESSING PRESS CONFERENCE): It's formally recognised already that there are overlapping claims in the zone. That's why we're going to initiate a new process of negotiation on maritime boundaries. We will do it.

ALEXANDER DOWNER (ADDRESSING PRESS CONFERENCE): We have lively negotiations, Australia and East Timor, because we're lively and interesting and entertaining people. So, um...we'll look forward to that. (Laughs)

JONATHAN HOLMES: But Australia's been in no hurry. Two years after independence, the first substantive negotiating session's just been held. At Australia's insistence, six months will pass before the next one. In East Timor, they plant and harvest a rice crop in less time than that. From the paddy fields of Suai to the government in Dili, a sense of impatience and even betrayal has been growing.

MARIA AMARAL (TRANSLATION): That's why I'm asking the Australian Government to resolve the oil issue quickly - so that our young ones will be able to work and look after their younger siblings and we will be able to send our children overseas to study.

JOSE TEIXEIRA, SECRETARY OF STATE FOR INVESTMENT, TIMOR-LESTE: It's become quite clearly evident, particularly in the latter part of last year, that in fact what was always intended to be an interim provisional treaty was in fact going to be used to extract a permanent benefit.

JONATHAN HOLMES: East Timor claims Australia is in flagrant breach of international law by continuing to take the revenue from the oilfields of Laminaria. They're in an area, they say, which even Australia has recognised is in dispute. Yet in a few years, there'll be no oil left.

PETER GALBRAITH: I don't expect the Australians to come to some quick conclusion. I don't expect them to change their position, but I think they should be in the same position as East Timor - that is, nobody gets the resource until we can agree who gets the resource, and that's exactly what has been required under international law.

JONATHAN HOLMES: Even Professor Triggs acknowledges that there's a case for putting the royalties from Laminaria into a trust account until the matter's resolved.

PROFESSOR GILLIAN TRIGGS: It's not for me to tell the Government what to do, but I think that if there is any credibility to the East Timorese argument on shifting that line further to the west, and if that were to be determined on any objective assessment of the law and of the geographical features that you mention, then there's a very good argument for putting the funds in escrow for a period.

JONATHAN HOLMES: But the Government doesn't appear to accept that East Timor's claims have sufficient credibility to justify any such action.

ALEXANDER DOWNER: Well, our response is that we're there in the Australian area, in the Australian maritime area, and that we will treat them - those areas - as such. I do make this point. I don't think that the tactic of strident rhetoric and denunciation of Australia - accusations of greed and ill faith and so on - I don't think that tactic in the end, which is a big surprise to us after all we've done for East Timor, I don't think that is going to prove to be very successful.

JONATHAN HOLMES: It's true that East Timor has been blatantly playing to the gallery. It claims it has no other choice.

DR MARI ALKATARI (ADDRESSING CONFERENCE): In addition to blocking a judicial resolution of our maritime dispute, Australia is unilaterally taking the resources from the disputed area.

RADIO ANNOUNCER (TRANSLATION): Australia should respect the people and help us for the future. It shouldn't exploit a small, poor country. We are poor because our resources are in the sea. We are not able to exploit them.

JONATHAN HOLMES: But Mari Alkatiri does have one more card, and he's played that too. Investment in the all-important Greater Sunrise field can't go ahead until the East Timorese Parliament ratifies yet another complex treaty governing how it's to be taxed and the revenue divided. Dr Alkatiri's government signed the so-called Unitisation Agreement last year. But in the current sour climate, he claims, even his own party, Fretilin, would vote against ratification.

ALEXANDER DOWNER: I think their idea here is that they think that they'll get more concessions out of us by delaying ratification of the Unitisation Agreement and, um...

JONATHAN HOLMES: Will they?

ALEXANDER DOWNER: I think, um... I think not, no. We've reached agreement on unitisation. The best strategy for them is to build good will.

JONATHAN HOLMES: But Sunrise can't go ahead, can it, unless that's ratified?

ALEXANDER DOWNER: It won't go ahead, no.

JONATHAN HOLMES: When the border negotiations finally began three weeks ago - months later than East Timor would have liked - the diplomatic niceties were observed. But only just. The talks themselves, from East Timor's point of view, were little short of a disaster.

