Indonesia calls for S. China Sea talks

 An aerial photo from May 11, 2015, shows the alleged land reclamation by China in the Spratly Islands.
An aerial photo from May 11, 2015, shows the alleged land reclamation by China in the Spratly Islands. PHOTO: REUTERS

Dialogue the best solution to spat but if it fails, international arbitration possible: Minister

Indonesia hopes to see an end to the South China Sea disputes through peaceful dialogue instead of an aggressive projection of power in the region.

However, if that fails and Indonesia is drawn into the tussle, it will prefer to turn to international arbitration, Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan said yesterday.

"Being the biggest Asean country, we would like to see a solution on this in the near future (through) dialogue, or we could bring it to... an international tribunal court," he said.

"But the stand of Indonesia is very clear - we don't want to see power projection in this area, we like to see a peaceful resolution by promoting dialogue; dialogue is the best solution to solve this."

Although Indonesia is not a claimant in the territorial disputes, it has kept a close watch on developments. China has supported its territorial claims using a map with a nine-dash line that encloses most of the South China Sea. In recent months, it has reclaimed land in disputed territories and placed military facilities on them.

  • Indonesians 'need not repatriate wealth'

  • JAKARTA • Indonesia will not require taxpayers to repatriate wealth back home as part of a tax amnesty initiative expected to be implemented by the end of this year, a senior Cabinet minister said yesterday.

    The comments by Coordinating Minister for Political, Legal and Security Affairs Luhut Pandjaitan come after private bankers in Singapore, where the Indonesian tax office estimates around 3,000 trillion rupiah (S$300 billion) of Indonesian assets are parked, said their clients were worried about the amnesty plan.

    "This one is not only about collecting money from outside, but the very important one is to strengthen our database on tax so by next year we can see much more tax revenue," Mr Luhut told reporters.

    Taxpayers disclosing their wealth in the first three months of the amnesty will be taxed at 2 per cent, he said, adding that the rate would rise to 4 per cent in the following three months and go up to 6 per cent at the end of next year, when the amnesty programme finishes.

    That compares to the current tax rate for individual income at 5 to 30 per cent, and for company profits at 20 to 25 per cent. Mr Luhut said those set rates would be lowered after the tax amnesty period ends.

    The government of South- east Asia's largest economy introduced the amnesty in a bid to counter dwindling revenues amid an economic slowdown and a sharp decline in demand for Indonesia's main resources, such as palm oil and coal.

    The tax office expects the tax amnesty plan to help add 60 trillion rupiah to next year's tax collection.

    The state Budget is expected to run a fiscal deficit near the maximum limit permitted by law due to a large tax shortfall this year.

    The amnesty plan is subject to Parliament approval.


Mr Luhut said the "nine-dash line is a problem" that not only affects the four Asean claimant states of Malaysia, Brunei, Vietnam and the Philippines but also Indonesia.

The minister was referring to the claims by China, Taiwan and the four Asean states in his speech at a Jakarta Foreign Correspondents Club gathering yesterday.

Another regional issue he addressed was the transboundary haze crisis in the past months, which saw air pollution hit record levels, affecting millions across South-east Asia.

Conditions this year are statistically the worst for the decades-old haze problem, surpassing the 1997 and 2013 crises. There have been 19 haze-related deaths so far, and more than half a million people have been treated for acute lung infections in Indonesia alone.

The fires have razed some 2.1 million hectares of forests and peatlands, and released record levels of greenhouse gases.

"It is not going to happen like this any more," said Mr Luhut, adding that the current government has learned from this year's crisis and put in place measures to prevent a repeat of the problem.

Besides coming down hard on errant farmers and companies that use fire to clear land, President Joko Widodo has also banned the cultivation of peatlands, including those on concessions that have yet to be turned into plantations.

"We are not going to negotiate with the (concession) owners of peatland any more," he said, admitting that it was a "big mistake by us" to have issued licences for the cultivation of some 6.3 million hectares of peatland over the last decade.

"So this is not going to happen again, I promise you," said Mr Luhut. "We have learned from this and won't be taking any more risk next year... we will be prepared for the worst."


A version of this article appeared in the print edition of The Straits Times on November 12, 2015, with the headline 'Indonesia calls for S. China Sea talks'. Print Edition | Subscribe