PETER GALBRAITH, LEAD NEGOTIATOR, TIMOR-LESTE: I don't think these negotiations are going any place at all because the Australian side has refused to talk about the key issue, which is - where are the lateral lines? And why is that the key issue? Because that's where the money is. The location of those lines means the difference between $4 billion for East Timor and $12 billion for East Timor. The Australian position is that that is not on the table. That's not a matter that's subject to negotiation.

ALEXANDER DOWNER: We will talk about anything, but we have our own claims, remember? I mean, I know they have their claims. I know they have their claims and I know they have their arguments, and I've seen in the media the fairly strident things that they've had to say, including denouncing my country. I've seen all that and I know all that. But, remember, we have our claims. And we want to stick with our international legal principles, principles that have served us in relation to negotiations with Indonesia, with Papua New Guinea, with New Zealand.

JONATHAN HOLMES: It's Indonesia, as always, that really matters to Australia. The next government in Jakarta may be still harder to deal with than the current one. Australia is determined that East Timor's border claims should not provide another source of friction with its biggest neighbour or, worse still, call into question its longest maritime border.

ALEXANDER DOWNER: Some of the claims they're making in relation to the lateral boundaries will make those lateral boundaries closer to Indonesia than to East Timor. Well, that, of course, isn't a proposition...that isn't a legal proposition that is going to stack up. And that's going to get them into a lot of difficulties with Indonesia.

JONATHAN HOLMES: Indonesia will argue that its seabed boundaries with East Timor should follow the lines of equidistance. Any concession by Australia on lateral boundaries would involve concessions by the Indonesians too. They're unlikely to be cooperative.

DR HASJIM DJALAL, FORMER INDONESIAN AMBASSADOR FOR MARITIME AFFAIRS: I cannot see the reason on what basis that line north-south on this side should be changed. I don't find any justification, and I think East Timor would have difficulty in arguing it.

PETER GALBRAITH: That is a matter to be negotiated both with Indonesia and with Australia, and, of course, East Timor wants to negotiate with both countries. But there's real urgency to the negotiations with Australia and there is no urgency with negotiations with Indonesia. Why is there urgency to the negotiations with Australia? Because, as we speak, Australia is pumping petroleum out of the area that is under dispute, the Government is getting $1 million a day, and so that already, since 1999, $1.5 billion is gone. Every day that we delay is $1 million less for this country.

DR MARI ALKATARI: I think that it is time for the Australian Government to listen to its own people. The people is voicing loudly on this issue and it's better to listen to their own people.

JONATHAN HOLMES: The Timorese seem to believe that the Australian public will be as sympathetic to their cause this time around as it was four years ago. But their loyal supporters in Australia are finding the going tough.

MAN (ADDRESSING RALLY): Today is the formation of the Timor Sea Justice Coalition in Darwin, and this is our first action. Ironically, the enemy has changed from being Indonesia to Australia...

JONATHAN HOLMES: Massacres are one thing, maritime borders quite another. So far, the issue has hardly set Australia alight. The Howard Government seems confident that most Australians will applaud it for hanging tough.

ALEXANDER DOWNER: We will do what we believe to be right, but, of course, in our interests, we are on Australia's side. I'm the Australian Foreign Minister. The obligation on me is to negotiate for the 20 million people in Australia.

PETER GALBRAITH: All we ask is that Australia stop taking the resource until we have an agreement, or that Australia negotiate seriously and rapidly about all the issues, including the lateral boundaries, or that Australia agree to an impartial decision by an international court of Australia's choosing. Any one of those three.

JONATHAN HOLMES: A rapid resolution seems unlikely. There have been harsh words and bitter feelings on both sides. There's no mood at present for pragmatic compromise. It's undeniable that the relationship has soured. Most Australians still feel proud of what their nation did to help its tiny neighbour. But for an Australian in East Timor these days, gratitude is hard to find.
Source; ABC, ABN: 52 429 278 345
Date; May 04

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RESEARCH – HEALTH SECTOR – CHINA

China exports Aids drug ingredients
It is a major exporter after only two years and is poised to drive down world prices
China, which began making Aids medicine less than two years ago, has become a major exporter of cheap raw material for Aids drugs and is gearing up to export finished drugs to Third World countries.

The move could see the country driving down the worldwide price for the medicine. But international experts caution that quality must be assured.
In response to a mushrooming HIV/Aids epidemic that has seen many poor farmers affected, the Chinese government in December 2002 gave approval to several domestic pharmaceutical firms to make generic versions of Western drugs whose patents had run out, to try to lower the cost of treatment.

So far, four Chinese companies are producing the anti-Aids medicine.
Shanghai-based Desano Biopharma Corp is exporting seven kinds of raw materials to India, Thailand and Brazil, the Xinhua news agency said.

According to Desano, its partner in South Africa reduced the annual medicine fee for an Aids patient from more than US$10,000 (S$17,000) to US$3,000 after using its materials.
However, international experts said China's Aids drugs have not passed standards set by the World Health Organisation (WHO).

'Lots of efforts are needed for the improvement of quality,' said Mr Zhao Pengfei, the WHO's HIV/Aids coordinator in China.

Currently, some 7,000 Aids patients in China are taking the Chinese anti-retroviral cocktail treatment under a pilot programme, but health officials have said about 20 per cent of them stopped due to severe side effects.
Health experts said they supported having more Aids drug producers if the quality could be controlled.
Source; AFP, May 04

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ECONOMY – JAPAN

Japan's surplus with Asia soaring
Japan’s trade surplus with Asia soared 62.6 per cent in April, help ed by a smaller deficit with China and a widening surplus with South Korea and Taiwan, the Finance Ministry said yesterday.

The surplus with Asia, the largest export market for Japan, expanded in a year to Y667.2 billion ($8.5 billion), to post a 10th consecutive monthly gain.
Asia-bound exports rose 19.6 per cent to Y2.49 trillion, with shipments of cameras and other optical equipment jumping 42.2 per cent, and electronic parts up 13.4 per cent.
Exports of steel products to Asia rose 25.7 per cent due to a shipbuilding boom in South Korea, a ministry official said.
Japan's exports to China rose 18.8 per cent while imports from China grew 12.9 per cent.
"The pace of growth in exports to China somewhat slowed as exports to China have until recently been rising 30-40 per cent year on year," the official noted.
He said it was uncertain whether the slowdown might have been caused by anti-inflation measures by the Chinese banking regulators, such as reducing money in circulation.
Shuji Shirota, senior economist at Dresdner Kleinwort Wasserstein in Tokyo, said: "Japan's deficit with China has been shrinking due to increased exports but the latest data showed export volume was falling slightly."
Imports from Asia climbed 9.1 per cent to Y1.83 trillion as purchases of electronics parts, such as semiconductors, increased 29.2 per cent.
Imports of office equipment, such as computers, rose 20.8 per cent and audio-video devices were up 27.0 per cent.
"The basic picture of pretty strong growth of exports is unchanged and I think that's still the main positive news for the economy going forward," said Peter Morgan, chief economist at HSBC Securities.
Japan's overall trade surplus in April rose 30.3 per cent to Y1.08 trillion. The surplus with the US fell 2.4 per cent to Y553.5 billion.
The surplus with the European Union expanded 1.6 per cent to Y275.2 billion.
"The figures confirm Japan's economy is still dependent on external demand. And it's becoming clear that its reliance is shifting towards China and other Asian economies from the United States," said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities.
Although gross domestic product data last week showed that exports were no longer the biggest contributor to Japan's economic recovery, economists said they remained a key factor underpinning the domestic turnaround.
The GDP data showed that the economy grew a real 1.4 per cent in the first three months of this year, with external demand accounting for just 0.2-percentage point of the expansion.
Source; The Australian/AFP, May 04

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GEOPOLITICAL – KOREA

Two Koreas open historic military talks
Senior South Korean military officers have opened talks with their counterparts in the North in the first ever general-level meeting between the two sides of the world's last Cold War frontier.

Officers from the two sides sat together at 10 a.m. at the resort of Mount Kumgang, on the northern side of the heavily fortified Demilitarised Zone (DMZ) that bisects the Korean peninsula and separates some 1.8 million troops, South Korean defence ministry officials said.

Five-member delegations headed by South Korean Commodore Park Jung-hwa and North Korean Brigadier General An Ik-san were expected to hold about two hours of talks focusing on avoiding naval clashes in the Yellow Sea west of the Korean peninsula.
In recent years, the rich fishing grounds have been the scene of naval clashes during the crab-fishing season in May and June that have killed or wounded scores of sailors on both sides.

The two Koreas technically remain at war because the 1950-53 Korean War ended in a truce rather than a peace treaty. The defence ministers of the rival Koreas met once in 2000 and more junior officers have worked together successfully in the building of rail and road links through the DMZ.
Source; Reuters, May 04

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